"Metro Manila Condo Oversupply Hits Record High 8.2-Year Absorption Time Expected

Title Metro Manila Condo Oversupply Hits Record High 8.2-Year Absorption Time Expected

As the Philippine real estate market continues to evolve, concerns about the oversupply of condominium units in Metro Manila have reached a record high. According to Colliers Philippines, the country's leading property consultancy firm, unsold condominium units surged by 77% in 2024 to a staggering P158 billion worth of inventory. This significant increase has led to an expected market absorption time of over eight years.

The Current State of Affairs

The rapid growth of the Philippine economy, improved consumer confidence, and increased demand for urban living spaces have contributed to this surge in demand. However, this surge has not kept pace with the supply side, resulting in a glut of unsold units. Furthermore, the proliferation of low-cost condominium developments in Metro Manila's fringe areas has exacerbated the oversupply issue.

The Consequences of Oversupply

This glut of unsold units is attributed to a combination of factors, including the rapid growth of the Philippine economy, improved consumer confidence, and increased demand for urban living spaces. The oversupply issue is further complicated by the proliferation of low-cost condominium developments in Metro Manila's fringe areas, which cater to lower-income households who are more price-sensitive.

Addressing the Oversupply

Some may argue that the oversupply is a mere myth with no basis in reality. However, the sheer scale of the oversupply and the expected market absorption time of over eight years suggests that this issue requires immediate attention. To mitigate the effects of the oversupply, Colliers Philippines recommends the following strategies

1. Price adjustments Developers must be willing to adjust their pricing strategies to reflect market conditions.
2. Product diversification A shift towards building more affordable units or mixed-use developments could help alleviate the oversupply issue.
3. Market segmentation Targeting specific segments of the market, such as young professionals or first-time homebuyers, can help developers better cater to demand.
4. Government support The government can play a crucial role in addressing the oversupply by implementing policies that promote affordable housing and urban development.

Conclusion

The record-high condo oversupply in Metro Manila is a pressing issue that requires immediate attention. By acknowledging the problem and implementing targeted solutions, we can work towards creating a more sustainable and balanced real estate market. It is essential to approach this challenge with a proactive and collaborative mindset to ensure that the industry emerges stronger and more resilient in the years to come.

Keywords Metro Manila condo oversupply, Colliers Philippines, market absorption time, unsold units, affordable housing, urban development

Edward Lance Arellano Lorilla

CEO / Co-Founder

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