The Philippine real estate market has recently shown a distinct "polarized pattern": the office market has welcomed a supply peak, while the residential market has fallen into a sales slump. Particularly after the withdrawal of the POGO "wild" group, residential demand in Manila plummeted, leading to a divergence between the office and apartment markets.
According to the latest research by JLL Philippines, Metro Manila will add 1.8 million square meters of office space between 2025 and 2030, with 568,000 square meters entering the market in the second half of 2025 alone, pushing the annual vacancy rate up to 18%, a historical high.
JLL Research Director Jalo Delos Reyes stated that although the vacancy rate slightly dropped to 18.2% in the second quarter, the concentrated release of future supplies will keep the vacancy rate high, and rent growth pressure will increase. He pointed out: "Unless corporate expansion is rapid, it will be difficult for rents to recover."
However, core business districts such as Bonifacio Global City (BGC) and Makati CBD remain attractive, with BPO companies and large corporations continuing to move in. Particularly in Makati, which will contribute 557,000 square meters of new office space, most of which is constructed by banks.
Meanwhile, the residential market has noticeably cooled down. According to Colliers data, affected by post-pandemic oversupply and the regulation of online gambling, the rental and sale of middle-class apartments have both encountered obstacles, with over 30,000 units currently unsold.
In the first half of this year, new residential projects decreased by 57%, sharply dropping from 26,000 units in the same period last year to 11,000 units. The residential vacancy rate rose to 24.5%, meaning one in every four apartments is vacant.
It is expected that by 2026, the residential vacancy rate will slightly decrease to 25.3%, mainly due to developers reducing new construction projects. From 2025 to 2027, the annual new residential units will drop to 5,800, less than the pre-pandemic average of 13,000 units.
Facing a sluggish market, many developers have launched promotions such as zero down payment, rent-to-own, and discounts of up to 50%, resulting in a 25% decrease in the rate of returned units in the second quarter. Colliers General Manager Richard Raymond pointed out: "The current discounts are far greater than before, with reductions reaching 45% or even 50%."
The current Manila real estate market is in a period of structural adjustment, and buyers and investors need to be more cautious in observing trends and potential risks.
