As the Philippine economy surges with a robust 5.5% GDP growth in Q2 2025, driven by strong services and agriculture sectors, Metro Manila's real estate market is a tale of contrasts. While the capital grapples with condominium oversupply and softening luxury prices, broader trends point to cautious optimism, fueled by easing interest rates and infrastructure expansions. This article delves into the hottest topics shaping Manila's property landscape, from CBD vacancies to the rise of suburban townships, offering insights for investors and homebuyers.

Condo Oversupply and Luxury Price Pressures

Metro Manila's residential market faces a glut of unsold units, particularly in central business districts (CBDs) like Bonifacio Global City (BGC) and Makati. In Q1 2025, the average price of a luxury 3-bedroom condo in these areas dipped 0.7% year-on-year to PHP 203,360 (US$3,638) per square meter, reflecting subdued demand amid high inventory levels. Nationwide, residential prices rose 6.7% nominally in 2024, but real terms growth slowed to 3.7%, signaling a cooling in premium segments.

The POGO ban's lingering effects have exacerbated vacancies, with condo completions projected at 8,000 units in 2025. Experts predict a gradual uptrend, with NCR prices climbing about 2% annually through 2026, but developers are recalibrating launches to focus on affordability. Manila's ranking as the 9th most expensive super-prime market globally, with 5.5% y-o-y price growth, underscores its allure for high-net-worth buyers despite short-term headwinds.

Office Market Resilience Amid Return-to-Office Trends

The office sector leads the recovery, with net absorption reaching 192,000 sqm in H1 2025, propelled by BPO expansions and global firms mandating hybrid work models. Metro Manila's vacancy rate hovers around 18%, down from 21% in 2024, as established CBDs like Makati maintain landlord-favorable conditions with rents at PHP 1,056/sqm/month in BGC. Fringe areas, however, require innovative strategies to combat persistent challenges.

With 612,000 sqm of new office completions slated for 2025, the market's resilience is evident in rising occupancy, reaffirming Manila's status as a top outsourcing hub. Industry sentiment ranks offices as improving steadily, supported by ESG-compliant green buildings demanded by multinational tenants.

Suburban Expansion and Infrastructure-Driven Growth

A major shift is underway toward suburban and provincial areas, as infrastructure like the North-South Commuter Railway (NSCR) and airport expansions enhance connectivity. Cavite and Laguna are hotspots for mid-market buyers, with suburban townships and sustainable horizontal developments gaining traction. Developers are prioritizing affordability and green features, bridging urban-rural divides.

In Central Luzon and Calabarzon, industrial demand from foreign enterprises is booming, with prime villages like Forbes Park seeing 15% price hikes to PHP 825,000/sqm. Government projects, including MRT-7 extensions, are making northern and southern edges more attractive, driving investor confidence and price appreciation outside NCR.

Hospitality and Retail: Tourism's Ripple Effects

The hospitality sector is rebounding, with Metro Manila leading 38% of new hotel keys in 2025, focusing on upper midscale properties in Luzon. Tourism arrivals hit 5.9 million in 2024, up 9.15% y-o-y, boosting short-term rentals and experiential retail. Malls are embracing suburban outlets, with retail ranked as the top-performing sector for 2025.

Outlook for Investors: Stability in a Dynamic Market

Manila's real estate in 2025 embodies resilience amid shifting dynamics, with BSP rates expected to ease to 4.75-5% by year-end, stimulating demand. While CBD oversupply tempers launches, suburban growth and BPO-led office demand offer stability. Investors should eye affordable segments and infrastructure-adjacent properties for long-term yields, as the sector cements its role as a "gold standard" investment in a volatile global landscape. For tailored advice, explore opportunities on our platform.