Concrete Caution: How Philippine Developers Are Navigating a Condominium Glut with Strategic Optimism

In the ever-evolving skyline of Metro Manila, a new force is shaping the future not construction cranes, but caution. As the Philippine condominium market faces an oversupply crisis, the country’s top developers are trading aggressive expansion for strategic restraint. The result is a rare moment of introspection in an industry long driven by relentless vertical growth.

More than 70,000 unsold condominium units currently crowd Metro Manila’s real estate market, primarily in the middle-income segment. This glut has been building over the past few years, accelerated by the Philippine government’s crackdown on offshore gaming operators, once a reliable source of demand and the broader cooling of economic momentum. Now, even industry giants like Ayala Land and SM Prime are tapping the brakes on new high-rise launches.

“We’ve just become more cautious,” said Ma. Anna Margarita Dy, CEO of Ayala Land. “Not so much based on our inventory levels, but on industry-wide inventory levels.” The company, part of the Zobel de Ayala empire, has shifted its focus from vertical towers in Metro Manila to horizontal developments in nearby provinces, an echo of a broader trend toward decentralization in real estate.

Developers are getting creative to move inventory. Flexible payment schemes, rent-to-own setups, bundled furniture, free parking spaces, and even property leasing assistance are being offered to entice hesitant buyers. DMCI Homes, for instance, is promoting minimal upfront costs and rent-to-own solutions to meet the financial constraints of would-be homeowners.

These promotional tactics appear to be bearing some fruit: according to property consultancy Leechiu, condo take-up rose 14% in the first quarter of 2025 compared to the previous quarter. Yet, the industry is far from declaring victory. Analysts at Colliers warn that, at current absorption rates, it could take up to eight years to clear the oversupply.

Still, developers see light at the end of the tunnel. “Our outlook for the residential market in 2025 is cautiously optimistic,” said Robinsons Land CEO Mybelle Aragon-Gobio. Her firm, part of the Gokongwei-led JG Summit group, is zeroing in on high-demand locations while tailoring projects to evolving buyer preferences.

Interestingly, the luxury and ultra-luxury segments remain immune to the market malaise. Ayala Land’s Park Villas, a 51-story tower where each floor is a single unit priced at a staggering ₱500 million ($9 million) sold briskly. The developer plans to launch another resort-themed luxury project in Makati later this year, banking on this niche demand.

SM Prime, controlled by the Sy family, shares this optimism, particularly as interest rates are projected to fall. “Demand in provincial markets continues to be healthy,” said President Jeffrey Lim, pointing to the company’s forthcoming 200-hectare residential estate in Carmona. SM Prime is also pressing ahead with its massive 360-hectare Manila Bay reclamation project, a testament to long-term confidence.

What’s emerging is a bifurcated market: one segment grappling with an oversupply of mid-range units, the other thriving in the high and ultra-high-end brackets. In response, developers are recalibrating their strategies, embracing data-driven launches and focusing on markets with proven resilience.

As the dust settles, one thing is clear: the Philippine real estate industry is no longer building blindly upward. It’s learning to pause, pivot, and plan laying a more sustainable foundation for growth beyond the skyline.