Escario Central: Overpriced or Undervalued? The market speaks.

The Metro Manila condominium market is sitting on roughly 81,000 unsold units, representing about 31 months of supply. That figure alone signals a market where buyers hold more leverage than sellers, yet prices in certain pockets continue to climb, creating a confusing landscape for anyone trying to determine whether a specific property is overpriced or fairly valued. The disconnect between macro-level oversupply and micro-level price resilience is precisely what makes this market worth examining carefully.

Nationwide residential price growth slowed to just 1.6 percent year-on-year in the fourth quarter of 2025, the weakest pace since 2019. That is a dramatic deceleration from the 9.8 percent growth recorded in the same quarter a year earlier. For a buyer walking into a showroom today, those numbers mean the days of automatic double-digit appreciation are gone, and the question of whether a unit is priced fairly depends far more on location, developer track record, and actual transaction data than on general market momentum. Understanding where the market actually stands requires looking past the headline oversupply figure and into the specific submarkets where conditions vary wildly. For a closer look at how specific developments are navigating these conditions, the analysis of Solinea’s market positioning offers a useful case study.

What the oversupply figure actually means for buyers and sellers

The oversupply narrative dominates headlines, but it masks a more nuanced reality. The 24.5 percent average vacancy rate across Metro Manila is dragged down severely by the Bay Area, where vacancy has remained above 50 percent. Meanwhile, established business districts like Rockwell Center (10 percent vacancy) and Ortigas Center (7 percent) are performing well above the average. The key takeaway is that the market is not one market — it is a collection of submarkets with vastly different supply-demand dynamics, and pricing that looks inflated in one area may be justified in another.

Why some properties hold value while others sink

The divergence between prime and fringe locations is not accidental — it reflects a structural shift in buyer and tenant preferences. The flight-to-quality dynamic that has reshaped office markets is now visible in residential condos as well. Buyers are willing to pay a premium for developments with strong location fundamentals, reputable developers, and quality construction, while secondary properties in oversupplied areas face downward price pressure. This explains why prime locations like Eastwood City can maintain single-digit vacancy rates while the overall market sits at nearly 25 percent.

For a buyer evaluating a specific property, the critical question is not whether the overall market is overpriced, but whether that particular unit sits in a submarket with strong absorption or one that will take years to clear. The roughly 30,000 unsold ready-for-occupancy (RFO) units in Metro Manila represent immediate competition for any seller trying to offload a unit at a premium. Developers have responded with promotions, extended payment terms, and rent-to-own schemes to capture mid-income buyers, which further pressures secondary-market prices. The experience of developments in other regions, such as the pricing dynamics examined in Vista Grande Subdivision, shows how location-specific factors can override broader market trends.

What the numbers reveal about fair pricing

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The table above illustrates why a blanket “overpriced” label is misleading. A unit in Eastwood City with 5.7 percent vacancy and stable prices is fundamentally different from a Bay Area unit sitting in a market with over 50 percent vacancy. The rental yield compression to 3.8 percent for primary units and 4.6 percent for secondary units means that buyers relying on rental income to cover mortgage payments face a significant shortfall at current interest rates of 7-8 percent. That gap is the single most important financial reality check for anyone considering a condo purchase today.

The interest rate factor that changes the math

The Bangko Sentral ng Pilipinas cut its benchmark rate eight consecutive times from August 2024 through February 2026, bringing the policy rate from 6.5 percent down to 4.25 percent — a total easing of 225 basis points. That is the lowest rate since October 2022. Yet mortgage rates for end-buyers remain in the 7-8 percent range, meaning the policy rate cuts have not fully translated into cheaper borrowing costs for consumers. For a buyer financing 80 percent of a PHP 5 million condo at 7.5 percent over 20 years, the monthly amortization is roughly PHP 40,000. If that unit rents for PHP 20,000 per month — a realistic figure given current yields — the owner is subsidizing the mortgage by PHP 20,000 monthly. That negative cash flow is sustainable only if the buyer expects significant price appreciation, which the current market does not support in most submarkets.

Where the market is actually growing

Not all segments are struggling. IQI Global reported that residential prices in Metro Manila still rose 6-8 percent year-on-year driven by presales in township developments in Quezon City and Taguig. These large-scale, mixed-use developments appeal to buyers seeking integrated communities with commercial, retail, and office components within walking distance. The success of these projects suggests that the market is not rejecting condos altogether — it is rejecting poorly located, poorly conceived projects while rewarding well-executed developments in growth corridors. This pattern mirrors what we see in other premium developments, such as the value proposition discussed in Cebu Royale Estate, where amenities and location justify ongoing costs.

How to determine if a specific property is overpriced

Compare against recent transaction data, not asking prices

Asking prices in the Philippines often carry a significant premium over actual transaction prices, particularly in a buyer’s market. The BSP Residential Property Price Index provides a reliable benchmark for price trends, but it is a lagging indicator. For a specific unit, the most useful comparison is recent sold prices of comparable units in the same building or nearby developments within the last three to six months. Real estate agents and online portals can provide this data, but buyers should verify it against official records from the Registry of Deeds where possible.

Calculate the rent-to-price ratio against mortgage costs

The simplest test for whether a condo is overpriced is whether it can generate enough rental income to cover at least 70 percent of the monthly mortgage at current rates. With secondary-market yields at 4.6 percent and mortgage rates at 7-8 percent, most units fail this test. A unit that passes it — either because the purchase price is low enough or because the location commands premium rents — is likely fairly priced. For example, a unit priced at PHP 3.5 million that rents for PHP 18,000 per month yields 6.2 percent, which comes closer to covering mortgage costs and suggests the price is justified by rental demand.

Assess the developer’s track record and project completion rate

In a market with roughly 30,000 unsold RFO units, developers with a history of delayed projects or quality issues face even greater difficulty selling. Buyers should check whether the developer has completed previous projects on schedule, whether those projects maintain their value in the secondary market, and whether the current project has secured necessary permits and approvals. A unit from a reputable developer in a well-located project may justify a premium over a comparable unit from an unknown developer in a fringe location.

Factor in the holding period and exit strategy

With an unsold inventory duration of 7.9 years, buyers should plan for a holding period of at least five to seven years before expecting to sell at a meaningful profit. Shorter holding periods in the current market carry significant risk of selling at a loss, particularly in oversupplied submarkets. Buyers who need liquidity within three to five years should be especially cautious about paying a premium for a unit that may not appreciate in that timeframe. The long-term perspective required here echoes the considerations for other high-value properties, such as the investment analysis of Pacific Grand Villas, where infrastructure timelines directly affect value.

Frequently asked questions about condo pricing in Metro Manila

What the market is telling buyers right now

The Metro Manila condo market is not uniformly overpriced or undervalued — it is a market in transition, where the old rules of automatic appreciation no longer apply and location has become the single most important determinant of value. Buyers who focus on prime submarkets with strong absorption, negotiate based on recent transaction data rather than asking prices, and plan for a holding period of at least five years are well-positioned to find fair value. Those who chase speculative gains in oversupplied areas or rely on optimistic rental projections face a much harder road. The market has spoken, and it is saying that quality, location, and patience matter more than ever. If this was useful, you might also want to read whether Monterrazas de Cebu lives up to its Beverly Hills billing.

Sources

Green Valley Subdivision: The security issues residents aren’t talking about — A closer look at how security concerns affect property values in gated communities.

The truth about traffic: Is Maria Luisa Estate Park really immune? — Examines how accessibility and traffic patterns influence premium property pricing.

The Property Market in the Philippines (2026 Outlook). Homes and Land Philippines, 2026.

Real Estate Market in the Philippines 2026: Trends and Stats. Own Property Abroad, 2026.