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As we reach mid-2025, Manila's property market stands at a critical juncture, with mixed signals across different segments and neighborhoods.
Property prices in the Manila residential market have shown conflicting trends: while the broader Metro Manila market experienced a slight contraction of 0.4% year-on-year in Q4 2024, quarter-on-quarter prices increased by 5.7%, and nationwide residential property prices rose by 6.7% during the same period.
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Manila's property market in June 2025 shows mixed performance with luxury condos declining 0.7% year-on-year while nationwide prices rose 6.7%, indicating a cooling in prime CBD areas but growth in broader markets.
The condo segment faces significant oversupply with 26% vacancy rates projected by end-2025, while demand for affordable housing remains critically underserved with a 6.5 million unit shortage nationally.
| Market Indicator | Current Status (June 2025) | Year-on-Year Change |
|---|---|---|
| Average Price per sqm (Metro Manila) | PHP 150,000 | Stable to slight decline |
| Luxury 3BR Condo (CBDs) | PHP 203,360/sqm | -0.7% |
| Nationwide Residential Index | +6.7% | Up from +6.5% (2023) |
| Condo Vacancy Rate | 24.3% | Rising (26% by end-2025) |
| Rental Yields | 5.12% | Down from 5.36% |
| Inflation Rate | 1.3% | Near 5-year low |
| Interest Rates (SSS) | 6.5% | Reduced from previous rates |
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
What were the exact property price changes in Manila during the first half of 2025?
Property prices in Manila showed divergent trends during the first half of 2025, with luxury segments cooling while broader markets maintained growth.
As of June 2025, the average price of a luxury 3-bedroom condominium unit in Metro Manila's central business districts fell by 0.7% to PHP 203,360 (US$3,638) per square meter compared to the same period last year. This marks the first year-on-year decline in CBD luxury properties since Q1 2022, contrasting sharply with the 3.22% growth recorded in the previous year.
However, the nationwide residential real estate price index tells a different story, rising by 6.7% year-on-year in Q4 2024. This nationwide growth followed annual increases of 6.5% in 2023 and 7.7% in 2022, indicating sustained momentum outside the luxury CBD segment.
Quarter-on-quarter data reveals short-term volatility, with Metro Manila prices increasing by 5.7% in Q4 2024, despite the annual contraction. This suggests that while yearly comparisons show weakness, recent months have seen some recovery in pricing momentum.
The divergence between luxury CBD properties and the broader market reflects the specific challenges facing high-end condominiums, including oversupply issues and the exit of Philippine Offshore Gaming Operators (POGOs) from key areas like the Bay Area.
Which Manila neighborhoods are experiencing the strongest price growth in 2025?
Several Manila neighborhoods are showing remarkable resilience and growth despite broader market challenges.
Taguig, particularly areas near Grace Residences, leads with a 6.5% rental yield, driven by strong demand due to proximity to Bonifacio Global City. BGC itself maintains robust performance with areas like Avida Towers 34th Street achieving 6.2% rental yields, attracting professionals and expatriates who value the district's modern infrastructure and lifestyle amenities.
Makati, especially the San Lorenzo Place area, continues to command premium prices with 6.0% rental yields. Despite being one of the most expensive areas in Metro Manila, with prices exceeding PHP 200,000 per square meter in prime locations, Makati remains attractive due to its established business environment and mature infrastructure.
Caloocan is emerging as a surprise growth area, with PHP 10.7 billion earmarked for urban development in 2025. This massive government investment is transforming the cityscape and creating new opportunities for property appreciation in what was previously considered a secondary market.
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Conversely, the Manila Bay Area, once a hotspot, now faces challenges with high vacancy rates due to the POGO exodus, making it less attractive for immediate price appreciation despite its prime waterfront location.
How much have property prices increased in Manila over the past 5 years?
Manila's property market has experienced a rollercoaster ride over the past five years, with dramatic ups and downs.
From 2020 to 2025, the market journey began with a severe downturn during the COVID-19 pandemic. In 2020, Metro Manila CBD house prices plunged by 20.16% when adjusted for inflation, ranking among the worst-performing global housing markets. The third quarter of 2020 saw Philippine house prices fall by 14.55% inflation-adjusted, marking the market's darkest period.
Recovery began in 2022 with prices increasing by 3.93% nominally, though still declining by 3.82% in real terms due to high inflation. The momentum strengthened in 2023, with the condo price index reaching 204.4 points and Manila's prime residential sector leading global price growth at an impressive 21.2%, outpacing major cities like Dubai and Shanghai.
By early 2024, Manila clinched the title of the world's fastest-growing luxury real estate market with a 26.3% annual price increase. However, this rapid growth proved unsustainable, and by 2025, luxury CBD prices began declining while the broader market maintained more moderate growth.
Overall, properties in prime areas have seen prices rise from approximately PHP 100,000-120,000 per square meter in 2020 to PHP 150,000-200,000 per square meter in 2025, representing a 50-66% increase over five years despite the pandemic disruption.
What are the property price forecasts for Manila in 2026 and beyond?
Property price forecasts for Manila suggest moderate growth with significant variations across market segments.
For the next 5 years, experts predict annual growth of 4-6% driven by urbanization and infrastructure projects. This projection assumes continued economic stability, with the Philippine economy expected to grow between 6-8% annually through 2026. The Development Budget Coordination Committee emphasizes that achieving these targets requires accelerating infrastructure investments and enhancing business competitiveness.
Looking 10 years ahead, moderate growth is expected to continue, though subject to macroeconomic and policy risks. The increasing number of ultra-high net worth individuals in the Philippines, projected to rise from 313 in 2021 to 441 by 2026, will likely support luxury property demand despite current oversupply issues.
For the 20-year horizon, long-term projections depend on sustained economic growth, demographic trends, and resolution of the housing shortage. Without major economic shocks, property values are expected to rise at a more moderate pace as the market matures, potentially averaging 3-5% annually as the market reaches equilibrium.
Infrastructure projects like the Metro Manila Subway and North-South Commuter Railway will be game-changers, boosting connectivity and making surrounding areas more valuable. Properties near these new transport links could see price premiums of 10-15% upon project completion.
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Which property types are seeing the biggest price increases in Manila?
Different property types in Manila are experiencing vastly different price trajectories in 2025.
Condominiums have shown the most dramatic price movements, with the condo price index increasing over 300% in the last decade, reaching 204.4 index points in 2023. Despite recent cooling in the luxury segment, mid-range condominiums priced between PHP 3-18 million continue to see steady appreciation of 6-8% annually over the past five years.
Townhouses have experienced more volatility, with a notable 7.6% surge in 2023 but only 0.4% growth in 2024 nationally. In Metro Manila specifically, townhouse prices declined by 3.4% in 2024, showing weakness compared to other property types.
Single-detached houses have maintained steady growth, contributing to the overall 6.7% nationwide increase in residential property prices. These properties benefit from consistent demand from growing families and remain less affected by the oversupply issues plaguing the condo market.
Construction costs provide insight into future pricing, with residential condominiums registering the highest average cost at PHP 19,939 per square meter, followed by single houses at PHP 11,903 per square meter. These construction costs suggest continued upward pressure on new development prices.
How do current mortgage rates affect Manila property prices in 2025?
Mortgage rates in 2025 are creating more favorable conditions for property buyers, potentially supporting price stability.
As of June 2025, SSS housing loans start at 6.5% fixed for 5 years, representing an improvement in affordability for buyers. Bank loans typically offer interest rates between 6-8% per annum, with terms ranging from 5 to 20 years. The Bangko Sentral ng Pilipinas has cut its policy rate by 75 basis points to 5.5% as of April 2025, with analysts expecting at least another 25 basis point cut for the remainder of 2025.
These lower interest rates are crucial for market recovery, as Colliers Philippines notes that reduced rates should help revive demand in the residential market. Developers are responding by offering more attractive payment schemes and promos, particularly for ready-for-occupancy units where inventory remains high.
In-house financing options, while carrying higher interest rates than bank loans, offer more flexible payment terms and are becoming increasingly popular. Pag-IBIG Fund loans remain a viable option for qualified buyers, providing competitive rates for affordable housing segments.
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The combination of lower policy rates and competitive financing options is expected to support property prices by improving affordability, though the impact varies significantly between luxury and affordable housing segments.
Where have Manila condo prices increased the most since 2020?
Condo price appreciation since 2020 has been highly location-specific, with certain areas significantly outperforming others.
Bonifacio Global City has emerged as the top performer, with properties near Uptown Bonifacio and the Grand Hyatt area seeing exceptional growth. Condos in BGC that sold for PHP 120,000-150,000 per square meter in 2020 now command PHP 200,000-300,000 per square meter, representing a 66-100% increase. The area's transformation with new malls like Mitsukoshi and continued infrastructure development has justified these price increases.
Makati's established areas like Legazpi Village and Salcedo Village have seen more moderate but consistent growth of 40-60% since 2020. Properties that were priced at PHP 150,000 per square meter now trade at PHP 210,000-240,000 per square meter, benefiting from the area's mature business environment and limited new supply.
Ortigas Center has experienced steady appreciation of 35-50%, with new developments and improved connectivity driving demand. The area's emergence as an alternative CBD has attracted both residents and investors seeking value compared to Makati and BGC.
However, the Bay Area tells a different story, with prices stagnating or even declining due to oversupply and the POGO exodus. Properties that saw rapid appreciation during 2020-2022 have given back gains, with vacancy rates projected to reach 56.5% by end-2025.
What economic factors are currently driving Manila property prices?
Multiple economic factors are creating a complex environment for Manila property prices in 2025.
Inflation has reached a nearly five-year low of 1.3% in May 2025, significantly improving purchasing power and creating favorable conditions for property investment. This low inflation environment, combined with BSP's accommodative monetary policy, supports both buyer affordability and developer confidence.
OFW remittances, a crucial driver of property demand, grew by 2.6% year-on-year in February 2025. These remittances continue to fuel demand for residential properties, particularly in the mid-market segment where overseas workers often invest for their families.
GDP growth of 5.2% in Q3 2024 demonstrates economic resilience, with projections of 6-8% growth through 2026. This robust economic expansion supports job creation and income growth, fundamental drivers of housing demand across all segments.
However, the property market faces headwinds from oversupply in certain segments, with unsold condo inventory in Metro Manila reaching 75,300 units as of Q3 2024. This oversupply, valued at PHP 154.5 billion for ready-for-occupancy units alone, creates downward pressure on prices in affected areas.
We made this infographic to show you how property prices in the Philippines compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
How does Manila's property market compare to other Southeast Asian capitals?
Manila's property market offers competitive pricing compared to regional peers, though with distinct characteristics.
In terms of pricing, Manila's average of PHP 150,000 (US$2,700) per square meter for general residential properties and US$3,600-3,638 for luxury CBDs is significantly lower than Bangkok's US$4,000-5,000 per square meter and Singapore's rates that can exceed PHP 300,000 per square meter. Manila's prices are more comparable to Ho Chi Minh City's US$3,500-4,500 range, positioning it as a relatively affordable option in Southeast Asia.
Rental yields in Manila average 5.12% gross, with some areas achieving 4.5-6%. This compares favorably with Bangkok and Ho Chi Minh City's 4-6% yields, making Manila attractive for income-focused investors despite recent yield compression.
Growth trends show Manila projecting 4-6% annual appreciation, similar to Bangkok's 3-5% but lower than Ho Chi Minh City's more aggressive 5-7% projections. However, Manila's recent volatility, including the 26.3% spike in early 2024 followed by current corrections, demonstrates higher market risk compared to more stable markets like Singapore.
Infrastructure development in Manila, while significant, lags behind the more advanced systems in Singapore and Bangkok, but ongoing projects like the Metro Manila Subway promise to narrow this gap and support future price appreciation.
What impact has the POGO exit had on Manila property prices?
The exodus of Philippine Offshore Gaming Operators has created significant disruption in specific Manila property segments.
The Bay Area, once a thriving hub for POGO operations, faces the most severe impact with vacancy rates projected to reach 56.5% by end-2025. This represents a dramatic reversal from the area's previous status as a hotspot, with approximately two-thirds of new condo supply between 2017-2019 concentrated here to meet POGO demand.
Property prices in POGO-dependent areas have experienced downward pressure, with some developers offering "fire sale" discounts to clear inventory. The PHP 2.6 billion worth of unsold condo units in these areas reflects the severity of the oversupply situation.
Rental markets in affected areas have seen even sharper corrections, with rates dropping 20-30% from peak POGO-era levels. This has compressed rental yields and forced landlords to accept lower returns or face extended vacancy periods.
However, the impact remains localized, with areas less dependent on POGO demand like Makati and non-Bay Area parts of BGC showing resilience. Some analysts view this correction as healthy, allowing the market to reset from unsustainable POGO-driven price inflation and creating opportunities for end-users and long-term investors.
Are there signs of a property bubble or crash in Manila?
Manila's property market shows warning signs of oversupply in certain segments but not a systemic bubble.
The condo market exhibits clear oversupply characteristics, with Metro Manila facing 75,300 unsold units representing a 34-month inventory at current sales pace. This "hyper-supply" situation, particularly acute in the Bay Area and mid-range segment (PHP 3-18 million), suggests prices in these areas face continued downward pressure.
However, several factors argue against a market-wide crash. First, the oversupply is segment-specific, with affordable housing facing acute shortages - a 6.5 million unit backlog nationally. Second, economic fundamentals remain sound with low inflation, declining interest rates, and steady GDP growth supporting overall demand.
Property investment guru Chinkee Tan describes the current situation as a "significant correction" rather than a crash, with prices adjusting from unsustainable peaks. The 0.7% decline in luxury CBD condos contrasts with 6.7% growth in nationwide residential prices, indicating localized rather than systemic issues.
Banks and developers are responding rationally by offering discounts and flexible terms rather than panic selling. The government's infrastructure investments and projected economic growth of 6-8% through 2026 provide underlying support for long-term property values despite short-term adjustments.
Which areas in Manila offer the best property investment potential in 2025?
Several Manila areas stand out for investment potential in 2025, each offering different risk-reward profiles.
Emerging areas near new infrastructure present compelling opportunities. Caloocan, with PHP 10.7 billion in government urban development funding, offers ground-floor investment potential. Properties near future MRT stations along the Metro Manila Subway and North-South Commuter Railway could see 10-15% premiums upon completion.
Established business districts like BGC and Makati remain attractive for rental income despite higher entry prices. BGC's Grace Residences area yields 6.5%, while Makati's San Lorenzo maintains 6.0% yields. These areas benefit from consistent demand from professionals and expatriates, providing stable rental income.
Value opportunities exist in oversupplied areas for investors with longer time horizons. The Bay Area's high vacancy creates buying opportunities at discounted prices, though recovery may take 3-5 years as the market absorbs excess inventory.
| Investment Area | Entry Price Range | Rental Yield | Growth Potential |
|---|---|---|---|
| Caloocan (Emerging) | PHP 50,000-80,000/sqm | 5-6% | High (8-10% annually) |
| BGC (Prime) | PHP 200,000-300,000/sqm | 6-6.5% | Moderate (4-6% annually) |
| Makati CBD | PHP 180,000-250,000/sqm | 5.5-6% | Stable (3-5% annually) |
| Bay Area (Distressed) | PHP 100,000-150,000/sqm | 3-4% | Recovery potential |
| Ortigas Center | PHP 120,000-180,000/sqm | 5-5.5% | Moderate (4-6% annually) |
| Quezon City | PHP 80,000-120,000/sqm | 5-6% | Moderate (5-7% annually) |
| Areas near MRT | PHP 70,000-100,000/sqm | 4.5-5.5% | High upon completion |
For affordability-focused investors, Quezon City offers a balance of reasonable entry prices and steady rental demand from young professionals seeking alternatives to expensive CBDs.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Based on the comprehensive analysis of Manila's property market as of June 2025, the answer is: No, they are stable. While certain segments like luxury CBD condos are experiencing slight declines (-0.7% year-on-year), and the condo market faces significant oversupply challenges with 26% vacancy rates projected, the broader residential market shows resilience with nationwide prices up 6.7% and quarter-on-quarter Metro Manila growth of 5.7%.
The market is undergoing a healthy correction rather than a crash, with oversupply issues concentrated in specific segments while affordable housing remains undersupplied. Economic fundamentals remain supportive with low inflation (1.3%), declining interest rates (5.5% policy rate), and projected GDP growth of 6-8% through 2026. For investors and buyers, this creates a market of opportunities where careful selection of location and property type is crucial, with emerging areas near infrastructure projects and established business districts outside the oversupplied Bay Area offering the best prospects for appreciation.
Sources
- Global Property Guide - Philippines Residential Property Market Analysis 2025
- Gulf News - Hyper-supply of Manila condos 2025 prospects
- Knight Frank - Manila World's Top Housing Market for Price Appreciation
- Bamboo Routes - Average condo prices in Manila 2025
- BusinessWorld - Condo prices in Manila create market imbalance
- Bamboo Routes - 17 trends for Manila property market 2025
- Cushman & Wakefield - Investment MarketBeat Report Philippines
- Bamboo Routes - Philippines Real Estate Forecasts 2025
- Global Property Guide - Rental Yields in the Philippines 2025
- Property Report - Metro Manila Property Market 2025