Authored by the expert who managed and guided the team behind the Philippines Property Pack
Yes, the analysis of Manila's property market is included in our pack
Manila's property market in September 2025 presents a mixed outlook with ongoing challenges from oversupply and elevated vacancy rates, particularly in the luxury condo segment.
Current market conditions show average residential condo prices ranging from PHP 150,000 to PHP 217,000 per square meter, with prime business districts commanding significantly higher premiums. The market experienced a 6.5% year-over-year appreciation in 2025, though luxury segments saw slight declines in early 2025.
If you want to go deeper, you can check our pack of documents related to the real estate market in the Philippines, based on reliable facts and data, not opinions or rumors.
Manila's property market in September 2025 shows steady growth in mid-tier segments while luxury condos face oversupply challenges. Rental yields remain attractive at 5.1-5.3% in main business districts, though vacancy rates are elevated at 26% for condos.
Foreign investment continues driving demand in prime areas like Makati and BGC, while infrastructure projects and OFW remittances support underlying market fundamentals despite current supply-demand imbalances.
| Market Indicator | Current Status (Sept 2025) | Key Details |
|---|---|---|
| Average Condo Price/sqm | PHP 150,000-217,000 | Prime CBDs: PHP 200,000-364,000/sqm |
| Annual Price Growth | 6.5% (2024-2025) | Luxury segment declined 0.7% in Q1 2025 |
| Rental Yields | 5.1-5.3% | Makati/BGC: 4.5-6% for premium units |
| Condo Vacancy Rate | 24-26% | Bay Area reaches 56% vacancy |
| Office Vacancy Rate | 18-20% | New supply keeping rates elevated |
| Foreign Ownership Limit | 40% per development | Strong foreign demand in prime areas |
| Mortgage Rates | 5.5-7.5% | Government-backed loans potentially 5% |
What's the current average price per square meter for residential condos in Manila?
As of September 2025, residential condos in Metro Manila average PHP 150,000 to PHP 217,000 per square meter.
Prime central business districts command significantly higher prices, with Makati and BGC reaching PHP 270,000 to PHP 364,000 per square meter for premium developments. Ortigas Center falls in the middle range at PHP 200,000 to PHP 250,000 per square meter.
The pricing varies dramatically by location within Metro Manila, with emerging areas like Quezon City and Mandaluyong offering more affordable entry points at PHP 120,000 to PHP 180,000 per square meter. Luxury developments in prime locations can exceed PHP 400,000 per square meter for penthouse units.
It's something we develop in our Philippines property pack.
How have property prices in Manila changed over the past 12 months?
Manila's property market delivered a 6.5% year-over-year appreciation from September 2024 to September 2025.
However, the luxury segment experienced a slight decline of 0.7% in Q1 2025, indicating market correction in the high-end category. Mid-tier developments performed better, with consistent growth throughout the period.
The broader residential market showed resilience despite economic headwinds, supported by strong fundamentals including infrastructure development and overseas Filipino worker remittances. Prime business districts maintained their premium pricing despite some softening in ultra-luxury segments.
Foreign buyer activity remained robust in Makati and BGC, helping to sustain price levels in these coveted locations while other areas experienced more modest growth.
What's the rental yield right now in the main business districts like Makati, BGC, and Ortigas?
Current rental yields in Manila's main business districts range from 4.5% to 6% as of September 2025.
Makati delivers yields of 4.5% to 5.5% for premium units, while BGC offers similar returns of 4.8% to 6% depending on the specific development and unit type. Ortigas Center provides slightly higher yields of 5.2% to 6.2% due to more competitive rental pricing.
Metro Manila's overall average gross rental yield stands at 5.12% to 5.28%, making it competitive compared to other Southeast Asian markets. The yields reflect strong rental demand from expatriates, business professionals, and the growing BPO sector workforce.
Higher vacancy rates in some developments are putting downward pressure on rental prices, but prime locations with good amenities and transport connectivity continue to command premium rents and maintain attractive yields for investors.
How strong is demand from foreign buyers and investors compared to local buyers?
Foreign buyers remain highly active in Manila's prime real estate markets, particularly in Makati, BGC, and Ortigas developments.
However, local Filipino buyers still dominate overall transaction volumes across Metro Manila, with foreign ownership legally capped at 40% of total units in any condominium development. This restriction ensures that domestic demand remains the primary market driver.
Foreign investors typically target high-end developments in central business districts, drawn by the attractive rental yields and the Philippines' growing economy. Chinese, American, and other Asian investors represent the largest foreign buyer segments.
Local demand is supported by overseas Filipino worker remittances, young professionals working in the BPO sector, and traditional Filipino families seeking investment properties. The 60% minimum local ownership requirement ensures steady domestic participation in the market.
What's the current vacancy rate for condos and office spaces in Manila?
| Property Type | Current Vacancy Rate | Location Details |
|---|---|---|
| Residential Condos | 24-26% | Metro Manila average, expected to reach 26% by year-end |
| Bay Area Condos | Up to 56% | Highest vacancy rates in Metro Manila |
| Office Spaces | 18-20% | Q2 2025 data for Metro Manila CBD |
| Premium CBD Condos | 15-22% | Makati, BGC, Ortigas - lower than average |
| Secondary Location Condos | 30-40% | Outer Metro Manila developments |
| New Office Developments | 25-30% | Recently completed projects seeking tenants |
| Established Office Buildings | 12-18% | Prime locations with established tenant base |
Don't lose money on your property in Manila
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How are interest rates and mortgage approval rates affecting property purchases in Manila?
Mortgage rates in Manila have stabilized at 5.5% to 7.5% for fixed loans as of September 2025, with government-backed financing potentially offering rates as low as 5%.
These elevated interest rates are constraining buyer purchasing power and leading to stricter documentation requirements from lenders. Banks have tightened their loan approval processes, requiring higher down payments and more comprehensive income verification.
The higher borrowing costs have particularly impacted first-time buyers and investors seeking to leverage their purchases. Many potential buyers are delaying purchases or reducing their budget expectations due to increased monthly payment obligations.
However, cash buyers and foreign investors with strong financial positions continue to find attractive opportunities, especially in developments offering significant pre-construction discounts or distressed inventory sales.
What's the pipeline of new residential and commercial developments expected in the next 2–3 years?
Manila's development pipeline shows a significant slowdown as developers respond to current oversupply conditions.
Residential condo completions are projected at approximately 8,600 units in 2025, declining to 6,200 units in 2026 and just 2,500 units in 2027. This represents a dramatic reduction as developers focus on absorbing existing inventory rather than launching new projects.
The office sector expects 1.8 million square meters of new supply between 2025 and 2030, with most deliveries scheduled for late 2025. This substantial pipeline will likely maintain elevated vacancy rates in the near term.
Developers are shifting strategy toward smaller, more targeted projects and are increasingly selective about locations, focusing on proven areas with strong infrastructure connectivity and established demand patterns.
How are infrastructure projects like new subway lines or airport expansions impacting property hotspots?
Infrastructure development is creating new property investment hotspots and boosting values in affected districts throughout Metro Manila.
The Metro Manila Subway project is generating significant interest in areas along the planned route, with properties near future stations already seeing increased buyer inquiries and price premiums. Areas like Quezon City and parts of Pasig are benefiting from this infrastructure-driven demand.
Airport expansion projects, including improvements to Ninoy Aquino International Airport and planning for new airport facilities, are influencing property values in southern Metro Manila areas with improved accessibility.
It's something we develop in our Philippines property pack.
Transport connectivity improvements are particularly valuable for rental properties, as tenants increasingly prioritize easy access to major employment centers and transportation hubs when making leasing decisions.
What's the government's stance on property-related taxes, foreign ownership rules, and incentives right now?
The Philippine government maintains its 40% foreign ownership limit for condominium developments, with no recent liberalization of these restrictions.
Transaction taxes remain substantial for non-resident investors, including capital gains tax and documentary stamp tax that can significantly impact investment returns. Local buyers enjoy more favorable tax treatment compared to foreign purchasers.
Current government policy supports property investment through various incentives, though these primarily benefit Filipino citizens and permanent residents. Foreign investors face higher tax burdens and additional compliance requirements.
Recent policy discussions have focused on addressing oversupply rather than relaxing foreign ownership rules, indicating that current restrictions are likely to remain in place for the foreseeable future.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Philippines versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How are remittances from overseas Filipinos influencing the Manila property market?
Overseas Filipino Worker remittances continue to be a major driving force in Manila's residential property market as of September 2025.
OFW families represent a significant portion of condo buyers, particularly in mid-tier developments that offer good value propositions. Developers actively target this demographic with flexible payment schemes and marketing campaigns designed for overseas workers.
Remittance flows provide consistent demand for residential properties, helping to stabilize the market during economic downturns. This steady capital injection supports both primary sales and rental markets across Metro Manila.
The OFW market preference for established areas with good rental potential helps sustain demand in prime locations, even as luxury segments face oversupply challenges.
What's the level of distressed sales or foreclosures currently happening in Manila?
Distressed sales are increasing significantly in Manila's property market, with unsold inventory valued at approximately $2.6 billion as of late 2024.
Fire sale discounts are becoming more common, particularly in luxury segments and older buildings where developers and individual sellers are offering substantial price reductions to clear inventory. Some developments are offering discounts of 15% to 25% below original asking prices.
Foreclosure activity remains relatively limited compared to distressed sales, as most financial institutions prefer negotiated settlements and payment restructuring over formal foreclosure proceedings.
It's something we develop in our Philippines property pack.
This environment creates opportunities for cash buyers and investors who can move quickly on attractive deals, though buyers should conduct thorough due diligence on distressed properties.
How are rental demand trends shifting between short-term (Airbnb-style) and long-term leases in Manila?
Short-term rental demand has rebounded strongly post-pandemic in Manila's central business districts, particularly appealing to expatriates and young professionals seeking flexible accommodation options.
However, long-term leases continue to dominate the residential rental market, providing more stable income streams for property owners. Traditional 1-2 year leases remain the preferred option for most tenants and landlords.
Landlords are adapting to market conditions by offering more flexible lease terms, including shorter initial commitments and negotiable renewal options to address the elevated vacancy rates.
The Airbnb market performs best in prime locations near business districts, shopping centers, and entertainment areas, while long-term rentals succeed across a broader range of locations throughout Metro Manila.
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.
Manila's property market in September 2025 presents both opportunities and challenges for potential investors and buyers.
While oversupply concerns and elevated vacancy rates create headwinds, the market's fundamental drivers including infrastructure development, OFW remittances, and foreign investment continue to provide underlying support for long-term growth prospects.
Sources
- Manila Average Condo Prices
- Global Property Guide - Philippines Price History
- Average Price Condo Philippines
- Gulf News - Manila Condo Price Correction
- Philippines 5-Year Real Estate Forecast
- Global Property Guide - Philippines Rental Yields
- Torre Lorenzo - Condo Investment Philippines 2025
- BusinessWorld - NCR Residential Vacancy Rate
- BusinessWorld - Office Space and Condo Launches
- Lobien Group - Office Market Vacancy Rate