The Philippine real estate market slumped in 2024, with condo sales and new launches hitting historical lows. Developers had to attract buyers with significant discounts and favorable payment schemes to cope with the weak market demand.
Data shows that only 11,000 new condos were launched nationwide in 2024, a sharp decrease of 59% from 25,000 in 2023; sales also plummeted, with only 9,000 units sold compared to 23,000 the previous year.
Facing nearly 30,000 unsold inventory units, developers continuously increased promotional efforts. Before the pandemic, cash buyers generally enjoyed discounts of 5% to 10%, but by 2023, the discount range had expanded to 15% to 30%. Currently, some developers even offer no down payment plans and have extended the payment period from the original 18 to 24 months to 48 months to lower the buying threshold. Additionally, free air conditioning and kitchen appliances are also provided as extra incentives.
However, these incentives are mainly concentrated in the economy and mid-low end condo markets, accounting for nearly 60% of the unsold inventory. Economy condos are priced between 2.5 million to 3.59 million pesos, while mid-low end condos range from 3.6 million to 6.99 million pesos. As for the high-end, priced between 12 million to 19.99 million pesos, and luxury condos priced above 20 million pesos, developers have not significantly reduced prices due to the smaller inventory.
Market data shows significant regional differences in inventory absorption. In high-end business districts like Makati CBD, with an average price of 399,000 pesos per square meter, and Taguig City's BGC, with an average price of 352,000 pesos per square meter, new housing stocks are nearly sold out, with only 0.7% of units available in BGC, and almost zero in Makati City's Rockwell, priced at 554,000 pesos per square meter.
By contrast, areas with lower prices still have a large amount of unsold inventory. Quezon City has an average price of 146,000 pesos per square meter with 19% inventory, while Manila City and Pasig City have 16% and 11% of condos still for sale, showing a clear division between the high-end and economy markets.
Due to the still sluggish overall demand, developers currently prefer to digest existing inventory rather than launch new projects. In the short term, the supply of new properties in the Philippine real estate market is expected to remain low, and the key to market recovery still depends on the improvement of the economic environment and the speed of consumer confidence restoration.
