The Metro Manila residential market is recovering as developers successfully reduce excess supply, while the nationwide office market is showing resilience as the information technology and business process management (IT-BPM) industry takes up the slack left by the departure of Philippine offshore gaming operators (POGOs).

“The market is gaining traction with encouraging signs of recovery—take-up has reached a seven-quarter high, and inventory levels are trending toward lower months of supply,” said Leechiu Property Consultants (LPC) director for research, consultancy, and valuation Roy Amado Golez Jr. in a media briefing.

He added that, “Metro Manila’s available supply dropped to 31 months (79,400 units) in the third quarter, down from 37 months in the second quarter of 2025. This signals progress toward a more balanced market, though further absorption is still needed.”

Growth in gross domestic product (GDP) and overseas Filipino workers’ (OFW) remittances continue to support housing demand and reinforce the market’s underlying strength.

Sales in the upper middle to luxury segments rose sharply, while the middle-income bracket lagged behind. This suggests that affordability remains a key barrier to broader market participation.

Meanwhile, rental rates across key districts remain subdued, with lessors continuing to feel the effects of the POGO exit. Only the Ortigas-Mandaluyong district posted a two-percent quarter-on-quarter increase, while most other districts recorded further declines.

Golez noted though that, “while the market is moving in the right direction, the reality is that most of the available inventory remains out of reach for the average Filipino household. Addressing this affordability gap is essential if we want to invite broader participation and ensure inclusive growth in the residential sector.”

Affordability constraints and modest rental yields continue to temper buyer appetite, particularly among middle-income households.

While developers remain cautiously optimistic—evidenced by a modest increase in new launches—buyers continue to navigate a complex landscape shaped by high housing prices, low rental returns, and a lingering oversupply of units vacated by POGOs.

On the other hand, the Philippine office market sustained modest but meaningful gains in the third quarter of 2025, reflecting resilience amid global uncertainty, policy shifts, and structural transitions across major sectors.

Demand reached 966,000 square meters (sqm) year-to-date, equivalent to 88 percent of 2024’s full-year level, underscoring continued stability and tenant confidence even without support from the POGO sector.

“The first three quarters of 2025 show that the office market continues to hold its ground—as long as demand remains stable and contractions stay manageable,” said LPC associate director for commercial leasing Edward Gador.

He added that, “What we’re seeing is a more sustained and resilient recovery, driven primarily by the IT-BPM sector and traditional office occupiers.”

Net office demand climbed to 319,000 sqm—or 76 percent of 2024’s total—marking a sustained rebound from last year’s trough.

The market has largely absorbed the impact of POGO exits, with contractions stabilizing and relocations driving continued movement across business districts.

The IT-BPM sector accounted for nearly half of total demand, at 45 percent, supported by global capability centers and third-party outsourcing firms expanding operations nationwide.

Traditional occupiers also remained active, taking up 449,000 sqm, while government relocations and new industries such as Philippine inland gaming operators (PIGO) contributed incremental growth.

“If the office market continues its steady demand performance—and if contractions stay manageable—we’re on track to reach last year’s demand level. That’s a strong and reassuring sign that the market has found its footing again.

“The stability we’re seeing today, even without POGO activity, tells us that this recovery is not just a rebound, it’s a sustained one,” said Gador.