The Metro Manila residential condominium market showed a moderate recovery in sales in the first quarter of 2025, although the recent turmoil in the global economy caused by US protectionist tariffs may temper the recovery in demand.

In a media briefing, Leechiu Property Consultants Research and Consultancy Director Roy Golez said the recovery seen in the first three months of the year is due to a 14 percent growth in condominium take-up to 6,508 units amid a 77 percent drop in project launches to 1,347 units during the period.

“We saw some recovery, some slight recovery...It actually broke the trend and went upwards for this quarter,” he said, adding that, even with the drop in new launches, the oversupply has still grown to 81,400 units (about 38 months’ supply) from 77,000 units in the fourth quarter last year.

Comparing the first quarter 2025 performance against the fourth quarter of 2024, Golez said the upper-middle income segment posted the strongest growth of 49 percent although the middle income, upscale, and high-end segments also grew.

However, he said the luxury segment fell 39 percent as it came from a high base with many developers shifting to the segment, which was perceived to have been unaffected by the glut and continuing to enjoy strong demand.

“There has been a lot of repositioning by developers focusing on the luxury segment. However, that’s also where most of the supply is coming from and where a lot of the slowdown has happened,” said Golez.

He explained that, “In the last two quarters of last year, the luxury segment has been growing significantly--so much higher than in the previous months, quarters, and years. Ang the decline, although it’s 39 percent, is just really back to the level it was previously.”

Golez said the mild recovery in the residential market may be due to lower interest rates and the incentives (furnishings, low to zero downpayment, zero interest, etc.) being offered by developers to buyers so they can reduce inventory. 

But, he warned that the reawakened buyer appetites will likely be tempered with the recent capital markets crash although it is still too early to get a grip on how recent geo-economic developments will affect jobs, income, and interest rates.

What is good for the Philippine market though is that it is very local, noted LPC Investment sales Director Tam Angel adding that, “at this point in time, it forms as an advantage, primarily because a lot of the demand is local.” 

“We don't have very many foreign players in the market. A lot of that has to do with our ownership regulations and land use regulations.

“It's also the fact that our market is relatively small for a lot of these foreign funds to come in. So because the demand or the action is primarily local, we're somewhat insulated from the global incidents. 

“Not all of it. It will impact us. But in the meantime, this law of our market, primarily being local, becomes an advantage,” he pointed out.