Condo oversupply reaches 34-month level, rental rates drop

The oversupply of condominium units in Metro Manila has reached a level equivalent to 34 months of supply, according to realtor Anthony Leuterio.

Leuterio attributes this issue to a mismatch between the inventory developers are creating and the actual demand from buyers in the Philippine real estate market, noting that flawed market studies skew towards developer needs rather than broader market demands.

He emphasized the importance for developers to conduct thorough market research focusing on buyer financial capacity instead of funding expensive projects with high recovery costs.

Rental rates for mid-market condo units have dropped to their lowest in about 15 years, particularly in areas like Manila Bay, Alabang, and Makati due to the exit of Philippine Offshore Gaming Operators (POGO).

Philippine real estate market experts believe that accurate market research and adapting to unmet buyer demands are crucial for sustainable growth.

Rizal Commercial Banking Corp. Chief Economist Michael Ricafort expects interest rate cuts by the BSP to boost demand in the property sector, although the lag time is not expected to be long.