Manila Real Estate 2025: Surprising Trends, Bold Forecasts & Hot Neighborhoods to Watch

Manila’s real estate market in 2025 is a study in contrasts. Residential condo supply has surged, pushing vacancy rates to record highs, yet demand is gradually recovering amid a rebounding economy. Commercial real estate—especially offices—shows early signs of revival after a pandemic-era slump, though rents remain under pressure from oversupply. Looking ahead to 2026–2028, analysts foresee a “flattish” but positive recovery in property values, with residential prices projected to rise modestly (~2% annually) and rents inching up ~1–2% per year bworldonline.com bworldonline.com. Key drivers include major infrastructure projects (from Metro Manila’s first subway to new airports and rail lines) that promise to unlock new growth areas, and favorable demographics fueling housing needs. However, risks such as oversupply in condos and offices, the exit of POGO tenants, and potential policy shifts (e.g. higher taxes, environmental suspensions) temper the outlook. This report provides a detailed review of Manila’s residential and commercial real estate in 2025, emerging hotspots, price and rental trends, infrastructure impacts, regulatory landscape, development pipeline, and the investment opportunities and risks shaping the market’s future.

Current Market Trends in 2025

Manila’s property market is navigating post-pandemic recovery against a backdrop of oversupply in some segments. Economic fundamentals are broadly supportive in 2025 – the Philippines recorded solid GDP growth (~5% in 2024) alongside easing inflation, boosting buyer purchasing power worldexecutivesdigest.com worldexecutivesdigest.com. Yet, the legacy of the pandemic and policy changes (like the ban on online gaming firms) continue to influence real estate dynamics in the capital.

Residential Sector Trends (2025)

Condominium Oversupply & High Vacancies: Metro Manila’s condo market faces a glut of inventory in 2025. Vacancy rates have climbed to unprecedented levels – about 24.3% in Q1 2025 and on track to reach ~26% by year-end bworldonline.com. In practical terms, one out of four condos in the secondary market is sitting empty bworldonline.com. The situation is most acute in the Bay Area (Manila Bay reclamation district), where the exit of Philippine Offshore Gaming Operators (POGOs) left a gaping demand void. The Bay Area’s condo vacancy is projected to hit a stunning ~56% by end-2025, up from just 14% vacancy in 2016 before the POGO boom bworldonline.com bworldonline.com. Other districts with significant unsold inventory include emerging hubs like Southern Quezon City (7,000 units unsold), Alabang–Las Piñas (6,000), Pasig City (5,000), and Makati Fringe and Manila Bay Area (4,000 each) bworldonline.com. By contrast, the established prime centers – Makati CBD and Bonifacio Global City (BGC) – have far fewer unsold units (roughly 1,000 each) bworldonline.com, reflecting relatively resilient demand for high-end projects.

Stabilizing Prices: After a pandemic-induced dip, residential prices are stabilizing. Nationwide home prices turned back to growth in late 2024, rising +6.7% year-on-year in Q4 2024 after a brief contraction business.inquirer.net business.inquirer.net. Notably, Metro Manila’s prices lagged – in Q4 2024, NCR residential values were still down 0.4% year-on-year (though this was a sharp improvement from a -14.6% plunge in Q3) business.inquirer.net. Price gains have been stronger in areas outside Manila (+9.3% YoY in Q4 2024) business.inquirer.net, as buyers increasingly look to suburbs and secondary cities. Within Metro Manila, the mid-market condo segment saw some price softening in 2024, creating opportunities for buyers: after three years of increases, condo prices have dipped for the first time, allowing first-home buyers to find units at more affordable rates worldexecutivesdigest.com. Industry experts describe the recovery in Metro Manila home values as “flat to modest” – Colliers projects condo prices to rise only ~2.2% annually through 2026 bworldonline.com. At that pace, Manila’s average condo values may not regain pre-pandemic peak levels until around 2029 bworldonline.com.

Shift to Houses & Peripheral Areas: With urban condos in oversupply, developers are pivoting to where demand remains robust – horizontal housing in suburban provinces. Large developers have ramped up lot and house-and-lot projects in CALABARZON (Cavite, Laguna, etc.), Central Luzon, Visayas, and Davao, which have seen steady price appreciation of ~4–7% annually in recent years business.inquirer.net. Lot-only developments have done even better, with values rising 7–15% per year from 2016–2023 in growth corridors business.inquirer.net. Within Metro Manila, upscale suburban-style communities and “township” projects that offer more space and amenities are in demand, especially as buyers prioritize health and lifestyle after COVID. The rise of themed developments – e.g. golf course communities in Antipolo (Rizal) or Cavite – exemplifies this trend, catering to affluent buyers seeking more than just a condo unit worldexecutivesdigest.com. Overall, housing loans for single-detached homes now make up the largest share (47.9%) of new mortgages worldexecutivesdigest.com, indicating Filipino families’ preference for landed homes as incomes improve.

Commercial Sector Trends (2025)

Office Market Early Rebound: Manila’s office sector, which was hit hard by the pandemic and work-from-home shift, is showing signs of life in 2025. In Q1 2025, office leasing activity jumped – about 237,600 sqm of office deals were closed, up 66% quarter-on-quarter and 15% year-on-year bworldonline.com. This marks a notable turnaround from the subdued performance of 2024 bworldonline.com. The demand is also more broad-based now: while BPO (outsourcing) firms remain key, over 60% of new leases in early 2025 came from traditional companies (government agencies, banks, logistics, flex space providers, etc.), indicating that office demand is diversifying beyond call centers bworldonline.com. Geographically, Fort Bonifacio (BGC) led in new leases in Q1 2025, overtaking the Bay Area (which fell to 6th place due to the POGO exodus) bworldonline.com. Makati CBD saw leasing double from the previous quarter – despite very limited vacant space – underscoring tenants’ strong preference for prime locations bworldonline.com. Outside Metro Manila, Cebu, Pampanga, and Davao are also sustaining office take-up as companies expand in regional cities bworldonline.com.

High Vacancies Keeping Rents Soft: Office vacancy in Metro Manila remains elevated at ~20–22% in 2025 bworldonline.com – an all-time high level – due to the large amount of new supply and loss of POGO occupiers. Colliers expects office vacancies to hover around 22% by end-2025 bworldonline.com, even as demand improves, because over 600,000 sqm of new offices are being completed in 2025 bworldonline.com. The oversupply means landlords continue to face a tenant-favorable market and have been reducing rents slightly to compete. Average Grade A office headline rents in Metro Manila have edged down by a few percent; for instance, in Q1 2025 effective office rents slid to roughly ₱987 per sq.m. per month, continuing the gentle decline seen in 2024 (≈-3% per annum) facebook.com. Cushman & Wakefield likewise forecasts office rents to fall another ~3.2% over 2024–2025 on top of earlier drops facebook.com. Landlords are offering incentives and flexible lease terms to fill space, especially in fringe locations. The bright spot is Makati CBD, which has only ~7% vacancy – if trends hold, Makati could become a landlord’s market by 2026 as virtually no new offices are coming there in the next 3 years bworldonline.com bworldonline.com. But elsewhere, tenants retain the upper hand in 2025, able to negotiate favorable rents in high-vacancy districts like the Bay Area, Alabang, and Makati Fringe bworldonline.com.

Retail and Hospitality Recovery: The retail property segment is benefiting from renewed consumer spending and revenge shopping. Mall foot traffic and retailer expansions picked up in 2025, aided by the Retail Trade Liberalization law which has made it easier for foreign brands to enter malls business.inquirer.net business.inquirer.net. Industry leaders note a focus on experiential retail – malls integrating entertainment like indoor amusement parks, immersive art, and tech-enabled stores to lure shoppers business.inquirer.net. In hospitality, tourism’s strong comeback (7+ million arrivals expected in 2025, heading to 12 million by 2028) is spurring hotel occupancies business.inquirer.net. Big developers are planning new hotels or partnerships with international operators, anticipating demand both in Metro Manila and emerging tourist destinations business.inquirer.net business.inquirer.net. The blended work model (hybrid office) is also influencing commercial space – e.g. growth in flexible workspace operators and sustained need for physical offices albeit with more adaptive designs business.inquirer.net business.inquirer.net. Overall, industry sentiment in 2025 is cautiously optimistic: experts rank retail and hotels as the best-performing sectors, with residential stable and office improving gradually business.inquirer.net.

Forecast for 2026–2028

Looking ahead, Manila’s real estate market is expected to continue a gradual uptrend in the next few years, supported by economic growth and infrastructure development but restrained by current oversupply. Most analysts envision a steady-but-unspectacular recovery rather than a return to the breakneck property boom of the 2010s.

Residential Property Outlook: The consensus is for moderate price growth in Metro Manila’s residential sector through 2028. Colliers projects condo prices in NCR to rise ~2% per year through 2026, a pace they term a “flattish recovery” bworldonline.com. Under this trajectory, 2025–2028 would see cumulative appreciation in the single-digit percentages, gradually rebuilding from the pandemic drop. Pre-pandemic price peaks may not be surpassed until 2029 for Metro Manila condos bworldonline.com. Outside the capital, however, residential values are expected to climb faster (mid to high single digits annually) as end-user demand in provincial cities and fringe suburbs stays strong. On the supply side, developers are acting prudently: new condo launches have been scaled back sharply to absorb existing inventory. Colliers estimates only ~5,800 units/year will be completed from 2025–2027, versus 13,000 units/year pre-pandemic bworldonline.com. In fact, after an 8,600-unit influx in 2025, completions drop to ~6,200 in 2026 and a trickle of 2,500 by 2027 bworldonline.com. This supply slowdown should help vacancies peak by 2025 and then slowly improve. By end-2025 Metro condo vacancy is seen at ~25%, then potentially easing slightly by 2027 as fewer new units hit the market bworldonline.com. Rental demand from expatriates and young professionals should also gradually rise if the economy remains robust. Colliers forecasts residential rents will inch up ~1.5–2% annually in 2024–2026, finally regaining pre-COVID rent levels by 2028 bworldonline.com. All this assumes no major shocks. One wildcard: the middle-income condo segment may face continued pressure – as one property CEO warned, the mid-market could “be hurt badly,” with some mid-level condo rents potentially falling further before they recover bworldonline.com bworldonline.com. High-end condos, meanwhile, are expected to stay resilient through 2026, buoyed by wealthy buyers and scarce supply in that niche bworldonline.com.

Commercial Property Outlook: The office sector’s recovery is likely to be slow and uneven through 2026–2028. Even as demand improves, the large pipeline of new offices will keep vacancy rates elevated in Metro Manila for a few more years. Office vacancy could remain in the high-teens to ~20% range into 2026, per industry forecasts bworldonline.com bworldonline.com. Consequently, rents are not expected to rebound strongly in the near-term – most projections have office lease rates staying flat or slightly declining into 2025, and only starting a meaningful uptick by 2027 once the oversupply is absorbed. Cushman & Wakefield, for example, sees Metro Manila headline office rents bottoming out between 2024–2025, then a tentative rise thereafter (but still below pre-pandemic peaks by 2028). There will be divergence by location: Makati CBD and BGC could tighten much sooner (Makati might shift to a landlord’s market by 2026 due to minimal new supply) bworldonline.com bworldonline.com, implying rent increases in those two CBDs before elsewhere. Secondary business districts (Ortigas, Alabang, Bay Area) will take longer to recover given higher vacancies and more incoming supply. The retail sector should continue strengthening through 2026 as consumption grows; new retail spaces (especially in mixed-use townships and transport hubs) will come online, and rents in prime malls may rise modestly in tandem with foot traffic returning. Hospitality faces a bright outlook – with tourist arrivals on target to hit record highs by 2028, expect more hotel and serviced residence projects in both Metro Manila and key tourist provinces business.inquirer.net business.inquirer.net. Industrial/logistics real estate is also poised for growth, fueled by e-commerce and manufacturing investment – modern warehouses and industrial parks near Manila (e.g. in Cavite, Batangas, Bulacan) will likely see strong occupancy and rental appreciation through 2028 business.inquirer.net.

In summary, 2026–2028 should bring steady improvement: residential values rising slowly off the trough, and commercial segments finding firmer footing as the economy expands. But the pace of growth will be measured, not exponential. By 2028, Manila’s property market is expected to be on more solid ground, supported by new infrastructure and hopefully a more balanced supply-demand equation.

Key Emerging Neighborhoods

Manila’s ever-expanding metropolis is seeing new hotspots emerge both within the urban core and on its peripheries. The following are some key neighborhoods and districts to watch as growth centers in the coming years:

Quezon City – North Triangle/Vertidis: Quezon City is on the rise with projects like Vertis North and the upcoming Unified Grand Central Station (connecting multiple MRT/LRT lines). Government offices are relocating to QC’s Triangle area, and new condos, malls, and hotels are mushrooming around North Avenue and Quezon Avenue. With the Metro Manila Subway and MRT-7 bringing stations here by 2026–2027, expect QC’s northern corridor to boom. Already, southern QC leads in inventory, indicating developer focus bworldonline.com. Vertis North and nearby areas could become the “next Makati” in terms of a mixed-use CBD outside the traditional downtown.
Makati Fringe & ARCA South (Taguig): While Makati’s core is mature, the Makati Fringe (areas just outside the CBD like Chino Roces Ave., Brgy. Bangkal, etc.) is an emerging condo hotspot with slightly lower prices but proximity to the CBD. Meanwhile, just southeast of Makati, ARCA South in Taguig (on the FTI redevelopment site) is being groomed as a new business district by Ayala Land. It will benefit from the planned Skyway and subway connections and overflow demand from BGC/Makati. These fringe areas offer growth potential as prime locations saturate.
Bonifacio Global City (and Uptown/Central): BGC in Taguig remains a key growth area, continuously expanding with new office towers, upscale residences, and retail (e.g. Uptown Bonifacio). It led Metro Manila in office take-up early 2025 bworldonline.com and continues to attract multinational firms and expatriates. While not “new,” BGC’s influence is spilling into adjacent areas like McKinley West and North and even into the ARCA South corridor. It will stay on the radar for investors seeking high-end properties.
Manila Bay Reclamation Areas (Bay City): The Entertainment City/MOA complex in Pasay and planned reclamation islands in Manila Bay are transforming the coastline. “SM New Bay City” – a 726-hectare trio of artificial islands by SM Prime – is underway, promising a futuristic mixed-use district with world-class infrastructure gulfnews.com gulfnews.com. Similarly, Horizon Manila/Harbor City (265 ha) and Manila Waterfront City (318 ha) are massive reclamation projects set to create “new downtowns” with skylines of their own gulfnews.com gulfnews.com. These areas, often dubbed the next “Manhattan of Manila Bay,” are earmarked for eco-friendly, smart-city designs. However, it’s worth noting that as of 2023 the government suspended many Manila Bay reclamation projects pending environmental review philstar.com bworldonline.com, so timelines are uncertain. Still, the existing Bay City (Pasay) around Mall of Asia is thriving with casinos, malls, and condos – albeit currently grappling with high vacancies due to POGO exits. Over the long term, as tourism and entertainment grow, this waterfront district is expected to regain its vibrancy.
Alabang–Las Piñas (South Metro): The southern fringes like Filinvest City (Alabang) and Las Piñas are emerging as self-contained communities. Alabang’s business district offers campus-style offices, retail, and residential developments that attract those seeking a less congested environment. With new skyway links and the upcoming LRT-1 Cavite extension improving access, the south is becoming more connected. The Alabang-Las Piñas area had one of the highest unsold condo inventories (6,000 units) bworldonline.com, indicating many new projects – but as infrastructure improves (e.g. the ongoing C5 Extension, Cavite coastal road upgrades), end-user demand here is set to rise.
Bulacan and Pampanga (New Aero Cities): Just north of Metro Manila, provinces like Bulacan and Pampanga are heating up thanks to big-ticket infrastructure. Bulacan will host the New Manila International Airport (NMIA) – a massive 200-million passenger capacity airport slated by 2027 gulfnews.com. Around the airport site in Bulakan town, an “Aerotropolis” is planned with new logistics hubs, residential communities and commercial zones gulfnews.com. This could spawn an entirely new property sub-market (land prices in parts of Bulacan have already surged on speculation). Further north, Clark Freeport in Pampanga (and New Clark City in Tarlac) are benefitting from the North–South Commuter Railway and existing Clark International Airport. Real estate in these areas – from industrial parks to suburban housing – is poised for growth as Metro Manila’s spillover and government decentralization take effect. While these are technically outside Metro Manila, they form the Greater Capital Region’s emerging nodes, likely to see significant development momentum into 2025–2028.
Others to Watch: Ortigas East and Bridgetowne (Pasig-Quezon City border) – large new mixed-use estates by Ortigas Land and Robinsons, respectively, injecting fresh residential and office supply in the Ortigas/C5 corridor. Bonifacio South/Mainila Army area – set for redevelopment in Taguig next to BGC. Parañaque – with the extension of LRT-1 and proximity to Entertainment City, areas like Baclaran and Sucat are revitalizing. And in the provinces, so-called “New Wave Cities” like Iloilo, Bacolod, and Davao are also drawing real estate investment for those looking beyond Manila’s borders business.inquirer.net business.inquirer.net. These areas won’t directly rival Metro Manila, but they indicate a broader trend: growth is spreading outward, creating multiple emerging real estate hubs.

Residential and Commercial Price Trends

Property Prices: Metro Manila remains the most expensive real estate market in the Philippines, though prices vary widely by location and property type. As of 2025, an average condominium unit in Manila costs around ₱5.2 million (≈$93,000), which translates to roughly ₱155,000 per square meter (≈$2,800/sqm) investasian.com. Prime locations command higher: upscale condos in Makati CBD or BGC often sell for ₱200k–300k per sqm (especially luxury projects). In contrast, condos in fringe suburbs or older buildings can be ₱100k/sqm or less. For landed homes, the average house in Metro Manila costs about ₱27 million (≈$490,000) with an average of ₱115,000 per sqm of floor area investasian.com – though this ranges from modest townhouses in the ₱5–10M range to Forbes Park mansions at ₱ hundreds of millions. It’s notable that Manila’s average per sqm prices are actually slightly lower than Cebu’s in some segments investasian.com, because Metro Manila has a huge supply of lower-end properties alongside its luxury enclaves, bringing the citywide average down. Prices have been on a rollercoaster: they surged steadily in the 2010s, dipped in 2020–2021 (Manila condo prices fell by ~-9% in 2020 by some indices), recovered slightly in 2022–2023, and by late 2024 into 2025 are in a cautious uptrend. The Bangko Sentral’s Residential Real Estate Price Index (RREPI) showed nationwide prices up 6.7% YoY in Q4 2024 business.inquirer.net business.inquirer.net. However, within NCR the index was roughly flat (–0.4% YoY) in that period business.inquirer.net, indicating Manila’s recovery is lagging. In essence, Metro Manila prices in 2025 are roughly on par with 2019 levels on average, after the pandemic slump and partial rebound.

Recent Price Change Highlights: Developers and analysts are not expecting rapid appreciation in the near-term given high inventory. Colliers’ forecast of +2.2% annual price growth through 2026 in Metro Manila suggests that real prices (inflation-adjusted) may even be flat or slightly declining in the short run bworldonline.com. Some specific market segments are under pressure – for example, the mid-market condos popular with investors (many of whom were leasing to POGO workers) have seen prices and rents fall due to the exodus of that demand. On the other hand, exclusive luxury properties (limited supply, prime location) continue to inch up in value despite market headwinds. Industry experts predict “luxury property prices in CBDs will keep rising due to limited supply and strong demand,” even as the broader condo market remains soft bambooroutes.com. Indeed, in 2023 some prime 3-bedroom condos in Makati/BGC still managed ~+4% price growth gulfnews.com. Land values for the best commercial lots in Makati and Ortigas have largely held firm as well. Meanwhile, outside Metro Manila, residential prices have been outperforming – e.g. suburban house-and-lot developments appreciating mid-to-high single digits annually in recent years bworldonline.com, fueled by end-user buyers.

Commercial Values: For office real estate, capital values have correspondingly dipped with rents. Average capital values for Grade A offices in Metro Manila fell during 2020–2022 and stabilized in 2023–2024 at lower levels. Many offices that would sell for ₱180k–₱200k per sqm pre-pandemic might fetch less now, unless they’re in Makati/BGC where investor interest remains relatively strong. Cap rates (office yields) have thus risen slightly given lower prices and steady lease rates. In the retail sector, prime shopping mall space in Makati or Ortigas still commands high rents and property values (some transactions pre-pandemic had mall capital values at ₱300k/sqm or more). There haven’t been many major commercial property sale transactions publicly disclosed recently, as investors wait for clearer signs of recovery. REITs listings in the Philippines have provided some benchmark: for instance, REIT portfolios of offices in 2020–2021 were valued implying yields around 5–6%. With the current market softness, any distressed sales of office condos or strata retail units could see discounts. But overall, the price trend for commercial assets is expected to follow the rental trend – a slow recovery starting likely in 2026 for offices, whereas retail (especially essentials-based retail) might see values firm up sooner as consumer spending normalizes.

To summarize, Manila’s price trends in 2025 show a market in correction and consolidation. Residential prices are stabilizing after a dip, with future gains likely modest. Commercial values are at a low ebb with potential for rebound once vacancies shrink. For buyers, this means 2025 can be an opportune time to negotiate and invest while prices are relatively subdued, provided one is selective on location and segment.

Rental Market Overview and Yield Potential

The rental market in Metro Manila is undergoing adjustments as well, influenced by pandemic recovery, oversupply, and shifting tenant profiles.

Residential Rentals: After a steep pandemic drop, residential rents have largely stabilized and are starting a slow climb, albeit unevenly. According to Colliers, average condo rents across Metro Manila were down a mild 0.4% in Q1 2025 from the previous quarter globalpropertyguide.com, essentially flat – a sign that rents may be bottoming out. In 2024, the Bangko Sentral reported rental prices had even ticked up slightly nationally, but NCR’s rental recovery is tepid. Some submarkets are seeing rent declines due to high vacancy: the mid-tier condos oriented to POGO renters have been hardest hit. Industry observers note that what used to rent for ₱600/sqm/month in those buildings could fall to ₱300/sqm or less – effectively halving the rent – given the surplus of empty units looking for tenants bworldonline.com. Landlords of many studio and 1-bedroom condos are having to offer discounts or perks to attract the limited tenant pool, especially in areas like the Bay Area or fringe locations. In contrast, demand for rentals in prime locations (Makati, BGC) and for larger family-friendly units has remained stronger; rents in Rockwell, Salcedo Village, etc., held up better and are now inching up as expatriates return. Overall, Colliers expects residential rents to rise ~1.5% per year in 2024–26 bworldonline.com, which is a very modest pace – meaning renters will enjoy relatively affordable rates for the next couple of years, and landlords face only gradual improvement in income.

Gross Rental Yields: Rental yields in Manila are relatively attractive compared to many regional markets. As of Q1 2025, the average gross rental yield for apartments in the Philippines is ~5.1% globalpropertyguide.com. In Metro Manila specifically, yields average slightly higher at 5.3% globalpropertyguide.com. These yields have actually compressed a bit from late 2024 (when they were ~5.3–5.4%), indicating either prices rose or rents dipped in that period globalpropertyguide.com. Yield levels vary by location and property type: interestingly, mid-priced condos in secondary business districts can generate higher yields than upscale units in Makati/BGC. For example, a typical studio/1BR condo in Mandaluyong averages an impressive ~8.4% gross yield globalpropertyguide.com, and in San Juan City 1BR yields can hit 7–8% (even 9–10% for some 2BR units) globalpropertyguide.com. These areas have lower purchase prices but still decent rental demand, boosting yield percentages. Meanwhile, in Taguig (BGC), yields are lower – around 4%–5% for most units globalpropertyguide.com – reflecting the high property prices in BGC that outpace rental rates. Makati CBD condos similarly yield in the 4% range on average. Pasig (Ortigas) and Quezon City condos yield roughly 4.5%–6% depending on unit size globalpropertyguide.com. Yields also tend to be higher for smaller units and lower for large luxury units (because high-end properties have a price premium but don’t command proportionally higher rents). For instance, a 3BR luxury unit in Makati or Taguig might yield under 4%, whereas a small studio in the city of Manila can yield 6–7% globalpropertyguide.com globalpropertyguide.com.

On the whole, a 5–6% yield is common for well-chosen Metro Manila condos in 2025, which is still appealing against low interest rates and yields in more developed cities (by comparison, many parts of Singapore or Hong Kong have 2–3% yields). Savvy investors are targeting those mid-market segments where rental yields are highest – often older condos or those in emerging locations with good rental demand. Rental yields also underpin the growing REIT market: several Philippine REITs (office-focused) yield around 6–7% annually to investors, highlighting the income potential in the property sector.

Rental Demand Drivers: A few factors are shaping rental demand in 2025. One, the return-to-office of employees (either full or hybrid) is bringing young professionals back to city condos, slowly filling some of the vacancy. Two, the rise of digital nomads and expatriates as global travel normalizes is positive for the serviced apartment and high-end rental market. Three, on the flip side, the POGO ban removed tens of thousands of renter occupants (both foreign POGO workers and the local employees serving them) – roughly 1 million square meters of residential space was vacated by POGOs leaving bworldonline.com, which is a major demand shock that the market is still absorbing. This is why landlords are offering incentives: some are temporarily lowering rents or throwing in free months, or flexible lease terms to stay competitive amidst the surplus worldexecutivesdigest.com. Renters in 2025 have more bargaining power, especially in mid-range condo segments. It’s effectively a “renter’s market” in many areas, although the pendulum may slowly swing back toward landlords by 2027 as excess supply gets taken up.

In summary, Manila’s rental market in 2025 offers stable or slightly soft rents and healthy yields for investors. It is a favorable environment for tenants (with good deals available), while property investors can still earn decent cash flow relative to asset cost. As the economy grows and vacancies gradually decline in the coming years, we can expect rental rates to gradually firm up – translating into potentially even stronger yields for those who buy at today’s subdued prices and lock in future rent appreciation.

Infrastructure Projects and Their Impact

The “Build, Build, Build” era of infrastructure development in and around Metro Manila is in full swing, and its impact on real estate cannot be overstated. Major infrastructure projects – rail lines, airports, highways, and bridges – are game changers that are reshaping the property landscape, unlocking new areas for development, and often driving up land values. Here we highlight key projects and their expected influence on Manila’s real estate:

Metro Manila Subway (MMSP): The country’s first underground metro is under construction, spanning 36 km from Quezon City to NAIA and FTI in the south. Phase 1 is slated for partial operation by 2025 (first 3 stations) and full completion by 2027–2028 gulfnews.com bworldonline.com. This will be a total game-changer for commuting, slashing travel times across Metro Manila’s busiest corridor. Property developers are already capitalizing on future stations – expect higher condo and office rents in areas like North QC (Mindanao Ave.), Ortigas North, Bonifacio (Lawton East), and FTI where stations are coming. Colliers notes the subway will benefit major CBDs including Quezon City, Ortigas, Fort Bonifacio, Pasay (Bay Area), even Valenzuela at the northern end bworldonline.com. Proximity to a subway stop is becoming a premium selling point; projects within 500m of stations are likely to see value uplifts and faster sales. By 2028, once fully operational, the subway could also redistribute development density – e.g. making north QC and eastern Metro Manila more attractive for businesses that traditionally wanted Makati access. In essence, the MMSP is bringing the “mass transit convenience” factor that has long been missing, and “location, location, location” may soon be redefined as “access, access, access” in Manila bworldonline.com.
North–South Commuter Railway (NSCR): A 163-km commuter rail linking New Clark City (Tarlac) to Metro Manila and down to Calamba (Laguna) is under construction, with sections opening progressively. This is a ₱873 billion mega-project expected to carry a million passengers a day once complete gulfnews.com. By around 2026, key segments connecting Clark airport to northern Metro Manila (via Malolos, Bulacan) should be operational. The NSCR (also called Manila-Clark railway) shrinks travel times from the capital to the north and south, spurring the rise of suburban communities and logistics hubs along the route. Clark’s development as a secondary metro – with government offices and businesses relocating there – is tied to this rail link. For Metro Manila real estate, the NSCR will alleviate some housing pressure by enabling people to live in Bulacan/Pampanga and commute in. It also boosts land demand around future stations (e.g. Marilao, Clark, Calamba), where new townships, industrial parks, and transport-oriented developments are springing up.
New Manila International Airport (Bulacan Airport): Under development by San Miguel Corp., the NMIA in Bulacan is a colossal airport project north of Manila, aimed at decongesting NAIA. It’s designed for up to 200 million passengers/year with 4 runways gulfnews.com. The first phase (targeted by 2027-2028) will likely have a lower capacity initially, but still transformative. Surrounding the airport, economic zones, aero-industrial parks, and residential “airport city” projects are already in planning. Real estate in Bulacan (esp. Bulakan and Marilao) has seen a surge in interest – prices of land have reportedly doubled/tripled in some barangays since the airport announcement. For Metro Manila, NMIA means easier travel and potentially some shift of economic activity northward. It may also increase demand for hotels, offices, and housing in the northern Metro (Caloocan, Valenzuela, QC) due to proximity to the new airport. The project is a Build-Operate-Transfer, to be eventually turned over to government gulfnews.com, ensuring long-term integration into national infrastructure. By late 2020s, Manila could effectively be a two-airport metro (NAIA in south, NMIA in north), boosting its regional competitiveness.
Sangley Point International Airport (Cavite): Another new airport project is brewing south of Manila, at Sangley Point, Cavite. Backed by a consortium including Cavitex and foreign partners (Samsung, Munich Airport, etc.), the plan is to build a modern airport to complement NAIA, with phase 1 by 2028 gulfnews.com gulfnews.com. If it proceeds, Sangley’s success will depend on connectivity to Metro Manila – likely via new expressways or ferry. There’s talk of a Manila Bay bridge or causeway to Cavite. For real estate, Sangley could catalyze development in Cavite – expect townships and resorts in coastal Cavite to pick up, and housing demand in areas like Bacoor, Imus (especially with LRT-1 Cavite extension improving access). However, since both Bulacan and Sangley airports are ambitious, some analysts question if both will fully materialize on time. The government’s current focus seems stronger on Bulacan, with Sangley as a longer-term supplement.
MRT-7 and Other Rail Lines: Beyond the subway and NSCR, Metro Manila is expanding its urban rail: MRT-7, a 23-km line from North Ave QC to San Jose del Monte, Bulacan, is about 79% complete as of March 2025 and slated for partial operations in 2026 gulfnews.com. This will open up northern QC and Bulacan suburbs along Commonwealth Ave and Quirino Highway. Areas near future MRT-7 stations (Fairview, Novaliches, SJDM) will likely see higher land values and new condo/mall projects – indeed, several developers have landbanked there in anticipation. LRT-1 Cavite Extension (to Bacoor) is under construction (Phase 1 to open by 2024/25, Phase 2 by 2027), boosting Cavite’s connectivity bworldonline.com. A proposed MRT-4 (Ortigas-Taytay line) is also in pipeline, which if built would greatly benefit the eastern suburbs (Pasig, Cainta, Taytay). Each of these transit projects tends to create a “30-minute city” effect – what used to be a 2-hour drive may become a half-hour train ride, massively expanding the feasible commuter belt. Consequently, developers are pursuing transit-oriented developments (TODs) – residential or mixed-use projects within walking distance of stations. For example, DMCI Homes has multiple condos (Crestmont, Infina Towers, etc.) positioned near MRT-3 or future subway/MRT-7 stations, precisely to leverage this demand for convenience bworldonline.com bworldonline.com. The real estate mantra is shifting to “near a station = higher price” in Greater Manila.
Expressways and Bridges: Several new highways are improving access around the metro. The Skyway Stage 3 (elevated expressway linking SLEX and NLEX) opened in 2021 and has already eased north-south travel; it also boosted property values in areas near its ramps (e.g. Sta. Mesa, Manila saw renewed developer interest). The NLEX-SLEX Connector Road (elevated toll road through Manila) is another that completed recently, enhancing logistics. Ongoing projects include SLEX TR4 (to Quezon province), Cavite–Laguna Expressway (CALAX), Central Luzon Link Exwy (CLLEX), etc., which mainly benefit fringe provinces by cutting travel time to Metro Manila bworldonline.com bworldonline.com. One especially ambitious project is the Bataan–Cavite Interlink Bridge – a 32-km bridge across Manila Bay that would connect the Cavite side (south of Manila) to Bataan (west of Manila) directly. If built (~$3.8B project, possibly by early 2030s), it would collapse a 5-hour drive into 30 minutes gulfnews.com. That could spur development on both ends: imagine Bataan’s beaches or industrial zones becoming essentially a short hop from Metro Manila. While still in planning, it reflects the transformative potential of infrastructure. As Aboitiz Land noted, “connectivity through projects like Skyway 3, TR4, TPLEX, Connector, etc. has significantly boosted demand and property values” in their integrated estates bworldonline.com bworldonline.com. They reported triple-digit percentage increases in residential lot values in some of their estates after new highways improved access bworldonline.com.
Other Notables: The government’s infrastructure pipeline under the “Build, Better, More” agenda includes 186 flagship projects totaling ₱9.6 trillion (~$163B) of investment bworldonline.com. Aside from transport, this covers new dams, airports, seaports, and even telecommunications improvements. For instance, the ongoing NAIA Rehabilitation and expansion is crucial in the interim before new airports come online bworldonline.com. In Clark and Cebu, new terminal improvements are driving tourism and BPO growth. Manila’s port area improvements could affect nearby commercial land use. Infrastructure also has a social dimension: big flood control projects and disaster resiliency infrastructure are planned, which, when completed, might expand the habitable, safe areas for real estate (for example, mitigating flooding in certain low-lying parts of Metro Manila could unlock value there).

Impact Summary: Across the board, these projects are creating new opportunities for real estate development. Properties near infrastructure enjoy a “connectivity premium” – Colliers notes developers can command higher prices and rents for projects near new infra because buyers/tenants value the convenience bworldonline.com. Historically, house/lot prices in regions with infrastructure jumps (like new expressways) rose 3.6–7.2% annually, and lot values 6.7–15.4% annually, in 2016–2023 bworldonline.com bworldonline.com. We can expect a similar or greater boost going forward in areas around the subway stations, new airport sites, and rail hubs. For investors, “follow the infrastructure” is a wise strategy – investing in real estate ahead of completion can yield significant appreciation. However, one must also be mindful of execution risks (delays, policy changes like the Manila Bay reclamation suspension). Overall, infrastructure is the powerful “turbocharger” for sustainable urban growth bworldonline.com, and in Manila’s case it is paving the way (sometimes literally) for the metro’s expansion and evolution over the next decade.

Government Policies and Regulatory Landscape

Government policies play a significant role in Manila’s real estate market, affecting demand, supply, and investment attractiveness. As of 2025, several policy and regulatory developments are influencing the property sector:

POGO Ban and Its Fallout: One of the most impactful recent moves was the Philippine government’s decision to ban Philippine Offshore Gaming Operators (POGOs). By end-2024, President Marcos Jr. ordered all POGOs (online casinos largely catering to Chinese clientele) to wind down, due to links to illicit activities bworldonline.com bworldonline.com. This policy has had sweeping effects on real estate: during the late 2010s, POGOs were a huge source of demand for office space and condos (housing thousands of foreign workers). The ban meant 1 million sqm of office space and countless condo units were suddenly vacated bworldonline.com. Areas like the Bay Area (Entertainment City) and Alabang, which had many POGO offices or dormitories, were badly hit with higher vacancies bworldonline.com bworldonline.com. While the ban addresses social concerns, its short-term effect is a supply overhang. Policymakers are not reversing this stance, so the market must adjust by finding new tenants (like BPOs or locals) to fill the gap. The government did offer tax perks to legit BPO companies and eased some WFH rules to encourage offices to re-occupy space, indirectly mitigating the POGO loss.
Taxation Changes: The government has floated changes in property-related taxes. Notably, a proposal to increase the Capital Gains Tax (CGT) on property is under discussion. Colliers has warned that a higher CGT (currently 6% on real estate sales) could “impede real estate transactions” bworldonline.com. If sellers factor a higher tax into prices, it could raise selling prices and slow down deal flow, hurting liquidity in the secondary market bworldonline.com. As of 2025, no new tax has been implemented yet, but investors are watching this space. On the positive side, Real Estate Investment Trust (REIT) regulations were liberalized in 2020 (lowering the public float requirement and tax friction), and since then around a dozen REITs have listed in the Philippines. This has been a boon, unlocking capital for developers and offering investors liquid access to property income. The government supports REITs as a way to spur construction (developers reinvest proceeds into new projects) and broaden investment opportunities. Additionally, local governments in Metro Manila periodically update land value zonal assessments and property tax rates, which can affect holding costs – in 2023 some cities adjusted these after years of no change, theoretically raising property taxes, but often implementation is phased.
Foreign Ownership Rules: The fundamental rule remains that foreigners cannot own land in the Philippines (except via long-term lease or if inherited). However, foreigners can own condominium units up to 40% of a project. There’s ongoing discussion in the legislature about possibly easing foreign ownership restrictions to attract more investment – for instance, raising the condo foreign ownership cap, or allowing land ownership under certain conditions (e.g., if part of a big investment). So far no constitutional change has been made, but it’s something to watch for beyond 2025. In practice, the current rules mean Manila’s condo market is open to foreign buyers (and indeed many Chinese, Korean, and Western investors have bought condos), but foreign ownership of large land (like for development) requires partnering with Filipino entities. The condo 40% rule is well known and developers usually sell out that quota fast to foreign buyers in desirable projects.
Housing and Zoning Initiatives: The national administration has a flagship social housing program (“Pambansang Pabahay”) aiming to build 1 million affordable housing units a year to address the massive housing backlog. This is extremely ambitious and still ramping up. If it gains traction, it could create public-private partnerships for mass housing (likely mid-rise buildings in-city or economic housing in city outskirts). For developers in Manila, participating could mean incentives (tax breaks, fast-track permits) in exchange for including affordable units. Zoning-wise, Metro Manila cities are encouraging mixed-use development and urban renewal. For example, Manila City has been keen on redeveloping old areas (the “Escolta revival” and vertical housing for informal settlers), while Quezon City has incentive zoning for green buildings, etc. There’s also a move to relocate some government facilities out of central Manila (to New Clark City or other provinces) – if that happens over time, it could free up prime land in the city for redevelopment (though on 2025 horizon this is minimal).
Regulatory Oversight & Permitting: The government has been pushing “ease of doing business” reforms which affect real estate in terms of quicker permitting, digitization of land titling, etc. One example is the integration of the Anti-Red Tape Authority (ARTA) guidelines in construction permitting, which could shorten development lead times. Environmental regulations have also come to the fore: as noted, in August 2023 the DENR suspended 22 reclamation projects in Manila Bay pending environmental impact reviews reuters.com philstar.com. This demonstrates the government’s willingness to intervene on environmental grounds. Developers involved in those reclamations (some of which are massive, like Horizon Manila) have had to pause, injecting uncertainty in project timelines. On the flip side, projects that clear the review or were exempt (one project was allowed to continue bworldonline.com) might then proceed with stronger environmental compliance. For investors, this underscores the importance of sustainability and compliance – future developments will likely need to meet higher environmental standards.
Incentives for Decentralization: Agencies like PEZA (Philippine Economic Zone Authority) offer tax incentives for businesses setting up in certain zones, and many developers align their projects to qualify (for instance, IT parks/buildings that get PEZA accreditation so their BPO tenants enjoy tax perks). The government in 2025 is encouraging investment outside Metro Manila by expanding these incentives to provincial sites – many developers are responding by planning BPO office towers in second-tier cities to attract PEZA-registered firms abs-cbn.com. This policy direction could moderate the demand in Metro Manila (some office demand going to, say, Iloilo or Clark instead due to incentives), but Metro Manila remains the primary hub so far.
Others: The Rent Control Act sets limits on rent increases for residential units under a certain rent level (₱5,000 or ₱10,000 per month, depending on city class). It’s been renewed periodically. In practice, most mid- to high-end rentals in Manila exceed those thresholds, so rent control affects mostly the low-income segment. There have been calls to update the law (the thresholds are low), but no significant change as of 2025. Also, the government is exploring sustainable building incentives – e.g. some cities reduce property taxes for certified green buildings. As sustainability becomes a focus, developers who incorporate green tech might see faster approvals or marketing advantages. Lastly, geopolitical and investment regulations (like the CREATE law which lowered corporate income taxes and rationalized incentives) indirectly support real estate by attracting more investment into sectors that lease offices or need warehouses.

In essence, the regulatory landscape in 2025 Manila is a mix of pro-growth measures and corrective actions. The government is walking a fine line: encouraging investment and construction (via infrastructure spending, REITs, incentives) while also addressing past excesses or risks (banning problematic industries, scrutinizing environmental impacts). For real estate stakeholders, staying attuned to these policy shifts is crucial. Thus far, the outlook is generally positive – the Philippines is seen as having a stable, albeit evolving, regulatory environment for real estate. But one should factor in possible changes in taxes or rules that could emerge as the government balances revenue needs with market health.

Real Estate Development Pipeline and Notable Projects

Despite recent challenges, Manila’s skyline continues to evolve, with a significant development pipeline in both the residential and commercial arenas. Developers are adapting to new trends (more open spaces, integrated townships, sustainable designs) and launching projects that will shape the market in the next few years. Here are highlights of the pipeline and some notable projects:

Residential Pipeline: As mentioned, new condo launches have slowed, but not stopped. Major players like Ayala Land, SM Development Corp (SMDC), Megaworld, Robinsons, and Federal Land still have projects underway:

Vertical Villages: Megaworld announced plans for 8 new residential projects in 2025 business.inquirer.net, many of which are in township developments. For instance, in Arcovia City (Pasig) and Capital Town (Pampanga), new condos aim to capture the shift to live-work-play environments outside the traditional CBDs. SMDC continues to build mid-market condos near transport nodes (e.g. along the future subway or MRT lines). Ayala Land is focusing on high-end offerings in Makati/BGC and more affordable mid-rise communities in the suburbs.
Transit-Oriented Condos: DMCI Homes has several projects specifically near upcoming train stations – e.g., The Crestmont (Quezon City) near MRT-3 Quezon Ave, Erin Heights near the MRT-7 route, etc. bworldonline.com. These will complete around 2025–2026 to align with the operational timeline of those trains.
Luxury and Mixed-Use Towers: In the luxury segment, one standout is the Park Central Towers in Makati by Ayala Land Premier (a high-end condo which will complete in 2025–26). Federal Land’s Grand Hyatt Manila Residences (BGC) has a second tower underway, complementing one of the tallest buildings in the country (the Grand Hyatt hotel). We also see more mixed-use high-rises: for example, The Estate Makati (an ultra-luxury residential tower designed by Foster+Partners) topping off, and Icone Tower in Ortigas (a proposed iconic skyscraper with office, hotel components). Such marquee projects cater to the top 1% and international investors.
Housing Communities: On the horizontal side, developers are launching master-planned communities around Metro fringes. For instance, Vermosa (Cavite) by Ayala, Evia and Ponticelli (Las Piñas/Cavite) by Vista Land are expanding with more house-and-lot phases. Nuvali (Laguna), while outside Manila, continues to grow and attract families willing to commute. These large communities often have years’ worth of land inventory to build out, representing pipeline supply in the mid-term.
Unsold Inventory Focus: A lot of the “pipeline” is actually inventory of already-launched but unsold units. Colliers noted about 75,300 unsold condominium units (pre-selling + ready) in Metro Manila as of Q3 2024 business.inquirer.net, which would take ~5.8 years to absorb at current sales pace business.inquirer.net. Many developers are thus prioritizing selling their existing projects (some even delaying construction until sales pick up). This means the skyline might see a slight lull in new cranes after the current projects finish, until the market digests the backlog. Nonetheless, completely new launches will likely pick up post-2025 once inventory normalizes.

Commercial Pipeline: Manila’s office and commercial supply is also increasing, though there’s caution given high vacancies:

Office Completions: Approximately 612,000 sqm of new office space is slated for delivery in 2025 alone bworldonline.com. Key upcoming office buildings include Jollibee Tower (Ortigas) which launched recently, DoubleDragon Meridian Park phase (Bay Area), SM Mega Tower (Mandaluyong), and various BGC office towers (e.g. One Filinvest, Park Triangle Tower). A chunk of the 2025 supply is concentrated in Quezon City, the Bay Area, and Makati fringe bworldonline.com, where large projects are completing. Notably, pre-leasing is making a comeback – about 10% of 2025’s new offices were already pre-leased as of Q1, reflecting some optimism bworldonline.com. Beyond 2025, 2026–27 will actually see fewer new offices (many developers held off new builds), so after this wave, the pipeline thins out, which should help the market recover.
Retail & Mixed-Use: Several new malls and retail centers are on the way as part of mixed developments. For instance, Gateway Mall 2 in Araneta City, QC opened in late 2023, adding more retail in that area, and Mitsukoshi Mall in BGC (a Japanese-themed mall) opened 2022 – these now mature in 2025. Upcoming is Ayala’s One Ayala Mall (Makati) and SM’s massive Mall of Asia expansion and new mall in Pasay within the SM Bay City reclamation. Township retail (smaller lifestyle malls within townships like Circuit Makati, Capitol Commons, etc.) continues to expand to serve new residents.
Hotels and Resorts: By 2025–26, a number of new hotels will come online in Manila: e.g., Westin Sonata in Ortigas, Hotel Okura Manila (opened 2022 in Resorts World Manila) fully ramping up, Solaire North in QC (an extension of Solaire brand from Entertainment City), and nuances of existing brands expanding. With tourism up, developers like Megaworld are building more hotels in Boracay, Cebu, Palawan, etc., but within Manila, one interesting project is the Admiral Hotel Manila Bay (a boutique luxury hotel on Roxas Blvd opened 2022). Also, casinos continue development – Solaire and Okada expanding, and a new NayonLanding project from a Hong Kong group is a possibility if it proceeds.
Industrial/Logistics: While not as visible, the pipeline of logistics warehouses around Manila (Calamba, Cavite, Bulacan corridors) is significant, often through joint ventures with foreign industrial park developers. As e-commerce grows, expect more last-mile distribution centers to pop up around the metro (though large logistics parks are typically just outside Metro limits due to land availability).
Notable Future Projects: A few city-changing projects deserve mention:
- Makati City Subway: An intra-city subway in Makati (10 stations) was started by a private consortium. It aims to connect key points in Makati (Makati City Hall, Century City, Ayala Ave, etc.) and interconnect with the Metro Manila Subway. Target completion is 2028. If completed, it would further enhance Makati’s accessibility and likely spawn new developments around its stations.
- Clark Green City and CALAX (outside Manila): Government’s push to develop New Clark City (NCC) in Tarlac as a new metropolis continues. By 2025 some government offices and sports facilities are operational there. While NCC is 100 km away, its success could relieve Metro Manila in the long term. Closer to home, Cavite–Laguna Expressway (CALAX) finishing by 2024 will integrate the growth of Cavite/Laguna areas with Manila – boosting projects like Ayala’s Vermosa and Silang developments.
- Redevelopment of Manila Port Area & East City: There are plans (conceptual) to redevelop the Manila Port/Shipyards area and other underutilized government lands (like the current prisons in Muntinlupa). While these are beyond 2025 perhaps, they indicate that Manila’s urban renewal could yield big land parcels for future projects.
- Sustainability Projects: A number of developments in pipeline tout green features: e.g., Menarco Tower (BGC) already is WELL-certified; upcoming NAIA rehab will supposedly include a property development component with sustainable design. Expect more solar-powered buildings, water recycling, etc., as per both market demand and forthcoming building code updates.

In terms of numbers, if we sum up: Residential – about 8,000+ new condo units in 2025, then fewer in 2026–27 bworldonline.com, plus continuing addition of a few thousand house-lot units in fringe areas annually. Office – ~0.6 million sqm 2025, then possibly <0.3M each in 2026 and 2027. Retail – MOA expansion (~200k sqm) and several township malls maybe ~100k sqm combined. Hotels – thousands of new keys by 2025–27 including integrated resorts expansions.

The development pipeline thus remains considerable, but developers are phasing projects prudently. Some plans might be deferred if market conditions warrant (to avoid exacerbating oversupply). On the other hand, other projects could accelerate if demand surprises on the upside (e.g., if the economy grows faster or if foreign investors rush back). Importantly, many of Manila’s future landmarks – be it a new reclaimed city, a subway-connected district, or a smart green township – are in the works now. By 2028, the skyline and metro area will likely look very different, with new clusters of skyscrapers and expanded city boundaries, all stemming from the pipeline being laid today.

Investment Opportunities and Risks

Manila’s real estate landscape in 2025 presents a mix of compelling opportunities for investors as well as notable risks that must be navigated. A strategic approach can leverage the former while mitigating the latter:

Investment Opportunities

Post-Pandemic Buyer’s Market: The current softness in certain segments (like condos and offices) offers a window of opportunity to buy at cycle lows. Investors can acquire condo units in prime locations at prices that have barely risen since 2019, but with the expectation of future capital appreciation as the market recovers. With developers offering promos and negotiable terms to clear inventory, both end-users and investors have higher bargaining power now than during the 2010s boom.
High Rental Yields: As highlighted, gross rental yields of ~5–8% can be achieved on Metro Manila residential properties globalpropertyguide.com globalpropertyguide.com. These yields are attractive, especially in a global context where many city properties yield under 4%. For cash-flow oriented investors, Manila’s rental market – particularly mid-market condos and student housing or worker dormitories – can generate solid income. Additionally, the new REITs in the Philippines offer yields in the 6%-range and are a more liquid way to invest in real estate income streams (there are REITs focused on office buildings, malls, even soon warehouses).
Emerging Locations and Undervalued Land: Infrastructure is creating new “gold mines” (figuratively) in real estate. Savvy investors are eyeing land in areas like Bulacan (near NMIA airport), north QC (near subway/MRT-7 stations), Calamba/Laguna (end of NSCR), and Cavite (near new roads and Sangley). Historically, investing in land or lots on the fringes ahead of infrastructure completion yields big payoffs as values jump once connectivity is in place. For example, Aboitiz Land reported 146% to 181% value appreciation in a few years for lots in their estates once expressways improved access bworldonline.com. There is a similar opportunity now with the new projects. Within Metro Manila, older districts poised for revitalization (e.g., parts of downtown Manila like Escolta/Binondo, or Pasig’s riverside) also offer upside if urban renewal efforts gain traction.
Growth of Secondary Cities: Investors can diversify beyond Manila to fast-growing secondary cities that are benefiting from decentralization. Cebu, Davao, Iloilo, Clark, Bacolod – these cities are seeing robust real estate activity and often have less volatile markets. For instance, rental demand in Cebu for BPO offices is high, and residential prices there outpaced Manila recently. Many listed developers have projects in these cities, so investing in those can capture growth where competition is lower than Manila. However, Manila remains the most liquid market, so the key is balancing core Manila assets with high-growth provincial assets.
Demographics and Urbanization: The Philippines has one of the youngest and fastest-growing populations in Asia. Metro Manila’s population (circa 13 million in the city proper, 20+ million including suburbs) grows each year, fueling housing demand. The trend of urban migration continues as people seek jobs in the capital. This underpins long-term housing needs. So while there may be short-term oversupply in condos, the structural demand – especially for affordable housing – is enormous (the national housing backlog is over 6 million units). This implies opportunities in economic housing, mid-market condos, co-living spaces, and rental housing that cater to the workforce.
Infrastructure-Linked Projects: Investment in projects that are integrated with infrastructure (like transit-oriented developments, or developments in new reclamation cities with planned ferry/rail links) could yield outsized returns. Early investors in places like Vertis North (QC) or ARCA South have already seen values rise as these become the next CBDs. Future ones include stations along the subway (e.g., properties near Anonas or Katipunan, which are student areas but will become more connected) or townships near new airports. Additionally, the government’s plan to spend 5–6% of GDP on infrastructure annually bworldonline.com means this engine of growth will continue, consistently opening new frontiers for real estate.
Diversification via Market Segments: The Manila market offers various segments – residential, office, retail, industrial, hospitality. Different segments shine at different times. Right now, for example, logistics/industrial properties are in demand (with e-commerce growth, warehouses are full and yielding well). Hotels are recovering; investing in a condotel or apartelle could be lucrative as tourist arrivals surge. Offices are depressed, but picking up a office condo or floor at a low price now could be a classic contrarian play, paying off in a few years when the office cycle turns up. The diversity allows investors to rotate and seize opportunities in whichever segment has the best outlook or value at a given time.

Key Risks and Challenges

Oversupply in Certain Segments: The most immediate risk is the oversupply of condos and offices. With residential vacancy at ~25% bworldonline.com and office vacancy ~20% bworldonline.com, absorption could take years. If demand doesn’t rise as anticipated, prices and rents might stay flat or even dip further. An investor who buys a condo now in an oversupplied area might face difficulty finding tenants or price appreciation for a while. Carrying costs (association dues, maintenance, financing costs) will eat into returns if a unit stays vacant. Thus, asset selection is critical – choosing the right project and location to avoid being stuck in the oversupply drag.
Interest Rate and Financing Risk: The macroeconomic environment has shifted to higher interest rates since 2022 (as the central bank raised rates to combat inflation). Mortgage rates in the Philippines have risen, which can dampen buyer affordability. If interest rates remain high or rise further, real estate activity could slow, and investors relying on leverage will face higher costs. On the flip side, Colliers noted a possible tailwind of easing mortgage rates if inflation stays low business.inquirer.net – but that’s uncertain. Investors should be prepared for rate volatility. Currency risk is another factor for foreign investors – the peso’s movement can impact returns when converting back to their currency.
Economic and Political Risks: The health of real estate is tied to the broader economy. While the Philippines has been resilient, any downturn (global recession, major drop in OFW remittances, etc.) could hurt property demand. Politically, while the environment is currently stable, any abrupt policy change or political instability can spook investors. The 2022 election brought a new administration; so far it has been market-friendly, but mid-term course changes are possible. Real estate is a long-term play, so one must consider the continuity of policies, regulatory regime, and rule of law. The Philippine political landscape can be unpredictable, which is a risk to monitor.
Regulatory Changes and Compliance: Regulations can introduce risk – e.g., the proposed higher capital gains tax could reduce liquidity bworldonline.com. The Manila Bay reclamation suspension is a reminder that government actions can halt or delay projects, impacting investors involved there. Environmental and building code regulations are tightening (for good reason), but could add costs for developers and property owners to retrofit or comply. Rent control, while not currently biting the mid/high-end market, could be expanded to higher rent brackets under political pressure, which would limit rental upside. Finally, bureaucracy and titling issues remain – property transactions in the Philippines can sometimes be marred by title inconsistencies or slow processes, posing legal risks.
Natural Disaster Risk: Manila is exposed to natural hazards – typhoons, flooding, and earthquakes. A major disaster can significantly impact real estate. For instance, strong earthquakes could test the structural integrity of high-rises (developers adhere to building codes, but risk is there). Severe flooding can lower the value of properties in flood-prone zones (some parts of Manila are low-lying and flood regularly). Insurance can mitigate some financial loss, but the event risk might deter tenant occupancy or cause physical damage. Investors should consider the geophysical risk profile of locations (e.g., reclamation areas might have higher liquefaction risk in quakes, riverside areas flood risk, etc.) and ensure proper insurance coverage.
Market Saturation and Competition: Manila’s market has many players. For rental properties, the sheer volume of similar condo units creates stiff competition for tenants. An individual investor’s unit is competing with thousands of others on Airbnb or listings, potentially driving rents down. For offices, companies have many choices, putting pressure on landlords to offer concessions. There is also the risk of new supply resurging too fast if developers become over-optimistic – if the market shows signs of recovery, a wave of new projects might launch (especially after 2025 given developers’ landbanks), which could prolong a cycle of oversupply. Thus, the timing of supply-demand rebalancing is a delicate factor.

Despite these risks, many are manageable with due diligence and strategy. Diversification (across locations and segments), choosing reputable developers, focusing on properties with unique value (e.g., near infrastructure or with limited direct competition), and maintaining financial flexibility (to hold through down cycles) are prudent approaches.

In conclusion, Manila’s real estate in 2025 is at an inflection point – offering perhaps the best buying opportunity in years, but requiring careful navigation of headwinds. For those who get it right, the rewards could be substantial: steady rental incomes in the mid-term and significant capital gains in the long run, as the metro gears up for what many see as a sustained growth trajectory fueled by its young population and improving infrastructure. The key is to capitalize on the opportunities – the “next big neighborhoods”, the soft pricing, the infrastructure boom – while diligently managing the risks inherent in a developing and dynamic market like Metro Manila.

Sources: Recent market analyses and reports from Colliers Philippines bworldonline.com bworldonline.com, industry expert insights via Inquirer business.inquirer.net business.inquirer.net and BusinessWorld bworldonline.com bworldonline.com, Bangko Sentral ng Pilipinas data on property prices business.inquirer.net business.inquirer.net, Global Property Guide for rental yields globalpropertyguide.com globalpropertyguide.com, and various news outlets covering infrastructure developments (Gulf News, BusinessWorld) gulfnews.com bworldonline.com. These provide a comprehensive, up-to-date view of Manila’s real estate landscape as of 2025.