Oversupply Alert: Why Condo Developers Are Offering Huge Discounts and Flexible Payment Terms This 2025
As of early 2025, the Metro Manila condominium market is facing a major supply-demand imbalance, with approximately $2.6 billion worth of unsold units sitting in inventory. This surplus stems from multiple factors, including the economic aftershocks of the pandemic, rising interest rates, and shifting homebuyer preferences. In response, developers have pivoted to aggressive marketing and sales strategies to offload existing inventory and maintain cash flow.
The Rising Oversupply and Its Causes
Several factors have contributed to the growing oversupply of condominiums in Metro Manila:
1. Slow Market Absorption – The number of newly launched units has significantly declined in recent years, as developers shift focus to selling existing projects rather than introducing new ones. Reports indicate that Metro Manila saw a 50% drop in new condo launches in 2024, reflecting caution in the face of weak demand.
2. Higher Interest Rates – The Bangko Sentral ng Pilipinas (BSP) has maintained elevated interest rates to combat inflation, making housing loans more expensive. This has deterred many potential buyers, particularly those in the middle-income segment who rely on financing.
3. Work-from-Home Trends – Many companies have retained hybrid work setups, reducing the demand for city-center condos, which were once in high demand among office workers.
4. Inflation and Purchasing Power – With inflationary pressures affecting household incomes, many Filipinos have postponed big-ticket purchases like real estate, opting instead for renting or investing in more affordable housing options.
Discounting Strategies: A Major Shift in Pricing Tactics
To address the sluggish demand, developers have ramped up incentives, particularly for cash buyers. Traditionally, discounts ranged between 5% to 10%, but with the mounting inventory crisis, some developers now offer as much as 25% off for outright cash payments.
- Why the Shift? Cash transactions provide developers with immediate liquidity, reducing reliance on financing and allowing them to reinvest in new projects.
- Who Benefits? Investors and high-net-worth individuals who can afford bulk purchases stand to gain the most from these discounts, acquiring properties at significantly lower prices with higher potential resale value.
Flexible Financing and Other Incentives
Aside from discounts, developers are also adjusting financing terms to entice buyers. Some of the most common strategies include:
1. Extended Down Payment Terms — Pre-pandemic down payments were typically payable over 24 to 36 months. However, some developers now offer extended payment terms to make ownership more manageable. For instance, a rent-to-own condo in Manhattan Plaza, Cubao, offers a move-in down payment starting at ₱279,000, with 48 months to pay at 0% interest. Contact us to learn more.
2. Lower Reservation Fees — To make it easier for buyers to secure a unit with minimal upfront cost, some projects have reduced reservation fees. For example, SMDC Shore 3 Residences offers ready-for-occupancy units with no spot down payment and a reservation fee of ₱50,000. Contact us to learn more.
3. Zero Down Payment Option — Developers are introducing zero down payment schemes, allowing buyers to start paying only when the unit is turned over. The same SMDC Shore 3 Residences project offers no spot down payment, enabling buyers to move in without an immediate large cash outlay.
4. Rent-to-Own Schemes — Certain developers are offering lease-to-own options, where a portion of the rental payment is credited toward the unit’s final purchase price. DMCI Homes, for instance, has introduced a 36-month rental term with a 10% rent increase in the third year under its HomeReady™ rent-to-own program, allowing renters to experience the property before deciding to purchase. Contact us to learn more.
5. Fully Furnished Units & Free Upgrades — Some high-end developments are including furniture packages, appliance upgrades, or smart home features at no extra cost to make their offerings more attractive. While specific examples were not found in the provided sources, it is common practice among developers to offer such incentives to enhance the appeal of their units.
The Competitive Landscape: Developers Adjusting Their Strategies
With multiple developers competing for a limited pool of buyers, the race to offer the best deals has intensified. Major real estate firms, including Ayala Land, SM Development Corp. (SMDC), and Megaworld, have all launched aggressive promotional campaigns targeting both local and overseas Filipino buyers.
- Ayala Land Premier and Alveo — Ayala Land, through its upscale brands Ayala Land Premier and Alveo, has implemented flexible payment schemes to accommodate buyers. For instance, Alveo Land’s Verdea project in Silang, Cavite, offers a payment plan of 10% down payment, followed by 15% spread over 48 months at zero interest, with the remaining 75% due by October 2028. Contact us to learn more.
- SM Development Corporation (SMDC) — SMDC has launched the “Move In Now” campaign, providing substantial discounts and flexible payment terms to expedite occupancy. This promotion includes a 10% discount upon reservation for select ready-for-occupancy developments, the opportunity to move in for as low as a 5% down payment, and additional perks such as premium furniture items from Our Home.
- Megaworld — Megaworld has tailored its marketing strategies to Overseas Filipino Workers (OFWs) by offering flexible payment terms and exclusive discounts. For example, the 215 San Antonio Residence provides a rent-to-own scheme with a 5% down payment, 36 months to pay at 0% interest, and a reservation fee of PHP 60,000, making it accessible to OFWs seeking property investments in the Philippines. Contact us to learn more.
The Road Ahead: Will Discounts and Incentives Be Enough?
While these strategies may help developers sell off excess inventory in the short term, long-term recovery will depend on broader economic conditions, including interest rate adjustments and consumer confidence. If financing costs remain high and demand continues to stagnate, developers may have to explore even more innovative solutions, such as co-living models, fractional ownership, or partnerships with institutional investors to absorb unsold units.
For buyers and investors, 2025 presents a rare opportunity to acquire prime Metro Manila properties at significantly discounted prices. However, due diligence remains crucial—potential buyers should assess a property’s location, potential rental yield, and long-term appreciation prospects before making a purchase.
U-Property PH 
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