Philippine condo developers offer longer payment terms instead of price cuts as unsold inventory hits record
Philippine condominium developers are offering extended payment periods and financing incentives rather than cutting prices, as high mortgage rates and a record 82,900 unsold units in Metro Manila weigh on the residential market. Property consultants say developers fear that outright price cuts woul
Philippine property developers are offering longer payment terms and financing incentives instead of cutting condominium prices, as high mortgage rates and a record inventory of unsold units weigh on residential sales, property consultants said. Mortgage rates of 7.7% to 7.8% have made home purchases less affordable, prompting prospective buyers to delay purchases or seek more favourable financing deals.
“We do not necessarily see developers broadly adopting outright price reductions, particularly for projects that have already been selling for some time,” Dino Palanca, head of research at Savills Philippines, told BusinessWorld. “Instead, we are seeing pricing adjustments take other forms, such as extended in-house payment terms, for example, a 15% downpayment spread over 60 months or more, sometimes at zero interest.”
Developers are reluctant to reduce advertised prices because doing so could undermine property values and upset buyers who purchased similar units at higher prices. Colliers Philippines Research Director Joey Roi Bondoc said developers risk alienating existing buyers if they cut prices on unsold units within the same project. He cited a hypothetical case in which a buyer who paid P5 million for a condominium would be dissatisfied if an identical unit were subsequently offered for P4.5 million.
Metro Manila’s inventory of unsold condominium units reached a record 82,900 in the first half, equivalent to about 34 months of supply across 616 actively selling buildings, Leechiu Property Consultants data showed. Ready-for-occupancy inventory reached 37,000 units after 10,000 units were completed in the second quarter. Residential take-up hit 14,500 units in the first half, up 6% from a year earlier, while project launches increased 18% to 4,900 units.
Leechiu Property said developers were conserving capital, slowing expansion, and prioritising the sale of completed inventory over launching additional pre-selling projects. Demand has shifted toward economic and socialised housing priced at P2.5 million or less, reflecting stronger interest from buyers seeking homes for their own use rather than investment, Mr. Bondoc added.
The state-controlled Home Development Mutual Fund or Pag-IBIG Fund increased its housing loan ceiling to P10 million to expand financing options for mid-market homebuyers. The fund’s socialised housing loan releases more than doubled to P6.7 billion in the first half of 2026, supported by a promotional interest rate of 4.5%.
Leechiu Property Consultants Associate Director for Research Sharon Roset-Saclolo cautioned that the increase in residential take-up did not necessarily signal a sustained market recovery because unsold inventory remained elevated. “The slowdown is really the norm. We don’t see the strength in demand as a signal that the market is really strengthening. We’re not there yet because the level of supply remains very high,” she said.
