May 7, 2026 l Manila Bulletin
Reports indicate a condominium glut of 74,000 to 75,300 unsold units, an inventory that could take 5.8 to 8.2 years for the market to absorb. A similar trend is emerging in residential housing, where “For Sale” and “For Rent” signs multiply with few takers in a softening market. Why did this happen? It appears the easy money once fueled by Philippine offshore gaming operations (POGOs) and corruption has dried up—at least for now.
The primary issue is that prices haven’t corrected enough to attract legitimate buyers. Compounding this, government-mandated zonal values used for tax purposes have outpaced reality, often exceeding actual market values. This inflates the friction cost of every transaction, further dragging down demand. One can only hope the government recognizes this folly and adjusts zonal values downward. Otherwise, these regulations risk pushing more Filipinos toward poverty by hobbling the middle class—the very engine of our economy.
For those who have spent years working and sacrificing to build a nest egg, is it time to plunge in? The quick answer: Not yet. Current political uncertainty, a slowing economy due to high fuel prices, and unresolved conflicts in the Middle East suggest that buyers could be walking into a trap.
Unlike equities or fixed-income investments, real estate lacks liquidity. Exiting a position is a long, drawn-out process burdened by capital gains tax—which is payable regardless of whether you actually make a profit—as well as documentary stamp taxes, brokerage fees, and documentation costs. Additionally, those inflated zonal values increase your carrying costs by serving as the basis for your annual property taxes.
Furthermore, consider the opportunity cost. While your capital sits in a money market placement, it earns interest and adds to your cash flow. Once you buy, that cash is gone. Even after the purchase, you still face renovation costs, association dues, and real property taxes. If you expect rental income to replace your previous interest earnings, you would be lucky to net even half of what you were making before.
When is the right time to buy? It depends on location, property type, funding costs, and personal circumstances. However, if we simplify the math based on a six-to-eight-year inventory overhang and a four percent interest rate on placements, property prices should arguably drop by 24 percent or more to be considered a safe bet.
There is no rush. We have not hit the bottom yet. I suggest waiting six months to a year before we see a true alignment of prices with reality. To those with a war chest of liquidity, it is a buyer’s market. Enjoy the moment and take your time. You may not catch the absolute bottom, but in six years, you will still be ahead.
***The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX. For comments, email gschua@ecopower.com.ph. Photo is from Pinterest.