The dream of owning a home in Metro Manila has always been a marker of financial stability. But with rising property prices and elevated interest rates, many prospective buyers are asking a familiar question: is it still worth buying a condo today?

Recent research suggests that the answer depends on how you look at it. While affordability remains a challenge, moderating property prices and stable rental yields are creating new entry points for long-term investors.

Understanding the Current Market

The Metro Manila residential market continues to gain traction. Primary condominium take-up recently reached a seven-quarter high, while new launches have slowed, bringing available inventory down to more manageable levels.

However, interest rates on housing loans remain elevated at around 7% to 8%, which affects short-term affordability. On the other hand, rental yields now range from 2.5% to 7.9%, depending on location and property type. This means that while owning a home through financing comes at a higher cost today, leasing it out can still provide a steady income stream that offsets part of those expenses.

A Case Study: The Makati Studio Unit

To illustrate how yields compare to financing costs, consider a 23-sqm studio unit in Makati priced at ₱7.6 million.

Here’s how the numbers play out:

Downpayment: 20% or ₱1.53 million
Loan Amount: ₱6.1 million
Loan Term: 15 years
Interest Rate: 8% per annum
Monthly Rent: ₱21,344 with a 3% annual escalation starting in Year 3 of the lease
Occupancy: 100%

Over the 15-year loan period, total interest payments would amount to roughly ₱4.4 million, while total rental income would reach ₱4.7 million—slightly exceeding interest costs by about ₱240,000.

This shows that the rental income generated over time can fully cover the interest portion of the loan, effectively allowing the property to “pay for itself” while the owner builds equity.

Why It Still Makes Sense for Long-Term Investors

While the upfront costs of property ownership remain high, real estate continues to be a long-term inflation hedge. Rent escalations and gradual price appreciation help investors recover financing costs over time.

Moreover, with the Bangko Sentral ng Pilipinas expected to continue its monetary easing cycle through 2026, lower borrowing costs could further improve affordability in the coming years. Buyers who enter the market now may be able to refinance at more favorable terms later on.

Balancing Cost, Yield, and Strategy

Buying a condo in Metro Manila today is less about timing the market and more about long-term positioning. Those who choose strategically located units, especially in established districts such as Makati, BGC, or Ortigas, are likely to benefit from stable rental demand, future price recovery, and potential refinancing opportunities.

While higher rates may discourage some buyers in the short term, investors with a 10- to 15-year horizon can still find meaningful value. The key lies in understanding cash flow, yield performance, and how financing can be optimized to sustain returns over time.

Thinking about investing in a condominium or building your property portfolio? Our Residential Sales and Leasing team can help you assess market opportunities, compare yields, and identify projects that fit your investment goals. Email inquire@leechiu.com to speak with our property specialists today.