Colliers Philippines is urging the government to raise the value-added tax (VAT) exemption ceiling for residential properties, arguing that targeted tax relief could improve affordability and help absorb Metro Manila’s growing inventory of unsold condominiums.
In its Q2 2026 Manila Survey Flash Report released Wednesday, the property consultancy identified 9,260 unsold ready-for-occupancy (RFO) condominium units priced between P3.601 million and P5 million. Quezon City accounted for the largest share, with 3,020 units, followed by Parañaque with 1,580 and Pasay with 1,410.
Colliers said raising the VAT exemption ceiling could ease buyers’ financial burden amid elevated interest and mortgage rates. The proposal comes as condominiums priced between P3.6 million and P7 million account for nearly half of Metro Manila’s total unsold RFO inventory, highlighting persistent challenges in the mid-income housing segment.
Developers have offered discounts, extended payment periods and rent-to-own arrangements to encourage purchases. However, buyer cancellations involving units priced between P3.6 million and P12 million increased again in the first half of 2026, particularly in projects nearing turnover. The trend suggests that promotional incentives alone may not sufficiently address affordability constraints and financing concerns.
Colliers’ survey found that 61% of respondents preferred extended and flexible payment terms, compared with 18% who favored zero spot down payment. The findings underscore the importance of financing structures that accommodate buyers’ cash flow and borrowing capacity.
Sustainability is also emerging as a consideration in purchasing decisions. Some 38% of respondents identified green features as a deciding factor, while 31% considered them essential, indicating that environmental performance may increasingly influence property preferences.
Colliers recommended that developers reassess financing schemes and strengthen public-private cooperation to address the imbalance between residential supply and demand. Raising the VAT exemption ceiling could provide additional support, but a sustained recovery will likely depend on broader improvements in affordability, financing access and buyer confidence.
