POGO withdrawal syndrome

Realtors are starting to feel unease over the deepening “price corrections” in the property market.

Property prices had been on a consistent climb in the past years, with some condominium values doubling and tripling over the past two to three years. “But now the tide is turning,” according to a realtor.

The source said the downturn was mostly the result of the government’s clampdown on Philippine Offshore Gaming Operators (POGOs) that were pivotal in driving the real estate rental market, especially in urban centers.

The sudden vacuum has led to a domino effect on the demand for office spaces. There is now a glut of units with fewer buyers or renters, according to a jittery soul in the realty sector.

With a surplus of units and waning interest, the market is correcting itself.

In December 2023, Knight Frank’s Prime Global Cities Index showed a 21.2-percent year-on-year surge in prime residential prices in Metro Manila, a growth rate that surpassed major global hotspots such as Dubai and Shanghai.

In 2023, the average price of a luxury three-bedroom unit in Metro Manila’s central business districts reached P203,550 per square meter (sqm), according to Colliers International.

But vacancy rates in Metro Manila CBDs are rising rapidly. In Q3 2024, the overall vacancy rate in Metro Manila’s secondary market rose to 17.4 percent, from 17.2 percent in the previous quarter, as Chinese employees vacated their condominium units, particularly in the Bay Area.

This came after the government ordered a ban on POGOs.

“Vacancies in Metro Manila’s secondary residential market are likely to remain elevated until 2025 due to substantial new supply and as the impact of the POGO exodus kicks in,” according to the realtor.