Manila Developers Extend Payment Terms as Condo Inventory Hits Record High

Payment Windows Stretch to Five Years

Metro Manila's condominium market has entered unfamiliar territory. Ayala Land now offers payment terms extending to five years on select properties, a significant departure from standard two- or three-year schedules that dominated the market before the pandemic. The shift reflects a deliberate strategy to move aging inventory in a market carrying 82,900 unsold units as of the second quarter.

Mikhail Cruz, Ayala Land's chief operating officer, explained that terms vary by location, project age, and sales velocity. Properties with slower turnover and older stock receive the most generous financing, while faster-moving developments come with discounts for buyers willing to settle within shorter windows.

The company has reduced its residential inventory from PHP 214 billion in 2024 to PHP 110 billion by June, excluding paused projects. That represents a clearance of nearly half its unsold value over two years, achieved without launching a single new residential project during the first half of 2026.

A Deliberate Pause

Both Ayala Land and SM Prime have stopped introducing new Metro Manila residential supply. Ayala recorded PHP 22.3 billion in reservation sales during the second quarter, drawn entirely from existing inventory. Anna Margarita Dy, president and CEO of Ayala Land, described the performance as encouraging given the absence of new product to drive excitement.

The developer's inventory now sits at roughly 15 months of sales, an improvement from the 18-month level it maintained before the pandemic. Sales teams have concentrated on clearing stock rather than chasing headline volumes.

SM Prime holds approximately 29,000 unsold units, with 13 percent ready for occupancy. Cris Noel Torres, executive vice president at SM Prime, confirmed the company will not launch any new Metro Manila residential projects through the remainder of 2026. Management is taking what Torres called a "wait and see" posture on both core and premium developments.

Buyer Quality Over Volume

SM Prime's approach differs from Ayala's payment-term flexibility. The Sy-led developer has instead focused on improving the profile of its buyers. Torres noted that high-downpayment and spot-cash transactions have risen meaningfully year on year, a shift the company interprets as a signal of stronger buyer commitment and lower cancellation risk.

First-half reservation sales reached approximately PHP 25 billion, roughly flat compared to the prior year. The stability comes despite the absence of new product and a market environment that Leechiu Property Consultants describes as the best buyer's market in decades.

Demand Persists Amid Oversupply

Unsold inventory reached an all-time high in the second quarter, according to Leechiu, yet absorption has not collapsed. Buyers took up 7,255 units during the quarter, and residential demand grew six percent in the first half compared with the previous six months.

Ready-for-occupancy discounts have deepened to record levels, creating opportunities for buyers with flexibility on location and unit specifications. The market is no longer rewarding developers who flood supply pipelines but those who can match inventory to genuine demand.

The current environment marks a reversal from the pre-pandemic years, when developers competed on launch velocity and buyers faced compressed payment schedules. Now, the balance has shifted. Developers are competing on terms, discounts, and willingness to accommodate buyer timelines.

What Comes Next

Ayala Land's inventory reduction and SM Prime's cautious stance suggest both companies expect the current conditions to persist through at least the end of 2026. Neither has signaled plans to resume aggressive launches, and both are prioritizing cash flow from existing projects over market-share expansion.

For buyers, the window may remain open for some time. Developers with large inventories have limited incentive to tighten terms while unsold stock remains elevated. Those willing to move quickly on older inventory may find the deepest concessions, while buyers seeking newer projects can negotiate longer payment windows.

The shift also reflects a broader recalibration across Southeast Asian property markets, where post-pandemic demand has failed to absorb the supply pipelines built during the previous cycle. Manila's experience mirrors patterns seen in Bangkok and Jakarta, where developers have similarly paused launches and extended buyer incentives.

Whether the current buyer's market represents a temporary correction or a structural reset will depend on employment growth, overseas remittance trends, and interest-rate trajectories over the next 18 months. For now, the leverage belongs to those holding cash rather than those holding land.