Authored by the expert who managed and guided the team behind the Philippines Property Pack
Everything you need to know before buying real estate is included in our The Philippines Property Pack
Davao City's rental market presents attractive opportunities with average monthly rents of PHP 18,500 for residential properties as of September 2025. The city offers competitive yields of 4.5-5.0% with low vacancy rates of just 8%, making it one of the most stable rental markets in the Philippines.
If you want to go deeper, you can check our pack of documents related to the real estate market in the Philippines, based on reliable facts and data, not opinions or rumors.
Davao City's rental market shows strong fundamentals with studio condos renting for PHP 10,000-20,000 monthly downtown, while family houses command PHP 35,000-80,000 in premium areas.
The city maintains excellent occupancy rates at 92% and offers rental yields between 4.5-5.0% for long-term properties, with short-term Airbnb rentals achieving up to 10% yields in top-performing locations.
| Property Type | Average Monthly Rent | Typical Yield (%) |
|---|---|---|
| Studio Condo (Downtown) | PHP 15,000-20,000 | 4-6% |
| 2BR Condo (Lanang) | PHP 25,000-40,000 | 4-6% |
| Family House (Shrine Hills) | PHP 35,000-80,000 | 4-5% |
| Townhouse (Toril) | PHP 18,000-25,000 | 4-5% |
| 1BR Apartment (Outside Center) | PHP 10,000-13,000 | 4-6% |
| Short-term Rental (Airbnb) | PHP 27,500 average | 8-10% |
| City Average (All Types) | PHP 18,500 | 4.5-5.0% |
What are the average rental prices across different property types in Davao City?
As of September 2025, Davao City's residential rental market shows a citywide average of PHP 18,500 per month across all property types.
Studio and one-bedroom condos typically range from PHP 10,000 to PHP 20,000 monthly in downtown areas, while units outside the city center command PHP 7,000 to PHP 14,000. The median list price per square meter for condos sits at PHP 141,089, making them accessible for most rental budgets.
Houses present a broader price spectrum, with the median rent reaching PHP 53,294 monthly for larger homes. Affordable 2-3 bedroom units in subdivisions average PHP 15,000 to PHP 25,000 monthly, while fully furnished homes in exclusive areas can command anywhere from PHP 35,000 up to PHP 120,000 or more per month.
Townhouses show significant variation depending on size and location, ranging from PHP 18,000 to PHP 65,000 monthly for typical units, with luxury versions spanning 100-150 square meters reaching up to PHP 180,000 monthly.
Apartments offer the most budget-friendly options, with 1-bedroom units in the city center averaging PHP 18,333 monthly, while similar units outside the center cost PHP 10,500. Three-bedroom apartments in central locations average PHP 45,750 monthly, dropping to PHP 20,750 outside the center.
How do rental prices vary between the main neighborhoods and districts of the city?
Lanang stands out as the premium district with the fastest price appreciation and highest rental rates due to its proximity to major shopping malls and new infrastructure developments.
Matina, Ecoland, and Shrine Hills experience high demand for both condos and subdivision properties, particularly benefiting from their proximity to universities and commercial centers. These areas command premium rents due to their established infrastructure and accessibility.
Toril and Tugbok represent the urban expansion zones offering more affordable rental options while experiencing significant price growth. These emerging areas provide excellent value for money as the city continues to develop outward.
Downtown areas maintain consistent demand with rental prices reflecting their central location and access to business districts, while outlying neighborhoods offer budget-friendly alternatives without sacrificing too much convenience.
What is the average rent per square meter depending on the size and surface of the property?
The citywide median monthly rent per square meter in Davao City is approximately PHP 963 as of September 2025.
This rate varies significantly based on property type and location, with condos generally commanding higher per-square-meter rates due to their amenities and prime locations. Houses typically offer better value per square meter, especially in subdivision developments.
Sale prices average PHP 45,600 per square meter for houses and PHP 141,089 per square meter for condos, which directly influences rental rate calculations. The rental yield typically ranges from 4% to 6% annually, making the per-square-meter rental rates competitive with other major Philippine cities.
Larger properties often show better value per square meter for tenants, while smaller units may command premium rates due to high demand from young professionals and students.
What does the total cost look like when you add in fees, maintenance charges, and taxes?
Beyond base rent, tenants and landlords face several additional costs that impact the total rental expense in Davao City.
Condominium maintenance fees typically range from PHP 1,000 to PHP 3,000 monthly, depending on the building's amenities and services provided. These fees usually cover common area maintenance, security, and basic utilities for shared spaces.
Real property tax in Davao City stands at 1.5% of the property's assessed value annually, which property owners must factor into their rental calculations. This tax burden is typically reflected in rental pricing rather than passed directly to tenants.
Utility costs average around PHP 3,500 monthly for typical residential units, covering electricity, water, and internet services. Gated subdivisions may include additional community fees that vary by development.
Rental agreements often specify whether utilities are included or separate, making it crucial for both parties to clarify these arrangements upfront to avoid surprises.
Don't lose money on your property in Davao City
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
How do mortgage costs compare to rental income if I finance a property here?
Financing a property in Davao City for rental investment shows promising returns when comparing mortgage payments to rental income potential.
An average monthly mortgage payment for a small condo valued around PHP 2 million over a 20-year term with 6-8% interest ranges from PHP 16,000 to PHP 20,000 monthly. This calculation assumes a typical down payment and current Philippine lending rates.
Rental income from similar properties typically generates PHP 15,000 to PHP 18,500 monthly, creating a relatively balanced cash flow scenario. Larger properties and premium locations can generate significantly higher rental income that comfortably covers mortgage payments.
Property yields in Davao City range from 4% to 6% annually for long-term rentals, making financed investments viable when considering appreciation potential alongside rental income. The low vacancy rate of 8% citywide provides confidence in consistent rental income streams.
It's something we develop in our Philippines property pack.
What are some concrete rental price examples for condos, houses, townhouses, and apartments?
| Property Type & Location | Size | Monthly Rent Range |
|---|---|---|
| Studio Condo, Downtown | 24m² | PHP 15,000-20,000 |
| 2BR Condo, Lanang | 40-50m² | PHP 25,000-40,000 |
| Family House, Shrine Hills | 90-150m² | PHP 35,000-80,000 |
| Townhouse, Toril | 45m² | PHP 18,000-25,000 |
| 1BR Apartment, Outside Center | 35m² | PHP 10,000-13,000 |
| 3BR House, Matina | 120m² | PHP 30,000-50,000 |
| Luxury Townhouse, Ecoland | 100-150m² | PHP 65,000-180,000 |
What's the difference in returns if I rent out a property short term versus long term?
Short-term rental strategies through platforms like Airbnb generate average annual revenue of PHP 330,000, equivalent to approximately PHP 27,500 monthly in Davao City.
Airbnb properties maintain around 45% occupancy rates with peak performers achieving yields up to 10% annually. These higher returns come with increased management requirements and potential seasonal fluctuations in tourist demand.
Long-term rentals provide stable yields ranging from 4% to 6% annually with significantly lower vacancy risks. The 92% citywide occupancy rate demonstrates strong demand from professionals and families seeking stable housing solutions.
Short-term rentals perform best in tourist-friendly districts but require active management, professional cleaning services, and compliance with local regulations. Long-term rentals offer predictable income streams preferred by investors seeking passive income with minimal day-to-day involvement.
The choice between strategies depends on your investment goals, available time for management, and risk tolerance for income variability.
Who are the typical renters in Davao City, and what profiles dominate the market?
Davao City's rental market attracts a diverse mix of tenants, with local professionals forming the largest segment of demand.
Business Process Outsourcing (BPO) employees, government workers, and business professionals represent the core renter demographic, typically seeking 2-3 bedroom units for families or quality studio apartments for single professionals.
University students create consistent demand for affordable housing options, particularly in areas near educational institutions like the University of the Philippines Mindanao and Ateneo de Davao University.
Returning overseas Filipino workers (OFWs) and expatriates contribute to demand for higher-end properties, often seeking furnished units in secure developments with modern amenities.
Young urban families dominate the market for subdivision houses and larger apartments, driving demand in established residential areas with good schools and shopping access.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Philippines versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What do the current vacancy rates look like across different property types and areas?
Davao City maintains one of the lowest vacancy rates among major Philippine cities at just 8% as of 2025, translating to a healthy 92% occupancy rate across all residential property types.
This exceptionally low vacancy rate contrasts sharply with Metro Manila's central business districts, which experienced approximately 24% vacancy rates during the same period. The stability reflects strong local economic fundamentals and growing population approaching 2 million residents.
Condominiums in prime locations like Lanang and downtown areas experience the lowest vacancy rates due to high demand from professionals and students. Subdivision houses maintain consistent occupancy driven by family housing needs.
The low vacancy environment benefits property investors through reduced income uncertainty and stronger negotiating positions for lease terms and rental increases.
What are the average rental yields today, and which property types perform best?
Davao City's rental market delivers competitive yields ranging from 4.5% to 5.0% for residential properties as of September 2025.
Condominiums achieve yields between 4% and 6% annually, with newer developments in prime locations often reaching the higher end of this range. Houses typically generate yields between 4% and 5%, reflecting their larger capital requirements relative to rental income.
Short-term rental properties through Airbnb occasionally achieve yields between 8% and 10% for top-performing listings, though these returns require active management and face higher operational costs.
Mid-market apartments near business districts consistently perform well, offering stable returns with strong tenant demand. The combination of low vacancy rates and steady rental growth makes most property types viable investment options.
Best-performing investments typically target properties serving the growing professional class in established neighborhoods with good infrastructure and amenities.
How have rents and yields changed compared to five years ago, one year ago, and what's the forecast for one year, five years, and ten years ahead?
| Time Period | Average Monthly Rent | Yield Range (%) | Market Trend |
|---|---|---|---|
| 2020 (5 years ago) | PHP 15,000 | 4.2% | Steady growth |
| 2024 (1 year ago) | PHP 18,500 | 4.5-5.0% | 3% year-over-year increase |
| 2025 (Current) | PHP 19,055 | 4.5-5.3% | 2-3% growth expected |
| 2027 (2-year forecast) | PHP 20,000+ | 4.7-5.2% | Continued steady growth |
| 2030 (5-year forecast) | PHP 22,000-24,000 | 4.7-5.5% | Urbanization-driven expansion |
| 2035 (10-year forecast) | PHP 26,000-30,000 | 5.0-5.8% | Mature market development |
Growth drivers include ongoing infrastructure development, population expansion approaching 2 million residents, commercial sector growth, and strong investor confidence. However, increasing supply helps moderate sharp price increases, maintaining market balance.
It's something we develop in our Philippines property pack.
How do Davao City's rents and yields compare with other large, similar cities in the Philippines?
| City | Average 1BR Rent (Center) | Rental Yield Range (%) | Vacancy Rate (%) |
|---|---|---|---|
| Davao City | PHP 18,333 | 4.5-5.0% | 8% |
| Cebu City | PHP 20,000 | 5.3-6.0% | ~10% |
| Metro Manila | PHP 25,000-27,000 | 4.5-6.0% | 24% (CBDs) |
| Iloilo City | PHP 15,000-18,000 | 4.0-5.5% | ~12% |
| Cagayan de Oro | PHP 12,000-16,000 | 4.5-5.5% | ~15% |
Davao City offers attractive rental investment opportunities with lower entry costs compared to Metro Manila while maintaining competitive yields. The city provides better occupancy rates than most major Philippine cities, indicating strong rental market fundamentals.
Compared to Cebu City, Davao shows slightly lower yields but significantly better vacancy rates and rental stability. The city's rental market demonstrates resilience and growth potential that positions it favorably among Philippine investment destinations.
It's something we develop in our Philippines property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Davao City's rental market presents compelling opportunities for both investors and residents seeking quality housing options at competitive rates.
With low vacancy rates, stable yields, and ongoing urban development, the city offers one of the most balanced rental markets in the Philippines for long-term investment success.
Sources
- Davao City Price Forecasts
- Philippine Property Hub - Davao Rental Market Update
- Numbeo - Property Investment in Davao
- Dot Property - Condos for Rent Davao City
- Dot Property - Houses for Rent Davao City
- Expatistan - Cost of Living Davao
- Bureau of Local Government Finance - Davao City
- Airbtics - Annual Airbnb Revenue Davao City
- Global Property Guide - Philippines Price History
- CrowdSq - Top Cities Real Estate Investment Philippines