Authored by the expert who managed and guided the team behind the Cebu Property Pack
Yes, the analysis of Cebu's property market is included in our pack
As of September 2025, Cebu's rental market delivers competitive yields with condos achieving 5-7% annual returns while commercial properties can reach 7-8% in prime business districts.
The Cebu property market has maintained steady performance with rental yields remaining attractive compared to other Southeast Asian cities, driven by strong demand from the growing BPO sector, expat population, and robust tourism industry.
If you want to go deeper, you can check our pack of documents related to the real estate market in Cebu, based on reliable facts and data, not opinions or rumors.
Cebu rental yields range from 4.5-8% depending on property type and location, with IT Park and Cebu Business Park delivering the highest returns.
Short-term rentals through Airbnb can achieve 8-10% gross yields in prime tourist areas, while traditional long-term rentals offer more stable but lower returns.
| Property Type | Average Rental Yield | Prime Locations |
|---|---|---|
| Studio/1BR Condos | 6-8% | IT Park, SRP, Cebu Business Park |
| 2BR+ Condos | 5-7% | Ayala, Banilad, Lahug |
| Houses/Townhouses | 4.5-6% | Gated communities, suburbs |
| Commercial Spaces | 7-8% | IT Park, Mandaue, SRP |
| Short-term Rentals | 8-10% | Mactan, IT Park, Ayala |
| Luxury Beachfront | 5-7% | Mactan Island |
| Suburban Properties | 4-6% | Talisay, Minglanilla |
What are the current average rental yields in Cebu?
Cebu rental yields as of September 2025 vary significantly by property type, with studio and one-bedroom condos leading the market at 6-8% annual returns in prime business districts.
Condominiums in IT Park, SRP, and Cebu Business Park achieve the highest yields due to strong demand from BPO workers and young professionals. These areas maintain low vacancy rates of 5-8% and command premium rents ranging from ₱25,000 to ₱45,000 monthly for studio and one-bedroom units.
Houses and townhouses in gated communities typically yield 4.5-6% annually, while commercial properties in strategic business locations can reach 7-8% or higher. The lower yields for residential houses reflect their higher purchase prices and slightly elevated vacancy rates of 10-15% compared to prime condos.
Short-term rentals through platforms like Airbnb consistently outperform traditional rentals, achieving gross yields of 8-10% in well-managed properties located in tourist hotspots and business districts.
How do rental yields vary between different property types?
| Property Type | Rental Yield Range | Key Characteristics |
|---|---|---|
| Studio Condos | 6-8% | Highest occupancy, popular with young professionals |
| 1-2BR Condos | 5-7% | Strong demand from expats and mid-level professionals |
| 3BR+ Condos | 4.5-6% | Limited demand, longer marketing periods |
| Townhouses | 4.5-6% | Family-oriented, stable but lower yields |
| Single Houses | 4-5.5% | Higher maintenance costs, suburban locations |
| Small Commercial | 7-8% | BPO and retail demand, location-sensitive |
| Large Commercial | 6-7% | Corporate tenants, longer lease terms |
Which neighborhoods in Cebu deliver the highest rental yields?
IT Park in Lahug consistently delivers the highest rental yields in Cebu, with well-located condos achieving 7-8% annual returns due to concentrated demand from the technology and BPO sectors.
Cebu Business Park (Ayala district) ranks second for premium yields, attracting multinational companies and high-earning professionals who can afford monthly rents of ₱35,000-₱70,000 for quality units. The area maintains excellent infrastructure and low crime rates, supporting stable rental demand.
Mactan Island offers strong potential for short-term rental investors, with beachfront properties near resorts and the airport achieving 8-10% gross yields through Airbnb operations. Tourist demand remains robust year-round, though management intensity is higher than traditional rentals.
Mandaue City presents emerging opportunities with good value appreciation potential and yields of 6-7% for both residential and small commercial properties, benefiting from ongoing infrastructure development and industrial expansion.
Talisay and Minglanilla represent budget-friendly options for investors seeking 5-6% yields with lower entry costs, though these areas require careful tenant screening and longer marketing periods.
What are the total purchase costs including all fees and taxes?
Total property acquisition costs in Cebu typically add 6-10% to the base purchase price when including all mandatory fees and taxes.
Studio condos priced at ₱900,000-₱1.5 million incur additional costs of approximately ₱54,000-₱120,000 for transfer taxes, registration fees, documentary stamps, and legal expenses. New units from developers also include 12% VAT, significantly increasing the total investment.
Larger condos ranging from ₱2-5 million face proportionally higher fees of 7-10% due to increased legal complexity and higher documentary stamp duties. Buyers should budget ₱140,000-₱500,000 in additional costs beyond the listed price.
Houses and lots carry similar fee structures but may include additional subdivision-specific charges and higher registration costs for land titles, typically totaling 6-10% of the purchase price.
It's something we develop in our Cebu property pack.
What are typical annual property maintenance expenses?
Annual maintenance costs for Cebu properties generally range from ₱50,000-₱120,000 for typical condominiums, significantly impacting net rental yields.
Property taxes amount to 1-2% of assessed value annually, though assessed values often lag behind market prices by 3-5 years. Condo owners in prime buildings pay ₱18,000-₱90,000 yearly in association dues for 50-square-meter units, covering security, maintenance, and amenities.
Houses in subdivisions face lower association fees of ₱6,000-₱24,000 annually but require additional budgets for private maintenance, repairs, and utilities that condo associations typically cover. Security fees and garbage collection add ₱3,000-₱12,000 yearly.
Special assessments for building improvements or major repairs can add ₱10,000-₱50,000 in unexpected costs, making it crucial to review association financial statements before purchase.
Utility costs for rental properties average ₱18,000-₱48,000 annually, though these are typically passed to tenants in furnished rentals.
Don't lose money on your property in Cebu
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 does mortgage financing affect rental yields compared to cash purchases?
Mortgage financing typically reduces net rental yields by 0.5-2% compared to cash purchases due to interest payments and loan-related costs.
Philippine banks offer property loans at 6-8% annual interest rates with 20-30% down payment requirements for foreign buyers. Monthly amortizations on a ₱3 million condo with 70% financing would consume approximately ₱18,000-24,000 monthly, reducing net rental income significantly.
Cash buyers enjoy immediate positive cash flow since gross rental yields of 5-7% exceed typical mortgage interest rates, but leverage allows investors to control larger properties or multiple units with the same capital.
The net yield calculation for financed properties must subtract interest payments and factor in loan origination fees, mortgage insurance, and processing costs that add 1-2% to the total investment in the first year.
Strategic investors often prefer cash purchases in Cebu's market due to relatively attractive gross yields and the complexity of foreign property financing regulations.
What are current monthly rental rates for different property types?
| Property Type | Monthly Rent Range (PHP) | Prime Location Examples |
|---|---|---|
| Studio Condo | ₱15,000-₱25,000 | IT Park, Business Park entry-level |
| 1BR Condo (Prime) | ₱25,000-₱45,000 | IT Park, Ayala premium buildings |
| 2BR Condo | ₱35,000-₱70,000 | Business districts, luxury developments |
| 3BR House | ₱20,000-₱40,000 | Gated subdivisions, suburban areas |
| 4BR House (Premium) | ₱40,000-₱60,000 | Exclusive villages, hillside locations |
| Townhouse | ₱15,000-₱25,000 | Middle-class subdivisions |
| Small Commercial | ₱30,000-₱80,000 | Business districts, ground floor retail |
| Large Commercial | ₱80,000-₱150,000 | Prime office spaces, flagship locations |
Who are the primary renter demographics and how do they vary by property type?
Young BPO professionals aged 22-35 dominate the condo rental market in IT Park and business districts, typically earning ₱25,000-₱60,000 monthly and preferring furnished studio and one-bedroom units near their workplaces.
Expatriate professionals and retirees represent a significant segment for higher-end condos and houses, usually seeking 2-3 bedroom properties with Western-style amenities and willing to pay premium rents of ₱40,000-₱80,000 monthly for quality locations.
Filipino families with children primarily rent houses and townhouses in gated subdivisions, prioritizing safety, schools, and space over proximity to business districts. These tenants typically sign longer lease terms and maintain properties well.
University students create demand for budget studio apartments and shared accommodations near educational institutions, though this segment offers lower rental rates and higher turnover compared to working professionals.
Business travelers and tourists drive short-term rental demand in Mactan, IT Park, and historic downtown areas, particularly for furnished units with modern amenities and convenient transportation access.
What are typical vacancy rates across different areas and property types?
Prime business districts maintain the lowest vacancy rates in Cebu, with IT Park and Cebu Business Park condos experiencing only 5-8% vacancy due to consistent demand from the expanding BPO sector.
Suburban residential properties face higher vacancy rates of 10-15%, requiring longer marketing periods and more competitive pricing to attract quality tenants. Older buildings and less desirable locations can experience vacancy rates exceeding 20%.
Commercial properties show significant variation, with prime ground-floor retail spaces maintaining under 5% vacancy while older office buildings in secondary locations struggle with 15-30% vacancy rates as businesses gravitate toward modern facilities.
Short-term rentals achieve median occupancy rates of 41% across Cebu, though well-managed properties in prime locations regularly exceed 80% occupancy during peak tourism and business seasons.
Seasonal fluctuations affect all property types, with December-April showing peak demand and July-September experiencing softer rental markets, particularly for tourist-oriented accommodations.
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.
How do short-term rentals compare to traditional long-term rentals?
Short-term rentals through Airbnb generate 20-40% higher monthly revenue than traditional long-term leases in prime Cebu locations, with gross yields often reaching 8-10% compared to 5-7% for conventional rentals.
Well-managed Airbnb properties in IT Park, Ayala, and Mactan command nightly rates of ₱2,500-₱5,000, translating to monthly revenues of ₱30,000-₱80,000 versus ₱25,000-₱45,000 for equivalent long-term rentals.
However, short-term rentals require active management, higher operating expenses for cleaning and utilities, and greater marketing effort to maintain occupancy. Operating costs typically consume 25-35% of gross revenue compared to 15-20% for traditional rentals.
Long-term rentals offer stability and predictable cash flow with lower management intensity, making them suitable for passive investors or those lacking local management resources.
Regulatory considerations favor established short-term rental operations, though some condominium associations restrict Airbnb activities, requiring careful due diligence before purchase.
How have rental yields and market conditions changed over recent years?
Cebu rental yields have remained remarkably stable over the past five years, with prime condo yields holding at 5-8% despite property price appreciation of 5-7% annually through 2025.
Rental rates have increased 5-8% annually, matching or slightly exceeding property price growth and maintaining attractive yield profiles for investors. Association dues have risen 5-8% yearly, reflecting inflation and improved building amenities.
The past year has seen continued strength in business district rentals, with IT Park and Ayala properties experiencing 5-8% rental growth while suburban areas lag with 2-4% increases. Vacancy rates have remained low in prime areas despite increased new supply.
Infrastructure improvements including new roads, bridges, and the upcoming Bus Rapid Transit system have boosted rental demand in previously secondary locations like Mandaue and Talisay.
It's something we develop in our Cebu property pack.
What are the rental yield forecasts for the next 1, 5, and 10 years?
Short-term forecasts for 2026 project stable rental yields in the 4.5-7.2% range, with potential slight increases in central mixed-use developments as infrastructure projects enhance connectivity and attract new businesses to Cebu.
Five-year projections through 2030 anticipate above-average yield growth driven by continued BPO expansion, tourism recovery, and limited prime location supply. Cebu is expected to maintain competitive 5-8% yields while secondary cities in Visayas may offer emerging opportunities.
Ten-year outlook suggests Cebu will sustain competitive yields of 4.5-7% through 2035, potentially outperforming Manila in select years due to urbanization trends, tech sector growth, and its strategic position as the Philippines' second city.
Compared to regional markets, Cebu offers superior yields to Manila (4-6%), Singapore (2-3%), and remains competitive with Bangkok (4-6%), Kuala Lumpur (4-5%), and Jakarta (6-8%), positioning it favorably for ASEAN-focused investors.
Infrastructure megaprojects including airport expansion, new bridges, and mass transit systems are expected to unlock value in currently underserved areas while supporting rental demand growth across the metropolitan area.
It's something we develop in our Cebu 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.
Cebu's rental market offers compelling opportunities for both domestic and international investors, with yields consistently outperforming many regional markets while benefiting from robust economic fundamentals.
Success in Cebu real estate requires careful location selection, thorough understanding of local regulations, and realistic expectations about management requirements, particularly for short-term rental strategies.
Sources
- 3D Universal - Cebu Real Estate Market Trends 2025
- BambooRoutes - Cebu Property Market Analysis
- BambooRoutes - Cebu Price Forecasts
- BambooRoutes - Philippines 5-Year Real Estate Forecast
- Cebu Grand Realty - Commercial Property Investment
- AirROI - Cebu City Rental Analysis
- Prime Investments - Airbnb Philippines Analysis
- Global Property Guide - Philippines Rental Yields