Get all the data you need about the real estate market in Calabarzon

Thinking of buying real estate in Calabarzon?

Acquiring property in a different country is a complex task. Don't fall into common traps – grab our guide and make better decisions.

Download Now

Is buying rental property in Davao City still worth it?

Why is Davao City rental property harder to judge now?

Davao City rental property can still work today, but the margin for buying the wrong condo has become much smaller.

At first glance, the numbers look attractive. Dot Property currently shows a median condo asking price of about ₱4.45 million, median rent of ₱24,864 a month and a gross rental yield around 6.7%. That gives Davao a much stronger income profile than markets where investors accept 3% or 4% gross yields and depend heavily on appreciation.

The city also has a real economic base behind those rents. The Philippine Statistics Authority's latest provincial and highly urbanized city accounts still place Davao City among the country's ten largest local economies and the only one in that top ten outside Luzon. At the regional level, Davao's economy grew 5.1% in 2025, ahead of the Philippines' 4.4% growth, while services accounted for 62.1% of regional output.

There are weaker numbers too. Davao City's population growth slowed to 1.0% a year between 2020 and 2024, down from 1.70% in the previous census period and 2.42% between 2010 and 2015. Financing is also expensive enough that a normal mortgage can wipe out much of the cash flow from a 6%–7% gross-yield property.

That leaves a more useful question than whether Davao is "booming": can we buy an individual property cheaply enough relative to the rent it can actually earn?

Are Davao City rental yields still good today?

Yes. A Davao City condo producing around 6.5%–7% gross remains interesting today, especially for a cash buyer.

Using Dot Property's current citywide numbers, a ₱4.45 million condo renting for ₱24,864 per month generates about ₱298,000 of rent a year. That works out to roughly 6.7% gross.

The yield is high enough to give the investor some breathing room. A property yielding 3% gross can become unattractive after even modest running costs. At 6.7%, there is still income left after normal operating leakage.

We should be careful with the dataset, though. Dot Property is comparing advertised sale prices with advertised rents rather than completed transactions and signed leases. Some landlords will accept less than the advertised rent, while buyers may negotiate below the advertised sale price.

So 6.7% is a useful market reference, not a promised return.

For an actual purchase, our cutoff today is closer to 7% gross unless the property has an unusually strong location, unusually low running costs or a clear pricing advantage. Once the initial yield slips toward 5%, the Davao investment case becomes much less convincing.

Don't buy the wrong property, in the wrong area of Calabarzon

Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.

Get the data

Can a 6.7% Davao rental yield survive condo costs and a mortgage?

A 6.7% gross Davao condo yield can survive normal running costs, but it usually struggles under heavy bank financing.

Take the current citywide example: ₱24,864 of monthly rent on a ₱4.45 million condo. One empty month reduces annual collected rent from roughly ₱298,000 to ₱274,000.

Then come association dues. Actual charges vary by building, but a few thousand pesos each month is common enough that buyers need the exact figure before calculating returns. Using ₱3,000 a month removes another ₱36,000 a year. Add a modest maintenance reserve and the return can fall to roughly 5% before tax and financing.

Debt makes the calculation much tougher.

BPI currently lists indicative acquisition rates starting around 7% for a one-year fixing period, rising with longer fixing periods. Recent promotional offers have been somewhat lower, while Pag-IBIG has also introduced cheaper options for qualified borrowers. A normal bank-financed investor should still expect borrowing costs in roughly the same range as the property's gross yield.

A ₱4.45 million purchase financed 70% leaves a loan of about ₱3.12 million. At 7%, interest alone is approximately ₱218,000 a year. Our illustrative operating income after vacancy, dues and maintenance comes to roughly ₱229,000.

There is barely any spread left before principal repayments and tax. That's the awkward bit.

Today's Davao rental market is much friendlier to cash buyers and lightly leveraged investors. With 70%–80% debt, we would demand either a much higher yield or a substantial discount before buying.

Does Davao City have too many condos?

Davao City does not currently show the kind of broad condo overhang that has hurt parts of Metro Manila, although individual towers can still be badly oversupplied.

That distinction is important for landlords. Davao's vertical market has historically been much smaller than Metro Manila's, and recent Colliers research showed relatively strong take-up across provincial condominium markets, with Davao among the better-absorbed major regional markets.

We therefore have little evidence of a citywide problem where huge amounts of completed inventory are sitting unwanted.

The building-level picture can look completely different.

Search a large investor-heavy development and dozens of near-identical studios may appear at the same time. Owners then compete with the same floor plan, furniture package, amenities and tenant pool. The quickest way to win a tenant becomes cutting the rent.

This is why citywide absorption numbers only take us so far. Before buying, we would check how many comparable units are currently for sale and rent inside the exact development, how long they stay advertised and whether landlords have started offering discounts.

A healthy Davao market can still contain a terrible rental building.

Get to know the market before buying a property in Calabarzon

Better information leads to better decisions. Get all the data you need before investing a large amount of money.

Get the data

Is Davao City growing fast enough to keep creating renters?

Yes, Davao City still has enough economic and household growth to support rental demand, although population growth by itself has become a weaker part of the story.

The latest census counted 1,848,947 people in Davao City, compared with 1,776,949 in 2020. That translates into annual population growth of about 1.0%.

The slowdown is substantial. Davao City grew 2.42% a year between 2010 and 2015 and 1.70% between 2015 and 2020. Anyone underwriting future rents on the assumption that the city is still adding residents at its old pace is using an outdated picture.

Household formation gives us a more encouraging number.

Across Davao Region, the Philippine Statistics Authority recently reported 1.51 million households, 13.1% more than in 2020, while household population increased only 2.7%. Average household size fell from 3.9 people to 3.5. Davao City itself now has about 544,000 households and an average household size of 3.4.

Smaller households create housing demand even without rapid population growth. A family splitting into two households can create an extra dwelling requirement without adding another person to the city.

Employment also helps. Davao Region's economy grew 5.1% in 2025, while services made up 62.1% of output. Public administration grew 13.4%, healthcare 9.8%, and transport and storage 8.2%. These are exactly the kinds of sectors that produce salaried urban workers who may rent near employment and commercial areas.

So the tenant base still looks solid today. We simply would not count on population growth rescuing a badly priced property.

Where should we buy a rental property in Davao City?

For long-term rentals, we would first look around Bajada, Obrero, Lanang and the stronger parts of Matina-Ecoland, because these areas already have jobs, malls, hospitals, schools and transport links generating tenant demand.

Bajada and Obrero sit close to Abreeza, hospitals, offices and central employment. Lanang combines Damosa, SM Lanang, hotels, offices and relatively convenient airport access. Matina and Ecoland reach a broader renter base around SM City Davao, schools and southern employment corridors.

The crucial comparison is rent versus acquisition price.

Lanang can command higher rents than cheaper districts, but premium developments also cost much more. Paying 40% more for the property makes little sense if tenants only pay 15% more rent.

Matina can sometimes offer better income arithmetic because entry prices are lower, although flood exposure varies dramatically by location. Bajada and Obrero tend to offer a good compromise between centrality and achievable rent.

Outer districts such as Toril and Mintal can be much cheaper. Their current rents are also lower, so investors are making a different bet there: lower entry price today with possible improvement as transport links get better.

We would choose the location only after calculating the yield from realistic local rent. "Prime area" is too vague to tell us whether a rental deal is good.

Buying real estate in Calabarzon can be risky

An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.

Download Now

Are new Davao condos better rentals than older resale units?

Usually no. A well-bought resale condo can currently produce better rental economics than a new Davao unit carrying a developer premium.

Tenants will pay extra for newer interiors, cleaner common areas, better amenities and a stronger location. They rarely pay enough extra rent to match every peso added to the sale price.

Suppose an older unit costs ₱4 million and can rent for ₱24,000 a month. Gross yield is 7.2%. A newer alternative at ₱6 million would need ₱36,000 a month just to produce the same yield.

That extra ₱12,000 is a big rent jump in Davao.

New developments can still make sense when the buyer receives a genuine launch discount, unusually favorable payment terms or access to a location where comparable resale supply barely exists. They may also require less maintenance during the first few years.

For a straightforward buy-to-let purchase, though, we would rather buy proven tenant demand cheaply than pay heavily for a newer lobby.

Is Airbnb in Davao City actually worth it now?

Davao City's short-term rental market looks much stronger lately, but lower nightly rates show that hosts are still fighting hard for bookings.

AirDNA currently tracks about 3,179 active short-term rental listings in Davao City. Average occupancy has reached roughly 51%, up 40.8% year over year. RevPAR is around $17, up 26.4%, while active listings have fallen 23.3%.

Those three figures together are much more interesting than a simple tourism-growth story. More nights are being filled even though fewer properties are actively competing.

Average daily rates tell the other half of the story. They have fallen about 12.4% to roughly $34.

Hosts are therefore filling considerably more nights without gaining the same pricing power. Someone entering the market today should not build the business plan around aggressive nightly rates.

Tourism provides plenty of demand. Davao City welcomed more than 2 million visitors in 2025, while the city's tourism office reported that visitor arrivals were still running 17.38% higher year over year in March 2026. Kadayawan alone brought more than 206,000 visitors during its 2025 run, and Pasko Fiesta attracted nearly 193,000.

Still, annual occupancy around 51% means an average property is empty almost half of its available nights.

Airbnb can outperform a standard lease for a good operator in the right building, particularly around major commercial areas and event demand. Once cleaning, furnishing, platform charges, utilities and management are included, the gap becomes smaller than the top-line revenue suggests.

Don't lose money on your property in Calabarzon

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.

Download Now

Will the Davao City Bypass and new infrastructure push property prices up?

Davao's infrastructure pipeline can improve certain rental locations, but the projects are still too incomplete for us to pay a large "future connectivity" premium today.

The 45.5-kilometer Davao City Bypass is the clearest example. Official regional monitoring showed overall physical completion at 38.33% by April 2026, up from 27.03% at the end of 2025.

Progress is extremely uneven. Package II-1 was already 88.82% complete and Package II-2 was 80.96%, while Package I-2 and I-3 were only 2.24% and 4.01%. The tunnel excavation has progressed much further, but the full corridor still requires substantial work.

Once finished, the government expects the relevant Toril-to-Panabo trip to drop from roughly 1 hour 44 minutes to around 49 minutes. That could make some outer residential districts much more practical for workers who currently avoid them because of travel time.

The Samal Island-Davao City Connector is also moving ahead. DPWH reported the bridge at just over 61% completion by late June 2026. Although that project serves a different transport pattern, it adds to the wider improvement in Davao's connectivity.

We would happily take those projects as upside on a property that already rents well. We would be much more reluctant to buy an outer-area condo or subdivision where today's yield is weak and the entire valuation depends on tomorrow's road network.

Infrastructure works best for an investor when the future improvement comes free with a deal that already makes sense.

Are floods and earthquakes a serious risk for Davao rental property?

Yes. Flood and earthquake exposure can change the value of a Davao rental enough that we would investigate the exact building before worrying about an extra half-point of yield.

Davao has repeatedly dealt with flooding around the Matina, Talomo, Davao, Lipadas, Bunawan and Lasang river systems and several smaller waterways. This makes broad neighborhood labels unreliable.

Two properties advertised as "Matina" can have completely different flood histories.

For condos, we would look beyond whether the unit itself sits on a high floor. Flooding can cut road access, damage basements and parking areas, disrupt elevators or utilities and make tenants think twice about renewing. Repeated incidents can also hurt resale liquidity.

Earthquake exposure adds another building-specific layer. Mindanao experiences frequent seismic activity, and the quality, age, structural history and maintenance of the tower matter more to us than the developer's brand alone.

Before buying, the useful questions concern past flooding, drainage, elevation, building inspection history, insurance and whether access roads remain usable during severe rain.

Physical risk is one area where a cheap Davao property can deserve to stay cheap.

Get the full checklist for your due diligence in Calabarzon

Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.

Download Now

Can foreigners buy a Davao City rental property?

Yes, foreigners can directly own qualifying Davao condominium units, making condos the easiest mainstream rental-property option for overseas buyers.

Philippine law generally restricts direct foreign ownership of land. Condominium ownership is permitted as long as foreign ownership within the condominium corporation remains within the legal limit.

That creates a major difference between foreign and Filipino investors.

A Filipino buyer can compare condos with house-and-lot rentals, townhouses and land-heavy properties where a larger part of the investment thesis may come from the underlying land. A foreign buyer generally has a narrower direct-ownership universe.

Foreign investors should therefore confirm the building's foreign-ownership availability before paying a reservation fee. In popular developments, the legal foreign quota can matter even when units are physically available.

The ownership rules make Davao condos accessible to foreigners, but they do nothing to improve a weak rental yield. Price, tenant demand and building quality still decide whether the investment works.

What price should we actually pay for a Davao rental condo?

For a normal Davao buy-to-let condo today, we would aim for roughly 7% gross yield and become increasingly reluctant once the achievable yield falls below 6%.

Working backward from rent makes this much easier.

If a unit can realistically rent for ₱25,000 a month, it produces ₱300,000 a year. A 7% gross-yield target values that income at about ₱4.29 million. At 6%, an investor could pay ₱5 million.

That ₱710,000 difference is huge. The tenant is paying exactly the same rent in both cases.

At ₱30,000 monthly rent, 7% gross supports a purchase price near ₱5.14 million. At ₱35,000, the figure reaches ₱6 million.

This calculation also exposes a common problem with expensive developer units. Once the purchase price climbs to ₱6 million or ₱7 million, the rent required to preserve a decent yield can move beyond what ordinary Davao tenants will pay.

We would estimate the rent first, haircut any optimistic broker projection, calculate our maximum purchase price and only then negotiate with the seller.

Don't sign a document you don't understand in Calabarzon

Buying a property over there? We have reviewed all the documents you need to know. Stay out of trouble - grab our comprehensive guide.

Download Now

Which Davao rental properties would we avoid right now?

We would avoid Davao condos yielding less than about 6% gross unless the price includes an unusually compelling advantage that we can quantify.

Heavy leverage is another red flag. Current bank rates leave very little spread between borrowing costs and normal rental yields, so a buyer financing 70%–80% of the purchase can end up owning a property that produces almost no cash.

Investor-heavy buildings also deserve caution. If dozens of identical furnished studios are permanently advertised inside the same tower, the landlord has very little control over rent. Tenants can move one floor away for a lower price.

We would also stay away from properties where future infrastructure is doing most of the work in the sales pitch. As seen above, major projects such as the Davao City Bypass are genuinely progressing, but completion varies enormously from one package to another.

Finally, flood exposure needs to be priced seriously. We would rather accept a slightly lower theoretical yield in a building with dependable access and a clean history than chase an extra percentage point in a property that becomes difficult every time severe weather arrives.

The common thread is price. Davao still offers enough rental demand to reward a good purchase, while overpriced, overleveraged and poorly located units have very little room for mistakes.

So, is buying rental property in Davao City still worth it?

Yes. Buying rental property in Davao City is still worth it today, but we would only buy selectively and we would want roughly a 7% gross yield before getting excited.

Several recent numbers support that judgment. Current condo asking data still puts the citywide gross yield near 6.7%. Davao Region grew 5.1% in 2025, faster than the national economy. The PSA's latest local economic accounts still place Davao City among the country's ten largest provincial and highly urbanized city economies. Household formation across the region has also been much faster than population growth, giving housing demand more support than the city's slowing population rate initially suggests.

Short-term rentals have improved dramatically lately as well. Occupancy is up more than 40% year over year even as active listings have fallen, although the 12% decline in average daily rates shows how competitive that market remains.

The weaker side of the investment case comes from financing and pricing. A roughly 7% bank mortgage sitting on top of a 6.7% gross-yield condo leaves almost no room once vacancy, association dues and maintenance are included. Population growth has slowed to 1% annually. Premium new developments can also cost far more than their additional rent justifies.

So we would currently favor cash or low-leverage purchases, established rental corridors and resale units bought at sensible prices. Around ₱4 million to ₱4.5 million for a property that can genuinely collect roughly ₱25,000 a month starts to look interesting. Paying ₱6 million for essentially the same rent does not.

Davao City still offers one of the more credible rental-income stories among major Philippine cities. These days, however, the opportunity comes from finding the right property and negotiating the right price rather than simply owning anything in a growing city.

Get fresh and reliable information about the market in Calabarzon

Don't base significant investment decisions on outdated data. Get updated and accurate information.

Get the data

Get to know the market before buying a property in Calabarzon

Better information leads to better decisions. Get all the data you need before investing a large amount of money.

Get the data

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Calabarzon. If you’d like to learn more about us, you can check our presentation page.