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What will happen in Davao City’s real estate market? Will prices go up or down? Is Davao City still a hotspot for foreign investors? How is the Philippine government impacting real estate policies and taxes in 2025?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who buy properties in Davao City, we’ve gained firsthand insights.
That’s why we created this article: to provide clear answers, insightful analysis, and a well-rounded perspective on market predictions and forecasts.
Our goal is simple: to ensure you feel informed and confident about the market without needing to look elsewhere. If you think we missed the mark or could do better, we’d love to hear your thoughts. Feel free to message us with your feedback or comments, and we’ll work hard to improve this content for you.

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1) Affordable housing prices in Davao City will rise steadily because of government incentives
In Davao City, affordable housing prices are set to rise due to government initiatives.
The government launched the Pambansang Pabahay para sa Pilipino (4PH) Program, which is heavily funded to boost affordable housing. This initiative is designed to increase both the availability and quality of housing units, making it a significant driver of the anticipated price increase.
By late 2024, the Davao City Investment and Promotion Center had approved incentives for developers, leading to Php 3.38 billion in investments. These incentives have attracted more developers, which in turn has increased demand and pushed up prices for affordable housing units. The city's expanding population and economy are also contributing to this growing demand.
Infrastructure projects like the Davao City Bypass Road and the Mindanao Railway System are enhancing the city's appeal, making properties more valuable. These developments improve livability, which naturally boosts property values. Looking at other regions, similar government incentives have historically led to increased property values, hinting at a similar trend for Davao City.
As more families seek housing solutions, the combination of government programs, developer incentives, and infrastructure improvements is creating a perfect storm for rising property prices in the affordable housing sector.
With these factors in play, Davao City is becoming an increasingly attractive option for property buyers, as the city's growth and development continue to drive up demand and prices.
Sources: Edge Davao, Mindanao Times, SunStar Davao, Davao City Government
2) Short-term rental yields will rise as Davao City attracts more tourists
Davao City is becoming a hot spot for tourists, and that's great news for property investors.
In 2023, the city welcomed 1.1 million visitors from January to October, a whopping 57.14% jump from the previous year. This surge in tourism means more people are looking for places to stay, which is a golden opportunity for those with rental properties.
Rental properties in Davao City are doing well, with a 92% occupancy rate in September 2024. This high rate shows that demand for short-term rentals is strong, ensuring property owners can enjoy steady rental income.
Travel to Davao City is getting easier, thanks to the return of international flights like those from Xiamen Air and Royal Air Philippines. With better connectivity, more tourists are likely to visit, which means even more demand for short-term rentals.
For those considering investing in property, Davao City's growing popularity as a tourist destination is a promising sign. The combination of increased tourist arrivals and high occupancy rates suggests that short-term rental yields are on the rise.
As the city continues to attract more visitors, property owners can expect consistent and potentially higher returns on their investments.
Sources: SunStar, Philippine Property Hub, MindaNews

We made this infographic to show you how property prices in the Philippines compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
3) Davao City’s property prices will keep rising due to strong economic growth
Davao City is booming economically, with a growth rate of 7.5% in 2023, making it the fastest-growing city in the Davao Region.
People are flocking to Davao City, and this population surge is pushing up the demand for homes. In 2024, pre-selling prices for residential units in Metro Davao jumped by 5-7% because more folks want to enjoy the perks of city life. The trend of urban living is catching on, with many drawn to the convenience and vibrancy of city life.
Infrastructure is another big player in this story. Davao City is seeing major projects that are enhancing its strategic location, making it a hot spot for both business and tourism. This development is expected to further boost the demand for homes, as more people and businesses set their sights on Davao.
With these infrastructure upgrades, Davao is not just a place to live but a thriving hub for opportunities. The city's strategic improvements are turning it into a prime destination, attracting more residents and investors alike.
As Davao City continues to grow, the real estate market is responding. The combination of economic growth, population increase, and infrastructure development is creating a perfect storm for rising property prices. This makes Davao an attractive option for those looking to invest in property.
For anyone considering buying property in the country, Davao City offers a promising opportunity. With its strong economic performance and ongoing development, residential property prices are expected to keep climbing, making it a smart investment choice.
Sources: Davao City Government, Inquirer, Philippine Property Hub
4) Property values in flood-prone areas will drop as climate change worries increase
Properties in flood-prone areas are losing their appeal as climate change becomes a bigger concern.
In places like Davao City, flooding events have become more frequent and severe, especially in 2023 and 2024. These floods have caused major disruptions and damage, making these areas less attractive to potential buyers. People are starting to think twice before investing in such risky locations.
Insurance companies are catching on too. They're either raising premiums or refusing coverage for properties in these flood-prone areas. This makes owning property there not only riskier but also more expensive. With higher costs and fewer insurance options, buyers are looking elsewhere.
Government reports and media are not helping either. They're constantly highlighting the risks of climate change, which is influencing buyer preferences. People are becoming more aware of the dangers and are opting for safer investments.
Real estate market analyses show a clear trend: buyers are moving away from flood-prone areas. This shift is leading to reduced demand and slower sales. It's a pattern seen in other regions hit by frequent natural disasters, where property values have also taken a hit.
In short, the combination of increased flooding, higher insurance costs, and growing awareness of climate risks is making flood-prone properties less desirable. Buyers are prioritizing safety and long-term value over risky investments.
Sources: The Star, Asian Development Bank, Climate.gov
5) Demand for mid-range homes in Davao City will rise as the middle class grows
The growing middle class in Davao City is driving up demand for mid-range homes.
With average family incomes in Davao del Sur rising by 12.3% in 2023, more families are finding themselves in a position to invest in these properties. This boost in income, now averaging PhP292.43 thousand annually, is a game-changer for many. As families see their purchasing power grow, the dream of owning a mid-range home becomes more attainable.
The Davao Regional Development Plan for 2023-2028 is also playing a crucial role. By focusing on expanding training and skills development, the plan aims to create more job opportunities, further supporting the middle class. This economic growth is not just about jobs; it's about enabling more people to consider buying homes that were once out of reach.
Urbanization is another factor. As Davao City becomes more urbanized, the demand for residential properties is naturally increasing. Government infrastructure projects are making certain areas more accessible and attractive, which in turn boosts the need for housing in these newly developed zones.
Financing options are improving too. The development plan emphasizes making financing more accessible for middle-income buyers, which is crucial for those looking to purchase mid-range homes. Easier access to loans and financial products means more families can take the leap into homeownership.
Finally, there's the lifestyle factor. The middle class in Davao City is increasingly aspiring to own homes, a trend often highlighted in media. This aspiration, combined with rising incomes and better financing options, is a strong indicator of the growing demand for mid-range housing.
Sources: Lumina, Global Property Guide, Philippine Statistics Authority
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6) Rents in central Davao City will continue to rise because demand is high and supply is limited
Rents in central Davao City are on the rise due to a tight supply and high demand for rental properties.
In 2024, the average rent for a home in Davao City hit PHP 18,500 per month, marking a 3% bump from the previous month. This upward trend is expected to continue, with prices likely to climb another 2-3% in the coming months. The city's population is booming, now nearing 2 million residents, which means more folks are hunting for homes, especially in the bustling central areas.
Despite a recent surge in apartment construction, the number of new units coming in 2025 and beyond is falling short of demand. The occupancy rate for rentals stayed strong at 92% in 2024, showing just how hot the market is. Davao City's economic growth and new infrastructure are making it a magnet for both businesses and residents, pushing rental demand even higher.
Real estate agents and property managers are seeing a big appetite for rentals, particularly in central spots, thanks to their convenience and lively atmosphere. The city's urbanization is drawing more people to these areas, but the supply of new homes isn't keeping pace. This mismatch is a key reason why rents are climbing.
With the city's ongoing development and appeal, it's no surprise that rental properties are in such high demand. The limited supply of new residential projects means that those looking to rent in central Davao City should expect prices to keep rising. The vibrant lifestyle and ease of access in these areas are major draws, but they also contribute to the competitive rental market.
Sources: Philippine Property Hub, World Population Review, CRE Daily
7) Suburban rents in Davao City will grow more slowly as more properties become available
In 2025, rental prices in Davao City's suburbs are expected to slow down as more properties hit the market.
Thanks to the government's Pambansang Pabahay para sa Pilipino (4PH) project, 82 new buildings with 8,200 units are set to rise in Davao City. This influx of residential properties is likely to create a surplus, making it a renter's market. Imagine having more choices and possibly negotiating better deals!
The Davao City Investment Promotion Center (DCIPC) is sweetening the pot for investors with perks like business and real property tax exemptions for up to five years. These incentives are a magnet for developers, which means even more properties will be available soon. With this increase in supply, vacancy rates could climb, nudging rent prices downward.
On top of that, the 4PH project is all about affordable housing, which means more budget-friendly rental options could be on the horizon. This is great news for those who felt priced out before. More affordable choices might stabilize or even lower rent growth, making it easier for more people to find a place to call home.
Let's not forget the remote work trend, which is reshaping where people want to live. With more folks working from home, the demand for suburban rentals might dip as people opt for urban areas with better connectivity. This shift could further impact rental prices in the suburbs.
So, if you're thinking about renting in Davao City's suburbs, keep an eye on these developments. The market is changing, and it could be a good time to explore your options.
Sources: Zawya, Mindanao Times, Buildium
8) More Chinese investors will enter Davao City's housing market as diplomatic relations improve
Chinese investment in the Philippines has surged dramatically over the past decade.
In Davao City, the presence of Chinese nationals is becoming more visible, with new Chinese businesses popping up in agriculture and manufacturing. This growing community is creating a welcoming atmosphere for more Chinese investors to consider buying homes here.
There's been a noticeable uptick in property sales to Chinese buyers. For instance, in early 2022, condominium sales in Davao jumped by 160%, with many of these units purchased by Chinese nationals. This shows a clear interest in the local real estate market.
As diplomatic ties between China and the Philippines strengthen, the number of Chinese investors in Davao's residential market is expected to grow. This trend is supported by the increasing number of Chinese businesses and expatriates settling in the area.
Chinese investors are not just buying properties; they are also contributing to the local economy by establishing businesses and creating jobs. This economic activity is beneficial for both the local community and the investors themselves.
With the ongoing development and urbanization in Davao, the city offers promising opportunities for those looking to invest in real estate. The combination of a supportive community and a growing economy makes it an attractive destination for Chinese investors.
Sources: SunStar Davao, SunStar Davao, AidData Report

We created this infographic to give you a simple idea of how much it costs to buy property in different parts of the Philippines. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
9) Demand for eco-friendly homes in Davao City will grow, pushing up prices for sustainable properties
The demand for eco-friendly homes in Davao City is rising as more people become aware of climate change and sustainable living.
In Davao City, residents are increasingly conscious of their environmental impact, which is driving interest in sustainable homes. The Philippine government is also playing a role by promoting green building practices through initiatives like the National Urban Development Framework and the Green Infrastructure and Green Spaces Program. These programs encourage the use of eco-friendly materials and sustainable construction methods, making it more appealing for developers and buyers to invest in sustainable properties.
Real estate market reports indicate that sustainable properties are commanding a premium. As more buyers prioritize environmental sustainability, the value of eco-friendly homes is expected to increase. This trend is further supported by successful case studies of sustainable housing developments in Davao City, which demonstrate the feasibility and appeal of eco-friendly homes.
Moreover, the local real estate market is seeing a shift. Buyers are now more inclined to invest in properties that offer long-term savings on energy and water bills. This shift is not just a trend but a reflection of a broader change in consumer preferences. Eco-friendly homes are becoming a smart investment for those looking to future-proof their assets.
Developers in Davao City are responding to this demand by incorporating more green features into their projects. From solar panels to rainwater harvesting systems, these features not only reduce the environmental footprint but also add value to the properties. Green features are becoming a selling point in the competitive real estate market.
As the demand for sustainable living grows, it's clear that eco-friendly homes in Davao City are not just a passing trend. They represent a significant shift in how people view their living spaces and their impact on the environment. This shift is expected to lead to higher prices for sustainable properties as more buyers seek out these eco-friendly options.
Sources: Billion Bricks, Davao Properties, IJPREMS
10) Yields for budget rentals in Davao City will rise as local worker demand increases
Davao City is booming economically, and this is great news for anyone considering buying property there.
With the city's economy on the rise, employment rates are climbing thanks to the growth of various industries and new development projects. This means more people are looking for places to live, especially affordable rental options. The buzz around town is that local businesses are thriving, which only adds to the demand for budget-friendly housing.
Infrastructure improvements like the Davao Public Transport Modernization Project and the Mindanao Railway Project have made getting around the city much easier. This enhanced connectivity is a big draw for workers, further boosting the need for rental properties. It's not just about getting from point A to B; it's about making the city a more appealing place to live and work.
As the population grows, so does the need for housing. Many local workers are opting to rent rather than buy because home ownership costs are rising. This shift is evident in the rental market, where there's a high occupancy rate of 92%. It's clear that affordable housing options are in short supply, nudging more people towards budget rentals.
For those eyeing investment opportunities, this trend spells potential. The demand for budget rentals is not just a passing phase; it's a response to real economic and social changes in the city. With more workers moving in and looking for affordable places to stay, rental yields are likely to rise.
So, if you're thinking about investing in Davao City, now might be the perfect time. The combination of economic growth, improved infrastructure, and a growing population makes it a promising market for budget rental properties. Local workers are driving this demand, and the city's development projects are only set to enhance this trend.
Sources: Philippine Property Hub, PNA, Global Property Guide
11) Yields on high-end rentals will drop as supply exceeds demand
Davao City's high-end rental market is seeing a big shift as new luxury developments flood the scene.
With projects like the Crown Residences by Torre Lorenzo Development Corporation planning to add 322 units by 2028, the city is bracing for a potential oversupply of luxury rentals. This could mean more options for renters but also more competition for landlords.
When there's too much supply, landlords often find themselves in a tight spot. They might need to lower rents to attract tenants, especially if the demand doesn't match the growing number of available units. While we haven't seen specific reports of falling rental prices yet, the signs are there.
Adding to the mix, Davao City is seeing a trend towards urban living with a growing population. This shift might mean more people are looking for affordable housing rather than luxury options, putting even more pressure on the high-end market.
As more residents opt for mid-range or budget-friendly homes, the demand for luxury rentals could take a hit. This change in preference is something landlords need to keep an eye on.
In the end, the high-end rental market in Davao City is at a crossroads. With supply potentially outpacing demand, rental yields might decline as landlords adjust to the new landscape.
Sources: Philippine Property Hub, BusinessWorld Online
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12) Downtown property prices will rise more slowly due to increasing congestion and pollution
Properties in downtown Davao City are facing challenges that could lead to slower price increases.
One major issue is the persistent traffic congestion, which has been stable at around 49% in 2024, mirroring 2023 levels. This indicates that the city's infrastructure is struggling to keep pace with its growing population. As a result, potential buyers might be hesitant, affecting property prices. Imagine trying to get to work or run errands with traffic that never seems to ease up; it’s a daily grind that can wear on anyone.
Air quality is another concern. While there’s been some improvement in overall particulate matter, certain areas still suffer from high PM 2.5 levels. This kind of pollution can be a deal-breaker for many looking to invest or settle down, as clean air is a top priority for health-conscious buyers. You wouldn’t want to step outside and feel like you’re breathing in a cloud of dust, right?
Residents are also voicing their dissatisfaction with urban living conditions, particularly due to congestion and pollution. This dissatisfaction could lead to a decrease in demand for downtown properties, slowing down price hikes. People are starting to look for quieter, cleaner places to live, and that shift in preference can impact property values.
Studies have shown a link between traffic congestion and decreased property desirability. When a neighborhood becomes synonymous with gridlock, it’s less appealing, which can negatively impact property values. Think about it: who wants to live in a place where getting anywhere is a hassle?
These factors combined suggest that while downtown Davao City has its perks, the ongoing issues of congestion and pollution are making potential buyers think twice, leading to a slower increase in property prices.
Sources: TomTom Traffic Index, BioRxiv, SunStar Davao, Breathe Safe Air
13) Rental yields in Davao City will rise as more expats relocate for work
Rental yields in Davao City are on the rise as more expatriates flock to the city for work.
In recent years, Davao City has become a hotspot for job opportunities, especially in booming sectors like BPOs and IT. These industries are magnets for expatriates, with international companies increasingly setting up shop in the city. This trend is expected to continue, pushing rental demand even higher.
The rental market in Davao City is buzzing, particularly in neighborhoods favored by expatriates. For example, the occupancy rate for rental properties held steady at 92% in September 2024, a clear sign of strong demand. Experts predict rental prices will climb by 2-3% in the next quarter and 5-7% annually over the next year.
The local government is also playing a big role by actively promoting Davao City as a business hub. Their efforts are likely to draw more expatriates, which in turn will boost rental yields. Increased foreign direct investment, especially in the BPO and IT sectors, is further fueling this trend.
With these developments, Davao City is becoming an attractive destination for expatriates, which means rental yields are set to grow. The city's strategic initiatives and economic growth are creating a perfect storm for property investors.
As more expatriates settle in Davao City, the demand for rental properties is expected to rise, making it a promising market for investors. The combination of job opportunities, government initiatives, and foreign investments is driving this upward trend.
Sources: Philippine Property Hub, MindaNews, Global Property Guide
14) Mid-range property prices in Davao City will stay stable as supply matches demand
The mid-range property market in Davao City is experiencing stable prices as supply aligns with demand.
In 2022, over 1,600 condo units were sold in the first half of the year, with expectations of reaching 3,500 by year-end. This shows a healthy balance between available properties and eager buyers, keeping the market steady.
Fast forward to 2024, and the rental scene is buzzing with over 2,097 active listings and a 92% occupancy rate. This strong demand for residential spaces indicates a consistent interest in mid-range properties, which helps maintain stable prices.
Infrastructure projects like the Davao City Coastal Bypass Road and the Mindanao Railway Project are game-changers. They're not just boosting land values but also supporting the residential market, making it a hot spot for mid-range property investments.
Government policies are also in play, backing housing development and creating a favorable environment for investors. This support is crucial in maintaining the stability of property prices in the area.
Sources: Anchor Land, Philippine Property Hub, SunStar

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.
15) Property prices in southern Davao City will rise significantly due to new commercial developments emerging
The southern parts of Davao City are seeing a notable increase in property prices as new commercial developments emerge.
One big reason for this is the increased infrastructure projects in the area. Take the Davao City Bypass Construction Project, for example. Approved by the National Economic and Development Authority (NEDA) Board, this project is set to improve traffic logistics and boost economic growth. By cutting down travel time between key areas, it makes the region more accessible and attractive for potential buyers.
There's also a growing demand for both residential and commercial spaces. Davao City is seeing a surge in interest for condominiums and residential properties, thanks to a trend towards urban living. This demand is further fueled by the city's fast-growing economy, which is drawing in businesses and increasing the need for commercial properties. Areas like Lanang, Matina, and downtown Davao are particularly hot right now.
The government is also playing a role by creating a business-friendly environment that attracts entrepreneurs and investors. Their commitment to sustainable development is encouraging more businesses to set up shop in the city, which in turn boosts the demand for commercial properties. Mixed-use developments that combine residential, commercial, and leisure spaces are becoming popular, offering convenience and drawing in both residents and businesses.
These mixed-use spaces are not just a trend; they're a smart solution for modern living. They offer the convenience of having everything in one place, which is a big draw for both residents and businesses. This kind of development is making Davao City an even more attractive place to live and work.
Sources: Davao Properties, PCO News Releases, Philippine Property Hub
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.