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If you're thinking about investing in Davao City real estate, understanding rental yields is one of the most important steps you can take.
This article breaks down everything you need to know about gross and net rental yields in Davao City, which neighborhoods perform best, and what costs will eat into your returns.
We constantly update this blog post to reflect the latest market conditions and data.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Davao City.
Insights
- Davao City condos deliver around 6.7% gross rental yield according to portal data, but the citywide average drops to about 5.8% when you include houses and townhouses with their higher land values.
- Studios and compact 1BR units in the 22 to 35 square meter range consistently outperform larger units in Davao City, often reaching 8% gross yields when priced correctly.
- The spread between high-yield and low-yield neighborhoods in Davao City is roughly 3 percentage points, meaning your location choice alone can make or break your investment.
- Matina, Ecoland, and Buhangin tend to be the strongest performers for rental yields in Davao City, while premium areas like Lanang and Azuela Cove often compress yields below 5.5%.
- Property management fees in Davao City typically run 8% to 12% of monthly rent, plus a one-month leasing fee for each new tenant, which can significantly reduce net returns.
- The Davao International Airport terminal expansion targeting December 2026 completion is expected to boost rental demand in nearby Sasa, Lanang, and parts of Buhangin.
- A realistic vacancy buffer for Davao City landlords is about one month per year, translating to roughly 8% of potential rental income lost to turnover and marketing time.
- Net rental yields in Davao City typically land around 3.9% after accounting for vacancy, maintenance, insurance, property tax, and management fees.
What are the rental yields in Davao City as of 2026?
What's the average gross rental yield in Davao City as of 2026?
As of early 2026, the average gross rental yield in Davao City across all common residential property types is approximately 5.8% per year.
Most typical residential properties in Davao City fall within a realistic gross yield range of 4.5% to 8%, depending on the property type, location, and how well the unit is priced relative to the market.
This puts Davao City roughly in line with other major Philippine cities outside Metro Manila, where condo-heavy markets often show slightly higher yields due to denser renter populations and more standardized pricing.
The single most important factor currently influencing gross rental yields in Davao City is the balance between property prices and rent levels, which varies dramatically by neighborhood and property type.
What's the average net rental yield in Davao City as of 2026?
As of early 2026, the average net rental yield in Davao City across all common residential property types is approximately 3.9% per year.
The typical difference between gross and net rental yields in Davao City is about 1.5 to 2 percentage points, meaning landlords lose roughly one-third of their gross return to operating costs.
Property management and leasing fees tend to be the expense category that most significantly reduces gross yield in Davao City, especially for investors who hire professionals to handle tenant placement and day-to-day management.
Most standard investment properties in Davao City deliver net yields in the 3.6% to 4.2% range, with the variation coming from how well owners control vacancy, maintenance, and management costs.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Davao City.
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.
What yield is considered "good" in Davao City in 2026?
A gross rental yield of 6% to 7% is generally considered "good" by local investors in Davao City, while anything above 7% is viewed as very good and often requires finding the right micro-location and unit size.
The threshold that typically separates average-performing properties from high-performing ones in Davao City is around 6% gross, as properties below this level often indicate premium pricing that does not translate into proportionally higher rents.
How much do yields vary by neighborhood in Davao City as of 2026?
As of early 2026, the spread in gross rental yields between the highest-yield and lowest-yield neighborhoods in Davao City is about 3 percentage points, ranging roughly from 4.5% to 8%.
Neighborhoods that typically deliver the highest rental yields in Davao City are those with strong, year-round renter demand and moderate property prices, such as Matina, Ecoland, Claveria in the downtown core, and parts of Buhangin near Cabantian and Sasa.
The lowest rental yields in Davao City tend to appear in premium or prestige-priced areas where property values are high relative to achievable rents, including Lanang, the Azuela Cove vicinity, and parts of the Bajada and Abreeza corridor.
The main reason yields vary so much across Davao City neighborhoods is the disconnect between purchase prices, which reflect prestige and amenities, and rental rates, which are driven by tenant budgets and practical commute needs.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Davao City.
How much do yields vary by property type in Davao City as of 2026?
As of early 2026, gross rental yields across different property types in Davao City range from about 4.5% for land-heavy subdivision houses up to 8.5% for well-located studios and older low-rise apartments.
Studios and small 1BR condos currently deliver the highest average gross rental yield in Davao City, typically between 6.5% and 8%, because they offer the best rent-per-peso ratio and attract the largest pool of renters.
Single-detached subdivision houses tend to deliver the lowest average gross rental yield in Davao City, usually between 4.5% and 6.5%, because a significant portion of their value is tied up in land rather than rentable space.
The key reason yields differ between property types in Davao City is that smaller units command higher rent per square meter, while larger properties carry more land value that does not translate proportionally into higher rents.
By the way, you might want to read the following:
What's the typical vacancy rate in Davao City as of 2026?
As of early 2026, the estimated average residential vacancy rate in Davao City is approximately 8%, which translates to about one month empty per year for a typical rental property.
Vacancy rates across different neighborhoods in Davao City realistically range from about 6% to 14%, with prime and correctly priced units at the lower end and overpriced or poorly positioned units experiencing longer gaps between tenants.
The main factor that currently drives vacancy rates up or down in Davao City is pricing strategy, as units priced in line with tenant budgets fill quickly while overpriced units can sit empty for months.
Davao City's vacancy rate is roughly comparable to other major Philippine secondary cities, though it tends to be slightly lower than national averages due to steady local employment from BPOs, healthcare, and educational institutions.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Davao City.
What's the rent-to-price ratio in Davao City as of 2026?
As of early 2026, the average rent-to-price ratio in Davao City is approximately 0.48% per month, which means landlords collect about 48 pesos in monthly rent for every 10,000 pesos of property value.
A rent-to-price ratio of around 0.5% monthly or higher is generally considered favorable for buy-to-let investors in Davao City, as this directly translates to a gross rental yield of about 6% annually, which is the threshold most local investors consider good.
Davao City's rent-to-price ratio is competitive compared to Metro Manila, where prestige pricing often pushes the ratio below 0.4%, but roughly similar to other growing Philippine secondary cities like Cebu and Iloilo.
We have made this infographic to give you a quick and clear snapshot of the property market in the Philippines. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which neighborhoods and micro-areas in Davao City give the best yields as of 2026?
Where are the highest-yield areas in Davao City as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Davao City are Matina and Ecoland near major retail hubs, Claveria in the downtown core, and parts of Buhangin especially around Cabantian and Sasa where workforce demand is strong.
These top-performing areas in Davao City typically deliver gross rental yields in the 6.5% to 8% range when properties are bought at reasonable prices and targeted at the right tenant profile.
The main characteristic these high-yield areas share is that they combine accessible locations with moderate property prices, meaning renters find them practical and landlords do not overpay for prestige.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Davao City.
Where are the lowest-yield areas in Davao City as of 2026?
As of early 2026, the top three lowest-yield neighborhoods in Davao City are Lanang especially for premium condo and large-house inventory, the Azuela Cove vicinity with its higher-end positioning, and parts of the Bajada and Abreeza corridor where prestige pricing is common.
These low-yield areas in Davao City typically deliver gross rental yields in the 4.5% to 5.5% range, which may still offer good capital appreciation but provide weaker cash flow for landlords.
The main reason yields are compressed in these areas of Davao City is that property prices reflect premium amenities, brand recognition, and lifestyle appeal, but rents do not rise proportionally because tenants have budget limits.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Davao City.
Which areas have the lowest vacancy in Davao City as of 2026?
As of early 2026, the top three neighborhoods with the lowest residential vacancy rates in Davao City are Bajada near medical and business hubs, Matina and Ecoland with their retail and transport convenience, and the downtown Claveria area with its dense local renter base.
These low-vacancy areas in Davao City typically experience vacancy rates in the 4% to 7% range, meaning landlords may only lose two to four weeks of rent per year to tenant turnover.
The main demand driver that keeps vacancy low in these areas of Davao City is the concentration of employment centers, hospitals, schools, and daily conveniences that create steady, year-round rental demand rather than seasonal spikes.
The trade-off investors typically face when targeting these low-vacancy areas is that property prices tend to be higher, which can compress yields even as occupancy remains strong.
Which areas have the most renter demand in Davao City right now?
The top three neighborhoods currently experiencing the strongest renter demand in Davao City are Bajada near the Abreeza area, Lanang with its business district and airport access, and Matina and Ecoland for their mix of retail and transport options.
The renter profile driving most of the demand in these areas consists of young professionals working in BPOs and corporate offices, medical staff from nearby hospitals, and small families who prioritize commute convenience over property size.
Rental listings in these high-demand Davao City neighborhoods typically get filled within two to four weeks when priced correctly, compared to six to eight weeks or longer in slower areas.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Davao City.
Which upcoming projects could boost rents and rental yields in Davao City as of 2026?
As of early 2026, the top three upcoming infrastructure projects expected to boost rents in Davao City are the Davao International Airport terminal expansion targeting December 2026 completion, the Davao City Bypass Construction Project improving cross-city travel, and the Samal Island to Davao City Connector bridge currently in progress.
The neighborhoods most likely to benefit from these projects include Sasa, Lanang, and parts of Buhangin near airport access, as well as Tugbok and southern approach areas that will gain from bypass connectivity.
Once these projects are completed, investors might realistically expect rent increases of 5% to 15% in directly affected corridors, though the gains will depend on how quickly new businesses and employers follow the infrastructure improvements.
You'll find our latest property market analysis about Davao City here.
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What property type should I buy for renting in Davao City as of 2026?
Between studios and larger units in Davao City, which performs best in 2026?
As of early 2026, studios and small 1BR units are the better-performing unit type in Davao City in terms of both rental yield and occupancy, consistently outperforming larger units across most neighborhoods.
Studios in Davao City typically deliver gross rental yields of 6.5% to 8% (around PHP 78,000 to 96,000, USD 1,400 to 1,700, or EUR 1,300 to 1,600 annually per million pesos invested), while larger 2BR and 3BR units usually yield 5% to 6.5%.
The main factor that explains why studios outperform in Davao City is that they attract the largest renter pool, including young professionals, couples, students, and transitional renters, while commanding the highest rent per square meter.
However, larger units might actually be the better investment choice in Davao City if you are targeting stable, long-term family tenants who typically stay for years and cause less turnover-related vacancy and wear.
What property types are in most demand in Davao City as of 2026?
As of early 2026, the most in-demand property type in Davao City is the studio or 1BR condo in core corridors like Bajada, Matina, Ecoland, and the edges of Lanang.
The top three property types ranked by current tenant demand in Davao City are studios and 1BR condos for young professionals, 2BR to 3BR townhouses and duplexes for families wanting space without buying, and subdivision houses in good-school and good-commute pockets.
The primary demographic trend driving this demand pattern in Davao City is the growth of BPO employment, healthcare sector jobs, and educational institutions, all of which bring renters who prioritize convenience and affordability over property size.
One property type that is currently underperforming in demand and likely to remain so in Davao City is the large luxury house or high-end penthouse, as the renter pool for these premium units is very thin and turnover can be lengthy.
What unit size has the best yield per m² in Davao City as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Davao City is approximately 22 to 35 square meters, which covers most studios and compact 1BR condos.
For that optimal unit size in Davao City, the typical gross rental yield per square meter translates to roughly PHP 400 to 550 in monthly rent per square meter (approximately USD 7 to 10 or EUR 6.50 to 9), depending on location and finish quality.
The main reason smaller and larger units tend to have lower yield per square meter compared to the optimal size in Davao City is that very small units can have fixed costs that eat into returns, while larger units see tenants pay for bedrooms but not proportionally more per square meter.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Davao City.
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 costs cut my net yield in Davao City as of 2026?
What are typical property taxes and recurring local fees in Davao City as of 2026?
As of early 2026, the estimated annual property tax for a typical rental apartment in Davao City ranges from about PHP 5,000 to 20,000 (roughly USD 90 to 360 or EUR 85 to 340), depending on the assessed value and whether the property is classified as residential or commercial.
Beyond property tax, landlords in Davao City must also budget for condo association dues if applicable, which can run PHP 2,000 to 8,000 per month (USD 36 to 145 or EUR 34 to 135), or subdivision dues and security fees for houses.
These taxes and local fees typically represent about 2% to 5% of gross rental income in Davao City, which is a smaller drag than many investors expect but still meaningful over time.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Davao City.
What insurance, maintenance, and annual repair costs should landlords budget in Davao City right now?
The estimated annual landlord insurance cost for a typical rental property in Davao City ranges from about PHP 3,000 to 15,000 (roughly USD 55 to 270 or EUR 50 to 255), depending on coverage level and whether you are insuring a condo unit or a full house structure.
The recommended annual maintenance and repair budget in Davao City is approximately 0.5% to 1% of property value, which for a PHP 3 million condo translates to PHP 15,000 to 30,000 per year (USD 270 to 540 or EUR 255 to 510).
The type of repair expense that most commonly catches landlords off guard in Davao City is air conditioning failure and plumbing issues, which can easily run PHP 10,000 to 25,000 (USD 180 to 450 or EUR 170 to 425) for a single repair.
In total, landlords in Davao City should realistically budget PHP 20,000 to 50,000 per year (USD 360 to 900 or EUR 340 to 850) for the combined costs of insurance, maintenance, and repairs on a typical rental property.
Which utilities do landlords typically pay, and what do they cost in Davao City right now?
In Davao City long-term rentals, tenants typically pay for electricity, water, and internet, while landlords are usually responsible for condo association dues or subdivision fees, and sometimes gardening or security costs for houses.
If you offer a fully furnished "all-in" rental where the landlord covers utilities, the estimated monthly cost in Davao City runs about PHP 3,000 to 8,000 (roughly USD 55 to 145 or EUR 50 to 135), depending on unit size and air conditioning usage.
What does full-service property management cost, including leasing, in Davao City as of 2026?
As of early 2026, the estimated monthly property management fee for full-service management in Davao City is typically 8% to 12% of monthly rent, which on a PHP 15,000 per month rental translates to PHP 1,200 to 1,800 (roughly USD 22 to 33 or EUR 20 to 31).
The typical leasing or tenant-placement fee charged on top of ongoing management in Davao City is one month's rent for a standard one-year lease, which means a PHP 15,000 rental would cost PHP 15,000 (USD 270 or EUR 255) each time a new tenant is placed.
What's a realistic vacancy buffer in Davao City as of 2026?
As of early 2026, landlords in Davao City should set aside approximately 8% of annual rental income as a vacancy buffer, which accounts for about one month of downtime per year between tenants.
The typical number of vacant weeks per year landlords experience in Davao City ranges from two to four weeks for well-priced properties in strong locations, up to six to eight weeks for overpriced or poorly positioned units.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Davao City, we always rely on the strongest methodology we can and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source Name | Why It's Authoritative | How We Used It |
|---|---|---|
| Dot Property - Davao City Condos for Rent | It's a major, established listing portal that publishes transparent market insight stats based on its own listing database. | We used the median rent, median condo list price per square meter, and the portal's gross rental yield estimate for Davao City condos. We treated this as our anchor for the condo segment and then adjusted to a citywide, all-property mix. |
| Dot Property - Properties for Sale in Davao City | It's the same large portal, and it shows price-per-square-meter on many listings, which is useful for cross-checking price levels. | We used it to sanity-check the price dispersion between condos and houses because listings show floor area and price. We used this to keep our citywide yield range realistic across property types, not just condos. |
| Bangko Sentral ng Pilipinas - RPPI Report | This is the Philippine central bank's official statistics publication for residential property prices. | We used it to anchor the national direction of prices and to avoid portal-only bias when thinking about 2026 pricing conditions. We also used it to frame what's normal for price growth and market cycles in the Philippines. |
| IMF - Technical Assistance Report on Philippines RPPI | The IMF is a top-tier international institution, and this report explains methodology and data quality around the RPPI. | We used it to validate that the RPPI is built with serious statistical methods so it's a strong macro cross-check. We used it as methodology support, not as a Davao-specific data source. |
| BLGF - Real Property Tax Quick Guide | BLGF is a Philippine government bureau and this document explains how real property tax works nationwide. | We used it to structure the property tax section in a way that matches how local government units implement RPT. We used it to avoid incorrect tax rate on market value assumptions. |
| BLGF - Davao City Local Tax Reference | It's an official BLGF publication that summarizes local tax parameters for Davao City. | We used it to ground the Davao City-specific property tax discussion so we're not guessing. We used it to translate RPT into an annual peso-range cost that can be deducted from gross yield. |
| Philippine Information Agency - Davao Airport Expansion | PIA is an official government information arm, and this is project status reporting tied to agencies like DOTr and CAAP. | We used it to name real, dated infrastructure projects that can lift rental demand in specific corridors near airport access and business nodes. We used it to avoid vague future growth claims. |
| Philippine News Agency - Davao City Bypass Updates | PNA is the government's newswire and it commonly reports agency progress updates. | We used it to support the upcoming projects section with a credible timeline and scope. We tied the bypass to likely renter demand shifts toward better-connected areas. |
| Manila Standard - Samal-Davao Connector Bridge | It explicitly attributes project completion updates to DPWH, which is the implementing agency. | We used it to identify a concrete demand catalyst from better Samal connectivity and the time horizon for completion. We used it to justify neighborhood examples near Lanang and Sasa access points. |
| Insurance Commission - Statistical Reports | It's the Philippine insurance regulator and publishes official industry performance statistics. | We used it to keep insurance assumptions conservative and real-market rather than random guesses. We used it as a regulator cross-check while still quoting practical premium ranges as estimates. |
| Malayan Insurance - Home Protect | Malayan is a long-running major non-life insurer, and this page shows what typical home cover looks like in-market. | We used it to validate what landlords usually insure like structure and perils and to frame insurance as a real operating cost. We used it to support our insurance budgeting range for net yield. |
| Pioneer Insurance - Home Insurance | Pioneer is a major insurer and this page is a direct, primary source for product availability in the Philippines. | We used it as a second insurer cross-check so our insurance assumptions aren't based on a single provider. We used it to keep the insurance budget section grounded in what's actually sold locally. |
| PhilPropertyExpert - Service Fees | It's a specialist property management operator that states fees clearly including leasing commission structure. | We used it to anchor the leasing plus management cost model such as one-month rent leasing fee for a one-year tenant. We used it to translate management into a net-yield haircut. |
| Colliers Philippines - Residential Market Report | Colliers is a top global real estate consultancy, and even high-level Philippines reports help triangulate cycle conditions. | We used it to cross-check that our 2026 narrative fits broader Philippine residential dynamics like demand recovery and vacancy themes. We did not treat it as Davao-specific pricing data. |
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