Should you buy property in The Philippines now?

Authored by the expert who managed and guided the team behind the The Philippines Property Pack

Everything you need to know before buying real estate is included in our The Philippines Property Pack

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 the Philippines. If you'd like to learn more about us, you can check our presentation page.

What's the current trend in property prices in the Philippines over the past 12 to 24 months?

The Philippines residential property market has delivered steady growth with national prices rising 6.7% in 2024 and 7.56% in early 2025.

Single detached and attached houses have been the star performers, posting double-digit growth rates of approximately 12.8% year-on-year. This surge reflects strong demand for landed properties, particularly in suburban areas of Metro Manila, Cebu, and emerging secondary cities where families seek more space and value.

Condominium prices have shown more moderate but consistent appreciation at around 5-6% annually, with the strongest performance in mid-market segments. Luxury condos in Manila experienced slight softening due to oversupply concerns, while affordable and mid-range units maintained solid price momentum across major cities.

Townhouse prices have been mixed, with some segments showing modest declines while others in prime locations have appreciated steadily. The variance largely depends on location, with properties near business districts and transport hubs outperforming those in purely residential areas.

As of September 2025, this growth trajectory continues with particular strength in infrastructure-linked corridors and secondary cities that benefit from improved connectivity and business expansion.

How do price forecasts look for the next year, the next three years, and the next five years?

The one-year outlook for the Philippines property market remains positive across most segments and locations.

Metro Manila is expected to see continued but cautious appreciation of 3-5% annually, with mid-market condos and suburban houses leading performance. Cebu stands out with projected growth of 3-7% yearly, driven by its expanding technology sector and business process outsourcing industry that creates steady rental demand.

Davao market conditions point to stable to slight growth, while secondary cities like Iloilo, Clark (Pampanga), and areas around Laguna are positioned for stronger gains as major infrastructure projects near completion. These locations could see appreciation rates of 5-8% annually through 2026.

The three-year forecast shows secondary cities and infrastructure-linked zones substantially outpacing Metro Manila. Clark's New Clark City development, the upcoming subway lines, and expanded airport facilities will drive property values in surrounding areas. Metro Manila's premium market will see slower but steady positive growth of 2-4% annually.

Looking five years ahead, long-term appreciation potential remains strong across the Philippines, particularly in areas benefiting from new transport links, commercial developments, and continued urban migration. Secondary cities maintain the top position for growth potential, with total appreciation of 25-40% possible by 2030 in the best-performing corridors.

Which areas are currently showing the strongest short-term growth and which ones look best for medium- to long-term appreciation?

For short-term growth through 2025-2026, Metro Manila's central business districts continue showing resilience, particularly in Makati, BGC, and Ortigas where office demand supports residential prices.

Cebu City has emerged as a short-term winner, especially in technology-enabled locations and suburban developments where prices have surged 5-8% annually. IT Park areas and nearby residential complexes benefit from the city's growing tech sector and expanding middle class.

Davao's mid-market subdivision segment shows consistent short-term appreciation, supported by steady economic growth and limited quality supply in desirable neighborhoods.

For medium to long-term appreciation over 3-10 years, the clear winners are infrastructure-driven secondary cities. Clark in Pampanga leads this list, positioned to become a major business hub with the New Clark City project and improved airport connectivity.

Iloilo represents another compelling medium-term opportunity, benefiting from port expansion, business district development, and its role as a regional center for Western Visayas. Santa Rosa and other parts of Laguna offer excellent long-term prospects due to proximity to Manila, industrial expansion, and planned transport improvements.

It's something we develop in our Philippines property pack.

What's the difference in performance between condos, single houses, and land in different cities and provinces?

How much rental yield can you realistically expect today in Manila, Cebu, Davao, and secondary cities?

Manila's rental market delivers gross yields of 4.5-6.5% depending on property type and location, with studio and one-bedroom condos in central business districts achieving the highest returns.

CBD locations like Makati, BGC, and Ortigas command premium rents due to proximity to offices and transport hubs. Mid-market condos in these areas typically generate 5.5-6.5% gross yields, while luxury units may only achieve 4.5-5% due to higher purchase prices and longer vacancy periods.

Cebu offers more attractive rental yields of 5-7%, particularly in technology hubs and suburban residential areas. The city's expanding business process outsourcing sector creates consistent demand for quality rental units, especially near IT Park and other business districts.

Davao rental yields range from 5-7%, with mid-market subdivisions and affordable housing projects performing best. The city's stable economy and limited quality supply support healthy rental rates, particularly for properties near commercial centers and universities.

Secondary cities consistently deliver yields above 6%, with locations near universities, government centers, and growing business districts achieving the best performance. Cities like Iloilo, Bacolod, and Clark offer particularly attractive risk-adjusted returns for investors willing to manage properties in emerging markets.

How does supply and demand look right now across these areas—are there oversupply risks or shortages?

Metro Manila faces a complex supply-demand dynamic with tight inventory in affordable and mid-market condominium segments while luxury condos show emerging oversupply risks.

The affordable housing segment experiences chronic undersupply across all major cities, with government programs unable to meet growing demand from the expanding middle class. This shortage supports price appreciation and rental yields in the PHP 2-5 million range.

Mid-market condos in Manila remain in healthy demand, particularly units priced between PHP 5-12 million that appeal to both end-users and investors. New project launches have been measured, helping maintain market balance.

Luxury condos above PHP 15 million face oversupply pressure in Manila, with multiple high-end projects competing for a limited buyer pool. This segment requires careful selection and realistic pricing expectations.

Cebu, Davao, and Iloilo demonstrate healthier supply-demand fundamentals with growing populations and business expansion driving consistent absorption. These cities have avoided the luxury oversupply issues affecting Manila while maintaining strong demand across all price segments.

Provincial growth corridors like Clark, Laguna, and Cavite show strong demand with limited oversupply risk due to land scarcity and measured development pace. Infrastructure improvements continue attracting new residents and businesses, supporting sustained growth.

What are the main risks in the Philippine market in the next two years, and how do they compare with long-term fundamentals?

Interest rate volatility represents the primary short-term risk, though rates are predicted to decline to 4.75-5% range which should support property demand and affordability.

Regulatory changes pose moderate risks, particularly for foreign ownership rules and taxation policies. However, recent trends have favored increased foreign investment rather than restrictions, with relaxed leasing rules and improved corporate ownership structures.

The luxury condominium oversupply in Metro Manila creates specific risks for high-end investors, with potential price corrections of 5-10% possible in oversaturated segments. This risk is localized and doesn't affect mid-market or affordable segments.

Global economic uncertainty could impact overseas Filipino worker remittances and business process outsourcing demand, both important drivers of property demand. However, the Philippines' diversified economy provides some insulation from external shocks.

Long-term fundamentals remain exceptionally strong, supported by infrastructure investment totaling over PHP 8 trillion through 2028, consistent population growth of 1.4% annually, and continued urbanization with millions moving from rural to urban areas each decade.

The country's young demographics, expanding middle class, and strategic geographic position in Southeast Asia provide sustained support for property demand over the next decade, far outweighing short-term risks.

How much budget do you need to enter the market at different levels (affordable, mid-market, luxury) and which segment is performing best?

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What are the transaction costs, taxes, and ongoing ownership costs you should expect?

Total transaction costs for property purchases in the Philippines typically range from 8-10% of the property value, making them relatively high compared to some regional markets.

Transfer taxes constitute the largest component at 0.5-0.75% of the property value, followed by documentary stamp tax at 1.5% of the higher of sale price or fair market value. Registration fees add another 0.25-0.5%, while notarial fees and legal costs contribute 1-2%.

Real estate agent commissions typically range from 3-6% of the sale price, usually split between buyer and seller agents. Buyers should budget for attorney fees of 1-2% for due diligence and transaction management.

Ongoing ownership costs include real property tax ranging from 0.2-2% annually depending on location and property value. Condominiums incur association dues typically ranging from PHP 50-200 per square meter monthly, covering common area maintenance, security, and amenities.

For taxation on sales, capital gains tax of 6% applies to all property disposals, with no holdback period exemptions. Rental income faces graduated tax rates from 20-32% depending on total annual income levels.

Property insurance costs approximately 0.1-0.3% of property value annually, while maintenance and repairs for condos average 1-2% of property value yearly when factoring major renovations.

If you buy today, how easy is it to resell within 1 year, 3 years, or 5 years in different areas and property types?

One-year liquidity in the Philippines property market varies significantly by location and price segment, with premium locations and affordable units showing the best short-term marketability.

Metro Manila CBD properties and well-located condos typically require 3-6 months to sell when priced appropriately. Affordable units under PHP 5 million move fastest due to strong end-user demand, while luxury properties above PHP 15 million may take 6-12 months or longer.

Secondary cities like Cebu, Davao, and Iloilo show moderate liquidity with average marketing periods of 6-12 months for most property types. Unique or overpriced properties may require 12-18 months to find suitable buyers.

Three-year resale prospects improve significantly as the market cycles and infrastructure projects mature. Properties in emerging growth corridors become increasingly attractive to both investors and end-users as connectivity and amenities develop.

Five-year liquidity shows the best prospects for infrastructure-linked areas and secondary cities where development programs reach completion. Early investors in Clark, Iloilo, and Laguna corridors should find strong buyer interest as these areas establish themselves as mature property markets.

It's something we develop in our Philippines property pack.

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 are the key legal and regulatory factors for foreigners and locals that could affect your strategy?

Foreign ownership regulations in the Philippines follow specific constitutional restrictions that significantly impact investment strategies and property types available to non-Filipino investors.

Foreigners can own condominium units provided the foreign ownership ratio does not exceed 40% of the total units in any given building or development. This limitation requires careful selection of projects with available foreign quota, as popular developments often reach the 40% limit quickly.

Land ownership remains restricted to Filipino citizens, though foreigners can acquire long-term lease agreements up to 99 years including renewal options. Alternative structures include corporate ownership through Filipino corporations with proper foreign investment registration.

Recent regulatory changes have favored increased foreign investment, with relaxed rules on condominium corporation ownership and improved lease registration processes. The Revised Corporation Code allows up to 100% foreign ownership in certain corporations that can then hold property.

For Filipino citizens, full ownership rights apply to all property types with straightforward inheritance and transfer laws. Estate planning becomes important for mixed Filipino-foreign families to ensure smooth property transfer across generations.

Tax residency status affects both income tax obligations and capital gains treatment, making proper tax planning essential for foreign investors who may become Philippine tax residents through extended stays or property rental activities.

Based on your goals—living, renting out, or flipping—where should you focus (which city, which property type, and what price range)?

For buyers planning to live in their Philippine property, Metro Manila and Cebu offer the best combination of lifestyle amenities, international connectivity, and professional opportunities.

Manila residents should focus on central locations like Makati, BGC, or Ortigas for maximum convenience, with budgets of PHP 8-15 million securing quality condos or townhouses. Suburban options in Alabang or Eastwood provide better value at PHP 5-10 million while maintaining access to business districts.

Cebu appeals to those seeking lower costs and relaxed lifestyle, with excellent properties available from PHP 4-8 million in IT Park vicinity or suburban developments. The city offers international schools, quality healthcare, and direct flights to major Asian cities.

Rental income investors should target studio and one-bedroom condos in central business districts where tenant demand remains strongest. Manila CBD properties in the PHP 4-8 million range typically generate 5-6% gross yields with good tenant quality from multinational companies and business process outsourcing firms.

Cebu and Davao rental properties offer higher yields of 6-7% with lower entry costs, making them attractive for investors seeking cash flow over capital appreciation. Secondary cities near universities or government centers provide yields above 7% for those comfortable managing remote properties.

Property flippers should concentrate on secondary growth corridors like Clark, Iloilo, and Laguna where infrastructure development creates rapid appreciation potential. Mid-market units priced PHP 5-12 million offer the best combination of liquidity and appreciation, avoiding both affordable segment competition and luxury market volatility.

It's something we develop in our Philippines property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Trading Economics - Philippines Residential Property Prices
2. Global Property Guide - Philippines Price History
3. BambooRoutes - Philippines 5-Year Real Estate Forecast
4. BambooRoutes - Philippines Price Forecasts
5. Buy Sell Lease - Best Cities to Invest in Philippines
6. BambooRoutes - Which Area to Invest Philippines
7. Global Property Guide - Philippines Home Price Trends
8. Phinma Properties - Philippines Real Estate Dynamics