Davao City is a growing city and is growing fast. Among indicators are the continuing constructions of high-rise and horizontal developments, infrastructure such as road networks, and the traffic – all of these attract a lot of developers to go to Davao City.
Marlon Escalicas, licensed real estate broker and proprietor of MCLE Realty, told Edge Davao that there is also a notable influx of developers (national and local players) and creation of masterplanned developments especially during the time of former president Rodrigo Duterte.
Escalicas said that during that time he noticed a migration of people from other areas of the country and even foreign retirees here in Davao City, which helped push the demand for housing.
“Rental rates have also gone up as more people from nearby provinces spend weekends here in the city as well as influx of tourists for leisure, business or conventions,” he said.
These major infrastructure projects and the entry of new investments in Davao City contributed to the appreciation of property values.
“Prices have gone up significantly over the past years, it has more than doubled. Those who bought properties several years ago are already reaping their harvest and earning huge income either from reselling or leasing it,” Escalicas said.
He said during the previous years, a buyer could buy houses below P1 million or even below P500,000, but recently it is already difficult to buy a house at this price.
“Even condominium prices have gone up and more than doubled in the last 2-3 years partly because the lot values where these buildings are going to be built have increased. After 16 years, there has been a significant change in the real estate industry. The prices have gone up and almost every year market values are increasing to about 5-10% or even more in prime areas,” Escalicas said.
Philippine Investment Management (Phinma) Holdings Corporation president and CEO Raphael B. Felix shared the same views.
Phinma recently launched Likha Residences Davao, an exclusive community nestling 94 modern townhomes in Davao City.
“The cost of land in Davao City is very high which is why a lot of developers build condominiums. One of the reasons why developers will develop condominiums is to have more profit and second is to make it more affordable. The more units you put in the same piece of land, the cheaper it becomes. Conversely, the more units you put in, the more profit you make,” Felix said in an interview.
The real estate market in Davao City is booming right now with buyers looking to buy into prestige, culture, and lifestyle.
“Majority of the developments in Davao are vertical projects so there is a big opportunity for developers in the horizontal projects especially in the affordable market. The majority would still prefer a house and lot over a condo if given a choice,” Escalicas said.
Escalicas said it is also important to closely monitor as well the outcome of phenomenal condo sales in the past 2-3 years as most of them would have finished their down payments in the next 2-5 years and ready for loan takeout.
“Hopefully, all of them or the majority will be qualified for a loan take out or will be able to fully paid, otherwise there will be a sudden increase in condo inventory which could reduce market values,” he said.
It is common knowledge that a booming real estate sector always complements the economic growth of the city.
“If Davao City’s economy will grow, there will be more demand for real estate and developers or private investors will have reason to build new and better real estate projects,” Escalicas said.
He also commended those developers that are considering areas other than downtown like Toril, Panacan, Mintal, and farther areas as this will help spread out development in the city.
“If new communities will emerge in those areas then economic development will follow as well,” he said.
Escalicas is optimistic that Davao City will always be attractive for real estate investors since it is a progressive city.
“It is an economic hub, a center for education, and a tourist destination so demand for real estate will continue to grow,” he said.
