Davao’s Tourism Boom: Is It Driving Up Property Prices Unfairly?

Davao City’s reputation as one of the safer urban centers in Southeast Asia, with a Safety Index of around 71.4 according to early-2026 Numbeo data, has become a powerful economic asset. That perception of security, combined with a tourism surge that brought over 4.15 million visitors in 2024, has fueled a real estate market that is now grappling with a difficult question: is the boom pushing property values beyond what is fair or sustainable for the people who actually live there?

The numbers paint a picture of a region on the rise. Davao Region ranked fourth among the fastest growing economies in the country in 2024, with a gross regional domestic product (GRDP) of ₱1.08 trillion, according to the Philippine Statistics Authority. The construction sector alone grew by 15.5 percent, while transportation and storage expanded by 10.5 percent. These are not abstract figures — they translate into new buildings, better roads, and more people moving through the city. But the same momentum that attracts investors and tourists also puts pressure on land values, and that pressure is now showing up in proposed property assessment hikes that have alarmed local officials and residents alike. For a closer look at how these trends affect first-time buyers, you can read our breakdown of Davao property prices for first-time buyers.

What the tourism and infrastructure boom means for property values

The connection between tourism and property prices is not always direct, but in Davao it is becoming harder to ignore. The Department of Tourism Region XI reported that the 4.15 million tourist arrivals in 2024 generated ₱34.79 billion in tourist receipts. That kind of spending supports hotels, restaurants, and retail, which in turn drives demand for commercial and residential space. From the first quarter to the third quarter of 2025, the region recorded 2.9 million overnight travelers, with domestic tourism leading the way.

Infrastructure projects amplify this effect. The Davao International Airport is expanding its passenger terminal from 17,500 square meters to 25,910 square meters, increasing seating capacity to 1,500. The 17.8-kilometer Davao City Coastal Road Project, which includes bike lanes, is expected to be completed this year. A 45.5-kilometer bypass road with a 2.3-kilometer twin mountain tunnel is under construction and slated for completion by 2028. The Samal Island-Davao City connector bridge, a 3.98-kilometer structure, is projected to handle up to 25,000 vehicles per day and cut travel time between Samal and Davao City from 30 minutes by ferry to just five minutes. These are not minor upgrades — they fundamentally change which areas are accessible and desirable, and land prices in those corridors tend to adjust accordingly.

Colliers Philippines research director Joey Bondoc noted that the mid-income segment, ranging from ₱3.6 million to ₱12 million, dominated condominium take-up in Davao from 2024 to the first half of 2025. For house and lot projects, the affordable to mid-income range of ₱2.5 million to ₱10 million saw strong activity from local investors and remittance-receiving households. These figures suggest that demand is real and broad-based, not just speculative. But they also set the stage for a confrontation between rising market values and the official property assessments that determine tax bills.

The proposed assessment hikes and what they mean for homeowners

The most contentious issue in Davao’s property market right now is not the price of new condominiums — it is the proposed revision to official property values that could raise assessments by 300 percent, 500 percent, and in some projections, nearly 800 percent. These are not market prices; they are the government’s valuation of a property for tax purposes. When assessments rise by that magnitude, property taxes follow, and the impact on households can be severe.

Davao City Councilor Dayanghirang, who has been vocal on the issue, warned that a sharp rise in assessed values could hit households hard. “We might be forcing people to sell their properties just to afford necessities,” he said, describing a middle class squeezed by rising costs and flat wages. He also noted that residents are already struggling with existing tax burdens, including VAT and the expanded business tax (Ebat). The concern is not that property values are rising — it is that the increase is happening too quickly for people to adjust.

The consultation process around these revisions has also drawn criticism. Dayanghirang said the process, limited in reach and participation, does not adequately explain to nearly two million residents how the revisions could affect individual tax bills. “A formula is made in Manila and then sent back for us to pass as an ordinance,” he said. “We will scrutinize that to make sure it’s balanced against the public’s ability to pay.” The tension here is between the need to update outdated valuations and the risk of imposing a burden that residents cannot absorb.

For context on how these dynamics play out in specific developments, our analysis of Davao condo oversupply and the Mandani Bay Suites hype explores whether supply is keeping pace with demand.

What gets missed in the debate over rising values

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Most discussions about Davao’s property boom focus on prices and taxes, but several nuances deserve closer attention.

The uneven geography of appreciation

Not all areas are experiencing the same pressure. Average condominium prices have climbed into six figures per square meter in prime districts such as Lanang and Bajada, while single-detached home values rise unevenly. Colliers projects that house-and-lot developments will expand toward southern and peripheral districts along Tugbok and Talomo, while lot-only residential projects will remain concentrated in southern corridors such as Toril. This means a homeowner in Lanang faces a very different financial reality than one in Toril, even though both are part of the same city. A blanket assessment hike applied uniformly would hit central districts hardest, but peripheral areas may see less immediate benefit from infrastructure improvements.

The disconnect between market value and tax value

Market value is what a buyer is willing to pay. Assessed value is what the government uses to calculate property tax. These two numbers can diverge significantly, especially when assessments are not updated regularly. The proposed revisions aim to close that gap, but doing so in one large jump — rather than through gradual adjustments — creates a shock. Real estate industry representative Tabjie captured this tension well: “We are not against appreciation, but sudden appreciation … that there could be a 300 percent, 500 percent increase, even up to almost 800 percent. We want realistic values that can still be competitive in the market.” The distinction between gradual and sudden change is crucial, and it is one that policymakers sometimes overlook.

The role of office and commercial vacancy

Davao’s office market tells a different story. At the end of 2025, the region had a total stock of 379,000 square meters of office space with a vacancy rate of just 3 percent, according to Colliers Philippines. That is an extraordinarily low vacancy rate, indicating strong demand from BPO firms and other corporate tenants. Low office vacancy supports commercial property values and, by extension, the broader real estate market. But it also means that commercial developers are competing for the same land as residential developers, which can push up land prices across the board.

For a deeper look at how infrastructure projects are reshaping land values, our article on Davao’s infrastructure boom and property prices examines whether the current pace of development is sustainable.

What residents and buyers can do right now

Whether you already own property in Davao or are considering a purchase, the current environment calls for a deliberate approach rather than a reactive one.

Understand how your property tax is calculated

Property tax in the Philippines is based on the assessed value of the property, which is a percentage of the fair market value set by the provincial or city assessor. The basic real property tax rate is 1 percent of the assessed value for provinces and 2 percent for cities like Davao. If the assessed value triples, your tax bill could triple as well — unless the assessment is phased in over time. Check with the Davao City Assessor’s Office to see whether your property’s assessed value has been updated recently and whether any proposed changes are on the table.

Review the consultation process

Dayanghirang has urged assessors to slow the process and consult the public more broadly. If you own property in Davao, attending public consultations or submitting feedback through the city council’s channels is one way to ensure your concerns are heard. The council has indicated it will scrutinize the formula to balance it against the public’s ability to pay, but that scrutiny depends on public input. The process is not closed — it is ongoing, and participation matters.

Look beyond prime districts

For buyers, the areas seeing the most price appreciation — Lanang, Bajada, the city center — are also the areas most exposed to assessment hikes. Peripheral districts like Tugbok, Talomo, and Toril are projected to see more house-and-lot development and may offer better value, especially as infrastructure improvements make them more accessible. The Samal Island-Davao City connector bridge, for example, will make areas near the bridgehead more attractive, but those areas are not yet priced at central-district levels.

Watch for future-phase developments

Several major projects are scheduled for completion in 2028, including the bypass road with the twin mountain tunnel and the Samal Island-Davao City connector bridge. Ayala Malls is also adding a new building in Abreeza Malls, expected to be completed in the second half of 2028. These timelines mean that the next two to three years are a window of opportunity — before these projects are finished and the areas around them see another round of price adjustments. If you are considering a purchase, understanding the completion timeline of nearby infrastructure can help you decide whether to buy now or wait.

For a practical perspective on specific developments, our review of Camella Homes Catalunan Grande looks at whether suburban projects deliver on their promises.

Frequently asked questions

What to watch for next

The debate over Davao’s property assessments is not resolved, and it will not be resolved quickly. The city council has signaled it will scrutinize the formula, and industry representatives have called for realistic values that do not undermine competitiveness. For property owners and prospective buyers, the key is to stay informed about the timeline of the assessment revisions and the completion dates of major infrastructure projects. The next two years will determine whether Davao’s boom becomes a model of balanced growth or a cautionary tale about the cost of success. If this was useful, you might also want to read whether ancestral domains are under threat from Davao’s development.

Sources

Is Davao still affordable? Property prices for first-time buyers — A practical guide for those entering the Davao market for the first time.

Davao condo oversupply and Mandani Bay Suites hype — Examines whether supply is outpacing demand in the condominium segment.

Davao property market faces valuation shock. SunStar Davao, 2026.

Davao Region: the investments and growth hub in the south. Manila Bulletin, 2026.