With economic recovery seen in 2022 and improvement in residential demand expected, developers are urged to continue lining up new residential projects in the city to capture pent-up demand.
Colliers sees Davao retaining its stature as one of the more attractive residential investment hubs in Mindanao. According to Theresa Teodoro, Colliers Senior Director and Head of Advisory Services: “Davao remains to be the preferred residential investment hub of Mindanao, given key indicators and upcoming infrastructure projects.”
In Colliers’ view, Davao’s residential market will continue to benefit from the region’s economic recovery beyond 2022. Despite market disruptions due to Covid-19, demand – primarily seen to be coming from overseas Filipino workers (OFW) and investors – is still expected to take up inventory as the country starts to ease mobility restrictions and economies open.
In 2021, 840 condominium units were sold in Davao City, up from the 655 units in 2020. We expect condominium demand to slowly pick up in 2022, fueled by regional economic growth and OFW remittances. In 2022, Colliers sees the delivery of about 1,790 condominium units, with the Talomo and Lanang districts covering 65% of the additional supply during this period. Condominium prices, meanwhile, are expected to grow by an average of 3% per annum from 2022 to 2026 as national real estate developers continue to launch new projects to cater to a mix of investor and end-user demand.
Colliers sees an improvement in demand beyond 2022 and this should play a crucial role in raising property prices and improving the feasibility of alternative sites for residential projects. We recommend that developers continue lining up new residential projects in Davao City to capture pent-up demand. Furthermore, we recommend that developers maximize available infrastructure and continue land-banking efforts outside of business districts.