Investment Opportunities in the Philippines’ Rising Stars: Real Estate Growth in Cebu, Davao, Iloilo, and Bacolod

In 2023, we identified Cebu, Davao, and Iloilo as key real estate areas in the Philippines beyond Metro Manila. Three years later, things have changed; the cities haven’t developed equally. Notably, Iloilo City has now outpaced Metro Cebu in occupied office space as of the first quarter of 2026. This shift impacts how investors should consider these markets in 2026.

This is not a general introduction to the four cities — we have specific neighborhood guides for three of them. This piece provides an investment update: current prices, completed versus promised infrastructure, yield data if available, and a practical framework for aligning each city with specific investment goals.

Bacolod will be included in this guide in September 2026. Inquirer’s Visayas coverage now includes it with Cebu and Iloilo as part of the same decentralization trend — businesses, investors, and households are looking beyond Metro Manila and the established Visayas cities. Bacolod’s condo market is expected to see one of the largest inventory increases among provincial markets, and demand remains strong across all price ranges despite the new supply. We analyze it with the same detail as the original three cities, rather than treating it as an afterthought.

Before we dive into the city-by-city details, here’s how the four compare at the moment. Consider this as a preliminary overview, not a conclusive judgment — the sections below clarify why each aspect appears as it does.

Calling Cebu an “emerging” market in 2026 doesn’t fully capture its status. Among the four cities in this guide, Cebu is the most developed, acting like a mature secondary metro with established business districts, a strong BPO presence, and a rich history of transactions that Davao and Iloilo lack. This maturity is why Cebu has the highest prices and remains the easiest market to exit.

The infrastructure landscape is a mix of completed projects and those yet to be realized. The Cebu-Cordova Link Expressway (CCLEX) opened in 2022, reducing travel time between Cebu City and Mactan/Lapu-Lapu, which boosts investment in Mactan beachfront projects. Mactan-Cebu International Airport claims to have enough terminal and runway capacity; a third terminal is being planned with MCIAA and Aboitiz InfraCapital, but no construction timeline is set as of August 2026. The Cebu Bus Rapid Transit (BRT) has faced delays and remains in the planning stage, so any completion date should be viewed with skepticism. South Road Properties (SRP) is seen as a key long-term development, expected to become the next central business district, although its construction will take years.

What drives Cebu’s rental demand is its IT-BPM sector. Cebu IT Park and Cebu Business Park have many multinational and outsourcing companies that fill office spaces and nearby residential towers. Additionally, tourism creates another demand on the Mactan side, where beachfront and resort-adjacent condos cater to short-term renters and lifestyle buyers instead of office workers.

Cebu has three distinct submarkets driven by different demands. Mactan’s coastal projects, such as Mactan Newtown and Costa Mira Beachtown, focus on tourism and short-term rentals. Cebu City’s IT Park and Lahug corridor, with developments like Kalea Heights, cater to BPO tenants with long-term leases. Meanwhile, Cordova and the SRP reclamation area are aimed at longer-term investments linked to the future CBD. Each submarket appeals to different types of investors, making “buying in Cebu” three unique decisions under one city name.

On yield, Cebu performs well within its price range. Gross rental yields are 5.5–7.0% in IT Park, 5.0–6.5% in Lahug, and 5.5–7.5% in Mactan, with short-term rentals occasionally reaching 7–10%. However, operating costs like association fees, property management, vacancies, and taxes typically take up 20–30% of gross rental income, reducing net yields to about 3.5–5.5% in Cebu’s top areas. Focus on net figures instead of gross numbers.

Davao’s economy started with agriculture, mainly durian and bananas, and that remains part of its identity. However, it is no longer solely reliant on this sector. By 2026, forecasts indicate that the region will see real diversification, with growth in services, BPO, industrial manufacturing, and logistics, strengthening local supply chains. This diversification is important for real estate as it expands the market of tenants and buyers beyond just one agricultural cycle.

Three infrastructure projects are changing how the city connects with Mindanao. The Davao City Bypass, which includes the longest mountain tunnels in the Philippines, reduces travel time between Toril and Panabo to about 49 minutes, opening up nearby districts. The expansion of the Davao International Airport’s passenger terminal is almost complete, enhancing trade and tourism. The Mindanao Railway Project is the most important of the three, but it will take time to complete; don’t include potential land value increases from the railway in short-term investments.

The bypass is helping buyers find what they need. Tugbok, an upland area benefiting from the new road, is being seen as a growth area because of three factors: a cooler climate than the city center, being flood-free, and closeness to new business centers along the bypass. This mix of better access and improved livability is a stronger reason for demand than just promises about infrastructure.

It’s important to directly address Davao’s reputation for peace and order instead of avoiding it. The city’s security has changed significantly over the last ten years, and the investment growth in BPO, manufacturing, and logistics, along with rising airport passenger numbers, is a better indicator for 2026 investors than old news. However, approach this like any secondary market: conduct specific research on the district where you’re investing, rather than relying on the city’s overall reputation, whether positive or negative.

On pricing, Davao offers better value compared to the other two cities. Residential prices in Davao average around ₱95,000 to ₱115,000 per square meter, which is lower than Cebu’s median, according to Bamboo Routes. However, it’s essential to note that asking prices are usually higher than actual sales prices. Condo rental yields are also similar, at about 5.5–7%, suggesting that Davao buyers can earn comparable income at a lower cost. One analyst suggests a possible 25–35% price increase over five years; consider this as one estimate and base your decision on yield and infrastructure factors instead.

Iloilo City overtook Metro Cebu in total occupied office space in the first quarter of 2026, based on Colliers Philippines data. Joey Roi Bondoc, Colliers’ research director, notes that Iloilo is attracting more than just BPO companies; it’s also drawing high-value outsourcing firms, as seen at Iloilo Business Park. This indicates Iloilo is moving up the value chain, not just increasing its workforce.

The residential demand data supports the office trend. Iloilo’s condominium take-up rate for 2026 is 89%, higher than the 87% average for Western Visayas, while house-and-lot take-up is even better at 96%, compared to a 92% regional average. The take-up rate is more important than just supply numbers, as it indicates that buyers and tenants are actually purchasing units, rather than them remaining unsold while developers announce new phases.

The macro backdrop supports the city-level story. Western Visayas experienced a 6.4% economic growth in 2025, which is the highest among the Philippines’ 18 regions, according to the Philippine Statistics Authority. Additionally, a Bangko Sentral ng Pilipinas survey showed that 17% of Filipino household remittances are now being used for real estate investment. While this is a national statistic and not specific to Iloilo, it is important because a significant amount of the province’s investable capital comes from OFW and diaspora channels.

Provincial-level spending is boosting private-sector growth. The Iloilo Provincial Development Council has approved a ₱30.11-billion Annual Investment Program for 2026, covering social services, economic services, general public services, and more. Two notable real estate projects are a proposed provincial government center in Santa Barbara, located along the Iloilo-Capiz Road near the international airport, which aims to be a new economic hub like other provincial capitals; and several farm-to-market bridge projects in Leon, Passi City, San Enrique, and Barotac Viejo, which will improve access to rural areas and expand investment opportunities beyond Iloilo City.

Developer confidence is based on data. Megaworld Corp. reported growth in its main businesses in its Q1 2026 results and remains optimistic about its provincial township projects, including Iloilo. This serves as a useful check: a large national developer investing in a market sends a stronger message than one analyst’s prediction.

Iloilo lacks the extensive price data that Cebu has, making it hard to compare prices accurately. This gap in information can actually support the argument: Iloilo’s market fundamentals — like office demand and provincial investment — are moving faster than the available pricing data. This situation offers potential benefits if these fundamentals are eventually reflected in the prices, but also poses risks if purchases are made based on incomplete information compared to Cebu.

Bacolod was not on our 2023 list, but recent coverage by Inquirer highlights its growth. Like Cebu and Iloilo, Bacolod is attracting businesses and households looking for alternatives to Metro Manila’s congestion. The report shows that Bacolod’s condo supply is increasing sharply, with steady demand across price ranges despite the new inventory. This indicates a healthy market, similar to what we’ve seen in Iloilo — real demand, not just speculation.

The city’s economy is changing like Davao’s did. Negros Occidental’s economy grew by 5.1% in 2026, with services making up over half of its output, and industry, including construction and manufacturing, growing the fastest at 11.9%. Agriculture, once dominant due to the sugar industry, now accounts for about 18% of output. In Bacolod City, BPO is the largest employment sector, and the city is recognized as the third Next Wave City in the Visayas. This means there is demand for office space in addition to residential growth, similar to Cebu and Iloilo.

On infrastructure, Bacolod stands out from the other three cities in this guide. While Cebu’s BRT, Davao’s Mindanao Railway, and MCIA’s third terminal are still unconfirmed, Bacolod has already completed its main connectivity project: the ₱7.389-billion, 48.8-kilometer Bacolod–Negros Occidental Economic Highway, which opened in mid-2024. This highway reduces travel time between Bacolod City and Bacolod-Silay Airport from about an hour to around 25 minutes, with an estimated 20,000 vehicles using it daily.

The airport needs improvement, with terminal rehabilitation about 80% done, and a ₱500-million terminal expansion set to begin in early 2026, aiming to increase hourly passenger capacity from 500 to 1,500. Passenger traffic is already rising significantly, so the airport upgrades are meant to address current demand, not future speculation.

Megaworld is bringing growth to Bacolod similar to its work in Iloilo. The Upper East is a 34-hectare township in Brgy. Villamonte that opened in 2015, featuring three completed condominium towers and an office building, with plans for two more residential buildings, another office tower, and a hotel currently under construction. This development is supported by a ₱3.4-billion Megaworld REIT block sale expected in mid-to-late 2025, along with a lifestyle mall set to start in 2026.

In January 2026, Megaworld announced The Sugartown, an ₱8-billion, 97-hectare township near Bacolod-Silay Airport in Talisay City, just five minutes from the airport. This marks the company’s 37th township in the country and includes a residential area called La Sonrisa, covering 15 hectares, managed by subsidiary Suntrust Properties. The project aims for full build-out in seven to ten years, contributing significantly to the reported inventory increase with a clear budget and timeline.

On price, Bacolod is clearly the most affordable of the four cities in this guide. The city’s residential median is about ₱30,966 per square meter, which is roughly a third of Cebu’s median and lower than Davao’s. This figure represents a citywide average that includes both older homes and new developments, so prices for units in places like The Upper East or future Sugartown phases will be higher. Bacolod also lacks the standardized gross-yield or take-up data that Cebu and Iloilo provide; this represents an earlier-stage information gap compared to Iloilo.

Asking “Which city is best?” is not accurate — each of the four cities suits different types of investors and timeframes. Compare your goal with the table below before choosing a city.

Foreign ownership, in plain terms. Foreigners can acquire condominium units in all four cities, adhering to the 40% foreign-ownership limit per project set by the Condominium Act. Land ownership is generally limited to Filipino citizens and corporations that are at least 60% Filipino-owned, applicable in every city in the Philippines. A common workaround for foreign buyers seeking site control without a Filipino co-owner is to enter into a long-term lease. For more details, see our guide to property ownership types and our foreigners and OFWs buying guide.

For OFW and diaspora buyers. Buying in Cebu, Davao, Iloilo, or Bacolod from abroad typically requires a Special Power of Attorney (SPA) that allows a trusted representative to sign for you during the reservation, financing, and title transfer steps. For more details, check our dedicated OFW SPA guide. With 17% of household remittances now going into real estate, this is a common practice, not just a workaround.

Financing snapshot. Major Philippine banks have branches in all four cities and will lend to qualified buyers, but appraisal and processing times can be longer outside Metro Manila. Developer financing is common for pre-selling units in these markets and is usually easier to qualify for, but often comes with a higher overall cost compared to bank loans when looking at total interest paid.

Due diligence in a secondary city. Check the DHSUD License to Sell before paying a reservation fee — our DHSUD verification guide explains the quick five-minute process. For house-and-lot purchases, ensure you are buying a clear individual title instead of an undivided mother title — refer to our mother title risks guide for properties subdivided from larger parcels, which is common in newer suburban areas like Tugbok.

Infrastructure-timeline risk. All major projects mentioned in this guide — Cebu’s BRT, the third terminal at MCIA, and Davao’s Mindanao Railway — do not have a confirmed completion date in the near future. Consider them as long-term developments, not as factors that will increase a unit’s value by next year.

Oversupply watch-points. Cebu’s Mactan and SRP pipelines have the most new supply among the four cities, making them important to watch against absorption data before buying pre-selling. Davao’s suburban growth near the bypass is still in early stages, resulting in less comparable-sales data. Iloilo’s office and BPO growth is a positive factor, but the residential supply is increasing faster than tenant demand, which is something to keep an eye on in the coming years.

Liquidity and exit. Cebu has the most active resale market among the four, with the longest history of transactions. Davao, Iloilo, and especially Bacolod might take longer to sell at your desired price due to less data for buyers to reference — consider a longer holding period for all three.

Bacolod’s specific risk profile. Bacolod has the least transaction history among the four areas, and much of its incoming supply depends on one developer: Megaworld’s Sugartown, which is still in its first year of construction. This creates delivery risk focusing on a single company’s performance instead of distributing it across various projects like in Cebu. Additionally, while the road to the airport is already built, the airport itself is still being upgraded. Therefore, the current 25-minute drive time may not reflect future arrivals until the terminal expansion begins.