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Real estate news in the Philippines

The rental yield in the Philippines rose to 5.19% in the first quarter of 2024

real estate due diligence in the philippines

The Philippine real estate market has kicked off 2024 on a high note, with the average gross rental yield climbing to 5.19% in the first quarter, up from 5.12% in the third quarter of 2023. Though seemingly modest, this incremental growth signals a strengthening of the Philippine property market, particularly in the rental sector, and suggests a robust demand for residential spaces in key urban areas.

Overview of the rising rental yields in the Philippines

The latest figures released on February 16, 2024, reveal a nuanced landscape of rental yields across Metro Manila and Cebu City, the two largest cities in the Philippines. In Metro Manila, the yields vary significantly by city and apartment size, with smaller units generally offering higher yields. For instance, studio and 1-bedroom apartments in Manila City boast a yield of 5.41%, while larger, 4+ bedroom units in Taguig City see yields as low as 3.36%. This disparity highlights the stronger demand for more compact living spaces, likely driven by young professionals and small families seeking affordability and convenience.

Cebu City, on the other hand, presents an even more attractive proposition for investors, with average rental yields of 5.35% across all apartment sizes. This higher yield rate compared to Metro Manila underscores Cebu’s growing status as a residential and commercial hub in the Visayas region, attracting local and international attention.

Opportunity to maximize returns on investments in the Philippines

For current property owners, the rise in rental yields represents an opportunity to maximize returns on their real estate investments, especially in high-demand areas. The data suggests that investing in smaller units could yield better returns, given their popularity and higher rental yields.

For potential investors, these numbers offer a clear insight into the Philippine real estate market’s potential, highlighting areas of growth and opportunity. The steady increase in rental yields indicates a healthy demand for rental properties, making it an opportune time to invest, particularly in cities like Manila and Cebu, which show strong potential for sustained growth.

Manila and Cebu are compelling choices for investors

The detailed breakdown of rental yields by city within Metro Manila reveals a complex and varied market. Areas like Manila City and Mandaluyong City are emerging as lucrative spots for investment, particularly for smaller units. In contrast, the luxury market, represented by larger apartments in Taguig City, offers lower yields, pointing to a saturated market with a slower rate of return.

Cebu City’s uniform attractiveness across all apartment sizes makes it a compelling choice for investors looking to capitalize on its growth. The city’s higher average rental yield is a testament to its vibrant economy and the increasing demand for residential spaces.

The Philippine real estate market’s promising start to 2024, with rising rental yields in key urban centers, paints an optimistic picture for the future. For property owners and investors in the Philippines and abroad, the current landscape offers a fertile ground for investment, promising growth and profitability in the years to come.

Your guide to buying property in the Philippines

Written by Matt Timmermans

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