As of February 2026, the Philippine real estate market is no longer just navigating market cycles; it is being fundamentally reshaped by the “soft power” of the state. With the Real Property Valuation and Assessment Reform Act (RPVARA/RA 12001) now in full swing, the administration of President Ferdinand “Bongbong” Marcos Jr. has unified the country’s valuation system.
However, this transition comes at a precarious moment. While the government “pumps” values up to modernize the tax base, the “hot air balloon” of the real estate economy is struggling to take off, weighed down by record-high national debt and riddled with systemic holes.
The “Valuation Shock”: Davao City 2017 vs. 2026
Davao City serves as the epicenter for this shift. The 2026 Schedule of Market Values (SMV)—the basis for this year’s general revision of assessments—reveals staggering jumps in base land values.
The Commercial Surge
Pichon Street & F. Iñigo Street: Prime sections have jumped from ₱27,740/sqm in 2017 to a standardized ₱60,100/sqm in 2026.
J.P. Laurel Avenue (Bajada): Proposed to hit ₱60,100/sqm, effectively doubling the “paper value” of the city’s main commercial artery.
Secondary Roads: Even minor roads connected to major hubs, such as E. Quirino Avenue, have seen their values rise from ₱4,920/sqm to ₱9,900/sqm.
Residential Realities
High-end subdivisions are seeing the most aggressive revaluations, creating a massive future tax liability for owners:
Ladislawa & Woodridge Park: Proposed at ₱37,000/sqm (SR1 classification), up from roughly ₱10,000/sqm and ₱7,000/sqm, respectively.
Northtown (North Crest): Rising from ₱3,480/sqm to ₱15,100/sqm.
NHA Buhangin/Agdao: Units previously valued at ₱2,860/sqm are now pegged at ₱12,300/sqm.
Holes in the Balloon: A Stalling Economic Engine
While RPVARA inflates these values, the broader economy is leaking pressure. As of February 2026, several “holes” are preventing a smooth takeoff:
The Debt Burden: The national debt-to-GDP ratio has breached the 63% threshold—the highest in two decades. Billions in borrowings intended for infrastructure and flood control are under intense scrutiny amid corruption probes, resulting in stalled projects and subdued investment activity.
Housing Backlog & Unaffordability: The national housing backlog remains at a crisis level, exceeding 6.5 million units. With government-mandated “floor prices” rising, the gap between what Filipinos earn and the cost of homes is widening.
Rental Ripple & Inflation: While food inflation has stabilized at 2.0% nationally, Davao’s inflation for the bottom 30% of households hit 3.6% in January 2026. This is driven largely by a 2.8% surge in housing rentals and an 8.5% jump in utility costs, proving that rising property valuations eventually squeeze the poorest citizens.
The Condo Crisis: Oversupply Meets Higher Costs
The condo market in both Manila and Davao is facing a unique “tax trap”:
Inventory Glut: Metro Manila continues to grapple with nearly 75,000 unsold units. Developers, facing higher RPT on “idle” unsold inventory under the new SMVs, are being forced to offer aggressive promos, yet high interest rates (around 4.5%) continue to deter buyers.
Soaring Fixed Costs: Condo owners are bracing for a double hit. As land values under buildings triple, HOA dues must rise to cover the building’s increased RPT.
Simultaneously, insurance premiums are climbing as insurers adjust to the government’s new, higher replacement-cost valuations.
A Question to the Government: Where is the Relief for the Backlog?
As the administration uses RPVARA to bolster LGU revenues and standardize the market, the core contradiction remains: How can the government address a housing crisis while its policies are making land, taxes, and the maintenance of those homes more expensive?
Professional Preparedness: Navigating the Pivot
In a market this volatile, “guessing” your property strategy is a liability. To ensure your real estate investments are robust enough to survive these soaring costs, expert local knowledge is essential.
In Davao City, property owners are encouraged to make an appointment with Davao Realtor Donato Te Esparrago II of Dakbayan Realty. As a licensed broker (PRC #16198) and a Real Estate Negotiation Expert (RENE), Donato provides the strategic insight needed to discuss Davao real estate trends, stress-test your portfolio, and navigate the RPVARA transition.
The Bottom Line
The 2026 property market is no longer for the faint of heart. We are seeing a “forced modernization” of values in an economy struggling with debt and oversupply.
For those holding real estate: Brace for impact and manage your finances. The era of “cheap” land holding is over. Whether you are a developer with a land bank or a family with a single condo unit, the government’s new valuation regime is now a permanent, high-cost line item in your monthly budget. Tapping a licensed real estate professional is now essential to navigate these soaring costs and ensure a robust preparedness for the years ahead.