Real estate mismatch plagues market, expert warns
The disconnect has led to the proliferation of high-cost properties in locations that do not align with the financial capacity or preferences of buyers.
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The disconnect has led to the proliferation of high-cost properties in locations that do not align with the financial capacity or preferences of buyers.
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The Philippine real estate sector faces a pressing issue of mismatch between developer inventories and buyer demands, according to Filipino Homes Founder Anthony Leuterio.
In a media statement on Thursday, Leuterio said stakeholders need a more customer-focused approach to fill the gaps in the industry that hinder sustainable growth.
“The market is huge in real estate, but the unmet demands versus the inventory are not matched,” Leuterio said, pointing to an oversupply of real estate inventory, particularly in Metro Manila.
He attributed the problem to developers relying on flawed market studies, which often reflect a skewed perspective favoring their interests over actual market needs.
“The problem in the whole country is that they are not looking at the marketing side—the unmet demands,” he explained. “The studies are focused on developers, not on the actual needs of the market.”
In Metro Manila, the oversupply of condominium units rose to 34 months as of November due to a sudden increase in available units, according to Leechiu Property Consultants (LPC).
The LPC study explained that while the supply and sales figures balanced at 4,000 units each, 6,000 backouts pushed the supply level up from 29 months recorded in the third quarter. At the current sales pace, it would take nearly three years to clear the existing inventory, far exceeding the typical 12-month maximum considered healthy by the market.
Leuterio noted that the disconnect has led to the proliferation of high-cost properties in locations that do not align with the financial capacity or preferences of buyers.
Thus, he urged developers to rethink their strategies by prioritizing thorough and accurate market research and involving marketing professionals, rather than relying solely on internal analyses.
Leuterio also stressed the importance of understanding buyer affordability before embarking on expensive projects requiring high recovery costs.
The Philippine real estate market, he said, has immense potential, but unlocking it requires developers to bridge the gap between what they build and what buyers need. “By addressing unmet demands, developers can open up opportunities for sustainable growth in this thriving sector,” he added.
