This sums up the gap between what buyers are asking for and what developers are willing to offer as they struggle to unload 75,300 pre-selling and ready-for-occupancy (RFO) units.
What buyers want
Findings from a recent survey by property services group Colliers Philippines showed an overwhelming 57 percent of respondents want discounts on the contract price, followed by extended payment terms (19 percent), early move-in (13 percent), lower reservation fees (10 percent), and free furniture or appliances (1 percent).
Developers have responded by offering 25 percent price discounts for cash buyers, extended downpayment terms, and discounts of up to P200,000.
Despite this, Colliers Philippines estimates it will take developers 5.8 years to sell their unsold units—five times longer than it took to clear excess inventory before the pandemic.
“In our view, developers should remain aggressive in offering innovative and attractive promos to re-capture residential demand,” Colliers Philippines said.
Over P150-billion worth of unsold finished units
It noted that of available inventory, about 36 percent, or 27,200 units, were RFO units valued at about P154.4 billion.
“Some developers may opt to offer early and easy move-in promos or attractive rent-to-own schemes for their RFO units,” it added.
“For non-RFO units, developers may offer extended down payment terms. These promos should be highlighted especially for a mid-income client base wary of rising inflation and mortgage rates,” it added.
High-end segment withstands challenges
“Residential developers in Metro Manila that provide upscale amenities, top-tier concierge services, and high-quality after-sales services continue to remain popular amongst the experienced and affluent clients,” Colliers Philippines said.
Ayala Land Inc. and Rockwell Land have managed to blunt the impact of the slowdown by focusing on the high-end market segment, while SM Prime Holdings, through its SM Residences brand, is similarly targeting affluent customers and projects outside the capital to drive growth.
“Colliers believes that developers should continue to innovate with their offerings, especially as they try to capture demand from a client base still reeling from the impacts of elevated interest and mortgage rates,” Colliers Philippines said.
“Developers should remain on the lookout for opportunities outside of Metro Manila given the still-subdued take-up in the capital region,” it added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
