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By Gilbert Yu, Contributor
AFTER enduring decades of booms and busts,
selected few profited, but majority lost heavily. Homeowners have
justifiably begun to question just how much value real estate
developers really contribute to the Philippine property industry. To
counter the skepticism, developers today engage in marketing
activities that are, frankly, incomprehensible. In their misguided
attempts to win back credibility, they employ strategies that are
entirely detached from the client they claim to service: the
homebuyer.
For example, developers flaunt awards received
for being the best company for the benefit of their stockholder,
instead of best service to their clients or homebuyers. Or they harp
about how Fortune magazine has bumped their majority owners up to
the richest-in-Asia list. Clearly, real estate developers have lost
their focus—they pat themselves on the back for launching one
project after another, collecting pre-selling payments and
increasing private wealth of their partners in the company. Wait a
minute . . . isn’t the whole point to build honestly priced
condominium units in uplifting locations while offering the most
affordable payment and matching low interest terms?
In the Philippines, the ocean between those who
own homes and those who do not is magnified because developers
target speculators more than homeowners. They wooed them by
promising appreciation of their investment. But why sell to
investors when there is a big market of sincere home-seekers looking
for dwelling, not to make money, but to actually live in? The
picture is clear since investors would hype up the price of homes
and bring more profit to the developers. One should understand that
housing is a need and not a commodity to make a large profit on.
Because real estate developers have such
self-serving priorities, their marketing come-ons have come across
as contrived. They host investor nights complete with nice music,
beautiful models, plenty of food and goodies. And even the
occasional fashion show. This would only be acceptable if the
Philippines possessed a mature property market similar to other
developed countries, meaning most customers were looking for luxury
second homes, which is clearly not the case in this country.
To highlight how disconnected and unabiding
developers are from basic business ethics, one company recently
declared that it would use proceeds collected from the pre-selling
of its developments to fund the purchase of another chunk of land
for land banking. Intelligent homebuyers are left scratching their
heads, wondering why developers juggle and divert their hard-earned
money and pocket enormous profit at their expense and risk.
Meanwhile, good things are happening, there is
now a growing number of professionals—architects, contractors and
engineers—who innovated a new service method that serve homebuyers
directly, minus the participation of middlemen in the process.
G&W Architects, for example, pioneered the build-to-own system
of homeownership in the Philippines. Others, too, are beginning to
practice the direct-cost scheme of building residential projects.
Manosa Partners and DMCI Homes gather clients together and charge
reasonable professional fees instead of excessive profit margins
many developers input into the selling price of their condominium
units.
The introduction of this new, more ethical and
professional business model has revealed many developers for what
they really are—superfluous excesses in the real estate industry
that, instead of adding value, they inflate costs. Simply put, there
is no legitimate reason for developers to pocket such exorbitant
profit for dwellings that can be built better by the professional
sector for much less. Many developers, with their mistaken focus on
speculative profit, have proven themselves to be dispensable
elements in the Filipino dream of homeownership. Home needers
can—and should—do without them.
Homebuyers are realizing that direct-cost
builders, who are intrinsically more passionate about their product,
are the ones who responsively service their needs. Every industry
must make its customers top priority. Since every Filipino deserves
to own his own home, the future of the real estate industry lies,
without doubt, in building quality houses at actual cost plus input
of service fee. If they do not adapt, many real estate companies
will go the way of the dinosaur.
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