Sunday, April 13, 2008 [ manilatimes.net ]
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.
____________________________________________________________________
