DMCI Homes slows down launches amid glut
Real estate giant DMCI Homes will likely launch only two projects this year, down from its initial plan of four, as the property market continues to grapple with oversupply.
DMCI Homes president Alfredo Austria told reporters one of the new launches would be “in a very prime location” within Baguio City. He added that the project would have five or six stories and cater to the premium segment.
“We have other projects in the pipeline but the timing of the launches is still uncertain,” Austria said.
In pursuing new projects despite a challenging real estate market in the Philippines, Austria said, “Of course, we want to manage our inventory. But the other side of the coin is we also want to have continuity for our workers. We just have to balance it out.”
Data from real estate broker Leechiu Property Consultants showed a 77-percent drop in new launches in the first quarter of the year as developers focused on marketing their existing inventory before rolling out new projects.
Last year, DMCI Homes saw its earnings fall by 35 percent to P2.5 billion due to weak demand, which pulled down real estate revenues.
The Consunji family-led firm has said that a profit growth was possible for DMCI Homes this year, especially after registering a 56-percent surge in its first-quarter bottom line to P1.4 billion.
However, it can be noted that this was due to higher income from forfeitures, entailing that there were more customers who backed out of their property purchase.
As of early May, Austria said they had at least 2,000 units ready for occupancy that they had yet to sell.
“Buyers are having a hard time continuing their payment … they voluntarily back out because they know that they can’t continue [paying],” he noted.
To encourage more buyers, Austria said they offered rent-to-own packages. Under this scheme, they will pay a monthly fee that is “a little over the usual monthly rent,” although Austria did not disclose how much more expensive this would be.
But he explained that 60 percent of this monthly payment would go to the renter’s equity. This essentially means that part of their rent would go toward increasing their ownership in the property before they eventually fully own it.
Those who go for the rent-to-own route will have the option to buy the property after three years, according to Austria.
DMCI Homes sells an average of 4,000 units a year. Of this, around 1,200 are under the rent-to-own scheme.
“It’s a win-win situation. Owning a unit becomes accessible to buyers, and we also benefit from it,” Austria said.
