Realty brokers push for low-end housing units

CEBU, Philippines – Real estate brokers groups in Cebu are challenging developers who are active in high-end realty to invest more in affordable or economy housing units which, they said, are in demand.

Cebu Real Estate Board (Cereb) president Samuel O. Lao said that although there is a mushrooming of mid to high rise condominiums, pocket subdivisions offering house and lot packages is still the top  market  choice.

Philippine Allied Chamber of Real Estate Brokers and Licensed Salesmen (PhilAcre) president Anthony Leuterio said  developers should also consider the increasing demand for affordable housing packages.

“Everybody is doing high-end condominium projects when the real demand now is for  housing units  within the P4,500 to P7,500 amortization per month,” he said.

Leuterio hopes that developers will be able to see this serious need, otherwise they will also suffer from inventory glut, if they continue to build projects that are not needed by the market.

In a separate interview, Winston Conrad B. Padajinog, senior economist and dean of the School of Management at the University of Asia & the Pacific,  said that the reason condominium projects are selling like hotcakes is not because developers are addressing the housing need, but rather they are providing the needs of the “investors” who are buying condominium units for investment and second home purposes.

However, he said buying condominium units as an investment may not be a good idea as assessment value of this particular product differs depending on the marketability and other factors.

Renting is a good way to make money out of condo investment but renting rates are also under pressure, depending on the demand, and location of the unit, he said.

According to Padajiong,  developers can address the lack of space  for horizontal residential projects  by  partnering with local government units in converting old urban poor areas into housing projects that will be made affordable to the existing residents.

The obvious bias of developers in building only projects for middle and high-end markets should be addressed, otherwise, the real estate industry will not achieve a balanced growth performance.

Earlier, economic housing developer Johndorf Ventures Corporation announced that it  is  building at least 2,000  economic housing units within Metro Cebu  to help lessen the huge backlog of affordable housing  within the metropolis.

Johndorf Ventures Corporation president and chief executive officer Richard D. Lim said that the company will build five to six more subdivisions, mostly in Mactan Island within the next five years.

Lim said that although he is very much tempted to join the lucrative condominium business, he would rather stick to his company’s core mission of providing affordable house and lot packages to the mainstream market.

To date, the Philippines has a huge 3.9 million housing backlog which is expected to reach to 7 million in 2030.