Developers urged to address inventory-demand mismatch

CEBU, Philippines — The Philippines’ top realtor, Anthony Gerard O. Leuterio, has urged developers to address the mismatch between inventories and actual market demand in the country’s real estate sector.

“The market is huge in real estate, but the unmet demand versus the inventory is not aligned,” said Leuterio.

Leuterio, who was recently named the 2024 International Realtor of the Year by the National Association of Realtors (NAR), highlighted a significant challenge in the Philippine real estate sector--the persistent mismatch between developer inventories and buyer demands.

The founder of Filipino Homes explained that the oversupply of real estate inventory, particularly in Metro Manila, is not due to the lack of buyers but rather a disconnect between the developed products and what buyers need.

One major issue Leuterio identified is the industry’s reliance on flawed market studies, noting that developers often base their decisions on data analysis skewed toward their perspectives rather than considering the broader market.

“The problem across the country is that developers are not looking at the marketing side—the unmet demands,” he explained.

He added that most studies focus on developers’ interests rather than the actual needs of the market.

This approach, according to Leuterio, has led to the production of high-cost properties in locations that do not align with buyers’ needs or purchasing power.

Leuterio called on developers to rethink their strategies by prioritizing comprehensive market research and engaging marketing professionals instead of relying solely on internal studies.

He emphasized that developers should focus on understanding the financial capacity of buyers rather than funding expensive projects that demand high recovery costs.

Leuterio believes that while the Philippine real estate market holds immense potential, addressing the mismatch between developer offerings and buyer needs is crucial for sustainable growth.

“By prioritizing accurate market research and adapting to the unmet demands of buyers, developers can bridge the gap and unlock opportunities in this thriving sector,” he added.

He also underscored the importance of tapping into the over 10 million Overseas Filipino Workers (OFWs), whose interest lies in investing their hard-earned money in worthwhile ventures such as residential properties.

In 2023, remittances from OFWs reached a record high of US$40 billion, making the Philippines the fourth-largest recipient of remittances globally.

Leuterio’s insights serve as a wake-up call for the industry to adopt a more customer-centric approach and ensure that real estate developments align with market realities. — (FREEMAN)