DMCI Homes, the real estate arm of DMCI Holdings Inc., said it expects to miss its P33-billion reservation sales target for the year as market conditions soften.
DMCI Homes president Alfredo Austria told analysts in a recent briefing that the company might not be able to reach the target because of a “softer market.”
Reservation sales in the second quarter declined on several factors, including a high base from last year’s launch of the Montielo Crest project and an increased focus on ready-for-occupancy (RFO) units and rent-to-own offerings, Austria said.
“In the second quarter we focused more on RFO or completed projects because it’s healthier for our cash flow to sell completed projects,” Austria said.
“We also became more aggressive in our rent-to-own program because it seems like there’s been a lot of interest and inquiries on our rent-to-own units,” he said.
Austria cited a general slowdown in Metro Manila’s residential market amid a condominium unit oversupply.
“There’s a lot of news going on about oversupply of condo units in Metro Manila and I think it’s affected buyers generally,” he said.
“They have a wait-and-see attitude so it takes a bit longer to close the sales,” said Austria.
While reservation sales were down, revenues from RFO units improved, which is healthier for the company’s cash flow.
RFO unit sales grew 13 percent in the second quarter to P2 billion from P1.8 billion. The company also posted its highest monthly reservation sales this year in July at P2.6 billion.
“So while sales reservations came down a little bit, rent-to-own reservations went up much more than what we had originally expected,” he said.
Austria said that for the rest of the year, the company plans to launch a P2.5 billion joint venture in Baguio City.
