What are Developer's offers now? in a slow Primary Property Market

by Sze Yhee (SY) 07 Jul 2015

7 July

Current rule on Buyer’s Stamp-Duty and Total Debt Servicing Ratio (TDSR) in today’s market have contributed to the increase in price sensitivity. 


After initial project launch and if the selling prices ( primary market ) do not attract buyers , sales will slow down. Buyers today are more cautious, where many would rather do nothing and wait for the prices to drop.

Will prices continue to drop?


Normally, when traditional marketing efforts fail,  developer will how to think out of the box, to be creative , to introduce ‘Cash-back incentives’ to entice buyers back to Showflat.

Cash-back come in many forms ( voucher, lucky draw, furniture /ID .. etc) . Usually comes with a dateline or limited time offer.


This may signaled 2 critical points; there are now more supply of residential units for non-landed properties in the market if the selling prices are beyond the reach of buyers  ( Supply more than demand ) and 2nd, developer’s profit margin will be taking a hit and it will take them longer to sell.


Question is, for how long can the developer and prospect wait ? 


Record from URA Property prices transaction since 01jun 15 until now shows more and more local projects offering cash-back to lure buyers.


These are the following projects


Non-Landed  Project

Market Segment

Cash-Back              $ range

% from   Caveat

Glades

OCR

10k-70k

1% - 6.8%

Lakeville

OCR

2k-24k

0.1% - 1.63%

Riverbank @ Fernvale

OCR

1,888 – 3,888

0.1% - 0.3%

Coco Palms

OCR

3.5k – 56k

0.3% - 2.4%

Jewel @ Buangkok

OCR

3.5k – 24.5k

0.2% - 1.4%

SunnyVale Residences

OCR

58,888

3.39%

Hillion Residences

OCR

35k – 40k

5% - 6%

D’Nest

OCR

3.5k

0.2%

Pollen & Bleu

CCR

31k-69k

2% - 5%

M5

CCR

6k

0.6%

Ardmore 3

CCR

58k – 62k

1%

V on Shenton

CCR

46k

2.2%

Corals at Keppel Bay

RCR

80k – 100k

4% - 5%

Alex Residences

RCR

35k

2%

The Venue Residences

RCR

50k

4%


Source : URA

OCR : Outside Central Region ( Area outside of RCR, Rest of Central Region )

CCR : Core Central Region ( Downtown core planning , District 9, 10, 11 and Sentosa area.

RCR : Rest of Central Region ( City Fringe: Clementi Road at West of Singapore to Jalan Eunos / Still Road at East of Singapore and Ang Mo Kio Avenue 1 at the North of Singapore )


Properties from the outside of Central Region are offering more 'cash back' ( by volume ) but the largest amount of ‘cash-back incentives’ is recorded in Corals at Keppel Bay at Rest of Central Region.  This works to out to be 4-5% of the net selling prices.


How long can this cash-back’ mechanism work ? Will there be more projects following this trend ? 


For more info of the above projects, do drop me an email at szey33@gmail.com


Thanks

SZE YHEE


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