Property developers of some high-end residential developments are giving large discounts and using creative marketing strategies to sell units. They are trying to avoid payment of big extension charges, according to a report by UOB Kay Hian on Singapore Business Review. Developers are required to sell units within 2 years after completion failure to which they incur extension charges to sell the remaining units.
For instance, Ardmore Three’s Wheelock Properties is offering buyers ABSD assistance of 13 – 15 % in addition to the 15 % existing discount; which translates to a 30 % price reduction.
The assistance package has improved sales. When UOB Kay Hian visited Ardmore Three, he learned that it had sold about 40 units up from 7 units sold in March. With discounts, the expensive units are going at over $3000 psf while the cheapest are at $ 2560 psf. This is below the initial price that ranged between $3,000 to $ 4,000 psf.
UOB Kay said that the high-end market has been showing promising signs of activity as developers give in on pricing by providing discounts at selected developments to entice buyers.
Another developer offering discounts is City Developments Limited at Gramercy Park. The discounts are going up to 18% in addition to the 2 % price cut that was being offered previously. The discounts have enabled CDL to sell six units of the 174 units in the project.
UOB Kay Hian noted that the slower activity at Gramercy Park in comparison to Ardmore Three could mean that price cuts are too low to attract potential homebuyers. It could mean that an effective discount should be about 30 %, which would translate to prices being as low as $ 2,000 for some units in order for the project to show similar interest to that of Ardmore Three.