http://www.businesstimes.com.sg/real-estate/developers-using-innovative-ways-to-sell
Developers using innovative ways to sell
Qingjian Realty cutting S$25,000-S$45,000 off prices by offering apartments without interior fit-outs or floor finishing
By Lee Meixian
[email protected]@LeeMeixianBT
3 Jan
AMID a sluggish property market, developers are cracking their brains for innovative ways to move their unsold units.
Now, one has come up with the idea of shaving S$25,000 to S$45,000 off the usual selling prices, with a catch: by offering the apartments bare, without interior fit-outs or floor finishing.
Market sources told The Business Times that Chinese developer Qingjian Realty is introducing a new "CoSpace flexi" concept for its Bellewoods and Bellewaters executive condominium projects (ECs), both launched last November.
According to caveats lodged in November, Bellewoods sold just 79 of 561 units at S$800 per square foot (psf), while Bellewaters sold 170 of 651 units at S$813 psf. Qingjian has not moved many units since, amid the December school holidays lull and the launch of another EC, The Terrace, at Punggol Drive.
With its new discount, a five-bedroom unit at Bellewoods selling for S$1 million could see its price cut to S$955,000.
Qingjian is understood to be the first developer offering bare EC units for cheaper. The point is to attract buyers who have become price-sensitive since the mortgage servicing ratio (MSR) for EC housing loans made it difficult for them to obtain financing.
Qingjian's offer lasts until the end of February. The cut-off time is due to the complications that varying buyer requests will bring to on-site construction. Construction has already begun at both developments up until several floors high.
R'ST Research director Ong Kah Seng said this is a very "atypical" marketing strategy that Qingjian is adopting, but believes that it will likely only improve sales slightly.
"While it would attract some of the buyers who can't get sufficient loans under the MSR cap, most others may not be very receptive to it. Effectively, one of the draws of buying a developer sales unit - be it an EC or a condo - is that it comes well fitted out. These buyers will still have to fork out a substantial amount for renovation and when they do the math eventually, they may find that they did not get a very good value after all. A direct price cut, maybe to around S$780 psf, would work better."
Qingjian already offers "CoSpace units" which give buyers the option of merging the utility room and study to create a room. These make up a quarter of its units at Bellewoods and Bellewaters. Of those who bought CoSpace units, 40 per cent chose to knock down the wall between the utility room and study.
BT understands that Qingjian's agents from ERA Realty and SLP International have been briefed on its new marketing strategy.
Meanwhile, The Terrace at Punggol Drive has sold 131 of its 747 units since its launch on Dec 7. It, too, plans to launch various marketing campaigns to move the rest of its units, but declined to say more.
Another Punggol EC, The Amore, has recently closed its e-applications, but did not want to divulge how many applications it had received. The EC will be launched on Jan 17. Its salesmen gave out 10,000 roses to potential buyers at Shenton Way and Orchard late in November to spread the message of love, as Amore means love in Italian.
Since 2010, ten ECs yielding more than 5,000 units have sprung up in Punggol and Sengkang, following the government's heavy promotion of the two estates, and soaked up much of the EC demand. These figures exclude the newly launched Bellewaters, The Terrace and The Amore.
The limelight has since been turned to the Jurong Lake District, where Lake Life EC did exceptionally well recently, nearly selling out over a two-day launch while its northern and north-eastern counterparts met with muted sales.