PDA

View Full Version : Smaller property projects sell fast even with little marketing



mr funny
17-02-07, 11:13
Feb 17, 2007

Smaller property projects sell fast even with little marketing

Upbeat sentiment moving down gradually to mid-tier market

By Fiona Chan


http://img248.imageshack.us/img248/8889/stimagesmnyfiosmallt27bhg1.png
HOT DEVELOPMENT: Axis @ Siglap, a 40-unit boutique condominium in Siglap, sold out in a matter of weeks. The bulk of the apartments had been taken up by the time the marketing brochures were ready and also before the project's show-flat was completed.


SMALL residential developments in suburban areas are selling strongly despite putting out almost no publicity - in some cases, not even a show-flat.

Property consultants say this is a sign that upbeat home buying sentiment is trickling down from the luxury segment to the mid- and lower market tiers, supported by strong economic growth and rising wages.

One such quick-selling project is Axis @ Siglap, a 40-unit boutique condominium that sold out in a matter of weeks.

About 35 units were snapped up even before the project's show-flat was completed two weeks ago, said Savills Singapore, which marketed the development.

'People just drove by the project site, saw the contact number on the hoarding, and called our office to make inquiries,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

He added that 'by the time the marketing brochures for Axis @ Siglap were printed, almost all the units had already been sold'.

Demand was strong despite the relatively high price of the freehold project, located in East Coast Terrace. Its average price was close to $800 per sq ft (psf), compared to between $600 and $700 psf for most other properties in the vicinity, said Savills.

Another fast-seller is The Mint Residences in Joo Chiat Terrace. Since last month, Savills has sold about 75 per cent of the 26 units.

The freehold development has no show-flat and there are no plans to construct one as sales are strong, said Mr Ku.

The Mint is fetching about $700 psf on average, at a premium over the average $630 to $650 psf for neighbouring projects, he added.

Closer to the city, Robertson Edge off Mohamed Sultan Road was recently sold out within three weeks at its preview, also without a show-flat.

Prices averaged $1,000 to $1,100 psf for the 70 units.

A side benefit of not building show-flats is that developers get to spend less on marketing, said marketing agents.

Putting together a show-flat for The Mint, for instance, would have cost developer Oaktree Properties between $500,000 and $1 million, Mr Ku noted.

In some cases, these cost savings are passed on to the home buyers.

One example of this is Tessa Lodge in Mountbatten Road, where 11 of the 13 units have been sold in the last three weeks.

The remaining two units have also already attracted interest from buyers, said property agency PropNex, which is marketing the project.

Tessa Lodge has no show-flat. Saving on the few hundred thousand dollars that would have gone into building one has resulted in lower prices for the project, said Mr Eric Cheng, senior division director at PropNex.

'We have only a sales gallery for the development, where we show buyers things like the floor plans, site plans, and tile samples,' he said.

This has allowed developer Ohayo International to price Tessa Lodge at about $620 psf, down from the original plan of $640 psf, added Mr Cheng.

Marketing agents say the strong buying for these low-key, boutique projects comes mainly from locals intending to live in these homes themselves.

Many are first-time buyers or Housing Board upgraders. Some are long-term tenants looking to buy their own home, while others are young couples or families moving out of their parents' homes.

But most of the buyers have this in common: They are making faster purchase decisions now where previously they would have been more cautious.

'The buying sentiment is much stronger now compared to just 12 months ago,' said Mr Ku.

'Last time they would just come in to have a look-see. Now if they see and they like it, they make a commitment to buy immediately.'

Because of this keen demand for suburban properties, Mr Ku believes mass-market homes will rise in prices, with some hitting $800 psf.

'There are still many undervalued areas outside the city centre, such as Marine Parade, Joo Chiat, Siglap, Thomson, Holland Road, Bukit Timah and West Coast up to Clementi Stadium,' he said.

Prices of new launches in these areas are therefore likely to outstrip those of existing homes, Mr Ku added.

[email protected]

Strong demand

# Interest in many fast-selling, low-key, boutique projects comes mainly from locals intending to live in these homes themselves, say property executives.

# Many of these buyers are making faster purchase decisions now where previously they would have been more cautious.

# The buying sentiment is much stronger now compared to just 12 months ago, according to Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

# Many recent smaller launches have even done away with show-flats altogether, with the effect of lowering the project's development costs. In some cases, these savings are passed on to the home buyers.