By Amanda Tan & Gan Yu Jia
Property developers are dangling freebies and other enticements to
tempt buyers amid an increasingly competitive market awash with new launches. The offerings range from steep developer discounts and stamp duty reimbursements to rebate incentives for people living in the vicinity
of the new project.

A check on seven upcoming condominiums found that total discounts
could slice about 20 per cent off a unit’s listed price. For instance, those
who bought units at freehold East Village in Bedok reaped a 15 per cent standard discount on the listed price plus a 3 per cent stamp duty rebate.
This means a three-bedroom penthouse would cost about $1,054 per
sq ft (psf) after the discount, a drop from the original $1,285 psf.
That would price a 1,668 sq ft unit at about $1.75 million instead of
more than $2.14 million.

Some earlier buyers of the 90-unit development by World Class Land
also had an additional 3 per cent shaved off the price under an early
bird promotion. As for buyers living in selected postal code areas around CapitaLand’s Bedok Residences, they can get a 1 per cent rebate under
the firm’s ‘neighbourhood incentive’. The same deal is offered to those
who own a home built by CapitaLand as well as those who buy two or
more units.

At Tuan Sing’s Seletar Park Residence in Seletar Road, there is a
three-tier discount of ’10 per cent plus 3 per cent plus 3 per cent’
off the gross price. The average price after discount would be about
$1,200 psf, pricing a 969 sq ft two-bedder at around $1.2 million,
down from $1.55 million.

PropNex chief executive Mohamed Ismail said such perks could be due
to the healthy supply of units being launched, which means buyers can
afford to be picky. Developers might also offer perks to spur people
affected by the recent cooling measures to return to the market, he said.
In February, a record 3,598 private units, including executive condos,
were launched – the highest number since July 2009, when 2,878 units
hit the market. Buyers also snapped up a record 3,138 new private homes
in February, despite tough cooling measures introduced last December and
a cloudy economic outlook. Some developers credit robust home sales to
the carrots being dangled.

Mr Chong Chou Yuen, chief financial officer of Tuan Sing Holdings, said
the package offered for Seletar Park Residence is a ‘new thing’ from the
firm as ‘we think that’s what the market wants’. ‘The fact that we have
sold 110 units shows discounts are working,’ he added. But consultants
are split on whether such packages genuinely lower prices. ‘At the end of
the day, you lodge the caveat and when you take up the loan, it’s based
on the net price after all these discounts,’ said Mr Alan Cheong, director
of research and consultancy at Savills. ‘You won’t get much out of it,
except that perhaps you may have less of a cash drain when the property
is completed.’

Mr Nicholas Mak, SLP International’s head of research, was more positive:
‘I think (discounts) do help, because it does cost the developer money
to give vouchers, rebates and so on.’

Ms Joyceline Gan, who works in a bank, agreed that discounts factor in
her decision to buy. The 38-year-old, who plans to upgrade her family
of four from her HDB flat in Serangoon, said ‘cash is the best’ of the
perks on offer.

Sales marketing manager Grace Tan, who is in her 50s and looking for
a private property for her family of five, said discounts may not be a
chief factor. ‘If I’m interested in buying, then of course the discounts
are a bonus. But if the psf (cost) is too high, I won’t be attracted to
the property.’

Source: The Straits Times, 05 April 2012