Originally Posted by
amk
I'm just looking strictly from marketing point of view. A 4-5rm HDB upgrader with 1-200k savings at hand, considering they can sell their HDB at 500k, pricing a 3bd unit at 800k will be simply too cheap, not maximizing profit. The condo pricing should always be slightly over the original "budget" but still within reach. If some one visits the show flat with a budget of 800k in mind, the showflat plus the crowd effect will have no problem convincing him to up the budget to 1mil. A new project will always have a 20% premium at least over old projects, as s'poreans are known to prefer new over old. In addition, mass market buyers are mostly for own stay. The calculation is mostly revolving around whether he can afford it, not how much he can make.
Look, people scoffed at the price for almost every mass market project launch in 2009. Even projects launching at $650 is ridiculed. But reality shows the support level is very strong. Save for a few projects that asked for 1.2k (that's no longer a mass market project), all were doing well. Developer of Optima/Airstream probably regretted setting the price too low. If a project was sold out within days, it simply means it could have charged higher. 100 Trees were practically sold out within 2 months. That's a good balance. Had it been priced at $800 psf only, it could have been sold out in days and CDL would have made less profit.
For this Yishun project, there are enough interest from people staying around Yishun to support. if MCL does it at $650-$700, do u agree it will be a fair price ? It would probably be sold out within days. That's not fair from developer's (or shareholder's) point of view, as it's not optimising profit. There is no need to have it sold within 3 days. Even a marketing contract with a pty agency is typically 6 month. Plus the cost of the show flat. The balance of this is always tricky. I think CDL had done it very well so far.