By Property Soul (Guest Contributor)
The annual GSS (Great Singapore Sale) may have started only on May 25, but for property new launches, the GSS started even earlier.
The sale is now on
With the steam of an overheated property market dying down, the buzz has now shifted to developers playing discount games to push new projects or clear old stock. With so many ‘great deals’, buyers are spoiled for choices.
1. MCL Land cut prices for Hallmark Residences in Bukit Timah and sold 39 units in February and March.
2. CapitaLand’s Sky Habitat in Bishan managed to move over 100 units after re-launching at 10 to 15 percent off its original prices set two years ago.
3. Wheelock Properties put up 95 units of The Panorama in Ang Mo Kio for balloting. With a discount of 12 percent, they claimed to sell 80 to 85 units.
4. China developer Ximeng Land relaunched the balance of 12 luxury villas on Pearl Island in Sentosa Cove, offering an 8 percent discount from a year ago.
It proves that ‘early birds’ enjoy no advantage. We don’t see developers giving rebates back to early buyers who have paid at premium prices.
Let’s face it: It’s a buyers’ market now!
I am particularly amazed by the 180 degree change of attitude at The Panorama. I visited the sales gallery three months ago. A developer’s representative was ‘patrolling’ there to ensure no photo-taking, and no distribution of the sales brochure before booking a unit.
Back in early January, a newspaper article mentioned that “hundreds of people visited the showflat” and “60 units out of the 120 units released were booked on the first day.” But the caveats show that only 56 units were transacted by end of April. So what happened to the units for the next 140 days after selling like hot cakes on the first day?
Anyway, the project won’t be completed until 2019. Who knows what the property market will be like five years from now?
Developers are now trying to transfer the risk of an unknown market to the buyers. Nonetheless, many buyers, especially first-time buyers and HDB upgraders, are excited by the new round of discounts and can’t wait to rush into the market.
More irresistible bargains on the way?
An HSR report revealed that 50 residential projects sold less than half of their total units, including Hillion Residences in Bukit Panjang, Hillview Peak in Bukit Batok, Vue 8 Residence in Pasir Ris, The Glades in Tanah Merah, Treasure in Balmoral, Victory Ville, Devonshire 8, One Balmoral and 8 Raja.
Eight of these new projects sold less than 10 percent while two did not manage to sell any unit since their launch last year.
A Straits Times article on June 7 highlights the fact that 24 projects may be liable to $55.1 million in extension charges. Developers with foreign shareholders have to pay 8 to 24 percent of the land price to the government if they fail to sell their units two years after TOP. Projects that have already missed the deadline include Emerald Hill and The Marq.
Just the tip of the iceberg
All these facts are only the tip of the iceberg:
1. Many luxury homes in prime districts like Ardmore Park and Grange Road have been completed but not yet launched.
2. According to URA, as of 1st quarter 2014, there are a total of 6,733 private residential units launched but unsold. On top of that, an additional 80,261 private residential units are in the supply pipeline from the rest of this year to beyond 2018.
3. While developers are clearing their existing stock, every month there are new projects obtaining their TOP and new sites released by the government to build more private housing.
4. New projects are not the only choice for buyers. There is strong competition from countless resale units whose owners are more flexible to slash prices if they are desperate to sell.
5. Local developers are competing with their counterparts from Malaysia, Thailand, Indonesia, Philippines, Australia, Japan, UK, US, etc. targeting the same buyers to move their current and future projects.
How can developers find so many buyers for their new units if they are only giving a 15 percent discount? This is just the beginning of the big sale!
Where are the foreign shoppers?
In the midst of this ‘uniquely Singapore’ Property GSS, our most wanted foreign shoppers are nowhere to be seen.
Can participating developers seriously look into promotions targeting tourists from top-spending destinations? How about partnering with Singapore Tourism Board for organized shopping tours with free sightseeing, flight and accommodation bundled with booking a luxury home, with the 15 percent foreigner Additional Buyer Stamp Duty absorbed by the developers?
After all, individual developers have already stepped up their marketing efforts in overseas countries. For instance, S P Setia is now marketing Eco Sanctuary at Chestnut Avenue to buyers in Hong Kong who are suffering from Double Stamp Duty introduced by the local government.
Lesson learned: Sales of any product not meeting expectations at home can often find a new market in other countries.
The sale worth waiting for
This year the GSS is in its twentieth year – experienced shoppers like you and I have long become savvy buyers.
When the sale just starts, I am not in a hurry to buy. It is different from a private sale that is only open for privileged customers for one day.
Every sale starts with a 10 percent end of season discount. Then it increases to a 20 percent storewide discount, followed by a further reduction of 50 percent, and ends with a final reduction of 70 percent or more. Sometimes there is even a warehouse sale or moving out sale with massive mark-down of prices for stock clearance.
By then, I may not be able to find the size, color or style I want. But it doesn’t matter. I have a limited budget and will be very happy spotting a few ‘gems’ from the leftovers!