Thursday, June 12, 2008
Dakota Residences in Dakota Crescent, a 99-year leasehold project by Ho Bee Investment with 348 units for sale will start its launch on next Saturday at an average of about $950 per sq ft (psf) - below the $1,000 psf to $1,100 psf that Ho Bee had previously targeted.
City Developments' (CDL) Shelford Suites in Shelford Road has also started previews for its 77 units at about $1,600 psf on average. Market watchers said this was lower than expected, as two units were sold in March for $1,869 psf and $1,905 psf. Shelford Suites' launch had been delayed for months as CDL waited for sentiment to improve.
This may be because developers are faced with no sign of improvement in the cooling property market, consultants say. The developers may be choosing to move units by making their projects more affordable rather than continuing to wait out the gloomy sentiment.
But while lowering prices may jump-start the market, a one-off reduction may not be enough to sustain sales, said Mr Colin Tan, the head of research and consultancy at Chesterton International. ‘Developers will have to continue to reduce prices if they want to maintain sales, as many projects are still out of the reach of owner-occupiers,’ he said.
So are buyers taking the bite just yet?
The following are some buyers' responses from Singapore Property Forum:
"However, if you want cheaper price, do continue to wait. Remember that the price drop can be 40%. "
"Agree with you that price can still drop ...only after it has dropped by at least 40% then it may start to make sense to invest in singapore property. "
"We're only seeing the tip of the iceberg of a severe, prolonged, global recession."
"Is it charity, a sense of compassion that they did it (developers lower prices)? No, reductions are anathema. Only reason they'd lower prices is because they are feeling pressured. Reading between the lines... there is a threat to buyers that 'you better take the deal now because we're going to be raising prices later'. Also, its a shrewed attempt to restart the market with a token 10% 'discount'. But with a 200% run-up in prices over a mere 2 years, a 10% reduction is still poor value. Buyers should not take the bait. Let the bubble burst. Lots of room to fall. "
"Well said, lots of room to fall."
"I read that sense of "threat" too. That tactic of "instilling fear by saying that price is going to go up soon, so buy now" unfortunately still work for weak characters. In fact, if developers do get reasonable response from the launches, they're going to up price so as to put more pressure on "weak buyers". It's all empty show. Hope enough buyers see through that. "