Tuesday, July 8, 2008

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Singapore Property Now Buyers' Market: Developers and Resales Sellers competing for Buyers

Judging from the news report from Business Times - 7 July 2008 below, it looks like developers are really cracking their heads over how to woe the buyers back.

Developers ponder tricky math before new launches - Business Times,7 July 2008
The decision on whether to launch a project now is a tricky one. A host of factors have to be weighed - not just pricing, location and the product, but assessing the depth of demand in the particular neighbourhood or micro-market where a condo is located, how many projects have been launched in the area over the past few years, and even the buyer profile in earlier projects..........
The ability to price projects attractively - from 7 to 25 per cent lower than market expectations 12 months ago - has been a critical factor in drawing buyers at recent launches......
Given the run-up in prices, some buyers in earlier projects may unload their units at prices below what the developer of the latest project in the area may be gunning for.....
Supposing you’re a developer and your upcoming condo launch will be the fourth project to have been released in a particular location in the past two years and buyers in the earlier projects bought their units for, say, $800 psf average and your breakeven cost is around $900 psf, you could be in a difficult position if you need to launch today,’ a seasoned industry player says.....
While many in the industry have lauded Clover’s ’success’, Credit Suisse’s property analyst Tricia Song finds the response wanting. ‘Given that the pricing is relatively attractive for a popular suburb that has not seen any new projects in years, we think the take-up is disappointing and is reflective of the cautious sentiment even among upgraders,’ she said in a June 30 research note. ‘If we exclude the 100 units that were sold during a private preview (on June 25) take-up has visibly slowed…’

Given that "take-up is disappointing" despite the recent price decline, buyers can make a good guess that there's still a lot more way to go in the downtrend of property price. In fact, according to URA data, developers still have some 63% unsold units.

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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