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Developers sweetening deals to woo home buyers

This story was first published in The Straits Times on Feb 14, 2014

DEVELOPERS appear to be becoming nervous about the slowing property market, with at least two projects dangling sweeteners to stir interest among wary buyers.

Market watchers tip that other developers will make similar moves to stir buyers into action.

United Engineers has been running a "promotion" for the three-bedroom loft units, penthouses and townhouse units at its Eight Riversuites condominium in Whampoa East since November.

Buyers who snap up a three-bedder can choose to take home a Renault Fluence car at a discount - understood from agents to be $10,000 - off the market price of about $131,000.

Penthouse buyers can opt for a discount off the Volvo S60, which has a market price of about $210,000, or a Volvo XC60 that could cost about $240,000.

Townhouse buyers can get discount on a Jaguar XF, with a market price of about $240,000 to $260,000.

Eight Riversuites is more than 70 per cent sold, at an average price of $1,300 per sq ft (psf).

Three-bedroom units of 1,195 sq ft are selling for about $1.4 million, while a penthouse of 1,453 sq ft costs around $1.88 million. A townhouse measuring 2,820 sq ft will set a buyer back $2.75 million.

The Straits Times understands that the car discounts could vary at the discretion of car dealer Wearnes Automotive and will depend on the car model.

United Engineers, which acquired Wearnes Automotive in May, said it sees the promotion as "beyond just generating sales, but more as a co-branding opportunity".

Developer Keppel Land has joined the fray, and is offering discounts for some one- and two-bedders at The Glades condominium in Tanah Merah.

Discounts vary from $48,000 off the price of a one-bedroom unit that starts from $690,000, to an $88,000 discount for a two-bedder that could cost from $780,000.

Property agents said at least three such units have been sold after the promotion started at the end of last year.

Keppel Land also threw in a Chinese New Year "hongbao" treat over the festive period, offering a discount of $4,800 on a one-bedder, $8,800 on two bedroom units, $12,800 on a three-bedder and $16,800 on a four-bedder or penthouse unit at the project. The 726-unit development has sold about 60 per cent of the 200 homes released.

Experts said buyers can expect developers to dangle more carrots as it has become clear from recent launches that cheaper units were the first to fly off the shelves as buyers get wary amid cooling measures and economic uncertainty.

"We can expect, before serious price discounting starts, to see more freebies, say in terms of furniture vouchers, rental guarantees, stamp duty rebates," said Century 21 chief executive Ku Swee Yong.

PropNex chief executive Mohamed Ismail said such promotions can prompt undecided home buyers to make a move.

Developers are not restricted when offering such incentives. However, the Monetary Authority of Singapore pointed out that any rebates, discounts or benefits must be deducted from the unit's purchase price before arriving at the loan amount that can be granted to a borrower.

Experts also cautioned that buyers should look beyond discounts and also consider older properties that could be in better locations which provide "better value".

Buyers should also ensure they are getting a direct discount on the purchase price instead of freebies that do not bring down the price, noted Mr Ismail.

ocheryl@sph.com.sg


DANGLING CARROTS

  • Keppel Land

Under its "star buys" promotion, certain one- and two-bedroom units at The Glades in Tanah Merah attract discounts of between $48,000 and $88,000. Other kinds of units also enjoy festive Chinese New Year discounts.

  • United Engineers

The developer is offering special discounts on cars, including the Renault Fluence, Volvo S60 or XC60, and Jaguar XF, with purchases of certain units at its Whampoa project Eight Riversuites. It acquired Wearnes Automotive in May.

This story was first published in The Straits Times on Feb 14, 2014

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