Packed property showrooms not indicative of real demand

SINGAPORE — Lured by discounts offered by developers, thousands of prospective home buyers flocked to the preview of two private property projects over the weekend, in spite of the latest round of property cooling measures introduced barely two weeks ago.

On Sunday (July 22), Daintree Residence at Toh Tuck Avenue in Upper Bukit Timah and The Tre Ver in Potong Pasir were jam packed when TODAY visited. More than 200 visitors were observed at each location, as the developers pulled out all the stops to woo prospective buyers — be it through offering dangling “special discounts” or “competitive pricing” carrots, or by ramping up the number of advertisements and outreach.

Comprising a mix of first-timers, buyers looking to upgrade to a second or third property, and those just having a “look-see”, visitors told TODAY they would still be willing to fork out should they like the property or feel that it would give them a good long-term return on their investment.

Daintree Residence, which opened for preview last week, has received more than 3,000 visitors to date. With its sales launch set for Saturday (July 28), the 99-year project with 327 units will be the first condominium to be put up for sale since the latest round of cooling measures came into effect. It is expected to receive its Temporary Occupation Permit in 2022.  

Citing an average price of S$1,800 per sq ft (psf), Mr Neo Keng Hoe, general manager for the developer SP Setia, however added that a “special discount” for the launch is still being worked out, so as to draw in more buyers.

Over at The Tre Ver in Potong Pasir, developer UOL Group said the project has received 6,000 visitors on just its opening weekend preview since Saturday (July 21).

Units at the 729-unit condominium, which will be completed in 2022, are priced ranging from S$738,000 onwards for a one-bedroom, to S$2.08 million onwards for a four-bedroom. It will be put up for sale from Aug 4.

Comparing the new project to condos in the surrounding area which are going for between S$1,750 and S$2,000 psf, Huttons Asia, one of the project’s sales agent, said it is “good value”, given that UOL had already “factored in what was happening in the market and is pricing it accordingly”.

Among the buyers undeterred by the latest cooling measures was businessman Michael Tan. The 47-year-old, who was eyeing Daintree Residence as among his choices for his fourth property, pointed out there was no point “waiting” when “you know 10 years down the road, the prices will go up … It’s simple common sense”.

He currently lives in a three-room Housing and Development Board (HDB) flat in Ghim Moh, and rents out his other two condo units at the Lakefront Residences.

Others, like 47-year-old regional sales manager in the oil and gas industry Collin Sim, have become “more cautious”. Mr Sim, who was viewing Daintree Residence, told TODAY he has become more active in comparing prices when shopping for his third property.

Designer Tan Mei Ting, 37, who has been house-hunting for one year, plans to continue comparing prices across different condos.

“(What will make us decide is) how much future appreciation (of the property there is), and whether this development is worth investing in the long-time,” said Ms Tan, who is currently living at the Bartley Ridge Condominium.

Acknowledging that buyers could be feeling “jittery” and “anxious” about the higher additional buyer's stamp duty (ABSD) and tightened loan-to-value limits on residential property purchases, Knight Frank’s director of residential project marketing Edison Ong, said buyers would still bite, depending on the kinds of carrots developers are dangling, and discounts of “at least 5 per cent” is what buyers would expect. Knight Frank is one of the sales agents for the Daintree Residence project.

The latest measures might also serve as a “wake-up” call for buyers previously sitting on the fence, waiting for prices to drop further, he added.

However, not everyone is as optimistic.

Analyst Ku Swee Yong, chief executive officer of International Property Advisor, felt that the strong visitorship numbers might not paint a “true” picture of the actual demand, and could be an impression deliberately cultivated by developers to allay fears.

“We don’t know if (the visitors) can actually afford (the property) … There are those who love to visit show flats to get ideas for their own home, or who are selling their homes in the vicinity who are there to compare product pricings … so we have to discount quite a fraction of that,” he said.

Adding that he expects the demand for new properties to fall, Mr Ku said: “When loan-to-value limits decreases, cash outlay goes up, so some buyers will drop out of the market until they save more money, while those buying the second apartment for investment may not have the additional stamp duty prepared.”

While there could be “genuine buyers” such as first-timers who are less affected by the latest measures or those “waiting on the sidelines” now swooping into the market fearing that prices might rise higher, Chris International's director Chris Koh said the proof of the pudding is still in the eating. To know if customers are biting, one still has to wait for the “actual sales figures to come out”, he said.

Going ahead, developers would be very careful in how they price their projects for “price-sensitive” buyers, Mr Koh added.