How Developers Thrive for Survival After the Market was Hit Hard

• 5 November 2020
• Local News
• 2634 Views

By Eric Wong Chon Lap

Property developers are thriving for survival after the market was hit hard by circumstances such as the oversupply of residential units in the market, the outflow of foreign investments and the COVID-19 pandemic.

Promotional campaigns became a necessity when the desired sales rates faded away. As a result, developers are coming up with creative marketing strategies to stay ahead of the competition, as straight-up discounts are not special enough to attract buyers who have become more sophisticated.

In order to clear unsold condominium stocks among developers, they have to come up with creative promotions which vary from development to development.

Apart from effective customised pricing strategies for each of their potential buyers, developers can clear their unsold stocks – for example – by adapting the strategy where completed developments were sold at their launch price years earlier.

This can be proved to be working for developments built by reputable developers, in good locations and accessible. Moreover, some developers can also waive their buyer instalments by being willing to pay 24-60 months of instalments for buyers who book the unit. Developers can even exempt transferring fees for example, or waiving their common expense fees on the first 2 to 3 years etc.

Apart from offering regular discounts, some developments can also offer their buyers in the form of gifts on top of the discount. Especially at the higher end of the market where developers get more creative, and extreme with their products offer. These developments can work with other partners to give away, for example, a luxury car when buyers purchase a unit under the promotion or give away vouchers to shop at the furniture store. This approach is selling the lifestyle rather selling the unit itself. Furthermore, developers can also hold online sales of discounted properties to improve sales.

More creative promotional campaigns can play as a vital tool to attract buyers. While all of us understand the current market condition has not yet improved, time will bring new, creative, and more interesting campaigns to the real estate market where buyers control the bargaining power. In the end, this all comes down to whether the prices are realistic or attractive enough for the target buyers in that particular market segment.

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Eric Wong has extensive experiences in the field of property consulting and development sectors, primarily within the emerging markets of Southeast Asia. From the property consulting prospective, he has lead market research assignments inclusive of providing descriptive, exploratory market research and analysis reports within the office, residential, hotel and retail segments in both quantitative and qualitative methods to determine suitable development types, scale and product mix, and address property-related matters from project positioning to absorption rates, phasing and pricing and marketing strategies etc.

 

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