Real estate agents have been pulling out all the stops in a quiet market, with one even offering car wash services during an open house for a three-storey bungalow.
With the quiet year-end festive season just over, showflats will soon open for a number of launch-ready residential projects - though it remains to be seen if buyers' interest will be piqued.
Sim Lian Group's The Wandervale executive condominium project (EC) in Choa Chu Kang is expected to be launched this month, according to agents. In February, the mixed development The Wisteria at Yishun by units of BBR Holdings could come on the market.
Qingjian Realty may be launching its EC project in Sembawang Road/Canberra Link in March, while a consortium led by Evia Real Estate is looking to launch its private condominium project in Toa Payoh in April.
"There could be a small window to drum up sales in January before the Chinese New Year mood sets in again," said ERA Realty key executive officer Eugene Lim. "It's a small window - there are some projects ready to go out in January - but every window counts. Things will get busy in January."
But with excitement for new projects - even those with huge turnouts at showflats in the initial weeks of launch - evaporating quickly in today's climate, agents can no longer passively wait in air-conditioned showflats for potential buyers to walk in. Many now ply the streets to issue marketing flyers at hawker centres, MRT stations and go from door to door in housing estates.
To ramp up human traffic in showflats after the initial hype wears off, developers have also turned to holding seminars, fengshui (geomancy) talks, magic shows and carnivals with free food.
"That trend is expected to continue as long as cooling measures are in place and the sentiment remains lukewarm," said PropNex chief executive Mohammed Ismail. He noted that developers in the past banked on direct outreach to consumers with strong advertising dollars if they are confident of their product.
Today, even a project with minimal flaws in the developer's concept, location or pricing may not sell well. A key question lingering in consumers' minds: "Why now? Will prices go down further?"
"Developers also realise that they can spend huge amounts of money on showflats, but nobody is coming in," he added. "We need to lure them to come and to have agents to persuade why this is a good product and why they should be taking a long-term view."
Century 21 Singapore CEO Ku Swee Yong noted that the "degree of desperation among agents has gone up so much that they need to stroll down the streets more to find deals".
While the pool of potential buyers has shrunk with the lending curbs, developers' appointment of multiple agencies for each project has stiffened competition among agents, Mr Ku lamented.
It is no wonder agents are more willing to please their clients, unlike in the past. In one novel attempt to drive traffic to an open house for a three-storey bungalow at Bedok Road two months ago, an agent from ERA Realty even offered a free car wash. That agent later told BT that there was already interest for the bungalow given its high-end features prior to the car-wash offer.
"Previously, when we have open house for a resale unit, 10 to 20 potential buyers will come and we can close the deal in 30 minutes. Now, we don't see this kind of situation. Three to four potential buyers are good enough," said the ERA Realty agent Kenny Neo.
The creativity of agents to attract crowds to showflats or to close deals can only stretch as far as the rules allow for it - under the Council for Estate Agencies guidelines, estate agents and salespersons shall not advertise or offer any benefit, in cash or kind, to any party in a transaction, so as to induce the latter to engage the services of the estate agents or salespersons.
But agents' growing proactiveness in drawing human traffic to an open house or showflat does not always translate to deals. Still, those who want to be part of the "core team" to market developers' projects typically have to each fork out S$300-500 for pre-launch marketing materials such as promotional flyers and the creation of project-related websites.
Assuming 600 agents are involved in a project launch and only 100 units are sold during a weekend launch, you have 500 agents not making money, one agency's key executive officer illustrated. "Many individual agents lost money participating in project launches."
Mr Mohammed Ismail feels one major bugbear is the additional buyer's stamp duty (ABSD), which discourages owners from making a second or third home purchase.
Singaporeans have to pay 7 per cent ABSD on a second home purchase and 10 per cent on the third or subsequent home purchase - this group of people may be concerned that when they sell their units later, they may lose out to other competing sellers who can price their units 7-10 per cent lower.
With a lot more agent activities required on the ground now to stir up interest, part of developers' effective sales strategy entails empowering agents as much as possible with product information to make their pitch more convincing, he reckoned.
This article was first published on Jan 2, 2016.
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