Overwhelming demand, more special offer and instant discounts

I was in a hypermarket in Subang Permai today and there were three different booths from three different developments. Situated at different places within the hypermarket. One happened to be a landed property located in Shah Alam north. From the charts, I think the developer or the agency appointed is only selling the left-over units. Another is one of those affordable projects by a state / government agency. The third one was a service apartment and the price was only slightly above RM500,000 and it’s near to many educational institutions. Seems attractive, right?

Well, as soon as I took the one page leaflet (Over RM500k per unit and the leaflet is ONE page, without any APDL details too) and started reading, the sales person rushed over and said, 10 percent discount. Oh, that’s not great. The selling point is the discount? Is it discounted because the price was too high to start with? Actually, regardless of the reason for the discount, it should not be the main selling point. A friend, not so close bought a condo in Cyberjaya because the developer gave him a big discount. He bought it and was so happy until he learnt that every other project nearby were either at the same price per sq ft as his, after discount. Honestly, unless the price per sq ft is already very attractive PLUS a discount, then it’s worth considering. The discount should not be to make the property on par with those in the vicinity.

Another discount story. If a project is selling very well, does it need to keep pestering buyers with discounts? No answers needed. We can all decide by ourselves. A good friend sent me a message sent to him by a sales person from a developer. The message said due to the overwhelming response for project XXX, now the developer will offer to the public new packages starting from RM378,800 onwards. I looked at its launching price, which is available all over the internet and the launching price was lower! Assuming this message is NOT a discount and in fact is an upgrade in prices, then does this mean that due to overwhelming demand, this developer is increasing the prices?

2016 is already shaping up to be a buyers’ year. It’s not going to last forever and the times when developers say, ‘I’m back’ will come back in future. For now, it may be better if the launching prices are really looking at the slowing demand. Smaller margins may be more important that selling for a very long time. Promote any new launch aggressively, use the allocated marketing funds based on GDV. It really do look bad if the project was soft launched over one year ago and is still selling so well that discounts are provided….. Happy selling.

written on 4 Mar 2016

Next suggested article: Developers are unlikely to reduce prices drastically? True, but… 

 

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