There are many ways to lower property prices. Everyone would have their own opinion. Build more units but smaller ones. Ask for higher density and the prices should become lower. Buy land much further away and build further away. Alternatively, reduce the quality of materials. Instead of European imported ceramic tiles, it could be imported from cheaper countries. Even better, instead of tiles, why not just finish the floor with cement? Wah…That should help lower property prices.
Well, today we look at the high-rise facilities. Many developers are advertising to the world that they have the MOST number of facilities. Much more than the other nearby high-rise un its for example. Question for everyone. Do building fewer of these meant that the property price could be made lower? Does this mean if there were no facilities, then would the developer be able to lower property prices?
Article in nst.com.my In the article, an unidentified senior property consultant was quoted as saying that if developers were to build fewer facilities in their future high-rise residential units, then the costs would be reduced and perhaps they could then lower property prices for all potential buyers.
The senior property consultant also shared that reducing home prices are the right thing to do if developers want to stay afloat amid the current Covid-19 pandemic and they can entice buyers with more affordable properties.
With regards to developers he said, “To achieve their sales target and maintain profitability, developers are building smaller apartments with fewer facilities. Some developers tend to build more than 30 facilities, including an infinity pool with floating cocoon, pavilion garden, BBQ deck, herb and zen garden and they take up valuable land resources. These are not free for the property buyers as the developer has incorporated the cost in the selling price.” Article in nst.com.my
We just need to also note that most people buy high-rise units with nice facilities because the facilities are nice and they believe they will use it often. More often than not, they may use it very sporadically instead. However, moving forward people would still continue to buy a high-rise because he likes the facilities. If there were no facilities, he would also not be willing to pay a premium too.
In other words, if we assume building fewer facilities could lower property prices, we need to also understand that the price increase would also take this into account in the future. This is especially if the condo with minimal facilities were to be compared to another with many nice facilities in the same neighbourhood.
I do think whether high-rise units or even gated and guarded developments, they need to ensure there are enough facilities being built. I do not think many gated and guarded developments would have buyers who are buying simply because these places provide security. Truth is, nicer landscaping would carry a premium.
A proper club house would also get a higher property price too. Perhaps in some situation, it is true that fewer facilities help lower property prices. Just remember that these properties would also not increase in price faster than those with proper facilities yeah.
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Dont need to be a genius – if you reduce facilities – nobody want to buy. Developers have economies of scale, they should be getting materials at best prices. If you reduce the quality of your materials, you risk the building crashing on the occupiers someday – ruining your reputation….People – including developers – need to realise we are in a connected era – developers should use this as an opportunity to maybe make less profit – yes – drop your prices – provide a good product and let your customers do the marketing for you with a good name. It takes guts to do this – stop chasing money – we are moving into a new are – like it or not – let Malaysia be the first to set a new global standard in sustainable and affordable development.