Developers must find ways to meet changing needs

To attract buyers during the current challenging times, developers have to be more innovative in their product offerings and introduce more flexible terms. This is on top of making sure their projects are in the right locations and well equipped with proper facilities and features to meet the changing needs of buyers.

As with most things in the world now, the call for change is growing louder and industry players have to be quick in making the necessary adjustments to maintain their competitiveness and ensure their projects get the attention from the targeted buyers.

Due to the worsening global financial meltdown, the demand for property is expected to worsen for the most part of this year before a recovery can be expected at the later part of the year or in early 2010.

Against this gloomy backdrop, developers who have taken the necessary measures and are pro-active in identifying new product trends and market preferences will be able to take a bigger share of the market.

Among the main concerns of buyers these days is a secure and wholesome environment for the family and new projects should be designed with security as one of the top priorities.

While developers will still launch their products this year despite the slower take up, the number and size of units launched will be smaller to ensure the units can be easily absorbed.

With less projects to undertake and more free time at their disposal now, they should conduct more indepth product research and development initiatives to keep themselves updated on the types of property that are saleable.

To ensure that they will not be pulled down by large unsold stocks, most developers are reviewing their product mix, unit built-up area and pricing to include more affordable and value for money products.

Under the current challenging economic climate, a number of developers have started implementing the necessary changes, including building houses with smaller built-up area to maintain house buyers’ affordability.

This will ensure that the absolute selling price of the property is affordable while at the same time, margin is preserved as selling price per square foot remains unchanged. There are also more freebies, including early bird discounts, guaranteed buy-back and lucky draws, offered to property buyers these days.

These incentives will boost sales, particularly among potential buyers who are holding out for good bargains. And even if such moves may erode margins of developers by 2%-3%, it may stem slipping property sales. As we all know, thinner margin is the lesser evil compared to dwindling sales. It helps too that the recent decline in building materials costs has minimised the risk of cost overrun.

Over the week, SP Setia Bhd came up with a creative strategy to boost sales. It launched its campaign on the 5/95 home loan package which will run for three months.

The package essentially allows buyers to pay 5% down payment while the remaining 95% will be financed by SP Setia’s panel of end-financiers.

Interest cost during the construction period as well as legal fee and stamp duty for sales and purchase agreement, loan agreement and memorandum of transfer will be borne by the developer.

Given its large landbank, SP Setia can also afford to be more flexible in tweaking its product offering to meet buyers’ changing demand.

At Setia Eco Park, 54 units of 1½-storey bungalows priced at around RM800,000 will be launched in the coming months. The price is more affordable compared to the semi detached houses of over RM1mil each launched in earlier phases.

> Angie Ng is deputy news editor of The Star. She hopes more sophisticated product innovation and holistic planning initiatives by industry players will result in more wholesome and safer living environment for the people. - By Angie Ng (The Star)

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