Far East Organization's project The Hillier in Upper Bukit Timah has chalked up healthy sales, despite the recent property cooling measures.
One key factor seems to be the developer's offer to give a stamp duty reimbursement of 3%. Another sweetener is furniture vouchers, with the amount varying based on the apartment size.
Far East is offering a "stamp duty reimbursement" of 3% to all buyers, a move industry players say is equivalent to a 3% discount.
Far East yesterday said 93% of the buyers were Singaporeans and PRs, adding that more than half of the buyers are existing residents in the Hillview neighbourhood.
The developer has been collecting cheques since the project's preview phase started on Dec 16 and buyers have snapped up 225 units averaging $1,175psf. So far, 333 units have been launched.
Prices start at $668,000 for a 549sqft one-bedroom studio unit, which works out to $1,217psf.
The concept is similar to Far East's other mixed-use projects such as The Tennery at Junction 10 and The Greenwich in Seletar, where residential components are integrated with retail malls.
Some market observers have labelled the offer to absorb stamp duty and the furniture vouchers as marketing tactics and have called on developers to lower their price instead.
But buyers like Dr Ng said he felt it made no difference to him. "Giving vouchers is like lowering the price. Ultimately, my concern as a buyer is the net amount I will have to pay and whether I feel it's value for money," he said.
Some market observers add that developers may wait for a while before cutting prices.
Developers will be more price sensitive in the current market, said PropNex chief executive Mohamed Ismail, where many buyers are aware prices could fall further.
"Hence lowering prices on its own may not always work as some buyers will feel it's not low enough... Pairing incentives like stamp duty absorption with lower prices may have greater appeal."
The Hillier, a 99-year leasehold project, contains a mixture of one- and two-bedroom apartment in two blocks: a 22-storey New-York themed tower and a 28-storey tower modelled after the modern architecture seen in London.
Both towers sit above hillV2, a retail and lifestyle shopping mall slated for completion by next year. The Hillier will be ready by 2016.
Source: The Straits Times
Despite calls from market observers for a direct lowering of prices, the wife and I felt that this will only happen as a last resort. There is compelling reason why developers like Far East will prefer to give out stamp duty reimbursements and furniture vouchers: By doing so, the average price for projects such at The Hillier can still achieve average price of $1,175psf. A direct discount will knock at least 4% (i.e. 3% stamp duty + 1% furniture vouchers) off the selling price, which will reduce the average selling price to around $1,128psf. So by employing what some market observers termed as "marketing tactics", developers may continue to prop up the (perceived) selling price. And as long as there are still buyers like Dr Ng, there is little incentive for developers to lower their prices directly.
If the wife and I are considering a 2-bedder at The Hillier because of hillV2 and its supposed proximity to the upcoming Hillview MRT station, we will be sure to check out neighbouring projects such as Glendale Park and Hillview Heights as well. Granted that these are older projects but both are freehold and currently transacting at about $1,000psf. And our gut feel suggests that the upside potential of these developments may not pale comparison to The Hillier...