Although it was reported recently that the average selling price of private property has eased, the per-sq-ft selling price of certain developments still hit new highs.
Property development is a high-threshold industry; it is capital and labour intensive, with not many major players in the field. Land is also scarce in Singapore; unlike raw materials of other products, it cannot be imported if local supply is insufficient.
So it is not easy to increase the supply of apartments in a short time. But demand is always there.
Years ago at their sales offices, property developers provided the price list of all units in a development, in addition to a booklet with the size and floor plan of each unit type. Show flats were completed with each wall and door.
Now, developments are sold in stages and sales results are given per stage. “Eighty-per-cent sold” refers to that stage, not the whole development. No price list is given; unit prices are given only upon enquiry.
Some walls disappear in the show flats. For instance, the main entrance may be an empty space without the main door and adjacent walls. Buyers are disadvantaged as developers try to push market prices up by withholding information.
Announcing sales results per stages would push some potential buyers into a rash decision when, in fact, many units may be available.
Some developers leak information, through agents, that they intend to increase prices in the next stage, indirectly “coercing” potential buyers to make a decision on the spot.
Without a complete price list, potential buyers would not know if there are units available at a more affordable price for them and developers may quote any price they wish when someone enquires.
Units adjacent to each other may be priced very differently.
Higher property prices lead to higher rentals and, thus, a higher cost of living.
When people have to spend more money on property, they have to spend less in other areas, affecting other industries in Singapore.
In view of all this, it would be fair to ask the property industry to resume its old practices.
Source : Today – 17 May 2012
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