As property sales slow, developers and real estate agents are trying to up buying interest with carrots including cash vouchers, lucky draws and even holidays.
For example, developer Wing Tai Holdings is holding a promotion at its Ascentia Sky project in Alexandra View.
Buyers who purchase the two-, three- or four-bedroom units will receive up to four airline tickets for a winter ski trip to Hokkaido in Japan, or up to $10,000 in rebates, after they exercise the option to purchase the unit.
A check with travel agents shows that a seven-day trip to Hokkaido starts from $2,000 per person.
Prices for a 1,012 sq ft two-bedroom unit start at $1,478 per sq ft (psf), or around $1.5 million.
Mr Colin Tan, research and consultancy director of property firm Chesterton Suntec International, is sceptical that such tactics will work.
He said that although this type of strategy gives a ‘perception of value for money’, it is likely to have a limited impact on buyers because such gifts are low in value when compared to the sale price of a condominium unit.
Real estate agencies beg to differ as they say offering promotional incentives sets them apart from the competition and creates a distinctive brand image, while increasing agent recruitment at the same time.
Black Diamond Real Estate Group, which is marketing projects including iSuites in Marshall Road and Onan Suites in Onan Road, is one such company.
It encourages its agents to come up with ‘fresh ideas’ to market its projects.
Some of its agents are offering promotions over the weekend, such as lucky draw opportunities for buyers to win consumer electronics like LCD television sets and washing machines.
HSR Property Group hopes to attract more customers with the chance to win a Mercedes-Benz car. The lucky draw contest, which started in the first half of this year, is open to anyone who buys, sells or rents a property through the company’s agents.
This promotion joins the slew of HSR’s monthly marketing activities, which include an 18-month home warranty scheme that provides free maintenance for a home’s electrical, sewage, mechanical, lighting and air-conditioning systems.
At Lumiere in the Central Business District, one sales team is throwing in a free iPad with the sale of every apartment.
Team members, who are paying for the gifts from their own commissions, are selling a range of units priced at between $1.3 million and $2 million.
Property consultants say agents could be resorting to these tactics in an attempt to boost sales without offering discounts.
Home sales have taken a breather in recent months as the second half of the year is traditionally slower for the sector.
But prices have yet to drop. Private home prices rose 2.9 per cent in the third quarter compared with the previous quarter.
Mr Patrick Liew, director of the HSR Property Group, said these strategies to ramp up business work better than price reductions, which could backfire.
‘If you always drop the price, sellers won’t need us. Professionalism dictates we have to help them get the highest possible price.’
Offering incentives to make a home purchase is not new, but the range of perks now goes beyond the likes of the traditional furniture vouchers. This change in strategy could be due to a shift in consumer behaviour, said Mr Chua Yang Liang, research head at Jones Lang LaSalle.
‘Today’s buyer profile has changed, it’s different from a generation ago. Looking at general market trends, we can see tastes have changed… This impacts what buyers are looking for and what incentivises them to buy,’ he said.
However he warned that ‘incentives are just marketing products and buyers at the end of the day will have to look at their finances’.