They partner distributors to offer customers chance to own luxury cars in effort to meet sector rules
Buying a condominium may just land the purchaser a car as well, or at least a discount for one.
Developers are getting creative in flogging unsold units, with some offering luxury cars in lucky draws and others giving out cash vouchers for such vehicles.
Until recently, Mont Botanik Residence in the Hillview area was giving out $50,000 vouchers for Jaguar cars for every apartment unit purchased. The Straits Times understands that in the past month or so, the promotion has been replaced by a 3 per cent discount for the apartment units.
After this discount, prices start at around $1.18 million for a two-bedroom unit in the freehold 108-unit condominium, which was launched for sale in the second half of last year.
The project’s developer, Tuan Sing Holdings, as well as the distributor for Jaguar, Wearnes Automotive, declined to comment on the collaboration.
Industry observers said partnering a luxury car label is a way to brand the project and, more importantly, helps to attract buyers without lowering prices, which may devalue the condominium.
National University of Singapore real estate professor Sing Tien Foo said the move by Mont Botanik Residence helps to “differentiate the residential development from other mid-range-priced projects in the Hillview area”.
“This could be a joint marketing strategy between the car dealer and the developer – both plan to target the same segment of buyers who are able and willing to spend on luxury items, including luxury houses, to allow them to signal their status,” he said.
He added that compared with direct cash discounts, such a promotion would enable the developer to avoid revising prices downwards, helping it to set a relatively high price to signal the project’s quality.
Property agent Kenny Lee, who specialises in condominium sales and rentals, said: “From a business point of view, it’s a win-win situation for both (the car distributor and the developer).”
Some developers go beyond offering vouchers and instead entice buyers with the chance of winning a luxury car.
The developer of Kingsford Waterbay, a 99-year leasehold condominium in Upper Serangoon View completed last month, organised a lucky draw last July for the remaining 30 or so units. The prize was a BMW worth more than $100,000, which a buyer won. All the units were sold by the end of September.
“It was the last few units and they wanted to get them out as soon as possible,” said Ms Yvonne Toh, one of the property agents who marketed the project, adding that the last time she saw such a lucky draw for a car in her 10-year career was about eight years back.
There is reason for such a rush: Under Additional Buyer’s Stamp Duty rules, developers need to sell all units at new residential developments within five years of buying the site, or pay extension fees to the state.
Since the rules took effect in 2011 to the end of 2017, developers have paid a total of $380 million in fees and charges to the Government for not being able to sell all residential units in their projects within stipulated deadlines.
Mr Nicholas Mak, executive director of real estate consultancy ZACD Group, said these incentives for buyers often appear during market slowdowns, such as during the Asian financial crisis in 1998 and in the aftermath of the dot.com bubble burst in the early 2000s.
Last September, Bloomberg reported a debt-laden developer in China giving away a BMW 3 Series car with each purchase.
But Mr Mak said such a move is unlikely to happen in Singapore. “Cars are so expensive here, it doesn’t make sense.”
“Source:[Developers get creative to push unsold condos] © Singapore Press Holdings Limited. Permission required for reproduction”
