Over the weekend of March 2-3, a total of 200 units were released at The Florence Residences. Of the figure, 54 units were snapped up. “That’s close to 30% sales,” says CB Chng, Logan Property executive director.
“Buyers these days are more cautious with their purchases and they would sometimes require a longer time to consider all factors,” adds Chng. “First-time buyers need to time to familiarise themselves with the project.”
A redevelopment of the former Florence Regency privatised HUDC estate, the 1,410-unit The Florence Residences located at Hougang Avenue 2, is considered the first launch of a “mega project” – above 1,000 units - in 2019.
The Florence Residences “is priced appropriately” at an average of $1,450 psf. Some units have prices starting from below $1,400 psf.
Challenges facing developers
One of the biggest challenges that developers face today is that “buyers have a lot of choices between new launches and already launched projects”, according to Ismail Gafoor, CEO of PropNex Realty, one of five appointed joint marketing agencies at The Florence Residences. The others are ERA, Huttons Asia, OrangeTee & Tie and SRI.
In January and February this year – prior to the launch of The Florence Residences - there were no significant suburban projects launched. As such, four neighbouring projects in the Serangoon-Hougang areas -- Affinity at Serangoon, The Garden Residences, The Tre Ver and Riverfront Residences -- garnered sales totalling about 200 units over the past four weeks, says Gafoor.
The pick-up in transactions at the 1,052-unit Affinity at Serangoon and the 613-unit The Garden Residences could be largely attributed to the Jan 25 announcement of the 12 stations on the first phase of the Cross Island Line (See Map below). One of the 12 upcoming stations on the line is Serangoon North, where one of the exits is located just 350m from Affinity at Serangoon, and 532m from The Garden Residences.
Since its launch last June, 460 units (43.7%) at Affinity at Serangoon have been sold. Over the past weekend (March 2-3), 30 units were sold. Average price achieved at Affinity at Serangoon is $1,475 psf.
“The recent announcement on the MRT stations of the Cross Island Line has been a key factor,” says Eugene Lim, director of marketing and sales, Oxley Holdings, which is part of a consortium of developers at Affinity at Serangoon and Riverfront Residences. “Some agents have also reported that, having viewed other recent launches, some buyers have returned as they prefer our project in terms of design and finishes.”
Two other projects that were launched last year -- the Riverfront Residences, launched on July 5 (the eve of the imposition of the property cooling measures), and The Tre Ver, launched in August -- also saw a steady pick-up in sales momentum.
At the 1,427-unit Riverfront Residences, 35 units were sold last weekend, bringing total sales to date to 935 units (65.5%). Average price of units sold is $1,350 psf. “Sales have been very encouraging,” says Oxley’s Lim.
The Tre Ver also saw “good sales momentum” in the first two months of 2019. The 729-unit condo located at Potong Pasir Avenue 1, launched last August, has achieved close to 45% sales to date. Average price achieved is said to be $1,558 psf. “Buyers are attracted to the city fringe location and strong product offering designed by WOHA,” says Jesline Goh, chief investment and asset officer, UOL Group.
Developers of some projects launched in late 2017 and 2018 also raised the commission rates offered to agents from 1-2% to a range of 3-5% in order to move the remaining units, according to property agents who declined to be named. This motivated agents to “divert prospective buyers over to those projects”, he adds.
Setting itself apart
“Some of these other projects in the vicinity were launched as early as April 2018 and there have been a series of varied marketing strategies applied respectively,” notes Logan Property’s Chng. However, he reckons that The Florence Residences will be able to set itself apart from the other projects.
The Florence Residences is served by two well-connected MRT stations, points out Chng. “We believe that our target audience will realise the investment potential, with the future Cross Island Line just a six-minute walk to Hougang MRT Interchange. We are confident of the project’s attributes, from the conceptualisation of the architecture and landscape design, to the creation of a fulfilling lifestyle for our residents.”
Developers have traditionally focused on sales at the launch weekend. “It’s going to be a long-drawn battle in today’s market,” says Ken Low, managing partner of SRI.
With at least 50 new projects slated for launch this year, developers will have to change their strategy, notes PropNex’s Gafoor. “Instead of placing all their advertising and promotion budgets on the launch weekend and focusing all their fire power on the first weekend of launch, they will have to pace their advertising & promotion over the long term. On-the-ground marketing has also become crucial.”