The next six months look set to be bumpy for the private residential property sector, with market watchers predicting prices will head south by about 10 per cent.
And real estate agents and developers are likely to get creative in driving sales and keeping costs down. Builder and developer United Engineers will focus on infrastructural projects elsewhere in the region while the Singapore property market adjusts to the global financial turmoil.
Given the uncertainties ahead, its CEO, Jackson Yap, said developers will be reluctant to bid for land for residential development. However, there is hope that construction costs could come down next year.
Mr Yap said: "The main thing is there is still a lot of activity in Singapore and (it) will probably peak with the construction of the two IR projects. Probably (in the) second half of next year, we can see it coming off and if construction cost comes off, then it is easier for developers to pass some of it through lower prices to consumers."
Real estate agency PropNex said buyers can expect more incentives, such as interest or stamp duty absorption schemes and vouchers that could be worth tens of thousands of dollars.
Mohamed Ismail, CEO, PropNex, said: "Some developers in the past have even (conducted)... a lucky draw... for the consumers, the buyers, and there is a separate draw for agents... From the developers' perspective, they just factor this as part of the marketing cost."
Market players said some developers may also hold more roadshows in the heartlands to reach out to a wider pool of potential buyers. But the effectiveness of all these strategies still comes down to good value and right pricing.
For now, industry watchers said it is unlikely for developers to lower prices, even though there may be some room for bargaining.
Ku Swee Yong, director, Savills, said: "Most of the large and experienced developers still have relatively deep pockets because of their investment income, for example from office rentals, retail mall rentals, hotel rentals. Those are still doing pretty well, and that is helping them with covering their interest expenses on their land bank and on properties that they have yet to launch and sell."
Developers are also expected to scale back on sales launches until consumer confidence picks up. - CNA/ms
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