Freebies galore as developers push sales

Developers need to be innovative to create demand for their projects

TIMES must be getting quite bad, judging from the recent spate of generous freebies and incentives thrown in by developers to push property sales.

While in the past such incentives were offered by big and small players, this time around it appears that the “big boys” are going all out to sell their products while the smaller ones are mostly lying low.

For example, Soon Tiek Development Sdn Bhd is offering a whopping 21% guaranteed rental return to buyers of its retail outlets at Leisuretainment @ Endah Promenade.

Sime Darby Property Bhd has also been aggressively marketing its products with a host of incentives, including a “Guaranteed Buy-Back” programme to allay any fears among buyers during the current “uncertain and challenging times”.

Buyers of its houses, including those in Bandar Bukit Raja, Planters’ Haven, Bukit Jelutong, Denai Alam, USJ Heights and Nilai Impian, also stand to win big cash prizes: RM100,000 (first prize), RM60,000 (second prize). RM40,000 (third prize) and RM20,000 (fourth prize).

The SPK Group is also wooing buyers of its Cahaya SPK two-storey superlink homes, priced from RM468,000, with its “Year-End Bonanza” which consists of a grand prize of a Toyota Camry, first prize of a seven-day, six-night Australia Gold Coast holiday for two and for the other winners, vacations to South Korea and Hong Kong.

The IOI Group, which has many developments in the Klang Valley, recently offered several incentives that included a 45-day interest-free period for EPF withdrawal applicants and a 90-day interest-free period for government loan applicants. Buyers of its latest two-storey terrace houses and The Grand 2, comprising three-storey shop offices in Bandar Puteri Klang, also get a chance to win RM10,000.

A few months ago, purchasers of Phase 2 Jelutong Heights’ 2½-storey semi-detached houses priced from RM1.12mil were offered a RM50,000 “early bird” discount at a special preview. Buyers need only pay 10% upon signing the sale and purchase agreement with “no cumbersome progressive interest” until vacant possession.

These incentives, usually thrown in with free lunches, tea parties and sometimes elaborate dinners with classical music for upmarket products where only a handful of privileged guests are invited, are becoming the norm.

Most developers will not openly admit that their sales have slowed but the “off-the-record” consensus is that 2009 will be very challenging.

But will these freebies and incentives have any impact on sales? Those with steady-paying job and sound finances may find the incentives attractive enough to help them decide to buy.

However, generally, people are still wary and uncertain of the economy and are adopting a “wait-and-see” attitude, something that developers do not want.

Developers have not only delayed launches but some of them are forced to downsize or make major changes to their projects.

Some are looking for greener pastures abroad and have re-branded while others are trying to create new demand with unique products.

Berjaya Land Bhd and AP Land Bhd have new projects in Cheju Island, South Korea, and Hokkaido, Japan, respectively. It can be expected that more developers will be venturing abroad as local demand is set to shrink.

Instead of competing with each other, developers must pool their resources to collectively woo more foreign investors to Malaysia under the Malaysia Property Inc, tasked with promoting the country as an international property investment destination.

The International Real Estate Federation Malaysia is facilitating this collaborative effort between the Government, Real Estate and Housing Developers Association, Malaysian Institute of Estate Agents and the private sector.

Britain, the Middle East and Japan have been identified as the main target markets to launch Malaysia’s branding and promotional initiatives, with the Malaysia My Second Home (MM2H) programme being given priority.

Foreigners should find our products, especially the high-end ones, comparable with some of the best in the world. What we need is to let the world know more of what we have to offer. The pricing of our properties and the cost of living are still favourable.

The Government can do more, not just by injecting funds but, more importantly, addressing issues such as rising crime rates to ensure that Malaysia is seen as a safe place for MM2H, and offering tax incentives to spur people to buy their first home.

By The Star (by S.C.Cheah)