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Saturday, June 27, 2009

Time to sharpen saws and make a difference

With signs of the economy and property market bottoming out in the coming months, developers should get back in shape and ready themselves for a more active pace and competition from their peers.

After a long lull that started around September last year, things will start to pick up again if all goes well in the global and local economic fronts. Hit by the widening impact of the global financial meltdown in the past one year or so, many project launches have to be deferred and developers were mostly selling unsold stocks from earlier launched projects.

Getting back into the business should be quite easy for most of the property companies as they have already build up their landbank and some even have project plans and approvals in place and are just waiting for the market to turn around to launch their projects.

While there are developers who have kept themselves active with projects to build and sell, there are also those who have no projects to proceed with and remain in “siesta mood” during the past few months.

It is time to jolt out of this mode and start “sharpening their saws” to make a difference and create more value for property buyers.

There have been much changes during the short spate of economic upheavals and it will be worth starting on the right footing.

Despite the pensive mood of most developers after the poor reception for their projects during those “under performing” months, there is no time to waste by brooding over what could have been if the market had continued to ride on the high gear that peaked before the global crisis sets in.

One consolation for property buyers and developers is the prevailing positive industry environment now; low mortgage rates are supporting property buying and investment activities.

Since May last year, the country has experienced negative real interest rates and this encourages the purchase of property as a hedge against inflation.

Buyers are having a field day with various promotions introduced by developers whereby stamp duty, legal fees and interest during construction period (some even extend by another year after delivery of the property) are borne by developers. These facilities have reduced upfront cost of property ownership.

However, this deal, that can be rated as among the best for property buyers so far, will not last forever as most developers are looking to end the facility in the next few months.

SP Setia Bhd, which was the first developer to come out with its Setia 5/95 Home Loan Package on Jan 19, will be ending it on July 19. The rest of the developers are bound to follow suit shortly after that.

The packages and low entry cost have prompted many buyers to make multiple purchases during the promotion period as they only need to make a downpayment of either 5% or 10% of the property price for each purchase and need not make any further payments until the property’s delivery in the next two to three years.

Whether the buying will continue after the facilities are withdrawn is a big question that have no immediate answer. Only time will tell and it is left to the ingenuity of developers on what value they can bring to their projects to attract buyers.

Buyers will continuously be looking for value buys in the coming days and will shop around for good quality products that offer them a good environment and amenities, safety and security, quality management and maintenance, among a long list of other needs.

Developers should have the right understanding of what the buyers need in the fast changing world today.

The rapidly rising temperature and searing heat we experience as a result of the worsening global warming should encourage developers to look into more breezy and well ventilated designs for their property products, whether they are residences or office buildings and other commercial projects.

At the end of the day, developers that put in the right effort to genuinely plan for the well being and comfort of their buyers will triumph.

● Deputy news editor Angie Ng says to celebrate the end of the long, gruelling crisis days (when they are finally over), it should be a good start for the industry if there are developers who can offer some really cool and refreshing “green” model projects.

By The Star (by Angie Ng)

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