The property market has been moving sideways for most of H1 2008, with developers not wanting to back down from their premium pricing of their newly launched developments. With exception of the luxury homes, which at the top-end of the property market is still selling at ultra-premium prices, most of those in the secondary property market have also felt the pinch of the dimmed interest.

Both sides had a face-off for several months now, and finally 2 developers have reported to backdown. Offering slightly discounted prices from their original estimated sale price. One of these developements is Dakota Residences at Dakota Crescent (which is minutes away from the soon to be developed Sports Hub and Kallang Waterfront), a joint project between Ho Bee and NTUC Choice Homes, originally slated to sell approximately around S$1000psf, they are now offering the units for sale between S$950psf and S$1000psf.  Our contacts within Ho Bee were not able to comment on what lead to the eventual decision to reduce the price, but the picture to us is quite clear. Property developers now do not want to end up holding on to too much inventory, but to move the units quickly.      …read full details

In a quick phone call to several of our real estate investors about today’s news, they are all adopting a wait-and-see attitutde to check if more developers are going to drop their prices too. 3 out of 5 of our clients say that it will continue to slide, slowly but surely. Given the hike in interest rates, the smaller developers will face more challenges.

In our opinion, developers of projects in prime locations and development of luxury homes of the likes of Nassim Park Residences will still hold out. They are definitely not eager to drop their prices anytime soon. But we would expect some discounting and possibly freebies to be given out to attract the HDB upgraders and HDB first time buyers who will shun the build-to-order projects. We expect the medium priced projects in the range of $700-$850psf to sell well. It is still shocking to see prime locations like Dakota Residences dropping their price.