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> Buying new project now = getting screwed?

holypredator
post Dec 8 2018, 10:15 PM, updated 2w ago

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https://themalaysianreserve.com/2018/12/06/...lower-earnings/


QUOTE
Sime Darby Property said it is currently undertaking a tactical price review of all unsold inventories, particularly the completed development units


Those who already bought sime darby property are going to get a big slap from the developer soon when they reduces the property price?

Don't know which sime darby project will kena first though but according to edge property the Lot 15 seems to be doing very well so I think they might not touch that property. Cantara, Elmina buyers might feel it though

QUOTE
β€œThe good sales performance of recent new projects such as Lot 15 by Sime Darby Property Bhd and the Grand Subang Jaya shows that property buyers still like Subang Jaya,”


https://www.edgeprop.my/content/1452230/sub...ation-education


and those are big players, if they are considering such drastic measures those smaller players like Loh & Loh (millenium creation sdn bhd), Mediaraya Sdn Bhd, paramount properties etc. might even abandon the project if they can't sell.

This post has been edited by holypredator: Dec 8 2018, 10:33 PM
foohoa
post Dec 8 2018, 10:31 PM

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DAP kena order cannot accept any project
and yes, now no more direct award project liao, those buy project memang screwed kao kao
holypredator
post Dec 8 2018, 10:35 PM

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QUOTE(foohoa @ Dec 8 2018, 10:31 PM)
DAP kena order cannot accept any project
and yes, now no more direct award project liao, those buy project memang screwed kao kao
*
If don't have new project, isn't it a good news for existing projects? Since consumers got no new choices, the existing projects would sell like hot cakes
icemanfx
post Dec 8 2018, 11:04 PM

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Those like to say "who doesn't know mother is a woman" will remind; developers are in business to make profits from buyers and don't guarantee profits for buyers/investors.

This post has been edited by icemanfx: Dec 8 2018, 11:13 PM
holypredator
post Dec 8 2018, 11:45 PM

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QUOTE(icemanfx @ Dec 8 2018, 11:04 PM)
Those like to say "who doesn't know mother is a woman" will remind; developers are in business to make profits from buyers and don't guarantee profits for buyers/investors.
*
It's not really about profits for the buyers, it's about pretty much screwing over your early bird buyers. Imagine yourself buying few months earlier and then out of the blue knowing that the developer lowered its price just shortly after. It's kinda different from buying the average consumer goods where there is a product life cycle. Your property is 3 years away from completion and you've already made a loss when your developer decides to give more discounts to clear their inventory.

It felt kinda like being cheated in a way knowing that you've overpaid for something that you've not gotten yet. For those who got extra discount from special privilege discount or referral discount, it basically just disappear the moment the developer shoot the price down with more discounts.

If the developer wants to clear their inventories, why not just throw in more freebies like furnishing etc. instead of pressing the property price down? They can easily give it to the existing buyers as well since the property hasn't even been completed yet and everybody would be happy. Otherwise, I think in future the momentum for high rise project would start off extremely bad since there is no point in buying early anymore since price will not go up but it will definitely go down during sales for new projects anyway.

I understand if small developers play such trick because they don't have any reputation to keep but I don't expect the big players to do that cause their reputation is at stake for future projects.

This post has been edited by holypredator: Dec 8 2018, 11:55 PM
foohoa
post Dec 8 2018, 11:50 PM

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QUOTE(holypredator @ Dec 8 2018, 10:35 PM)
If don't have new project, isn't it a good news for existing projects? Since consumers got no new choices, the existing projects would sell like hot cakes
*
everything want open tender now and also now they SESB(tnb) is checking the equipment before you can tender the project
this to prevent of those maincon get the project and sub to other contractor, this quiet good also la
AskarPerang
post Dec 8 2018, 11:59 PM

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1. Willing seller, willing buyer.
2. Sime Darby not the first one doing that. Mah Sing, SCP doing the same quietly but didnt announce in the news to the world.
3. LGE reminds all developer to reduce house price by 10% due to SST exemption for construction.

holypredator
post Dec 9 2018, 12:05 AM

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QUOTE(AskarPerang @ Dec 8 2018, 11:59 PM)
1. Willing seller, willing buyer.
2. Sime Darby not the first one doing that. Mah Sing, SCP doing the same quietly but didnt announce in the news to the world.
3. LGE reminds all developer to reduce house price by 10% due to SST exemption for construction.
*
Willing seller willing buyer should applies for smaller developers only not bigger developers, they have their reputation at stake. Imagine people knowing that they can't trust their investment on those big names, who would still want to go for their future projects? Might as well wait it off..

Well, developers can throw in freebies to compensate their existing buyers? whistling.gif

As said earlier, this is not something that has product life cycle. You don't enjoy being an early adopter since you don't get to touch the product when you pay for it and you are basically enjoying your product the same time as any other buyers at any given time.

This post has been edited by holypredator: Dec 9 2018, 12:08 AM
holypredator
post Dec 9 2018, 12:12 AM

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Anyway if that is how the market works, I suggest everyone to just hold off from buying property until they've peak promotion like how you buy clothes from the store.


nbi
post Dec 9 2018, 12:45 AM

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those earlier buyers should united to sue that developer if no fair compensation given.

This post has been edited by nbi: Dec 9 2018, 12:46 AM
icemanfx
post Dec 9 2018, 01:23 AM

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QUOTE(holypredator @ Dec 8 2018, 11:45 PM)
It's not really about profits for the buyers, it's about pretty much screwing over your early bird buyers. Imagine yourself buying few months earlier and then out of the blue knowing that the developer lowered its price just shortly after. It's kinda different from buying the average consumer goods where there is a product life cycle. Your property is 3 years away from completion and you've already made a loss when your developer decides to give more discounts to clear their inventory.

It felt kinda like being cheated in a way knowing that you've overpaid for something that you've not gotten yet. For those who got extra discount from special privilege discount or referral discount, it basically just disappear the moment the developer shoot the price down with more discounts.

If the developer wants to clear their inventories, why not just throw in more freebies like furnishing etc. instead of pressing the property price down? They can easily give it to the existing buyers as well since the property hasn't even been completed yet and everybody would be happy. Otherwise, I think in future the momentum for high rise project would start off extremely bad since there is no point in buying early anymore since price will not go up but it will definitely go down during sales for new projects anyway.

I understand if small developers play such trick because they don't have any reputation to keep but I don't expect the big players to do that cause their reputation is at stake for future projects.
*
Developers traditionally offer early birds discount or increase price on subsequent phase is to play on fear of missing out/boat psychology.

demand is largely dictated by price. when price is too high, demand will be poor. company management responsibility is to shareholders not buyers. if management couldn't meet kpi e.g sales, management's head could roll. it is management responsibility to bring in sales e.g marketing, promotion, discount and lowering price.

whether this strategy will hurt their future sales is remain to be seen because most consumers/buyers have short and preferable memory.

in free economy, price could goes up as well as down.


This post has been edited by icemanfx: Dec 9 2018, 01:24 AM
holypredator
post Dec 9 2018, 01:35 AM

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QUOTE(icemanfx @ Dec 9 2018, 01:23 AM)
Developers traditionally offer early birds discount or increase price on subsequent phase is to play on fear of missing out/boat psychology.

demand is largely dictated by price. when price is too high, demand will be poor. company management responsibility is to shareholders not buyers. if management couldn't meet kpi e.g sales, management's head could roll. it is management responsibility to bring in sales e.g marketing, promotion, discount and lowering price.

whether this strategy will hurt their future sales is remain to be seen because most consumers/buyers have short and preferable memory.

in free economy, price could goes up as well as down.
*
well, can't argue with that but still I believe many new project investors would feel short changed because of that not because they are losing out on profits (that is never the case to be consider with since it is a risk) but losing out just by default from the developer itself.

what I can conclude though is that if I want to buy a new project, I think it is best to wait it out especially if the market is not doing very good.

Some might argue "early birds get to pick units" but is it that important though? Even if you are eyeing on a particular section of the property or particular layout, chances are there would still be units left unless you specifically wants to buy a certain unit for whatever reason like you have to buy the unit at 18th floor or something.

This post has been edited by holypredator: Dec 9 2018, 01:36 AM
AskarPerang
post Dec 9 2018, 01:37 AM

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I give you one best example here: Razak City Residence, Sg Besi.
2 big booster gone, vanish within this year itself.
Before this they are already selling with added value of Bandar Malaysia and MRT2 station already factor into the pricing.

So how the developer gonna clear away their remaining stock?
By offering cheaper price of course.
Or to not look so obvious, they can package it differently. But at the end of the day, will be more worth it to get it now compare to those early bird buyer.
AskarPerang
post Dec 9 2018, 01:39 AM

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Real case study:

D'Sara Sentral by Mah Sing. Late buyer got throw in 25% rebate while early bird only got 9% rebate.
You can read it yourself here: https://forum.lowyat.net/index.php?showtopi...post&p=86920761
Continuation part 2 (with typical alasan): https://forum.lowyat.net/index.php?showtopi...post&p=86969476
Paper loss 100k stated by 1 of the buyer himself: https://forum.lowyat.net/index.php?showtopi...post&p=86978041
and can read from that post onwards......


Real case study #2:

No need to guess is from the same developer again!!!
M City, Jalan Ampang.
Project completed 2 years ago. But developer units still fail to sell out. (How to sell when got so many units end up cheaper price in auction?)
So what to do? Throw in big rebate to sell.
Unit dispose same like 7 years ago early bird pricing. If count progressive interest, and 7 years of lost opportunity. Late buyer actually got big advantage.
Read: https://forum.lowyat.net/index.php?showtopi...post&p=89879928

This post has been edited by AskarPerang: Dec 9 2018, 01:39 AM
holypredator
post Dec 9 2018, 01:46 AM

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QUOTE(AskarPerang @ Dec 9 2018, 01:39 AM)
Real case study:

D'Sara Sentral by Mah Sing. Late buyer got throw in 25% rebate while early bird only got 9% rebate.
You can read it yourself here: https://forum.lowyat.net/index.php?showtopi...post&p=86920761
Continuation part 2 (with typical alasan): https://forum.lowyat.net/index.php?showtopi...post&p=86969476
Paper loss 100k stated by 1 of the buyer himself: https://forum.lowyat.net/index.php?showtopi...post&p=86978041
and can read from that post onwards......
Real case study #2:

No need to guess is from the same developer again!!!
M City, Jalan Ampang.
Project completed 2 years ago. But developer units still fail to sell out. (How to sell when got so many units end up cheaper price in auction?)
So what to do? Throw in big rebate to sell.
Unit dispose same like 7 years ago early bird pricing. If count progressive interest, and 7 years of lost opportunity. Late buyer actually got big advantage. 
Read: https://forum.lowyat.net/index.php?showtopi...post&p=89879928
*
That is really good explanation.

Makes me wonder if the only way to properly invest in a new project is to eye a few units you like then monitor it as often as possible. No point jumping in to buy early cause there is a very high chance to lose compared to you buying it later.
gks
post Dec 9 2018, 02:40 AM

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For every case of MahSing, there are maybe other 10 developer launches that will never reduce it initial price.

Again.. It is market supply and demand.
brianccg
post Dec 9 2018, 10:04 AM

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YTL Fennel also having "special promotion" for unsold units.
ibwo
post Dec 9 2018, 10:22 AM

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Herd mentality.. when ppl are scared. No one will be buying. Especially if u r seeing ppl losing money and price going down. Buckle your seat belts for wild rides. Those who can't hold will be in deep teouble when they find out that rental market is weak as well. With all the affordable housing, rents will be further under pressure. Congrats to earlier owners of making 300% or more. The party is over now..
langstrasse
post Dec 9 2018, 10:26 AM

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QUOTE(nbi @ Dec 9 2018, 12:45 AM)
those earlier buyers should united to sue that developer if no fair compensation given.
*
Those who think this way would be better off by just staying away from any investment with risk. Just park money in FD lol.

If you buy stocks at IPO, and then the stock price decreases, should all the early stockholders unite and sue the company ? πŸ˜‚πŸ˜‚πŸ˜‚

And consider the opposite scenario - early bird buyers go into the project early then 3 years down the road the property price goes up. Should the later buyers unite and sue the developer ? πŸ˜‚πŸ˜‚πŸ˜‚
holypredator
post Dec 9 2018, 11:21 AM

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QUOTE(langstrasse @ Dec 9 2018, 10:26 AM)
Those who think this way would be better off by just staying away from any investment with risk. Just park money in FD lol.

If you buy stocks at IPO, and then the stock price decreases, should all the early stockholders unite and sue the company ? πŸ˜‚πŸ˜‚πŸ˜‚

And consider the opposite scenario - early bird buyers go into the project early then 3 years down the road the property price goes up. Should the later buyers unite and sue the developer ? πŸ˜‚πŸ˜‚πŸ˜‚
*
The things you've mentioned does not exactly correlates to one another.

Property investment involve risk but it doesn't make much sense when the risk occurs during the purchasing process. You can't compare stock price with purchasing new projects because stock price fluctuates but the SPA price doesn't just go up because there are higher demands. At purchasing stage, you are just a consumer buying a product NOT investing. You are owning the stock on paper once you've purchased it and it is within your disposal to do whatever you want with it but buying new projects eventhough on paper you own it, it still belongs to the developer until it is completed and you have no control over it.

Bear in mind that selling under construction properties requires the developer's consent, you literally have no control over the property since it is not completed. The property still belongs to the developer in a way until it is completed and the keys are hand over and until you've fully paid up. (You only pay based on the percentage of the property is being completed i.e. when the foundation is done, you will pay your first payment then when the common area is done, you pay the next... so on and so forth)

3 years down the road, when the property is completed and the keys are handed over to the early bird buyers, they will be considered "owning" the property since it is then fully paid. If the market price goes up, the later buyers will buy it as sub-sale. When that time comes, it will only be considered "Investment" since the price will then move according to supply and demand but when the property is still under construction it is unfair that the price move based on weak demand but not strong demand.

You can't mix investment theory into buying a new project. It is not the same as buying a completed project.

This post has been edited by holypredator: Dec 9 2018, 11:25 AM

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