Do-or-die move: Developers forced to slash prices of new projects to move inventory in Q3

Hefty fines await those can’t adapt.

Policy-battered residential developers are resorting to extreme measures to move their unsold stock. In order to avoid hefty government fines, some developers are choosing to slash prices at new projects to entice stingy buyers.

According to CBRE, residential developers focused on clearing their stock in the third quarter to avoid incurring additional costs to extend the sales period.

For example, the remaining 37 units of the recently completed luxury condominium The Vermont At Cairnhill were all sold at around $2,110 psf, some 13% lower than its original price.

At The Panorama at Upper Thomson, 60 units were sold in Q3 at $1,240 psf, markedly lower than its launch price pf $1,350 psf in January 2014 in an effort to boost sales.

“This slowdown in the residential market shows that the effect of the TDSR framework is growing more apparent. Potential homebuyers are finding it increasingly difficult to obtain financing to purchase residential properties. In addition, those who are buying their second or subsequent properties need more cash to overcome the next hurdle of ABSD,” noted CBRE.