At the launch of new condos, forego the VIP inside track

At the launch of new condos, forego the VIP inside track

Give each prospective buyer the same treatment and let chance determine who gets first dibs on desirable apartments.

January 27, 2025

CONDOsingapore.com

In Singapore, obtaining a desired new residence frequently requires more than just money.

Candidates must fulfil stringent eligibility requirements in order to purchase a Build-To-Order (BTO) apartment from the Housing and Development Board. It frequently depends on luck to get a good ballot number in order to get a four- or five-room apartment on a high floor in an estate that an applicant is interested in.

However, some applicants have better chances in the computer ballot for apartments offered in HDB's BTO exercises thanks to priority schemes. Additional ballot opportunities are available to those who qualify for priority schemes.

For instance, first-time families with Singaporean children under the age of 18 or married couples under the age of 40 are given preference when applying for HDB BTO apartments, provided they meet certain requirements.

VIP treatment

In a similar spirit, getting a good ballot number at popular new condo launches requires luck in order to secure choice units. However, prior to the launch, some interested buyers can purchase at a project's VIP preview to get a first look.

Buyers of several units, the developer's business associates, or project marketing agents may be eligible to choose a unit at a condo project's VIP preview.

If you get on the inside track, you have a better chance than many others of obtaining that desired two-bedroom apartment with a nice layout and facing at a well-liked new condo development.

The Orie, a 99-year leasehold condo complex in Toa Payoh that was co-developed by Frasers Property (TQ5 0%), City Developments Limited (C09 +2.72%), and Sekisui House, sold 668 units, or about 86% of the 777 units that were available during its launch weekend earlier this month. The most popular apartments in the project had two or three bedrooms. Additionally, Singaporeans made up roughly 93% of the purchasers.

Purchases made during the VIP preview greatly boosted The Orie's robust launch sales. According to real estate firm Huttons Asia, more than 170 units were purchased during the preview.

There are undoubtedly benefits to having priority at the opening of a new condo development. Should such a priority be granted based on factors like whether a household has children or close family members living close to the aforementioned new condo? One could argue that applying such standards is more equitable than, say, giving preference to agents or a developer's business associates.

After some thought, giving up VIP previews at the launch of new condos might be the most equitable and moral course of action. At the launch of a new condo project, let all prospective buyers cast ballots with equal chances, and let luck be the only factor determining who gets to pick a unit first.

Undoubtedly, there are other companies besides housing developers in this area that provide preferential treatment to a select few clients. Consider luxury brands or high-end fashion houses that offer limited-edition releases or highly sought-after new products to a select group of customers. However, a large number of these selected clients are probably repeat, high-spending clients.

Many of the VIPs attending the launch of a new condo project might not be recurring clients of a specific developer. Furthermore, just because some other companies give their clients an insider's advantage does not mean that local housing developers should follow suit.

Since purchases by agents, business associates, and other VIPs can influence other interested parties to commit to buying, a developer may argue that selling units to VIPs at a preview before a condo project's launch makes financial sense.

However, it's unlikely that many buyers will be persuaded of the benefits of a specific condo project by the presence of VIPs purchasing units. Before choosing whether to try to purchase a unit at a project, trust a prospective buyer who is willing to pay a princely sum for a new home to have done work on the project's location, design, unit floor plans, amenities, developer, and so on.

Giving up VIP previews voluntarily

Indeed, developers ought to have discretion over the pricing and marketing of their condominiums. As it stands, strict regulations aid in ensuring that developers sell their houses quickly.

There is probably no need for legislation that restricts the percentage of units that can be sold at a VIP preview or that forbids the sale of homes to VIPs prior to the opening of a new condo project.

Reputable real estate developers who respect all clients and recognise the value of creating an inclusive society ought to voluntarily stop providing VIPs with preferential treatment when purchasing brand-new condominiums.

By offering all purchasers who trust them and are prepared to shell out a substantial amount of hard-earned cash an equal chance at obtaining a unit of their choosing in a condominium development, developers should promote equality and inclusivity.

If necessary, the Real Estate Developers' Association of Singapore, which works to advance best practices and foster the expansion of a thriving and forward-thinking real estate sector, can take the lead in urging developers to treat all prospective purchasers equally when launching new condominiums.

Indeed, some Singaporean families and businesses have made significant fortunes thanks to their success in building private residences. However, given the high costs of land and construction, as well as the potential for additional property cooling measures, developers of new private housing projects assume significant risks.

By creating beautiful, functional homes with sustainable features, numerous developers have improved the quality of life for Singaporeans. Many of the developers in this area are also leaders in sustainability and have a proven track record of producing high-quality homes over the years. However, developers may be able to improve the way that new homes are marketed.

There is a lot of buying momentum for newly launched condos here. Some prospective purchasers may have to refocus their attention on future condo launches if they were unable to purchase the unit they had their eye on at The Orie's launch.

February may see a lot of new launches as we welcome the Year of the Snake. With February's rush of new launches, may developers here increase transparency by giving all prospective homebuyers an equal opportunity to realise their condo dreams and eschewing the VIP inside track.