Ditch the VIP inside track at new condo launches

IN SINGAPORE, one often needs more than just funding to secure a sought-after new home. 

To buy a Build-To-Order (BTO) flat from the Housing and Development Board, applicants must meet strict eligibility criteria. To get a four-room or five-room unit on a high floor in an estate that an applicant is eyeing often comes down to luck in obtaining a good ballot number. 

Still, there are priority schemes that enhance chances for some applicants in the computer ballot for flats offered in HDB’s BTO exercises. Those eligible for priority schemes can get additional ballot chances.

For example, subject to meeting various criteria, first-timer families with Singaporean children aged 18 and below, or married couples aged 40 and below, are prioritised in their HDB BTO flat applications.  

VIP treatment

In a broadly similar vein, luck is needed to snare choice units at popular new condo launches by securing a good ballot number. But, some interested buyers can get first bite by buying at a project’s VIP preview – ahead of the launch.

Those eligible to select a unit at a condo project’s VIP preview may include buyers of multiple units, business associates of the project’s developer or agents involved in marketing the project.

Get on the inside track and you raise your chances of landing that coveted two-bedroom unit with good layout and facing, ahead of many others who hope to buy such a unit at a popular new condo project.

Earlier this month, 99-year leasehold condo project The Orie in Toa Payoh, which is jointly developed by  City Developments Limited , Frasers Property and Sekisui House, sold 668 units or around 86 per cent of the 777 available over its launch weekend. The project’s two- and three-bedroom units were the most popular. And about 93 per cent of buyers were Singaporeans.

Contributing significantly to The Orie’s strong sales at launch were purchases made at the VIP preview. Over 170 units were bought at the preview, according to property agency Huttons Asia.

Clearly, enjoying priority at a new condo project’s launch has advantages. Should such priority be conferred applying criteria such as whether a household has close family members living near to the said new condo or has children? Using such criteria may arguably be fairer than giving priority to, say, agents or a developer’s business associates.

Upon reflection, the fairest and right course of action is perhaps to drop VIP previews at new condo launches. Let all interested buyers ballot at a new condo project’s launch with equal chances and luck be the sole determinant of who has first bite at choosing a unit.

Certainly, housing developers here are not the only group of businesses which give some select customers privileged treatment. Think of high-end fashion houses or luxury brands that give selected customers first bite at much sought-after new products or limited edition releases. Still, many of these chosen customers are likely to be high-spending repeat customers.

In the case of VIPs at a new condo project’s launch, many may not be repeat customers of a particular developer. And because some other businesses give some customers an inside track does not mean housing developers here should adopt such a practice.

Arguably, a developer may posit that selling units to VIPs at a preview ahead of a condo project’s launch makes business sense as purchases by agents, business associates and others from among the VIPs can help sway other interested parties to commit to purchasing.

Nonetheless, many buyers probably do not need VIPs buying units to convince them of a particular condo project’s merits. Trust a potential buyer who is prepared to pay a princely sum for a new home to have done work on a project’s location, design, unit floor plans, amenities, developer and so forth before deciding whether to try to snare a unit at the said project.

Voluntarily ditch VIP previews

Sure, developers should have latitude over how they price and sell their condo units. As it stands, tough guidelines help ensure developers sell their homes in a timely manner.

Legislation to disallow the sale of homes to VIPs ahead of a new condo project’s launch or limit the proportion of units that can be sold at a VIP preview are probably unnecessary.

Instead, reputable housing developers who value all customers and the importance of building an inclusive society should voluntarily drop giving VIPs an inside track on buying new condo homes. 

Developers ought to champion equality and inclusivity by giving all buyers who place faith in them and are willing to spend a sizeable sum of hard-earned money an equal shot at securing a unit of choice in a condo project.  

If need be, the Real Estate Developers’ Association of Singapore, which strives to promote best practices and to support the growth of a vibrant and progressive real estate industry, can lead in encouraging developers to treat all potential buyers fairly at new condo launches.

Sure, success in building private homes has helped create large fortunes for some businesses and families in Singapore. Nevertheless, developers take on significant risks in new private housing projects given high land and construction costs as well as risks of more property cooling measures.  

Many developers have enriched the lives of Singapore residents by building well-designed, efficient homes, with sustainable features, that are great to live in. Also, numerous developers here have established solid track records for building high-quality homes over the years and are leaders in sustainability. Still, developers can possibly do better in how new homes are sold.

Buying momentum in new condo launches here is strong. Invariably, some potential buyers who failed to secure a unit that they were eyeing at The Orie’s launch may have to shift their focus to upcoming new condo launches.

As we welcome the Year of the Snake, February could be a busy month for new launches. May developers here improve transparency by giving all potential homebuyers a fair shot to realise their condo dreams and ditching the VIP inside track, starting with February’s flurry of new launches.