MARKETING STRATEGIES OF PRIVATE HOUSING DEVELOPERS IN A DOWNTURN ECONOMY - THE PRICE WAR

Abstract

The regional financial turmoil has hit Singapore's property market badly. The market is glutted and buyers become more cautious and adopt the "wait-and-see" attitude. Some measures such as the off-budget measures and reduced land supply were introduced to help developers tide over the crisis. These only help to some extent and developers faced cashflows problems and high interest costs for their projects. In an attempt to sell off their projects to ease their cashflows and therefore to repay their debts, more and more developers resorted to low pricing, price cuts and more incentives to entice buyers. This resulted in the phenomenon of competitive pricing. This dissertation therefore seeks to determine if developers have benefited from competitive pricing in this downturn. With reference to three case studies, of which two are engaged in a price war and the other is not, the proposition that developers have not benefited from price wars is supported. By not engaging in price wars, it also prevents buyers from adopting lower expectations for property prices. Other alternatives, besides competitive pricing, are proposed, which may help to alleviate the situation. Developers should prevent this phenomenon since the industry suffers as a whole and therefore to come up with healthier alternatives for the well-being of the economy.