Properties sales are the most challenging part in realestate especially nowadays with the high levels of risks and uncertainty. Moreover, most developers are focusing on high-level lux properties for rich clients or on a very small units with just the minimum needs with exaggerated prices.
Undoubtedly, they have the right to do so as I supposed it was paying-off very well previously; but now the pandemic has changed dramatically almost every fact we know about the market as follows:
- Most Rich People behavior has changed and their focus on how to spend less or at least control
- Rich people investments are negative or at breakeven point, so no buffer to waste
- Competitions nowadays are global not local, so rich people tend to buy properties with special privileges such as: residency or nationality or investors visas
- Due to current rescission, rich clients are less than before as targeted clients for luxury properties
Many economy experts advised developers, and investors to change their realestat business module to focus on the middle class properties since 2009, but that was ignored totally. You should understand that the middle class is the main driver of any economy as they pursuit to become rich, and poor class pursuit to be a middle class.
Nowadays, developers will record a massive losses as they must lower the sales prices to suit middle class and bank loans limits due to limited sales. We know many will keep denying and trying fishing sales hoping to sell some with profit margin to reach at least breakeven point; but it’s going to be extremely difficult. In order to boost your sales and have some recurring income rather than ZERO, see the following suggestions:
- Lower your prices by certain percent (30% suggested) with easy payment plan
- Lower your down-payment or cancel it, to get people interested
- Adjust your prices aligned with bank loans limits, so buyers can buy properties
- Adjust your payment installment to be similar or close to a monthly rent prices, so buyers will go to buying option rather than renting
- Don’t be stubborn and advise your investors, owners that this time is not like 2009, and recovery will take more than 10 years with very slow gradual improvement, so you need to adopt and reduce the losses by serious actions today
- Don’t depend on bail-out money for investors whatsoever from governments as most governments priority now is to limit spending and letting the market adjust itself trying to go-along with side effects to have a new market baseline
These are some of the possible practical suggestions; however, if developer will be stubborn again, this time the looses are like a snow ball unlike 2009 as every month without sale, the prices will go down more and less buyers will be interested. The global bubble of realestate will burst awfully and dirty money wouldn’t be enough to cover it like before as there is a big shortage in currencies values…
We are stating the ugly truth and the facts as it appears day by day after the pandemic; however, you have to process the above based on your local market parameters you are aware of the most. In short, adjust and adopt quickly otherwise you will be hit badly and forced to lower your prices even more than you have ever expected…