Free gifts attract but it’s the fundamentals that get house buyers to sign
Business Times 31/05/2006 By Chong Jin Hun

PROPERTY developers acknowledge that gifts and sweeteners may attract potential house buyers, but at the end of the day fundamentals will get them to sign on the dotted line.

Location, price and a developer’s reputation still remain the deciding factors in any property purchase where home-financing is now costlier due to higher interest rates.

“Nobody really makes a buying decision based on the freebies offered. Serious buyers consider factors including location, price, accessibility and amenities.

“If your product is good, customers will still sign on the dotted line without any freebies,” said Mah Sing Group Bhd managing director and group chief executive Datuk Leong Hoy Kum.

Delighting buyers with free gifts is not necessarily an across-the-board strategy, Leong pointed out. Buyers of premium homes worth over

RM1 million, for example, may not consider these free items as important.

Still, sellers, reluctant to drop the prices of their houses, have been offering optional items at no extra charge to help move their properties.

Some recent freebies include home entertainment and security packages, electrical appliances, home furnishing, cars and golf club membership.

Asia Pacific Land Bhd senior manager (sales and marketing) Daniel Lee Lock Soon believes that there are instances when offering freebies does help to move properties, especially if similar competing properties are located in the same area.

“It (giving freebies) is a common practice, particularly when the home market slows. But free gifts won’t be a deciding factor.

“Still, if it involves two home sellers offering similar properties in the same location, then giving freebies may mean something,” Lee said.

From a house buyer’s perspective, lower property prices should be the way to win customers instead of giving out freebies.

National House Buyers Association secretary-general Chang Kim Loong admits that local buyers are easily influenced by these sweeteners, which pull them away from the core considerations of location and price.

“Developers who want to sell their properties need not use such gimmicks. They can just lower their price and people will buy.

“They (developers) tend to capitalise on the Malaysian attitude for free stuff. Once given, a buyer’s attention will be taken off from the real issues — property and price,” he said.