By Joseph Wong

For many high-rise condominiums and serviced apartments, selling the remaining units, often referred to as residue stocks, poses a significant challenge. These units are usually the hardest to move off the market due to a variety of factors, including reduced advertising spending by developers, the nature of the remaining units and market conditions. This article explores the reasons behind this difficulty and suggests strategies that developers can employ to overcome these hurdles.

The reasons behind slow-moving residue stocks are varied but can be narrowed to four main issues, namely reduced advertising spending, less desirable or mismatched units among the residue stocks, market saturation and competition as well as economic factors.

As projects near completion, developers typically scale back their marketing budgets. The initial rush of advertising and promotions, which attracts early buyers, dwindles, leaving the remaining units with less visibility. Without aggressive marketing, these units struggle to catch the attention of potential buyers, especially in a competitive market.

The units left unsold are often the less desirable ones, such as those with poor views, lower floors, or less favourable layouts. Additionally, these units might be priced higher, either due to their size, features, or market positioning, making them harder to sell in a market where affordability is a key concern. This mismatch between what is available and what the majority of buyers are looking for can lead to a prolonged sales period.

In areas where there is a high concentration of similar developments, the market can become saturated. Buyers have a plethora of options and new projects with more modern amenities and attractive pricing can overshadow older developments. This makes it even more challenging to sell off the last few units of a completed project.

Economic downturns or periods of uncertainty can also contribute to slower sales. When the economy is uncertain, potential buyers may be more cautious with their investments, leading to a slowdown in property transactions. High-interest rates or stringent lending policies can further exacerbate the situation by making financing less accessible.

Strategies to sell residue stocks

To address these challenges, developers need to adopt creative and targeted strategies. Some approaches that can help include:

• Collaborate with real estate agencies and negotiators: Partnering with experienced real estate agencies and negotiators can be a powerful tool. These professionals have extensive networks and can tap into a broader pool of potential buyers. They can also offer valuable insights into market trends and buyer preferences, helping to tailor sales strategies more effectively.
• Enhance the project's reputation: A strong reputation can significantly influence a buyer's decision. Developers should focus on maintaining high-quality standards throughout the project and addressing any issues promptly. Positive reviews and testimonials can boost the project's image, attracting buyers who value reliability and quality. Encouraging satisfied residents to share their positive experiences can also help generate word-of-mouth referrals, which are often more trusted than traditional advertising.
• Dual market tactics: Developers with multiple projects can leverage their portfolio to create attractive offers. For instance, they could bundle units from different developments or offer special incentives to buyers who purchase multiple properties. This cross-promotion strategy not only increases the chances of selling the residue stocks but also enhances the visibility of other projects in the pipeline.
• Flexible financing options: Offering flexible payment plans or financing options can make higher-priced units more accessible to a broader range of buyers. This could include longer payment periods, lower down payments, or partnerships with banks to provide favourable mortgage rates. Such incentives can make the purchase more financially manageable and appealing.
• Enhanced marketing efforts: Even with a reduced advertising budget, developers can explore cost-effective marketing strategies. Digital marketing, social media campaigns and virtual tours can reach a wide audience at a relatively low cost. Highlighting unique features or benefits of the remaining units, such as exclusive views, premium fittings, or special offers, can help these units stand out.
• Targeted promotions and events: Hosting open house events, special viewing sessions, or exclusive promotional events can create a sense of urgency and attract serious buyers. Offering limited-time discounts or bonuses, such as free maintenance for a year or complimentary upgrades, can also incentivize quick decisions.
• Price reduction: This should be the final option as it inherently has an effect on the value of the property. By drastically reducing the price, any owner wishing to sell off their units will be affected, hence, this tactic should be executed with caution.

With a thoughtful and proactive approach, developers can strategically transform these lingering units into valuable assets, maximising their appeal and marketability, ultimately leading to the successful completion of their projects and ensuring a satisfying conclusion to their investment endeavours.

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