{"id":7068,"date":"2016-09-12T10:48:14","date_gmt":"2016-09-12T02:48:14","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=7068"},"modified":"2022-07-01T04:03:40","modified_gmt":"2022-06-30T20:03:40","slug":"99-co-guides-hints-developer-launch-price","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/99-co-guides-hints-developer-launch-price\/","title":{"rendered":"99.co guides: Hints on developer launch price"},"content":{"rendered":"
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Developers are in the business of building houses for people, they want to make a good product that is of value to the consumers, and they need to generate healthy profit levels for their shareholders. We have previously showed you how to get <\/span>hints on developer launch dates<\/span><\/a>, we will now show you how to get a good estimate of their prices.<\/span><\/p>\n

If we look at a property in\u00a0parts, the most expensive component will be the land, followed by construction costs. This is similar to Cost of Goods Sold (COGS)<\/a> in the accounting terms we are familiar with. Add on the administrative, sales and marketing expenses, finance costs, profit margin etc. we will arrive at the selling price.<\/span><\/p>\n

\"Knowing
Knowing the land cost and construction cost will give you an estimate of the developer’s launch price<\/figcaption><\/figure>\n

Example: Gem Residences<\/h3>\n

The site was <\/span>awarded<\/span><\/a> to the developer in June 2015 at S$345.86 million, which translates to S<\/span>$755 per square foot (psf) per <\/span>Gross Floor Area (GFA)<\/span><\/a>. Construction costs, including architecture design, is about $350 psf for a mass market condominium. Add them up and you get the base cost.<\/span><\/p>\n

Next, take 30% of the base cost that will cover the other expenses and profits for the developer. This comes up to about $331 psf, and it includes:<\/p>\n