Saturday, October 31, 2009

Top-line oven to warm home buyers' hearts

More property developers are throwing in branded ovens and other luxury fittings to draw homemakers

A MIELE oven can do more than bake a cake these days - it might just help whip up a home sale. More developers are including branded appliances in apartments to impress home seekers, and some have certainly stopped to gawk at the gadgetry.

But will all house hunters bite? Anecdotal evidence suggests that some would still care more about the prices of the homes, especially if they were never fans of the brands to begin with.

'The inclusion of branded appliances has both its good and bad points,' said Chesterton Suntec International research and consultancy director Colin Tan.

'If the developer knows his target market well, it is a plus. . . It is a negative if the buyer does not recognise the brand or appreciate it.'

Developers of mid to high-end units have used premium furnishings to boost their projects' image for some time, but the trend gathered more steam some two years ago when markets boomed.

Rich consumers searched for new ways to spend, and steel fridges and dishwashers quickly became the new status symbols.

It is easy to get used to a good thing but difficult to quit it. The recession may have eroded some consumers' savings but not their aspirations for luxury. This is especially so in Asia, which did not bear the brunt of the downturn.

'As consumers become more globalised and develop a taste for fine living, they are more willing to pay for luxury homes that are distinguished in areas such as design and architecture, premium fittings and furnishings as well as facilities,' said Keppel Land marketing general manager Albert Foo.

CapitaLand and Far East Organization also shared that they use fittings which meet home owners' lifestyle needs.

To stand out among the competition, prime-district projects such as Keppel Land's The Promont, Viva, and Belle Vue Residences will have bathrooms decked out with Axor fittings.

The brand comes under Hansgrohe and according to the latter, Axor Starck, Axor Citterio and Axor Massaud fittings are popular with developers here. Single-lever high-riser basin mixer from these lines are priced from around $1,300 to $2,190. 'We have achieved consistent and very significant growth in our partnership with property developers,' Hansgrohe said.

Developers are also giving attention to kitchens. Units at The Ritz-Carlton Residences and The Marq On Paterson Hill will come with a 90cm Miele oven, which is priced at a cool $15,730.

'Apart from the key essentials which are cooker hoods, hobs and ovens, many property developers have further embraced lifestyle components such as Miele wine cellars, coffee makers, steam ovens and plate warmers for their luxury developments,' said Miele projects general manager Roland Ong.

And reflecting the growing trend of using branded appliances, even mass-market projects such as Trevista in Toa Payoh and The Peak @ Balmeg in West Coast are creating a splash in their bathrooms with Hansgrohe fittings.

'Not only in the prime areas - in other districts also, more developers are using branded goods,' Knight Frank executive director (residential) Peter Ow observed.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak estimates that 6-8 per cent of the cost of building a high-end apartment goes to appliances and furnishings such as dryers and cooker hoods. For mass-market condominium units, the figure is about 5-6 per cent.

Chesterton Suntec's Mr Tan believes that the money is well spent for prime projects which compete less on pricing. The appliances 'add considerably to the overall show apartment experience' and with them, 'developers are able to go some way to justify the higher prices'.

In fact, market watchers reckon that developers could have received discounts from buying the appliances in bulk. This would lower the cost of including them in units.

But the strategy may not be as effective for mass-market projects which tend to draw more price-sensitive buyers. A civil servant who declined to be named told BT that she recently bought a resale condominium unit because it cost less than a newly launched one. The place did not come with fancy appliances but she later installed one - a Hansgrohe shower.

Home seekers in this market may also place less emphasis on brands and developers need to know their target markets well, Mr Tan said.

Source: Business Times, 31 Oct 09

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