Market AnalysisMay 9, 20143 min read

Buyers Are Choosing Developers More Carefully

Developer reputation now matters as much as location. How buyers are judging developers and what distinguishes the strongest ones.

Michael Chen

Director of Research

Previously with Knight Frank's Global Research team. Michael brings deep expertise in cross-border capital flows and emerging market real estate dynamics.

One of the lessons of the last cycle was that the developer matters. Buyers who bought from companies that failed or delayed projects for years learned this the hard way. Today, buyers are much more selective about developers, and reputation has become one of the most important factors in off-plan purchases.

How buyers judge developers

Track record: completed projects delivered on time.
Quality: the condition of finished buildings years after handover.
Financial strength: shareholders, funding and stability.
Transparency: clear contracts, registration and escrow.
After-sales service: handling of snagging and defects.

What distinguishes the strongest

The strongest developers have a portfolio of completed communities, retain their reputation through cycles and invest in master planning and amenities.

Effects on the market

Launches by established developers sell faster and at higher prices, while projects by smaller or less known developers face more scepticism. This is concentrating the market among strong players.

Smaller developers

Some smaller developers deliver excellent projects. Buyers should judge them on their completed work rather than size alone.

Practical checks

Visit completed projects, read contract terms carefully, verify registration and escrow and ask about handover experiences of previous buyers.

Talking to previous buyers

One of the most revealing checks on a developer is to speak with people who bought in its earlier projects. Owners can describe whether handover happened on time, how snagging issues were handled, what the finishes are like after several years and how responsive the developer was after completion. Online forums and owners' associations can help buyers find these residents. Visiting an older project in person adds further insight: well-built buildings age gracefully, while weaker ones show cracks, worn finishes and maintenance problems. This kind of research takes a little time but provides information that marketing materials will never include, and it can save buyers from costly mistakes.