With luxury site losing appeal, mass residential sites gain traction amongst developers

This as interest in acquiring luxury residential sites declined.

Home developers are shifting their focus on acquiring mass residential sites instead of luxury homes, JLL report showed.

Slow sales velocity, increasing financing prices, and longer payback periods for luxury residential developments caused the shift.

Luxury sites lost their appeal because of weakening sentiment towards the pricey housing market.

Payback period for developments is around six years after acquisition, which is less attractive than mass projects which takes two years to pre-sell

What’s making luxury projects less attractive is the weakened sales performance of luxury housing, with recent luxury projects taking multiple years to reach reasonably high sales rates, leading to a longer investment/payback period.