Property Developers Rather Hold on Empty Unsold Units (& Pay Levies)

Developers would rather pay the ABSD than slash prime home prices: report

Limited supply will help arrest price falls.

Potential property buyers had first hoped that high holding costs will force prime home developers to aggressively cut prices in order to evade hefty stamp duties.

However, it seems that developers are fairly resistant to sharp price cuts, and would rather suffer higher holding costs than offer sharp discounts.

A report by CBRE highlighted the case of Mon Jervois, which has 59 unsold units as at the end of March 2016. The additional buyer's stamp duty (ABSD) which the developer is required to pay by February 2017 has been reported at around $15 million, which translates to about $250,000 per unit.

Caveats lodged for recent sales at Mon Jervois show that units went at an average price of $2.4 million, which means that the ABSD amount translates to nearly 10% per unit.

"On this basis, it may make more sense for any developer who has the financial muscle or long term plans or a business strategy to pay the ABSD instead of making price adjustments. After all, good sites from the GLS programme are hard to come by," CBRE said.

"While there is pressure on prices, the limited prime supply will help to arrest significant price falls," the report added.
- See more at: http://sbr.com.sg/residential-prope...prime-home-prices-report#sthash.EY1vkyJw.dpuf

That means paying the taxes is more profitable then to sell it cheaper.

That's to say that they will see govt relaxing the regulations in longer term. These developer has planted their spies long time ago at MND.

Dropping prices for that few remaining unsold units is going to impact the value of developer's land bank, And hence their balance sheet. Anyone with good business sense will not look at big picture first? There are many ways to legally avoid the penalty and some are already been doing it for years.

Just need wait for ABSD to be relax, which likely to be sooner than anyone expect, it will send the kiasu sinkies tripping over each other to grab at higher prices.

Government land sales still attracting above average bids, which form a huge portion of cost. Anyone holding breath for prices to drop significantly, wiser do it near a hospital A&E, just in case you need resuscitation.

ask them hold until interest rates hike. then when they wanna sell cheap also nobody is buying.

Pinkieslut said:

Developers would rather pay the ABSD than slash prime home prices: report

Limited supply will help arrest price falls.

Potential property buyers had first hoped that high holding costs will force prime home developers to aggressively cut prices in order to evade hefty stamp duties.

However, it seems that developers are fairly resistant to sharp price cuts, and would rather suffer higher holding costs than offer sharp discounts.

A report by CBRE highlighted the case of Mon Jervois, which has 59 unsold units as at the end of March 2016. The additional buyer's stamp duty (ABSD) which the developer is required to pay by February 2017 has been reported at around $15 million, which translates to about $250,000 per unit.

Caveats lodged for recent sales at Mon Jervois show that units went at an average price of $2.4 million, which means that the ABSD amount translates to nearly 10% per unit.

"On this basis, it may make more sense for any developer who has the financial muscle or long term plans or a business strategy to pay the ABSD instead of making price adjustments. After all, good sites from the GLS programme are hard to come by," CBRE said.

"While there is pressure on prices, the limited prime supply will help to arrest significant price falls," the report added.
- See more at: http://sbr.com.sg/residential-prope...prime-home-prices-report#sthash.EY1vkyJw.dpuf

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Whoever wrote this article needs to have their head examined. In the first place, the ABSD is not due until Feb 2017. They have one year to off load the units. In this one year, many things can happen. 'Furniture discounts" and other non cash discounts might be offered to entice buyers. Some developers are offering a free car or some other benefits. Again all these items are non cash and hence does not show up as an actual discount on the price. Its too early for them to just say that all 59 units will still be unsold, and hence they will be stuck with 59 units.

Buy car for 2.4M and get condo free.

Papsmearer said:

Whoever wrote this article needs to have their head examined. In the first place, the ABSD is not due until Feb 2017. They have one year to off load the units. In this one year, many things can happen. 'Furniture discounts" and other non cash discounts might be offered to entice buyers. Some developers are offering a free car or some other benefits. Again all these items are non cash and hence does not show up as an actual discount on the price. Its too early for them to just say that all 59 units will still be unsold, and hence they will be stuck with 59 units.

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Buy a condo and give you a car for free ? Actually not bad deal. Since they can give you furniture discount.

congo9 said:

Buy a condo and give you a car for free ? Actually not bad deal. Since they can give you furniture discount.

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Here you go, if you are .interested


New condominium offers free cars

May 04, 2012 - By: Sheena Chua
A new condominium is raising eyebrows even before its launch—not for its fancy facilities or strategic location—but for the huge freebies on offer. Developers of the 530-unit FLO Residence are dangling a massive carrot in the form of 18 European cars, to buyers of their new Punggol mass market project, slated to launch later this month.

image: http://pictures.iproperty.com/sharedproject/iresources/article/f9431c5fde124bf59a0790b57d071dec.jpg
(Developers of FLO Residence are promoting its launch with 18 European cars.)

Analysts say giving away 18 Volkswagen cars to promote a mass market development—one which developers Capital Development and ZACD Investments tout as “possibly the most affordable private residence” in Punggol—is unusual. While luring buyers with modest freebies like shopping vouchers is common in Singapore’s competitive condominium market, mass market homes are still considered the more affordable private housing option.

One analyst thinks these 18 costly freebies are the developers’ attempt to make up for their less known track record. Speaking to The Straits Times, Chesterton Suntec International’s head of research Colin Tan noted, “If you think about it carefully, they don't have to give away 18 cars—they could give away five or 10.”

“They're trying to make a statement.”

As part of the promotion, the first 30 home seekers to purchase a unit at FLO Residence will enter into a lucky draw, where one buyer walks away with a Volkswagen. The remaining 29 will be rolled over into the next round together with the second batch of 30 buyers, where a second buyer will win another car.

The cars—one a Jetta and the others, Polos—may not come with certificates of entitlement (COEs), but are still worth a sizeable sum. Without their COEs, the Jetta is worth some $75,000, while each Polo is worth about $64,000. For the fortunate winners, these cars could mean a significant discount off the price of their homes, should they choose to sell them.

FLO Residence prices start from $620,000 for a two-bedroom unit with an area of 764-861 sq ft, and from $990,000 for a four-bedroom flat spanning 1,227-1,346 sq ft. Across all units, the average price per sq ft (psf) works out to $850 psf.

The99-year leasehold joint venture condominium is situated at Punggol Field Walk, at the heart of the waterfront estate, and boasts a one-of-a-kind clubhouse that houses a double-decker children’s playhouse and a ‘theatrette’ that offers private screenings, among other facilities.

image: http://pictures.iproperty.com/sharedproject/iresources/article/f3330939af244184b34365626b4feec4.jpg
(The FLO Residence clubhouse boasts stunning architecture and unique facilities.)

Chesterton’s Tan insists that the enormous carrot is not a sign of buyer fatigue in the mass market. On the contrary, he believes “competition is heating up” among developers. “While developers are quite confident of sales, nobody is quite sure how deep the pool of buyers will be. [The developers] are trying to get off to a flying start […] after which they can take their time to sell.”

True enough, SLP International Property Consultants—which is marketing the project—revealed that it is all about the publicity. Its director of residential services Emily Eng told The Straits Times, “We want something that will attract attention. It's something that will get our buyers talking—if you buy this project, you'll get a chance to win a car, versus buying another project when you don't get that chance.”

Eng let on that prices were not marked up for the lucky draw, adding, “If you compare [FLO Residence prices] to the two other private condos in Punggol, A Treasure Trove and Watertown […] you'll know [we're] very competitive.”

At the A Treasure Trove launch last September, units went for an $866 psf on average, while Watertown initial sales in January chalked up an average price of about $1,080 psf.

Read more at http://www.iproperty.com.sg/news/5240/New-condominium-offers-free-cars#Rop7rTwJ7X7Z1Hoa.99

Sorry to digress a little but since this thread is on the topic of property, does anyone have any information on this condo project Country Park?
Does anyone have friends who live there?
We live in the West but may have to move to the East due to my son's work and an agent recommended this condo.
Thanks.

ontheA1 said:

Sorry to digress a little but since this thread is on the topic of property, does anyone have any information on this condo project Country Park?
Does anyone have friends who live there?
We live in the West but may have to move to the East due to my son's work and an agent recommended this condo.
Thanks.

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Seriously? Singapore is so small, but you want to relocate from the West to the East for your son's work? hahahahhahahaha. If you say you are relocating from West Coast California to East Coast New York, then that is something lah.

i think the bubble is bursting,they have so many condo projects in progress or coming to completion in east coast,fort rd,holding out is not going to do anything.greed will kill them all,unlike HDB flat supply which can be artificially reduced,the developers are busy killing the golden goose trying to make as much profit as possible in the short term.

Papsmearer said:

Seriously? Singapore is so small, but you want to relocate from the West to the East for your son's work? hahahahhahahaha. If you say you are relocating from West Coast California to East Coast New York, then that is something lah.

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it is very common to see commuters driving from sacramento to sillycon valley and back everyday, and the 1-way distance is about 120 miles, which is equivalent to the sg-melaka route. imagine driving from melaka to sg and back everyday for work. in the sacramento-peninsula commute the driver would have spent more than half his day creeping along in traffic going forth and back. in sg, going from tuas to changi and back is such a breeze.

Papsmearer said:

Seriously? Singapore is so small, but you want to relocate from the West to the East for your son's work? hahahahhahahaha. If you say you are relocating from West Coast California to East Coast New York, then that is something lah.

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eatshitndie said:

it is very common to see commuters driving from sacramento to sillycon valley and back everyday, and the 1-way distance is about 120 miles, which is equivalent to the sg-melaka route. imagine driving from melaka to sg and back everyday for work. in the sacramento-peninsula commute the driver would have spent more than half his day creeping along in traffic going forth and back. in sg, going from tuas to changi and back is such a breeze.

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We dont own a car and it is better for his shift duties.

ontheA1 said:

We dont own a car and it is better for his shift duties.

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i work in the graveyard shift as a jaga, and i rent a mattress in bedok to be close to work.

ontheA1 said:

We dont own a car and it is better for his shift duties.

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There is such a thing called Taxis. Try it out. However much cab fare your son pay, is still going to be a helluva lot then getting a condo.

ontheA1 said:

We dont own a car and it is better for his shift duties.

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How about buying a car? Even a small capacity car will do and it benefits the entire family. Otherwise go get a motorcycle license and get a motorbike.

Rather pay a million than getting a car or motorbike? As suggested taking taxis is cheaper than owning a car, why not?

What if he change job and new office is in West? What about, touch wood, he gets retrenched? A new property will get him into high debts for sure.

these developers r greedy pigs. they should learn from me, demolish the flats first so that there will be no oversupply, in fact they can start with one at oxlee road.

eatshitndie said:

i work in the graveyard shift as a jaga, and i rent a mattress in bedok to be close to work.

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I am a bangala cleaner employed by PAP town council and I eat, sleep and shit inside the HDB bin centre.

eatshitndie said:

i work in the graveyard shift as a jaga, and i rent a mattress in bedok to be close to work.

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Wah, such luxury. I can only afford to use cardboard as bed and sleep in the park.

you should stay around martin lut. confirm can lut until song song.