Is there a trend of property developers offering discounts?

In 2016, there was much commotion over the imminent deadlines that developers had need to face over the remission of their Additional Buyers’ Stamp Duty. It is known that these property developers need not have to pay the Additional Buyers’ Stamp Duty, on the land they purchased, if they can complete and sell all of the individual units within 60-months from the date of acquisition. Failing to do so will result them to incur the Additional Buyers’ Stamp Duty, even if they are just left with one single unit unsold. The Additional Buyers’ Stamp Duty also differs – 10% if they had purchased the land between 8 December 2011 and 11 January 2013 and 15% if they purchased the land on or after 12 January 2013. A 5% interest rate per annum will also be levied.

Many of the home buyers in the market believe that because of reasons like the Additional Buyers’ Stamp Duty, the developers will introduce incentives for them to sell their units especially those with high numbers of unsold units and are nearing the 60-month deadline. As funny as it may seem, usually projects with a small number of unsold units have the biggest incentive to offer attractive discounts. The discount will help speed up sales. At the same time, there is sufficient time for the developer to sell off all its units.

Distressed sale? Unlikely.

Let us take The Santorini at Tampines for example. The new condominium at Tampines Ave 10 has had naysayers backing it as the first property development to incur the expensive 10% Additional Buyers’ Stamp Duty given its high amount of unsold units as at March 2016. Recently, the market speculated that the developer has slashed prices to move sales and avoid the ABSD charges.

In most cases, developers usually will offer discounts to minimise the numer of the units that they have to purchase through another investment as a safeguard, in case they are unable to clear off the unsold inventory. That also doesn’t mean that these discounts offered will be substantial or attractive in the eyes of a home buyer – it is also largely due to the the holding ability of the developer with factors like the cost of the land and also competition.

On that basis, we think that new property developments with a small number of unsold units are most likely to be very eager to offer discounts or price cut. This is because these incentives can enable them to speed up the sales giving them more than enough time to clear off the remaining stocks – All theses because they already have profited from the sales earlier in the launch and they can save the trouble of going through an investment company to buy their remaining stock.

More people going for 3Gen Homes – Why?

Have you heard? More people are starting to like 3Gen Homes and uptake of such homes are growing in numbers.

What is 3Gen homes?

3Gen flats are so-called the homes catered for multi-generational living. The government loves the idea of families staying together in one big family. It also seen as a good choice for local couples who want to live together with their old folks. These 3Gen apartments come in sizes that are bigger than the average, they are usually 115 square metre and above. Singaporeans can only apply for a 3Gen home together with they parents in the application.

These 3Gen HDB flats usually cost about $300,000 to $600,000 depending on how good the location of the flat is. Importantly, 3Gen flats have an additional restriction to the regular HDB flat and that is they can only be sold to other multi-generation living once the owners have completed the usual Minimum Occupancy Period (MOP). To add on, these homes also cannot be rented out in terms of room rental until the Minimum Occupation Period (MOP) has ended.

In the beginning, many had doubt the take up rate of these apartments back in 2013. No one had ever thought they would be popular because of the resale restrictions. Even the government did not seem impressed after it put such homes out in the market. Said former Minister Khaw Boon Wan – “I doubt it is a huge demand, so we will try it out and if it works … If it doesn’t, it doesn’t matter”

Recent sales of these homes

Things have completely changed today, more than 650 units of such apartments were booked since the release of these units in recent developments such as Saraca Breeze @ Yishun, Punggol BayView, and Tampines Green Ridges. Many of the new executive condominiums are also featuring this. Check out Sol Acres Executive Condo.

This unexpected response is puzzling and at the same time have revealed how several of traditional school of thought on Singaporean home buyers may in fact be wrong.

Many of such home buyers mentioned that the need to take care of their aging parents is at their utmost priority. For a handful, the cost of running to and from their folks’ apartment flat as well as the upkeep of the place makes it alot more economical, in terms of time and money, to simply live with their parents.

Today, there have been a number of HDB flats are bought for over a million dollars. Many say that these people bought at such prices because they see their flats as their retirement income; it’s certainly a common strategy to downsize the flat to fund retirement. For some, Buyers of these flats may not even bother about resale gains, so it doesn’t matter that they can only resell to other multigenerational families (they may never want to resell).

News homes set to uplift home sales in Singapore

New private home deals are relied upon to get a lift with four venture dispatches expected by April, announced the Straits Times.

These are Clement Canopy in Clementi by Singland Homes and UOL Group; Park Place Residences at Paya Lebar Quarter by Lendlease; Grandeur Park Residences in Tanah Merah by CEL Development, a unit of Chip Eng Seng Corporation; and Seaside Residences in Siglap by Frasers Centrepoint Singapore.

This comes as designers sold only 367 new units in December, when just 90 new units were propelled. On a yearly premise, be that as it may, new home deals expanded by seven percent from 7,440 units in 2015 to 7,972 units a year ago. This year, Knight Frank anticipates that engineers will offer around 8,000 to 9,000 units in the midst of “continuously returning enthusiasm” from nearby and remote purchasers.

“With more individuals trusting that the market is presently near the base of the down cycle, enthusiasm for new dispatches will probably be managed,” said Christine Li, Research Director at Cushman and Wakefield.

Experts noticed that repressed interest for homes stays versatile in spite of the property cooling measures and weaker financial standpoint. Regardless, home purchasers are relied upon to remain value touchy and particular, choosing intensely estimated and very much found ventures.

“They will execute just when they see significantly… However, a quick ascent in loan fees would affect showcase assessment, which may make request withdraw,” said Wong Xian Yang, Head of Research and Consultancy at OrangeTee.

Back in 2016 – PropNex Realty CEO Ismail Gafoor predicted an up to 2 per cent decrease in the index in 2016, led by price drops in the OCR. This would be the smallest annual contraction in three years; the index shed 3.7 per cent last year and 4 per cent in 2014. Wong Xian Yang, OrangeTee senior manager for research and consultancy, also mentioned that CCR prices in Q2 2016 may have been supported by recent developer sales at OUE Twin Peaks and Ardmore Three which are included under “resales” in URA’s terminology since these projects are delicensed. “These projects are relatively newer compared with the usual mix of resale transactions – units in older projects sold by individuals – and could slightly uplift overall prices in the CCR.”

Prime home prices in Singapore up to 2% increase

Top residential costs in Singapore are anticipated to increase by two percent in 2017, in step with property consultancy Knight Frank and suggested the financial instances. This comes as the recent hike in Hong Kong’s stamp obligation may divert home buying curiosity to the city-state.

“With strong fiscal fundamentals and a stable political climate, Singapore is predicted to maintain its popularity as a haven investment vacation spot for each individual and institutional global traders” stated Liam Bailey, Knight Frank’s international research Head. Bailey also suggested that the trend is moving towards properties with location close to MRT like Alex Residences and Three Balmoral.

High residential costs are anticipated to maintain company in London, the big apple and Hong Kong, at the same time Sydney and Paris are anticipated to put up 5 percentage and two percentage progress, respectively. Miami, however, will see top residential costs drop by means of five percentage.

Bailey believes the primary factor affecting the high property market this 12 months can be their domestic monetary efficiency. There can even be a shift within the fee of money and forex, with a gradual transition from document low interest premiums to be led by the us.

Strength of Dollar

“The strength of the dollar can be expected to inspire dollar-pegged traders to don’t forget UK or European funding choices” he mentioned. Bailey noted that tax has additionally emerged as a growing have an impact on on market efficiency. Correctly, a quantity of ideas targeted at controlling the vacation spot of funding flows had been offered over the last 12 months.

Australia, for instance, saw three states ‘ Queensland, New South Wales and Victoria ‘ roll out a stamp obligation surcharge for foreign residence shoppers. This is on top of a new 10 percent withholding tax on the sale of excessive-end Australian property via foreign residents.

In the meantime, New Zealand introduced a capital positive factors tax for short-term property investments, whilst the uk and Vancouver carried out yet another fee of stamp responsibility on luxurious property purchases and an empty-houses tax, respectively.

“certainly the enlargement of so-called cooling measures to manipulate global wealth flows into property suggests no sign of easing” said Bailey.

Secondskin – Real estate trends in Singapore

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