Who is affected?
The Venue Residences should be fully sold by September 2017 in order for CDL to avoid the cost that was ABSD.
Even with the multi-million dollar fines entailed if they don’t sell all their residential units within five years, property developers in Singapore are unlikely to cut on property prices to bring buyers, reported The Straits Times.
I don’t think as many of them have some holding power, they will be slashing prices dramatically,” said Alan Cheong, Head of Research at Savills Singapore. OrangeTee’s Head of Research and Consultancy also concurs, saying “developers have been largely keeping prices steady in 2016 as the demand for new dwellings has picked up”.
Under the Additional Buyer’s Stamp Duty (ABSD) rules introduced in December 2011, developers must construct and dispose of all units in residential projects within five years of obtaining their sites. Otherwise, they should fork out a 10 percent levy based on the acreage cost, plus a five percent interest.
So the next year 2017 saw the trend of developer launching at a good entry price like Parc Riviera. Another mixed development, Park Place Residences has yet to released it prices and hence we shall see if they are following the trend too.
One of the projects with deadlines that are upcoming is CDL’s Bartley Ridge, but its developer is affirmative that it may offload the remaining two units there before the January deadline, as well as the remaining 97 units in another project, The Venue, before September next year. CDL would need to pay ABSD plus interest of around S$79 million if it fails to sell the unsold units.
“To further accelerate sales, we’ve started various advertising and promotional activities, including the CDL Dream Attract, which is appropriate to The Venue Dwellings and three other projects,” said a representative.
Huge number of unsold units
Meanwhile, The Trilinq by IOI Properties still had 303 remaining units as of October 31. In case these units aren’t disposed of by January, the developer is liable to pay S$50.9 million.
SingLand has Alex Residences: Mon Jervois, Pollen & Bleu, and three developments with unsold stock. It must fork out a total of about S$70 million if it fails to locate buyers for all these projects by February, June and December respectively.
For Mon Jervois, if we have to pay ABSD, I believe our gross profits will be able to absorb that and still provide an adequate profit,” noted Michael Ng, Group General Manager of UIC, the parent business of SingLand. “It may be better to hold on to the units and try to sell at a higher price later on, as the market for this section is improving,” he added.