Developers offering fewer indirect discounts

Once popular with private homebuyers, indirect discounts like furniture vouchers and cash rebates have become less prevalent, reported The Business Times.

In fact, only three percent of some 3,850 non-landed private homes sold by developers since 25 May had indirect discounts, with an average discount of 1.7 percent of the transacted price. The units were from 18 of the 132 projects that saw sales since 25 May, according to an analysis of developers’ new sales data.

Notably, legislative amendments requiring developers to submit detailed transaction data to the Controller of Housing every week took effect on 25 May this year. The said data is then published by the Urban Redevelopment Authority (URA).

Aside from the transacted prices of units, developers are also required to declare the value of benefits given to buyers, such as rental guarantees, cash rebates, furniture vouchers, and the absorption of legal fees or stamp duties, which would otherwise conceal the actual value of the units sold.

“There was a season when discounts, rebates and other perks were dangled as carrots to attract buyers. However, these may be relatively passé today,” said Tan Tee Khoon, managing director of KF Property Network, a Knight Frank subsidiary.

This is because developers may find it pointless to give out cash rebates now that such data has become public information, said Savills research head Alan Cheong., As such, developers who need to urgently clear their stock in order to meet the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate (QC) requirements are more likely to lower prices directly.

The QC rule requires developers to pay extension fees for condominium units sold within two years of the project’s completion. Since December 2011, housing developers were also required to develop residential sites acquired and sell all the units within five years to qualify for an ABSD remission on land cost.

Projects offering indirect discounts since May to qualify for the remission of ABSD include The Venue Residences, Jewel @ Buangkok, Pollen & Bleu and The Glades. Those unaffected by ABSD or QC include Keppel Land’s Corals at Keppel Bay, City Developments Ltd’s D’Nest and Coco Palms, and Far East Organization’s The Seawind.

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