Tag Archives: ABSD

Call for review of property curbs increasingly insistent

Posted on 18 Nov 2015 | Comments Off on Call for review of property curbs increasingly insistent

Singapore’s second-biggest property developer, City Developments, has been calling on the government to ease the property cooling measures “as soon as possible”, reported the Singapore Business Review.

The company saw its profit fall 16 percent in Q3, on the back of lower contributions from its property development unit. “The Group continues to hold the view that the property cooling measures need to be reviewed as soon as possible, given that the home ownership rate in Singapore is over 90 percent. Timing is the most important factor to achieve a healthy and sustainable property market,” it said in a statement.

Notably, the quarterly Real Estate Sentiment Index released by the Real Estate Developers’ Association of Singapore (REDAS) and the National University of Singapore (NUS) earlier this month showed that market sentiment among property developers had fallen further in Q3 2015. “The sentiment in the market continued to weaken in Q3 2015,” said NUS associate professor Sing Tien Foo.

As such, more respondents called for the removal of “some of the cooling measures, such as ABSD and SSD to arrest the worsening market condition”.

In fact, 83.1 percent of the respondents believed the government should tweak or lift the cooling measures in the next six months. 56.7 percent of them felt the sellers’ stamp duty (SSD) should be lifted, while 60.8 percent said the additional buyers’ stamp duty (ABSD) should be removed.

“ABSD should be removed due to the tight supply of housing in the market. It should not be a permanent policy, as it creates inefficient market equilibrium. Furthermore, it does not encourage financial prudence. MSR and TDSR are based on ratios and percentages; percentages only address the issues of the average category, and could be too harsh or too lenient,” noted one survey respondent.

“The ABSD should be lifted as private residential property prices dropped by about eight percent in Q2 2015, compared to the third quarter of 2013. However, the TDSR Ratio should be retained,” said another respondent.

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Developers offering fewer indirect discounts

Posted on 18 Nov 2015 | Comments Off on 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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