Properties launched 5 years ago are now facing their deadline to sell their units or incur the dreaded Additional Buyers’ Stamp Duty (ABSD). The regulation allows developers a 5-year window period in which to build and sell the the units in a residential project. Beyond this time frame, they will need to pay a 15 per cent duty on remaining units. This impacts the final selling price, which will see even fiercer competition from newer launches and other resale properties.
Photo: Mon Jervois private apartments
What some developers do is to purchase their own units, if the cost of paying the ABSD supersedes the losses otherwise. Properties launched before mid-2013 have mostly sold all their units, but launches after the Total Debt Servicing Ratio (TDSR) framework kicked in tell another story. Non-Singaporean developers have an even tougher job as they need to sell their units within 2 years of completion or incur hefty fines and pay for extensions.
Prices of unsold units at these projects facing the deadline have already come down since their launch. At Kingsford@Hillview Peak for example, the media selling price have fallen from $1,340 psf to $1,288 psf in about 3 years. More than half of the 512 units remain unsold.
A similar story is told at The Trilinq in Clementi where 220 of its 775 units has sold by the end of 2015 at median prices of $1,329 psf. When it was launched in Q1 of 2013, the average selling price was at $1,545 psf. It is not only the larger scale projects which are facing the deadline pressure. The 109-unit Mon Jervois apartments also saw a drop of $235 psf in the last 2 years. The project is approximately 43 per cent sold.