2017 to welcome more bulk sales?

As Qualifying Certificate (QC) deadlines close in on more residential projects, bulk sales could the difference between having to pay hefty penalties and escaping by the skin of their teeth. The Qualifying Certificate which developers are issued with once they purchase a private residential land plot binds them in a contract to finish building the project within 5 years of acquiring the land and to sell all units within 2 years of obtaining a temporary occupation permit (TOP). Should there be remaining units after this time, the developers will be required to pay extension charges.

nassimhillcapitalandPhoto credit: CapitaLand

The Qualifying Certificate which developers are issued with once they purchase a private residential land plot binds them in a contract to finish building the project within 5 years of acquiring the land and to sell all units within 2 years of obtaining a temporary occupation permit (TOP). Should there be remaining units after this time, the developers will be required to pay extension charges.

iLiv@GrangeThe most recent bulk sale of the 45 remaining units at The Nassim has helped developer CapitaLand avoid having to possibly pay up to millions of dollars worth of penalties as their QC deadline is in August this year. Mr Wee Cho Yaw, chairman emeritus of United Overseas Bank has paid $411.6 million for the 45 units with a strata area of 16,466 sq m at an approximate 18 per cent discount on the current sale price of individual units. The development consists of 55 units housed in eight 5-storey blocks, and the other 10 units have been sold to individual buyers.

Other recent bulk sales include the 156 units sold at a 16 per cent discount at Nouvel 18 and 30 units sold at a 23 per cent discount at iLiv@Grange. Though this enbloc exit of units may relief the unsold inventory of some pressure, more completed units are entering the market this year and may we could be looking at more bulk sales in the year ahead.

 

Unsold Condo units – Price cuts and Bulk Sales likely

iLiv@GrangeWith deadlines looming for a number of residential projects launched in last 5 years, buyers and investors may do well to keep a lookout for potential deals. Though developments which have a considerably large number of unsold units may not drop prices drastically, they may be seeking out buyers who are willing to take on bulk sales.

Foreign developers are required to sell all their units within 2 years of obtaining a Temporary Occupation Permit (TOP). That, coupled with the Additional Buyers’ Stamp Duty (ABSD) and the increased number of new units, the market has been a little shaky. Extension charges, pro-rated according to the number of unsold units, will be levied beyond the deadline. Some of the charges can be rather hefty, with $38.2 million at Nouvel 18 and $22 million at The Interlace.

The TrilinqPhoto: The Trilinq

Some of the other properties potentially also facing extension charges include D’Leedon, Goodwood Residence, TwentyOne Anguillia Park and iLiv@Grange. At The Trilinq in Clementi, prices have fallen from $1,545 psf when it first launched, to $1,359 psf. Though property experts are not expecting too much of a price-tweak, the increasing amount of unsold stock in the market may push developers to consider alternative means of cutting down on losses. It looks like 2016 could continue to be the buyers’ market.

Slow private home sales – The Grange Road effect?

Is this merely a trend that is happening to properties along Grange road or are other city centre properties suffering the same fate? Prime district properties have been nursing a bruise on its sales records since last quarter of 2012. January’s new round of cooling measures with the increased additional buyers’ stamp duty (ABSD) and the threat of possibly more to come, has put the damper on the market even further.

Twin Peaks condominium at Leonie Hill.

Twin Peaks condominium at Leonie Hill.

Even new property launches, which have been selling like hotcakes in the suburbs, along this stretch have been falling flat. The 462-unit Twin Peaks have sold 68 of the 70 units released. Median sale price stands at $3, 157 psf. At The Lumos, although units went for sale as early as 2007, only 18 units have been sold. That is less than half of the 53 units in the high-end residential project.

Even completed projects have found the recent situation to be an uphill struggle. Cliveden at Grange, which was completed in 2011, has sold 80 per cent since its launch in 2007. That’s an average of 18 units per year. The increasing number of new launches in the vicinity certainly have not helped things, neither for the new properties themselves nor their older neighbours. The newbies on the block include iLiv@Grange, Ferra and Opus at Grange.

Cliveden at Grange condominium project.

Cliveden at Grange condominium project.

Resale home prices and sales numbers have already shown a dip. In 2012, only 21 resale homes were sold in the Grange road area. And rental prices have also slowed by 9.3 per cent to $8.49 psf in March 2013.

Will the sky-high prices of these sky-high luxury apartments continue to skim the price ceiling or will they drop as time passes? Industry experts are expecting sales in the area to pick up some slack this year, as the exclusivity of the Grange Road district and corresponding improvements in the Western economies may bring investors back for seconds.