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.

Good Class Bungalows prices peak

Against all odds, the Good Class Bungalows (GCB) sector of the luxury property market has reached a price peak last month. Amidst the general market slowdown, luxury homes have been hit the hardest with a decline in sales volume and prices.

The average price for GCBs rose to $1,428 psf from the $1,405 psf in 2012. The rarity of these properties, plus their equally rare price tags, make them fodder for only the rich and wealthy. With their deep pockets, they may not be as affected by the recent property market slump as the everyday joe. There are only 3,900 Good Class Bungalows in Singapore, and they are located in gazetted areas. Only Singaporeans are allowed to purchases these properties.

GoodwoodResidencesWith the lack of foreign buying of local property due to the 15 per cent Additional Buyers’ Stamp Duty (ABSD) levied in 2013, the luxury home market has been on the downward slide for sometime. In Sentosa, where anyone, local and foreigner alike are able to purchase a property, only 3 bungalows were sold last year at a 20% price drop. Even with the lower prices, average selling price was at $1, 676 psf.

Non-landed luxury apartments also did not fare well last year. The most number of units sold were at Goodwood Residences. 41 units were sold at a median of $2,461 psf at this Bukit Timah Road property. This may be due to high competition in the market with 7 luxury condominium developments completed last year, including Ardmore 3, Le Nouvel Ardmore, Sculptura Ardmore, Tomlinson Heights, Hana, Nouvel 18 and TwentyOne Anguillia Park.