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.

 

Property market slowdown reflected in stamp duty collected

In 2014, the property stamp duty assessed was at $4.11 billion. This year, the total amount for the period ending March 31 was 28 per cent lower at $2.96 billion. Property prices and transaction volume have also fallen since the peaks of 2009 and 2013.

TheOceanfrontThe real estate market here has hit a number of speed bumps over the past 3 to 4 years and with the various cooling measures in place, buyers and investors have shied away from this previously almost-surefire means of investment. Introduced almost 5 years in December 2011, the Additional Buyers’ Stamp Duty (ABSD) has gradually taken effect on the market, perhaps in particular the luxury property sector which used to attract mostly foreign investors. With the 15 per cent ABSD imposed on them, and 7 to 10 per cent on Singaporeans, many may have thought twice about buying a second or subsequent property as the additional monies to be paid are considerable.

Much of the ABSD assessed came from share transfer from bulk purchases by non-Singaporean entities or shareholders who may have to let go of unsold units before they are hit by the Qualifying Certificate (QC).

marinacollectionBut with the current financial and economic climate hazy at best, the future of other investment products fairly volatile, and local property prices having fallen to affordable quantum levels, could more buyers be picking off units to secure more stable future yields?