(SINGAPORE) DEVELOPERS have started to cut prices and offer discounts on a case-by-case basis in a bid to stop buyers from walking away from planned purchases.
At least one developer, Roxy-Pacific????Holdings, has cut asking prices for the upcoming launch of its new residential project, Spottiswoode 18. Previously, prices for one-bedroom units started from $700,000. Now, in light of the new measures to cool the property market announced last Thursday, prices will start from $600,000 instead. Prices for other types of units at the project have been cut as well.
More such price cuts at upcoming launches are likely, market sources said.
In addition, some developers are giving potential buyers discounts on a case-by-case basis in order to entice them to exercise their options to purchase, the sources said.
In one case, a listed developer offered a group of investors a discount of around 5 per cent to persuade them to exercise their option to purchase a unit at a project in Cairnhill. But the investors still chose to walk away and forfeit their deposit. Some developers have also offered to absorb the buyer's stamp duty, which is up to 3 per cent of the price, sources said.
Developers are reacting to the government's decision to raise the seller's stamp duty for private homes to 16 per cent, 12 per cent, 8 per cent and 4 per cent for properties that are bought on or after Jan 14 this year and sold in the first, second, third and fourth year after purchase respectively.
Previously, owners who sold houses and apartments less than three years after buying them had to pay a seller's stamp duty of only up to 3 per cent.
The Loan-To-Value (LTV) limit on housing loans was also lowered from 70 per cent to 60 per cent for individual buyers with one or more outstanding housing loans.
The measures dampened buying sentiment over the weekend. Showflats on Saturday and Sunday were markedly quieter as agents reported a fall in buyer interest - although a few projects still drew interest.
'Turnout at showflats was quite mixed,' said DMG & Partners property analyst Brandon Lee who visited showflats over the weekend.
But there were deals done. Far East Organization said in an update that it sold 18 units over the weekend across its mid and high-end projects. Eight of the units sold were from The Tennery at Bukit Panjang. A handful of units were also sold at Allgreen Properties' The Cascadia in Bukit Timah.
Oxley Holdings also rolled out its 36-unit Vibes@Kovan, along Kovan Road, over the weekend. The developer could not provide a sales update yesterday.
A spokeswoman for CapitaLand, Singapore's largest listed developer, also said it was 'business as usual' for the group. She added that homebuyers who recently bought its properties have completed the Sale and Purchase agreements.
Looking ahead, developers are likely to hold back property launches as they wait for the market to absorb the news.
City Developments and Far East Organization have both said they are assessing the situation. Lim Yew Soon, managing director of EL Development, similarly said that the launch of his company's Skysuites17 at Balestier could be delayed.
'We were scheduled to launch it in March, but now we will monitor how the market reacts before deciding whether to launch it or to hold it back,' Mr Lim said.