Friday, January 18, 2013

New private homes going for less

Developers roll out incentives to ease pain of latest cooling measures
Jan 18, 2013

Prices at some private home launches are being cut and other sweeteners offered in response to the tough cooling measures unveiled last Friday.

Developers are rolling out the incentives in a bid to alleviate the sting of the new rules that include increased stamp duties and tighter loan limits.

The 630-unit Qbay Residences in Tampines, for instance, has cut its average prices from $1,050 per sq ft (psf) to $985 psf.

The developers, a consortium of Frasers Centrepoint, Far East Organization and Sekisui House, said a 5 per cent to 7 per cent discount is being offered at the project's preview today to help cushion the impact of the additional buyer's stamp duty (ABSD).

Buyers can take this as an upfront discount or as a rebate.

"We would not have introduced the discount if not for the measures," said Mr Elson Poo, general manager of sales and marketing at Frasers Centrepoint.

The Qbay project has already collected about 500 cheques, largely from first-time buyers and Housing Board upgraders, but interest from investors has "shrunk a lot", Frasers said.

Far East Organization is also offering discounts of up to 4 per cent for all its projects now.

Discounting was already a feature of the market before the new measures came into force last Saturday as some projects struggled to move units.

The 1,715-unit d'Leedon developed by CapitaLand has been offering a range of promotional discounts since November.

These include a special discount of 2 per cent for all units and a further 2 per cent for buyers with an HDB address, up to a maximum discount of 10 per cent.

After a lull, the project sold 303 units in the past two months alone, bringing total sales to 848 since its November 2010 launch.

Mr Wong Heang Fine, chief executive of CapitaLand Residential Singapore, said: "It is quite normal for us to run promotional programmes now and then to incentivise buyers for certain units in a development."

EL Development managing director Lim Yew Soon said that various discounts were already factored into La Fiesta's launch last Friday and so prices remain between $1,100 and $1,200 psf.

Mass market and mid-tier home prices might soften by 5 per cent to 7 per cent this year while those of high-end apartments could plunge by 10 to 15 per cent, said Mr Cheang Kok Kheong, CEO of Frasers Centrepoint.

Sales volumes could take a larger hit although the fall is unlikely to be at an "alarming level".
One development since the measures came in has been an increase in interest from permanent residents (PRs), Mr Cheang said.

This is because there are more restrictions now when PRs buy HDB resale flats so they have turned to the private market.

Frasers' projects like Eight Courtyards in Yishun sold its last two units over the weekend to PRs despite the increased stamp duty while Palm Isles at Flora Drive sold one unit to a PR.

Mr Cheang said Frasers is still interested in developing executive condominium projects despite new rules which include size curbs and development charges for private enclosed spaces and private roof terraces.

"Trust me, the private developers have ideas to go round this and still create interesting projects," he added.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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