News: Developers remain upbeat despite 2020 ABSD deadline

Nov 8, 2019

While the seven projects, including Queens Peak (pictured) still have a total of 95 unsold units, most have already moved more than 90% of their inventory as at end-September.

Developers of seven housing projects launched 3 to 4 years ago have expressed confidence in beating the 2020 Additional Buyer’s Stamp Duty (ABSD) deadline to sell their unsold units, on the back of robust demand and low supply during the launch of their projects, reported the The Business Times.

According to the rules, developers must develop the residential site they acquired and sell all units within the new project within five years from the date of acquisition/purchase to qualify for upfront remission of ABSD based on the purchase price of the land. Should a developer fail to do so, it will have to pay the 25% ABSD with interest, which was raised from 15% since 6 July 2018 onwards.

“The majority of projects with ABSD deadlines in 2020 and 2021 were launched in 2016 to 2018, which benefited from the recovery of property prices and demand in 2017,” said Wong Xian Yang, Senior Manager (Research) for Singapore & Southeast Asia at Cushman & Wakefield.

“On the supply side, these projects were acquired in 2015 and 2016, a time when market sentiment was relatively weak and before the ramp-up of en bloc sales. When demand poured in during 2017, the supply of new launches was relatively low. As such, these ‘first movers’ enjoyed brisk sales.”

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Cushman & Wakefield data showed that the seven projects have a total of 95 unsold units. However, a majority of them have already moved more than 90% of their inventory as at end-September.

Not many balance units left

Hao Yuan’s Executive Condominium (EC) Northwave cleared its last unit as at end-September, while Pinnacle Assets’ Cayman Residences cluster homes project only has two remaining unsold units.

Far East Consortium-backed FEC Skyline, on the other hand, is confident of selling the 45 unsold units at its Artra condominium before its 2020 ABSD deadline, pointing to project’s full range of facilities and access to Redhill MRT station as likely draws.

HY Realty also expects to sell the 32 remaining units at Queens Peak before its June 2020 deadline. “One of our ongoing (marketing) efforts includes plans to sell the four remaining penthouses with a fully-furnished interior design package, which will enable buyers a faster move-in process with less hassle,” shared a spokesperson for HY Realty.

Meanwhile, analysts warned that residential projects with a 2022 ABSD deadline may face a bleaker outlook considering the economic slowdown.

“A shorter economic downturn with earlier recovery would reduce the risks for these projects but if the downturn deteriorates and is prolonged, negative sentiments could weigh on demand and affect sales adversely,” said JLL senior director of research and consultancy Ong Teck Hui.

As at the end of 3rd Quarter 2019, there was a total supply of 50,964 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, according to the Urban Redevelopment Authority (URA).

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg

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