SPK: I agree. As of now, there is already a very stringent set of rules and penalties (Qualifying Certificate extension charge and Additional Buyer Stamp Duty remission clawback) if developers cannot sell all their units within 5 years from the date that they acquire the site. Even though the Singapore government is getting concern on the activities in the collective sale market, it is still too early to take actions as the activities are happening on the supply side of the property market. On the demand side, things are improving but not at a heated level yet.
SPK: The return of foreign buyers could be a potential wildcard to fuel additional property demand and price increase in the property market. Property purchase by foreigners is recovering but it is still below the long-term average level. Chinese buyers will be an important group to watch out for. Based on 2017 statistics, the three most popular locations with Chinese buyers were districts 19 (Serangoon Garden, Hougang, Punggol), 23 (Hillview, Bukit Panjang, Choa Chu Kang) and 5 (Pasir Panjang, Clementi New Town). Oxley might have a good chance to sell its upcoming developments in District 19 – a 1,450-unit development at former Rio Casa site and 1,050-unit development at former Serangoon Ville site to Chinese buyers!
SPK: Oxley, my favourite developer, is in the news once again! I would say that this is a very shrewd transaction by Oxley. The landowner is carving out a 99-year leasehold of the land and selling it to Oxley in return for a cash consideration of S$13 mil and the 2nd and 3rd floor of the completed development. Oxley will retain 4th to 8th floor of the development for sale. As the upfront cash payment is low, the return on investment for this project should be much higher. I’m impressed by Oxley’s strong business acumen, evident in its ability to beat over 80 parties to buy the site!
SPK: What a difference a year makes! Just a year ago, everyone was waiting for developers to give ‘special discounts’ to sell their old inventories in order to avoid paying QC extension and ABSD remission. Sad to say, that didn’t really happen unless you happen to be a member of the Wee family (who bought up all the remaining units at The Nassim from Capitaland) or some big funds who managed to bulk purchase remnant units during Feb/March last year.
Today, there are only around 80 developments (with a total of about 750 unsold units) that could be subjected to these fees and charges in 2018. This has come down significantly if we compare to last year when a total of 4,230 units were affected by the rules last year. With the recovery in the property market, concerns on the penalties due to QC extension and ABSD remission claw-back has since abated. In fact, developers may be more than happy to hold the units if they expect prices to increase further during the year!
SPK: You can read my earlier analysis on this topic here!