Projects Benefit from More Time Given for Deadlines

As many as 500 private housing projects may benefit from the 6 months extension being given to complete and sell their units, according to a Singapore Ministry of Finance spokesperson.

The extended time frame given to help developers meet conditions for remission of ABSD (Additional Buyer’s Stamp Duty) is one of a number of relief measures being rolled out this week.

These measures are intended to help home buyers and developers amid the disruptions to property sales and construction work during this Circuit Breaker period.

The six months extension to project completion periods applies to industrial and commercial, as well as residential developments, and applies with immediate effect.

Hence if a project was supposed to complete by 31 January 2024, it can now have up to 31 July 2024 to do so, such as at Wilshire Residences. Or an extended TOP date of 31 January 2025 for the Clavon condo.

An MND (Ministry of National Development) spokesperson said that around 100 industrial, commercial and residential development projects will qualify for this extension to their completion deadlines.

For most of the former en bloc collective sale projects targeting completion in 2022 or 2023 such as 15 Holland Hill, this extension gives the developers greater flexibility in setting their selling prices, noted Credit Suisse analyst Mr Louis Chua.

In addition, with the falls in residential sales amidst the current pandemic, and construction work still subject to strict rules, the extension will allow new property launches to be delayed to the second half of 2020, and into 2021.

The new measures will also help home buyers, as they now have up to one year to sell their existing residential property instead of six months, to qualify for remission of ABSD on their new property purchase. HDB upgraders will especially benefit, relieving the pressure to sell their HDB flats in what is currently a slow market.

However many property analysts think that if the COVID-19 pandemic is prolonged, more relief measures could be needed.

DBS Group Research expects sales volume to drop by 25% to 30%, to around 7,500 units this year, and the property price index to possibly fall between 5 to 10%. The DBS analysts said: “In our view, the next step is a review on the ABSD rates if market volumes remain tepid in the medium term.”

Senior partner at Dentons Rodyk & Davidson’s corporate real estate, Mr Lee Liat Yeang, commented that the measures are a good first step, but noted that: “While most developers should have buffered for more time in their sale and purchase agreement with buyers, they may still face problems delivering units by agreed deadlines if the pandemic drags on for more than six months. This could affect housing projects due to be completed beyond this year until 2023.”

In the event of delay in delivery of a project, the Ministry of National Development said: “We encourage developers to come to a mutually agreed arrangement (with buyers). For example, developers could offer to extend the defects liability period if purchasers agree to defer the delivery of units to a later date without claiming damages. The deferment period should not be unreasonable.”

However Mr Lee is of the opinion that it is very difficult for developers to renegotiate delivery date commitments. Such developers could expose themselves to liquidated damages for late delivery should buyers not acquiesce to the revised dates.

Read the original article at this page on extension of time for 500 private home projects.

Source: The Straits Times . 9 May 2020