View Full Version : Developers' calls to extend project deadline meet with a "no"
http://www.businesstimes.com.sg/real-estate/developers-calls-to-extend-project-deadline-meet-with-a-no
Developers' calls to extend project deadline meet with a "no"
MOF does not see need to relax 5-year deadline for developers to complete and sell off a project
By Kalpana Rashiwala
[email protected]@KalpanaBT
Owners of Shunfu Ville, the tender for which closes on Oct 27, recently submitted a petition to MOF and IRAS requesting that the site's successful bidder be granted seven years, instead of five, to finish building the project on site and selling all the units.
Oct 8, 2015
THE government has rebuffed calls by some developers to extend the five-year deadline for them to complete a residential project and sell all its units - part of a slew of property cooling measures introduced in recent years.
Meeting the conditions gave developers an upfront remission of the 15 per cent additional buyer's stamp duty (ABSD) on the purchase price of the residential site, but many are struggling to do so because of the sluggish real estate market.
"Currently, we do not see a need to relax this condition as the deadlines remain relevant and reasonable," a Ministry of Finance spokeswoman told BT.
The five-year deadline is meant to encourage developers to complete the development and sale of the residential units so as to increase the supply of housing units and help moderate residential property prices, she noted.
"We assess that five years is a reasonable duration of time for licensed developers to sell the residential units as developers can start selling the units off-plan, before development is completed. In fact, they have already been doing this all along."
"The government will continue to monitor the market and review our policies periodically," the MOF spokeswoman added.
She acknowledged that MOF and the Inland Revenue Authority of Singapore had received appeals from developers for an extension to comply with the ABSD remission conditions, but declined to reveal how many such requests had been received or to give any other details, citing "confidentiality of taxpayers' information".
Going by market talk, the period of extension requested by developers is one to two years.
A market watcher suggested that the authorities may find it too early to start entertaining requests for the deadline extension given that there is still more than a year to go before the earliest deadline would be due.
When the ABSD was first introduced effective Dec 8, 2011, the rate for purchases of residential property (including land) by companies was set at 10 per cent of the purchase price. From Jan 12, 2013, this rate was hiked to 15 per cent.
The five-year deadline for completing the project on the residential site and selling all its units kicks off from the date of contract or agreement to buy the site - which for collective sales, is the date of the collective sale order granted under the Land Titles (Strata) Act.
Property agents have been complaining that residential collective sales have been hit by the five-year deadline. For prime district sites, having to sell all the units within this timeframe poses a challenge, given the generally subdued buying sentiment for luxury properties, which had relied significantly on foreign buyers, who now have to pay 15 per cent on their residential property purchases. Singaporean investors too have to pay an ABSD, albeit at lower rates.
Feedback from developers is that they have also found large en bloc sale sites such as former Housing & Urban Development Company (HUDC) estates risky.
Each estate can potentially yield a thousand or more new units, which is at least double the size of a typical private housing site offered at state land sales.
If developers cannot finish selling all the units in time, they will have to pay the ABSD with interest calculated at 5 per cent per annum starting from 14 days after the date of contract or agreement.
Norman Ho, partner at Rodyk & Davidson, said that he advises clients against writing in to IRAS for an extension of the deadline.
"It is unlikely IRAS will give you an extension or waiver, because if they did, then all the other developers will also start asking for it. And when you got the upfront remission, you had given an undertaking to comply with the deadline."
He also noted that the five-year period to finish selling all units in the new project may not be enough amid current market conditions.
"After a collective sale order has been granted, it takes another three months for the sale to be completed, after which sellers are usually allowed to stay on in their units for a further six months. So you have nine months eating into the five-year period. Things are even worse for big estates like ex-HUDC estates as there are more owners involved."
Knight Frank chairman Tan Tiong Cheng highlighted that "urban renewal by the private sector is also being inhibited by the difficulty in doing collective sales, in light of this deadline".
"It may be hard for existing owners in older residential developments that are in deteriorating condition to sell their units individually as prices may be depressed. Refurbishing the building may require more funds from the owners but more fundamentally it could be only a temporary solution - if obsolescence has set in. The most natural exit would be an en bloc sale."
Not only have some developers been seeking extensions from the authorities, but at least in one case, owners of an estate where an en bloc sale has been launched, are taking the initiative to boost their chance of a sale.
Some owners of Shunfu Ville in Marymount Road recently signed and submitted a petition to MOF and IRAS requesting that the site's successful bidder be granted seven years, instead of five, to finish building the project on site and selling all the units.
When contacted, JLL, the sole maketing agent for the collective sale, confirmed that the petition collected more than 200 signatures from owners.
Among other things, the owners highlighted maintenance issues such as leakage and roofing in the development, which is more than 20 years old.
The owners are also seeking a fair chance for a successful collective sale; beyond that, they argued that allowing developers more time to complete and sell off a residential project would help other former HUDC estates as well.
In the first instance, the authorities encouraged privatisation of HUDC estates. In the past, this was greeted warmly by owners as they could attempt an en bloc sale post-privatisation.
JLL, said, however, that the introduction of ABSD had produced an unintended deterrent to en bloc sales, which is the main option for rejuvenating old estates.
Shunfu Ville's tender will close on Oct 27. Located a stone's throw from Marymount MRT Station on the Circle Line, the estate is on a site of about 409,000 square feet and zoned for residential with a gross plot ratio of 2.8 under Master Plan 2014. The site could potentially yield about 1,100-plus units with an average size of 1,000 sq ft.
Currently on site are 358 units in three 16-storey apartment blocks and three low-rise blocks of six-storey maisonettes. Built in the late 1980s by the former HUDC, Shunfu Ville was privatised in 2013.
thomastansb
14-10-15, 14:36
Ya, best decision. 5 years cannot build and sell, don't talk cock. 76 Shenton sold out in 1 day and built in 3 years. You want to bid high high, then you can go f yourself.
Good decision!
yeah some of these developers full of BS....everything also want in their favour...not confident to sell then just dont bid or do the collective sale...make huge profits that time keep quiet...when times get tough cry mother cry father...i also see some dont hestitate to lower quality to keep their margins...so why shd we care if a few of them make loss or go bankrupt because of their own greed...
There's is no Harm asking. You never ask, you never know.
There's is no Harm asking. You never ask, you never know.
Greedy developers shall be punished. :im-a-gonna-get-u:
Developers' calls to extend project deadline meet with a "no"
MOF does not see need to relax 5-year deadline for developers to complete and sell off a project
The five-year deadline is meant to encourage developers to complete the development and sale of the residential units so as to increase the supply of housing units and help moderate residential property prices, she noted.
"We assess that five years is a reasonable duration of time for licensed developers to sell the residential units as developers can start selling the units off-plan, before development is completed. In fact, they have already been doing this all along."
If developers cannot finish selling all the units in time, they will have to pay the ABSD with interest calculated at 5 per cent per annum starting from 14 days after the date of contract or agreement.
Will the workmanship be good and safe with a "rush work"? Will the developer add the cost of the ABSD for not able to sell in time to the buyers?
For a smaller projects, maybe 5 years is enough but for a bigger projects like few hundred units, maybe it might be a bit difficult in today's market. I have a friend, he got a HDB flat in Punggol some time early this year but the completion date is Year 2020. HDB do not have much facilities like private where there is a swimming pool, gym etc and swimming pool needs to test out first before using to make sure that there is no leakage, this might take a few months to do that, worst if there is a problem, it might drag even longer.
workmanship will be surely be lousy when you have lousy/greedy developers...doesn't make a difference how much time you give them...they will still maximize their margin and hand over a sub-par project/unit to you...sure the developer can try pass on the cost of absd to the buyer but obviously that will affect their sales...
if they are not confident to sell then just don't bid at a price that cannot move the units...simple as that...regulators will obviously not make any exception for anybody...
thomastansb
15-10-15, 10:06
5 years, I don't see the need for rush work. Anyway, quality depends on developer. If the developer sucks, the quality will be bad anyway. There is no difference.
If they add ABSD cost to buyers, then it really depends on the intelligence of the buyer. I don't believe the developer can jack up the prices because prices is dependant on market. They can jack up still but 0 sales for many months and the next round of ABSD is coming, what do you think the developer will do? LOL.
HDB don't say la. Different ball game. The average time for a BTO is like 3 years only. Private also pretty similar. 3 to 4 years. So 5 years is more than enough IMO. Unless they building a 7,000 units condo in a land that is the size of sentosa.
Will the workmanship be good and safe with a "rush work"? Will the developer add the cost of the ABSD for not able to sell in time to the buyers?
For a smaller projects, maybe 5 years is enough but for a bigger projects like few hundred units, maybe it might be a bit difficult in today's market. I have a friend, he got a HDB flat in Punggol some time early this year but the completion date is Year 2020. HDB do not have much facilities like private where there is a swimming pool, gym etc and swimming pool needs to test out first before using to make sure that there is no leakage, this might take a few months to do that, worst if there is a problem, it might drag even longer.
thomastansb
15-10-15, 10:07
Exactly! If the developer wants to cut corners, they would have done it no matter what. I don't believe in ethics.
The moment regulator relaxes this rule, it will make a mockery of our system.
workmanship will be surely be lousy when you have lousy/greedy developers...doesn't make a difference how much time you give them...they will still maximize their margin and hand over a sub-par project/unit to you...sure the developer can try pass on the cost of absd to the buyer but obviously that will affect their sales...
if they are not confident to sell then just don't bid at a price that cannot move the units...simple as that...regulators will obviously not make any exception for anybody...
Cutting corners is the norm, rather than the exception, these days. None are spared including HDB.
There will be a higher proportion of units left unsold after top. So potential buyers get to inspect the actual unit before buying. If workmanship is sub standard then prepare to be left unsold for a long time.
let me be a devil's advocate, and say something from developer's perspective :)
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
Reason is simple: when I as a developer bid for a land, I calculated my cost with the expected sales, and expected market risk , as any business would in a market economy. I arrived at a fair price I thought profitable and went for it. If the market turned out badly, like a recession, or I overpriced, I should suffer a loss. That's part and parcel of the business, no problem. Now, after I bought the land, some time down the road, you gov announced ABSD/cooling measures that severely restricted the buying, i.e., my sales, which severely distorted the market. You basically eliminated 50% of my potential customers. This is directly interfering my business. The property business is no longer market driven. To be responsible to shareholder, I have every right to ask you gov to compensate my loss due to your off-market draconian administrative intervention. The game is simply not fair: you cannot start the game and change the rule after.
This is only applicable to those lands bought before ABSD. For those bought after, developers of course have no grounds whatsoever. You already knew the rules. For the same argument, you cannot start the game and expect the rule to be changed after.
Those Shunfu guys are dreaming. Now that you know enbloc is not easy huh. Never see you complain when privatising the estate, and blocking out the access path for other HDB blocks.
This is only applicable to those lands bought before ABSD. For those bought after, developers of course have no grounds whatsoever. You already knew the rules. For the same argument, you cannot start the game and expect the rule to be changed after.
Don't agree, ABSD is after BSD and one of the control measures. The Game rule are very clear, when they announce some win some lose.
http://static.streetsine.s3.amazonaws.com/CoolingMeasure/Non-landed%20Overall%20Sales.jpg
Then let me add on to the developer's perspective. "Not only did you lower the sales significantly, you also ordered an cut (ABSD) of 7% (second time local buyers) and 15% (foreigners) for your own coffers. My market projection never included these % cuts."
Actually I trust the Govt has a bigger plan in place. Some pieces are just invisible to the market. The accommodation of prices is meant for the greater good of all, but it will not be a plan to crash the market. Let's be patient and let them sort it out.
let me be a devil's advocate, and say something from developer's perspective :)
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
Reason is simple: when I as a developer bid for a land, I calculated my cost with the expected sales, and expected market risk , as any business would in a market economy. I arrived at a fair price I thought profitable and went for it. If the market turned out badly, like a recession, or I overpriced, I should suffer a loss. That's part and parcel of the business, no problem. Now, after I bought the land, some time down the road, you gov announced ABSD/cooling measures that severely restricted the buying, i.e., my sales, which severely distorted the market. You basically eliminated 50% of my potential customers. This is directly interfering my business. The property business is no longer market driven. To be responsible to shareholder, I have every right to ask you gov to compensate my loss due to your off-market draconian administrative intervention. The game is simply not fair: you cannot start the game and change the rule after.
This is only applicable to those lands bought before ABSD. For those bought after, developers of course have no grounds whatsoever. You already knew the rules. For the same argument, you cannot start the game and expect the rule to be changed after.
Those Shunfu guys are dreaming. Now that you know enbloc is not easy huh. Never see you complain when privatising the estate, and blocking out the access path for other HDB blocks.
challenger
15-10-15, 21:24
let me be a devil's advocate, and say something from developer's perspective :)
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
Reason is simple: when I as a developer bid for a land, I calculated my cost with the expected sales, and expected market risk , as any business would in a market economy. I arrived at a fair price I thought profitable and went for it. If the market turned out badly, like a recession, or I overpriced, I should suffer a loss. That's part and parcel of the business, no problem. Now, after I bought the land, some time down the road, you gov announced ABSD/cooling measures that severely restricted the buying, i.e., my sales, which severely distorted the market. You basically eliminated 50% of my potential customers. This is directly interfering my business. The property business is no longer market driven. To be responsible to shareholder, I have every right to ask you gov to compensate my loss due to your off-market draconian administrative intervention. The game is simply not fair: you cannot start the game and change the rule after.
This is only applicable to those lands bought before ABSD. For those bought after, developers of course have no grounds whatsoever. You already knew the rules. For the same argument, you cannot start the game and expect the rule to be changed after.
Those Shunfu guys are dreaming. Now that you know enbloc is not easy huh. Never see you complain when privatising the estate, and blocking out the access path for other HDB blocks.
No harm asking, but it is correct for government to say no. Government has already said it wants to cool property. This was made known to everyone. All fair and square. Developer bidding high price is just a gamble that fails to pay off. Bet right you win big, if not too bad lor.
Actually rules in Singapore is already very transparent with warning. The measures imposed by the government was incremental and in fact a tad slow. Developers have plenty of time to make less, cut loss and exit. The real killer was TDSR which was imposed in 2013.
that's not true. Prior to 2010, there was no such thing as "gov having clear message to cool the market", as the mkt at that time was completely down. Many enbloc done prior to that did not have the expectation that gov is going to "cool the mkt imminently". It is completely valid for developer to argue about fairness.
Obviously what gov did is "for the greater good". But as a business, which employs thousands of employees, this is really hard time. Think of your friends or relatives who work for a developer. Current situation is almost entirely gov man-made.
let me be a devil's advocate, and say something from developer's perspective :)
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
Agree.
It is just like getting a loan from a bank, once contract is signed, whether the interest goes up or down, the bank has no right to change it unless the borrower is willing to give up and get penalty.
As a business entity, the company is operating in a business environment which are highly effected by external environment including social, economic and political. Many experience companies had already offloaded their inventories or sold their assets as Reits when they saw prices reaching insatiable level by 2011. The less experience companies or late comers would end up holding inventories they could not sell. It is like savvy property buyers know when to buy and when to get out of the market. This is how the market works. Many companies make profits but some will end up losers.
As a business entity, the company is operating in a business environment which are highly effected by external environment including social, economic and political.
I just knew someone will say something like this. This is just grand and hollow slogan. We are not in China. A business is not dictated by the state. SG is supposed to be free market economy. Business is ran with all business risks, but with minimal "political" risk. This is how people have confidence in the system. This is critical. This is what SG offers, that politics is not meddling around free market. Had SG become Malaysia where business rules can be changed at whim, or "a business environment .. highly affected by ... politics", we will lose competitiveness immediately. As a matter of fact, when politics adversely affects business, in normal circumstances, SG gov helps the business. For example, for the social good, gov has to limit/reduce foreign workers, and while doing that, gov is trying to find ways to help affected businesses.
Look , even the generals in Thailand knew this. Politics in Thailand is not stable, but all the generals always want to tell businessman "everything is normal not affected, please continue to do what you are doing".
I knew nobody likes developers. That's why I want to be a devil's advocate and look at things from business angle. This trade is capital intensive, involves massive investment, comes with high risk. Economists can't even agree with each other on the GDP growth of next quarter, and here this trade requires betting on economy condition in a few years. And dun forget all the downstream businesses it employs. So be fair when you want to change rules.
I
I just knew someone will say something like this. This is just grand and hollow slogan. We are not in China. A business is not dictated by the state. SG is supposed to be free market economy. Business is ran with all business risks, but with minimal "political" risk. This is how people have confidence in the system. This is critical. This is what SG offers, that politics is not meddling around free market. Had SG become Malaysia where business rules can be changed at whim, or "a business environment .. highly affected by ... politics", we will lose competitiveness immediately. As a matter of fact, when politics adversely affects business, in normal circumstances, SG gov helps the business. For example, for the social good, gov has to limit/reduce foreign workers, and while doing that, gov is trying to find ways to help affected businesses.
Look , even the generals in Thailand knew this. Politics in Thailand is not stable, but all the generals always want to tell businessman "everything is normal not affected, please continue to do what you are doing".
I knew nobody likes developers. That's why I want to be a devil's advocate and look at things from business angle. This trade is capital intensive, involves massive investment, comes with high risk. Economists can't even agree with each other on the GDP growth of next quarter, and here this trade requires betting on economy condition in a few years. And dun forget all the downstream businesses it employs. So be fair when you want to change rules.
A society or an economy cannot operate without rules and policies. Market is inefficient and hence rules, policies and government's interventions are necessary to maintain market order and social equity. Any responsible government must be effective in ensuring market order to achieve social equity and economic stability.
I just knew someone will say something like this. This is just grand and hollow slogan. We are not in China. A business is not dictated by the state. SG is supposed to be free market economy. Business is ran with all business risks, but with minimal "political" risk. This is how people have confidence in the system. This is critical. This is what SG offers, that politics is not meddling around free market. Had SG become Malaysia where business rules can be changed at whim, or "a business environment .. highly affected by ... politics", we will lose competitiveness immediately. As a matter of fact, when politics adversely affects business, in normal circumstances, SG gov helps the business. For example, for the social good, gov has to limit/reduce foreign workers, and while doing that, gov is trying to find ways to help affected businesses.
Look , even the generals in Thailand knew this. Politics in Thailand is not stable, but all the generals always want to tell businessman "everything is normal not affected, please continue to do what you are doing".
I knew nobody likes developers. That's why I want to be a devil's advocate and look at things from business angle. This trade is capital intensive, involves massive investment, comes with high risk. Economists can't even agree with each other on the GDP growth of next quarter, and here this trade requires betting on economy condition in a few years. And dun forget all the downstream businesses it employs. So be fair when you want to change rules.
I know a colleague in the 90's came in to the office and say he have just register his name in his relative project.
A few days later, he sold the property, make a profit with no money down.
News reporting is what I want you to know.
Don't tell me you don't know about this before.
The Rule of the game is very clear, at your own risk.
HDB may increase BTO flat supply next year: MND's Lawrence Wong
http://www.channelnewsasia.com/news/singapore/bto-flat-supply-to-be/2196802.html?cid=fbsg
Govt should consider removing ABSD for Sporean homeowners who are switching homes, i.e. selling the home they currently stay in and buying a replacement home. Some of them are affected by ABSD as they may happen to own investment property.
As a business entity, the company is operating in a business environment which are highly effected by external environment including social, economic and political. Many experience companies had already offloaded their inventories or sold their assets as Reits when they saw prices reaching insatiable level by 2011. The less experience companies or late comers would end up holding inventories they could not sell. It is like savvy property buyers know when to buy and when to get out of the market. This is how the market works. Many companies make profits but some will end up losers.
Talking residential property here, not commercial. What reits? Stay on thread please.
Talking residential property here, not commercial. What reits? Stay on thread please.
If you only look at the residential market only rather than the real estate market as a whole, than just take away the Reits portion. The scenario remains the same.
free market without regulation! you got to be kidding...corporations are not people so we cannot expect them to act with responsibility...by nature they need to generate profit....leave them alone you can be assured they will use whatever means possible including illegal and unethical ones...the developers can go f*** off if they don't like the rules here....but then you can be assured they will stick around like leeches.....the property business is lucrative...
You must be kidding yourself if you think SG is "free-market"....the biggest company here is Singapore Inc (our government).....the biggest property developer is HDB....SG government is good because they are pro-active to take measures to address the needs of the greater society...if they 'free-market' like some of you suggest....the property bubble would have burst long long long ago....took so many rounds of cooling measures before the crazy property speculation stopped....and look at the damage done.....hugely inflated housing price and lagging wages...
Singapore govt dont change rules for fun....
free market without regulation! you got to be kidding...corporations are not people so we cannot expect them to act with responsibility...by nature they need to generate profit....leave them alone you can be assured they will use whatever means possible including illegal and unethical ones...the developers can go f*** off if they don't like the rules here....but then you can be assured they will stick around like leeches.....the property business is lucrative...
You must be kidding yourself if you think SG is "free-market"....the biggest company here is Singapore Inc (our government).....the biggest property developer is HDB....SG government is good because they are pro-active to take measures to address the needs of the greater society...if they 'free-market' like some of you suggest....the property bubble would have burst long long long ago....took so many rounds of cooling measures before the crazy property speculation stopped....and look at the damage done.....hugely inflated housing price and lagging wages...
Singapore govt dont change rules for fun....
what does "lagging wages" have anything to do with developer business ? "hugely inflated housing", not really. had it been that huge, you dun see ppl snapping up HighPark units.
you are taking it to the extreme and wants gov to take care of everything. No market is "totally free". What we have is transparent, stable, predictable, and fair, business friendly environment. It must remain as such.
No one is doubting the validity of these measures. what is in dispute is just a small portion that has valid reasons to appeal. the majority of sites are bought with the knowledge of gov measures/message "that property investment business is not encouraged now", so have no grounds to argue. This is what we called fair.
Govt should consider removing ABSD for Sporean homeowners who are switching homes, i.e. selling the home they currently stay in and buying a replacement home
I concur. in fact, ABSD should be removed all together. TDSR ensures financial prudence; SSD discourages flipping ; ABSD for what ? simply to artificially suppress demand. It's like China, simply forbid ppl buying 2nd home, even when ppl have real genuine reasons. HDB market could be tightly/carefully regulated as it's public service , private residential business should be left to private business.
thomastansb
16-10-15, 19:31
Isn't Government intervention a business risk? If they failed to see that, then it is too bad. Suck it up.
let me be a devil's advocate, and say something from developer's perspective :)
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
Reason is simple: when I as a developer bid for a land, I calculated my cost with the expected sales, and expected market risk , as any business would in a market economy. I arrived at a fair price I thought profitable and went for it. If the market turned out badly, like a recession, or I overpriced, I should suffer a loss. That's part and parcel of the business, no problem. Now, after I bought the land, some time down the road, you gov announced ABSD/cooling measures that severely restricted the buying, i.e., my sales, which severely distorted the market. You basically eliminated 50% of my potential customers. This is directly interfering my business. The property business is no longer market driven. To be responsible to shareholder, I have every right to ask you gov to compensate my loss due to your off-market draconian administrative intervention. The game is simply not fair: you cannot start the game and change the rule after.
This is only applicable to those lands bought before ABSD. For those bought after, developers of course have no grounds whatsoever. You already knew the rules. For the same argument, you cannot start the game and expect the rule to be changed after.
Those Shunfu guys are dreaming. Now that you know enbloc is not easy huh. Never see you complain when privatising the estate, and blocking out the access path for other HDB blocks.
thomastansb
16-10-15, 19:33
Then we have to think for people working in a bank, car showroom, SMRT etc as well isn't it?
that's not true. Prior to 2010, there was no such thing as "gov having clear message to cool the market", as the mkt at that time was completely down. Many enbloc done prior to that did not have the expectation that gov is going to "cool the mkt imminently". It is completely valid for developer to argue about fairness.
Obviously what gov did is "for the greater good". But as a business, which employs thousands of employees, this is really hard time. Think of your friends or relatives who work for a developer. Current situation is almost entirely gov man-made.
thomastansb
16-10-15, 19:36
Sorry, a business is dictated by the state. Always. It is just for better or for worse. For one side that is losing, another side is winning. Just a matter of more people winning or more people losing. A good G will want more people winning. In this case, it is obvious. If developers don't want to play anymore, don't worry. There are hundreds willing to come in. Far East is always happy to buy all the land. Just look at east coast :)
I just knew someone will say something like this. This is just grand and hollow slogan. We are not in China. A business is not dictated by the state. SG is supposed to be free market economy. Business is ran with all business risks, but with minimal "political" risk. This is how people have confidence in the system. This is critical. This is what SG offers, that politics is not meddling around free market. Had SG become Malaysia where business rules can be changed at whim, or "a business environment .. highly affected by ... politics", we will lose competitiveness immediately. As a matter of fact, when politics adversely affects business, in normal circumstances, SG gov helps the business. For example, for the social good, gov has to limit/reduce foreign workers, and while doing that, gov is trying to find ways to help affected businesses.
Look , even the generals in Thailand knew this. Politics in Thailand is not stable, but all the generals always want to tell businessman "everything is normal not affected, please continue to do what you are doing".
I knew nobody likes developers. That's why I want to be a devil's advocate and look at things from business angle. This trade is capital intensive, involves massive investment, comes with high risk. Economists can't even agree with each other on the GDP growth of next quarter, and here this trade requires betting on economy condition in a few years. And dun forget all the downstream businesses it employs. So be fair when you want to change rules.
thomastansb
16-10-15, 19:38
I haven't seen a country without regulation. lol. We know what humans are capable of without regulations. It is a no brainer to me.
free market without regulation! you got to be kidding...corporations are not people so we cannot expect them to act with responsibility...by nature they need to generate profit....leave them alone you can be assured they will use whatever means possible including illegal and unethical ones...the developers can go f*** off if they don't like the rules here....but then you can be assured they will stick around like leeches.....the property business is lucrative...
You must be kidding yourself if you think SG is "free-market"....the biggest company here is Singapore Inc (our government).....the biggest property developer is HDB....SG government is good because they are pro-active to take measures to address the needs of the greater society...if they 'free-market' like some of you suggest....the property bubble would have burst long long long ago....took so many rounds of cooling measures before the crazy property speculation stopped....and look at the damage done.....hugely inflated housing price and lagging wages...
Singapore govt dont change rules for fun....
walkthetiger
16-10-15, 20:02
Isn't Government intervention a business risk? If they failed to see that, then it is too bad. Suck it up.
Exactly. Singaporean is overly dependent to govt's help, so much till they forget the role of govt to ensure "bigger picture".
challenger
16-10-15, 21:56
what does "lagging wages" have anything to do with developer business ? "hugely inflated housing", not really. had it been that huge, you dun see ppl snapping up HighPark units.
you are taking it to the extreme and wants gov to take care of everything. No market is "totally free". What we have is transparent, stable, predictable, and fair, business friendly environment. It must remain as such.
No one is doubting the validity of these measures. what is in dispute is just a small portion that has valid reasons to appeal. the majority of sites are bought with the knowledge of gov measures/message "that property investment business is not encouraged now", so have no grounds to argue. This is what we called fair.
I concur. in fact, ABSD should be removed all together. TDSR ensures financial prudence; SSD discourages flipping ; ABSD for what ? simply to artificially suppress demand. It's like China, simply forbid ppl buying 2nd home, even when ppl have real genuine reasons. HDB market could be tightly/carefully regulated as it's public service , private residential business should be left to private business.
Is ABSD a permanent or short term measure? ABSD makes it cheaper for Singaporeans to buy property compared to foreigners. It gives first time Singaporean buyer an advantage compared to property owner. In a way, it helps reduce income inequality since rich pay more. To me, this seems like it should be a long term measure, especially in view of increasing measures to subsidise healthcare and the poor. It may be necessary to adjust the quantum, and not necessary downwards. After all, if Singapore grows more important as a regional centre and everyone wants to buy properties in Singapore to rent out or as holiday home, our small country will see its property sky rocket again, with many empty units.
If no ABSD, will government increase the stamp duty to a higher percentage, thus imposing higher stamp duty for all? Food for thought.
ABSD should be a temporary measure. Why ABSD? Because they are definitely more buyers than sellers in the market previously. Even after ABSD, people are still buying albeit more selectively in certain good projects. That is why we need ABSD. You might also heard of creative strategies that married couples employ to avoid ABSD. I would think increasing GST is a more feasible solution to increase our government's coffers rather than ABSD.
I concur. in fact, ABSD should be removed all together. TDSR ensures financial prudence; SSD discourages flipping ; ABSD for what ? simply to artificially suppress demand. It's like China, simply forbid ppl buying 2nd home, even when ppl have real genuine reasons. HDB market could be tightly/carefully regulated as it's public service , private residential business should be left to private business.
Totally agree.
I haven't seen a country without regulation. lol. We know what humans are capable of without regulations. It is a no brainer to me.
no I am not saying we are in a system of no rules. we are in a system with plenty of rules. the issue is, are we in a system where rules are transparent, fair, and consistent ? or are we in a system where rules are adhoc, unfair, and inconsistent ? If I (as developer) am operating in Malaysia, I would know fully well what kind of rules I am expecting, so I would have nothing to complain about. However I am operating in SG, a system known to be (more or less) free, fair , consistent, I expect the system to continue to be so. The principle of my argument is simply this: you should not apply new rules retrospectively, like what Malaysia always does. That is what a fair system is. Of course here it is a bit arguable whether it is "retrospective", as it is indirect. That's where the argument is about. Had it been direct, it would have been clear cut. The dispute is not whether "you greedy developers suck it up new rules". It is about the fairness of the system. Note the emphasis on "before". whatever land bought after the rules, developers have nothing to complain about.
Singaporean is overly dependent to govt's help
Clearly this is something we all agree is wrong. Now look at what happens with perception of ABSD, in this very thread :
ABSD makes it cheaper for Singaporeans to buy property compared to foreigners. It gives first time Singaporean buyer an advantage ... it should be a long term measure...
Look, ppl once again rely conveniently on gov "help" , without knowing it. This is the real problem. More often than not, it is the case where individuals are frequently asking gov for help, rather than business. Developers are not "asking gov to help", as what you put it. Developers are merely asking gov to be fair. Individuals on the other hand, are asking gov to hold the prices down so they can afford a pte pty. This mentality is very wrong. This is the result of gov meddling in pte pty business, which, by right, should affect only the top 20% of the society. Gov has created an illusion that pte pty is accessible to the majority of population. Now he has to maintain that illusion for the gen Y/Z's.
One problem is sometimes we really segregate the roles of Govt, developers, buyers, sellers, public.
Try the kelong method: the seller is also the buyer. The Govt is also (in part) the developers, or at least their backing force. The public is the Govt, as well as both the buyer and the seller. Everybody is the banker and the player.
Then you may have a slightly more enlightened view on the situation of the ABSD, and more likely to come to terms with it.
no I am not saying we are in a system of no rules. we are in a system with plenty of rules. the issue is, are we in a system where rules are transparent, fair, and consistent ? or are we in a system where rules are adhoc, unfair, and inconsistent ? If I (as developer) am operating in Malaysia, I would know fully well what kind of rules I am expecting, so I would have nothing to complain about. However I am operating in SG, a system known to be (more or less) free, fair , consistent, I expect the system to continue to be so. The principle of my argument is simply this: you should not apply new rules retrospectively, like what Malaysia always does. That is what a fair system is. Of course here it is a bit arguable whether it is "retrospective", as it is indirect. That's where the argument is about. Had it been direct, it would have been clear cut. The dispute is not whether "you greedy developers suck it up new rules". It is about the fairness of the system. Note the emphasis on "before". whatever land bought after the rules, developers have nothing to complain about.
Clearly this is something we all agree is wrong. Now look at what happens with perception of ABSD, in this very thread :
Look, ppl once again rely conveniently on gov "help" , without knowing it. This is the real problem. More often than not, it is the case where individuals are frequently asking gov for help, rather than business. Developers are not "asking gov to help", as what you put it. Developers are merely asking gov to be fair. Individuals on the other hand, are asking gov to hold the prices down so they can afford a pte pty. This mentality is very wrong. This is the result of gov meddling in pte pty business, which, by right, should affect only the top 20% of the society. Gov has created an illusion that pte pty is accessible to the majority of population. Now he has to maintain that illusion for the gen Y/Z's.
not sure why the complaints about government absd rules...if you noticed...most of the rules that our government introduced do take into account the impact on those who will be affected and will often exclude them or offer some sort of support....but sometimes they don't do it (for reasons only they will know)....it would be wrong to paint the perception that they consistently implement new rules that disregard existing stakeholders....
no government can be transparent, fair and consistent all the time...just not possible....truth is our government is already very pro-business...and i'm than happy to see them throw some sucker punches to property developers....in any case good companies will always factor in and manage regulation risk… so I don’t see any need to feel too sorry or unfair for the developers….the government have valid reasons to supress demand and it is also clearly what the general population wants…
if you still feel sore about application of rules retrospectively…get over it I say…it’s not going to harm the property developers much….makes things difficult but hardly going to bankrupt them….think about Singaporeans who have it much worse…our CPF minimum sum keep getting adjusted upwards….is that fair? why don’t the government exclude existing members of CPF when they change rules?…and what is wrong with having a system whereby Singaporeans have advantage over foreigners in purchase of property? I don’t see it as government holding down prices to ‘help’ singaporeans….singaporeans need the advantage because they live and work here….foreigners don’t give a hoot…just buy sell buy sell to extract maximum profit…how is that in long-term good for our country?
Property prices affects every singaporeans…it affects inflation, GDP, etc…I say it again…if the government didn’t meddle in private property business with cooling measures…we would have been in far worse state today…and when global recession comes…we would have no weapons/methods to revive the economy/property industry…and not right to blame the gen Y/Zs…if they work hard...why should they not aspire to own private property...and why only top 20% should own? where this figure come from...why don't we increase it to top 30% or 50%....or even reduce it to top 10%, 5% or 1%....why must be maintained at 20%?
thomastansb
19-10-15, 15:01
Of all examples, you use Malaysia. HAHAHAHAHAHAHA
If you know what I am laughing about.
no I am not saying we are in a system of no rules. we are in a system with plenty of rules. the issue is, are we in a system where rules are transparent, fair, and consistent ? or are we in a system where rules are adhoc, unfair, and inconsistent ? If I (as developer) am operating in Malaysia, I would know fully well what kind of rules I am expecting, so I would have nothing to complain about. However I am operating in SG, a system known to be (more or less) free, fair , consistent, I expect the system to continue to be so. The principle of my argument is simply this: you should not apply new rules retrospectively, like what Malaysia always does. That is what a fair system is. Of course here it is a bit arguable whether it is "retrospective", as it is indirect. That's where the argument is about. Had it been direct, it would have been clear cut. The dispute is not whether "you greedy developers suck it up new rules". It is about the fairness of the system. Note the emphasis on "before". whatever land bought after the rules, developers have nothing to complain about.
Of all examples, you use Malaysia. HAHAHAHAHAHAHA
If you know what I am laughing about.
I think you did not get my drift.
where this figure come from...why don't we increase it to top 30% or 50%....
the figure is from statistics, that roughly 80% of the households live in HDB. A result of natural selection, not by any "plan" or "program". I suppose that turns out to be the threshold of affordability. "Lowering that threshold so more ppl can afford pte pty" should not be Gov's job.
80% living in HDB...a result of natural selection?!
what the hell are you talking about?...so people living in hdb somewhat less evolved?!!
i hope you are just joking...
80% living in HDB...a result of natural selection?!
what the hell are you talking about?...so people living in hdb somewhat less evolved?!!
i hope you are just joking...
You missunderstand the point. The point is not everyone will live in Condo nor not every one will leave in HDB. The ratio does not matter. The mater is the ration will always be there.
proud owner
19-10-15, 23:31
this 5 yr rule only applies to listed companies (developers).
if FEO is the successful tenderer ... then they can take forever to sell , still no issue.
remember SC Global ? when they couldnt sell their projects by the 5th year, they got fined.
to prevent further fine, they delisted themselves.
challenger
20-10-15, 00:20
I think you did not get my drift.
the figure is from statistics, that roughly 80% of the households live in HDB. A result of natural selection, not by any "plan" or "program". I suppose that turns out to be the threshold of affordability. "Lowering that threshold so more ppl can afford pte pty" should not be Gov's job.
So what is the government's job? I would say ensure proper housing, healthcare, security, education, jobs, transport, etc for its citizens. Like most things, there is now a conflict. Housing versus jobs (business). The business we are talking about is that some developers are affected by property measures.Property investment is no longer lucrative, and foreigners may prefer countries like Australia. Due to this, the country lose valuable investment. companies like city development potentially losing out in the race.
On the flip side housing price has shoot up relative to wages. People may not have enough money after retirement. Also cost of doing business in sing is high, and 1 factor is housing price. You pay high property price, u will demand high rental. Expats n foreigners will suffer initially, but eventually businesses in Singapore will no longer be competitive. There is a lot more at stake. This is not yet the time to be soft.
challenger
20-10-15, 01:03
this 5 yr rule only applies to listed companies (developers).
if FEO is the successful tenderer ... then they can take forever to sell , still no issue.
remember SC Global ? when they couldnt sell their projects by the 5th year, they got fined.
to prevent further fine, they delisted themselves.
Condition is that if company is 100% Singaporean own, no need qc.
Has any developer paid the full extension charge of 8, 16 and 24%? If they are not confident, just set up subsidiary and sell to it at an extra cost of 15%. This is no secret.
this 5 yr rule only applies to listed companies (developers).
if FEO is the successful tenderer ... then they can take forever to sell , still no issue.
remember SC Global ? when they couldnt sell their projects by the 5th year, they got fined.
to prevent further fine, they delisted themselves.
There is a difference between ABSD and Qualifying Certificate
http://forums.condosingapore.com/showthread.php/18167-What-the-QC-and-ABSD-policies-mean-for-developers
Qualifying certificate
"This means that they need to obtain a QC in order to buy private land for development. Sites bought from the Government Land Sales (GLS) programme are exempted from the QC requirements."
ABSD
"Since late 2011, developers here have to develop any residential site they buy, and sell all the units in the new project within five years, or face paying the ABSD.
The ABSD applies to both GLS sites and private land, and both Singapore and foreign companies."
Since most land sales now are GLS, projects that would be hit by QC rules is running out. i think mostly CCR sites that were enbloc in the 2006-2008. In future, QC should be only applicable for non-GLS like enbloc sales.
ABSD would apply to ALL projects from now on.
The worst hit would be enbloc sales, they are hit by both QC and ABSD rules if bought by non-singaporean company.
so FEO as singaporean company would be exempt from QC rules, but not exempted from ABSD rules. so i dont think there is any point for FEO to buy new land for landbanking anymore. buy and launch new land. keep stock of old land that is bought before late 2011 for landbanking. my :2cents:
.....
I'd say those land bought before ABSD/severe cooling measures were announced has some grounds to argue for extension.
.....
After giving it some thought, perhaps your idea of time extension would be a remedy that is logical.
If govt say ABSD rules not applicable to old projects, the old projects would have price/profit margin advantage over new projects, up to 15% extra (worth of ABSD).
I dont think developer would price old projects lower than new projects just because they are not under ABSD and i definitely dont think they will pass the savings to consumers :)
If govt say ABSD rules are applicable to old projects, the new projects would have price/cost/profit margin advantage over old projects, up to 15% extra (worth of ABSD).
developers of new projects would have factor in the new rules and price their purchase of land accordingly.
How to balance the 2?
your idea of time extension is logical. However, ABSD is still overall negative for the old projects, especially in a stagnant/falling market simply because they had paid more for the land. In a rising market, nobody complains :)
well, can't satisfy everybody
The worst hit would be enbloc sales, they are hit by both QC and ABSD rules if bought by non-singaporean company.
so FEO as singaporean company would be exempt from QC rules, but not exempted from ABSD rules. so i dont think there is any point for FEO to buy new land for landbanking anymore. buy and launch new land. keep stock of old land that is bought before late 2011 for landbanking. my :2cents:
These are conditions that will cause corresponding strategies from developers and consumers. I suspect the clues can be gotten from examining the Normanton Park enbloc carefully.
山不转路转，石不转我转。
These are conditions that will cause corresponding strategies from developers and consumers. I suspect the clues can be gotten from examining the Normanton Park enbloc carefully.
山不转路转，石不转我转。
finally, something good comes out of our education system.
it teaches the art of "smoking", that supremely difficult art of saying nothing and looking intelligent while doing it
finally, something good comes out of our education system.
it teaches the art of "smoking", that supremely difficult art of saying nothing and looking intelligent while doing it
Say too much people pissed. Say too little people say you smoking.
If you read that thread, you will see my full prediction to the PSF.
The solution:
1. Helps house existing private home retirees
2. Mitigates high cost and quantum of private properties
3. Helps developers avoid or minimise QC and ABSD issues
4. Helps buyers see the inherent values in existing 90 year LH.
5. Intensify the land use for existing properties without the direct intervention of Govt.
There is no other way to go if developers and existing property owners hold on to their properties.
finally, something good comes out of our education system.
it teaches the art of "smoking", that supremely difficult art of saying nothing and looking intelligent while doing it
:D as usual hopeful style :D..
... and I'm glad you share my perspective.
So what is the government's job? I would say ensure proper housing, healthcare, security, education, jobs, transport, etc for its citizens. Like most things, there is now a conflict. Housing versus jobs (business). The business we are talking about is that some developers are affected by property measures.Property investment is no longer lucrative, and foreigners may prefer countries like Australia. Due to this, the country lose valuable investment. companies like city development potentially losing out in the race.
On the flip side housing price has shoot up relative to wages. People may not have enough money after retirement. Also cost of doing business in sing is high, and 1 factor is housing price. You pay high property price, u will demand high rental. Expats n foreigners will suffer initially, but eventually businesses in Singapore will no longer be competitive. There is a lot more at stake. This is not yet the time to be soft.
very balanced argument indeed :)
but even if all that you said is true, what does granting a few extensions for some old lands stop what you advocate ? The majority of the sites are not affected. You still get what you want. And at the same time, gov can once again demonstrate SG is a fair system, that new policies are not meant to be retrospective.
:D as usual hopeful style :D..
... and I'm glad you share my perspective.
We can definitely afford to be patient and wait at least for 19 Jan 2016 (deadline for Normanton enbloc) before we pass judgement on others.
Hillford has shown developers that buyers will take the offer (sold out in one day). What ABSD or QC issues will there be if there is a one day sellout?
So what is the government's job? I would say ensure proper housing, healthcare, security, education, jobs, transport, etc for its citizens. Like most things, there is now a conflict. Housing versus jobs (business). The business we are talking about is that some developers are affected by property measures.Property investment is no longer lucrative, and foreigners may prefer countries like Australia. Due to this, the country lose valuable investment. companies like city development potentially losing out in the race.
On the flip side housing price has shoot up relative to wages. People may not have enough money after retirement. Also cost of doing business in sing is high, and 1 factor is housing price. You pay high property price, u will demand high rental. Expats n foreigners will suffer initially, but eventually businesses in Singapore will no longer be competitive. There is a lot more at stake. This is not yet the time to be soft.
The explanation is make sense. But indirectly ABSD is also inflating the property price. Like it or not the buyer will consider ABSD and Stamp Duty as part of the property cost when they want to sell it or rent it.
From what i think increasing HDB supply next year is a big mistake. They should remain or reduce supply gradually.
From what i think increasing HDB supply next year is a big mistake. They should remain or reduce supply gradually.
If increase next year means the BTO flat will be built around 2021.
It's the right way forward for population planning and delinking public homes versus private homes.
HDB prices simply cannot be allowed to run away for long term govt stability.
These are conditions that will cause corresponding strategies from developers and consumers. I suspect the clues can be gotten from examining the Normanton Park enbloc carefully.
山不转路转，石不转我转。
Just remembered our exchange. this elephant is getting old, so pardon for the fading memory.
http://www.straitstimes.com/business/normanton-park-collective-sale-interest-but-no-bids
What clues are gotten from your careful examination of the Normanton Park enbloc?
Does anyone knows how to check which developments are subjected to the Qualifying Certificate (QC)? Is it stated in the SNP document?
•Such developers are given 5 (five) years to complete construction and obtain TOP.
•Finish selling all units developed within 2 (two) years of the TOP date.
•Developer is not allowed to lease out any unsold units.
•Developer will need to pay extension charges for extension of TOP or for extra time to sell the remaining unsold units.
Just remembered our exchange. this elephant is getting old, so pardon for the fading memory.
http://www.straitstimes.com/business/normanton-park-collective-sale-interest-but-no-bids
What clues are gotten from your careful examination of the Normanton Park enbloc?
It's going to be a long journey I guess. I have to concede that market conditions remain tough at the moment, but let's be patient.
The point I was making in post#48 is enbloc sales will be hit by both ABSD and QC rules if bought by non-Singaporean company. Developers would rather buy from GLS since only ABSD rules applies.
And FEO also won't be landbanking new land since ABSD rules apply for both enbloc and GLS unless they want to get hit by a one time payment of ABSD. They, like other developers would buy and sell new land within a span of 5 years, no more holding it for generations. They would however hoard their old lands like a miser hoard his money.
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