Creative schemes to move unsold units

[jwong71]

http://www.theedgeproperty.com.sg/content/creative-schemes-move-unsold-units
By Feily Sofian / The Edge Property | April 5, 2016 6:55 PM MYT

[Amber Woods]

By Feily Sofian / The Edge Property | April 5, 2016 6:55 PM MYT


One developer gets creative to clear its unsold units. According to market sources, OUE is offering two payment schemes for its OUE Twin Peaks project on Leonie Hill Road.

Under the first scheme, also referred as the delayed payment scheme, buyers can put down a 20% down payment and exercise the option by December 30, 2016. Buyers who are subjected to ABSD payment stands to benefit if the Government tweaks the ABSD requirement by then.

http://s3-ap-southeast-1.amazonaws.com/www.theedgeproperty.com.sg/s3fs-public/editorial/Schemes-01.jpg

The second scheme, similar to a deferred payment scheme, allows buyers to put down a 20% down payment and pay the balance 80% two to three years later. Buyers have to exercise the option within two weeks and collect the key to the unit by paying an additional $2,000. They will also pay the typical stamp duty plus ABSD where applicable.

In addition, buyers will enter into a private treaty with the developer to pay the remaining 80% two to three years later. In the meantime, they are allowed to occupy or rent out the unit.

Buyers can delay interest payment under the second scheme. At the same time, they can continue earning interest on their CPF or invest their rental income. Buyers who are currently constrained by TSDR or LTV requirements can also take advantage of this scheme while they dispose other properties or accumulate more cash to pay the balance 80% of payment.

The second scheme has one drawback. According to market sources, the developer is extending a 15% discount off the listed price under the first scheme but only 12% discount under the second scheme.

http://s3-ap-southeast-1.amazonaws.com/www.theedgeproperty.com.sg/s3fs-public/editorial/Schemes-02.jpg

The two schemes are possible as OUE Twin Peaks has obtained the Certificate of Statutory Completion (CSC). The project received its Temporary Occupation Permit in February 2015. Based on this, the developer has until February 2017 to finish selling all the units to avoid paying extension charges.

As at September 2015, there were still 392 unsold units in the development. The 99-year leasehold project has a total of 462 units on two towers. Units in the project are on the market fully-furnished.

Upon obtaining CSC, developers are not required to report their sale status to the Controller of Housing. Based on caveat record, there have been four transactions from October to date.

Two of these transactions were lodged this year, both involving 570 sq ft units. One of the units, on 35th floor, fetched $2,918 psf. The other, on 14th floor, was sold for $2,629 psf. Anecdotal evidence showed prices have trended down. In May 2013, a 570 sq ft unit on the 16th floor changed hands for $2,805 psf.

[Kelonguni]

Is like Uber helping buyers overcome financing regulations when buying new car, or car companies offering in house loans to help buyers loan more.

If nobody willing to support, such schemes will not exist.

[hopeful]

By right:
https://www.ura.gov.sg/uol/guidelines/residential-property/Home-Buyers/Sections/Option.aspx
"A licensed housing developer is required to use the standard form of Option to Purchase when selling units in a housing project.

The developer is required to seek approval from the Controller of Housing for any change to be made to the standard Option to Purchase. The standard Option to Purchase cannot be amended even by mutual agreement between the buyer and developer unless approval is given by the Controller of Housing."

So once project has acquired CSC status, not only
1) developers are not required to report their sale status to the Controller of Housing
2) developers can issue non-standard OTP. (from "The two schemes are possible as OUE Twin Peaks has obtained the Certificate of Statutory Completion (CSC)")

we learn something new everyday.
i can only bang my head for being stupid. I knew that sales from developer after TOP/CSC is considered as "Re-sales" instead "New sales" and developer need not report sales. However I did not extrapolate by being categorised as "re-sales" and not reporting sales, developer can ALSO issue non-standard OTP. It is no longer bound by certain sections of housing development act.

so to extrapolate further, this being a non-standard OTP, buyer from OUE for twin-peaks can now put their own name and/or nominee.
So those who chose scheme A can speculate within these 8 months before exercising OTP, can start flipping already :)

[MM Lovers]

By right:
https://www.ura.gov.sg/uol/guidelines/residential-property/Home-Buyers/Sections/Option.aspx
"A licensed housing developer is required to use the standard form of Option to Purchase when selling units in a housing project.

The developer is required to seek approval from the Controller of Housing for any change to be made to the standard Option to Purchase. The standard Option to Purchase cannot be amended even by mutual agreement between the buyer and developer unless approval is given by the Controller of Housing."

So once project has acquired CSC status, not only
1) developers are not required to report their sale status to the Controller of Housing
2) developers can issue non-standard OTP. (from "The two schemes are possible as OUE Twin Peaks has obtained the Certificate of Statutory Completion (CSC)")

we learn something new everyday.
i can only bang my head for being stupid. I knew that sales from developer after TOP/CSC is considered as "Re-sales" instead "New sales" and developer need not report sales. However I did not extrapolate by being categorised as "re-sales" and not reporting sales, developer can ALSO issue non-standard OTP. It is no longer bound by certain sections of housing development act.

so to extrapolate further, this being a non-standard OTP, buyer from OUE for twin-peaks can now put their own name and/or nominee.
So those who chose scheme A can speculate within these 8 months before exercising OTP, can start flipping already :)

But we still need to pay for selling stamp duty.

[bargain hunter]

By right:
https://www.ura.gov.sg/uol/guidelines/residential-property/Home-Buyers/Sections/Option.aspx
"A licensed housing developer is required to use the standard form of Option to Purchase when selling units in a housing project.

The developer is required to seek approval from the Controller of Housing for any change to be made to the standard Option to Purchase. The standard Option to Purchase cannot be amended even by mutual agreement between the buyer and developer unless approval is given by the Controller of Housing."

So once project has acquired CSC status, not only
1) developers are not required to report their sale status to the Controller of Housing
2) developers can issue non-standard OTP. (from "The two schemes are possible as OUE Twin Peaks has obtained the Certificate of Statutory Completion (CSC)")

we learn something new everyday.
i can only bang my head for being stupid. I knew that sales from developer after TOP/CSC is considered as "Re-sales" instead "New sales" and developer need not report sales. However I did not extrapolate by being categorised as "re-sales" and not reporting sales, developer can ALSO issue non-standard OTP. It is no longer bound by certain sections of housing development act.

so to extrapolate further, this being a non-standard OTP, buyer from OUE for twin-peaks can now put their own name and/or nominee.
So those who chose scheme A can speculate within these 8 months before exercising OTP, can start flipping already :)

oue very clever, support lippo to beat uob. lol.

[HP65]

oue very clever, support lippo to beat uob. lol.

There is another developer out there who is quietly offering the deferred payment scheme post obtaining CSC. The development offered has TOPed quite a while. They are very creative in offering schemes to move their units all these years :-)

[amk]

oue very clever, support lippo to beat uob. lol.


alamak, Lippo owns OUE !

[Kelonguni]

There is another developer out there who is quietly offering the deferred payment scheme post obtaining CSC. The development offered has TOPed quite a while. They are very creative in offering schemes to move their units all these years :-)

Deferred Payment Scheme is already not allowed.

Now is called Delayed Payment Scheme.

Already CSC.

Can normal (retail) sellers also offer such terms?

[HP65]

Deferred Payment Scheme is already not allowed.

Now is called Delayed Payment Scheme.

Already CSC.

Can normal (retail) sellers also offer such terms?

I meant it's similar to DPS. Too used to the term even after all these years. Thanks for the correction.

Of coz retail sellers can do that...if you are rich enough. Also, in the landed market, this is a common practice for unlicensed developers to just collect 10/20% and the rest upon top. In a way, it's kinda like DPS

[bargain hunter]

alamak, Lippo owns OUE !

that's the point mah. they r clever, deserve to win haha.

[bargain hunter]

There is another developer out there who is quietly offering the deferred payment scheme post obtaining CSC. The development offered has TOPed quite a while. They are very creative in offering schemes to move their units all these years :-)

who else has done it before/still doing it?