What about the Change?
To start with and for the purpose of clarity as you go through this brief but informative article, ASBD stands for:
B – BUYERS.
S – STAMP.
D – DUTY.
ASBD stands for additional buyers stamp duty remission. This concept is critical to the survival of developers in the residential market. The grace period is for just five years within which every developer is expected to complete the development and subsequent sale of land they have purchased. This change will have a great on Singapore Condo units.
Another five years is around the corner when the rules as laid down by the ASBD will be enforced on every land developer that fails to measure up with laid down prospects and rules.
A lot of survival strategies will be put in place in this war to beat ASBD. The rules are clearly spelt out. For purchases made between December 8th 2011 and January 11th 2013, the indebtedness is 10% even if only one unit was left unsold.
If the purchase falls within the period after January 12th 2013, the charge of 15% applies to all unsold purchases. A 5% interest rate per annum also applies.
So you can clearly see the reason why one can conveniently predict that land developers will do everything within their capacity to up sales so to beat the deadline. Developers with fewer units will without any ado give out big discounts to escape the sanction of ASBD; that is very predictable.
In the light of the above, developers who have fewer units left are more like to pull through and hence, they are the more aggressive in making irresistible discounts in a bid to clear the backlog that is on ground. They have brighter chances of pulling through with this Condo sales.
There may be some wisdom in the adage that it is not over except it is over for developers with large volumes of unsold units. They fall within what is called borderline in the real estate sector. Such developers should get the best sales through discount and thereby minimizing units that will be purchased through Investment Company. Some of the property units that will feel the impact of the changes include Thomson Impressions and Pollen & bleu.
Every business venture comes with its own risks. For the Singapore condo market, it comes when the five year time limit of ASBD is around the corner. But even through this, there is a way out.