I Wouldn’t Count Too much on ABSD-related discounts this year…
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Ryan J
- June 30, 2024
- 4 min read
4 min read
I wouldn’t count too much on ABSD-related discounts this year.
If you’ve never heard of it, an ABSD discount is when a developer comes close to its five-year deadline for completing and selling 90 per cent of the units. If they can’t manage it within this time frame, they pay a hefty sum based on the outstanding units (right now developers pay ABSD of 40 per cent on the land price, of which 35 per cent is remittable if they meet the deadline).
So when a developer has just a handful of units left, and the ABSD is around the corner, that’s when buyers start to circle around and watch for fire sales. But for anyone looking for an opportunity this year, I’d say don’t hold your breath.
44 projects which had a deadline between ‘21 and ‘23 were given an extension, on a case-by-case basis. But this has led to a number of questions on the ground: why were some of these projects given extensions, whereas others weren’t?
A good reason for keeping things opaque
The general response to inquiries over the extensions has been “due to extenuating circumstances” or “site-specific delays.” Which doesn’t really answer anything. Also, you’ll notice that it’s quite hard to find the names of the 44 projects, or any of the announcements that they were seeking extensions in the first place.
Some people have argued that it’s unfair to keep all this information opaque: from reasons such as “buyers have a right to know,” to making sure the system is fair. But I have an inkling that the information on this – just like information on why some people are allowed to sell their flats before MOP, is kept obscure for a reason.
Case-by-case is a sensitive thing: once you grant an extension or a reprieve for a “case,” a few dozen – or perhaps a few hundred – people will rush up claiming their situation is similar.
Grant one developer an extension because a subcontractor went bankrupt, and suddenly five or six others may come banging on the door saying one of their sub-cons went bust as well, so now they need a six-month extension too. And pretty soon, the relevant government agencies are swamped with trying to provide justifications as to why some cases are more valid than others.
So it’s just a necessity that, when it comes to real estate, not everything is too out in the open; and we can’t expect too many specifics on why a developer was granted an extension.
That being said, there’s something inherently unfair about ABSD-related discounts anyway
If you want another example of why the rich get richer, ABSD-related discounts are the perfect example. You see, it’s quite rare for the average Singaporean to benefit from these, whereas the affluent can get huge discounts from them.
For starters, the last units left tend to be the very high quantum units; the penthouses or premium stack units, which aren’t moving because of their $5 million+ price tags. This is not something the average person can afford even with the discount – so it means that, while the richest buyers can wait around for these to have a 10, 15, or even 20 per cent discount, the average buyer doesn’t have the means to seize these opportunities.
The other reason is that developers aren’t inclined to give discounts to buyers of individual units. If there are seven units left, what’s the use of discounting them when the developer may end up selling just four or five, and still get hit by the ABSD anyway?
More often, the developer would rather sell all the remaining units to one affluent buyer (or group of affluent buyers), at a steep discount. Once again, not an opportunity for the average Singaporean – but a huge win for the more affluent buyers.
Meanwhile in other property news…
- Want a gigantic 2,650+ sq. ft. freehold apartment that can serve as an intergenerational asset? Here are some options.
- Last call for these new launch condos, which are on the verge of selling out. If they’re on your shortlist, move fast.
- Can you imagine having a home that you just…leave empty for seven whole years? Some Singaporeans apparently will do it while abroad.
- Should you rent out your HDB, to get money to rent a condo? Here’s a look at the details involved.
Weekly Sales Roundup (17 June – 23 June)
Top 5 Most Expensive New Sales (By Project)
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | TENURE |
| WATTEN HOUSE | $6,026,000 | 1851 | $3,255 | FH |
| KLIMT CAIRNHILL | $5,508,000 | 1432 | $3,847 | FH |
| TEMBUSU GRAND | $3,468,000 | 1432 | $2,422 | 99 yrs |
| J’DEN | $3,062,000 | 1259 | $2,431 | 99 yrs (2023) |
| 19 NASSIM | $3,062,000 | 926 | $3,308 | 99 yrs (2019) |
Top 5 Cheapest New Sales (By Project)
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | TENURE |
| TEMBUSU GRAND | $1,352,000 | 527 | $2,563 | 99 yrs |
| LENTOR HILLS RESIDENCES | $1,385,000 | 581 | $2,383 | 99 yrs |
| LENTORIA | $1,491,000 | 732 | $2,037 | 99 yrs (2022) |
| HILLHAVEN | $1,500,786 | 678 | $2,213 | 99 yrs (2023) |
| THE LANDMARK | $1,515,000 | 495 | $3,060 | 99 yrs (2020) |
Top 5 Most Expensive Resale
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | TENURE |
| THE SOVEREIGN | $8,600,000 | 3305 | $2,602 | FH |
| N.A. | $6,300,000 | 2874 | $2,192 | FH |
| HILLTOPS | $4,600,000 | 1550 | $2,968 | FH |
| THE SEAFRONT ON MEYER | $3,930,000 | 1604 | $2,450 | FH |
| THE RESIDENCES AT W SINGAPORE SENTOSA COVE | $3,312,000 | 1948 | $1,700 | 99 yrs (2006) |
Top 5 Cheapest Resale
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | TENURE |
| KINGSFORD . HILLVIEW PEAK | $750,000 | 517 | $1,452 | 99 yrs (2012) |
| THE GALE | $855,000 | 689 | $1,241 | FH |
| NEEM TREE | $878,000 | 506 | $1,735 | FH |
| SUITES AT BUKIT TIMAH | $890,000 | 517 | $1,723 | FH |
| THE INFLORA | $910,000 | 743 | $1,225 | 99 yrs (2012) |
Top 5 Biggest Winners
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | RETURNS | HOLDING PERIOD |
| THE SOVEREIGN | $8,600,000 | 3305 | $2,602 | $4,000,000 | 14 Years |
| CHILTERN PARK | $1,850,000 | 1270 | $1,457 | $1,350,000 | 21 Years |
| GARDENVISTA | $2,138,800 | 1130 | $1,892 | $1,348,800 | 18 Years |
| HIGHGATE | $1,850,000 | 1227 | $1,508 | $1,255,000 | 17 Years |
| 8 @ MOUNT SOPHIA | $2,460,000 | 1421 | $1,731 | $1,244,288 | 19 Years |
Top 5 Biggest Losers
| PROJECT NAME | PRICE S$ | AREA (SQFT) | $PSF | RETURNS | HOLDING PERIOD |
| HILLTOPS | $4,600,000 | 1550 | $2,968 | -$1,935,442 | 17 Years |
| THE LAURELS | $1,380,000 | 549 | $2,514 | -$146,769 | 14 Years |
| DUO RESIDENCES | $1,228,000 | 538 | $2,282 | -$122,000 | 11 Years |
| THE ROCHESTER RESIDENCES | $1,400,000 | 1023 | $1,369 | -$93,973 | 17 Years |
| URBAN VISTA | $1,760,000 | 1485 | $1,185 | -$79,352 | 11 Years |
Transaction Breakdown
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