LEEDON RESIDENCE – PAYMENT SCHEMES
Deferred payment schemes have been catching on with property developers, with two more offering the option in a bid to move units.
The DPS seems to work for projects that are subjected to QC extension charges. The DPS was abolished in September 2009 in the first in a series of property cooling measures. However, at the time, the scheme was offered by developers mainly for projects under construction.
In its current reincarnation, the DPS is offered for projects that have already obtained a TOP and Certificate of Statutory Completion, which means the developments are no longer under the Controller of Housing. Any scheme offered by the developer after CSC — whether sales rebate, furnishing package or DPS — is considered a resale or private treaty deal between the developer and the buyers, explains Savills’ Cheong.
Developers are therefore motivated to complete their projects. One example is listed property group United Industrial Corp (UIC), which has three projects under construction: the 429-unit Alex Residences in Alexandra, the 106-unit Pollen & Bleu on Farrer Drive and the 109-unit Mon Jervois on Jervois Road. Alex Residences is scheduled to be completed in February 2017.
As the sites were purchased under the Government Land Sales programme, they are not subjected to QC conditions. However, the developer will be subjected to a 10% ABSD at the end of the five-year ABSD remission period if there are unsold units in the three projects.
“Our priority is to push for completion — TOP and CSC — so buyers will be able to see and appreciate the completed project before committing to a purchase,” says Michael Ng, group general manager of UIC. Mon Jervois still has 50 unsold units, while 90 units are still available at Pollen & Bleu. At Alex Residences, there are still 171 unsold units. “After TOP, CSC and legal completion, we will have the flexibility of providing more flexible sales terms such as those that are now in the market,” adds Ng.
Teambuild Land, the property development arm of Teambuild Construction, is also looking at a similar strategy and pushing for the completion of its 58-unit Singa Hills development on Jalan Singa, off Bedok Reservoir Road. So far, there are 28 unsold units in the project, which is subjected to both QC extension charges and a 15% ABSD. For now, the developer is offering a 10% discount for selected units. “Once we have obtained legal completion, we will explore various means to sell the remaining units, including some form of DPS,” says Richie Chew, executive director at Teambuild Land.