SINGAPORE (June 5): Singapore homebuyers will drive harder bargains in an already depressed housing market as new rules that require developers to disclose discounts and other perks unmask the actual value of properties for sale.<\/p>\n
Starting Friday, the Urban Redevelopment Authority will publish weekly net prices on home transactions that will take into account incentives and rebates, such as those for stamp duties, to improve transparency.<\/p>\n
\u201cIt will give homebuyers more bargaining opportunities,\u201d said Donald Han, managing director at real estate broker Chesterton Singapore Pte. \u201cBuyers are already asking for more perks, so this gives them additional information that they can use to negotiate a better price.\u201d<\/p>\n
Hefty furniture rebates became the subject of a S$181 million (RM499 million) lawsuit in November after United Overseas Bank Ltd. claimed it was a \u201cvictim of a conspiracy\u201d and handed out larger-than-permitted housing loans after some buyers at the luxury Marina Collection on Sentosa island didn\u2019t declare perks that cut prices by as much as 34%.<\/p>\n
Now, freebies such as luxury goods vouchers, jewellery and furniture used to entice homebuyers will be made public. Home sales dropped to a six-year low last year, while prices fell for a sixth straight quarter in the three months ended March 31, the longest losing streak in more than a decade.<\/p>\n
Developers hard pressed to sell apartments have been peddling offers such as discounted prices on select units for a short time period, known as \u201cstar buys,\u201d while others offer furniture rebates or luxury-goods vouchers amounting to about 1% to 2% of the transaction value.<\/p>\n
While developers will be able to adjust their marketing because of the more detailed price information from competitors, they won\u2019t lower prices indiscriminately, said Chia Siew Chuin, director of research and advisory at broker Colliers International.<\/p>\n
Home sales have been hurt by the government\u2019s campaign to cool property prices in Asia\u2019s second-most expensive housing market. Measures since 2009 include a cap on debt repayment costs at 60% of a borrower\u2019s monthly income and higher stamp duties and real estate taxes.<\/p>\n
\u201cDevelopers will become more competitive when everyone\u2019s discount is disclosed,\u201d said Xian Yang Wong, manager of research and consultancy at property brokerage OrangeTee, who estimates the discounts range between 10% and 15%. It \u201cwill be good for the market.\u201d<\/p>\n
UOB was approached by agents to provide housing loans for 38 units at the Marina Collection. Of these, 37 have defaulted. The bank accused Indonesian tycoon Mochtar Riady\u2019s Lippo Marina Collection Pte of being the main beneficiary along with seven others from the sale of apartments at the 124-unit condominium.<\/p>\n
The developer said in court papers such rebates are a \u201ccommon sales\u201d strategy and denied deceiving the bank. Lippo said it wasn\u2019t involved in financing of the units and UOB\u2019s decision to grant loans should be based on its own checks. UOB\u2019s lawyer Eddee Ng declined to comment.<\/p>\n
Lippo said it dealt with the buyers only through the property agent who asked for discounts in the form of furniture rebates. The developer agreed to give rebates of between 25% and 34% to promote the sale of units, adding that this was a \u201cfairly common sales and marketing strategy.\u201d<\/p>\n
\u201cIt is for UOB to answer for how it ended up granting loans totalling more than S$181 million to customers who do not seem to have had the ability to repay these loans,\u201d Siraj Omar, Lippo Marina\u2019s lawyer said.<\/p>\n
Developers have been reporting net prices on monthly sales since 2013. Failure to comply with the reporting rules may include license revocation and suspension. Other new rules in the Housing Developers Bill may include a maximum fine of S$100,000 and a jail term for as long as three years.<\/p>\n
\u201cURA is just filling the gap in the reporting,\u201d said Alan Cheong, a Singapore-based director at broker Savills Plc. \u201cThere is this suspicion that developers are giving out hefty discounts, but it\u2019s not true. Those are one-off cases.\u201d<\/p>\n
The latest rules will force developers to price the homes competitively when they start marketing new projects, said Alice Tan, Singapore-based head of consultancy and research at brokerage Knight Frank. She estimates discounts will range from 3% to 8%.<\/p>\n
\u201cIn light of the weak market, developers need to get the price right at the start, in order to garner immediate interest from buyers,\u201d Tan said.<\/p>\n
*TheEdgeproperty<\/p>\n","protected":false},"excerpt":{"rendered":"
SINGAPORE (June 5): Singapore homebuyers will drive harder bargains in an already depressed housing market as new rules that require developers to disclose discounts and other perks unmask the actual value of properties for sale. Starting Friday, the Urban Redevelopment Authority will publish weekly net prices on home transactions that will take into account incentives …<\/p>\n