Year's first condo comes with 7% price cut

The average price for units at Q Bay Residences - the first private condominium launch for 2013 - has dipped 7 per cent in response to the new property cooling measures introduced last Friday.

From an originally planned price of $1,050 per square foot per plot ratio (psf ppr), the developers, a consortium of Frasers Centrepoint, Far East Organization, and Sekisui House, launched the 630-unit residential project at an average of $985 psf ppr at its preview sale yesterday.

This translates to about $525,000 for the smallest 527 sq ft one-bedroom unit and $1.7 million for the largest 1,981 sq ft five-bedroom unit.

The price takes into consideration the maximum possible discount - a 15 per cent early bird discount as well as a 7 per cent stamp duty discount to cushion the additional buyer's stamp duty (ABSD) imposed on Singaporeans who purchase their second and subsequent home, and permanent residents (PRs) who purchase a home here.

Home buyers can choose to either take the 7 per cent as an upfront discount or as a rebate.

According to property agents, the price change is necessary to attract buyers amid uncertain market conditions as a result of the tighter regulations imposed by the government.

Singaporeans previously did not pay ABSD even on their second home purchase. But with the new measures, they will have to pay 7 per cent ABSD.

For their third and subsequent home purchase, they previously paid 3 per cent ABSD, which has now been raised to 10 per cent.

PRs, too, who were previously exempt from ABSD for their first home purchase will now have to pay 5 per cent on their first purchase and 10 per cent on their second and subsequent home purchase.

Thus, developers are bracing themselves for a 20-25 per cent dip in volume of sales as a result of third-time buyers being deterred due to the steeper ABSD.

However, Cheang Kok Kheong, CEO of Frasers Centrepoint Homes, said: "I think the measures are a wise move by the government because although it affects us as far as the third-time home buyers are concerned, it is a very good time for new home owners and the real upgraders to purchase a property."

Speaking at a press briefing at the Q Bay Residences showflat yesterday, Mr Cheang also shared his projections for the property market this year.

"It is likely that prices for mass and mid-tier condos will drop by 5-7 per cent this year, and higher-end condos that depend more on foreigners see a drop of 10-15 per cent in price."

Mr Cheang also added that with the new restrictions imposed on permanent residential households, the PRs are likely to shift their demands away from the HDB sector towards private residences.

"The PRs anticipate more restrictions, so the first home they buy, they might as well start with a two to three bedroom condo."

The new property rules recently introduced mandate that PR households be disallowed from subletting their entire HDB flats and PRs owning HDB flats must sell their flats within six months of buying a private residential property in Singapore.

Although a sizeable proportion of PRs are expected to purchase units at Q Bay Residences, Elson Poo, general manager of marketing and sales, Frasers Centrepoint Homes, said that the majority of those who have indicated interest are new home owners and families looking to upgrade from their current HDB apartments.

Furthermore, since the 99-year leasehold development at the junction of Tampines Avenue 1 and Tampines Avenue 10, is the first private condominium to be launched in Tampines in the last two years, the developers are optimistic that demand will be strong.

With a total of 11 different unit configurations such as one bedroom, two bedroom, Trio, and four bedroom verandah units, the development aims to cater to a wide profile of potential home owners.

The Trio units allow for inter-generation homes which basically sees one or more bedrooms that come together with an adjoining studio apartment under a single strata title to allow for three generations of a family to live together.

"Q Bay Residences has the highest percentage of Trio units among Frasers Centrepoint Homes' developments to-date and we expect strong demand for the Trio units as the idea of multi-generational families living together continues to become more viable and prove popular," said Mr Cheang.

Source: Business Times –18 January 2013


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