The move will boost transparency on home prices, say industry players.
This is one of the changes contained in the Housing Developers (Control and Licensing) (Amendment) Bill - which will be tabled for its second reading at a future Parliament seating.
The Ministry of National Development said yesterday: "The...amendments to the Act will further enhance protection of home buyers and promote transparency in the property market. These amendments have taken into consideration feedback from the general public, as well as developers, property agents, property consultants, solicitors and other real estate professionals."
The changes will empower the Controller of Housing to require developers to submit to it information on sales transactions in their projects such as the purchase price and agreements (for instance by a developer to reimburse a buyer for stamp duty paid on his purchase). The Bill will also allow the controller to publish the information or use it for compilations, analysis, research studies or surveys.
Developers already submit monthly sales data on their projects (including prices of units sold) based on options granted, to the Urban Redevelopment Authority, which then releases the data on the 15th of the following month. However, the prices captured in this exercise would typically not reflect the incentives which have not been received by the buyers at the point when they were granted the option - such as reimbursement of stamp duty (usually given after it has been paid by the buyer), a furnishing voucher, or even an expensive artpiece.
Such incentives may be given by the developer to the buyer only when the option is exercised several weeks later or even much further down the road, such as when the project has been completed, say agents. As a result, some of the developers' sale prices being submitted to URA each month and also reflected in caveats may be inflated. With such data fed into URA's private home price indices, this would mean that the indices may not reflect true property values.
Analysts reckon that when the new rules take effect, URA's price indices could take a downward adjustment.
A property consultant suggests URA could ask developers to adjust price data for units they have sold since the start of 2012. "Stamp duty absorption and other soft discounts became more popular again after the first round of additional buyer's stamp duty was introduced in December 2011. Such a refinement would allow us to see whether prices actually dipped around Q1 last year," he added.
Market watchers agreed that the impending change will promote greater transparency in the property market. With the end of this form of "price protection", the true property values will be made public and valuations would come down, said one property agent who declined to be named.
In addition to enabling URA to collect and publish more comprehensive and timely information on transacted prices of private homes, amendments to the Bill will also regulate the set-up of showflats, to ensure greater accuracy in developers' representation of housing units offered for sale. Moreover, the criteria for granting licences to housing developers will be tightened.
"For example, a licence will not be granted to a developer company with a director who has been convicted of, or has served a sentence of imprisonment for, a fraud or dishonesty-related offence in or outside Singapore within a period of five years before the date of the licence application," MND said.
As the fine amounts in the current Act were set in 1965, the Government is proposing to increase the fine amounts five-fold to sustain the deterrent effect.
"The amendment will also allow offences under the Act and subsidiary legislations to be compounded," MND added.
Source: Business Times –7 February 2013
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