When contemplating the investment of a real estate property, many considerations must be carefully evaluated. One of the most crucial factors is the location, particularly in Singapore. The right positioning can significantly impact a property’s value and future growth prospects. In Singapore, condominiums situated in central areas or near vital amenities such as schools, shopping centers, and public transportation hubs have shown a consistent increase in value. Areas like Orchard Road, Marina Bay, and the Central Business District (CBD) are some of the prime locations where property values have consistently demonstrated an upward trend. Not only do these areas offer desirable benefits, but their proximity to reputable schools and educational institutions also makes condos in these locations especially attractive for families. For those interested in investing in the real estate market and maximizing potential growth, it is crucial to monitor new condo launches. Keep yourself updated on the latest New Condo Launches for opportunities in highly sought-after areas.
The Ministry of National Development (MND) has recently announced revisions to the Additional Buyer’s Stamp Duty (ABSD) regime for licensed housing developers. These revisions, which will take effect on March 6, aim to encourage developers to undertake urban transformation developments, optimise land use, and rejuvenate older estates or adopt new construction technologies.
One major change to the ABSD regime is the extension of the remission timeline for developers undertaking complex projects from six to 12 months. This move is expected to benefit developers undertaking en bloc redevelopments, with a target of at least 700 units upon completion and 1.5 times the number of homes of the existing development. It will also apply to projects with complex technical or instructional requirements, such as those integrated with major public transport facilities.
Additionally, the revisions will also affect projects approved under the Strategic Development Incentive (SDI) scheme and projects aiming to achieve higher productivity targets through the adoption of new construction technologies, methodologies or practices. Under the new changes, projects falling under any of these four categories will receive a six-month extension, while projects that meet the criteria of more than one category will be granted a one-year extension. These changes will apply to all residential land acquired on or after March 6.
Currently, licensed housing developers purchasing residential redevelopment sites are subject to 5% ABSD upfront, which is non-remittable, and another 35% ABSD, which is remittable when the developer completes and sells all the units in the project within the five-year timeframe. These changes come on the back of revisions announced in February last year, which offered a lower clawback rate for residential developments with at least 90% of units sold.
CEO of PropNex Realty Ismail Gafoor believes that the extended timeline will give developers more flexibility and may help mitigate development risks to some extent. This will allow developers more time to sell units, especially for larger projects. Senior director of data analytics at Huttons Asia, Lee Sze Teck, also commented that the revisions will help boost the en bloc market, particularly for larger en bloc projects.
However, some industry experts believe that despite the proposed policy change, developers may still face challenges in selling their units due to other factors, such as buyer and seller negotiations. Managing Director of ERA’s capital markets and investment sales department Tay Liam Hiap believes that the policy change will come at an opportune time for older projects, such as Braddell View and Pine Grove, to explore en bloc opportunities. These projects, with expansive land areas, may yield some 2,000 new homes and may require more time to sell. However, Gafoor also notes that this policy change may not spark a revival in the en bloc market, as developers continue to be cautious due to high redevelopment costs, an influx of private housing supply, and potential policy risks.