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Subscribe to this list via RSS Blog posts tagged in Re-Ballot

Bellewaters-re-balloting-exercise.original.jpg

Chinese developer Qingjian Realty conducted a re-balloting exercise for 10 units at its fully-sold Bellewaters executive condominium (EC) in Sengkang last Saturday (8 April).

The 651-unit project comprises three- to five-bedroom units with sizes ranging from 926 sq ft to 1,528 sq ft. It is expected to be completed by this quarter.

PropertyGuru understands that a mix of unit types were resold and demand was particularly strong. “The ballot units were more than four times oversubscribed with a total of 43 applications,” said Yen Chong, Deputy General Manager at Qingjian Realty.

“These units became available when the original buyers did not meet the eligibility requirements (of the Housing and Development Board) for an EC purchase,” she noted, without going into specific details.

One industry expert who chose to remain anonymous, said that in such cases, a change in family nucleus is the main contributing factor. This could be due to the breakup of an engagement, divorce or death of a family member, with the first two scenarios being the most common reasons. Thus, they must pay a five percent cancellation fee, down from 20 percent in 2013.

Calling it a common issue faced by EC developers, the source added: “The developer will have to actively re-market such units to avoid incurring the Additional Buyer’s Stamp Duty (ABSD).”

Under the ABSD rules introduced in December 2011, developers must build and sell all units at their projects within five years of acquiring the sites. Failure to do so will incur a 10 percent levy on the land price, plus a five percent interest. Subsequently, the levy was increased to 15 percent for sites purchased from January 2013 onwards.

Alvin Tan, Executive Director of Local Projects at PropNex International, said that in some instances, the affected units could be resold at higher prices, but this depends on which stage the units were released for sale.

“If it is just after launch, it could be sold at launch price. If sales are good, the price would possibly be higher. Only when the project is nearing completion are developers maybe under pressure to offload the units, which could possibly see some discounts coming in,” he said.

Qingjian would not disclose pricing details for the re-balloting exercise, but URA Realis data shows that the total median transacted price of units at the 99-year leasehold project is $795 psf

Credits: Propertyguru.

 

 

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Should local players be scared?

According to BNP Paribas, in the past few years, it has seen foreign developers, especially the Chinese developers, making an effort to gain market share, possibly for scale effect, and for beefing up their pipeline to sustain their business operations in Singapore.

Here's more:

Since the recovery in 2009, more foreign developers have entered the land market to compete against local developers. While they may have contributed to the property market in terms of fresh development ideas and product diversity, their presence has in no doubt heated up competition for land. Based on SLP studies, foreign players' participation rate has increased from 8% in 2009 to 26% in 2013.

Before 2009-10, foreign developers were mainly from Malaysia such as IOI Properties (IOIPG MK), SP Setia (SPSB MK) and Sunway (SWB MK), and from Hong Kong such as Cheung Kong Holdings (1 HK) and MCL Land. Since then, we have seen more Chinese developers entering the market, such as Qingjian (not listed), MCC Land, Hao Yuan and Kingsford Development.

Although relative newcomers as developers, some of them (such as Qingjian and MCC Land) are familiar with the Singapore property market, and have operated here for over a decade as construction companies.

Different approaches of participation

Foreign developers adopt various approaches when investing in the Singapore land market. Japanese players tend to participate in joint ventures with local developers.

For example, Mitsui Fudosan (8801 JP) has a JV with Hong Leong via TID. Mitsubishi Estate (8802 JP) has a long standing partnership with CapitaLand, while Sekisui House (1928 JP) with Fraser Centrepoint and Far East. We also see Malaysian developer, Sunway, teaming up with local Hoi Hup (not listed), while more recently China Vanke entered the Singapore land market by partnering with Keppel Land.

Hong Kong players such as Cheung Kong and MCL Land (part of Hong Kong Land group) tend to participate on their own, as do most Chinese players such as Qingjian, MCC Land, Hao Yuan and Kingsford.

Credits: Singapore Business Review

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