Condo narrowly escaped $48.5 mil ABSD with discounts
By Feily Sofian
/ The Edge Property |
Bartley Ridge narrowly escapes the punitive additional buyer's stamp duty. The developer would have to fork out around $48.5 million of ABSD if it cannot sell all the units in the project by mid-January 2017.
The 868-unit Bartley Ridge still had two penthouses remaining unsold as at end-October, but they found buyers in November based on caveats lodged. Developers have to pay ABSD on land price if they fail to sell all their units within five years from the land acquisition date. Even if the project is left with one unsold unit, the full amount of ABSD would apply.
The two remaining penthouses at Bartley Ridge were transacted at discounted prices. The bigger unit, spanning 1,345 sq ft on the 18th floor, was sold at $1.34 million, or $996 psf. It was the only unit within the development that sold below $1,000 psf.
The smaller penthouse spanned 1,313 sq ft and located on the 17th floor of another block. It also fetched $1.34 million, or $1,019 psf, a slight discount relative to other penthouses of similar sizes in the project which changed hands at an average price of $1,059 psf.
Bartley Ridge was developed by a consortium comprising City Developments (CDL), Hong Leong Holdings and TID Residential. Completed this year, the project is a stone’s throw away from Bartley MRT station of the Circle Line and within 1 km of popular primary schools including Maris Stella High School and Paya Lebar Methodist Girls’ School (Primary).
The ABSD for land acquisition is computed based on 10% of the land price if the developer purchased the land between Dec 8, 2011 and Jan 11, 2013, and 15% if it purchased the land on or after Jan 12, 2013. A 5% interest rate per annum will also be levied. The Bartley Ridge site fetched $388.1 million in a state tender, or $495 psf per plot ratio. It was awarded to the developer on Jan 16, 2012.
We understand that Echelon condominium on Alexandra Road is not subject to ABSD, although the site was awarded to the developer on Dec 8, 2011. The site fetched $396 million, or $754 psf per plot ratio, in a state tender that closed on Dec 6, 2011. There are still two unsold units in the project. The 508-unit development by CDL, Hong Leong Holdings and Hong Realty is a short walk from the Redhill MRT station.
Separately, CDL has also sold the last two units at Jewel @ Buangkok in October. CDL would have to shell out $37.6 million of ABSD if it fails to sell all the units in the development by June next year.
The remaining units, both 1,421 sq ft in size, were located on the 10th and 12th floor. They fetched $1,218 and $1,220 psf respectively in October. The prices reflected a slight discount as lower floor units of the same stack and comparable size were transacted at an average price of $1,233 psf. The 616-unit Jewel @ Buangkok is located next to Buangkok MRT station of the North-East Line.
CDL moved the last two units at Jewel @ Buangkok in October
In Tanah Merah, the developer of eCO condominium, is marketing the last eight of the 34 strata townhouses in the project. The ABSD for the project will be due in February 2017 and estimated to cost $43.2 million.
The remaining townhouses are attractively priced from $2.98 million, or $829 psf. In 2014 and 2015, six townhouses in the project commanded an average price of $1,302 psf.
Jointly developed by Far East Organization, Frasers Centrepoint and Sekisui House, the project offers five different residential types - condominiums, lofts, SOHOs, suites and townhouses. eCO is also one of the last few developments in which non-Singaporeans are eligible to purchase townhouses without having to get approval from the Singapore Land Dealings Approval Unit. The project is expected to be completed by 1Q2017.
The last eight of the 34 townhouses at eCO is on the market from $2.98 million, or $829 psf
Six more projects may potentially be impacted by ABSD in 1H2017. These are Kingsford Hillview Peak, Mon Jervois, Pollen & Bleu on Farrer Drive, Stratum in Pasir Ris, The Trilinq in Clementi and Vue 8 Residences in Pasir Ris. Among them, Kingsford Hillview Peak and Stratum have the least number of unsold units, totalling 18 and 14 as at end-November respectively.
Projects with a small number of unsold units would likely have the biggest incentive to offer attractive discounts. The discount will help speed up sales. At the same time, there is sufficient time for the developer to sell off all its units.
On the other hand, projects with a large inventory of unsold units might not complete selling their units even if they were to slash prices. They might also avoid buying back the units through an investment company as they would have to incur the conventional stamp duty charges and 15% ABSD on the individual units. These developers, as such, are likely to opt for paying the ABSD charges. Any discount offered will be simply to drive sales momentum, rather than avoid the ABSD and the discount rates are likely to be minimal to moderate.
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