Developers may use incentives to boost sales
by Wong Siew Ying 04:46 AM Dec 15, 2011
SINGAPORE – Property developers are likely to offer incentives to draw in buyers and boost sales amid tighter regulations by the Government and a slowdown in the economy, according to analysts.
Singapore imposed unexpectedly last week a second round of cooling measures this year, a move described by analysts as harsh. The most recent measures impose an additional stamp duty on property purchases by foreigners and on locals seeking to buy multiple residential units.
“If transaction volumes were to decline and sustain into 2012, then prices are expected to be affected,” said Dr Chua Yang Liang, research head at Jones Lang LaSalle. Mr Chua has forecast a decline of between 10 and 15 per cent, with prices for high-end properties to suffer the most with an expected drop of 20 per cent.
Analysts expect new private homes sales to fall to between 15,000 and 16,000 units this year from nearly 16,300 units last year. Sales volume for next year is likely to dip further to fewer than 14,000 units.
To mitigate the impact of the cooling measures, developers may start offering incentives.
“They may have to even align their prices to move sales or look at incentives,” said Ms Chia Siew Chuin, director of research and advisory at Colliers International. These may include “extending rebates by using discounts or even absorbing stamp duty on behalf of buyers or extending other kinds of incentives not only to buyers but also to agents to help them move sales”.
Still, developers will have to continue to launch new projects, especially those in the suburban areas mainly because “the Government sales of sites that have been launched in the last 24 months will have to come into the market. They have to do it now as these are on 99-year leases”, said Mr Donald Han, vice-chairman at Cushman & Wakefield.
As such, developers are likely to be more measured in their land bids next year, and prices for sites that are less attractive could dip by some 10 to 12 per cent, analysts that MediaCorp spoke to said.
Source : TODAYonline – MediaCorp Press Ltd’s copyright
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