In a market that has taken a hit by government cooling measures, property developers are finding that buyers are a rare commodity. It has put them in a position where they must now find creative ways to get unsold units off the shelves and into the hands of buyers. However, the criteria for who makes a potential buyer can be hard to follow. Developers need buyers with the following:
– A buyer who is able to afford the large cash down payment that new project units require.
– A buyer who is willing to fork over anywhere from 5% to 15% in Additional Buyer Stamp Duty.
– A buyer who isn’t bothered by the fact they will need to hang on to that property for 4 years if they wish to avoid having to pay the 4%-16% Additional Seller Stamp Duty.
– A Buyer who can pass the Total Debt Servicing Ratio requirements in order to obtain the percentage of loan to value limit desired.
– A buyer who had the courage to buy now in a market where property prices are now falling.
Most developers are probably in the same mind as buyers and sellers, that it is better to let a unit go for a lower price rather than get stuck with a unit later on. The problem is that developers don’t want to undermine confidence in the market at such a crucial time. They want to be generous, or at least fair, to those early buyers, especially the VIP clients or early bird buyers who purchased their units during a much better market at premium prices.

Ways to get Symphony Suites Buyers

If you want to get a look at the tactics that most Symphony Suites developers and their marketing agents are utilizing, all you need to do is spend a couple of days at the sales galleries. You will see things like this:

1. Markup/Discount
The way this works is, a developer will take their remaining unsold units and mark them up by 10% to 15%. They will then offer a 15% discount. Most people don’t want the hassle of looking at the past transactions of these projects so it will seem like a great deal.

2. Units labelled as “Star Buys”
Developers will take units that are less desirable and put them forth as a Star Buy. These units are usually ones that have not been sold or have been returned, have bad facing, unit numbers that are considered inauspicious, or have just been leftover for other reasons. One example of Star Buy offerings can be seen at Hillion Residences and Citron Residences.
A marketing agent may tell potential buyers that the Star Buys have just started for the current month or they will tell them that they are only valid for a very short period of time, like a weekend. A word of warning though! Don’t let temptation cause you to grab these time limited special offers without first checking the units recent transacted prices. You can then find out why these particular units have been deemed “special” to begin with.

3. Incentives to Buy Symphony Suites
A developer may go the route of creating a package deal, for example a unit and a car, or a free renovation, travel vouchers or furnishings. Developers use such gimmicks as a way to draw in buyers while managing to keep constant pricing levels.

4. Absorbing the Additional Buyers Stamp Duty Symphony Suites
A few developers will go the route of financing the buyer’s percentage of ABSD that they must pay. Developers will only reimburse this amount after completion of the sale.

5. Guaranteed Rental
For higher end condos the rental guarantee option is no stranger. An example is the NeWest mixed development that has offered an additional 10% discount for their commercial units. In some instances a buyer may be given the option of having a 7% plus 7% rental guarantee that will be payable in a two year time frame after the Temporary Occupation Permit.

6. Cash Rebates
Another way developers will try to draw buyers in is by offering cash rebates to their buyers. An example here would be Hillion Residences who has offered a 6% CASH REBATE ON TOP OF THE 4% discount already on offer. 3% will be given after the buyer exercised the option and the other 3% is given upon the conclusion of the Temporary Occupation Permit of the project. Basically, a buyer will be paying 14% for the unit’s down payment instead of the full 20%.

Discounts on Symphony Suites Condo Buyers

So what are the effects that these hidden project discounts have on the market?

1. Property Price Inflation
Cover warnings are reported to the SLA (Singapore Land Authority) by REALIS, URA and INLIS. The Singapore Real Estate Exchange (SRX) utilizes this data form the URA, along with major property agencies transacted sales. Neither the warnings nor the transactions reflect those different incentives that were used by a developer to gain a buyer for Symphony Suites Condo. Because of this the property prices that are being published, aside from any resale units, have been inflated.
Developers are required, under the Housing Developers Act, to report all incentives used. However, after the Temporary Occupation Permit is ended, a developer is able to clear away any unsold units using any discount, price level or incentives they want without being required to inform the public.
The simple fact is that it isn’t a scarce thing to find the per square foot price of a unit, that had a caveat recently lodged with the URA, in the same project staying fairly consistent with its previous transactions, or in some cases even higher.

2. Property indices that are misrepresented
After the Temporary Occupation Permit, a developer for Symphony Suites is under no demand to submit any sales status of projects that have been de-licensed. It is URA’s opinion that the overall Property Price Index is not affected by these low volume transactions. While this may correct in a more robust market, it is not always the case in a market where many projects still have quite a lot of units that have been unsold after the Temporary Occupation Permit, more so in the higher end market.
It’s a known fact that reporting caveats to the SLA is a voluntary based transmission. If you were to check out any project in the URA caveat database that has been sold out, you would discover that not every unit and sales price has been recorded.
This incomplete data for Symphony Suites is what makes it hard for the public to really get a good picture of what the current Singapore private property market really is. In truth, the property indices are basically for information only at best.
American Investor Jim Rogers has stated that GDP figures look backwards and are pretty much made up. One will find that at a later date they will be revised. While this information has to be reported via television, as an investor he doesn’t really pay much attention to these figures.
Perhaps this could be relevant to property figures in Singapore as well.

3. Loan to value limit and valuation inaccuracies
If one were to base residential property valuations on the most recent transactions for similar, or the same, development while leaving out any rebates given by a developer, the resulting figures would more than likely be high and unrealistic at best.
Furthermore, basing the loan to value limit on a Symphony Suites’s vauation would allow a buyer to borrow a larger loan for housing from banks based on these purchase prices that are undiscounted.
Practices such as these are at cross purposes with the government’s resolve to ensure property buyers are using better financial conservatism.

Selling prices for Symphony Suites

In the end, you get what you give.

The infringement of not filing the true selling prices, along with the authority’s failure to take the proper action will only temporarily hide the truth of the situation. There is a Chinese saying that says; “No one can swathe flames in paper”. The actions of the sellers and buyers of these new projects in the present will no doubt come back to bite them later on.
If the government were to start demanding that the actual transaction prices for Symphony Suites, after these rebates, be reported, those buyers who have been benefitting from these earlier incentives could find themselves at risk of having property on their hands that has negative equity. This would mean their outstanding mortgage amounts would be much higher than their properties fair market value.
In a different light, the government can use the inflated Symphony Suites property price index as a positive excuse for demanding that it is too soon to relax the cooling measures in the property market. This would eventually thin out and do away with this type of buyer. On the other hand, the government may turn around and place even harsher regulations on property buying as a way to further correct the market. More so when the time comes to make the voters happy