As condos come close to their 5 year ABSD time limit, buyers and investors should start to pay more attention. There are no guarantees that the developers will start having fire sales, but there’s a chance that the developer will decide to give some discounts to the units left unsold nearer the 5-year ABSD deadline.
What is the ABSD deadline?
When property developers buy land to build a new project, they have to pay ABSD of 40% (revised from 30%) of the land price upfront, with 35% remittable when they complete and sell every unit in the development within 5 years of the land purchase.
This can sometimes result in fire sales as developers rush to sell out the last few units in a development. Some developers might also opt to sell their last few units in bulk to a private investor or company at a cheaper price.
Which projects are nearing their 5-year ABSD deadline in 2022?
There was a strong demand of private housing in 2021, and as a result, many of the projects are close to 100% sold. The list of new launches that still have units left as of Mar 2022 is pretty short:
|Development||Percentage Sold||Number of Units||Remaining units||Expected TOP|
|Stirling Residences||99.99%||1,259||Last 2 1BR units||Oct-22|
|Uptown@Farrer||99%||116||Last 5BR Penthouse unit||Jan-22|
|8 Hullet||98%||44||Last 2BR unit||Mar-22|
|The Woodleigh Residences||94%||667||2BR/3BR/4BR||Aug-24|
|Parkwood Collection||78%||50||Semi-detached houses||Mar-23|
|One Draycott||14%||64||2BR and 2BR Penthouse||Sep-23|
While there are already ongoing discounts and you could possibly find some good buys in the developments above, let’s explore our other new launch project options.
Since the land sales of the above projects was around 2017, the next best thing to look at would be the land sales in 2018.
Potential Fire Sales Projects in 2022
Notable New Launches Facing the 5-Year ABSD Deadline in 2023
|Development||Percentage Sold||Number of Units||Expected TOP|
|Haus on Handy||31%||188||Q4 2023|
|Normanton Park||92%||1862||Q4 2023|
|Avenue South Residences||78%||1074||Q4 2023|
In general, it will always be cheaper to buy a new launch from the developer earlier(when the TOP date is far far away…) rather than nearing the TOP date, as there is usually more demand for immediate housing rather than waiting the 1-3 years for the project to be built.
However, due to the recent apparent increases in GLS and land prices, the future new launch projects from 2022 onwards will most definitely be priced higher than the previously launched projects. So, dig deep my friends…
If you are looking out for a good deal, feel free to reach out to us for some free property advice.
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