Home buyers to get more accurate snapshot of property market from fuller price disclosures

Private condominiums and HDB flats in Singapore. An upcoming move to disclose the net prices of individual units sold by developers will give buyers, property firms and policymakers a more accurate snapshot of the market, said experts. -- ST PHOTO: C
Private condominiums and HDB flats in Singapore. An upcoming move to disclose the net prices of individual units sold by developers will give buyers, property firms and policymakers a more accurate snapshot of the market, said experts. -- ST PHOTO: CAROLINE CHIA 

Thumbs up for move to release net prices of individual units in projects

The upcoming move to disclose the net prices of individual units sold by developers will give buyers, property firms and policymakers a more accurate snapshot of the market, said experts yesterday.

The change, which was mentioned on Tuesday by the Urban Redevelopment Authority (URA) in a Straits Times Forum letter, will kick in during the first half of next year.

It will fundamentally alter the system in place now, which leaves buyers relying on prices quoted by developers and caveats filed with the Singapore Land Authority for a sense of what a unit is worth.

The URA has been releasing information on developer sales each month, including the median, lowest and highest net prices at each project.

While these give buyers a sense of what units in a project are worth, they will be armed with far more information once the URA releases net prices of individual units on its website, experts said.

Caveats, which are submitted by a buyer's lawyer, may not paint the full picture. They are typically based on the price in the sales and purchase agreement and may have not have factored in indirect discounts.

These can include a developer absorbing the additional buyer's stamp duty or handing out furniture vouchers, said Mr Lee Liat Yeang, a partner at law firm Rodyk & Davidson.

Such indirect discounts have become increasingly common in today's soft market.

"Developers may also prefer not openly cutting prices, as this would upset earlier buyers," said Mr Lee.

This means prices in caveats could be slightly inflated now, said SLP International executive director Nicholas Mak.

"The provision of net prices gives buyers an extra tool for negotiating. A developer now can't cite the value of a previous transaction as x dollars, when it isn't actually a net of those discounts," he said.

More detailed numbers would also help consultants and developers in studying the market, said Savills Singapore research head Alan Cheong, adding: "There could be certain patterns that broad numbers don't tell us."

The disclosures of net prices of individual units will not apply to projects after they have been de-licensed. This typically occurs a year after a project's temporary occupation permit has been obtained. The disclosures will apply only to new sales.

The change is good news to home owner and investor Mark Yap, 44. "It's more transparent for consumers and is the type of information we would like to know. For example, looking at how much an eighth-floor unit sold at, we can now decide how much more we are willing to pay for a ninth- floor unit," he said.

wrennie@sph.com.sg