Incentives and discounts offered by developers of de-licensed private projects will be excluded when the Urban Redevelopment Authority (URA) compiles its quarterly price index.
Developers of such projects will be required to submit net prices of units sold to the URA from this month. The changes to use only a unit's net price will be incorporated in the index for the third quarter, it was announced yesterday.
The index is computed based on prices from all property sales in the new sale and resale market.
"The purpose of this is to ensure that the PPI (property price index) remains robust in reflecting property price movement," the URA added in a statement.
De-licensed projects are those that have obtained the Certificate of Statutory Completion and where individual titles have been issued, so they no longer come under the Housing Developers Rules.
Developers of such projects need not provide sales updates to the URA and have more flexibility to offer creative marketing schemes, such as deferred payment, discounts and rebates.
Mr Augustine Tan, president of the Real Estate Developers' Association of Singapore (Redas), said yesterday that the change will "improve transparency in the property market".
The changes also serve to harmonise the rules as licensed developers have had to submit net price data to the URA since May last year.
Dip in private home prices in Q1, from the last quarter of last year.
Dip in private home prices in Q2, from the first quarter.
Market watchers said that pricing data captured from units sold in de-licensed projects now may be slightly inflated as they include incentives offered to buyers.
"With the change, there may be a downward pressure, particularly on the sub-index for the core central region as that's where some of these de-licensed projects are," said Chesterton Singapore managing director Donald Han.
These projects include OUE's Twin Peaks, which is offering a deferred payment scheme and discounts, as well as Ardmore Three by Wheelock Properties. The latter offers a 15 per cent discount against its list price and a rebate for the Additional Buyer's Stamp Duty.
Mr Wong Xian Yang, OrangeTee's head of research and consultancy, does not expect the change to have much impact on the overall property price index, "as the volume of developer sales from de-licensed projects is relatively small compared with islandwide total sales".
Private home prices dipped by 0.4 per cent in the second quarter from the first, and followed a 0.7 per cent decline in the first three months of the year from the last quarter of last year.
Mr Tan, who was speaking at the Redas annual Mid-Autumn Festival lunch yesterday, also flagged concerns such as rising vacancy rates, disappointing global economic outlook and slow loan growth, which has been "negative for 10 consecutive months". "As economic slowdown bites further, this will whittle down the sense of security of those who are thinking of purchasing a home, including that of public housing."
Unlike in past speeches, Mr Tan did not lobby the Government to ease cooling measures. Instead, he said Redas is "appreciative" of the Government's emphasis that it is monitoring the market carefully and is "ready to pull levers on measures" when appropriate.
The lunch was attended by 500 guests from the industry as well as Mr Lawrence Wong, Minister of National Development and Second Minister for Finance.