Time is running out for at least five private residential projects to sell their unsold units before their developer is slapped with hefty fines under the Qualifying Certificate (QC) rules, according to a report from Square Foot Research.
“These developments were completed in 2013 and have less than a year to meet stringent QC requirements,” it said.
The projects listed by Square Foot Research are The Interlace (pictured), GoodWood Residence iLiv @ Grange, Urban Resort Condo and Ei8ht Raja.
“With an outstanding 169 unsold units remaining, The Interlace by CapitaLand tops the chart with the most number of unsold units. This, however, is consequential to its massive supply of 1,040 units in total. Contrary to beliefs that the developer will cut price, prices of The Interlace have actually seen a gradual increase over time,” the report stated.
Square Foot Research added, “The price in the primary market, however, is noticeably lower than recent transaction prices in the secondary market on a per-square-foot basis. With more than 80 percent of the units sold, the developer should have profited from the development and may not see the need to reduce prices immediately. The estimated fees payable to extend its deadline to sell also does not appear to be substantial.”
Under the Residential Property Act’s QC rules, all developers with non-Singaporean directors or stockholders need to obtain their private housing projects’ Temporary Occupation Permit (TOP) within 5 years, and sell all units within two years thereafter.
Failure to comply with this timetable would result in developers forfeiting their banker’s guarantee of 10 percent of the land purchase price.
“To extend the deadline, developers will have pay an additional 8 percent, 16 percent and 24 percent of the land purchase price for the first, second and subsequent years respectively. The amount is pro-rated accordingly to the proportion of unsold units,” the report said.