Publicly listed S'pore developers to be exempted from QC regime: MinLaw, SLA

The Business Times - 7 Feb 
The Ministry of Law and the Singapore Land Authority (SLA) on Thursday announced that it will allow for the exemption of publicly-listed housing developers with a "substantial connection to Singapore" from the Qualifying Certificate (QC) regime.

This is an answered prayer for publicly-listed developers which have for a long time bemoaned the fact that they are subject to stringent timelines and penalties like their foreign counterparts, despite the fact that they are local firms.

This is because under the Residential Property Act (RPA), a Singapore company is defined as one that is incorporated in Singapore, and all its directors and shareholders are Singapore citizens or Singapore companies. 

Tricia Song, Head of Research:
The fine-tuning of the Qualifying Certificate (QC) rules to allow for the exemption of publicly listed housing developers with a substantial connection to Singapore is a timely move, and in our view, creates a win-win-win situation for the real estate developers, the capital markets, and policy makers.

The QC rules, along with the additional buyer’s stamp duty (ABSD) – which was hiked to 30% (of which 25% is remittable) in July 2018 – have been seen by developers as a “double whammy”, both carrying hefty penalties if they do not sell all units in a project within the stipulated timeframe. This exemption will certainly be greeted with much relief, particularly for developers who are concerned about clearing their inventory and potentially having to pay for QC extension. 
With the QC exemption, we think land bid prices for larger sites may potentially improve as developers may not need to provision for both ABSD and QC penalties for failure to sell all units within five (ABSD)/seven (QC) years. This could further help to promote efficiency in the marketplace as developers have a clearer picture of their risk exposure. Read our analysis

Developers likely to proceed with launches amid virus outbreak

The Business Times - 5 Feb 
Residential projects slated for launch in the next couple of weeks appear likely to go ahead as planned for now. However, visitorship to showflats and transaction volumes could decrease amid concerns about the coronavirus outbreak, analysts say.

Where prospective buyers are concerned, sentiment is likely to be affected, with dampened enthusiasm to visit showflats as developers put in place precautionary measures such as temperature checks, he adds.

Tricia Song, Head of Research:
The new coronavirus will likely dent sentiment in the near-term. Developers are likely to hold back new launches in view of the weaker sentiment. The super-luxury sector may also be more impacted as Chinese buyers and overseas buyers will have to postpone viewings of the properties. 

Depending on how severe and protracted the situation develops, some of the planned new launches could delay into 2021.  However, we believe the delay will not be overly prolonged as pent-up demand will return later.

Based on the experience during SARS, new sales fell to 119-228 units per month between January to May 2003, before rebounding to 775 units in June 2003 and 1,271 units in July 2003 as the epidemic subsided and pent-up demand returned.