Regulators are keeping a close eye on the market as many developers have been reimbursing the ABSD (additional buyer’s stamp duty) in a bid to boost sales. If the practice begins to affect property prices and loan values, the government will intervene.
While the Ministry of National Development (MND) is continuously monitoring the market to ensure transparency, it said: “As long as they do not distort prices, there is no need for the government to intervene against such business decisions and practices”.
In addition, the Monetary Authority of Singapore (MAS) has urged consumers to divulge any discounts or rebates received from developers when taking up home loans from banks.
If isolated, reimbursing the ABSD as a sales strategy will not likely have a serious impact. But if done on a wider scale, industry watchers fear that it could sabotage the government’s transparency efforts.
Since these discounts are provided after the transaction is completed, sales caveats might not reflect the actual prices.
“The ABSD reimbursement is being made in this way so that it does not affect the pricing. If they give a discount on the price, then their pricing is affected, and the developers don’t want that because it may upset their earlier buyers who did not get to enjoy the discount,” said a consultant.
The Real Estate Developers’ Association of Singapore (REDAS) expressed its support of MND’s position “on fair and transparent practices which will enable home buyers to make an informed decision”.
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