Developer OUE is offering audience a form of deferred payments in a bid to market off leftover units at its Twin Peaks condo as the market grapples with lots of unsold share.
Deferred payment schemes (DPS) were extremely popular in 2002 to 2006 but they were abolished in October 2007 for uncompleted private homes. Developers cannot offer comparable flexible payment plans if their projects continue to be uncompleted.
OUE has acquired its certificate of statutory completion for the project so it is no more licensed underneath the Housing Programmers Rules. These involve stringent progress payment rules where a developer is paid based on stages of work done until the project is fully finished.
The 462-unit development was completed in Feb last year. Around 80 models have been sold at one system with OUE planning to bulk-sell units at the other system.
Under the first variation, buyers must make a 20 per cent downpayment and sign the sale and purchase contract by the end of the year, when the 80 per cent balance and Additional Buyer’s Stamp Duty (ABSD) is also paid.
Under the second variation, buyers make a 20 per cent downpayment and sign the sale and purchase agreement now. They can then collect the keys for their unit.
The rest of the 80 per cent is paid two or three years later, although OUE withholds the title deed until the complete sum is paid.
But there is a capture – OUE prices in a premium. For example , a fourth-floor unit underneath the DPS seems to be going at about 9 per cent more than if it were sold without the scheme, based on approximations from recent transactions.
While the system introduces more flexible options on OUE’s circumstance, buyers is going to still be minimal by mortgage loan curbs.