Buyers of 10% of One Shenton units back out of deal

Feb 10, 2007, The Straits Times
Buyers of 10% of One Shenton units back out of deal

By Fiona Chan

PROPERTY speculation may seem like a good way to make a quick buck, but not all would-be profiteers manage to pull it off. The Straits Times understands that buyers of more than 30 units at luxury condominium One Shenton in Shenton Way have backed out of their purchase options.
This amounts to an unusually high 10 per cent of One Shenton's 341 units - 10 times the average proportion of lapsed options in a typical residential development, according to market players. The 99-year leasehold condo was almost sold out within 30 hours of its soft launch on Jan 5, with some buyers putting up their units for resale the very next day. Market watchers said the buyers who have pulled out are likely to be failed speculators who had hoped to quickly resell their units but were unable to find takers, possibly due to high asking prices.

Home buyers generally put down 5 per cent of the home price for an option to purchase it, which they have three or four weeks to exercise. If they do so, they must fork out at least another 8 per cent for downpayment and stamp duty. If they opt not to buy, they forfeit 1.25 per cent of the property's purchase price. That could be about $50,000 for a $4 million four-bedroom one at One Shenton.

Property consultants said the high number of forfeits should serve as a warning to speculators who cannot afford to hold on to their properties.
'Speculators...should keep in mind that not every project can be profitable,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Mr Ku Swee Yong, director of business development and marketing at Savills Singapore, said these punters were 'probably amateurs who did not evaluate their financial options carefully and were caught up in the rush for Marina Bay homes'. Property players added that this may be the first sign of the speculative activity in Marina Bay cooling off. Property agents told The Straits Times that owners of Marina Bay homes who are trying to resell their units are having a tough time.

:) :) :)

Thanks Madeira! :)

Top Print Edition Stories
Published February 10, 2007

Over 30 One Shenton options lapse


(SINGAPORE) Options for slightly more than 30 apartments at City Developments' One Shenton project were not exercised when the deadline to do so passed yesterday, BT understands.

CityDev and its marketing agents for the project are expected to offer the units to those on a waiting list for the 99-year leasehold project who were unable to secure apartments during the preview in early January. It remains to be seen what prices CityDev achieves for the returned units.

At the time of the preview, CityDev said it achieved prices ranging from $1,500 psf to $2,200 psf. It began its preview on the afternoon of Friday, Jan 5. On the next day, the listed property group announced that more than 95 per cent of the 341 units at the development had been sold.

Market watchers said those who failed to exercise their options by yesterday's deadline would lose a quarter of their 5 per cent deposit, amounting to 1.25 per cent of the price of the unit they had booked - or $12,500 for every $1 million of purchase price.

But this may be a smaller price to pay than what faces speculators who have failed to sell their units in the sub-sale market for a profit. The latter face having to sink in more money soon - stamp duty within 14 days and the next payment to the developer of 15 per cent within eight weeks of the date they were issued options.

Industry sources say that at Marina Bay Residences, options for eight units were not exercised by the deadline around mid-January. The 428-unit project was sold out during its preview in December, achieving an average price of $1,950 psf.