About 50 homebuyers walked away from deals in October

[UniquelySG]

From today's Business Times.
Interesting - Only 112 units sold in the month of October
50+ prospective buyers walked away by forfeiting 1.25% of the purchase price of the unit

[leveraged]

it would be interesting to see if people would be able to walk away from 20% downpayment for DPS buyers.

[must walkaway]

it would be interesting to see if people would be able to walk away from 20% downpayment for DPS buyers.

many will have no choice because they wont get finance. Developers then have to back the sale out of their books and downgrade profits and asset values

[leveraged]

it would be interesting to see if people would be able to walk away from 20% downpayment for DPS buyers.

many will have no choice because they wont get finance. Developers then have to back the sale out of their books and downgrade profits and asset values

i understand most DPS would have signed a SPA, not an option, and that is subject to specific performance under law. not sure if they can just walk away even if they want to....

[so what if]

if they dont have the money they dont have it. So do they have to decalre bankrupcy?

[DPS ?]

I thought the DPS scheme has been shelved last November.

It could be another method the developers created to woo buyers back.

Some projects recorded no sales at all so its going to get worst.

[leveraged]

if they dont have the money they dont have it. So do they have to decalre bankrupcy?

some will, some wont, have the money. whether you are the bank or the developer, you got to make sure that you grab on to some first.

[the LIST]

Business Times -- 18 November 2008
The Tally: Units Returned in October 2008

Beacon Heights -- 1
Clover By The Park -- 1
Concourse Skyline -- 14
Kovan Residences -- 1
Madison Residences -- 2
Parc Sophia -- 2
Silversea -- 5
Soleil @ Sinaran -- 2
The Peak @ Balmeg -- 11
Tresalveo -- 5
VIVA -- 5
Waterfront Waves -- 2

[passed]

I used to drive past the Madison Residences on Bukit Timah road last month every other day and all I see is an empty parking lot with lots of Agents stading around in the hot sun.

[u forgot]

must be 3rd rate developer and units are basement units, next to dustbins and etc  ha ha...

property prices will tank and many will return units  this is only the beginning  

[leveraged]

silversea is another one i couldn't understand....

[wondering...]

regarding DPS, does anyone know whether or not it was available to foreigners or only Singaporeans?

Good luck to any developer trying to chase DPS payments from Indonesians or Chinese who have seen their stock market wealth wiped out...

[Kubes.SG]

DPS was available to all people.  To commit to the DPS purchase you had pay an upfront 2% to the developer.  You could pay via personal cheque on the spot, or cash if you wanted to leave no trail.  Payment to 10% was required within a few months, and by the 6-12 month point your payment to the developer would be 20%.  These levels and timings varied a little.  The outstanding amount would come due as the development reached TOP often 2-3 years in the future.

Either no records were kept or no one is reporting exactly how many or who made DPS purchases.  The many were speculators who planned to flip and it appears quite a few made fortunes getting in and out sometimes before even 20% had to be paid.  There are still many thousands who bought in 2007 on DPS who have now already lost their 20% down-payment.  The big question now is what do the banks do?  My bet is they don't provide the remaining 80% of the purchase price, instead something like 70% of the "current" market valuation in 2009/10.  This could easily leave a 20-50% funding gap.

Hmmm, Singapore's own brand of a sub-prime-like disaster but for wanna-be rich people and greedy developers.

[Pseudo]

I heard from some that there is another scheme where you just pay the interest only on a development or something similar to DPS but not sure of the details. This is to circumvent the banning of the DPS.

[Beavis]

What I have a hard time grasping is: why didn't the government even try to restrain outright speculation?   Measures like the DPS could easily have been tweaked to keep condo flippers out, while still meeting their stated purpose of helping upgraders.

The failure to restrain outright speculation has created a few big winners (those who went in an out at the right time), but also created a lot of damage.  The cost of doing business in Singapore spiked upwards, a lot of restaurants and stores were forced to move because they could no longer afford the rent, bankruptcies will rise among those who agreed to too high rents, small developers will start to go bankrupt because they overpaid for land (no pity there, but there will still be some fallout), banks get stuck with bad loans, etc.

All the government had to do to stop condo flippers was to impose a punitive capital gains tax on "flipped" condo sales (for instance, within a 3-year time period).  Or it could have required a higher downpayment for investment properties.  Why didn't it?