Downward pressure on home prices intensifies as more projects face ABSD deadlines

5 projects nearing Jan2017 deadline remain unsold.

In the coming months, MayBank KimEng believes that the spotlight will be on the actions of developers that have significant unsold units for projects facing their respective ABSD deadlines.

Developers who bought residential land since its implementation in Dec 2011 were exempted from paying ABSD on land cost at the time of purchase. In order to qualify for the exemption, developers would need to complete and sell every single unit in the project within a five-year period. They will need to pay the exempted stamp duty if they fail to do so.

One of the first projects facing the ABSD deadline is The Trilinq by IOI Properties. 48% of this project remains unsold with just five months to its deadline in Jan 2017.

Otherprojects facing ABSD deadlines in 2017 are Mon Jervois (50% unsold, Feb 17) and Pollen & Bleu (88% unsold, Jun 17) by UIC, The Venue Residences (45% unsold, Sep 17) by CityDev and The Crest (70% unsold, Sep 17) by Wing Tai JV.

"While we have yet to see significant price cuts, there could be more pressure to do so as project deadlines near. This could lead to downwards pressure on prices if these developers choose to cut prices," said MayBank.