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08 February 2013

8th February, Friday




Homing in on property price cuts

Source: The Straits Times

Developers who have been cutting prices following the new cooling measures risk angering buyers who bought at the earlier levels, say experts.

But developers claim that the recent discounting does not necessarily disadvantage early buyers.

Property experts say some buyers who have just shelled out on a new home will inevitably be unhappy when they see units at the same development suddenly going cheaper.

An industry player, who declined to be named, said price cuts are a sensitive issue and unhappiness with the developer can be expected with some buyers "banging tables".

When asked if earlier buyers had expressed unhappiness at the discounts, A CapitaLand spokesman told The Straits Times: "Our buyers, in general, are aware that we consider the prevailing market conditions and offerings at other developments within the same area when coming up with promotional schemes.

"In fact, some buyers who purchased units earlier enjoyed more attractive pricing despite the current promotional discounts." He pointed out that these buyers also paid lower stamp duties and had higher loan quantums so once these factors are taken into consideration, it would not be meaningful to compare prices of units bought at different times.

Another developer, who declined to be named, said the firm explains to earlier buyers that the price premium they might have paid is due to the choicer units being offered to them at the earlier launch date.

Even with discounts, prices rarely fall below the launch level, he added, as prices are typically inched up gradually as the project sells more units.


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Call for review of zoning policy for industrial land

Source: The Straits Times

The way industrial land is zoned should be re-assessed to ensure small and medium-sized enterprises (SMEs) will be able to grow, according to a property consultancy.

The firm, responding to the Government's White Paper on Population, said there is a risk some firms will be left out in the cold by existing zoning categories. These were devised for a manufacturing sector that is rapidly evolving - and in turn, threatening to leave these zoning definitions looking outmoded.

Much of the traditional assembly and production activity has gone offshore. But the newer enterprises often do not know if their activities - often they involve creative work or other design-related activity - run foul of zoning laws.

There are three types of users under the Business 1 (B1) zoning for industrial property.

There are product manufacturers, for whom the zoning was initially devised. But there are also firms which are not authorised to use industrial space, such as tuition and employment agencies.

And increasingly there is a "grey area". For example, local SMEs are often subcontractors for multinational companies, specialising in a few aspects of the larger firm's production process. These should be allowed to use industrial space, which is cheaper than office space, even if their activities do not resemble traditional manufacturing.

If the Government does not adapt B1 definitions to meet the realities of modern manufacturing, then one alternative could be to create a new supply of basic, no-frills office space in non-central locations.

Another option would be to create a hybrid industrial-office, a land-use category used by firms in Hong Kong which need a local administrative base to coordinate factories in China.

The consultancy also called for more clarity, sooner rather than later, to ensure that the "manufacturing sector and Singapore will be better able to keep abreast of global competition".


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