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Analysis of the Singapore Government’s Temporary Relief Measures for Developers during COVID-19

08/05/2020

The Temporary Relief Measures are definitely timely and very generous in terms of the extension due to the impact of Covid-19. This will give developers, especially the large developments some reprieve as some already have challenges meeting the 5 year ABSD remission deadline. The impact on developments that will hit the ABSD and PCP deadline for 2020 is quite minimum. This is because according to our calculation, only about 30 over units remain unsold across 5 projects. Even without the extension, I believe these developers have ways to clear the unsold stock in time to meet the deadline. Even in 2021, there are only about 15 projects with about 400 units unsold. However, given that the Covid-19 pandemic is unprecedented and developers’ new home sales have been severely impacted due to social distancing and 2 month long lockdowns, property transactions would likely to take some time to recover. As such, the 6-month-extension might not be adequate and might need further tweaks if the pandemic is protracted.

Even when things start to re-open, we also expect social distancing measures to continue affecting the showflat activities and buyers sentiment in view of the bleak climate in the whole global economy. We are of the view that the extension should not be a one-off measure, as Covid-19 continues to evolve with the potential second and subsequent waves or even lockdowns in the foreseeable future. Hence, the government should continue to engage the stakeholders, such as developers, REDAS, individuals who are affected by the sales and ABSD remission and provide the much-needed help if the situation is protracted.

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