Singapore's Marina Bay offers below-secondary market prices to lure Hong Kong buyers

Hong Kong and mainland buyers are being offered the remaining flats in a luxury residential tower in the new financial centre of Singapore at prices the developers say are 10 per cent less than prices for equivalent flats in the nearby secondary market.

But since foreign buyers will have to pay a new 15 per cent stamp duty, they will still be paying an effective premium of 5 per cent on the secondary market.

Cheung Kong, Hongkong Land and Singapore's and Keppel Land have turned to Hong Kong and mainland Chinese buyers in a bid to sell the remaining 22 flats in the 66-storey Marina Bay Suites in the wake of a plunge in home sales in Singapore.

Home sales slid to 1,009 units last month, compared with 1,949 in October last year. The decline came after the government imposed an extra 15 per cent tax on foreign buyers in December and tightened lending conditions on second mortgages.

The developers will offer the remaining units at an average of S$2,700 (HK$16,800) per square foot, making the cheapest flat S$4.6 million. Standard units range from 2,045 square foot to 2,690 sq ft. Two penthouses are for sale, one of 4,700 sq ft and the other 8,100 sq ft. Prices in the nearby secondary market were about S$3,000 per sq ft, Thomas Tan, director of marketing for Raffles Quay Asset Management, the management arm of the development, said.

Alan Cheong, head of research for property consultancy Savills in Singapore, said developers of high-end projects were offering discounts of up to 20 per cent from the 2008 market peak to offload their stockpiles.

Marina Bay Suites is part of the S$4.5 billion Marina Bay Financial Centre development that is being developed by Cheung Kong, Hongkong Land and Keppel Land.

Demand for private homes, which house about 20 per cent of the city state's 5.3 million people, weakened sharply in July after the central bank introduced rules to ensure that buyers' monthly mortgage payments do not exceed 60 per cent of their combined incomes.

Cheong said just 11 new and second-hand homes had sold in Marina Bay Suites and a nearby development, Marina Bay Residences, since June, when banks tightened mortgage lending.

Last month a 2,077 sq ft unit on the 61st floor of the Suites was sold for S$3,258 per sq ft, the highest price since June.

But in the secondary market a seller barely achieved a break-even result after reselling his 21st floor unit for S$2,197 per sq ft this month. The owner bought the unit for S$1,900 per sq ft when it was launched for pre-sale in late 2009.

"Foreign buyers are affected most by the cooling measures after the government introduced the 15 per cent extra duty," Cheong said.