Discounts and other incentives offered by de-licensed projects developers will not be included in the Urban Redevelopment Authority (URA) quarterly price index.
Starting this month (September), developers of de-licensed projects will need to submit to URA the net prices of sold units. The change to the use of only the net price of a unit will be included in the third quarter index.
The URA index is calculated based on property sales prices in the new and resale market.
In a statement, URA said that the changes will make sure that the property price index (PPI) remains relevant in reflecting the price movement of property.
De-licensed projects are those with the Certificate of Statutory Completion and have been issued with individual title deeds. They no longer fall under the Housing Developers Rules.
Developers are not required to provide URA with sales updates and are more flexible when it comes to offering creative marketing schemes such as discounts, rebates, and deferred payment.
The changes will also bring the rules in harmony since licensed developers have been submitting to the URA the net price data since last year May.
Donald Han, managing director Chesterton Singapore observed that the change may bring downward pressure especially on the core central region sub-index where there are de-licensed projects.
However, the head of research and consultancy at Orange Tee, Mr. Wong Xian Yang is of the opinion that the change may not have a significant impact on the property price index since the sales volumes of de-licensed projects is small in comparison to the total sales in Singapore.
The first quarter of 2016 recorded a 0.7% decline in home prices from what was recorded in Q4 2015 while Q2 2016 had a 0.4% decline from quarter one.