{"id":23352,"date":"2019-02-28T13:00:23","date_gmt":"2019-02-28T05:00:23","guid":{"rendered":"https:\/\/www.99.co\/blog\/singapore\/?p=23352"},"modified":"2022-06-13T17:06:18","modified_gmt":"2022-06-13T09:06:18","slug":"why-were-seeing-a-spike-in-returned-units-from-2018","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/why-were-seeing-a-spike-in-returned-units-from-2018\/","title":{"rendered":"Why We’re Seeing a Spike in Returned Units from 2018"},"content":{"rendered":"
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There’s been a huge spike in returned units<\/a> (paywall) from the last quarter of 2018. This suggests sales volumes were much lower than reported, and developers are now re-issuing Options. Here’s what it means and why it happened:<\/p>\n

The “phantom sales” of Q4 2018<\/h3>\n
\"Ghostly
Where did all the supposed buyers from 2018 go? Over 20 per cent of sales have vanished for Q4 2018<\/figcaption><\/figure>\n

There’s been a discrepancy between the actual number of sales transactions recorded by URA, versus the number of sales developers claim. The reason is that developers often claim a sale once the Option to Purchase (OTP) is\u00a0 secured.<\/p>\n

The OTP requires a non-refundable deposit of around one per cent of the purchase price – once the OTP is secured, it’s commonly assumed the unit has been sold. It’s rare for buyers to back out due to the financial cost – but that’s exactly what we’re seeing from Q4 last year.<\/p>\n

URA says the actual number of transactions for Q4 last year is now 1,836 units – that’s 20.3 per cent (or 469 units) fewer than initially reported. For last December alone, 602 units were reported as sold, but more than half of these (398) were returned, with buyers forfeiting the OTP.<\/p>\n

Why is this happening?<\/h3>\n
\"Person
Some buyers forfeit their OTP due to loan application issues<\/figcaption><\/figure>\n

The four main reasons are:<\/p>\n