Monday, October 26, 2015

Developers Facing Extension Charges




  1. Hi B,

    The developers will definitely try their best to avoid any extension charges. Other than selling the units cheap and taking the company private, do you think some of the companies will end up using their subsidiary companies to purchase the unsold units and repackage them as service apartment to rent out meanwhile? This will 1) give the developers some rental income meanwhile, 2) wait for improvement in the market, 3) avoid any indefinite extension charges by paying a 1 time ABSD.

    1. Hi Anonymous

      You are right. There are some ways to get around this although all of them does need to be done on an arm length basis. Alternatively, they can also temporarily lease out their properties though I doubt these developers want to hold on to their inventory for as long as they'd like. I think the cycle is still a far far away and they'd rather clear their old inventories as much and move on from there.