News Update - 19 Feb 2013

RESIDENTIAL MARKET

Rush to beat curbs propels home sales

Private-home sales surged 42.8 per cent in January from the month before, as developers dished out discounts and rebates to entice buyers in the wake of the seventh round of cooling measures.

Excluding executive condominiums (ECs), a total of 2,013 transactions were clocked in in January, up from 1,410 in December. This was the highest in four months, and exceeded the 1,799 units launched by developers.

Buyers who rushed to lock in their purchases before the cooling measures on Jan 11 - which included higher additional buyers' stamp duty (ABSD) as well as stricter borrowing limits - kicked in, helped drive sales.

EL Development's La Fiesta, one of many showflats that stayed open late, saw snaking queues on Jan 11, as potential buyers tried to beat the midnight deadline. The project, located in Sengkang, recorded 404 transactions in January.

"(EL Development) had earlier shared that it had sold 360 units in the project before Jan 12. . . So by deduction, it probably sold about 44 units after Jan 12," said a market watcher.

According to the Urban Redevelopment Authority (URA), about 60 per cent of the units (excluding ECs) sold by developers were sold before Jan 12 while the remaining 40 per cent were sold from Jan 12.

January's sales were also buoyed by attractive incentives offered by developers.

Q Bay Residences (372 sales), for instance, offered stamp duty discounts of 5 per cent to 7 per cent, while D'Leedon Residences (263 sales) offered discounts of up to 15 per cent. Of this, 163 units at D'Leedon were moved from Jan 12.

Mass-market suburban regions (Outside Central Region) contributed 63.9 per cent of total sales (1,287 transactions), a marked increase compared to the 44 per cent recorded a month earlier. The Core Central Region and Rest of Central region made up 17.4 per cent (350 sales) and 18.7 per cent (376 sales) of January sales, respectively.

Sales of EC units dropped 69.8 per cent to 256 units. Including ECs, a total of 2,269 residential units were sold in January, on a par with the 2,259 units sold a month ago.

Consultants expect slower sales in February, in the light of the usually quiet Chinese New Year, even though a handful of developers had opened their showflats over the festive season.

Source: Business Times –16 February 2013

Developers anxious about cooling measures

The new head of the Real Estate Developers' Association of Singapore (Redas) says developers here are "naturally anxious" about the latest round of cooling measures, but they understand the government's push for "a soft landing of the property market" and will thus support the population roadmap set out for 2020 and beyond to 2030.

Chia Boon Kuah, in his maiden speech since being elected to the post this month, noted yesterday that real estate is a cyclical business, buffeted by global economic performance, geopolitical developments and domestic market conditions.

And with property players here facing added challenges from limited land and high development costs, they are, he said, "naturally anxious" about the cooling measures implemented amid a maturing property cycle and global uncertainties.

He was speaking at Redas's annual Spring Festival lunch, at which Foreign Affairs and Law Minister K Shanmugam was the guest of honour.

Mr Chia, also the chief operating officer for property sales at Far East Organization, described the real estate industry as part of the diverse ecosystem that is Singapore's economy, and one which provides jobs and properties to families and businesses and generates dividends for unitholders in real estate investment trusts (Reits).

"As a major stakeholder in the wellbeing of our ecosystem, Redas acknowledges the government's desire to achieve a soft landing of the property market."

He said Redas would build on its role as a partner of the government to add value to national development; it will also plan for business interests to align with national objectives.

Describing the Population White Paper for Singapore up to 2030 as bold and wide-ranging, Mr Chia said: "It is a vision to ensure a good quality of life in a dynamic city with future infrastructure to accommodate an enlarged population of 6.9 million, if necessary.

"Redas stands ready to support the execution of this important blueprint."

It will, for example, set up Redas Foundation, a non-profit body to "coalesce the efforts and resources" of its members to improve the lives, living environment and the future of communities here, Mr Chia disclosed.

Redas will carry on its ongoing Redas Conversation, which runs parallel to the National Conversation; it will also continue engaging tertiary institutions and professional bodies to promote urban solutions, with a key focus on providing more elderly-friendly designs and amenities.

Speaking on the sidelines of the event, Lim Ee Seng, the second vice-president of Redas and Frasers Centrepoint chief executive, said he foresees prices stabilising the rest of this year, as buyers become more cautious. Transaction volumes could stay at about the same as last year, he added.

Wong Heang Fine, the immediate past president of Redas and chief executive of CapitaLand Residential Singapore, said it's too early to tell whether the cooling measures are working, going by the latest private home sales figures.

The Urban Redevelopment Authority (URA) said yesterday that 2,013 private residential units, excluding executive condominiums, were sold last month; this was 7.5 per cent higher than a year ago.

Mr Wong said: "Basically, the measures came in only on Jan 11. So you've got to wait a few months for them to kick in."

Source: Business Times –16 February 2013

OCBC sees up to 30% fall in new home loans

OCBC Bank expects new home loan sales to fall up to 30 per cent this year following recent property-cooling measures, but the impact will not be as great to its mortgage book, said Ching Wei Hong, the bank's chief operating officer.

Over the past few years, OCBC has grown its mortgages strongly and the drawdown in 2013 of home loans sold in 2010 and 2011 will cushion the fall in new sales, he said at OCBC's fourth-quarter 2012 results briefing yesterday.

Last year, OCBC's home loans grew 18 per cent, or $5.7 billion, to $37.8 billion, with Singapore accounting for about 80 per cent.

Mortgages are OCBC's biggest loan product, making up 26 per cent of the $144 billion total loan book, which grew 7 per cent over the year and 3 per cent over the quarter.

"We've built up a very good size and do not expect loans to taper off significantly, come down slightly, will still get low teens (growth)," said Mr Ching, who also heads the bank's consumer financial services.

"In terms of sales, we do expect a sharper fall in new loan bookings, we estimate in the range of 20-30 per cent reduction in bookings," he said.

The government introduced harsher cooling measures on Jan 11 to rein in the red-hot property market. Private-home sales rose to a record 22,290 units in 2012, easily eclipsing the previous 16,292 peak in 2010.

The fall in new loans refers to bookings for new projects while mortgage sales for older properties or resales, are very quiet, he said.

"In terms of pricing, we've actually pricing up our loan book over the last quarter," said Mr Ching.

The margin pressure on home loans is easing off but it is still very competitive, he added.

OCBC's more optimistic view on home loans is in contrast to that of its bigger rival, DBS Group Holdings.

DBS' local mortgages growth could halve this year as the residential property market slows, said chief executive Piyush Gupta.

Its Singapore loan book is about $100 billion and mortgages make up about $37 billion, up about $5 billion in 2012, he said last week during the group's Q4 results briefing.

Resale bookings are down 25-30 per cent while bookings for new projects are 25-30 per cent higher because developers are giving discounts, noted Mr Gupta.

The problem is that resale bookings get onto the loan book immediately but for a building under construction, the loan disbursements happen over two to three years, he said.

In Hong Kong, DBS is running down its mortgage business which is not making money because of its high funding cost, he said. DBS Hong Kong's mortgages dropped $1 billion last year.

DBS' total loan book grew 8 per cent to $210.5 billion in 2012. Growth was broad-based, led by corporate loans in Singapore and the region and consumer loans. Housing loans rose 10.4 per cent to $45.6 billion.

Source: Business Times –16 February 2013

Strong new home sales driven by mass market

Once again, mass market homes were overwhelmingly the main driver of new home sales.

Suburban condominiums accounted for nearly two-thirds of developer sales last month.

The latest round of cooling measures, effective Jan12, led to higher sales as some buyers scrambled to avoid the curbs, while others were lured by developer discounts offered in their wake.

But analysts said demand would likely slow down in the coming months, as the full effects of the measures sink in.

The high-end market in the city centre and mid-tier market in the city fringe made up 17per cent and 19per cent of January developer sales respectively.

The number of suburban private homes sold, at 1,287 in January, was more than double December's figure of 620.

This helped to drive total developer sales to 2,013 units last month, 42.8 per cent higher than the number sold in December and 7.5 per cent higher than the same month last year.

The boost came in the main from two new project launches. La Fiesta, next to Sengkang MRT station, sold 404 units, while QBay in Tampines sold 372 units.

The majority of the sales at the 810-unit La Fiesta came on the night of Jan 11, right before the cooling measures kicked in.

Attractive discounts offered after the cooling measures kicked in on Jan 12 also gave a fillip to sales.

The 630-unit QBay was launched after the new measures, with its average prices slashed from $1,050 per sq ft (psf) to $985 psf for its preview sales.

At the 1,715-unit d'Leedon in District 10, 263 units were sold last month following the cooling measures, after its developer dangled discounts of up to 15 per cent.

Reduced loan-to-value ratios implemented could also have caused some buyers to reassess their finances and buy lower- priced or smaller units in suburban areas instead, Mr Lee said.

An Urban Redevelopment Authority spokesman said that about 60 per cent of the developer sales last month came before the cooling measures took effect.

Some suburban homes also set benchmark sales prices. In recent weeks, a unit at freehold condominium Hillbrooks in Bukit Batok changed hands at $1,086 psf, while a unit at 99-year leasehold condominium Rivervale Crest in Sengkang was sold at $913 psf.

Analysts said that despite January's strong sales volume, demand for private homes could fall in the next few months by as much as 15 per cent.

Source: The Straits Times –16 February 2013

New projects inject vibrancy into Yishun

Yishun may be one of Singapore's largest and most mature property estates, but it tends to be seen as a quieter cousin to neighbouring towns such as Ang Mo Kio and Woodlands.

That could change as interest in the fast-emerging Iskandar development region just over the border in Malaysia grows stronger, according to property experts.

Situated in the Republic's northern region, Yishun comprises both industrial and residential property - and is a natural jumping off point for Iskandar. A new highway, the Eastern Dispersal Link, has shortened considerably the travelling time between the Causeway and Iskandar.

Yishun's industrial property market has been fairly dynamic in the past year, with a focal point of activity centred on the stretch between Yishun Avenue 6 and Yishun Avenue 7.

This stretch includes developments such as A'Posh Bizhub, Northpoint Bizhub and North Spring Bizhub.

These three projects accounted for nearly a quarter of all industrial transactions in District 27 - which not only covers Yishun but also other neighbourhoods like Sembawang and Admiralty - in the year to January.

A total of 133 transactions were recorded by the Urban Redevelopment Authority, 23 per cent of the 582 industrial transactions during that period.

The area has also seen a number of new residential launches in recent years, including private property projects like Skies Miltonia and The Miltonia Residences.

These projects have contributed to Yishun's 1,189 residential property transactions in the year to January.

Only seven transactions were recorded within the area in January last year, made up of new sales, sub-sales and resales. But in January this year, 26 transactions were recorded, with 20 of them lodged after the latest round of property measures, announced on Jan 11.

Details from the Department of Statistics show that Yishun has a low percentage of residents aged 15 years and below, while 11 per cent of residents earn between $1,000 and $1,999 a month.

But experts say Iskandar's rise could bring on a radical change in Yishun's residential market.

Source: The Straits Times –16 February 2013

More holding on to their HDB flats

A higher percentage of home owners are holding on to their Housing Board flats, reversing a trend that had been rising in the past four years.

According to data from the Housing Board yesterday, the percentage of home owners who sold their property within the year after it hit the five-year minimum occupation period (MOP) was 11.8 per cent last year.

It had been climbing steadily, from 4.3 per cent in 2008 to 18.3 per cent in 2011.

These figures are for flats bought directly from the HDB.

Property analysts say the drop can be attributed to various factors, chief among them being sky-high private property prices that deter HDB upgraders, and restrictions incurred after selling a flat.

Resale HDB flat prices went up 6.6 per cent last year, while private home prices increased by 2.8 per cent.

Since August 2010, private property owners have been required to sell their existing property if they wanted to buy an HDB resale flat.

But HDB owners who have fulfilled their MOP are allowed to purchase a private property and hold on to both at the same time.

That round of measures in 2010 also revised the MOP for letting out a flat from three years to five years.

In tandem, the number of flats being sublet out also dipped last year, according to the HDB.

Some 3.1 per cent of home owners let out their flats last year, compared with 4.8 per cent in the year before.

Source: The Straits Times –18 February 2013

INDUSTRIAL MARKET

Net allocation of JTC ready-built factories dips

Net allocation of JTC's ready- built facilities (RBF) was a negative 3,200 square metres (sqm) for the final quarter of 2012, making the October-December period the second consecutive quarter that net allocation has fallen into negative territory.

Despite being wider than the negative 2,500 sqm in Q3 2012, the net allocation - derived from the difference in gross allocation and terminations - still showed an improvement over the negative 11,400 sqm posted in Q4 2011.

The quarter-on-quarter weakening was largely due to a smaller gross allocation of 9,700 sqm.

Terminations in Q4, however, eased to 12,900 sqm from 25,000 sqm in the previous three months. Of that, 10,500 sqm came from terminations in standard factory space.

The occupancy rate during the period edged 0.6 point lower to 95.5 per cent, but was still within the healthy range.

Together with the Q4 numbers, the full-year's net allocation was 9,530 sqm, rising above the axis from a negative 23,150 sqm last year.

The strong take-up rate at the CleanTech One building, which was completed last year, helped JTC's business park segment record a leap to 14,720 sqm in net allocation, from 2,120 sqm.

JTC's standard factory and flatted factory segments also narrowed their negative net allocations to a respective minus 2,100 sqm and minus 3,280 sqm, from minus 10,020 sqm and minus 15,100 sqm previously.

Figures for prepared industrial land (PIL) ran in the other direction, with a better quarterly performance but a muted full-year result.

Net allocation for PIL trebled to 61.1 hectares in the fourth quarter, from 19 ha in the previous quarter, owing to a greater gross allocation of 79.4 ha, from 57.4 ha, and terminations of 18.3 ha, from 38.4 ha. Net allocation was 20.9 ha for the same period last year.

For the full-year, however, net allocation of PIL was down 15 per cent at 177.3 ha from 207.7 ha in 2011, when the numbers had posted a surge.

JTC expects to secure the temporary occupation permit for its Small Footprint Standard Factories in the first quarter of the year.

Its Surface Engineering Hub is slated for completion in the third quarter of this year, and the MedTech One, in the fourth. Besides these, CleanTech Two in CleanTech Park and Fusionopolis' Towers A through C are scheduled for completion between 2014 and 2015.

Source: Business Times –16 February 2013

COMMERCIAL MARKET

Six prime office units at Samsung Hub up for sale

Six strata office units have been put up for sale on the 17th floor of Samsung Hub, a 999-year-leasehold, Grade A office block on Church Street, near Raffles Place.

The units have strata areas ranging from 883 sq ft to 3,595 sq ft, adding up to 13,132 sq ft. Their absolute price quantums range from $3 million to $12 million.

Their owner, Church Street Holdings, has put the units up for sale.

"We've had agents calling us, giving offers of $3,300-3,500 psf, so we decided to conduct the tender in a fair and transparent manner. If we get offers around those price levels for all or most of the six units, we will consider selling. Otherwise, we're happy to hold on to our investment," said Kishore Buxani, managing director of Buxani Group, one of the shareholders of Church Street Holdings.

The highest price achieved for an entire floor in Samsung Hub is $3,000 per square foot for level 16, which spans 13,132 sq ft. It changed hands for $39.396 million last December.

The tender for the six units will close on March 15.

Samsung Hub, which was completed in 2005, has a total strata area of 299,753 sq ft in a 30-storey office block, with a six-storey podium for 178 carpark lots.

Source: Business Times –19 February 2013

News Update - 8 Feb 2013

RESIDENTIAL MARKET

Homing in on property price cuts

Developers who have been cutting prices following the new cooling measures risk angering buyers who bought at the earlier levels, say experts.

But developers claim that the recent discounting does not necessarily disadvantage early buyers.

Property experts say some buyers who have just shelled out on a new home will inevitably be unhappy when they see units at the same development suddenly going cheaper.

An industry player, who declined to be named, said price cuts are a sensitive issue and unhappiness with the developer can be expected with some buyers "banging tables".

"But you can't expect the best deal all the time, especially if the market has turned... When developers raise prices after a launch, they don't ask the earlier buyers to cough up more money instead," he said.

Some developers have cut prices amid concerns of a deluge of housing supply in the pipeline, coupled with the risk of the market slowing on the back of the tough new curbs.

CapitaLand projects such as 1,040-unit The Interlace at Alexandra Road have slashed prices by an additional 10 per cent, while 1,715-unit d'Leedon in the former Farrer Court estate offered discounts of up to 15 per cent for some units.

Far East Organization also offered further discounts of up to 5 per cent at eCO in Bedok and Seastrand in Pasir Ris recently, after the seventh round of curbs kicked in on Jan 12.

When asked if earlier buyers had expressed unhappiness at the discounts, A CapitaLand spokesman told The Straits Times: "Our buyers, in general, are aware that we consider the prevailing market conditions and offerings at other developments within the same area when coming up with promotional schemes.

"In fact, some buyers who purchased units earlier enjoyed more attractive pricing despite the current promotional discounts."

He pointed out that these buyers also paid lower stamp duties and had higher loan quantums so once these factors are taken into consideration, it would not be meaningful to compare prices of units bought at different times.

Another developer, who declined to be named, said the firm explains to earlier buyers that the price premium they might have paid is due to the choicer units being offered to them at the earlier launch date.

Even with discounts, prices rarely fall below the launch level, he added, as prices are typically inched up gradually as the project sells more units.

Price cutting is certainly not new.

Melrose Park, a 999-year leasehold project in the River Valley area, for instance, cut prices by as much as 40 per cent during the Asian financial crisis as the market bottomed out.

Source: The Straits Times –8 February 2013

Call for review of zoning policy for industrial land

The way industrial land is zoned should be re- assessed to ensure small and medium-sized enterprises (SMEs) will be able to grow.

Responding to the Government's White Paper on Population, said there is a risk some firms will be left out in the cold by existing zoning categories. These were devised for a manufacturing sector that is rapidly evolving - and in turn, threatening to leave these zoning definitions looking outmoded.

Much of the traditional assembly and production activity has gone offshore. But the newer enterprises often do not know if their activities - often they involve creative work or other design-related activity - run foul of zoning laws.

There are three types of users under the Business 1 (B1) zoning for industrial property.

There are product manufacturers, for whom the zoning was initially devised. But there are also firms which are not authorised to use industrial space, such as tuition and employment agencies.

And increasingly there is a "grey area". For example, local SMEs are often subcontractors for multinational companies, specialising in a few aspects of the larger firm's production process.

These should be allowed to use industrial space, which is cheaper than office space, even if their activities do not resemble traditional manufacturing.

If the Government does not adapt B1 definitions to meet the realities of modern manufacturing, then one alternative could be to create a new supply of basic, no-frills office space in non-central locations.

Another option would be to create a hybrid industrial-office, a land-use category used by firms in Hong Kong which need a local administrative base to coordinate factories in China.

More clarity is called, sooner rather than later, to ensure that the "manufacturing sector and Singapore will be better able to keep abreast of global competition".

Dr Moh Chong Tau, deputy president of Singapore Manufacturers' Association, said land use is a big issue for many of his members.

He said: "If the business provides support for manufacturing, even if it does not create the physical product, it should not be considered as an 'office environment', where rentals could be two to three times higher than industrial space. If costs are so high, manufacturing spin-offs will go elsewhere."

Source: The Straits Times –8 February 2013

News Update - 7 Feb 2013

RESIDENTIAL MARKET

Next-gen HDB flats will be better designed: Khaw

The future of Singapore will look like Punggol, National Development Minister Khaw Boon Wan said yesterday, but just how might this pan out?

Mr Khaw told Parliament that the next generation of public housing would be even more comfortable and better designed, holding up Housing and Development Board precincts at Punggol South as an example.

Newer neighbourhoods, such as Punggol, were planned as smaller estates, HDB said in response to queries. Each Punggol precinct is made up of between 1,000 and 3,000 homes.

There is also more intensive land use, it said, pointing to the gross plot ratio (GPR) of about 3-3.5 in Punggol.

This compares with earlier public housing developments in the 1970s and 1980s in older towns such as Ang Mo Kio, Bedok and Clementi, where GPR ranged from 1.8 to 2.8.

"In general, as gross plot ratio increases, the number of dwelling units within the same plot size of land increases. More families can then be housed in the development," HDB said.

To maintain liveability, planners had to exercise creativity.

For example, some carparks were integrated with housing blocks, covering the first few floors. To maintain a sense of space, HDB's planners executed ideas such as communal gardens on the rooftops of integrated carparks.

Each precinct at Punggol also shares a "common green" of about 0.4-0.7 of a hectare in size within walking distance from each block, compared with the 1-1.5 ha neighbourhood parks shared by 4,000 to 6,000 households in older estates serving a wider catchment.

"So what is our future? It is not to be a concrete jungle. It is to be a city in a garden, it is to be Punggol - multiply that many times. And the best is yet to be," Mr Khaw said yesterday.

Feedback about developments at Punggol South has been positive, Mr Khaw noted. He added that the same applies for preliminary plans for Punggol North. Planners are now working on Tampines North, Bidadari and Tengah.

"They will be awesome," Mr Khaw assured.

Source: Business Times –7 February 2013

 

Bill gives more teeth to Controller of Housing

The Controller of Housing will be empowered to require developers to disclose any benefits they provide to home buyers - including reimbursements of stamp duty, discounts and vouchers - and to publish the information, under an amendment Bill introduced for first reading in Parliament yesterday.

The move will boost transparency on home prices, say industry players.

This is one of the changes contained in the Housing Developers (Control and Licensing) (Amendment) Bill - which will be tabled for its second reading at a future Parliament seating.

The Ministry of National Development said yesterday: "The...amendments to the Act will further enhance protection of home buyers and promote transparency in the property market. These amendments have taken into consideration feedback from the general public, as well as developers, property agents, property consultants, solicitors and other real estate professionals."

The changes will empower the Controller of Housing to require developers to submit to it information on sales transactions in their projects such as the purchase price and agreements (for instance by a developer to reimburse a buyer for stamp duty paid on his purchase). The Bill will also allow the controller to publish the information or use it for compilations, analysis, research studies or surveys.

Developers already submit monthly sales data on their projects (including prices of units sold) based on options granted, to the Urban Redevelopment Authority, which then releases the data on the 15th of the following month. However, the prices captured in this exercise would typically not reflect the incentives which have not been received by the buyers at the point when they were granted the option - such as reimbursement of stamp duty (usually given after it has been paid by the buyer), a furnishing voucher, or even an expensive artpiece.

Such incentives may be given by the developer to the buyer only when the option is exercised several weeks later or even much further down the road, such as when the project has been completed, say agents. As a result, some of the developers' sale prices being submitted to URA each month and also reflected in caveats may be inflated. With such data fed into URA's private home price indices, this would mean that the indices may not reflect true property values.

Analysts reckon that when the new rules take effect, URA's price indices could take a downward adjustment.

A property consultant suggests URA could ask developers to adjust price data for units they have sold since the start of 2012. "Stamp duty absorption and other soft discounts became more popular again after the first round of additional buyer's stamp duty was introduced in December 2011. Such a refinement would allow us to see whether prices actually dipped around Q1 last year," he added.

Market watchers agreed that the impending change will promote greater transparency in the property market. With the end of this form of "price protection", the true property values will be made public and valuations would come down, said one property agent who declined to be named.

In addition to enabling URA to collect and publish more comprehensive and timely information on transacted prices of private homes, amendments to the Bill will also regulate the set-up of showflats, to ensure greater accuracy in developers' representation of housing units offered for sale. Moreover, the criteria for granting licences to housing developers will be tightened.

"For example, a licence will not be granted to a developer company with a director who has been convicted of, or has served a sentence of imprisonment for, a fraud or dishonesty-related offence in or outside Singapore within a period of five years before the date of the licence application," MND said.

As the fine amounts in the current Act were set in 1965, the Government is proposing to increase the fine amounts five-fold to sustain the deterrent effect.

"The amendment will also allow offences under the Act and subsidiary legislations to be compounded," MND added.

Source: Business Times –7 February 2013

 

Major shift in planning strategy: Khaw

The Government has made a major shift in the way it provides housing and public transport infrastructure - it will now invest and build well ahead of demand.

Complaints about overcrowding, congestion and the long wait for a Housing Board flat prompted the switch, which National Development Minister Khaw Boon Wan described as "a major shift in planning and development strategy".

"We will do our best not to allow population to surge ahead of our infrastructure again," he told Parliament yesterday. "What we must do is to build infrastructure ahead of demand and where possible, we must also build in a buffer so that we can respond to unexpected developments and needs."

He said the Government had learnt "a valuable lesson" from the current problems.

"The congestion we experience today is real... We are not happy with the status quo. We are resolute in addressing these concerns... But we must also learn from this and be clear about the need to plan and build ahead of demand so that we will not be caught again with another infrastructure crunch like this one."

He was speaking on Day Three of the debate on the Population White Paper, which has drawn strong reaction for its projection of a population of 6.5 million to 6.9 million in 2030. That prospect has been criticised by the public as well as Members of Parliament.

"Many MPs have conveyed their strong sentiments. Singaporeans are upset. We know," said Mr Khaw. "Then why are we moving such an unpopular debate? Indeed, why is the Government, well aware that Singaporeans are already upset with overcrowding, still insisting on planning for a larger population?"

He pointed to the reasons given by Deputy Prime Minister Teo Chee Hean, who explained on Monday that Singapore was heading for a crisis given its rapidly ageing population and shrinking labour force.

Mr Khaw said that having been caught wrong-footed, with an infrastructure mismatch that has been painful for Singaporeans and planners alike, the Government was now planning on a "stretched scenario of 6.9 million".

"We hope never to reach this level. However, for long-term planning, it is safer to prepare enough land and infrastructure for a larger number."

Focusing mainly on housing, his message to Singaporeans was: Don't worry. He said there will be more than enough HDB flats for everyone, prices will stay affordable, waiting times will be cut, and the quality of life preserved.

His ramped up public housing programme will add about 200,000 new homes within the next four years, with more beyond that, and building all these new homes would need more construction workers.

Taking a swipe at the Workers' Party's alternative road map, he said he was shocked by its recommendation to freeze the number of foreign workers if the local workforce can be grown.

"My housing plan will be badly affected! I will not be able to deliver the new flats as promised to 200,000 families," he said.

Urging the opposition party to rethink, he said its plan would seriously disrupt his efforts to stabilise the housing market.

Acknowledging anxiety over HDB flat prices, including resale prices, he outlined efforts to keep flats affordable and cool the market. "We are determined to tame the property market, especially the HDB resale market. We think the recent cooling measures will make an impact. If necessary, we will do more."

Mr Khaw also assured Singaporeans that the quality of life would not suffer in a more crowded Singapore. He was confident that the opposite would be achieved, with plans for parks, nature reserves, well designed neighbourhoods in new estates all helping to ensure liveability here.

Among those who spoke yesterday was former national development minister Mah Bow Tan, who called the White Paper "the most important document regarding our future since Independence".

Emeritus Senior Minister Goh Chok Tong praised Prime Minister Lee Hsien Loong for raising the population issue for discussion now instead of leaving it for his successor to deal with.

"Singapore has succeeded only because of the courage of our leaders and people to face challenges squarely, and because of our will to succeed and our ability to work together to overcome issues of survival," he said.

Source: The Straits Times –7 February 2013

 

Enough homes so young S'poreans 'need not worry'

Some 200,000 homes will be ready by 2016, said National Development Minister Khaw Boon Wan yesterday in Parliament, as he sought to assure Singaporeans that progress is being made in "relieving the strains we feel today".

Of these, 111,159 are HDB flats, 9,800 are executive condominiums and 76,600 are private property units.

And even as those projects are going on, the Government is continuing to launch more flats and sell land to developers.

Once the current backlog of demand is cleared, said Mr Khaw, the Housing Board will start to build up a "meaningful stock of unsold HDB flats to meet the needs of couples who may need housing urgently".

"In short, young Singaporeans, you do not have to worry," he said.

He revealed that for the longer term, the Ministry of National Development (MND) has reserved sufficient land to develop another half a million housing units.

If fully realised, this would increase housing stock at a proportion that is double the projected population growth, he noted.

This is a kiasu approach to give planners plenty of buffer, he said.

Mr Khaw also reassured young Singaporeans that flat prices are within their reach, especially since he has delinked the prices of Build-To-Order (BTO) flats from the resale market.

Since Mr Khaw took over the housing portfolio in 2011, he has unpegged the prices of BTO flats from resale flats in the vicinity.

So, BTO prices are stabilised by "increasing the government subsidy when resale prices rise, instead of following resale prices up", he explained.

This will continue until the resale market stabilises, he said.

"We are determined to tame the property market, especially the HDB resale market," he said.

Property cooling measures last month - the seventh in three years - should help to do that, he said, promising that "if necessary, we will do more".

Mr Khaw characterised his new approach to housing provision, and the Government's new strategy in infrastructural development, as being not just about building ahead of demand, but also setting aside enough space to provide options for future generations.

He described it as "planning for unknown unknowns", since no one could predict what the world would be like beyond 2020 and 2030.

"They (future generations) can decide what they want to do with the options, to create the kind of society that they want," he said.

Mr Khaw explained that new land reclamation and recycling the use of existing land was a key part of the move to create options.

He cited the Southern Waterfront City - to be created by moving port facilities at Tanjong Pagar, Pulau Brani, Keppel and Pasir Panjang to Tuas - as an example. It would serve as the western wing of the Central Business District where Marina Bay now serves as the eastern wing.

"So the CBD, eastern wing, western wing together will offer a bigger scope, much more than Marina Bay. This is an exciting option beyond 2030 and it is totally within our grasp." he said.

Source: The Straits Times –7 February 2013

News Update - 6 Feb 2013

RESIDENTIAL MARKET

Cooling measures won't hit banks heavily: Citi Research

The latest round of property cooling measures is unlikely to impact banks heavily, with mortgage and construction loan demand expected to remain resilient this year, though at a slower growth rate.

This is because data so far since the cooling measures were implemented suggests that demand for property is still strong, Citi Research said in a report yesterday.

It expects the mortgage growth rate to reach 9 per cent this year, compared with 16 per cent last year. It also predicts the growth rate for construction and non-bank financial institution loans to drop only slightly from over 17 per cent to about 15 per cent.

Citi Research cited the sale of about 300 units at the 630-unit QBay Residences, and the strong interest received at a Jurong residential site near the MRT station with 12 developer bids as evidence of continued strong demand.

Also, despite the previous six rounds of property cooling measures, there was still a growth of over $20 billion in net mortgage drawdowns last year. The latest measures in mid-January - the most comprehensive yet - could lead to lower residential sales volume, seeing the net new mortgage drawdowns taper to $14 million this year, said analyst Robert Kong.

He also expects demand for construction loans to be "robust".

In relation to the White Paper suggesting a population of 6.5-6.9 million by 2030, National Development Minister Khaw Boon Wan has said that about 200,000 homes will be built by 2016 and enough land for 700,000 homes will be set aside by 2030.

Based on this, Mr Kong predicts government residential land sales to remain at $7-8 billion annually for the next two years (it came up to $8.6 billion last year), supporting strong levels of construction loans.

Source: Business Times –6 February 2013

 

Few bids for site in Queenstown

A plum, 99-year leasehold private housing site opposite the Queenstown MRT Station drew just three bidders, surprising property consultants who had expected between five and 10 contestants for the plot.

The top bid was, however, within expectations at $562.8 million, or $883 per square foot per plot ratio (psf ppr). This came from a consortium backed by Hong Leong Holdings and City Developments. Predictions for the top bid had ranged from $700 psf ppr to $1,100 psf ppr.

Some market watchers whom BT had earlier spoken to had expected the plot to be keenly contested because strata landed homes could be built on it with prior written approval from the Housing & Development Board (HDB). They say that such sites are getting harder to come by.

Two tenders for 99-year leasehold residential plots at Lakeside and Ang Mo Kio after the latest property-cooling measures were announced had attracted more than 10 bidders.

The plot is also located in an area known for its highly sought-after homes.

A five-room HDB Strathmore unit is observed to be asking for up to $100,000 cash-over-valuation, one of the highest transactions recorded.

One reason the tender fell short of expectations could be the large sum of over $500 million that developers had to cough up for the plot.

The effect of the cooling measures, rolled out in January, may be starting to set in, too.

Located along Commonwealth Avenue and just next to Queenstown MRT Station, the 1.2-hectare plot can potentially yield about 700 homes, according to the HDB.

It has a 4.9 plot ratio (ratio of maximum gross floor area to land area), which means it can accommodate a high-rise condo of over 40 storeys, said consultants.

Source: Business Times –6 February 2013

 

Indirect discounts for home buyers under review

The dangling of sweeteners to home buyers by developers to take the sting out of recent property cooling measures is being reviewed by the Government.

It is concerned that sweeteners such as stamp duty rebates and furniture vouchers cause home prices to be artificially inflated.

The Straits Times understands that the Urban Redevelopment Authority (URA) is looking into the practice and might act soon, as indirect discounts could make the cooling measures seem ineffective.

Unlike upfront discounts, some rebates and vouchers are given only after a buyer has completed a purchase, so the price cuts are not reflected in the sales caveats lodged with the URA.

That means home prices fed to the URA quarterly price index - based on caveats lodged - might not reflect real property values.

Experts say this causes home prices to be less transparent and keeps them artificially inflated.

But developers prefer indirect discountsas they do not affect the caveat pricing. This keeps the official pricing firm so earlier buyers are not unhappy at missing out on price cuts, and also props up home prices islandwide.

Sources say as a start, the URA could be looking at publishing net prices that take into account indirect discounts as part of its monthly developers' sales data.

The latest property curbs last month led developers to pull out all the stops. Some offered rebates to lessen the impact of the additional buyer's stamp duty (ABSD). Frasers Centrepoint, for instance, offered stamp duty discounts of 5 to 7 per cent to all buyers of Q Bay Residences in Tampines. Buyers could take an upfront discount or a rebate after 20 per cent of the price had been paid.

Giving full or partial ABSD rebates is not new but if the latest curbs lead to an increase in the practice, it would distort prices.

Developers say URA has already been encouraging them informally to be more transparent with prices. Some add there is no benefit in masking prices as the Government has stated its intention to see prices soften and artificially propping up prices might only attract more measures.

Some experts add that the review is overdue as developers' indirect discounts are negating the impact of the measures.

A National Development Ministry spokesman said the true purchase price of the property must be accurately conveyed to the potential buyer so that he can make an informed decision.

The Commissioner of Stamp Duties can also recover any deficient duties if the declared price of a property falls below its market value, he added.

The Monetary Authority of Singapore said that since 2002, it has required banks to factor in any discount or other benefit when calculating an appropriate loan.

Source: The Straits Times –6 February 2013

News Update - 5 Feb 2013

RESIDENTIAL MARKET

Buyers home in on larger flats in mature towns

Larger flats in mature estates have once again drawn the most interest in the latest Build-To-Order (BTO) exercise, a trend that is likely to continue along with the promise of rising resale values.

When the most recent exercise closed last night, there were 12 applicants for every five-room flat on offer in Ang Mo Kio and six for every four-room unit there.

In Tampines, each four-room flat drew about seven bids.

With the Government's promise to keep prices of new flats affordable, bigger units offer top prospects for price appreciation amid rising resale prices, analysts noted.

Last week, National Development Minister Khaw Boon Wan made it clear that he had delinked prices of new flats from that of resale units to keep them affordable for first-time buyers.

He had implemented the change since taking over the housing portfolio 18 months ago, and would continue to do so, so long as "property remains hot".

For instance, prices of four-room units in Tampines start from $293,000 in the latest exercise, similar to last September's BTO rollout where prices started from $305,000. Prices for resale counterparts in the area range from $440,000 to $481,000, according to the Housing Board's website.

HDB resale flat prices have been climbing steadily after a slight dip in 2009 due to the financial crisis..

The overall application rate for the first exercise of the year, which offered 3,346 flats in six towns, is 3.5. The overall rates for the past three years, from 2010 to last year, had been 5.7, 3.8 and 2.9 respectively.

One reason could be the implementation of a priority scheme for married couples with children younger than 16, although the application rate for this group was not made known.

Now, 30 per cent of the BTO-flat supply is reserved for them.

In the past, they had to vie with other first-timers, including engaged couples.

Among the non-mature towns, Choa Chu Kang emerged as the poorest performer due to its location, while Hougang attracted the most bids as it was considered developed by many buyers.

Those who have yet to apply for a flat said they are assured that there is a strong supply in the pipeline.

HDB has promised to launch at least 23,000 flats this year.

Source: The Straits Times –5 February 2013

Slow weekend for sales at showflats

Property sales at showflats continued to slow over the weekend as home-seekers adopted a wait-and-see approach in the wake of the new cooling measures.

A combination of Chinese New Year distractions and the possibility that some developers might start throwing in discounts meant sales are being put on hold.

Q Bay - the joint development by Frasers Centrepoint, Far East Organization and Sekisui House - at Tampines sold just 10 units at the weekend, bringing the total to 382 out of 630 units.

Prices for some units have been increased by 1 per cent to 2 per cent over the weekend, depending on their outlook and size, said a Frasers Centrepoint spokesman.

The average price of $985 per sq ft (psf) at the preview launch two weeks ago has risen to about $1,000 psf. However no additional incentives have been rolled out on top of the 5 per cent to 7 per cent discount already offered to mitigate the new additional buyer's stamp duty.

Weekend sales were also slow at La Fiesta, which sold just seven units, mostly two-bedders, although all its one-bedroom units have been taken, said Mr Lim Yew Soon, managing director of developer EL Development.

The project has sold 405 out of 810 units at an average price of $1,150 per sq ft since the Jan 11 preview launch.

CapitaLand bucked the mediocre sales trend, thanks to new and existing discounts at its Interlace and d'Leedon projects.

Discounts of up to 15 per cent were offered for the 1,715-unit d'Leedon last week.

At The Interlace, an additional cut of 10 per cent was dangled on the weekend in addition to a 10 per cent discount offered previously. The incentives helped The Interlace move 15 units while d'Leedon sold a robust 47 units on the weekend.

Source: The Straits Times –5 February 2013

News Update - 4 Feb 2013

RESIDENTIAL MARKET

Singapore offers a glimpse of its future

A couple of days after projecting that the population could rise to upto 6.9 million by 2030, the government yesterday revealed how they might be accommodated without Singapore feeling the squeeze.

Reclamation alone will raise the land area by up to 5,200 hectares or 7.3 per cent - much of it in Tuas Port, Pulau Tekong and Jurong Island. Some of the existing 10,000 ha stock of reserve land will be tapped. Old industrial areas and some golf courses will be recycled to achieve higher land productivity. Infrastructure permitting, land use can be intensified.

Singapore's current population of about 5.3 million live on 71,400 ha of land. By 2030, some 76,600 ha could be available.

Analysts have already started debating the impact that this Land Use Plan would have on the property market. The government highlighted that the pace at which land will be rolled out may depend on market conditions.

National Development Minister Khaw Boon Wan said: "As planners, our mantra is . . . 'Prepare for the worst but hope for the best'. . . .The figure 6.9 looks aggressive. But from planners' point of view, we need aggressive figures and projections so that we can prepare for the worst. The worst is if we plan for the best then if the worst comes, then we will be under-providing, as what has happened in the last few years."

The proportion of Singapore's projected land area in 2030 that will be used for housing will be 17 per cent, up from around 14 per cent currently. Industry and commerce's share of Singapore's land supply too will rise from roughly 13 per cent to 17 per cent to power Singapore' economic growth.

The Marina Bay area can support the expansion of the Central Business District by at least another one million square metres gross floor area of prime office space. Currently, the Central Area which includes the CBD (which in turn includes Marina Bay) has six million sq m of prime office space. There will be capacity to increase the figure to more than 11 milion sq m by 2030 in the Central Area - if there is demand. Singapore will develop a "North Coast Innovation Corridor" spanning Woodlands Regional Centre, Sembawang, the future Seletar Regional Centre, and the learning corridor and creative cluster in Punggol.

To support the growth of the manufacturing sector, sufficient land will be set aside in Woodlands, Sengkang West, Seletar, Lorong Halus, Pasir Ris and Tuas. By 2030, Singapore will also develop more commercial centres outside the city, amounting to 13 million sq m to provide more employment and amenities close to where people live.

As part of the plans to boost the island's stock of homes by 700,000 units to 1.9 million by 2030 to support a rising population, the Republic is planning for new housing estates in the Central Region - at the former Bukit Turf Club, Kallang Riverside, the waterfront area around Keppel, and Bukit Brown.

In the longer term, a "Southern Waterfront City" with commercial and housing projects will be developed after the existing container port facilities in the City Terminals and Pasir Panjang Terminal are consolidated and relocated to 1,700 ha of reclaimed land in Tuas Port. This will be one of three major land reclamation sites, along with Pulau Tekong (2,000 ha) and Jurong Island (600 ha). Existing military training areas across the island will be moved to the expanded Pulau Tekong, freeing up land for other uses such as housing.

Increased connectivity is generally seen as a plus factor for property values.

Source: Business Times –1 February 2013

700,000 new homes by 2030: too many or too few?

More homes will be built in the central region, including the former Bukit Turf Club, Kallang Riverside, Bukit Brown, and the waterfront area around Keppel, as part of the government's long-term plan to roll out 700,000 new housing units by 2030.

Of these, almost 200,000 homes, comprising 90,000 private units including executive condominiums, and 110,000 public homes, are expected to be completed by 2016.

According to the Land Use Plan released yesterday, three new towns will be carved out: Bidadari which will have about 11,000 homes (both public and private housing), Tampines North which will have about 21,000 homes, and Tengah which will see about 55,000 homes.

Market watchers generally concurred that the areas highlighted in the plan should see land values increase over time.

About 87,000 new homes are expected from the three new towns created. Build-To-Order (BTO) projects can be expected in Bidadari and Tampines North in the next two to three years while BTO projects in Tengah are expected to come onstream in the next three to five years.

More housing estates are also being planned within the central region. The number of housing units released will depend on various considerations, including achieving a good mix of housing types. The sites will be staged for development by 2030 pending demand.

Separately, Minister for National Development Khaw Boon Wan stressed that prices of new flats sold by HDB are not linked to the resale flat market, adding that BTO prices across HDB's new launches in the past 18 months have been stable even as prices of resale flats have been climbing steadily.

Source: Business Times –1 February 2013

BTO prices not pegged to resale flats

National Development Minister Khaw Boon Wan yesterday made clear he has delinked prices of the Housing Board's Build-to-Order (BTO) flats from resale flat prices to keep new flats affordable, especially to first-timers.

This new pricing policy has been in place since he took over the housing portfolio after the 2011 General Election, he told journalists.

"Although the resale market is going up, I've stabilised BTO prices, by increasing the government subsidy," he said in Mandarin, to back up his assurance that public housing will remain abundant and affordable even with population projections of 6.9 million by 2030.

Mr Khaw also said he has directed HDB to continue with this new pricing policy for as long as "property remains hot".

His remarks confirm what property analysts have suspected for the past 18 months - that the Government has increased its subsidy for new flats.

That is how it has kept BTO prices across HDB's flat launches largely stable, despite the resale price index rising 12.5 per cent since the second quarter of 2011.

Traditionally, new flats are priced at a discount to resale flats in the same area.

HDB's home ownership programme incurs an annual deficit of about a billion dollars due to this practice, a shortfall that the Government covers.

But before this new policy, prices of new flats were still pegged to those of resale flats and rose on the same trajectory. If not, the shortfall that the Government would have to plug would grow indefinitely.

In the current financing framework, the Ministry of National Development (MND) has to buy from the Singapore Land Authority (SLA) the land on which HDB flats are built. Each plot is valued according to several factors, including the price of resale flats in the vicinity. So as the resale flat market rises, so too does the value of the land and what MND has to pay for it.

The money that SLA collects from the land sale is considered part of national reserves.

ERA realtor Eugene Lim called Mr Khaw's promise a step in the right direction for its assurance to home buyers.

But flat buyers should not expect HDB to price units "haphazardly" in defiance of the market, he said.

"The prices of BTO flats in mature estates could very well be 40 per cent more than those in outlying, suburban areas."

Source: The Straits Times –1 February 2013

Three new towns to offer about 90,000 homes

Three new towns will provide some 90,000 homes in the next few years while other sites such as Keppel and Bukit Brown could also be developed in future.

The new estates - Bidadari, Tampines North and Tengah - will offer both private and public housing, according to the Ministry of National Development's Land Use Plan, which was unveiled yesterday.

The Government has committed to a supply of 700,000 new homes by 2030 to house a bigger population.

Bidadari, a former cemetery whose graves were exhumed in 2001, will offer 11,000 units over the next three years.

Concurrently, Tampines North, which now has many open spaces, will also be further developed to yield 21,000 homes.

Tengah, in the west, is now being used as a training ground by the military but some parts will make way for 55,000 homes in about three to five years' time.

Houses could also be built in areas such as the former Bukit Turf Club, Kallang Riverside, Keppel and Bukit Brown to allow more people to live closer to their workplace. This would reduce commuting time and traffic jams, said a ministry spokesman.

She added that these areas could be developed by 2030 but this will depend on demand.

According to the plan, more homes will also be built on vacant land in existing estates.

Eco-town Punggol will become one of the largest HDB towns with 96,000 homes.

In an interview at the HDB Hub yesterday, National Development Minister Khaw Boon Wan said much planning has gone into ensuring that the amenities and design features in the new sites are attractive to home buyers.

For instance, parts of Bidadari's undulating terrain and existing greenery will be retained while Tengah, with its largely un- changed landscape, could be a test bed for new designs.

Of the new towns, property analysts expect high demand for homes in Tampines North and Bidadari.

Tampines North is part of Tampines, which is already well-developed, while Bidadari is only a 15-minute drive to the city.

Said ERA Realty spokesman Eugene Lim: "People have seen how a former cemetery like Bishan has been converted into a bustling town. They might expect the same for Bidadari."

As for the new areas, Mr Lim said Keppel and Kallang Riverside would likely have high-rise buildings while Bukit Brown and the former Bukit Turf Club could support a lower-density housing model.

"There will be something to cater to all needs," he added.

Source: The Straits Times –1 February 2013

Tampines North may pip Tengah in attractiveness

Tampines North and Tengah are slated to be bustling new towns in the coming years, though analysts say the latter could be a harder sell because of its location and current condition.

The two estates are part of the Land Use Plan released this week, to chart out the infrastructure needed to house a projected population of 6.9 million by 2030.

Tampines North, which is near the furniture store Ikea and Giant hypermarket, has a large expanse of open space measuring some 240ha.

It is bounded by Tampines Avenue 10 and Tampines Avenue 9. Over the next three years, the site is expected to offer about 21,000 homes.

Attracting residents to Tengah, a location currently dominated by forests, farmland and military areas, would be a bigger challenge.

Located in the west and bounded by Choa Chu Kang, Bukit Batok and Jurong West, the 700ha site is expected to host 55,000 homes in about three to five years.

But there is potential.

National Development Minister Khaw Boon Wan has said previously that Tengah's wide spaces will give planners "maximum opportunity to plan even better, such as new layouts and new building forms".

Source: The Straits Times –2 February 2013

Island south of Sentosa zoned for housing

In more than two decades, some residents could call Pulau Seringat - a tiny island south of Sentosa - home.

The island, reported as a potential site for a casino resort six years ago, has been zoned for residential use under the Ministry of National Development's (MND) Land Use Plan announced on Thursday.

The six southern islands - Kusu, St John's, the Sisters' Islands, Kias, Lazarus and Seringat - were reportedly set to be clustered into one of the two casino resorts, which were eventually sited at Marina Bay and Sentosa.

Pulau Seringat bore marks of progress when The Straits Times visited yesterday afternoon, with paved roads, covered shelters and a visitors' centre greeting boats docking at a small jetty.

It is open to the public and the island's crown jewel is a sparkling crescent-shaped beach with clear greenish-blue water.

But some parts are still rustic: beachgoers trek through a sandy dirt path to the beach, and the bulk of the island teems with overgrown greenery.

It was a desolate sight at the visitors' centre, with locked toilets, an empty VIP room, and no staff present.

All that is set to change if bulldozers take to the island, which is linked by a bridge to neighbouring St John's Island.

The islands have gas, water, electricity and telecommunication lines from Sentosa.

Visitors take the ferry, which runs between Marina South Pier, St John's Island and Kusu Island, or charter a private boat to reach the island.

It is a spot popular among swimmers and couples who like the rustic scenery for their wedding pictures, said boat captain Junrey Millan, 33. He runs about four trips daily to the island, and brings in maintenance staff twice a week, so that they can clear litter and trim the grass.

Asked about its plans for the area, the MND said that there were no further development plans for Pulau Seringat at this time, and the southern islands would be retained for recreational uses.

Source: The Straits Times –2 February 2013

More home owners 'decoupling' property to avoid hefty duty

Home owners are finding ways to reduce the amount they have to pay after hefty stamp duty increases were introduced two weeks ago.

One way is for families - say a husband and wife, or a parent and child - who bought a house together to transfer one partner's share to the other person.

This creates a sole owner and leaves the other half of the pair free to buy another home without having to pay the additional buyer's stamp duty (ABSD), as that purchase will be seen as his first.

The saving can be substantial. A Singaporean buying a second home will have to pay a 7 per cent ABSD, while permanent residents (PRs) pay 10 per cent.

KhattarWong managing partner Gurbachan Singh told The Straits Times that he has seen more cases where couples "decouple" their property.

The firm has fielded about 10 queries over the past fortnight, and is already acting in two or three decoupling cases.

"It's no longer co-ownership or part ownership. They want to transfer everything to one party so that the other party can buy without the burden of the ABSD.

"Although the Government says this is temporary, we don't know when it's going to be lifted, therefore given that uncertainty... people are taking pre-emptive action," he added.

But the transferring of a half share to one of the co-owners is still subject to the standard stamp duty rate of 3 per cent, as it is considered a transaction, Mr Singh noted.

KhattarWong is also taking more appeals to the taxman over the revised ABSD rates.

One aspect has to do with a will that bequeaths a property with apparent instruction for sale, so that the beneficiary receives the sale proceeds of a property rather than the property itself.

This could entail the executor of the will selling the property and distributing the proceeds to those named in the will. No tax is payable on the distribution of sale proceeds to the beneficiary.

If, however, instead of selling the property, the executor transfers the property to the beneficiary, the Inland Revenue Authority of Singapore's (Iras) position is that stamp duty - and in turn ABSD, if applicable - should be paid, Mr Singh said.

Take a Singaporean who owns a private home, and is then left the proceeds of a property by his deceased parent.

If he opts to keep this property instead of allowing it to be sold as stated in the will, he will have to stump up 10 per cent in stamp duty based on a market valuation. This includes the standard 3 per cent and the additional 7 per cent, as it is a second home.

A PR in the same position has to pay the standard 3 per cent plus the additional 10 per cent.

If the son then sells the inherited apartment within four years, he will also be subject to the seller's stamp duty (SSD) of up to 16 per cent.

"We don't think (having ABSD or SSD levied on such inheritances) is correct, we presently have two instructions to object and to appeal against (Iras') position," Mr Singh said. "If the response from Iras is not satisfactory, we may take a court ruling for it."

Lawyers note that if the will had instructed for the physical property be handed down to the son, no stamp duty applies, thus this same rule should be applied even in these alternative cases.

Mr Singh said the new stamp duty laws are the "most radical" since 1973, when the Residential Property Act was introduced, which prevented foreigners from buying landed homes. "If you look at the ABSD, we seem to give regard to your citizenship status, and I suppose the message is that the Government's interest is to look after Singaporeans first."

Source: The Straits Times –2 February 2013

CapitaLand cuts prices at Alexandra condo

Capitaland has slashed prices at another of its residential projects, this time The Interlace in Alexandra Road.

The Straits Times understands that the developer will offer an additional price discount of 10 per cent of its list price for sales starting from today.

This brings the total discount to 20 per cent, as the company had already been offering a 10 per cent discount previously.

Of the 302 units left unsold at the mega 1,040-unit project as of the end of last year, most are three-bedroom, three-plus-study and four-bedroom apartments.

Prices for typical three-bedroom units of between 1,593 sq ft and 1,905 sq ft, for instance, are now expected to range from about $1.9 million to $2.3 million - or between about $1,100 per sq ft (psf) and $1,300 psf.

The prices for such units were about $2.1 million to $2.5 million before the additional discount.

Designed by renowned German architect Ole Scheeren, The Interlace was launched for sale in 2009 on the site of the former Gillman Heights.

Earlier last month, CapitaLand also offered discounts of up to 15 per cent for the mega 1,715-unit d'Leedon in the former Farrer Court estate. It has seen only moderate sales since its 2010 launch.

It has sold 142 units since the discount was introduced on Jan 19, with total sales at the project said to have hit about 1,000 units now.

When asked if the discounts were introduced because of the cooling measures, a CapitaLand spokesman said: "It is quite common for us to run promotional programmes every now and then for certain units within a development to incentivise buyers."

Experts say CapitaLand offered price cuts mainly for its mega projects of more than 1,000 units to move unsold stock.

The Interlace, for instance, is also expected to be completed this year, and the company might be trying to avoid the cost of holding completed but unsold units.

The land cost for the project is also low, which gives the developer a sufficient buffer to lower prices, the experts add.

Other developers have been deploying similar tactics - slashing prices and offering other sweeteners - in response to the new rules unveiled on Jan 11.

Far East Organization, for example, is offering discounts of up to 4 per cent for some its residential projects such as eCO in Bedok and Seastrand in Pasir Ris.

Frasers Centrepoint also threw in a discount of 5 per cent to 7 per cent for its recent launch Q Bay at Tampines - the first residential project pushed out after the measures - to cushion the impact of the additional buyer's stamp duty.

Source: The Straits Times –2 February 2013

Changi properties ready for take-off

The Changi neighbourhood may adjoin one of the region's busiest airports, but it has long slipped under the radar of property investors - certainly when compared with the nearby mature townships of Tampines and Simei.

Still, the low-key district has witnessed a quiet warming of its non-residential property market with rents and prices registering a slight increase in the past year.

The area is dominated by industrial facilities and business park space, such as Sim Siang Choon Building and Changi Business Park, housing UE BizHub East and Honeywell Building.

While the district does have retail spaces, they are mainly limited to three areas: shopping mall Changi City Point, Changi Airport and Singapore Expo.

Property investors looking to buy industrial units here will find that prices have risen considerably in recent times.

Data from analysts point to the i-Lofts@Changi project as the major source of strata-titled units up for sale. The project is a 30-year leasehold development at Changi North Street 1 and contains 36 units.

Transaction prices have risen, with units fetching an average price of $266 per sq ft in 2012, up 21 per cent from the average $219 psf price in 2011.

Rents have also been on the rise. In the final three months of 2012, median rents of warehouse space in the Changi area stood at $1.80 psf per month, about 6 per cent higher than a year earlier.

While the property market in the area is still far from buzzing, newer developments are expected to whip up more excitement.

UE BizHub East is located at the heart of the Changi Business Park, a business hub in the east.

The development, which has been completed, houses a business hotel with up to 300 rooms as well as office and retail space.

Firms such as Cisco Systems and British Telecom have signed on to lease space within the BizHub development. Just a stone's throw away, several other big-name firms have inked leases at One@Changi City, including Credit Suisse and IT firm EMC.

One@Changi City consists of business park space, the Changi City Point mall and a boutique hotel residence, Capri by Fraser.

These two developments, plus the upcoming Singapore University of Technology and Design campus in Changi South, will no doubt supplement the modest 16,500 residents living in Changi, thereby boosting shopping traffic in the area as well.

But whether Changi will reach its full potential remains uncertain, experts say.

Source: The Straits Times –2 February 2013

Insiders of Alexandra developer took 11 units

Executive directors of Alexandra Central's developer Chip Eng Seng bought retail units at the project before its launch two weeks ago.

Some directors and their family members bought 11 units in all at the mixed development, Chip Eng Seng told the Singapore Exchange (SGX) on Thursday.

They spent about $16.7 million for the units, which were a mix of shops and restaurants.

The Straits Times understands that these units were selected by the executive directors before the Jan 21 official launch.

Chip Eng Seng told the SGX that the executive directors "enjoyed no more favourable purchase terms than were available to third-party buyers".

It added that its audit committee had reviewed the sale terms and decided that they were fair, reasonable and "not prejudicial to the interests of the company and its minority shareholders".

Buyers at the launch had to take part in a ballot due to overwhelming demand for the 99-year leasehold project. Out of the 116 units available, 114 were sold by the end of the day.

The executive directors paid around $7,200 per sq ft (psf) to $7,800 psf for units on the first floor and $5,400 psf to $5,500 psf for those on the second.

Units on the third floor were mostly sold to them at prices from $4,300 psf to $4,500 psf, with the exception of a small unit that went for $3,600 psf.

That unit was sold to two sisters of Chip Eng Seng group chief executive Raymond Chia's. The sisters are not on the board.

The price range roughly fits the $4,000 psf to $8,000 psf range indicated by a spokesman from Chip Eng Seng unit CEL Development on the launch day.

The executive directors who bought units at Alexandra Central, which is next to furniture retailer Ikea on Alexandra Road, were Mr Lim Tiam Seng, Mr Lim Tiang Chuan and Madam Dawn Lim Sock Kiang.These three abstained from the board's review and approval process for the sale, Chip Eng Seng said.

Mr Lim Tiam Seng is executive chairman of Chip Eng Seng. He spent nearly $5.5 million on two third-floor units, in joint purchases with his wife and son.

Mr Lim Tiang Chuan, who is deputy executive chairman and Mr Lim Tiam Seng's brother, bought one $1.7 million restaurant unit on the second floor with his wife.

Madam Lim, who is Mr Lim Tiam Seng's daughter, spent almost $3.3 million in total on three small shop units on the first floor with her husband.

Other members of the Lim family not on the Chip Eng Seng board also bought units.

Madam Lim Sock Joo, Madam Dawn Lim's sister, bought a $2.3 million restaurant space on the first floor, and a small shop on the third floor for $694,000.

Mr Lim Tian Moh, a director of a Chip Eng Seng unit, bought two shops on the first and second storey for $2.6 million in all.

Meanwhile, some buyers of Alexandra Central are already trying to make a quick buck by flipping their units, according to media reports.

At least 19 retail units sold at the launch appeared to be on the market again within six days, The Business Times said on Monday.

Source: The Straits Times –2 February 2013

INDUSTRIAL MARKET

Two JTC industrial sites put up for tender

JTC Corporation has launched two plots of industrial land at Buroh Crescent and Tuas Bay Walk for sale by public tender.

The two plots are the first to be launched out of the 13 sites in the confirmed list under the Industrial Government Land Sales (IGLS) programme for the first half of 2013, JTC said yesterday.

The land parcel at Buroh Crescent has an area of 1.77 hectares (ha) and is zoned for Business 2 use. It has a 30-year lease and a maximum permissible gross plot ratio of 2.5.

The 0.58-ha site at Tuas Bay Walk is also zoned for Business 2 food development. It has a 30-year lease and a maximum permissible gross plot ratio of 1.7.

Earlier this month, JTC awarded a nearby site on Buroh street to a joint venture between Capital Development and ZACD Investments for $82.1 million, or $111.35 psf ppr. This site is bigger at 2.74 hectares.

Tenders for two other nearby sites at Tuas South, also launched by JTC, will close earlier this month, which may put another dampener on bids for this new Tuas Bay Walk site, he added.

Both tenders will close on March 14 at 11am.

Source: Business Times –1 February 2013