RESIDENTIAL MARKET
Govt brings out Big Chiller to freeze property prices
The government yesterday announced its seventh and most sweeping package of property cooling measures in over three years.
Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam described the package as the "most significant to date" and stronger than those introduced in previous rounds. Some measures will be temporary and will be reviewed later, once prices soften, while others are likely to stay for the long term.
"We're not intending to engineer a market crash," he added.
Effective today, residential property buyers are being slapped with steeper additional buyer's stamp duty (ABSD) rates to tighten property investment as well as foreign buying, while loan-to-value limits are being lowered and minimum cash downpayment raised on housing loans to discourage excessive borrowing.
For the first time, the authorities have introduced a seller's stamp duty (5 to 15 per cent) for those who sell industrial properties within three years of purchase - to discourage speculation in this market segment which has heated up from a diversion of monies from the residential sector.
In addition, curbs have been announced for executive condo (EC) developments with a maximum unit size specified for the first time for an EC unit at 160 sq metres (1,722 sq ft).
Private enclosed spaces and private roof terraces will be counted as part of the 10 per cent bonus gross floor area (GFA) for all non-landed residential developments including ECs and private condos, and subject to payment of development charges/differential premium. Currently, such spaces are excluded from GFA computation and hence considered "free area" for developers to sell.
As for strata commercial and industrial projects, the private enclosed space and private roof terrace will be computed as part of the maximum gross floor area stipulated under the Master Plan.
In the public housing sphere, tighter loan eligibility for the purchase of HDB flats has been introduced.
In addition, permanent residential households will be disallowed from subletting their entire HDB flats. PRs owning HDB flats must sell their flats within six months of buying a private residential property in Singapore.
The finance minister also grouped the measures into two sets.
The first group, which are temporary, counter-cyclical measures - comprising the increase in ABSD rates, tighter LTV and higher cash downpayment on housing loans - are aimed at calming the property cycle and will be reviewed once the market has cooled.
The second group are more permanent, structural measures - such as those pertaining to ECs and rules for PRs' owner-occupation of HDB flats - and are likely to be retained.
"Both groups of measures work in the same direction in the short term - to cool the market. But the measures which are cyclical and temporary will be reviewed once the market softens," he said.
From today, ABSD rates will be raised between 5 and 7 percentage points across the board. Only Singapore citizens buying their first residential property will be spared the ABSD.
Singaporeans previously did not pay ABSD even on their second home purchase. But now they will have to pay 7 per cent ABSD.
For their third and subsequent home purchase, they previously paid 3 per cent ABSD, which has now been raised to 10 per cent.
PRs will no longer be exempt from ABSD even on their first home purchase. The rate is set at 5 per cent for the first purchase, and 10 per cent on the second and subsequent purchase. Previously they paid 3 per cent on their second and subsequent purchase. For non-PR foreigners and corporate entities, ABSD on any residential property purchase has been upped from 10 per cent to 15 per cent. The move comes despite a decline in foreign buying share of private home purchases last year, note market watchers.
The revised ABSD structure will take effect on residential properties bought from today. Buyers granted options to purchase on and before Jan 11 and who exercise them on or before Feb 1 (without any extension of the option validity period) may apply to the taxman for remission so that the old ABSD rate will apply.
LTV limits on housing loans granted by financial institutions will be tightened for individuals who already have at least one outstanding loan, as well as non-individuals such as companies.
Specifically, LTV ratios will be lowered by 10 percentage points for second housing loans and by 20 percentage points on third and subsequent housing loans.
In addition, minimum cash downpayment for individuals applying for second or subsequent home mortgages has been raised from 10 per cent to 25 per cent.
These measures will not impact most Singaporeans buying their first home, the Government said.
For non-individual borrowers such as corporates and funds, their LTV limit has been lowered again, from 40 per cent to 20 per cent.
Mr Tharman also noted: "The reality we face is that interest rates are extraordinarily low, globally and in Singapore, and continue to add fuel to our property market. We have to take this further round of measures now, to check recent market trends and avoid a more serious correction in prices further down the road."
National Development Minister Khaw Boon Wan highlighted the sizeable pipeline of housing. "A large supply of public and private housing - up to 200,000 units in total - will be completed in the coming years. Coupled with the new measures, we will be better placed to ensure that housing remains affordable to Singaporeans."
Real Estate Developers' Association of Singapore (Redas) said last night: "It is in the interest of the market to have a gradual trend in growth and value for home owners and investors in the long term. Redas remains confident that Singapore's property market will continue to be underpinned by sound economic fundamentals and a favourable business environment."
Source: Business Times –12 January 2013
HDB flats, ECs will feel brunt of new measures
The public housing sector, as well as the hybrid executive condominium (EC) market, will bear a significant load from the slew of cooling measures introduced by the government yesterday.
Beyond a broad range of measures that apply across residential properties, they will be subject to further specific policies announced by the authorities yesterday, which market watchers have welcomed.
The EC market, which has been in the limelight over escalating prices and whether it has served its purpose to cater to the sandwiched class, will see several measures put in place from today.
First, the maximum strata floor space for new EC homes will be capped at 160 square metres (1,722 square feet), effectively spelling the end of super-sized penthouses and the high prices that come with them.
Also, private roof terraces and private enclosed spaces will be counted as part of the 10 per cent bonus gross floor area (GFA) for all non-landed residential developments, including ECs and private condos, and subject to payment to development charges or differential premium.
New dual-key EC units will also be restricted to multi-generational families. This will prevent abuse by investors looking to rent out the smaller unit for income.
The final new measure for the EC market is that developers for future EC sale sites from the Government Land Sales programme can only launch units for sale 15 months from the award of the sites or after foundation works are completed, whichever comes first.
As for the public housing sector, the Government is tightening the eligibility for loans to buy Housing and Development Board (HDB) flats.
From today, the Mortgage Servicing Ratios (MSRs) for housing loans will be capped at 35 per cent of a borrower's gross monthly income if it was from HDB, and 30 per cent if the loan was from a financial institution.
Further, permanent residents (PRs) will also be barred from subletting their entire HDB flat if they own it. This applies to existing owners, and those intending to get a resale flat, but not to those who had obtained HDB approval before today.
PRs must now also sell their HDB units within six months of buying a private residence. This excludes those who had received permission from HDB to own a private property before today.
A separate measure to tighten the terms for granting HDB loans and using CPF savings to buy flats with fewer than 60 years' lease left will take effect on July 1.
Source: Business Times –12 January 2013
Q4 resale prices of private homes up 6.6%
Resale prices of non-landed private residences grew at a faster pace last year despite a fall in transaction volumes from the year before.
Buyers paid an average of $1,233 per square foot (psf) in the fourth quarter of 2012, the Singapore Real Estate Exchange (SRX) said yesterday. That was 6.6 per cent higher than the third quarter's $1,157 psf.
That means prices rose 13.4 per cent last year compared with the previous year, and outpaced the 10.4 per cent growth in 2011.
This was despite fewer units changing hands. About 12,500 private non-landed homes were sold in 2012, down 7 per cent from 2011.
SRX put the drop down to the introduction of the additional buyer's stamp duty in late 2011, which led to a slump in the first half of 2012 even as sales picked up strongly afterwards.
The fourth quarter's figures reflected the trend for the full year.
Resale prices rose across all the regions. The Outside Central Region (OCR) saw the biggest increase of 4.8 per cent. The Core Central Region (CCR) followed with 4.6 per cent, while the Rest of Central Region (RCR) was up by 3.6 per cent.
CCR's higher-than-expected growth came down to its December performance, which pushed up the final figures.
"The strong growth is partly attributed to a possible record breaking price paid for residential land by Hong Kong's Swire Properties in Hampton Court en bloc," SRX said.
The Business Times previously reported that Swire's purchase - thought to be worth $155 million - is believed to have set a new unit land price for residential land of $2,526 psf per plot ratio.
Meanwhile, transaction volumes fell 5.5 per cent in the fourth quarter from Q3, a "seasonal drop", SRX noted.
As for the rental market for non-landed private homes, rates softened in the fourth quarter of last year, falling one per cent to $3.91 psf from the previous quarter. This dragged rental yield down to 3.8 per cent, from 4.1 per cent in Q3.
Analysts expect a moderation in growth for the resale private non-landed home market in 2013.
On the public housing front, there was little sign of relief from a bouyant resale market.
SRX said the median cash- over-valuation (COV) for resale Housing and Development Board (HDB) homes rose to $34,000 in the last three months of 2012, up $4,000 from Q3. As a result, the median price for an HDB resale flat hit a new high of $455,000, 1.1 per cent higher than the previous quarter.
Median rents for HDB homes stayed flat at $2,400 per month.
Source: Business Times –12 January 2013
Property sector's new buzzword: Penthouse
Move over, shoebox apartments. Penthouse units have claimed the spotlight ever since the launch of a 4,349 sq ft penthouse suite at an executive condominium (EC) in Tampines last month.
The unit, including a 1,600 sq ft roof terrace, was sold for $2.05 million - the most expensive EC penthouse ever sold.
But just what is a penthouse unit? The definition is fuzzy, apart from the apartment being rather swanky and on the top floor. No fixed criteria apply and the term is mainly used as a marketing tool.
Penthouses generally have a large floor area compared with the other units in a project.
For instance, the "penthouses" in 68-unit Kembangan Suites are as small as 635 sq ft, said Ms Chia Siew Chuin, director of research and advisory at Colliers International. Other units in that project, one- and two-bedders, are also smaller, at between 344 and 624 sq ft.
Even selected HDB blocks in some estates including Bishan and Strathmore Avenue in Queenstown can be considered as having penthouse units, Ms Chia said, though the quantity of HDB penthouses is very limited.
However, other analysts set the minimum size at between 2,000 and 2,300 sq ft.
A penthouse usually includes a balcony or roof terrace, a private lift lobby and more than two bedrooms. It also has two or three storeys, analysts added.
For example, an 8,740 sq ft penthouse in Ardmore Park is being marketed for $35 million. A 13,000 sq ft penthouse in Chatsworth Court has an asking price of $50 million while another 11,200 sq ft penthouse at Boulevard Vue is listed at $68 million.
Penthouses appeal to a select group of buyers for their spaciousness, exclusivity and accompanying bragging rights, analysts said.
The typical penthouse buyer is often a wealthy executive, though lately, multi-generational families have pooled their cash to buy such units as well.
But the downside is that penthouse owners who do not intend to occupy the unit for the long term may find it harder to sell it later, for a few reasons.
One is that penthouse buyers are a select group of people, so the resale value of a penthouse depends on limited demand.
Another factor is that the proliferation of so-called "penthouses" in many developments is undermining the term's prestige.
Third, there are very few comparable sales and leases that can be used to benchmark prices because of the scarcity and exclusivity of penthouses.
Source: The Straits Times –12 January 2013
New curbs may delay January launches
A slew of new residential projects that were expected to be launched this month may be delayed as a result of new curbs announced by the Government yesterday.
Experts say the string of new launches this month caters to various budgets with both suburban and higher-end launches coming onto the market.
But one project is going ahead. EL Development's 810-unit project La Fiesta, next to Sengkang MRT station, was launched yesterday.
It will feature 13 blocks of 15 storeys comprising one- to five-bedroom units. Dual-key apartments will also be for sale.
Unit sizes at the 99-year leasehold development range from 431 sq ft for a one-bedroom unit to 1,765 sq ft for a ground-floor apartment while average prices are expected to be between $1,100 and $1,200 per sq ft (psf).
The 630-unit Q Bay Residences in Tampines Avenue 10, a joint venture by Frasers Centrepoint, Far East Organization and Sekisui House, is also expected to preview next Friday.
Agents say average prices are around $1,050 psf.
The freehold 183-unit Spottiswoode Suites also had its soft launch recently with about 110 units sold at average prices of $2,200 psf. The official launch by developers Lian Beng Group and Centurion Properties is expected this month.
Agents are also out drumming up interest for Urban Vista in Tanah Merah by Fragrance Group and World Class Land. The project will have 582 homes and three commercial units and is expected to preview at the end of this month or early next month.
Marketing material suggests that prices will start from $650,000 with agents giving an indicative price of more than $1,400 psf on average.
A three-bedroom apartment, for instance, of more than 800 sq ft is expected to cost between $1.2 million and $1.35 million.
Landed project The Whitley Residences, which will have 58 strata semi-detached and three strata terraces, will also be launched today.
But some of this month's launches have already done well.
The freehold 52-unit development SeaSuites in Pasir Panjang, launched earlier this month, is almost sold out. Prices were at an average of $1,650 psf.
The year-end school holiday period and Christmas festivities typically keep home buyers away from the market.
But experts say the total number of new home sales this year might not surpass the record number last year as a cap on the number of homes that can be built on a site - which limits the number of tiny shoebox homes that can be built in a project - takes effect.
Source: The Straits Times –12 January 2013
Showflats quiet as new cooling measures kick in
Showflats were quiet yesterday, following a surge of customers last Friday eager to beat the new cooling measures which kicked in on Saturday.
The government announced its seventh and most sweeping package of property cooling measures on Friday, including higher additional buyers' stamp duty as well as stricter borrowing limits.
The executive condominium (EC) market, which has recently been in the limelight due to the increasing size and quantum of certain EC units, was one of the segments cut down to size.
According to the new rules, new units cannot exceed 160 square metres. In addition, private enclosed spaces and private roof terraces will be counted as part of the 10 per cent bonus gross floor area (GFA).
Previously, developers of non-landed private projects and ecs did not have to pay development charges for sky terraces as they were not treated as part of the GFA.
Citylife@Tampines - which saw the sale of a 4,349 sq ft penthouse unit, including a 1,600 sq ft roof terrace at $2.05 million last month - sold only two units yesterday.
The 514-unit project, which opened for bookings on Dec 29 with average prices of $770 per square foot, had only 20 three-bedroom units left for sale.
On the latest measures aimed at the EC market, National Development Minister Khaw Boon Wan noted that the size and pricing of EC units had previously been "quite moderate, and very much in keeping with what the market thinks the target buyers can afford".
The showflats of two newly launched projects along Pasir Panjang - the 52-unit seasuites and 148-unit Village - were quiet as well.
According to marketing agents for seasuites, only eight units were unsold, of which half were three-bedroom configurations.
Selangor Dredging's Village, on the other hand, still had about 30 per cent of its units available for sale. The developer is offering an early bird discount of 15 per cent, a vicinity and stamp duty discount of 3 per cent each, and an additional 3 per cent discount for select units.
Source: Business Times –14 January 2013
COMMERCIAL MARKET
Commercial hub shaping up in Jurong Gateway
Jurong Gateway, the area around Jurong East MRT station, is well on the way to becoming a major commercial hub in the western part of Singapore.
Upcoming launches of more shopping malls, a hospital, a hotel and office space will add buzz to the district, which used to be hilly jungle land dotted with prawn ponds and crocodile- infested rivers.
But analysts note that the area has few private residential projects, with most condominiums being nearer to the Lakeside district, west of Jurong Gateway. The only private condo homes are the 280-unit Westmere, an executive condominium launched in 1996, and Ivory Heights, a former HUDC project.
But a new condo is on the cards. A residential site at Boon Lay Way, launched last April, attracted 12 bids, with the top bid at $705 per sq ft. Analysts said this reflected positive sentiment from developers. The site is estimated to yield 590 homes.
Based on the Government's Master Plan 2008, the 70ha Jurong Gateway is expected to provide 500,000 sq m of office space, 250,000 sq m of retail, F&B and entertainment space and about 2,800 hotel rooms.
But office space is limited, analysts said. The main office buildings in the area are JTC Summit and the CPF Jurong Building.
There is about 1.1 million sq ft of office space, said CBRE Research associate director Desmond Sim.
But this will grow because a 1.1ha site with a potential gross floor area of nearly 700,000 sq ft along Venture Avenue to be developed predominantly for office use is listed on the Government Land Sales confirmed list.
Business parks, retail malls and institutional facilities form most of the existing developments in Jurong Gateway.
Business parks completed in the past five years include 1A International Business Park, Icon@IBP and 29A International Business Park.
Among retail malls, Jurong Entertainment Centre was recently refurbished and renamed JCube. It features an Olympic-size ice skating rink, and is the latest commercial development in the area. The IMM mall is also undergoing a $30 million revamp to become an outlet centre, set for completion in the middle of this year.
New malls being built include Jem by Lend Lease, Westgate by CapitaLand and the Big Box Retail development by TT International.
Jem and Westgate will offer new office supply. Jurong Gateway will also get a new hospital and hotel. The 700-bed Ng Teng Fong General Hospital is slated for completion next year. Also, the first hotel site in Jurong was awarded last November to Tamerton, a unit of Genting Singapore. This site has a potential gross floor area of about 204,500 sq ft.
Analysts are positive on the outlook for the area, though they warn that congestion could become a problem.
Source: The Straits Times –12 January 2013
INDUSTRIAL MARKET
Stamp duty for industrial property sold within 3 years
A seller's stamp duty (SSD) is being introduced on industrial properties for the first time, as the government tries to rein in market speculation that has caused a doubling in prices over the past three years, outpacing rental increases.
Specifically, a respective SSD of 15 per cent, 10 per cent, and 5 per cent will be imposed on industrial properties sold within the first, second, and third year of purchase.
The SSD will apply for industrial properties and land bought on or after Jan 12, 2013.
Speculation was cited as the key reason for the introduction of the cooling measure.
In 2011 and the first 11 months of 2012, about 15 per cent and 18 per cent respectively of all transactions of multiple-user factory space were resale transactions carried out within three years of purchase. This compares with the average of about 10 per cent from 2006 to 2010.
The spillover of speculative demand has largely been from the residential market, which saw a range of cooling measures including SSD, more stringent loan-to-value ratios, and an additional buyers stamp duty.
Source: Business Times –12 January 2013
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