With the latest measures in-lieu of the Government’s way to deal with cooling down the property market, more new flats has been introduced into the supply pipeline which gives more choices to first-time home buyers.

The reason given for the Minimum Occupation Period (MOP) revision is to dampen HDB buying speculations. The measures as follow:-

1. The MOP of non-subsidised flats for reslae and subletting of flat will be increased from three to five years.
2. Buyers of non-subsidised flats will be disallowed from concurrently owning both an HDB flat and private residential property within the MOP. Private property owners who buy a non-subsidised HDB flat must now dispose of their private residential property within six month from the date of flat purchase. Ownership of private properties by HDB lesees will be allowed after the MOP

HDB Minimum Occupation Period Revised to Five Years is a post from: Benson Koh, a Singapore Realtor

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The Singapore Government has recently released further measures today to curb the possibly speculative hot property market which will be in effect immediately (30th August 2010) as follows:-

• Seller’s Stamp Duty Holding period extended from 1 year to 3 years

For residential properties bought4 on or after 30 August 2010, SSD will be imposed if these properties are sold within three years of purchase. Specifically, the SSD levied on residential properties will be revised to as follows:

1. Sold within the first year of purchase, i.e. the property is held for 1 year or less from its purchase date – The full SSD rate (1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance) will be imposed.

2. Sold within the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.

3. Sold within the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.

No SSD will be payable by the vendor if the property is sold more than 3 years after it was bought. Please see Annex for examples of how the SSD will be computed.

• Cash Component Revised from Minimum 5% to 10% Loan to Value Limit for Property Owners with More Than One Outstanding Loan
• Loan to Value revised from 80% to 70% for Property Owners with More Than One Outstanding Loan

The LTV limit is lowered from 80% to 70% with effect from 30 Aug 20108 for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase. Borrowers who do not have any outstanding housing loans continue to have an LTV cap of 80%. These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is in line with HDB’s home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.

Financial institutions’ lending standards have remained prudent and the asset quality of housing loans has stayed robust, with the non-performing loans ratio at less than 1% as at Q2 2010. Nonetheless, there are signs that more housing loans are originating at higher LTV bands of above 70%. In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers already servicing one or more outstanding housing loans.

The reasons as exact given by Ministry of National Development,

While Singapore has enjoyed strong economic growth in the first half of 2010, our economic growth is expected to moderate in the second half of the year. There are also still uncertainties in the global economy. Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole. Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves. Therefore, the Government has decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

Huge impact should follow with such, and we could very likely see the property transactions drop drastically.

We’ll have to wait out for more details from each relevant government agencies on how the changes should impact your usual property transactions.

New Cooling Measures – Seller Stamp Duty Holding Period, Lower LTV, Minimum Cash Revised is a post from: Benson Koh, a Singapore Realtor

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Mickey Mouse Apartments? Think Again. Image Credit: Cake by Nesrin, Flickr

Definition of Mickey Mouse/ Shoebox Units

This term could be unique to Singapore for micro sized apartment that has really a small built-in area that could be just enough to function. You could have sizes like a studio unit with only 258 sqft (Suites at Guillemard) and have penthouses of up to 1,000sqft. At current, URA only approves units which are more than 300sqft according to a Business Times article cited in October 2009.

The trend could have started from February last year with the successful sale of Alexis at Alexandra.

Advantage

Affordable Overall Price

Developers are smart these days when it comes to planning for sizes and the affordability of the units. With more units that could be built in a single development because of the small sizes, developers (eg. projects such as Siglap V) will price them in accordance to the affordability level of most mass market income group, starting prices could be even slightly lower than $500,000.

With such type of affordability price, banks are more willing to lend to you as the risk of defaulting a mortgage is much lower as compared to apartment quantum that goes over the $1,000,000 mark.

Disadvantage

Size versus Capital Gain

Because of the size of the apartment, any increment in terms of per square foot (PSF) movement wouldn’t prove any much valuable unless it’s a big jump. It makes it less cost effective for an investment as with all the costs that is also factored in.

Assume that you would have bought an apartment of 300sqft at 1,300psf, any increment in 50psf would net you $15,000 and in which the high psf that you would have bought in from the developer would make it hard for it to even raise in price action. Factoring all costs involved including your conveyancing, stamp duty and bank loan penalty, it would be very tough to have even decent capital gain profit because of its size.

High per square foot (PSF)

The high psf cost that you have bought in as explained will also be a huge resistance for new buyers to buy from you via sub-sale or resale market for your capital gain. You will always have a very serious objection to buyers who are psf sensitive which most buyers are.

Unlikely Too Functional

It could be done with space saving modules for a 300sqft studio to function. But think of those projects which are approved prior before 2010 where URA has given free gross floor area (GFA) to developers to add planter boxes, bay windows. Minus those spaces off from the 300sqft, you REALLY will have very little space left for your living in. Extremely claustrophobic.

During hard times when the economy is facing bad times, your mickey mouse unit might have a better liquidity function. But having said that it’s a bad economy, you would have a hard time achieving a good target selling price. Vice versal, during good economy times, people would prefer space, your mickey mouse unit will drop in terms of preference because of the lack of functional space.

Rental Yield?

Let’s work backwards on how much a freehold $450,000 mickey mouse studio apartment (300sqft) you should be collecting based on average 4% gross yield rental.

Annual Value at 4%: $18,000
Rental Per Month: $1,500

To pay for $1,500 for a 300sqft apartment, working in terms of per square foot rental would be $5 psf. With such high psf, a question would be on whether people will be paying for the size of the apartment. Also for mickey mouse unit projects, facilities are definitely not the main focus, in which comfort and ergonomics are sacrificed for more apartment units, which could make it harder for you to rent the apartment out. (ps, this is gross. you need to factor in a few more things such as agent’s commission, and monthly maintenance for net)

Comparatively a $1,500 rental could get you a 3-rm HDB apartment (800sqft) in which the living functions are not sacrificed.

Speculative Element Killed Instantly With Seller’s Stamp Duty

An attraction to buying mickey mouse units would be the possible speculative element in which margin profit that could be made with very small investment quantum. With the introduction of Seller’s Stamp Duty (SSD) in February this year, this effectively kills speculative mood of property punters.

In terms of percentage, they would have to pay another extra 3% (averaging, with bank’s penalty and legal fees) and to the government should they be selling it within a year. Having said that, they would have already paid a buyer’s stamp duty prior purchase, which is another extra 3%.

So with at least -6% off your initial investment and a high psf bought-in price, it would be hard to achieve any gains within a year.

I would strong discourage people to start with investing in a too small unit which is heavily priced even when the total price (quantum) is affordable. No doubt there’s inflation protection in property investment, but with the price that you have paid for (citing future price has already been priced in by developers), it will take quite sometime before other bigger apartment catches up with your psf price that you have paid for.

The Problems with Investing in Mickey Mouse Units is a post from: Benson Koh, a Singapore Realtor

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DTZ Singapore Auction will be on the of 29th of July 2010, Thursday.

Venue:
The Amara Hotel Singapore, Connection Room 1, Level 3

Time:
02:30 PM

Download DTZ Auction List here

Knight Frank Singapore will be having its Auction on the 27th of July 2010, Tuesday

Venue:
The Amara Hotel Singapore, Connection Room 1, Level 3

Time:
02:30 PM

Download Knight Frank Auction List here.

JLL Singapore will be having its Auction on the 28th of July 2010, Wednesday

Venue:
The Amara Hotel Singapore, Connection Room 1, Level 3

Time:
02:30 PM

Download JLL Auction List here.

Singapore Property Auctions for the Month of July 2010 is a post from: Benson Koh, a Singapore Realtor

Related posts:

1. Singapore Auctions – DTZ Upcoming Property Auction on 21st July 2009
2. Singapore Auctions – Knight Frank Upcoming Property Auction on 23rd June 2009
3. DTZ Singapore Property Auction February 2010
4. Singapore Auctions – DTZ Upcoming Property Auction on 25th June 2009
5. Knight Frank Singapore March 2010 Property Auction

HDB has issued a reminder today to room rental Landlords to register their sublets with the them. The deadline is 31st of July 2010.

Date issued : 15 Jul 2010

Flat owners who sublet their rooms are required to register with HDB. HDB would like to remind flat owners with ongoing subletting tenancies commencing before 1 Feb 2010 that the deadline to register the subletting with HDB is in two weeks’ time, on 31 July 2010.

Background

On 12 Jan 2010, HDB announced that with effect from 1 Feb 2010, flat owners who sublet rooms in their HDB flats will have to register with HDB within 7 days of doing so. They are also required to notify HDB when they renew or terminate their subletting contracts, and when there are changes to their subtenants’ particulars. There is no need to seek prior approval for subletting of rooms.

This requirement supports Ministry of Home Affairs (MHA)’s ongoing efforts to eradicate loansharking activities, and to better protect HDB residents. Currently, some people use their old addresses to borrow from loansharks while they rent a room in another HDB flat. As they have moved their place of residence without updating their addresses in their NRICs, innocent new flat occupants ended up being harassed by the loansharks while the borrowers are untraceable.

The new rule will allow HDB to capture particulars of those who rent rooms in the HDB flats. With information on the addresses of owners and subtenants, MHA will be able to trace the movement of borrowers.

The new rule applies to all new and existing cases of rooms sublets:

o For new cases of subletting from 1 Feb 2010, owners are required to register with HDB within 7 days from the start date of the subletting; and

o For subletting tenancies that commenced before 1 Feb 2010, owners are given a 6-month grace period from 1 Feb 2010 to register their subletting of rooms with HDB. The 6-month grace period will expire on 31 July 2010.

As at 30 June 2010, about 32,000 flat owners have registered their subletting of rooms with HDB. This includes those with tenancies commencing before and after 1 Feb 2010.

Register by 31 July 2010

Flat owners who sublet their rooms before 1 Feb 2010 are reminded that they have about 2 weeks to register their subletting. They are advised to register early to avoid a last minute rush. Registration can be done online at www.hdb.gov.sg or at the HDB Branch Offices, where HDB staff will be on hand to guide residents on the process.

Penalty For Non-compliance

HDB may impose a penalty on those who flout the rule. The penalty may involve a fine of up to $3,000 or for recalcitrant cases, compulsory acquisition of their flats.

HDB Issues Reminder to Register Room Sublets is a post from: Benson Koh, a Singapore Realtor

Related posts:

1. HDB extends Second Concessionary Loan
2. HDB Annual Value Raised
3. HDB New Minimum Occupancy Period

Far East’s most luxury brand, Inessence has launched Skyline at Orchard for private preview. Since Inessence is their creme de la creme and just like their other Inessence products, they sell white plans for Skyline at Orchard.

The Inessence Brand

Every Inessence residence shares four uncompromising qualities: the most prime of locations in and around the famous shopping and lifestyle destinations of Singapore, a unique design from a master architect, thoughtfulness in space and details, and unprecedented levels of personalisation and bespoke customisation.

What Are White Plans?

Blank plans. Or allow-yourself-to-custom-your-home plans. You have a choice to take their recommended layout, or with the help from their qualified people, ink your own layout based on your lifestyle. Not only in your layouts, you get to pick and customize the finishes and fittings.

Designed by Professor Fumihiko Maki, the same designer as their very own Alba, Far East promises delivery in taste, design and aesthetics.

Location

Google Map for Orchard Boulevard

[googlemap lat="1.303282" lng="103.829418" yaw="90" pitch="1.89" zoom="0" width="500px" height="300px" align="undefined" type="STREETVIEW"]Singapore 249697[/googlemap]

Address: 23 Angullia Park, Singapore 239975

Details of Skyline at Orchard Boulevard

Tenure: Freehold
Site Area: 38,810 sqft
Ready in: estimated Dec 2015
Type: A block of 33-storey with 40 units
Sizes:

• 1+1-bedroom (1,744sqft)
• 2-bedroom (2,067sqft)
• 3-bedroom loft (3,100sqft)
• 3+1-bedroom (3,767sqft)
• 4+1 Penthouse (9,419sqft)

Facilities at Skyline at Orchard Boulevard

• 25M Lap Pool
• Children Pool
• Indoor Dining Pavilion
• Outdoor Dining Pavilion
• Sun Bathing Deck
• Lawn Garden
• Spa Suites with Jacuzzi
• Sauna
• Gymnasium
• Pool Cabanas
• Outdoor Fitness Terrace

For An Exclusive Preview

Far East’s Skyline at Orchard Boulevard Previews is a post from: Benson Koh, a Singapore Realtor

Related posts:

1. Boulevard Vue – Singapore Luxury Condo At Its Best

Knight Frank Singapore will be hosting its June monthly 2010 Auction on 29th June 2010.

Date : 29th June 2010, Tuesday
Venue : The Amara Hotel Singapore, Connection Room 1, Level 3
Time : 2.30 pm

JLL will be hosting its June monthly 2010 Auction on 30th June 2010.

Date : 30th June 2010, Friday
Venue : The Amara Hotel Singapore, Connection Room 1, Level 3
Time : 2.30 pm

Do refer to my auction guide FAQ if you’re new to Singapore Auctions.

Upcoming Singapore Auction – Knight Frank and Jones Lang Lasalle for the month of June 2010 is a post from: Benson Koh, a Singapore Realtor

Related posts:

1. Singapore Property Auctions for May 2010
2. Singapore Property Auctions for April 2010
3. Knight Frank Singapore Property Auction on 26th February 2010
4. Knight Frank Singapore Property Auction on 29th September 2009
5. Singapore Auctions – Knight Frank Upcoming Property Auction on 23rd July 2009

Orchard Underpass to get a facelift. Photo credit: costner_v, flickr

Sun Hong Kai and Capitaland will join hands together to give the underpass a face lift.

A spokesperson from ION Orchard said the pedestrian passageway will be widened to double the existing width, and there will be shops on both sides of the underpass. According to the CEO of Orchard Turn Developments, Soon Su Lin, there will be a facelift which will be similar to the underpass connecting Orchard ION and Wheelock Place.

The last time any major work was done there was in 1988. The move is expected to inject vibrancy to the old tunnel. Details of the upgrading will be out at a later stage.

Also, if you are unfamiliar with Sun Hong Kai and Capitaland’s joint ventures, Orchard ION and The Orchard Residences Orchard most highest and iconic residential building as of present, are championed by the two developers.

Facelift for ION Orchard’s & Tangs Plaza Underpass is a post from: Benson Koh, a Singapore Realtor

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DTZ will be hosting its June monthly 2010 Auction on 24th June 2010.

Date : 24th June 2010, Thursday
Venue : The Amara Hotel Singapore, Connection Room 1, Level 3
Time : 2.30 pm

Colliers will be hosting its June monthly 2010 Auction on 23rd June 2010.

Date : 23rd June 2010, Wednesday
Venue : The Amara Hotel Singapore, Connection Room 1, Level 3
Time : 2.30 pm

Do refer to my auction guide FAQ if you’re new to Singapore Auctions.

Upcoming Singapore Auction – DTZ & Colliers for the month of June 2010 is a post from: Benson Koh, a Singapore Realtor

Related posts:

1. Singapore Auctions – Colliers Upcoming Property Auction on 24th June 2009
2. Colliers Singapore Property Auction on 23rd September 2009
3. Colliers Singapore Property Auction on 26th August 2009
4. Singapore Property Auctions for April 2010
5. DTZ Singapore Property Auction on 27th August 2009

Gloomy outlook? Hmm. Photo credit: hsalnat, Flickr

Everyone is asking the same question with regards to the current financial market as Singapore Exchange (SGX) seem to be volatile with no directions.

Greece/ Europe Situation

With over 54 billion euros in debt, Greece as alongside with Spain and Portugal sent a shock wave to the global economy to end Singapore Exchange’s bullish streak from over 3,000 index point back to the 2,700 point in a matter of 1 week.

This highlights the fragility of the Euro dollar and its economy with 16 countries of the EU zone tied to one currency. As there’s no solution to Greece’s pressing issues at this stage, the world economy’s eyes will be watching and following tightly.

Here’s how the Greece problem happened.

Government injecting Land Sales

The government has been introducing numerous land to allow local developers to top up their land banks as we understand developers are running short of supply. This effectively brings down the possible en bloc fever that has happened in 2007 in which was the former peak of the real estate prices in Singapore (At current, 9 en blocs has been successful this year).

With more land supply coming into the market and with Government stepping in with measures such as the Seller’s Stamp Duty to cool prices down. It’s quite clear that the Government introduce more measures to cool the market down if the price continues to climb.

Additional Home Supplies Coming Along for TOP Projects

Numerous projects are about to TOP soon and with some already having obtaining their Occupancy Permit, you will have more supply in the market. Owner-occupied units are unlikely to be affected unless the job economy is not doing well. What we are afraid of would be only investment units which are looking for tenants. If there’s a good number of tenants coming into the market, the prices will maintain;

On the contrary should the units be empty, investors will be tested on their pockets on the ability to hold out for either a good or bad rental.

Is it a Good Time still to Buy?

All these seems to be market dampener no matter what angle you look at it. Personally, my take is its always a good time to buy should you be able to identify and justify your property purchase.

For example, If a condo development has 176 units and only has 7 units of 2-bedroom units and the rest are bigger. No matter how you look at it, you know you’ll never go wrong in the long haul with the supply and demand math.

Its also never wrong to start buying early if its for your own stay. No matter how the market declines, it will come back as our estate cycles are getting shorter. And in a good or a bad market, there’s always transactions that looks reasonably fair and attractive in prices. How would you explain that?

With a land scarce situation that Singapore is facing with the growing population on a limited amount of land, and even for the Government to start devising an Underground Master Plan. land value could only head north overtime.

My two cents. What’s yours?

Market Sentiments – Will Singapore Property Market Turn? is a post from: Benson Koh, a Singapore Realtor

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