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CEA’s new rules to set standards for estate agency work

2010-10-30T10:29:00.002+08:00

Source : Channel NewsAsia – 29 Oct 2010

The Council for Estate Agencies (CEA) released new rules on Friday that will set standards and regulate the conduct of estate agency work.

From 15 November, salespersons cannot represent both buyers and sellers in a property transaction under the Estate Agents (Estate Agency Work) Regulations.

It will also prohibit estate agents and salespersons from handling cash in certain transactions or referring their clients to any moneylender.

Other provisions will kick in on 1 January.

They include prescribed estate agency agreements that estate agents will use with their clients for the sale, purchase or lease of residential property in Singapore.

Individuals who undertake estate agency work will also be required to take part in continuing professional development programmes for a minimum of 6 hours per year from 2011.

From March next year, the regulations will require salespersons to display their estate agent’s card, when doing estate agency work. This is to allow the industry sufficient time to comply with the estate agent’s card requirement.

Separately, the Estate Agents (Licensing and Registration) Regulations and the Estate Agents (Fees) Regulations will take effect on 1 November.

Application for estate agent’s license and salesperson’s registration will start from that date and those who successfully register with CEA will have their names published on its website from 1 January.

Those who do not meet the licensing or registration criteria will not be granted a license or registration. This includes those with criminal records, especially for fraud and dishonesty.

Also from January next year, it will be an offence for sales persons who are not registered with CEA to handle estate agency work.

They must also have written agreements with estate agents before they can practise.

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Proposed changes to Residential Property Act not expected to weigh down on prices

2010-10-19T17:08:00.002+08:00

Source : Channel NewsAsia – 18 Oct 2010

Proposed changes to foreign ownership of landed residential property in Singapore and a seven-day cooling period for HDB resale flats are not expected to weigh down on property prices, according to analysts.

Over 80% of Singapore’s population resides in flats. Hence, proposed amendments to the Residential Property Act will have little impact on the overall market, said experts.

The Act regulates foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

The proposed changes to foreign ownership of landed homes were outlined in the Residential Property (Amendment) Bill, introduced in Parliament on Monday.

Commenting on the changes, Nicholas Mak, executive director of property consultancy firm SLP International, said: “This is not a cooling measure; this is to bring some of the rules in line with modern practices and keep them more current and effective…There are about 70,000 landed properties (in Singapore), only 3% or about 2,000 are owned by foreigners. Most of these have plans to stay and live in Singapore for a long period of time, so the rules that affect them are not really that great.”

Separately, HDB has announced a 7-day cooling period for flat buyers and sellers before completing transactions.

Mohamed Ismail, CEO of PropNex, said: “I don’t think this measure will in any way further bring down prices, simply because I see this as another step of prudence measures.

“On the other hand it could be open to abuse because the sellers have cooling off period. During the 7 days he may choose not to sell and during the 7 days there may be another buyer that comes along to up the price by $500 or $1,000, and the first buyer may lose out.”

However, analysts added that cooling measures implemented by the government at the end of August will still have a greater impact on the overall property market. And some experts said that as a result, prices in mass market properties could see a decline of 8% in the next six months.

The government introduced the recent set of property measures to pre-empt a speculative bubble from forming, to encourage greater financial prudence and to reinforce the objective of long-term owner occupation for public housing.

Speaking in Parliament on Monday, National Development Minister Mah Bow Tan said: “By taking these calibrated steps one at a time, we are able to let the air out of the bubble…. gradually, rather than to prick the bubble and then have it burst, because when the property bubble bursts, a lot of people will be hurt, not to mention the economy as a whole.”

Some experts note that the volume of property transactions in private and public sector has gone down by 30% since the measures were implemented.

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New curbs on foreign ownership

2010-10-19T17:07:00.002+08:00

Source : Today – 19 Oct 2010

Foreign ownership of landed homes here is set to be tightened, four years after the Residential Property Act was last revised.

The latest changes to the law, tabled yesterday in Parliament, include more stringent penalties and come at a time when residential property prices have risen significantly while some fines and jail terms have been the same since 1974.

The newest requirement is for Singaporeans who give up their citizenship and foreigners who give up their permanent residency to dispose of their landed property within two years. Failure to do so will result in a fine of up to $20,000 and/or a three-year jail term.

In addition, foreigners who inherit landed property have to sell it within five years instead of the current 10 years.

These moves are to reinforce the benefits of citizenship and PR status, said property analysts such as Suntec Chesterton International research and consultancy director Colin Tan.

When the Act was introduced in 1973 – the penalties were revised a year later – foreigners had to be permanent residents and get approval from the government to buy landed property, including strata-landed housing and vacant residential land.

They can buy only one landed home for owner-occupation, not for rental, and must dispose of their existing restricted property before acquiring a new one.

They are not allowed to sell the property within three years from the date of purchase or from the date of the Temporary Occupation Permit.

The amendments in 2006 increased the penalty for converted foreign companies which own restricted properties without approval and citizens who hold such homes as nominees for foreigners.

If the new Bill is passed, those found breaching these rules will be fined up to $200,000, up from $5,000 previously, and a further fine of $2,000 each day they remain non-compliant.

Other penalties include a fine of up to $10,000 or three times the rental income, whichever is higher, for unauthorised rental. The Controller of Residential Property also gets powers to lodge a caveat to prevent unauthorised sales.

SLP International’s executive director of research and consultancy Nicholas Mak said the move would close a “loophole” for foreigners who buy landed property after becoming citizens or PRs and then give up their residency status after a few years.

MediaCorp understands there have been three to four offences of unauthorised property sale in the last two years. Of the 70,000 landed homes, PRs own 3 to 4 per cent.

Another change will affect foreign developers – defined as any company with foreign directors or any amount of foreign ownership, including listed companies since foreigners can buy the shares – which will include firms such as Keppel Land and CapitaLand.

The Government will charge a fee if foreign developers extend the five-year window to complete residential developments after acquiring the land, or take more than two years to sell all units from the date of TOP.

MediaCorp understands the Government can make exceptions on a case-by-case basis, such as during a recession.

Other Bills introduced in Parliament yesterday include the Maintenance of Parents (Amendment) Bill, which proposes mandatory conciliation sessions and tribunal access to necessary government records and documents, the Industrial Relations (Amendment) Bill, which proposes a new mediation scheme for some disputes involving employees who are managers and executives, and the Civil Defence (Amendment) Bill, which will provide for officers to serve outside of Singapore.

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More changes ahead for flats & landed property market

2010-10-18T17:09:00.000+08:00

Source : Channel NewsAsia – 18 Oct 2010

More changes are on the way for the regulation of Singapore’s property market.

From November, sellers of Housing & Development Board (HDB) flats will have to observe a seven-day cooling-off period before they can grant an Option-to-Purchase (OTP) to the buyers.

And foreign owners of landed property could face tougher rules under changes being proposed by the Law Ministry.
The HDB said in a statement on Monday that the seven-day cooling-off ruling is part of the enhanced resale checklist and submission procedures to better protect the interests of sellers and buyers and help them make informed and prudent decisions.

From November 1, sellers of HDB flats, acting with or without agents, will have to observe a seven-day cooling-off period after they have completed the resale checklist, before granting an OTP to the buyers.

The enhanced checklist also requires flat sellers buying another HDB flat to work out the estimated sale proceeds of their current flat and a financial plan for the purchase of the next flat.

Additionally, buyers of resale flats, acting with or without agents, will also be required to complete and submit the resale checklist, which was introduced in 2008 to ensure that HDB flat sellers and buyers are aware of the key resale and financial policies before they commit to a transaction.

New rules are also in store for foreign ownership of landed residential property, if a new Bill introduced in Parliament on Monday is passed.

The Law Ministry is proposing to amend the Residential Property Act, which regulates foreign ownership of restricted properties in Singapore, so as to enhance its penalty framework.

The Act was introduced in 1973 and imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners, in this case referring to PRs, must get approval from the Singapore Land Authority before buying. The penalties have not been revised since 1974, despite significant increases in residential property prices.

Among the proposed changes set out in the Residential Property (Amendment) Bill is that landed home owners must dispose of their property within two years if they lose their permanent residency or citizenship status.

Failure to do so could see them facing a S$20,000 fine and/or a 3-year jail term.

Foreign beneficiaries of landed properties must also dispose them within 5 years, instead of the earlier 10-year time-frame.

And currently, foreigners who purchase landed properties are not allowed to rent them out.

Under new rules, those caught doing so will face a penalty of S$10,000 or up to three times the rental income collected during the period of breach, whichever is higher.

The new HDB ruling and the proposed changes by the Law Ministry follow a slate of property-cooling measures announced at the end of August.

These included barring buyers from owning both a HDB flat and a private home within the Minimum Occupation Period.

National Development Minister Mah Bow Tan told Parliament that it is too early to assess the full impact of the recent measures, but said there are signs of greater stability in the market.

He cited a slower increase in private residential property prices over the quarters – 3.1% in the third quarter of FY2010 compared with 5.3% in Q2.

Mr Mah said: “The take-up of private residential properties has decreased in September this year as compared to August. And the recent level of sub-sales has been relatively low. In the public housing market, the number of resale flat transactions in September has decreased by 25 percent compared to August.”

On foreign ownership of landed properties, Mr Mah said: “The proportion of landed residential properties purchased by PRs and foreigners has also been relatively low, accounting for less than 6 percent of all landed housing transactions for the past two years.”

In the light of recent changes in HDB policy on the ownership of overseas properties, MP for Ang Mo Kio GRC, Lee Bee Wah, wanted to know if HDB would allow exemptions for those who inherited foreign properties out of bequests.

Mr Mah clarified that this would not be possible. He said: “HDB is unable to allow exemptions for those who inherited these overseas properties, as a general policy. However, I will ask HDB to look into the circumstances of special cases upon appeal.”

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Property market shows signs of cooling as measures take effect

2010-10-16T15:13:00.000+08:00

Source: Today 16/10/10

The Republic’s property market met a frosty reception last month as the Government’s cooling measures appear to have tempered demand.

Data released on Friday by the Urban Redevelopment Authority (URA) showed that 911 private homes were sold last month – a 27-per_cent drop compared to August, when 1,259 units changed hands.

The September figure was the second-lowest monthly sales recorded this year. In June, when the World Cup was held, only 847 units were sold.

The latest round of property cooling measures announced at the end of August included barring buyers from owning both a Housing and Development Board flat and a private home within the Minimum Occupation Period.

“The drop is a very clear signal that the measures were having an effect in September,” said Mr Nicholas Mak, executive director of research and consultancy at SLP International.

In the prime districts, only 84 units were sold out of the 109 launched. The city fringes and outlying areas saw 226 and 601 units sold respectively. The most expensive property sold was at the Orchard Residences where a unit went at a median price of $4,258 per square foot.

“The luxury market is still hovering at about 12 to 13 per cent well below peak value, so I think there are some rich pickings in the Singapore market that could be of interest to the regional investors in that sense,” said Cushman & Wakefield managing director Donald Han.

The decline in sales volume is expected to continue. Analysts estimate launches and sales in the fourth quarter to hover between 800 and 1,000 per month. Still, they expect sales for the whole of the year to exceed 14,000 units.

And sentiment will likely improve in the first three months of next year, analysts said.

Looking ahead, buyers would be watching interest rates closely, said Dr Chua Yang Liang, Jones Lang LaSalle’s Head of Research for South-east Asia.

Said Dr Chua: “As total returns compress, interest rates are expected to play a bigger role in influencing buyers’ decisions. The impact of state intervention on home demand and prices may thus be cushioned in light of today’s falling interest rates.”

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S’pore office rents 15th highest in the world

2010-10-06T15:30:00.002+08:00

Source : Channel NewsAsia – 5 Oct 2010

Singapore is the 15th most expensive office location globally, in terms of occupancy cost, according to property consultant Colliers International.

Its Global Office Real Estate Review for the first half of 2010 showed Singapore surged nine spots from six months ago.

The report found Grade A Central Business District (CBD) office space here has an occupancy cost of US$58.08 per square foot per year as of June.

The increase comes after Singapore’s Grade A CBD office rents nudged up by 7.6 per cent in local currency terms.

Hong Kong retained its status as the most expensive office location, followed by London West End and Tokyo.

Colliers said a rapidly-improving business environment amid an economy that is speeding ahead led to the jump in office property prices.

It added that Singapore’s office property market accelerated in the third quarter, as robust occupier demand emboldened landlords to raise rents.

Collier also said the brisk leasing activity put a squeeze on the office market, such that the average occupancy rate of Grade A office space in the CBD reached 94.1 per cent by end of September.

This is 1.1 percentage points higher than that registered in the second quarter.

Colliers expects the office market here to maintain its growth in the last quarter of 2010, albeit at a moderate pace of not more than 10 per cent.

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Strong demand for Esparina exec condo

2010-10-06T15:27:00.002+08:00

Source : Channel NewsAsia – 5 Oct 2010

The first executive condominium (EC) development launched in over five years has received strong response in the market.

Applications for the Esparina have been oversubscribed by at least two times, according to developer Frasers Centrepoint who is unable to give exact figures.

Executive condos are a hybrid of public and private housing. New units have the same restrictions as public housing, but these expire after ten years.

Experts say they are not surprised by the strong response and believe there is pent-up demand for such housing.

The show flats of the Esparina have been packing in crowds over the weekend.

Among the reasons for the popularity of the EC is its proximity to Buangkok MRT Station.

The temporary occupancy permit is expected in the first quarter of 2014.

The Esparina also has a unique selling point in its dual key units. About 12 per cent of the total units can be split into two separate apartments with different entrances.

With rising prices in the property market, observers say the affordability of ECs is another attraction for buyers, especially among the sandwiched income class.

Mark Teo, senior group division director, ERA, said: “There are some families who have the income of between S$8,000 to S$10,000 – that is, exceeding the limit to buy HDB flats directly from HDB.

“But at the same time, if they were to buy a private condo, even a mass market private condo, it could be well above a million dollars, so to them it is a big financial burden.

“EC buyers are generally young professionals, maybe they’re just starting to work, so to them they have other expenses to take care of them, so ECs for this group of people really serve this purpose.”

In recent years, prices of mass market condos have generally risen by more than half to hit over S$1,000 per square foot, according to experts. This makes ECs more attractive as they are about 25 per cent cheaper.

The 573 units at Esparina, ranging from two- to four-bedroom units and the penthouses, are priced at S$730 to S$750 per square foot on average.

The project is the first EC to be launched since the La Casa in Woodlands in 2005.

There are at least four more developments set for launch this year, which observers believe will help cater to pent-up demand for such developments.

The Canopy in Yishun previews this weekend.

Christine Sun, senior manager, Savills Research & Consultancy, said: “The demand for ECs is expected to stay firm. Buyers would have a wider home selection as a further supply of about 1,980 EC units from four other projects is expected to be released within the next six months.

“The average unit price for these units may not deviate too much from Esparina; they could range between S$720 and S$780 psf.”

Mr Teo said: “The introduction of new ECs is going to be able to curb the escalation of prices of mass market condos. However, it is not going to drag the prices down, I believe.”

The supply of ECs will be boosted with the release of two more EC sites for sale on Wednesday.

The two sites are at Tampines and Bukit Panjang, and are under the confirmed list of the Government Land Sales Programme for the second half of 2010.

The Ministry of National Development had said in August that it would release more land for tender to yield 3,000 DBSS flats and 4,000 ECs to make it easier for first time home buyers to secure a home.

In 2011, the ministry plans to release land sites for another 4,000 DBSS flats and 4,000 ECs.

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GIC sees more opportunities in real estate, private equity than equities

2010-09-30T17:37:00.001+08:00

Source : Channel NewsAsia – 29 Sep 2010

The Government of Singapore Investment Corporation (GIC) has said real estate and private equity investments can give better returns compared to equities.

So it said it will continue its investments in these areas as part of its emerging markets strategy.

Speaking at a CFA Institute Conference on private wealth management on Wednesday, GIC’s group chief investment officer, Ng Kok Song, said developed economies will continue to see slower growth over the next ten years while emerging markets continue to prosper.

GIC expects global Gross Domestic Product to grow by 3.8 per cent this year, with advanced economies expanding by 2.4 per cent. Emerging Asia is forecast to grow at 8 per cent this year.

It added that industrial output in emerging Asia has recovered fully and now stands at 12 per cent above pre-crisis levels, while developed economy output remains 2 per cent below levels seen two years ago.

Mr Ng said: “So what do we do as investors in this new investment landscape? (We) have to grapple … between deflation risk and deteriorating sovereign debt ratings in the developed economies versus inflation risks and stronger credit ratings in the emerging economies.

“As a result of our review of our policy portfolio, GIC has decided to increase further our investments in the emerging economies, especially in Asia.”

As of March this year, GIC’s exposure to emerging market equities was 10 per cent, or about one fifth of its global equity portfolio.

In GIC’s annual report released on Monday, it said it had recouped most of its losses made during the financial crisis as stock markets rebounded.

Its real rate of return in excess of global inflation was 3.8 per cent, up from 2.6 per cent a year ago.

GIC added that gains in the last fiscal year lifted its 20-year nominal annual rate of return to 7.1 per cent in US dollar terms from 5.7 per cent. And this was possible because the fund had executed strategies to exploit the investment opportunities.

Mr Ng said: “It is not sufficient to be reasonably prescient in discerning the future landscape, but we need also to have positioned the portfolio ahead of time before the future scenario is reflected of discounted in asset prices.”

One example is how GIC increased its investments in public equities from 38 per cent in 2008 to 51 per cent last year.

GIC has investments valued at about S$132 billion.

Mr Ng, who is also the chairman of the Wealth Management Institute, said private wealth industry leaders also see Asia’s growth creating more affluence.

The CFA Institute reported that in 2009, high net worth individuals – those with assets greater than US$100 million – rose 26 per cent from 2008. It added that this trend is likely to continue, with double digit growth in the number of high net worth individuals in 2011.

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Ophir-Rochor to see mix of residential & commercial development: analysts

2010-09-22T18:21:00.002+08:00

Source : Channel NewsAsia – 21 Sep 2010

The Ophir-Rochor area is touted as the next downtown district, with plans for it to be an extension of Singapore’s Central Business District (CBD).

It will now be developed by a Singapore-Malaysia joint venture, following Monday’s land swap between the countries.

After years of negotiation, Singapore and Malaysia finally agreed to a deal on Malayan railway land that cuts through the heart of Singapore.

In exchange, Malaysia has accepted six land parcels in Marina South and Ophir-Rochor.

One analyst estimates that under current market conditions and based on recent land sales, the Marina sites could be worth between S$3.5 billion and S$5 billion, while the Ophir parcels could fetch S$2 billion.

The two land parcels at Orphir Road have been designated as “white sites”, which means the land can be used for high-value commercial, hotel or residential projects, thus allowing for greater flexibility.

With the financial and shopping districts within close proximity, analysts said the sites will likely be used for a mix of residential and commercial developments.

“The government has in the last 1 to 1.5 years been focusing mainly in the Marina Bay area to service the financial district. Now they are looking at overall development, at expanding the tourism areas,” said Colin Tan, director of Research & Consultancy at Chesterton Suntec International.

The Singapore government has not released details of the land it receives from the deal.

But analysts said beyond the value of the Malayan railway land, Singapore will also gain from the potential value unlocked in the areas surrounding these sites.

Nicholas Mak, executive director of Research & Consultancy at SLP International said: “Some of these other sites will also benefit, because now they can be amalgamated once the railway track is removed, and this will allow greater flexibility in its development and allow the land which is currently adjacent to the railway track to realise their full market potential.”

And with Tanjong Pagar slated to be developed into a waterfront city once the port’s lease expires in 2027, analysts said ownership of the railway land will allow for better long-term planning.

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Ophir-Rochor area the next downtown district?

2010-09-22T18:20:00.002+08:00

Source : Today – 22 Sep 2010

Singapore-Malaysia joint venture to develop parcels there

The Ophir-Rochor area is touted as the next downtown district, with plans for it to be an extension of the Central Business District.

A 2.67-hectare area there will now be developed by a Singapore-Malaysia joint venture, following yesterday’s land swap announcement by the two countries.

After years of negotiation, both neighbours agreed to a deal on Malayan Railway land that cuts through the heart of Singapore.

In exchange, Malaysia accepted six land parcels in Marina South and Ophir-Rochor under the joint venture.

Property analyst Nicholas Mak, executive director of research and consultancy at SLP International, estimates that under current market conditions and based on recent land sales, the Marina sites could be worth between $3.5 billion and $5 billion, while the Ophir parcels could fetch $2 billion.

The two land parcels at Ophir Road have been designated “white sites”, which allow for greater flexibility of land use. With the financial and shopping districts within close proximity, analysts said the sites will likely be used for a mix of residential and commercial developments.

Chesterton Suntec International head of research and consultancy Colin Tan said: “The Government has, in the last one to one-and-a-half years, been focusing mainly in the Marina Bay area to service the financial district.

“Now they’re looking at maybe overall development, at expanding the tourism areas. So this is one way because we have Arab Street there; there are interesting places. So maybe to kick-start development, from the Raffles City area down to Ophir Road.”

The Singapore Government has not released details of the land parcels it receives from the deal.

But beyond the value of the railway land, Singapore will also gain from the potential value unlocked in the areas surrounding these sites, analysts said.

Mr Mak said: “Some of these other sites will also benefit because now they can be amalgamated once the railway track is removed, and this will allow greater flexibility in development and allow the land which is currently adjacent to the railway track to realise their full market potential.”

With Tanjong Pagar slated to be developed into a waterfront city once the lease on the port area expires in 2027, analysts said ownership of the railway land will allow for better long-term planning.

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Investment property sales grow 86% on-year

2010-09-21T17:45:00.002+08:00

Source : Channel NewsAsia – 20 Sep 2010

The property investment market in Singapore recorded S$5.91 billion in sales for the third quarter of 2010.

This is an 86 per cent on-year growth, according to property research firm Jones Lang LaSalle (JLL).

However when compared to the previous second quarter, investment property sales slipped eight per cent.

Still, there are several deals under conditional contracts worth more than S$590 million and this can prop-up third quarter sales to close even higher than last quarter, JLL said.

JLL pointed out that there was a shift in investors’ profile, with significant contribution from bigger players and also increased activity in the non-residential sector.

It added the office sector was a standout, with only seven transactions, but sales numbers hit S$1.91 billion.

This is almost a five-time increase on-quarter.

It said this was due to returning investors’ confidence as some real estate indicators suggest that the office market is bottoming out.

The largest transaction came from the sale of DBS Towers, purchased by Overseas Union Enterprise at S$870.5 million.

Government land sales also performed well.

A commercial site at North Buona Vista Drive was awarded to Singapore-listed developer Ho Bee Developments at S$411 million.

JLL added the hotel sector also seemed more upbeat with a 23 per cent increase in investment sales to S$519 million on-quarter.

Going forward, the firm expects investors to continue their focus on non-residential sector given the recent measures targeted at cooling the residential property market.

JLL’s head of research for South East Asia Dr Chua Yang Liang said: “With improving market sentiments and office rental growth gaining strength, investment sales in this sector will likely remain positive and face upside.

“Already brewing in the pot are potential deals by Goldman Sachs Funds for Hitachi Tower and Chevron House”.

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M-S likely to seek joint venture with established developer

2010-09-21T17:44:00.002+08:00

Source : Channel NewsAsia – 20 Sep 2010

With the land swap agreement between Singapore and Malaysia settled, market watchers have said the company in charge of developing the land parcels would likely seek a joint venture with an established developer.

The joint company, M-S Pte Ltd, is 60 per cent owned by Malaysia’s Khazanah Nasional. The rest of it is owned by Temasek Holdings.

The Marina South site will be among the six land parcels to be jointly developed by M-S Pte Ltd. The other site is at Ophir-Rochor.

Both areas are white sites, which means they can be used for mixed developments like a combination of retail, residential and office space.

Market watchers said the sites could be put up for sale but they believe M-S Pte Ltd would prefer a joint venture with an established player.

SLP International executive director of research and consultancy Nicholas Mak said: “(The) M-S development will probably have a more active role after the two parcels of land are injected into its portfolio, so they can still participate in the development of these two sites and perhaps guide in the future development.

“Another reason is that there will be other joint ventures in Iskandar Malaysia, between Singapore and Malaysia. So (these) two sites can also be part of that bigger portfolio”.

The four parcels at Marina South have up to a gross floor area of 341,000 square metres.

Experts said this could accommodate a 50-60 storey building with a gross plot ratio of 13.

The two land parcels at Ophir-Rochor have a gross floor area of about 160,000 square metres. This could possibly accommodate a 25-storey building with a plot ratio of six.

Observers also expect developments at the Tanjong Pagar area once the railway station is relocated to Woodlands by July next year.

“The present railway track cuts across Singapore from north to south,” Mr Mak said.

“With its removal, there will be parcels of land formerly divided (by) the railway track (that) could be amalgamated, and their true market potential could be realised.

“For example a larger parcel of land could have greater flexibility in its development and therefore realise a higher market value.”

The land swap deal is part of the Points of Agreement (POA) signed in 1990 between Singapore and Malaysia.

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Not penalising private home owners

2010-09-16T14:46:00.000+08:00

Source : Today – 16 Sept 2010

Instead, says Mah Bow Tan, Govt making things more equitable for both them and HDB flat owners, alike

The recent cooling measures have resulted in an “anomaly”, Non-Constituency MP Sylvia Lim told Parliament yesterday, noting that while a Housing and Development Board (HDB) flat owner can own private property after the Minimum Occupation Period (MOP), but a private property owner has to sell his property within six months of buying an HDB flat.

In response, Minister for National Development Mah Bow Tan said the Government was not penalising private property owners but making it more “equitable” for both HDB and private property owners.

He pointed out that in the past, subsidised HDB flat owners could not buy private property until after five years, whereas a private property owner could own both private and HDB properties at the same time.

Mr Lim Biow Chuan, MP for Marine Parade GRC, wanted to know why private property owners who bought HDB flats, after the new rules kicked in, would have to dispose their private property when they intended to live in their HDB flats during the MOP of five years.

Mr Mah said there were people who wanted to “have the best of both worlds” – keeping their private property and renting it out while living in an HDB flat. However, he added that there was “a genuine need from first-timer couples for HDB resale flats and I think we should let them have first crack at it”.

About 3 per cent of HDB flat owners – or 24,000 flat owners – own both private property and HDB flats.

Mr Mah added: “If you already own private property, please don’t, at this point in time, compete with the others to buy HDB resale unless you are genuinely downgrading.”

The Minister said many flat owners caught up in the “upgrading fever” in the nineties were hit by the financial crisis.

Mr Mah reiterated that the new measures did not disadvantage upgraders or investors as there was ample public and private housing supply in the pipeline. The measures were timely to encourage them to exercise greater financial prudence and think carefully about their purchases, he said.

As for MP for West Coast GRC Ho Geok Choo’s question on whether there would be enough executive condominiums (ECs) and flats under the Design, Build and Sell Scheme (DBSS) to cater to the needs of those with a monthly income of $8,000 to $10,000, Mr Mah said HDB was ramping up the supply of land sites for DBSS and ECs.

HDB plans to release land sites for about 7,000 DBSS flats and 8,000 ECs in 2010 and 2011.

In two years, HDB will triple the current stock of 4,000 DBSS flats and double the current stock of 10,000 ECs that have been launched for public sale since the start of the scheme.

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Estate Agents Bill passed

2010-09-16T14:44:00.002+08:00

Source : Today – 16 Sept 2010

MPs speak out in support of the measures aimed at making the industry more professional

Parliament yesterday passed the Estate Agents Bill aimed at shaking up the real estate industry and making it more professional.

When the new statutory board, the Council of Estate Agents (CEA), starts operation on Oct 22 – it will have the power to set codes of practice, ethics and professional conduct to regulate the practices of estate agencies and their agents.

From Jan 1 next year, all property agents will have to be registered with the CEA. They will have to meet certain standards to continue working.

Information on all registered estate agents will also be available on a public register, including the agency they are working for. Any disciplinary action taken against them will also be published.

The Bill comes after a rising number of complaints against errant agents.

It follows a recent housing Bill passed by Parliament in July to close a loophole which had allowed moneylenders to lodge caveats on HDB flats to claim a stake in sale proceeds.

Members of Parliament have spoken out in support of the measures.

Mr Cedric Foo, MP for West Coast GRC, wanted to know whether the CEA would consider those with criminal records or undischarged bankrupts to enter the industry.

Minister for National Development Mah Bow Tan said he would ask the CEA to consider applications on a “case-by-case basis and not to automatically disqualify these people from the trade”.

When MPs Lim Biow Chuan, Ang Mong Seng and Cynthia Phua asked whether the CEA would prescribe the amount of commission real estate agents could charge – currently between one and two per cent – Mr Mah said: “The CEA cannot fix the commission charged because it is anti-competitive.”

He added that it is “better” for commission rates to be decided by the market and to educate consumers so that they can negotiate the “best commission rates based on the level of services to be provided”.

MP for West Coast GRC, Ms Ho Geok Choo, expressed concern that those moonlighting as real estate agents could lose their full-time jobs if they are listed in the public register.

Mr Mah said: “The new regulatory regime does not prohibit people from doing part-time real estate work. But it will require all persons doing real estate agency work, part-time or full-time, to be registered.”

He added that this is not to “deter” part-timers, but if they want to be part of this industry, they must be registered.

“I don’t think we should exempt them from this, they will have to sort it out with their employer,” he said.

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Hungry Ghost month fails to spook buyers

2010-09-16T14:43:00.000+08:00

Source : Today – 16 Sept 2010

The Singapore housing market was well and alive during the Hungry Ghost Month as demand for new private homes continued to be strong in the month of August, with sales staying above the 1,000 level.

Latest figures from the Urban Redevelopment Authority revealed 1,248 units were sold last month, a 19-per-cent dip from the 1,549 sold in July.

In total, 1,326 units were launched in August with buyers snapping up 94 per cent of the new units launched.

Traditionally, demand for homes are more sluggish during the Hungry Ghost Month. The Government’s package of anti-speculation measures, however, had come on the second-last day of August, meaning market watchers would have to wait another month before confirming its impact on market sentiment.

The strong sale was well beyond analyst expectations of 500 to 800 units and brought the number of new homes sold in the first eight months of this year to 11,381 units.

“There is a lot of liquidity out there and a lack of financial investment alternatives with the low interest rates,” said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.

She added many still see property as a safe haven, citing its potential for capital appreciation and rental yield of 3 to 3.5 per cent – higher than savings and housing loan rates.

The hottest development last month was The Greenwich at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of $1,095 per square foot (psf). The units ranged from 616 square feet (sq ft) to 738 sq ft.

Viva Vista at South Buona Vista Road came in second as it sold 139 units of between 334 sq ft and 485 sq ft. at the median price of $1,509 psf.

“Their attraction lies in the affordable price quantum as well as proximity to major transport nodes,” said Mr Li Hiaw Ho, executive director, CBRE Research.

Property consultancy Jones Lang LaSalle said the Core Central Region remained the quietest despite the 406 units launched by developers to stir up the market. Only 155 units from Core Central Region were sold there. This is much lower than the 1,093 units sold in both the Rest of Central Region and Outside Central Region.

Market experts said the latest URA figures showed escalating prices, where 88.2 per cent of units sold had a median per square foot price of over $1,000.

However, looking ahead, observers expect the recent cooling measures by the government to impact buying sentiments. Jones Lang LaSalle estimates September private home sales to contract 30 to 35 per cent on-month as the policy takes effect.

“Although the full quarter numbers have not been released, we estimate resale volume (for all residential properties excluding executive condominium) in the third quarter could decline by 20 to 25 per cent quarter-on-quarter or 25 to 35 per cent year-on-year,” said Dr Chua Yang Liang, Head of Research South-east Asia at Jones Lang LaSalle.

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Private residential rentals set to rise with influx of foreign workers

2010-09-16T14:41:00.001+08:00

Source : Channel NewsAsia – 15 Sept 2010

Rental rates in the private property market are poised to rise with the expected influx of some 80,000 foreign workers this year.

Analysts said this is because of the shortage of private housing.

And the supply situation may not improve this year as only 5,000 private housing units are expected for completion by year’s end.

The government’s forecast on the number of foreign workers here comes on the heels of an expected boom in the job market.

And as housing needs for these foreign workers increase, rental rates are likely to follow.

“This could cause rentals to rise anywhere from 2 to 5 per cent for the second half of this year,” said Nicholas Mak, executive director of Research and Consultancy at SLP International.

Second-quarter figures from the Urban Redevelopment Authority (URA) showed private property vacancy rates were at 5.4 per cent.

Analysts said private residential property rental yields are currently at 3 to 4 per cent.

With the rise in foreign workers, they expect rental yields for non-landed properties to increase by about 1 per cent.

“Typically, the rental market in Singapore is pretty stable. It will only drop, for example, in times when the economy is in a recession. That’s when big numbers of foreign workers may then leave the country,” said Eugene Lim, associate director of ERA Asia Pacific.

Analysts said the latest cooling measures are also unlikely to impact the private property rental markets over the short-term.

One of the new measures introduced include a lower loan-to-value ratio at 70 per cent for buyers with more than one mortgage.

This may deter buyers who plan to purchase a second property for rental and investment purposes, analysts said.

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Peak Predictions

2010-09-15T13:45:00.000+08:00

Source: Property-Report.com

While others are predicting luxury property prices in Singapore will cool, The Luxury Expert says they’re still some way from their peak.

Alex Shlaen is a man who is rarely wrong. As Property Report South East Asia’s Luxury Expert he recently predicted Chinese buyers would turn their attentions to Singapore some three months before it happened. His take on the markets is weeks and, in some cases, months ahead of other industry commentators and mainstream media. His views – which are often directly opposite to current thinking – are widely read and respected; when he talks people listen.

His view about Singapore’s luxury sector are ones you should listen to because, in stark contrast to almost every other industry watcher, he’s predicting prices will continue to rise. He says: “Both the market and prices are surprisingly strong. I believe that the very high-end properties in Singapore are significantly off their peak by some 25 to 30 per cent. The reality is there are few luxury properties around and little in the way of speculation. Buying in this sector is a long term investment.”

When it comes to China, The Luxury Expert has been firm in his views that it offers strong potential. In July he wrote: “This is only the beginning of China’s reign at the top of the real estate world market, and this wave will be as significant and probably more long lasting than the Japanese wave of buying the world’s top properties.” His views have not altered.

“If you’re asking me whether the is a bubble in China’s property market then I will say definitely. But is that bubble a threat? My answer is no. People say ‘China is going to crash’ but the way I see the Chinese market is that it will be up and down like a zig-zag, up and down at times but the general trend will be higher.” He points out that the luxury property sector is getting stronger, and in places like Chengdu, the capital of Sichuan province, there are already some luxury projects being developed.

Thailand’s luxury sector has been hit hard by the recent bout of political instability, despite the recent sale of Beyond Villa for a reported US$24 million. The Luxury Expert says: “Thailand is the most important luxury property market in the region, but Phuket has suffered because there’s nothing much besides luxury properties on the island. The sale of Beyond was an exception although it does show the increasing importance of Russian buyers in the market.” An unidentified Russian buyer is thought to have purchased the property. “The luxury market in Thailand shouldn’t be too far behind anywhere else. There is a lot of money that is looking for a home right now and Thailand is missing out.”

So what exactly does luxury mean to The Luxury Expert? He says: “The actual definition of what is defined as luxury changes around the region. In Singapore it’s generally property priced above S$2,500 (US$1,845) per sq ft. Location is just one of the ingredients in a project which are important factors in creating luxury. In most cases in Singapore, a new launch hails itself as ‘true luxury’ or ‘luxury living’. Advertisements are splashed with lush greeneries around the upcoming condo, usually accompanied by a smiling, dressed-up teenage model who also strikes a pose by the swimming pool. I have never teenage girls buying luxury condominiums.” He adds that he feels some agents and developers are confused about what luxury actually means. “In some cases the only luxury element to a property is the price tag.”

To The Luxury Expert property still remains an attractive investment. “Some people are unsure about the stock market, and at least with property if the market drops you are still left with the property. Asia is attractive to many people elsewhere in the world, and there is certainly a lot of money coming this way. Markets like Singapore are very transparent and attractive and will benefit, and if Thailand can restore some stability it can benefit too.”

About the Author: Alex Shlaen is an economist and holds an executive MBA from Kellogg School of Management and HKUST. He is the founder of Panache Management Pte Ltd and represents ultra luxury branded products, furnishings and interiors by Tonino Lamborghini and Formitalia in South East Asia. He is also a serial real estate investor. He writes as The Luxury Expert for Property Report South East Asia. www.panachemanage.com

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Muted sales after new property rules kick in

2010-09-13T12:36:00.001+08:00

Source : Straits Times 13 September

Buyers waiting for prices to drop, but developers hold steady

IT IS fewer visitors and even fewer sales for property showflats across the island as buyers play a waiting game in the hope of seeing prices fall.

However, developers have yet to blink, with asking prices at most showflats holding steady, with one – NV Residences in Pasir Ris – even raising prices marginally at the weekend.

Two weeks after measures to cool the property market were introduced, NV Residences bucked the trend of muted sales with a strong showing of 90 units sold at the Hari Raya weekend.

This brings total sales to 250 out of 300 units released. Eighty per cent of buyers were Singaporeans; the rest were permanent residents and foreigners, a City Developments (CDL) spokesman said.

Prices were raised by between 1 per cent and 2 per cent at the weekend from its average selling price of $830 per sq feet (psf) when the condominium first previewed last Wednesday. The 642-unit condo is the first large residential project to be released after the Government introduced new property rules on Aug 30.

The new measures included tighter lending rules for home owners with existing mortgages looking to buy another property. They can now borrow up to only 70 per cent of the value, down from 80 per cent. Those who buy an HDB resale flat on or after Aug 30 must also dispose of their private property – including any held overseas – within six months of the HDB purchase.

When The Straits Times visited NV Residences on Saturday afternoon, more than 100 potential buyers crowded its showflat at Pasir Ris.

Madam Linda Tay, 55, who bought a two-bedroom apartment there, said she was unaffected by the new rules as the mortgage on the HDB flat she and her husband have been living in for the past 22 years was paid up.

‘This is a long-term investment for us, we can rent it out or pass it on to our children…We think it is better than just leaving our money in the bank,’ she said.

PropNex chief executive Mohamed Ismail said the project’s good location and reasonable pricing were key to its strong sales. Other sites sold to developers this year are expected to be launched for up to $1,000 psf, given their break-even prices of about $800 psf, he said.

Another analyst said that NV Residences, as the newest launch on the market, would attract the most buyer interest.

At other showflats across the island, buyer traffic was down, with only a handful of visitors at any one time. It was a quiet Saturday afternoon for the showflats at Waterfront Gold at Bedok Reservoir Road, Centro Residences near Ang Mo Kio MRT and Flamingo Valley in Siglap.

Some agents said the number of walk-in buyers at showflats has dropped by up to 10 per cent since the cooling measures were introduced.

Far East Organization’s Centro Residences did not record any sales at the weekend. Phase Two of 319-unit leasehold project The Greenwich at Seletar Hills saw nine homes sold, bringing total sales to 225 out of 265 units launched, at an average selling price of $1,074 psf.

Frasers Centrepoint Homes declined to give weekend sales figures for Flamingo Valley and Waterfront Gold.

DMG and Partners property consultant Brandon Lee said it was unlikely developers would lower prices immediately as the strong run up in property prices and sales over the past year have given them a strong holding power.

Mr Ong Kah Seng, Cushman & Wakefield Asia-Pacific research senior manager, said that for prices to fall, take-up must first moderate, reflecting the onset of a contraction in homebuying interest.

‘Developers and home owners are reluctant to lower prices and…will consider doing so only when all circumstances dictate a necessity,’ he said.

But PropNex’s Mr Ismail said that while it was still too early to expect any price adjustment, the mass market segment might see a 5 per cent to 10 per cent reduction in prices should the take-up rate in newer launches be lukewarm. ‘This will probably unfold in the next couple of months,’ he said.

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Property cooling measures timely: Wing Tai

2010-09-04T15:14:00.000+08:00

Source : Today – 4 Sep 2010

The measures announced by the government on Monday to cool the property market were timely as prices had gone up to unsustainable levels, according to real estate developer Wing Tai Holdings.

Mr Edmund Cheng, Wing Tai’s deputy chairman who said this on Friday at the launch of its luxury project Belle Vue Residences, added that prices for future land tenders would need to be adjusted downwards as sentiment had cooled.

However, he said Wing Tai would not be affected too much by the new curbs.

“The measures, I think, address the upgraders’ market more. Most of our properties are all high-end, upper-middle and super high-end, so the impact is not much,” he said.

Wing Tai said 109 of its 167 units at Belle Vue had been sold. It said it was confident that the project would be fully taken up, with foreigners expected to make up half the buyers. The remaining units are priced between $2,300 and $2,800 per square foot.

But while developers such as Wing Tai may stay positive, some observers expect the banking sector to feel the impact from the recent anti-speculative measures.

Banks could see a significant drop in profit contributions from housing loans, some analysts said.

“UOB has the largest percentage based on their total income. For them, we are looking at 20 to 30 per cent of their total top line coming from housing loans. Therefore they would be, in our view, most affected by the clamp down in the property sector, followed by DBS,” said Mr Moh Tze Yang, lead analyst at SIAS Research.

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10 questions about new property rules

2010-09-04T15:10:00.001+08:00

Source : AsiaOne – 4 Sep 2010

Ms Tan wanted to buy a resale three-room flat for her twilight years, but the new property regulations have put a spanner in the works.

The retiree told Lianhe Wanbao that she owns a private property, but she wanted to move into a Housing Development Board (HDB) flat and rent out her private property to supplement her retirement income. Living in an HDB flat will also help to lower her monthly expenses.

Unfortunately, her plan is unfeasible after HDB announced that private property owners who buy HDB flats have to sell their private properties within six months of their HDB purchase.

Many existing property owners who were in the process of buying a second property were also affected when new regulations were announced on August 30.

Quite a few had to re-evaluate their finances as the minimum cash outlay has now been raised to 30 per cent of the value of the property.

The changes caught even industry insiders by surprise, and the implications are still sinking into the market.

Lianhe Wanbao and Chinese radio station 100.3FM asked the principal consultant of Propnex, Mr Lim Yong Hock 10 questions from readers and listeners.

How many people are affected by the changes?

Many people will be affected, it just depends on the degree. After the change in regulations, many people will change their minds about buying resale flats. Add to that the fact that more new flats will be built, the demand for resale flats will definitely fall, and price will also fall in tandem.

How much will prices fall by?

Based on past and current trends, prices will fall about 10 per cent this year, and 20 per cent next year.

Should I buy or sell?

With the new rules, it is a better market for home buyers than sellers, so buyers should take the opportunity to negotiate a good price for their dream home. Buyers should not be too inflexible, as prices will most likely fall with increased supply.

I have an HDB flat, but I’ve also paid a $5,000 deposit for a private property. If the new rules affect me, can I retrieve my deposit?

Usually once the deposit has been paid, only buyers who do not get HDB’s approval will have their deposit returned. You are not likely to get the deposit back if you are the party who changes your mind.

I already have a private property, and I also bought a resale flat, but will only collect the keys next week. Will I be affected?

As long as you registered the purchase before August 30, you will not be affected.

I signed the contract two weeks ago, but my agent only processed my application with HDB on August 30. I feel that this is negligence on the part of the agent, can HDB make an exception for cases like mine?

This case a bit more complicated. If you had an understanding with the agent that the application was to be immediate, then it may be the fault of the agent. However, sometimes the delay could be due to the seller. It’s best that all parties meet to discuss the issue.

As a first time buyer, how will I be affected?

The new rules are good news for first time buyers, as property prices are likely to adjust downwards. Loan terms now favour first time buyers as well.

I have a property overseas, but now I want to buy an HDB flat. Do I have to sell my overseas property?

Yes, overseas properties are affected.

I have a four-room HDB flat and a private property. Now I would like to upgrade to a five-room flat, should I?

Under the new regulations, you have to sell your private property within six months of buying your new flat. It is not a good time to change your property now.

Will the rental market be affected by the new rules?

Rents should stay stable as long as the immigration policy is not changed.

Same rules apply for overseas homes

2010-09-02T15:23:00.002+08:00

People owning a property overseas will still have to comply with the new rules on property ownership if they are planning to purchase an HDB resale flat.

The clarification came amidst uncertainty on who might not be exempted from the new regulations, which state that home owners planning to purchase a HDB resale flat must first sell any existing private property within six months of the purchase.

According to HDB, the new rule also applies to people owning a property abroad. This means that an overseas property must be sold within six months of purchasing an HDB resale flat.

A non- subsidised HDB flat owner who has yet to meet the minimum occupation period of (MOP) of five years will also not be allowed to purchase property both in Singapore and abroad.

Clarifications on new financing rules that affect property owners abroad have also been made. The MAS said that homebuyers with an overseas property loan will not be subjected to the new mortgage rules if purchasing an additional property in the country.

However, the MAS noted that it “expects financial institutions to take into account the borrower's outstanding loans when making their credit assessment”.
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Measures to maintain a stable and sustainable property market

2010-08-30T17:06:00.002+08:00

1      The Government announced today the following measures to maintain a stable and sustainable property market:

Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.

For property buyers who already have one or more outstanding housing loans1 at the time of the new housing purchase:

Increase the minimum cash payment from 5% to 10% of the valuation limit2; and

Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.

The measures will take immediate effect on 30 August 2010.

2      The Government’s objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. The property market is currently very buoyant. While the rate of price increase of private residential properties has moderated in the last 3 quarters, prices have still increased significantly by 11% in the first half of 2010, and price levels have now exceeded the historical peak in the second quarter of 1996.

3      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.

Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties Sold from 1 Year to 3 Years

4      The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties3 on or after 20 February 2010 and sell them within a year of purchase.

5      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:

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.

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.

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.

6      The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

7      IRAS will be releasing an updated e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-tax guide will be available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.

Increase the Minimum Cash Payment from 5% to 10% of the Valuation Limit for Property Purchasers with one or more outstanding Housing Loans

8      Previously, property buyers have to make cash payment of at least 5% of the valuation limit5. With effect from 30 Aug 20106, the cash payment is increased from 5% to 10% of the valuation limit7. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats) who are taking housing loans from financial institutions regulated by MAS and who already have one or more outstanding housing loans at the time of applying for a housing loan for the new property purchase.

Decrease the LTV limit for housing loans granted by financial institutions regulated by MAS from the current 80% to 70% for Property Purchasers with one or more outstanding Housing Loans

9      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).

10      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.

11      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.

Adequate Supply in the Pipeline

12      The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.

13      Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.

14      The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.

1 Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the buyer has an outstanding housing loan at the time of applying for a housing loan for the new property purchase. For joint buyers, if either buyer has an outstanding housing loan, the joint buyers will be considered as having an outstanding housing loan.

2 This is in addition to the cash over valuation amount that has to be paid in cash.

3 The SSD will apply to the transfer or disposal of interest (including sale and gifts) of residential lands and residential units (whether completed or uncompleted).

4 The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier. The date of resale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.

5 The amount of CPF monies plus housing loan taken for the purchase of the property cannot exceed 95% of the valuation limit (defined as the lower of property value or property price).

6 The 10% minimum cash payment will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.

7 Therefore, the amount of CPF monies plus housing loan that can be used for the purchase of the property will be reduced from 95% to 90%.

8 The 70% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.

9 These refer to new development and redevelopment projects with planning approvals, i.e. either a Provisional Permission (PP) or Written Permission (WP).

10 These refer to private residential developments with Housing Developer Licence and Building Plan Approval. Under the Housing Developer (Control and Licensing) Act, a sale licence must be obtained for a project with more than 4 units, if the developer intends to sell uncompleted residential units in the development. However, the sale of the residential units can only commence with the approval of the building plans of the development.

11 These refer to uncompleted private residential developments without pre-requisites for sale but with WP or PP granted. The sale licences could be obtained within 5 working days and building plan approvals could be obtained within 7 working days from the date of application for cases where clearances from various technical agencies are obtained and relevant documents are in order during formal submissions.

Issued by: Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
Date: 30 August 2010

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HDB ups MOP for resale flats to 5 years

2010-08-30T17:05:00.002+08:00

Source : Channel NewsAsia – 30 Aug 2010

The Housing and Development Board (HDB) will increase the Minimum Occupation Period (MOP) of non-subsidised flats from three to five years.

It said this will reinforce the message that flats are meant for long-term occupation and dampen demand from those who are not in urgent need of housing.

Buyers of these flats will also be banned from concurrently owning both an HDB flat and a private residential property within the MOP.

Private property owners who buy a resale HDB flat must now dispose of their private residential property within six months from the date of flat purchase.

HDB said this will help ensure buyers purchase flats only when they have the intent of staying in it for long term and ensure equitable treatment for all flat lessees during their MOP.

Ownership of private properties by HDB lessees will be allowed after the MOP.

The changes will apply to resale applications received by HDB from Monday.

The Prime Minister in his National Day Rally speech on Sunday said more will be done to ensure that HDB flats will remain within reach of first-time buyers.

HDB will ramp up the supply of new flats, Design, Build and Sell Scheme (DBSS) flats and Executive Condominiums (ECs) substantially to meet the housing needs of first-time property buyers.

It will be offering more than 16,000 new flats this year.

If demand remains strong, HDB said it’s prepared to launch up to 22,000 new flats next year.

Over two years, it will offer more new flats than the total flats of 35,400 in Toa Payoh town today.

In addition, it will release more land for tender in 2010 to yield an estimated supply of 3,000 DBSS flats and 4,000 ECs.

In 2011, HDB will release land sites for another 4,000 DBSS flats and 4,000 ECs, if demand is sustained.

To widen their housing options, HDB will allow first-timer households with monthly income of between S$8,000 and S$10,000 to buy new DBSS flats with a CPF Housing Grant of S$30,000.

Similar to the purchase of ECs, the HDB concessionary loan will not be available for these buyers.

This revision will be applicable to DBSS projects launched for public sale after Monday.

To help households get their new flats faster, HDB has also streamlined the Build-to-Order (BTO) processes to allow flat buyers collect keys to their new homes six months earlier.

Buyers of projects launched in mid-2011 onwards will generally need to wait for two and a half years to collect the keys instead of the current three years.

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Jasper Chan (+65) 9100 6623 Jasper@sghousehub.com
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Hungry for property

2010-08-17T13:42:00.002+08:00

Festival which started last Tuesday.

Data from the Urban Redevelopment Authority showed last month’s sales were 82.3 per cent higher than June’s 847 units. This also lifted the total number of private residential units sold in the first seven months of this year to 9,957 – just 43 units short of the 10,000 mark.

For the whole of this year, observers expect sales figures to hit around 13,000 to 15,000 units. Last year, more than 14,700 homes were sold.

Property consultancy Jones Lang LaSalle said developers launched several popular projects to capitalise on the improved sentiment before the Hungry Ghost month.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak added: “There was pent-up supply and demand. The number of units launched and sold in the previous month was quite low.”

In June, a total of 1,010 units were reportedly launched while some 1,335 units were launched last month.

Ms Tay Huey Ying, director for research and advisory at Colliers International, noted that three projects – The Scala, Terrene and 368 Thomson – contributed 59.7 per cent and 46.6 per cent of the total units launched and sold, respectively, in July.

The hottest development was The Scala at Serangoon Avenue 3, of which 400 units were sold at a median price of $1,173 per square foot. Terrene at Bukit Timah registered sales of 162 units at a median price of $1,248 psf while 368 Thomson saw sales of 157 units at a median price of $1,403 psf.

Ms Tay also pointed out that despite the increased demand, buyers are refraining from pricier units, especially those “above $1,500 psf”.

Mass-market homes in the suburban areas continue to lead sales, accounting for 42.8 per cent of developers’ sales in July. Meanwhile, high-end or luxury homes in the Core Central Region were the smallest contributor to last month’s total sales, accounting for only 17.9 per cent.

Industry experts cautioned that sales could slow to between 800 and 1,200 units this month due to the Hungry Ghost month and fears of a double dip recession in the United States.

In Parliament yesterday, National Development Minister Mah Bow Tan said foreigners accounted for about 13 per cent of all private housing purchases in the first half of the year. He was replying to Nominated Member of Parliament Calvin Cheng who wanted to know how much of the recent increase in property prices could be attributed to foreign buyers.

Source : Today – 17 Aug 2010Singapore Property News | Buy | Sell | Rent | Invest
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OUE buys DBS Towers 1 & 2 for nearly S$871m

2010-08-13T15:40:00.000+08:00

Source : Channel Newsasia - 12 August 2010

SINGAPORE : Overseas Union Enterprise (OUE) has bought DBS Towers One and Two for S$870.5 million from funds managed by Goldman Sachs.

DBS Towers, with a 99-year lease, is located at Shenton Way in the heart of the central business district.

Analysts said the move will enhance OUE’s position as an office property player.

They said the timing of the acquisition is good, given the recent upturn in the office space sector. Pricing is fair as well, hovering around S$970 to S$986 per square foot on existing net lettable area.

Observers said this is the largest deal done since the global financial crisis.

DBS Tower One was built in 1975 and was then the tallest building in Singapore and the first to incorporate a covered walkway around the entire city block.

Together with DBS Tower Two, the 37-storey skyscraper comprises a total gross floor area of around 1.2 million square feet and a total net lettable area of some 883,000 square feet.

Both towers are currently fully leased out. Major tenants include financial institutions like DBS Bank, Deloitte & Touche, Aviva and Deutsche Bank.

Some of them are expected to relocate to Marina Bay Financial Centre, and observers said that should allow OUE the chance to upgrade the property if some premises remain vacant.

OUE said the acquisition is in line with its strategic goal of maximising investment opportunities from high-yield properties.

Industry watchers said OUE could possibly divide the property into a commercial and residential development. This will reduce its exposure in the office portfolio and allow it to participate in the residential market, which could help lower borrowings and enhance cash flow for the company.

Current private residential prices in the area range from S$1,800 to S$2,500 per square foot.

Observers said there could also be retail and F&B options on the lower floors of the revamped property.

They added that demand for office space this year could cross the 2 million square feet mark, which is at pre-crisis levels.

OUE expects rentals to rise over the next few years due to limited supply of office space in 2013 and 2014.

Market watchers said on average, prime office rents could increase 10 per cent in the second half.

OUE also sees asset enhancement potential in DBS Towers, as it is located close to Marina Bay.

The downtown area has been transformed into a new lifestyle hub with a range of commercial, convention, leisure and entertainment facilities.

OUE will fund the acquisition by a combination of internal funds and debt facility.

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