There is no evidence that specific buyer groups, like permanent residents (PRs) and private property owners (PPOs) are driving up prices of HDB flats.

National Development Minister Mah Bow Tan told Parliament on Friday that the median cash-over-value (COV) paid by PRs have been the same as the overall median COV paid for resale flats for the last two quarters.

‘Cases of PRs paying high COV are the exception, not the rule,’ Mr Mah said.

He said of the 37,205 resale transactions in 2009, 58 cases had COV exceeding $70,000 (US$49,995).

Of this, only eight cases or 14 per cent involved PRs.

Mr Mah added while PPOs pay higher COVs in general, their numbers are not large enough to drive up prices.

‘If we banned PPOs from buying HDB resale flats, what about HDB owners buying private properties? Should we ban that too?’ he asked.

‘I would urge that we take a longer-term view and not over-react, and do things we regret and have to reverse down the road.’

Source: Business Times, 5 Mar 2010

SINGAPORE: They were free to discuss any point raised in the Budget 2010 speech — and on Tuesday, several parliamentarians chose to reiterate the concerns Singaporeans have over the affordability of housing board flats.

While Finance Minister Tharman Shanmugaratnam in his February 22 speech had touched on a new tax regime to buffer flat owners, whose flat values are rising, from a growing property tax bill, MPs broached a more direct fear: Would residents be priced out of public housing, whether by foreigners or private property owners?

By admitting too many immigrants too quickly into the country, Mr Inderjit Singh (Ang Mo Kio GRC) said Singaporeans must now compete for resources, which drives up the cost of living: “The clearest manifestation of this is the cost of HDB flats.”

Dr Ahmad Magad (Pasir Ris—Punggol GRC) said going by anecdotal evidence, there were private property owners who owned resale HDB flats, but instead of staying in them, as the rules require, were renting them out. “While the numbers may now be quite small, I fear they will swell if no new measures are introduced.”
He is asking the Government to review its policy of allowing the sale of HDB flats after a year if they are purchased with a bank loan and the rental of HDB flats after a three—year occupation period.
“Harsh action should be taken against those who rent out their flats illegally,” he added.

MP Sin Boon Ann (Tampines GRC) called for a review of the S$8,000 household income ceiling for buyers of new flats.

“Not everyone whose combined income exceeds the household limit can afford private housing, (nor will they) necessarily have the ability to stump out cash for the cash portion if they bought an HDB flat from the secondary market,” he said.

And with the perception that property prices are rising, many feel owning “a decent home” is even further out of reach, he said.

Meanwhile, MP Liang Eng Hwa (Holland—Bukit Timah GRC) hoped the Government would pre—empt another emergence of en bloc fever, which he said could distort the property market and cause short—term volatility.

“Besides, en bloc sales, if too widespread, can be harmful for the environment and waste much of our precious resources,” he added.

Source, Today 5 March 2010

Upmarket residential property rentals could climb 5-10% this year: CBRE

LAUNCH prices of new luxury residential projects in Singapore rose about 20-25 per cent last year and could appreciate a further 10-15 per cent this year, says CB Richard Ellis.

Rentals of completed luxury homes, which slid 10.5 per cent in 2009, could increase 5-10 per cent this year, according to the property consulting group.

Already, in the first two months of this year, prices have been climbing steadily, CBRE said, citing sales of 88 units at Urban Suites at $2,500 psf on average and about 35 units at The Laurels at $2,500-2,900 psf, although the latter features smaller units. Both projects are in the Cairnhill area.

Other luxury projects that will be marketed in the first half of 2010 include Ardmore 3, Nassim 8 and those on the sites of Grangeford and Parisian, CBRE said.

The Singapore residential property launch meanwhile continues to teem with activity in various market segments.

At Meyer Road, Hong Leong Holdings is releasing this week close to 60 upper-floor units at Aalto, a 27-storey freehold condo with a total of 196 units. Prices will start from $2,000 psf.

‘Absolute pricing ranges from $3.1 million for a 1,442 sq ft three-bedder on the 18th floor to $5.3 million for a 24th level four-bedroom apartment of 1,959 sq ft,’ the company said in a statement yesterday. A handful of lower-floor units are also available, from $1,500 psf.

The project was first launched in early 2008 and as at end-January this year, 118 units had been sold. Aalto comprises three and four bedroom apartments and penthouses. It is expected to receive Temporary Occupation Permit in September this year.

Hiap Hoe is also doing an official launch of its 200-unit Waterscape At Cavenagh this week. So far, it has sold 96 units. The average selling price is about $1,880 psf. The seven-storey freehold condo comprises one-to-four-bedroom apartments, and penthouses.

Later this month, Hong Leong Group could release a 202-unit project on the former Ong Building site at 76 Shenton Way. TID Pte Ltd – a joint venture between Hong Leong and Mitsui Fudosan – is also expected to preview in a few weeks Nathan Suites, a 24-storey project at Nathan Road, opposite the Malaysian High Commission. The project’s 65 units comprise two, three and four-bedroom apartments as well as penthouses.

CBRE, in its release on the luxury residential market, said that recent sales activities point to the start of a revival in this market segment. ‘It is likely that this interest in luxury homes is sustainable given the low interest rates and improving economic environment,’ the firm’s executive director, Li Hiaw Ho, said.

However, he predicts that ‘we are unlikely to see runaway prices the way we did in 2007 as homebuyers will be less impulsive and more discerning following the latest government measures’ to cool the market.

Back then, average launch prices of new luxe projects jumped from $1,800-2,600 psf in 2006 to $2,000-4,000 psf in 2007.

Overseas buyers returned at upmarket property launches in Singapore in Q4, as seen at Marina Bay Suites, Urban Suites, and Kasara the Lake, a plush villa development at Sentosa Cove. This bodes well for the market segment.

Elsewhere in Asia, prices of luxury homes in the secondary market edged up in Beijing, Shanghai, Guangzhou and Hong Kong by 6-10 per cent in Q4 2009 over the preceding quarter while remaining largely stable in other markets.

Singapore saw a 2.7 per cent quarter-on-quarter gain in average prime residential price in the secondary market to $2,260 psf in the fourth quarter. Despite strong sales, leasing demand for luxury homes remained rather fragile in some cities, with Beijing, Guangzhou, KL and Ho Chi Minh City posting a modest rental drop in Q4.

Leasing markets in Hong Kong, Shanghai and Bangkok began to gradually recover, with rents for luxury homes rising by increments ranging from one per cent in Bangkok to 6 per cent in Hong Kong.

Looking ahead, CBRE forecasts that end-users and investors may adopt a more cautious approach in the next couple of months following the introduction of measures that tighten lending for property in certain markets.

Source: Business Times, 4 Mar 2010

ALTHOUGH it was not directly addressed in Budget 2010, worries about the cost of housing in Singapore were reflected in several MPs’ speeches yesterday.

There were calls to review housing policies, including current rules that allow private property owners to buy HDB flats and to sublet them.

It was also suggested that the $8,000 household income ceiling be raised to allow more Singaporeans to buy new subsidised flats (that are not executive condominiums) from the Housing Board.

The growing number of new immigrants in recent years has caused not just a squeeze on jobs, but also on transport and housing, said MPs.

Mr Inderjit Singh (Ang Mo Kio GRC) said: ‘By bringing in too many people too quickly…the cost of living has gone up rapidly. The clearest manifestation of this is the cost of HDB flats.’

He said though permanent residents (PRs) cannot buy new flats, they still indirectly inflate prices. This is because demand by PRs in the resale market can push up prices, and the price of new HDB flats is pegged to the resale market.

There are also many PRs who rent HDB flats and this contributes to the upward pressure on flat prices, he added.

HDB resale prices have risen about 40 per cent in the past three years, far outstripping Singapore’s economic growth.

The Ministry of National Development has maintained that PRs, who make up only one in five resale flat buyers, have minimal impact on resale prices.

Yesterday’s debate also saw Dr Ahmad Magad (Pasir Ris-Punggol GRC) raise concerns on the effectiveness of recent measures to curb property speculation.

Three days before the Budget statement on Feb 22, the Government announced new rules: A property buyer has to pay extra stamp duty if he sells the property within a year; and the amount buyers can borrow from lending institutions was reduced from 90 per cent to 80 per cent of the property’s value.

Despite these measures, people are still thronging showrooms and snapping up properties, said Dr Ahmad.

He was particularly concerned about the policy that allows private property owners to own HDB flats as well. While the policy says they must live in the flats, anecdotal evidence shows many do not, and are renting them out. ‘If no stern action is taken, it will encourage more dual property owners to do the same,’ he said.

Mr Sin Boon Ann (Tampines GRC) wants the Government to review the income ceiling for a group of young Singaporeans – graduates who have worked a few years before deciding to settle down – struggling to buy a new HDB flat.

He argued that not all couples whose incomes exceed the current limit can afford private housing, or have enough cash to meet the down payment for a pricier resale HDB flat from the secondary market.

National Development Minister Mah Bow Tan said recently the Government was looking into measures for the HDB market and that announcements would be made in Parliament some time this week or the next.

Source: Straits Times, 3 Mar 2010

High-end properties are revisiting the $3,000 psf price range. In the Marina Bay area, the 1,111-unit The Sail @ Marina Bay steals the spotlight once again with six transactions in the week of Jan 26 to Feb 5; four above $2,000 psf while two crossed the $3,000 psf level. While Sentosa Cove and Keppel Bay are abuzz over the opening of Resorts World at Sentosa, excitement is also mounting at Marina Bay as Las Vegas Sands announced last Wednesday it will open the first phase of its US$5.5 billion ($7.8 billion) Marina Bay Sands integrated resort with casino on April 27, and the second phase on June 23.

The two resale transactions at The Sail at above $3,000 psf were for two neighbouring units on the 58th floor of the 63-storey Tower 2. According to a Feb 1 caveat lodged with URA Realis, an 883 sq ft two-bedroom unit was sold for $2.69 million or $3,048 psf. The previous owner purchased the unit when Tower 2 was launched in late-2004 for a mere $961,830 ($1,090 psf), hence recognising capital gains of close to 180% in five years.

The other sale was for a 936 sq ft two-bedroom apartment that went for $3 million ($3,204 psf). The previous owner recognised capital gains of 200%, as he had purchased the unit at launch for $1,065 psf or $997,216.

Developed jointly by giant listed property developer City Developments Ltd and AIG Real Estate, Tower 2 was launched in October 2004 and completed in mid-2008, while the 70-storey Tower 1 was launched in 2005 and completed in 4Q2008.

The last time a unit at The Sail crossed the $3,000 psf level was when a 60th-floor, 1,033 sq ft unit in Tower 2 changed hands in a sub-sale for $3.5 million ($3,387 psf), according to an April 4, 2008 caveat. That is still the record in terms of psf price. The previous owner of the apartment, however, had purchased the unit in a sub-sale for $2,999 psf, according to an Aug 6, 2007 caveat, and only recognised some 13% in gains.

At the peak of the most recent property boom from August to October 2007, there were five sub-sales at $3,000 to $3,300 psf at The Sail. Perhaps we will see more transactions at such price levels in the coming months as the opening of the IR gets closer.

The other four transactions were at $2,080 to $2,600 psf (see table). According to a Feb 2 caveat, an 861 sq ft, Marina Bay-facing unit on the 39th floor of Tower 1 changed hands for over $2 million ($2,367 psf). The previous owner did a quick flip; according to an earlier caveat, the unit last changed hands in August at $2,100 psf. Hence, he recognised a gain of 12.7% in about six months. The first owner purchased the property in November 2005 at the launch for just over $1 million ($1,174 psf). His capital gain over a four-year period was close to 79%.

While The Sail is the most actively traded project at Marina Bay, Icon earns that title at Tanjong Pagar. Launched in 2003 just after the SARS outbreak, the 646-unit project by Far East Organization was completed in 2007. From end-January to early February, there were three resale transactions at Icon at $1,449 to $1,600 psf.

One was for a 915 sq ft unit on the 25th floor of the 46-storey building, which changed hands for $1.464 million ($1,600 psf), according to a Feb 1 caveat. The previous owner purchased the unit three years ago, according to a February 2007 caveat, for $896,000 ($979 psf), hence seeing a gain of 63.4%.

A 13th floor, 657 sq ft one-bedroom apartment went for $1,599 psf ($1.05 million). This is the third time the property has changed hands in the secondary market. The previous owner purchased the unit in February 2007 for a prosperous amount of $888,888 ($1,354 psf), hence recognising an 18% gain. However, the owner before that saw an 82% capital appreciation in just over a year as he had purchased it for just $488,000 ($743 psf), according to a December 2005 caveat. The very first owner purchased the unit at launch in 2003 for $454,600 ($692 psf).

With Far East Organization having started private previews of the 280-unit, 62-storey Altez right next door to Icon, interest has once again returned to the area. Since the private previews started on Feb 10, 140 out of 155 units released were sold at an average of $1,850 psf. Not surprisingly, asking prices at Icon have also increased in tandem.

In the Tanjong Pagar area, Allgreen Properties is expected to launch its project (Skysuite) next to Altez in 2Q, and market speculation is that Hong Leong Holdings will likely launch 76 Shenton Way, which will be redeveloped into a high-end condominium tower at prices in the $2,000 psf range.

Source: The Edge, 1 Mar 2010

Frustrated buyers have pointed their fingers at permanent residents and private property speculators for pushing up HDB resale flat prices to record levels.

They claim the speculators snap up resale flats and then rent them out illegally or sell them quickly but legally after the stipulated one-year period.

A week ago, National Development Minister Mah Bow Tan said the Government is looking into ’something’ regarding measures for the HDB market.

Property experts reckoned the Government could extend the minimum occupation period for those who bought their flats with bank loans as well as make checks to ensure owners are not flouting the rules.

Under HDB rules, those who buy resale flats without housing grants can sell their flats after 21/2 years if they take a loan from HDB, or one year if they take a bank loan.

They can rent out the entire flat only if they have lived in it for at least three years.

Buyers who take up housing grants for their purchases can sell only after a minimum occupation period of five years.

‘Speculation is not an issue right now. But it may become an issue if buyers are sure that prices will continue to rise for the next year,’ said the managing director of C&H Realty, Mr Albert Lu.

ERA Asia-Pacific associate director Eugene Lim said the Government has already started to rein in the sizzling HDB resale market with the lowering of the loan-to-value limit (LTV) for housing loans taken from banks.

This means buyers can borrow less than before – at up to 80 per cent of the property’s valuation instead of 90 per cent previously.

This will likely affect deals for the high-value resale flats involving cash-over-valuation (COV) of anywhere from $50,000 to $90,000, as buyers will now have to fork out more down payment, in addition to the cash, said Mr Lim.

COV is the amount over and above the flat’s valuation that is payable only in cash.

There are not many other things the Government can look at, as it will not want to affect genuine demand, property experts said.

While the lower LTV limit will have an impact, it won’t be big, said Mr Chris Koh, director of Dennis Wee Properties.

‘It is the 5 per cent cash down payment and the COV that the buyers find challenging to come up with,’ he said.

An industry observer suggested that the Government may raise the first-time applicant’s housing grant to buy resale flats.

The Government can also extend the minimum occupation period for those who bought resale flats with bank loans to as long as 21/2 years, though this may not go down well with the banks as this may increase their risk exposure, property pundits said.

‘The banks may not agree to extending the period, but this area needs to be looked into so that people will not look at flats as a quick one-year turnaround investment,’ said Mr Koh.

Mr Lu suggested that the Government ban private property owners from buying resale flats if their sole intention is to rent them out.

HDB flats are in demand as the well-located ones can easily command a rental yield of 7 per cent to 8 per cent.

HDB, he said, can conduct regular checks to see that the private property owners are living in their flats instead of renting them out during the minimum three-year occupation period.

‘This, however, does not solve the problem of private property owners renting out their HDB flats legally after the minimum three-year occupation period,’ Mr Lu said.

HDB owners can buy private property but they must continue to live in their flats.

However, those who have obtained prior approval from HDB to sublet their flats can live in the private property.

Some property experts suggest going back to the days when flats could not be easily rented out.

‘One possible measure is to revert to the old system of allowing HDB flats to be rented out only if the owner has valid reasons such as being posted overseas to work,’ said Mr Lu.

Mr Koh added that HDB flats should not be seen as a short-term investment as this changes the whole concept of government housing.

SUGGESTED CHANGES
~ Extend minimum occupation period for those who buy HDB flats with a bank loan
~ Check to ensure that owners are not flouting occupation rules
~ Raise first-time applicant’s housing grant to buy resale flats
~ Ban private property owners from buying resale flats to use as rental property
~ Revert to old system where HDB flats may be rented out only for valid reasons

Source: Sunday Times, 28 Feb 2010

HOUSING is a perennial hot topic of discussion, especially in Singapore where it touches almost every segment of society – from the low to middle income in public housing to the middle and higher income aspiring to upgrade to private property.

The recent spikes in both public and private housing prices have added fuel to the debate on affordability. Analysts and experts have attributed the price increase to a rise in demand, especially from foreigners and permanent residents.

What is clear is that housing demand changes constantly, which means that government policies seeking to offer decent and affordable homes have to keep changing too.

The International Housing Conference last month, organised by the Housing and Development Board (HDB) to mark its 50th anniversary, gave the housing authorities a platform to share ideas and strategies.

Even with the best of intentions, it is often hard to give people equal access to affordable housing because of uncertainty about the number who need it as well as an inelastic housing supply.

This commentary aims to compare the housing situation in Singapore, Hong Kong, London and Sydney.

As with most countries, Singapore’s housing provision system is rooted in its historical and political background. During the initial years of independence, the Government adopted a subsidised rent system to resolve an urgent housing shortage.

However, by 1964, it was decided that home ownership was a better strategy as it was thought that citizens would be more likely to sink their roots in the country if they owned a stake in it. This marks the first deviation from public housing systems in countries with a strong welfare focus, such as the United Kingdom and the Netherlands. By the late 1970s, when many welfare countries were starting to revamp their public housing systems due to economic reasons, public home ownership was thriving in Singapore because of the development of the resale market for public housing.

Over the last few decades, the HDB has become the dominant housing provider, accounting for the homes of 82 per cent of the population. Table 1 shows the key differences between the housing systems in four major cities, including Singapore. It provides a broad picture of the composition of public and private housing and the proportion of rental and ownership for each category.

Table 1 makes two key points: One, these cities differ from Singapore in that most of their housing is provided by the private sector. This is also the case in most countries.

Two, only Singapore has a significant proportion of ownership when it comes to public sector housing. In fact, public housing in London and Sydney is solely rental, while Hong Kong has 35 per cent public housing ownership as compared with more than 95 per cent here.

Clearly, housing systems in different countries are shaped by their respective history, economy and the cultural and social needs of their people. Each system has its own merits and limitations; what matters is whether it can offer decent and affordable housing. We assess these two criteria in terms of living space, ratio of income to housing price as well as housing options. Table 2 compares the population density, ratio of median housing price to median annual household income and the average living space per person in Singapore, Hong Kong and London.

Table 2 shows that it is not meaningful to rate housing systems based on one factor alone. Take population density, for example. While Singapore scores the highest of the three, much of Hong Kong’s land area is unbuildable because of the terrain, which means that the living space per person in the territory is less than half of that in Singapore. In fact, living space per person in Singapore compares favourably to that in London, where land supply is not a constraint.

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

As for housing options, some countries offer greater diversity. In London, for example, if a family is unable to buy or rent a good home from the open market, a range of affordable options is available, including public housing from the local authorities at a subsidised rent. There is also the possibility of buying a home through shared ownership, a part-buy, part-rent scheme from one of the independent, non-profit associations providing low-cost housing.

In Singapore, the HDB has diversified its housing types over the years through design, construction and technology. For example, besides the bulk of build-to-order flats, it also engages private developers to build public housing under the Design, Build and Sell Scheme.

While housing systems vary from country to country, what is important is the ease with which people can live in quality homes, defined as housing with water, sewerage and electricity.

In Singapore, all this – together with estate maintenance and neighbourhood amenities – has been achieved by the HDB over a relatively short history of 50 years.

Perhaps the success has also raised expectations. Each spike in house prices – fluctuations in prices will likely increase, given Singapore’s open economy and rapidly changing global economic climate – will heighten the anxiety of potential buyers, despite the empirical evidence that housing in Singapore is still very much affordable by any standard.

The writers are from the Department of Real Estate, National University of Singapore.

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

Source: Straits Times, 27 Feb 2010

IF THERE was a party in the property market going on after the Chinese New Year, the Government would have been the party pooper. Barely a week into the new year, it introduced measures to cool the febrile-prone property market. A new seller’s stamp duty was introduced, together with a reduction in the loan-to-value limit for home loans, from 90 per cent to 80 per cent. The measures came just five months after the Government implemented moves to kill innovative interest absorption home loan schemes.

For property prices to go up is patently reasonable. After all, the property market is now seeing ample liquidity, low interest rates and growing consumer confidence buoyed by a recovering economy. That said, however, the speed at which the market is heating up is puzzling. In January, property developers sold 1,476 units – a figure treble that of the preceding month. Prices have increased at a faster rate compared to rebounds from the troughs of previous property cycles. Mortgage lending has also increased steadily by about 12 per cent year-on-year through the whole of last year. Market watchers can only surmise that the strong demand could be coming from either pent-up demand or buyers flush with cash from collective sales.

Typically, official measures to cool the market are inevitably late, given that they occur after the fact. But thankfully, they do not come so late as to fail to pre-empt any speculative bubble. In essence, the Government is doing what it has been adept at doing – precision targeting to put a brake on speculative demand before it spirals out of control. The stamp duty will hit short-term speculators, while the bank loan limit will affect buyers at the margins.

The most powerful weapon in the Government market-cooling arsenal, however, is not the series of measures already announced, but those yet to be. This is one of the oldest tricks in the book, be it in fields as diverse as nuclear strategy, politics or an endeavour as earthy as property: to receive pain in one big dose is bad; to get the same pain in small but discrete instalments is worse, but to have no certainty as to when the dose will come is the worst. As one industry watcher noted, if the Government can enact the measures so fast and without warning, it can do something ‘faster and more painful’ if prices continue to head north. Here, in essence, is the nub of the Government’s pre-emptive strategy that will keep property developers and speculators awake at night: keep them guessing.

Source: Straits Times, 26 Feb 2010

Weekend sales of about 45 units at Waterscape at Cavenagh and over a dozen units at L’VIV

THE buzz in private home sales appears to be continuing even after last Friday evening’s government announcement of new measures to cool the property market.

About 45 units at Hiap Hoe’s Waterscape at Cavenagh are said to have been sold since Saturday – the bulk of them one bedders although some two and three-bedroom units were also sold. Hiap Hoe is understood to have offloaded 61 units so far in the 200-unit project, which will be officially launched soon. The majority of buyers are understood to be Singaporeans; foreigners made up about 15-20 per cent of purchasers.

The freehold project is five to seven storeys high. The average price achieved is understood to be about $1,873 per square foot, with prices ranging from $1,738 to $2,010 psf. The lowest-priced unit sold was a one-bedder of 581 square feet on the second level that fetched $1.03 million or $1,778 psf.

Wing Tai is also understood to have sold slightly more than a dozen units over the weekend at L’VIV at Newton Road. This takes total sales to about 35 units.

The 147-unit freehold project comprises almost entirely of one and two-bedroom units (both with study). The average price is said to be about $2,000 psf and buyers have to purchase on the old deferred payment scheme (DPS). They pay 20 per cent of the purchase price initially with the rest deferred till the 32-storey project receives Temporary Occupation Permit, which is expected around 2013.

Developers that had obtained approval from the authorities to sell projects on DPS prior to the scheme being scrapped in October 2007 are still allowed to offer DPS.

Last Friday, just hours before the government’s announcement, a joint venture between Sing Holdings and Forum Partners is said to have sold more than 40 units at The Laurels on Cairnhill Road, which is being developed on the former Hillcourt Apartments site.

The units were sold at a one-day private preview held for former owners of Hillcourt Apartments as well as the developers’ staff and business associates. Those who turned up for the preview were quoted a price range of $2,500 to $2,900 psf, although a one-bedder on the 18th floor is said to have sold at just a shade below $3,000 psf. In absolute quantum, the highest-priced unit transacted was a penthouse with four bedrooms and a garden that fetched almost $9.9 million or about $2,040 psf, BT understands.

The buyers were mostly Singaporeans, although some Indonesians who had formerly lived in Hillcourt are also said to have bought. The Laurels will be next previewed in a fortnight, on March 13.

The project is near Capitaland’s Urban Suites, where 88 units were sold last month at prices ranging from $2,213 psf to $2,921 psf.

The landed housing market also continues to teem with activity. RealStar Premier Property Consultant managing director William Wong says that his firm has brokered or co-brokered four bungalow deals in the past few days. These include a two-and-a-half-storey property at Berrima Road off Dunearn Road that sold for $8.75 million or $1,944 psf, based on its land area of about 4,500 sq ft. The bungalow was completed a few months ago.

At Kheam Hock Road nearby, a brand new bungalow sold for $8.5 million or $1,577 psf. The other two transactions were at Namly Grove ($10.8 million or $1,125 psf) and Coronation Road West ($10.4 million or $906 psf).

Mr Wong does not expect the measures announced by the government last Friday – which include a seller’s stamp duty for those who sell a residential property within a year of purchase – to affect landed property buyers. Those who buy bungalows often renovate them and this could take six months to a year; so they’re unlikely to have been planning to resell within a year, according to Mr Wong. Besides, bungalow buyers usually have more holding power, he added.

Mr Wong forecasts a 5-10 per cent rise in landed home prices this year, citing limited supply; the stock of landed homes on the island is much smaller than condos/apartments.

Singaporeans make up about 60 per cent of Mr Wong’s bungalow buyers these days; the other 40 per cent are permanent residents, who are allowed to buy bungalows with land areas up to around 15,000 sq ft.

Meanwhile, at West Coast Crescent, agents marketing The Vision are said to be collecting cheques ahead of the 99-year leasehold project’s preview planned in the second week of March.

Those issuing cheques are said to have been told prices could be in the $1,000 to $1,200 psf range, although there will be an early bird discount.

The Vision, being developed by a Singapore unit of Cheung Kong Holdings, comprises 281 apartments housed in two 33-storey towers and 14 strata houses. The development will not have any one-bedroom apartments, which typically are the first to be snapped up these days because of the lower entry barrier in terms of a smaller lumpsum investment.

Instead, The Vision’s apartments will be two, three, and four bedders as well as penthouses. The majority of units are three-bedroom apartments – mostly ranging from 1,259 to 1,313 sq ft, with three ground floor units (inclusive of private enclosed space) of 1,776 sq ft to over 2,000 sq ft.

Summing up the continued enthusiasm of home buyers, a seasoned property consultant said: ‘Buyers are quite confident prices won’t fall; in fact, they’re likely to rise because of the improving economy and the completion of the IRs.’

Agreeing, an agent says: ‘There’s still a lot of money; if you can’t put it in property, where else can you put it?’

Source: Business Times, 25 Feb 2010

This week’s preview of MCL condo could indicate if demand has been dented

ALL eyes in the property market are on MCL Land’s preview this week of its Yishun condo to see if demand has been dented by last Friday’s anti-speculation measures.

One and two-bedroom units – which have typically been popular among some speculators at property launches over the past year – make up nearly 40 per cent of the total 608 units in the project, The Estuary.

The Hongkong Land subsidiary will preview about 200 units in the 99-year leasehold condo at an average price of about $750 per sq ft (psf), said MCL chief executive Koh Teck Chuan.

Property industry watchers will be focusing on the demand for smaller units – especially the 85 one-bedders which range from 590-603 sq ft. Smallish apartments have often been targets for speculators over the past year as the lump sum outlay is relatively more affordable. And for developers, smallish units can achieve the highest psf price.

MCL is pricing its one-bedders at $835 psf on average, translating to a lump sum investment of about $500,000.

Meanwhile, property giant Far East Organization said last Friday night’s government announcement of measures to cool the market had affected the number of show-flat visitors at the weekend.

The group’s chief operating officer, property sales, Chia Boon Kuah, said: ‘We have seen some impact on visitors. The weekend launch of Altez (in Tanjong Pagar) received about 600 groups of visitors. So far we have sold a total of 140 out of 155 units released.

‘Across our other show flats, we noticed a slowdown in visitorship, though the number of units sold remain comparable over a typical weekend.

‘The majority of Far East’s buyers are owner-occupiers or investors with a mid to long-term investment horizon. We will continue to meet demand from this segment and expect to proceed with our planned launches this year, while keeping a close watch on market reactions.’

As for Yishun, where MCL is gearing up to preview The Estuary, Mr Koh said: ‘We believe our buyers will comprise mostly owner-occupiers and will not be affected by the government’s measures. There hasn’t been any private condo launch in Yishun for many years.’

The development, in blocks of 15-17 storeys, is near Khatib Station and overlooks Lower Seletar Reservoir.

Last Friday night, the government announced the introduction of a seller’s stamp duty for those buying residential properties from Feb 20 and selling them within a year, in a bid to curb short-term speculation. The new seller’s stamp duty is in addition to the buyer’s stamp duty.

As well, the loan-to-value limit for all housing loans provided by financial institutions will be reduced from 90 per cent to 80 per cent to foster greater financial prudence.

Some property consultants say the second measure could have an impact on some buyers of entry-level private condos.

‘That can be quite a challenge for some HDB upgraders as effectively it could mean having to come up with 20 per cent cash downpayment, since their CPF savings would be tied up in their existing flats,’ said Knight Frank managing director (residential services) Peter Ow.

‘And schemes like interest absorption and deferred payment – which helped such buyers tide over the construction of their new homes – are no longer available.’

The Estuary’s two-bedroom units range from 904 to 926 sq ft and have an average price of $780 psf. Its three-bedders (1,184 to 1,302 sq ft) cost $722 psf on average, while the four-bedders (1,453-1,528 sq ft) have an average price of $689 psf.

Savills Singapore’s analysis of URA Realis caveats information as of yesterday showed 191 caveats for sub-sales – sometimes seen as a proxy for speculative activity – of non-landed private homes were lodged last month and 10 for February. The highest monthly figure last year was in June, when 597 sub-sale caveats were lodged. During the 2007 bull run, the highest monthly figure was in July, with 867 caveats.

Source: Business Times, 23 Feb 2010