CPIB director to be seconded to help head new regulatory body
A TOP cop will help helm the new Council for Estate Agencies (CEA) – a regulatory body which is tasked to regulate the property agents.

Mr Soh Kee Hean, director of the Corrupt Practices Investigation Bureau (CPIB) since 2005, will be seconded to the Ministry of National Development (MND) to take up the position of deputy executive director (designate) of the CEA.

The new statutory board will be formed later this year and will take over the Inland Revenue Authority of Singapore’s (Iras) role in licensing real estate agencies and their agents.

CEA will have the power to investigate consumer complaints against housing agents and agencies, and will have the authority to mete out penalties, such as suspensions and fines.

Rogue housing agents have plagued the property market of late, with the Consumers Association of Singapore (Case) receiving an average of over 1,000 complaints a year.

In the first four months of this year, Case received 358 complaints. Last year, 1,079 cases were brought to its attention, while the figure was 1,100 in 2008.

Complaints ranged from agents failing to give proper advice and using misleading sales tactics, to the non-honouring of agreements. There were other questionable practices, such as agents taking commissions from both buyers and sellers of flats.

There are about 25,000 real estate agents and 1,700 agencies in Singapore.

When contacted, local real estate companies welcomed the news.

ERA Asia-Pacific associate director Eugene Lim felt that Mr Soh’s new appointment will benefit the industry, by weeding out the crooks.

He said that as ‘Mr Soh comes from a background dealing with corrupt practices’, he believed the intention was to tackle the problem of ‘shady agents’.

Likewise, PropNex chief executive Mohamed Ismail felt that this move showed the determination of the MND in ensuring that the new council ‘will work effectively in upgrading the professionalism of the real estate industry’.

Mr Soh, a former deputy director of the Criminal Investigation Department (CID) as well as a former commander of the Geylang Police Division, will be replaced by Mr Eric Tan Chong Sian.

Mr Tan, the commissioner of the Immigration and Checkpoints Authority (ICA), will relinquish his current position tomorrow and will take office as CPIB director on Oct 1.

When contacted, both Mr Soh and Mr Tan declined to comment as they have yet to take up their new roles.

Taking over Mr Tan will be Mr Clarence Yeo Gek Leong, the current deputy commissioner (operations) of ICA.

Source: Straits Times, 31 Aug 2010

New restrictions expected to cool property market; prices tipped to soften

A SERIES of sweeping measures designed to take the heat out of the booming property market and rein in investors and speculators were announced yesterday.

The buy-at-any-cost sentiment that has been boiling away in recent months is expected to take an immediate hit, with prices tipped to soften.

The restrictions, like cooling measures last September and in February, are designed to stop a housing bubble forming.

They target owners who try to sell – or flip – their properties for a quick buck, while those aiming to buy investment properties in addition to their existing home will find it far more costly.

The new rules – which came in yesterday – also make it harder for Housing Board and private home owners to dabble in each other’s markets.

National Development Minister Mah Bow Tan, who announced the moves, told a briefing: ‘We think that if we do nothing, there’s going to be a bubble.’

He said the ‘calibrated’ steps would stabilise the private property market and prevent it from overheating.

With Singapore’s strong economic growth expected to moderate in the second half, a property bubble will likely form if the current momentum in the market continues, said Mr Mah.

‘And when the bubble bursts – not if – there will be severe implications for individuals as well as for the economy as a whole,’ he said.

‘Furthermore, the very low interest rates we are seeing today are not sustainable. And when they eventually rise… there will be severe implications for buyers who have overextended themselves.’

He said the Government had taken several small steps to cool buying sentiment, unlike its ‘big-bang approach’ in 1996, when tough measures like a capital gains tax caused a market crash.

‘All the measures are meant to affect people who intend to buy and sell … the speculators in the market,’ he added. ‘If you are a genuine buyer, if you are an owner-occupier, to all intents and purposes, these measures will not affect you.’

Property experts believe the new rules will hit sentiment instantly, with buyers likely to hold back while prices of private homes and resale flats stabilise or even fall over the longer term.

‘We may have an extended Hungry Ghost Festival this year,’ said Knight Frank chairman Tan Tiong Cheng.

But first-time buyers will have reason to celebrate, as they may find fewer potential buyers competing with them and, possibly, softer prices.

Civil servant Joshua Yap, 28, is one: ‘I will definitely resume my house search after putting it on hold for the past few months. I am very thankful for the measures because they will serve to cool the irrational market.’

The Government is also bumping up the supply of public housing, including executive condominiums.

The private housing market has so far resisted two earlier rounds of cooling measures. Private home prices surged 38.2per cent in the year to June, exceeding the historical peak of 1996.

Experts say many local buyers have been maxing out loans, but the new measures may prove a spanner in the works.

Buyers already servicing mortgages must now fork out double the cash amount to buy a second property, so the mass market private homes segment will be hit, say experts.

‘The impact will be huge for the mass market as this is where the buyers do not have that much cash,’ said a developer, adding that the market for newly-launched, uncompleted private homes will be harder hit.

‘For new project sales, I would say that the bulk of the buyers are those getting a second home. Now, upgraders will not be able to buy properties under construction if they don’t have the cash and CPF savings for the 10 (per cent) and 20 per cent down payment respectively,’ he said.

DTZ’s head of South-east Asia research, Ms Chua Chor Hoon, said: ‘Developers are likely to lengthen the period of ongoing previews and soft launches to test the market.

‘The impact will be felt more in the public resale and mass market segments due to the double whammy of a cutback in demand and increase in supply.’

The Real Estate Developers’ Association of Singapore said the new measures may affect affordability due to the higher upfront cash component, but will not hit genuine home buyers.

Cash-over-valuation levels in the HDB resale market are expected to dip, thanks largely to the huge upcoming supply of flats and a move barring private home owners from buying a resale flat while holding on to their private property.

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, believes yesterday’s measures were motivated largely by the unabated rise in public housing prices. But demand should cool for HDB resale flats.

Some property consultants expect price rises for private homes to moderate. Jones Lang LaSalle forecasts that prices will now rise by 2-3 per cent per quarter for the rest of the year.

Others are less optimistic. Ms Chua believes mass-market prices will slip by a few percentage points over the next six months, citing the backdrop of uncertainty in the global economy, slower sales activity and growing price resistance.

Mr Tan added: ‘When things are moving fast, there are people who feel that they are priced out of the private market. Now, their opportunity has arrived if prices flatten out or move south.’

Property share prices fell by about 4-5 per cent in reaction to the changes.

Asked if the new measures had to do with the upcoming general election, Mr Mah said: ‘Housing has been a hot topic for as long as I can remember. (It is a) hot topic before all elections, and will be a hot topic in the next election, whenever that is.’

Source: Straits Times, 31 Aug 2010

String of steps to douse speculation; prices and sales of mass-market private homes may be hit

(SINGAPORE) The Prime Minister had hinted on Sunday that major moves were afoot to cool the property market. Even so, when the Ministry of National Development (MND) spelt out the measures yesterday, several market-watchers did a double-take. Many of them expect private home prices and sales to be hit.

Of all of MND’s new measures, analysts pegged the move to disallow concurrent ownership of HDB flats and private residential properties within the minimum occupation period (MOP) as the most significant. The MOP is the time that buyers are required to stay in their flats before they can sell.

Private property owners who buy an HDB flat now have to dispose of their private homes within six months. National Development Minister Mah Bow Tan, who announced the measures, said that right now, around half of private property owners who buy an HDB flat sell their private properties. The rest hold onto both.

The MOP for non-subsidised flats was also increased to 5 years from 3 years.

PropNex chief executive Mohamed Ismail said that the mandate to dispose of one’s private property when purchasing an HDB flat will have ‘great ramifications’ for the industry. Based on his firm’s records, about 10 per cent of all HDB resale purchases are by private property dwellers.

‘These may be investors who will now not be able to purchase HDB flats and keep their private property for investment purposes,’ he said.

MND also targeted potential buyers of second homes with two policy changes. Those who hold an existing mortgage can now only borrow up to 70 per cent of a property’s value for the second home, down from 80 per cent previously. They must also pay 10 per cent in cash, up from 5 per cent.

And owners who sell houses and apartments less than three years after buying them will also have to pay a seller’s stamp duty. Previously, the seller’s stamp duty was only imposed on those who sell their homes within one year of purchasing.

The Real Estate Developers’ Association of Singapore (Redas) said in a statement that while the latest measures may affect affordability due to higher upfront cash component, they will not impact genuine home buyers.

But at least one developer BT spoke to felt that the measures would hit sales of mass market private homes as HDB upgraders will have to cough out 10 per cent cash and can only borrow up to 70 per cent of the property’s value.

‘Genuine upgraders could be turned off as they will have to sell their HDB flats and settle that loan before buying a new property,’ the developer said. ‘Now, the practice is to buy units from developers at new launches and then wait for their new property to be built before selling existing homes.’

CBRE Research executive director Li Hiaw Ho also pointed out that the pool of HDB upgraders looking to buy private properties will shrink as this group will now have to wait for five years instead of three.

The government acted as Singapore’s strong economic growth, low interest rates and high liquidity continued to push home prices up in 2010 – sparking concerns of a property bubble. Private home prices were up 38 per cent year on year as of end Q2, while HDB resale prices climbed 15 per cent over the same period.

‘If the current momentum in the market continues, what will likely happen is that a property bubble will form,’ said Mr Mah. ‘And when the bubble bursts – not if, but when it bursts – there will be severe implications for individuals as well as for the economy as a whole. Furthermore, the very low interest rates we are seeing today are not sustainable in the long run.’

Analysts said that the new measures will hit private home prices and sales volumes.

Colliers International’s director for research and advisory Tay Huey Ying said that developers’ sale volume for September to December 2010 is now predicted to come in at the lower range of her earlier forecast of between 800-1,000 units a month.

She also revised her earlier forecast of up to 5 per cent growth in the official residential property price index for Q4 2010 downwards to ‘at most 2 per cent’.

HDB prices are also expected to moderate as the government plans to release up to 22,000 new build-to-order flats in 2011, up from the more than 16,000 in 2010. It will also release more land for executive condominium projects and design, build and sell scheme (DBSS) flats next year.

Yesterday’s measures follow earlier demand-side measures introduced in February.

Then, the government first implemented a seller’s stamp duty for all residential properties sold within one year from the date of purchase. It also lowered the loan-to-value limit to 80 per cent from 90 per cent for all housing loans provided by MAS-regulated financial institutions.

But Prime Minister Lee Hsien Loong said on Sunday that previous measures had failed to keep prices from rising.

Looking ahead, collective sales and bidding for government land sales are expected to slow down for the rest of the year as developers monitor the market and the strength of recovery in the US and European economies, said DTZ’s head of South-east Asia research Chua Chor Hoon.

Source: Business Times, 31 Aug 2010

SINGAPORE : Market watchers are not surprised by the government’s move on Monday to cool the housing market, and some even said that it’s long over due.

On average, analysts expect the latest measures to dampen private home sales by about 20 per cent for the rest of the year.

And developers may also hold back on new launches, and turn to preview sales instead.

The relaxation of some housing policies will make Design, Build and Sell Scheme (DBSS) flats more accessible to Singaporeans who belong to the ‘sandwiched class’ income group, earning between S$8,000 and S$10,000 and previously did not qualify to use CPF housing grants for them.

And observers said that could shrink the pool of buyers upgrading from public housing to a private property, causing demand for private homes to soften.

This group of buyers has been snapping up mass market private homes in the past year and fuelling price increases in the segment.

Donald Han, regional MD of Cushman & Wakefield said: “I think mass market has come up if you’re looking at the first quarter of 2008, prices have gone up by 6-7 per cent. We probably will not expect prices to come down in the next two to three quarters, but we probably expect more stabilisation in values. After all, the market needs to take a breather.

“And if we can contain the leap, in terms of price increases of HDB flats, I think it will put a lid on the price increases, in terms of the mass market as well.”

Analysts also expect developers to be less aggressive in their bids for state land.

Meanwhile, the Real Estate Developers Association of Singapore (REDAS) said the latest measures may make property less affordable upfront.

But it is confident the property market will create value for home-owners and investors in the long term.

Overall, prices are expected to moderate with the slew of cooling measures.

But experts are not ruling out further intervention from the government, citing concern over the huge amount of liquidity in the market and the low interest rates.

Colin Tan, director of Research & Consultancy at Chesterton Suntec International said: “The previous measures were largely symbolic, and it didn’t quite address the liquidity problem. Right now, you have loan to value ratio of 70 per cent, and you have a minimum cash payment of up to 10 per cent, so that will at least soak up some of the liquidity.

“If this set of measures don’t work in terms of restraining prices, we can possibly expect more measures. Going forward with what the government has mentioned – that prices have increased 11 per cent for the first half of the year – we know that a 11 per cent rise is unacceptable. So at least we now know it should be lower, much lower than 11 per cent, maybe 10 per cent for the whole year.

According Leong Waiho, senior regional economist at Barclays Capital, price levels have now exceeded the historical peak in Q2 1996.

Average private residential prices are up 38 per cent, compared with the trough in the same quarter in 2009. This also outstrips the growth in rental yields of 9.2 per cent on-year.

For the second half of the year, analysts expect private home prices to grow by up to 6 per cent.

Source: Channel News Asia, 30 Aug 2010

SINGAPORE : Market watchers said the new rules requiring private property owners to sell their homes within six months of buying an HDB flat will go some way in cooling the red-hot resale market.

New rules on second home loans may also moderate demand somewhat.

Some analysts expect the rules restricting dual home ownership to have an “almost immediate” impact on resale demand.

Chris Koh, director of Dennis Wee Group said: “Those who’ve dreamed of owning a HDB flat and a private at the same time now have to think harder. I would expect this will probably dampen prices a little.

“HDB owners who are hoping to find private property owners to buy their HDB flats and are willing to pay premiums, will no longer have that option. So those who buy flats today really buy it for owner occupation, which primarily is the function of public housing.”

The new rules kick in on August 30, and some analysts estimate that about 10 per cent of such transactions will be affected.

HDB said those who have only recently submitted their applications to buy an HDB flat may be granted exemptions on a case-by-case basis.

But there will be no such leeway for buyers looking to finance their second home, be it private or HDB, with a bank.

Under new rules, they will have to cough up a larger cash payment – from 5 per cent previously, to 10 per cent.

And those with an outstanding loan can only get a bank loan of up to 70 per cent of the property’s value, instead of the previous 80 per cent.

The idea is to prevent people from being overstretched by servicing two loans.

But those looking to buy a second home using a bank loan, may find themselves in a sticky situation. This is because a sales transaction takes a few months to complete and if you’re in the midst of selling your home which has an outstanding loan, the higher cash requirements apply.

So one way around it is to complete the sale of your first property before buying your second, but this means you’ll need to find a place to live in the meantime.

Koh suggested that an alternative is to take up a bridging loan from the bank to finance any cash or loan shortfall, should one buy first before selling.

Other industry watchers welcomed the wider options for the “sandwiched class” – so-called because their incomes are too high for most new HDB projects, but are too low for private condominiums.

They can now buy flats under the Design, Build and Sell Scheme (DBSS) and analysts expect some demand to move away from the resale market.

Some observers said the move will pile on more demand for DBSS projects, which tend to see strong take-up rates.

“From previous launches you can see that practically all DBSS projects are sold out, except for units leftover primarily because of the Ethnic Integration Ratios that have been exceeded. So by and large, most of the DBSS projects are all well taken up, and this was before including this ‘sandwiched class’,” said Eugene Lim, director of ERA Asia Pacific

According to HDB, two DBSS projects launched this year – The Peak in Toa Payoh and Parc Lumiere at Simei, with over 1,500 units in total – 90 per cent were sold out as of end-May.

HDB is looking to shorten waiting times for new flats from three years to two and a half years.

But some buyers said they may still stick to buying resale.

“Two and a half years is not my concern. The problem is I’m not guaranteed. For instance, I’m waiting for the balloting, and it ends up that I may not get what I want after the balloting result is released,” said home-buyer Ang See Ngee.

Overall, analysts said the new rules will help to ensure that resale demand is based on real demand.

Source: Channel News Asia, 30 Aug 2010

SINGAPORE: The government has introduced more measures to cool the private property market.

This comes as a strong economy and low borrowing rates have continued to push prices up, sparking concerns of a property bubble.

“If prices remain at this kind of trajectory, at this kind of momentum, it’s likely that the market itself is going to overshoot economic fundamentals,” National Development Minister Mah Bow Tan said.

“So if you ask me whether a bubble has formed already, I would say that prices are on the high side. But with low interest rates at the moment, I think people are still able to afford,” he said.

The initiatives include raising the holding period of the seller’s stamp duty from one to three years.

Another measure will impact those who have more than one outstanding housing loan.

Property buyers who already have one or more outstanding housing loans at the time of the new housing purchase will have to pay more money upfront.

The government will increase the minimum cash payment from five per cent to 10 per cent of the valuation limit.

Those with more than one outstanding housing loan will also see a decrease in the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS.

The LTV will be lowered from the current 80 per cent to 70 per cent.

The government said the objective of the measures is “to ensure a stable and sustainable property market where prices move in line with economic fundamentals”.

It noted that the property market is currently very buoyant, with prices increasing by 11 per cent in the first half of this year.

It added that while Singapore has enjoyed strong economic growth in the first half, growth is expected to moderate in the second half of the year.

Should economic growth falter and the market correct, the government said property buyers could face capital losses.

It has thus decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

The measures will take immediate effect on August 30.

Source: Channel News Asia, 30 Aug 2010

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

Host of projects to come on stream when Hungry Ghost Festival ends, but affordability is still key

The market for new property launches has slowed this month but should see a rebound after the Hungry Ghost Festival ends on Sept 7.

Developers are already lining up projects for launch, and these choices are expected to range from mass-market homes to high-end ones.

Next month, Hoi Hup Sunway is targeting to launch the 473-unit Vacanza@East – a freehold project in Lengkong Tujoh in the east, near the Pan-Island Expressway.

Hoi Hup said the joint venture bought the vacant freehold site for the project late last year. The condo will have one- to four-bedders from as small as just under 500 sq ft. Prices will start from more than $500,000, sources said.

City Developments and Hong Realty’s 642-unit NV Residences in Pasir Ris Grove is also likely to be pushed out next month.

Marketing material shows that the 99-year leasehold condo has one- to four-bedroom units as well as penthouses, with the smallest one-bedders also just under 500 sq ft in size. The material says prices for the two-bedders will start from more than $600,000.

Around the same time, Chip Eng Seng’s Oasis@Elias in Pasir Ris is likely to be relaunched at higher prices. The condo had sold for an average of $670 per sq ft in July last year, though its price has since risen to about $740 psf.

Property experts say rising prices have forced buyers to pay more for a private home. But affordability remains the key.

A report by property consultancy DTZ last week said those with public housing addresses are increasingly buying private homes that cost more than $1 million.

Some 43 per cent of buyers with HDB addresses bought homes costing more than $1 million in the second quarter, up from 36 per cent in the first quarter, it said.

This is due to prices having risen almost 20 per cent since the third quarter of last year.

‘There is a chance new mass-market projects may be launched at higher psf prices,’ said Savills Residential director Phylicia Ang.

‘As long as developers keep the total price quantum affordable, there should be demand for these projects.’

Said Mr Peter Ow, managing director (residential services) at Knight Frank: ‘The pricing of mass-market projects is constrained by the target market’s income level.

‘So what developers do is to build smaller units across the board, from the two- to the four-bedroom units. Smaller units help to keep the total quantum price affordable,’ he said.

Unlike the previous 2007 boom which was led by the high-end sector, the current buying wave is mainly in the lower-end market segment – which is buoyed by rising public housing resale prices, DTZ said.

The high-end market is quiet given the global economic uncertainty, though a few developers may start launching such projects from next month. These could include Twin Peaks in Leonie Hill, The Peak@Cairnhill in Cairnhill Rise and Belle Vue Residences in Oxley Walk.

Belle Vue Residences was soft launched more than a year ago, and more than 100 of its 176 units have been sold. June caveats showed that three units were sold at $2,064 psf to $2,700 psf.

In the later part of next month, two projects in the mid-tier to high-end category can be expected, Knight Frank’s Mr Ow said.

There is the freehold 250-unit Cityscape at Farrer Park by IOI group and Kim Seng Heng Realty. It is likely to be launched at an average of $1,500 psf.

Amara Holdings is also looking to push out its 30-unit Killiney 118, which is within walking distance of Somerset MRT station. This freehold project is expected to go for more than $2,000 psf.

According to CBRE, two executive condominium launches may hit the market come October. These are the 573-unit Esparina Residences by Frasers Centrepoint and Lum Chang Building Contractors, and the 406-unit The Canopy by China-based MCC Land.

Looking ahead, experts expect buying activity in the mass- to mid-market segment to continue, though it is expected to be more selective due to the higher prices.

‘Although prices of mass-market homes are peakish, take-up could still be healthy due to the strength of underlying demand for them, if developers do not try to push the price border further,’ said Colliers International director of research and advisory Tay Huey Ying.

Source: Sunday Times, 29 Aug 2010

MORE than 80 per cent of the 144 residential units in Oxley Holdings’ Viva Vista were snapped up during the project’s preview yesterday – indicating that there is still strong demand for small, or shoebox, apartments.

The sizes of the units in the project along South Buona Vista Road range from 323 sq ft to 1,076 sq ft, with the bulk being just shy of 400 sq ft.

Oxley Holdings said that the average transacted price was $1,450 per square foot (psf) while the absolute price started from about $520,000.

The project also has more than 100 commercial units which are yet to be sold.

Market watchers said that affordable and shoebox units continue to be popular with buyers, which could have prompted Oxley to go ahead with the launch of Viva Vista even as most developers hold back their sales activity this month – the seventh month in the lunar calendar.

Last month, 400 out of 468 units were sold in Hong Leong Group’s The Scala, accounting for a quarter of July’s total sales volume.

Analysts cited the project’s affordable pricing tagged to its mainly small units (around $985,000 for a 839-sq-ft two-bedroom unit) as one of the reasons behind the good showing.

The popularity of shoebox units first spiked in 2009. A study by property consultancy CB Richard Ellis in October 2009 showed that small apartments have become more common.

The firm looked at caveats lodged between January and September 2009 and found that 412 new non-landed residential units measuring 500 sq ft or less had been sold – 38 per cent more than the 299 sold in the whole of 2008.

In 2006 and 2007, 171 and 275 such apartments were sold respectively.

Source: Business Times, 24 Aug 2010