singapore property weekly issue 86

7/30/2019 Singapore Property Weekly Issue 86

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Issue 86Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 7th Round of Cooling Measures The

Anvil to Smash the Camels Back?

p9 Singapore Property News This Week

p17 Resale Property Transactions

(December 26 December 31)

Welcome to the 86th edition

of the Singapore Property

Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected]


3/19

SINGAPORE PROPERTY WEEKLY Issue 86

Page | 2Back to Contents

7th Round of Cooling MeasuresThe Anvil to Smash the Camels Back?

By Mr. Propwise

As I had discussed previously, skyrocketing

residential and industrial property prices

dramatically increased the risk of additional

government measures to prevent a

destabilizing property bubble from forming.And this time, no punches were pulled. On 11

January 2013 the Ministry of Finance,

Ministry of National Development, Monetary

Authority of Singapore and Ministry of Trade

& Industry issued a joint press release to

announce a large slew of measures, aimingto break the back of the stubbornly bubbling

market.
http://www.propwise.sg/singapore-property-prices-reach-all-time-high-but/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/have-industrial-property-prices-spiraled-out-of-control/http://www.propwise.sg/singapore-property-prices-reach-all-time-high-but/http://www.propwise.sg/singapore-property-prices-reach-all-time-high-but/http://www.propwise.sg/singapore-property-prices-reach-all-time-high-but/


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Summary of the latest round of measures

One of the distinctive features of this round is

the sheer quantity of measures announced,

with a broad reach covering public housing,

private residential and industrial property, and

targeting the supply, demand, financing and

taxation of property.

While theres been tons of media coverage of

the measures, Ive not seen a succinct and

easy-to-read yet detailed summary of themeasures, so heres my attempt to capture

everythings that been announced.

Effective 12 January 2013:

Private Residential Property Measures

1. The Additional Buyers Stamp Duty (ABSD)

will be raised by 5% to 7% and will be

imposed on Permanent Residents (PRs)

purchasing their first and Singaporeans

purchasing their second residential property:

i. Singaporeans will pay 0%/7%/10% of ABSD

on the first/second/third property onwards

respectively

ii. PRs will pay 5%/10% ABSD on the

first/second property onwards respectively

iii. Foreigners and non-individuals

(companies) will pay 15% ABSD from the first

property onwards

2. The Loan-to-Valuation (LTV) on housing

loans will be reduced for non-individuals and

individuals with at least one mortgage:

i. For individuals obtaining their second

mortgage, the LTV is lowered to 50% or 30%

if the loan is longer than 30 years or extends

beyond 65 years of age of the borrower

ii. For individuals obtaining their third or

greater mortgage, the LTV is lowered to 40%


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or 20% if the loan is longer than 30 years or

extends beyond 65 years of age of the

borrower

iii. For non-individual borrowers, the LTV is

lowered to 20%

3. The minimum cash downpayment for

individuals applying for the second or

subsequent loan is raised from 10% to 25%

Public Housing Measures

1. The Mortgage Servicing Ratio (MSR) will

be reduced to 30% for bank loans and 35%

for HDB loans

2. PRs who own HDB flats cannot sublet their

whole flat

3. PRs who buy a private property will have to

sell their HDB flat within 6 months even if they

have fulfilled the Minimum Occupation Period

(MOP)

Executive Condominium (EC) Measures

1. The maximum strata floor area will be

capped at 160 square meters

2. New dual-key ECs will only be sold tomulti-generational families

3. Government Land Sales (GLS) EC sites

can only be launched for sale 15 months from

the date of award or after completion of

foundation works, whichever is earlier

4. Private enclosed spaces and private roof

terraces will be counted as bonus GFA and

subject to extra charges

Industrial Property Measures

1. Seller's Stamp Duty (SSD) will be imposed

on industrial properties and land sold within

three years from date of purchase:

15%/10%/5% for first, second and third year

respectively


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What is the government thinking?

You can sense a level of frustration in the

Government over the property market

despite multiple rounds of cooling measures

since September 2009 to moderate housing

price increases, property prices have

stubbornly climbed upward, albeit in a

generally decelerating speed, until the pickup

in the last few quarters. This seventh round of

measures represents their most serious

(desperate?) attempt to throw as many darts

as they can to burst any sector that looks

bubbly.

Ironically, theres little they can do to treat the

fundamental cause of the rise in property

prices sustained extraordinarily low interestrates, and the expectation that they will

remain low for the foreseeable future. As

Singapore has chosen to keep an open

capital market and manage its exchange rate

(in a dirty float system), it has to give up

control over its monetary policy (part of the

impossible trinity of Economics) in other

words, interest rates in Singapore are

dependent on global monetary conditions,and theres not much the Government can do

to control it.

So they can only put together a package of

administrative measures to discourage

property ownership for investment, keep

foreign buyers out with punitive taxes, cap

borrowing limits, and curb excesses in the

market especially in public housing (e.g. from

the uproar created over a $2 million 4,300

square feet publichousing penthouse).

Impact of this round of measures on theproperty market

In my opinion, the most potent measure in

this round is the implementation of ABSD for


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Singaporeans buying second homes (7% for

the second home and 10% for the third and

subsequent one) and for PRs buying their first

home (5% for the first home and 10% for the

second home and beyond). This will basically

kill investment demand for residential

property by Singaporeans and curb end user

demand by PRs.

As an investment vehicle, residential property

will make much less sense. With theimplementation of the measures, a

Singaporean looking at buying a second

home will have to pay close to 10% in stamp

duties! But given the low interest rate

environment and the negative real interest

rates if you leave your money in fixeddeposits, investment demand will likely flow to

other assets with good yields, such as

commercial property (e.g. retail shops and

office units) and high dividend equities such

as REITs.

For PRs and foreigners, the buy or rent

equation will shift markedly towards renting

and thus rental demand could strengthen.

This will partially ameliorate concerns over

who will be renting the large supply of

completed properties coming onto the market

in the next few years. For foreigners, the hike

in the ABSD to 15% will no longer make

buying Singapore property relatively moreattractive than Hong Kong, thus preventing

the further inflow of hot money.

Will property prices fall in 2013?

Overall, I believe that the marginal demand

for property will fall significantly, leading to a

drying up of liquidity in the market and a fall in

the number of property transactions this year.

Note that this does not mean that property

prices will fall.

SINGAPORE PROPERTY WEEKLY I 86


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Rather, the bid-ask spread between what

property sellers want for their property and

what property buyers are willing to pay

(especially after imputing the increased taxes)

will widen, leading to fewer transactions being

closed. Unless you are specializing in rentals,

it could be a tough year to be a property

agent.

A significant fall in volumes due to the

severity of the seventh round of measurescould cause significant market disruptions.

The Government is aware of this, and have

hedged themselves by calling the current

round of measures temporary, giving them

the leeway to lift these measures if market

conditions deteriorate significantly.

For Singapore property prices to fall, I believe

well need to see some sort of external shock

(what I call a black swan, using Nassim

Talebs terminology) that will lead to an

increase in interest rates and/or

unemployment rates. The cause could be

anything from rising inflation rates, to a

recession, to an epidemic. Only then will see

forced sellers and blood on the street.

By Mr. Propwise, a Chartered FinancialAnalyst and resident expert at

PropertyMarketInsights.com, a site to help

property owners and investors make

profitable decisions in uncertain times.

SINGAPORE PROPERTY WEEKLY I 86
http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/http://propertymarketinsights.com/


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http://www.erc.com.sg/eblastimages/pptylanding/pptylanding.html


10/19


Singapore Property This Week


ResidentialGuidelines on private enclosed space to

be reviewed

Following recent reports of super-sized EC

units being sold to buyers not from the

sandwiched class the ECs are meant to cater

to, URA had been directed review guidelines

on private roof terraces and private enclosed

space on ground floors. These spaces which

are open to the sky are not considered part of

the GFA has no development charges to

encourage developers to build more private

or communal open spaces for residents to

enjoy. They are the reason why penthouses

units can be sold at much lower psf prices

than smaller typical units since the entire

space of the unit (including the open space) is

included in the pricing. The resulting high

price of the units may not be affordable for

the class ECs are targeting and buyers who

can afford these units may not even need the

subsidies. Furthermore, as more developers

sell off the open space, there will be less

communal space for all residents and buyers

of units with these open spaces may not

covered them up or enclose them in the

future.

(Source: Business Times)

Over 75% of Echelons units sold

390 units of the 99-year 508-unit private

condominium project next to Redhill MRT at

Alexandra View have been sold.



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Over 200 of these units were sold at its

preview at an average selling price of $1,700

psf. The price will increase by 2% and 4%

subsequently for future releases. 80% of the

buyers were Singaporeans, with theremaining being PRs and foreigners. The 43-

storey, twin-tower development houses one to

four-bedroom apartments and four

penthouses.


Freehold Hampton Court at Draycott sold

All 12 units in the four-storey Hampton Court

(located at the corner of Draycott Park and

Draycott Drive) were said to be sold to Swire

Properties at $155 million or $2,526 psf ppr

including a $22.3 million development charge,

breaking the previous record of $2,525 psf

ppr. The 33,425 sq ft freehold site has a 2.1

plot ratio and can be built up to 24 storeys. It

can potentially be redeveloped into a project

with 33 2,000 sq ft apartments.


Possible measures to hit various propertymarkets

Following recent reports of super-sized EC

units being sold to buyers not from the

sandwiched class the ECs are meant to cater

to, URA had been directed review guidelines

on private roof terraces and private enclosed

space on ground floors. This may lead to

additional development charges if private roof

terraces and enclosed spaces are included

under the GFA. There may also be additional

measures introduced in the resale flat market

especially since the increase in prices of

mass market homes can be attributed to the

high HDB resale prices. Upgraders may have

to sell their flats before purchasing private



12/19



property, or have restrictions placed on them.

On the commercial end, there could also be

seller stamp duties to discourage investment

demand, and strengthen enforcement

against unauthorised use of industrial spaces

and an extension of guidelines regarding

strata division of certain sites sold under the

industrial GLS to private sites.


Freehold Villa Des Flores back on the

market for the third time

The 41-unit condominium (13 townhouses

and 28 apartments) at Whitley Road is back

on the market for the third time with an

unchanged asking price of $160-165 millionor $1,533-1,581 psf. The development sits on

a 104,370 sq ft which can be redeveloped

into two-storey mixed landed housing of

detached, semi-detached, terrace housing or

a combination, based on conventional

housing types or as a cluster housing

development. The tender closes on Jan 30 at

3pm.


Slew of cooling measures to hit property

markets (effective 12 Jan); both short and

long term

The temporary measures include an increase

in ABSD rates, lower LTV ratios and increase

in minimum downpayment while the

permanent measures include a maximum EC

unit size, restrictions on PRs subletting flats

and disallowing PRs to retain HDB flats after

buying private property.

The ABSD now applies to the second home

purchase of Singaporeans at a rate of 7%,

and the ABSD for their third and subsequent

home purchase has been increased



13/19



to 10% from 3%. Similarly, PRs now have to

pay a 5% ABSD and the rates for the second

and subsequent purchase has increased from

3% to 10%. The ABSD for non-PR foreigner

and corporate purchases has also beenincreased from 10% to 15%. Buyers whose

options were granted before January 12 and

exercised them by Feb 1without any

extension of the option validity period can

apply for remission so that they only need pay

the old rates. The LTV ratios will also belowered by 10% and 20% for second housing

loans and third and subsequent housing

loans respectively for individuals with at least

one outstanding loan and companies. The

minimum cash downpayment for the second

or subsequent home mortgages has alsoincreased from 10% to 25%. The LTV limit for

non-individual borrowers was also lowered

from 40% to 20%.

ECs now have a maximum unit size of 160 sq

m (1,722 sq ft) and the formerly free private

enclosed spaces and private roof terraces will

now be included in the 10% bonus GFA for all

non-landed residential developments

including ECs and private condos, and besubject to development charges. The latter

will also be included under the maximum GFA

for strata commercial and industrial projects.

Eligibility for HDB loans has also been

tightened, in addition to stipulating that PRs

who purchase private housing must sell theirHDB flats within six months of the purchase

and that PR owners of HDB flats are not

allowed to sublet the entire flat.


New cooling measures to affect mainly

HDBs and Ecs

With the restriction on the maximum unit size

of ECs to 160 sq m (1,722 sq ft), there will

unlikely be record high prices of $2.05 million



14/19



ECs in the future, with most costing under

$1.2 million, based on an average price of

$700 psf. In addition, the previously free

private roof terraces and private enclosed

spaces will now be considered under the 10%bonus GFA for all non-landed residential

developments including ECs, and hence

subject to development charges. Other new

measures affecting ECs include the restriction

of dual-key EC units to multi-generational

families and the stipulation that developerscan only launch the development for sale 15

months after the site is awarded or after the

completion of foundation works.

For HDBs, the Mortgage Servicing Ratios

(MSRs) for housing loans is lowered to 35%

and 30% of the borrowers income for loans

from HDB and financial institutions

respectively. PR owners of HDB flats are also

not allowed to sublet their entire flats if they

had not obtained their HDB approval before

January 12. PRs who purchase a private

property on Jaunary 12 or after must also sell

their HDB flats within six months of the

purchase. This will likely result in increase inresale HDB flats. In addition, from July 1,

there will be tighter terms in relation to HDB

loans and the use of CPF savings to

purchase flats with fewer than 60 years' lease

left.


Resale prices of private homes saw 6.6%

increase in Q4

The average resale price of private homes hit

$1,233 psf in Q4 2012, a 6.6% increase from

$1,157 psf in Q3, bringing the year-on-year

increase to 13.4% in 2012, compared to

10.4% in 2011. Specifically, resale prices rose

4.8%, 4.6% and 3.6% in the OCR, CCR and



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RCR respectively. Transaction volume,

however, fell by 5.5% in Q4 from Q3 and also

fell by 7% from 2011 to around 12,500 private

non-landed homes in 2012. Rents fell 1% to

$3.91 psf in Q4 from Q3, resulting in asmaller rental yield of 3.8% in Q4 compared

to 4.1% in Q3.

Growth in resale prices are expected to

increase by 5% at most in 2013, given the

increase in supply in the primary market,

which will also possibly lead to a fall in prices

and rents. Sales volumes are also likely to

fall, given the economic conditions and

possible new cooling measures.

Meanwhile, the median COV for HDB resale

flats increased by $4,000 to $34,000 in Q42012, resulting in a 1.1% increase of the

median price of HDB resale to $455,000 in

the same period. Median rents remained at

$2,400 per month.


Commercial

99-year leasehold Mohd Sultan

conservation shophouse for sale

The three-storey-plus attic shophouse at 15

Mohamed Sultan Road is asking for $15.5

million or $2,259 psf based on its 6,862 sq ft

GFA. The 2,606 sq ft site zoned for residentialuse with commercial on the first storey has a

3.8 plot ratio. This allows for potentially 3,000

sq ft more GFA at the back of the building,

bringing the height of the building to five

storeys. The site is located near the River

Valley Road, the Singapore River and theupcoming Fort Canning MRT Station. The

tender will close on Feb 20.




16/19

S G O O ssue 86


Strata factories transactions made in 2012

mostly profitable

There were 1,136 secondary-market

transactions involving resales and subsales of

60-year strata factory units, of which only 618

had caveats of previous transactions that can

be found. 60% of these 618 units were last

transacted in 2010 or 2011, with another

5.8% last transacted in 2012. 99.7% of these

transactions were profitable, with only two

transactions involving units last bought in

2011 being a loss. The average profit made

was 47% or $262,636, with the 73 units last

bought in 2007 making an average of 85% or

$406,160, the units bought in 2009 gaining

64% or $366,208, the 177 units bought in

2011 gaining 27% or $166,795 and the 36

units bought and sold last year gaining 15%

or $86,797.

The total sales volume of both primary and

secondary market will likely be lesser than

2011s 5,183, with 4,392 caveats lodged and

4,700 predicted for the year of 2012. Prices

for 60-year upper storey factory andwarehouse units rose 3.3% to $451 psf in Q4

2012 from Q3, bringing the full-year price

increase to 13%, compared to the 26% in

2011. However, the rental market did better,

with 5,924 rental deals transacted in the first

11 months of 2012, compared to the 5,575deals in 2011. Monthly average rents for

upper-storey factory and warehouse units and

high-tech units hit $2 psf and $3 psf

respectively in Q4 2012. There is around 27

million sq ft GFA of upcoming industrial space

in 2013.




17/19


SSD for industrial properties sold within 3

years introduced

To control the increasing prices of industrial

properties, a SSD of 15%, 10%, and 5% willbe imposed respectively on properties sold

within the first, second, and third year of

purchase with effect from Jan 12. There has

been diversion to the industrial property

market following the introduction of cooling

measures in the residential sector, which hadled to an increase in resale transactions of

multiple-user factory space within three years

of an earlier purchase to 15% and 18%

respectively in 2011 and the first 11 months of

2012 from a 10% average from 2006 to 2010.


http://www.propwise.sg/vis2013


18/19


Non-Landed Residential Resale Property Transactions for the Week of Dec 26 Dec 31

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 861 2,080,000 2,415 99

4 REFLECTIONS AT KEPPEL BAY 1,744 4,300,000 2,466 99

5 DOVER PARKVIEW 936 1,180,000 1,260 99

5 THE INFINITI 1,238 1,268,000 1,024 FH

7 TEXTILE CENTRE 1,163 965,000 830 99

8 CITYLIGHTS 560 1,000,000 1,787 99

9 THE ORCHARD RESIDENCES 1,808 5 ,990,000 3,312 99

9 VIDA 527 1,260,000 2,389 FH

9 RIVERGATE 1,033 2,375,000 2,298 FH

9 SCOTTS 28 1,098 2,430,000 2,213 FH

9 ROBERTSON EDGE 474 955,000 2,016 999

9 ONE OXLEY RISE 732 1,450,000 1,981 FH

9 TRIBECA 1,905 3,600,000 1,890 FH

9 ASPEN HEIGHTS 1,324 2,100,000 1,586 999

9 WATERMARK ROBERTSON QUAY 1,830 2,680,000 1,465 FH

10 ARDMORE II 2,024 5,750,000 2,841 FH

10 G RANGE RESIDENCES 2,669 7,580,000 2,840 FH

10 DRAYCOTT EIGHT 2,895 7,180,000 2,480 99

10 CUSCADEN RESIDENCES 1,442 3,250,000 2,253 FH

10 GALLOP GREEN 3,272 6,478,560 1,980 FH10 QUINTERRA 1,389 1,850,000 1,332 99

10 GISBORNE LIGHT 1,249 1,580,000 1,265 FH

10 THE SIERRA 1,033 1,300,000 1,258 947

11 SKY@ELEVEN 1,851 3,000,000 1,620 FH

11 NINETEEN SHELFORD ROAD 980 1,360,000 1,388 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

11 KHEAM HOCK GARDENS 1,356 1,850,000 1,364 FH

12 PRESTIGE HEIGHTS 581 980,000 1,686 FH

12 OLEANDER TOWERS 1,152 1,388,000 1,205 99

12 AVA TOWERS 1,227 1,355,000 1,104 FH

13 AVON PARK 1,281 1,770,000 1,382 FH

13 BLOSSOMS @ WOODLEIGH 1,410 1,780,000 1,262 FH

13 SENNETT ESTATE 829 1,000,000 1,207 FH

13 THE ACACIAS 1,216 1,438,000 1,182 FH

14 D'OASIA 538 827,000 1,537 FH

14 CASSIA VIEW 1,206 1,260,000 1,045 FH

14 CASA SARINA 1,270 1,250,000 984 FH

15 ONE AMBER 1,302 1,850,000 1,420 FH

15 THE MAKENA 1,152 1,575,000 1,367 FH

15 THE TREELINE 926 1,165,000 1,259 FH

15 TANJONG RIA CONDOMINIUM 1,378 1,650,000 1,198 99

15 SERAYA 9 797 925,000 1,161 FH

15 LAGUNA PARK 1,615 1,500,000 929 99

15 MALVERN SPRINGS 2,099 1,880,000 896 FH

16 COSTA DEL SOL 1,345 1,798,000 1,336 99

16 SUNHAVEN 1,259 1,330,000 1,056 FH16 BAYSHORE PARK 936 938,000 1,002 99

16 THE CLEARWATER 980 954,000 974 99

16 CASAFINA 1,302 1,200,000 921 99

17 DAHLIA PARK CONDOMINIUM 1,292 1,230,000 952 FH

17 CHANGI GARDEN 1,399 995,000 711 FH



19/19


NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

18 MODENA 1,561 1,500,000 961 99

18 OASIS @ ELIAS 1,302 1,240,000 952 99

18 MELVILLE PARK 936 790,000 844 99

19 SUNSHINE GROVE 1,076 1,155,000 1,073 FH

19 KOVANA 1,184 1,250,000 1,056 FH19 CHERRY GARDENS 1,066 1,060,000 995 99

19 CHILTERN PARK 1,475 1,350,000 915 99

19 THE QUARTZ 1,507 1,292,400 858 99

19 REGENTVILLE 1,076 880,000 818 99

20 FAR HORIZON GARDENS 3,907 2,100,000 537 99

21 SUMMERHILL 947 1,140,000 1,204 FH

21 ASTOR GREEN 1,066 1,210,000 1,135 99

21 SYMPHONY HEIGHTS 990 1,100,000 1,111 FH

21 CLEMENTI PARK 1,539 1,550,000 1,007 FH

23 THE JADE 1,087 1,168,000 1,074 99

23 HILLVIEW REGENCY 1,195 1,155,000 967 99

23 GUILIN VIEW 861 825,000 958 99

23 HILLVIEW RESIDENCE 1,259 1,200,000 953 999

23 GUILIN VIEW 1,259 1,080,000 858 99

23 THE WARREN 1,238 1,020,000 824 99

23 PALM GARDENS 1,216 933,000 767 99

28 SELETAR SPRINGS CONDOMINIUM 1,335 1 ,065,000 798 99
http://propertymarketinsights.com/

singapore property weekly issue 86

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