Residential Market News Extract - 21 August 2012

Iras: Property tax flat for most landed homes

The taxman's review of the annual values of 56,000 landed homes so far this year has left about two-thirds unchanged, so the owners will not have to pay higher property tax.

The other homes have had their annual values adjusted upwards by an average of about 10 per cent, generally below last year's rises, the Inland Revenue Authority of Singapore (Iras) told The Straits Times.

A small number were increased over 20 per cent, as they had not been revised for a year or more.

There are 72,000 landed homes in Singapore and 193,000 private high-rise apartment units.

Iras is still reviewing the annual values of the private apartments and the rest of the landed homes. The review is expected to be completed by the end of the year.

Home owners typically keep an eye on a property's annual value, as it determines how much tax they pay. The annual value is the estimated annual rent the property may fetch.

This value can be revised up or down, based on market rentals of similar properties in the vicinity, said Iras. Valuation notices will be sent to owners when the annual values are revised, Iras added.

Reviews are generally held every year, but do not always result in changes to the annual values.

Property analysts say rents in some segments have eased, with the global crisis hitting expat budgets.

But because the annual value is a lagging indicator, it is more likely to capture last year's rates, and may not fully reflect the current market.

Source: The Straits Times – 21 August 2012

 

HDB rents soar as tenants flee private flats

Tenants moving into Housing Board flats to escape pricey private accommodation have driven up rent levels.

Overall median HDB rents rose 10 per cent in the 12 months to June, to $2,200 a month, the highest since it started collecting data in the first quarter of 2006.

Landlords in popular, mature estates like Toa Payoh and Marine Parade are asking for much more.

Median monthly rents for five-room HDB flats in Toa Payoh, Geylang and Marine Parade are $2,900 with some choice units close to the MRT station eclipsing $3,000, agents say.

A Ministry of Trade and Industry statement about June's inflation rate noted that accommodation cost increases, while moderating, have been stronger than expected.

The gain is largely due to the strong Singapore economy that has seen continued employment of foreigners across various sectors.

Demand from permanent residents (PRs) is also propping up rents, as the slew of residential cooling measures has made renting, rather than buying, the preferred choice for some.

Housing budgets are also being reduced across the board due to firms tightening their belts, prompting many employees to opt for the more affordable HDB option.

Tighter immigration policies are also likely to cap further rental gains.

Source: The Straits Times – 20 August 2012

 

New buzz soon for quiet Hillview

The sleepy Hillview enclave between Bukit Batok and Bukit Panjang is about to get a shake-up with a range of new projects to be completed over the next few years.

Property consultants say the new additions will boost the desirability of the upper-middle class area among home seekers, given that many condominiums there are now at least a decade old.

At least 1,500 new homes are expected to be completed in the next few years, including units to be built on a plot in Hillview Avenue that can yield 534 units.

Kingsford Development bought the 99-year-leasehold site in March.

Other projects include Far East Organization's The Hillier, which has sold 506 units out of a total of 528 at an average price of $1,267 per sq ft (psf) since its launch in January.

The mixed-use development includes the hillV2 mall, which will be ready in 2014, while the flats will be completed by 2016.

About 120 units have also been sold at The Lanai, also by Far East. The 214-unit condo, launched in 2010, has been selling at an average price of $1,354 psf this year. It will be ready in 2014.

The 193-unit Natura@Hill-view, a joint development between Macly Group and Roxy-Pacific Holdings, sold 157 units by July at a median price of $1,318 psf. It was launched in the first quarter of this year.

While new launches were priced at between $1,300 psf and $1,500 psf, median resale prices were lodged at between $750 psf and $1,000 psf.

Still, prices have generally been on the uptrend in the past three years, lifted partly by buyer interest for suburban homes.

Home owners who have held their units for at least 21/2 years have seen profitable transactions.

The rental range is quite mass market but the condos are of fairly good quality, noting that the area is still "remote" and hard to reach without a car.

But its transport options will improve once the Hillview MRT station opens in 2015.

Source: The Straits Times – 18 August 2012

 

Developers dangling rental guarantees as a draw

Some developers are turning to rental guarantees as a carrot to attract buyers for properties in Singapore and emerging markets in the region.

As competition hots up, these schemes are used to sweeten deals, with some helping investors to secure tenants and ensure they get a minimum predetermined yield.

But some experts warn that buyers need to examine the details carefully before signing up - and realise that a rental guarantee may already be built into the price.

They add that these enticements can amount to an indirect discount and are often dangled for overseas projects to attract investors to emerging and unfamiliar markets.

But the offer is also made during times of market weakness by developers convinced of a property's long-term potential.

They believe this will entice buyers to bite, as an alternative to lowering prices, which might depress the value of a project.

If developers start offering rental guarantees for Singapore projects, it would reflect the slow take-up of units as a result of cooling market sentiments, rather than Singapore being an unfamiliar market.

Source: The Straits Times – 18 August 2012