EC: Sea Horizon @ Pasir Ris with more than 80% of units enjoying sea view!

 

E-Application Period: 7 Aug 2013 - 18 Aug 2013

 

SEEKING INDICATION OF INTEREST NOW

Upcoming Executive Condominium at Pasir Ris Drive 3

MORE THAN 80% OF UNITS WILL ENJOY SEA VIEW

495 units: 2 to 5 Bedroom & Penthouses available for choice

• Mins walk to Pasir Ris MRT Station (White Sand Shopping Mall)
• Living close to the upcoming revamped Downtown East (worth $200 million) with Chalet, Theme Park, Amphitheater and other recreational facilities
• Near to Hai Sing Catholic Sch, Casurina Pri Sch, Pasir Ris Crescent Sec Sch, Pasir Ris Pri Sch, Loyang Pri Sch,
• Short drive to Changi International Airport, Changi Business Park, Singapore Expo, Tampines Regional Centre, Tampines Mega Store (IKEA, Courts & Giant), Loyang Technology Park.

Executive Condominium (EC): The Topiary @ Fernvale

Targeted E-Application Period

***30 Nov – 4 Dec ***

(subject to final confirmation by developer)

Development Attributes

• Nestled within exclusive Seletar Estate

• Most units are of North – South orientation

• Selected units get to enjoy unblock views of Seletar Estate

• Full condo facilities with superb choices of 2 / 3 / 4 bedroom types, Dual Key Units & Penthouses catering to various families’ needs

• Proximity to Seletar Aerospace Park, AMK Industrial Park & Sengkang West (High Tech Wafer Fabrication Park), good potential for rental yields!

• Only 5 mins away from Fernvale LRT Station

• Greenwich Village & Upcoming Seletar Mall within close proximity

• Great recreational activities in the vicinity such as Punggol Promenade, Punggol Park, Sengkang Sports & Recreational Complex, Sengkang Sculpture Park, Sengkang Riverside Park, Punggol Horse Riding School & Punggol Marina

• Highly accessible to various parts of Singapore via TPE, CTE & KPE

• Proximity to Rosyth Sch, Nan Chiau Primary, Hougang Primary & Pei Hwa Secondary School

Do register with us for more exciting updates!

Residential Market News Extract - 30 October 2012

HDB resale prices in Q3 ratchet up another 2%

Prices of resale flats stayed at a record high in the third quarter, after having grown at the fastest pace of the year.

But while analysts expect the upward trend to continue, they do not forecast runaway prices.

The Resale Price Index (RPI) for Q3 stood at 197.9, an increase of 2 per cent over the previous quarter, data from the Housing and Development Board (HDB) showed yesterday. This was in line with earlier official estimates.

Resale prices had grown at a 1.3 per cent clip in the second quarter, and 0.6 per cent in the first quarter.

For the first nine months of the year, prices have gone up 3.9 per cent, the HDB said.

The number of resale transactions fell 6 per cent to 6,560 from Q2, after surging 19 per cent in the previous quarter, the HDB said.

On the demand side, analysts cited buyers who cannot or prefer not to wait for a new flat, second-time home buyers and those ineligible for Built To Order (BTO) units, such as permanent residents and singles, for driving up prices.

As the cost of resale flats have headed north, so too has the premium that buyers have to pay out of pocket. The median cash-over- valuation (COV) in Q3 rose between 15 and 20 per cent from the previous quarter to $30,000 overall, data from analysts showed.

HDB figures bear this out. For instance, the median COV for a five-room flat in Bishan in Q3 was $66,500, and that for a four-room flat in Queenstown, $55,000. In the previous quarter, the figure was $46,500 for such Bishan flats and $43,000 for Queenstown ones.

Eugene Lim, key executive officer at ERA Realty, agreed broadly with that reading, citing a low unemployment rate here and a growing economy.

Prices could also face pressure from the recent cap on home loan tenures, as homeowners may simply drop their plans to move, he said.

"That adds to the supply crunch of HDB resale flats."

That said, analysts do not expect growth for resale flat prices to reach the rates of the previous two years. They forecast overall increases of 5 to 7 per cent this year, compared to the 10.7 per cent last year and 14.1 per cent the year before.

The record 27,000 BTO units that the HDB is offering this year will help offset any sharp hikes, said Mr Lim

Source: Business Times – 30 October 2012

 

Heron Bay penthouse sold for record $1.774m

A new record price of $1.774 million has been set for a five-bedroom penthouse unit in the recently launched Heron Bay executive condominium (EC), surpassing last week's transaction for the most expensive EC to date.

Last week, a double-storey penthouse at 1 Canberra in Yishun was sold for $1.61 million, setting a record for EC transactions.

To be sure, the higher prices are largely due to the size of some of these new ECs, analysts said.

The price for the Heron Bay penthouse unit, which stands at 2,845 sq ft, was $624 per square foot (psf). The unit price for the 2,716-sq-ft 1 Canberra unit was $595 psf.

Before the 1 Canberra unit made headlines, a 2,476-sq-ft unit at The Rainforest in Choa Chu Kang was the most expensive EC with a price tag of $1.58 million, which translated to $637 psf.

ERA Realty key executive officer Eugene Lim said these skyrocketing prices do not reflect overall pricing for ECs on the whole.

"These type of transactions are not common. It is a one-off for big units, which is why there is a premium pricing to it," he said.

The smallest unit at Heron Bay, a 775-sq-ft two-bedroom unit, sold for about $553,000 or $713 psf.

In its opening weekend of sales which started on Oct 26, more than 90 per cent of units were snapped up, reflecting the healthy demand for ECs. The average selling price was $725 psf.

Earlier this year, Heron Bay also set a record for the number of applications it received relative to subscription rates for an EC over the past few years. There were 1,664 applications for its 394 units, which translated to approximately 4.2 applicants for each unit.

"EC home-buyers today are more sophisticated as they expect better quality and service and at affordable prices, and this is where Heron Bay addressed their needs. Otherwise, it would have been another cookie-cutter, utilitarian EC project," said Leslie Lim, managing partner of EVIA Real Estate Management Pte Ltd, one of the developers of Heron Bay.

Other developers in the consortium are Ho Lee Group, See Hup Seng and CNH Investment.

Construction for Heron Bay is due to be completed in 2016.

Source: Business Times – 30 October 2012

 

Two bungalows sold for $26.1m and $10.38m

There has been no dearth of bungalow transactions recently, despite signs of a slowing economy.

A Good Class Bungalow (GCB) at 27 Olive Road was sold for $26.1 million while another bungalow at 44 Faber Drive was sold for $10.38 million.

The GCB at 27 Olive Road was put up for sale by the estate of the late Khoo Oon Teik via an expression of interest exercise which closed on Sept 18, 2012.

Nestled in a GCB enclave at Caldecott Hill Estate, the bungalow has a land area of 23,423 square feet, which translates to a land rate of about $1,114 per square foot (psf).

Transactions of properties along Andrew Road and Olive Road typically fetch prices of $1,100-$1,200 psf.

A bungalow along Olive Road is believed to have changed hands for about $30 million or $1,185 psf earlier this year.

The second bungalow at Faber Drive is located at an elevated site of 11,719 sq ft. This reflects a land rate of approximately $886 psf.

Future developments for the Faber Drive bungalow site could see the construction of two smaller detached houses.

Source: Business Times – 30 October 2012

 

Coming up: Over 100,000 housing units

The number of new private properties in the pipeline has ballooned to more than 100,000 units at the end of the third quarter, said the Urban Redevelopment Authority (URA) yesterday.

The news may bring cheer to buyers concerned about the persistent uptick in prices but dismay to those who had bought for investment or leasing purposes.

The upcoming private home supply comprises 83,975 private residential units, 9,824 executive condominiums and 10,070 units from land sites that the Government has sold, or that are slated for sale. This is the highest-ever total recorded since data was collected in 2001.

The URA said many of the units will be completed in the next three or four years. More than 35,000 units will be ready next year and in 2014, with the rest completed after that.

More than 36,000 private residential units or about 44 per cent of the upcoming supply remain unsold. Developers have some leeway to hold back units, but not much. A cooling measure last year requires that they build and sell residential units within five years or face a 10 per cent stamp duty.

In addition, the Housing Board (HDB) announced yesterday it will roll out another 6,400 Build-To-Order flats next month in Bedok, Choa Chu Kang, Queenstown, Sengkang and Toa Payoh, bringing its crop of new flats this year to the promised 27,000 - also a record high.

The hefty numbers, combined with the Government's move to slow the influx of foreign labour, will likely hit the rental market the hardest in the coming years, said analysts.

The vacancy rate of completed private residential units has increased slightly to 6.1 per cent in the third quarter from 5.9 per cent the quarter before, said the URA.

Low interest rates will sustain buying momentum but "if interest rates shoot up, there will be a glut everywhere", said ERA Realty key executive officer Eugene Lim.

For now, buyers seem undeterred and willing to pay. Private home prices rose 0.6 per cent in the third quarter, up from 0.4 per cent in the second quarter. The HDB's resale price index climbed 2 per cent, up from 1.3 per cent in the second quarter.

Developers sold more private units in the third quarter - 5,916, up from 5,402 in the second quarter - despite launching 20 per cent fewer properties.

As has been the case since cooling measures brought the number of foreign buyers down, demand in the third quarter was driven by mass-market homes in the suburbs. About 74 per cent of the units sold by developers were in the outside central region, which saw prices rise 1 per cent, compared to the 0.1 per cent uptick in the core central region.

Shoebox units accounted for 16 per cent of all sales in the quarter, less than the 19 per cent in the previous quarter, said the URA.

In the HDB resale market, analysts said a bottleneck in the supply of flats is sustaining price inflation. Resale transactions fell by 6 per cent to 6,560 cases in the third quarter.

More HDB upgraders are holding on to their flats when they buy a private home, preferring to lease them out rather than release them into the resale market, they said, in the belief that they can make money from rental yield, and sell for a higher price later.

According to the HDB, the number of flats approved for sub-letting grew to 42,920 in the third quarter. They form about 4.5 per cent of the total stock of flats.

Source: The Straits Times – 30 October 2012

 

HDB, URA release more rental data

The authorities are releasing more information on rentals to help landlords and tenants get a fuller picture of their options.

The rental data on private and public housing will be made available by the Urban Redevelopment Authority (URA) and the Housing Board (HDB) respectively on their websites.

The move, said the agencies yesterday, is aimed at providing timely information on rentals and helping people make informed decisions before signing a contract.

Those thinking of renting out an HDB flat, for instance, are now able to check the monthly rental for a particular room type at a specified block and road, if the transaction was done within the past year. They would also be privy to when the lease was taken up.

To protect the privacy of owners, unit details, such as the level and floor area, are not given.

Previously, information on HDB rentals was restricted to the median amount, and broken down by town and flat type.

As for private properties, one is now able to check the monthly rental for a unit in a particular condominium or executive condominium and landed home, from as far back as the start of this year.

Such data includes the number of bedrooms if they are non-landed units, size of the place, street name and postal district.

In the past, the URA provided general information such as the aggregated median per square metre rentals for a project.

But the provision of more information does not necessarily lower rentals. "It will make the market work more efficiently but rising rentals are due to demand and that has not changed," he added.

Rentals of private residential properties rose by 0.9 per cent in the third quarter this year, compared to 0.3 per cent in the second quarter.

On the HDB front, the number of subletting transactions rose 4 per cent, compared to 3 per cent in the previous quarter.

Source: The Straits Times – 30 October 2012

 

Room for more property cooling measures?

The local residential property market seems to have defied six rounds of cooling measures over the past three years.

The latest measure, introduced earlier this month to stop home buyers from over-extending themselves, has had little discernible effect on developers' home sales so far.

Some smug property investors may see this as another instance of King Canute trying to hold back the tide - the tide being the assumption that demand for property in economically strong and politically stable Singapore will always remain high.

But, in fact, the tide in this case is coming in from far beyond Singapore's shores. And there's a rip current in it that can endanger the naive investor who wants to surf the waves.

It isn't just Singapore that is taking measures to cool overheating property markets. There are no easy ways to stem the strong flow of cheap money from abroad, afforded by the ultra loose monetary policy that is being pursued by the central banks in the United States, Britain, the euro zone and Japan.

In Singapore, the latest government measure sought to restrict all home loans to a more reasonable timeframe, of up to 35 years.

Home buyers who take a loan that lasts more than 30 years, or extends past their retirement age of 65, will now have to fork out significantly more in cash.

Where previously a buyer may borrow up to 80 per cent of the property's value for his first mortgage, he can now do so for up to 60 per cent if he busts the 30-year loan or 65-year-old age limit. Under a similar scenario, the borrowing ceiling shrinks to just 40 per cent for his second and subsequent mortgages.

The new rules are a further refinement of a previous measure to tighten the loan-to-value ratios.

Other measures included creating new stamp duties; up to 16 per cent on the seller and an additional buyer's stamp duty that goes as high as 10 per cent for foreigners.

Taken together, Singapore is said to have put in some of the harshest property cooling measures in the freewheeling capitalist world.

Is the Government running out of ammunition under its calibrated approach to cool the market?

Not by a long shot, judging by the range of measures that other regional economies have pursued to combat their rising domestic home prices.

Malaysia, for instance, has imposed a real property gains tax (RPGT) - similar to a capital gains tax - of up to 10 per cent for properties disposed of within two years.

Hong Kong, meanwhile, has introduced rules limiting the maximum loan tenor of new mortgages to 30 years and lowering the debt servicing ratio limit - a borrower's total monthly debt payments divided by his net income - to 40 per cent for certain purchases.

Many of their measures are similar to Singapore's. The most common are: lowering the loan-to-valuation ratio for certain home purchases, imposing a penalty for those who flip properties in a short span of time and raising the barrier of entry for foreign home buyers.

In 2010, Malaysia raised the minimum price of residential property that foreigners can purchase to RM500,000 (S$200,800) from RM250,000 previously. There is speculation that this might be further raised to RM1 million.

When these measures did not have the desired effect, the Malaysian government rolled out another round of measures that will include a hike in the RPGT from Jan1 next year.

Hong Kong last week announced fresh measures that impose a stamp duty of 15 per cent on home purchases by foreigners, as well as raise the resale tax on property by about 5 percentage points and extend the period during which it will apply from two years to three.

It is also slated to start banning foreigners from buying new homes in the city, with a pilot scheme on two sites restricting sales to permanent residents of Hong Kong.

The city's sizzling real estate market has seen prices skyrocket about 85 per cent over the past 21/2 years, buoyed by demand from mainland Chinese buyers.

But the most draconian measures can be found in China, where the authorities have restricted the number of properties that a household can own in bustling cities such as Beijing and Shanghai.

Being an open city, however, Singapore is unlikely to implement such socialist measures outside the realm of public housing.

Here, it bears mentioning that the Government is most concerned with Housing Board flat prices.

This is not surprising, given that 80 per cent of Singaporeans live in HDB flats. The Government cannot allow prices - at least those of new flats - to climb beyond the affordability of most first-time buyers.

As the HDB market has a symbiotic relationship with private housing - except at the very high end - cooling the private housing market is also a way of cooling the HDB resale market.

As a result, the latest cooling measure is unlikely to be the last if demand for housing shows no sign of abating and prices continue to head north.

The good news is that private home prices have risen by just 1 per cent in the first nine months of the year. However, resale HDB prices have climbed by 3.9 per cent over the same period.

Until both the public and private housing markets show clear signs of stabilising or softening, the next stick may not be too far away.

Taking its cue from cooling measures implemented by other countries, one additional measure the Government can consider is curbs to restrict the number of homes that foreign buyers can purchase - or subjecting them to a hefty multiple ownership tax.

Alternatively, simply tightening the screw on existing measures may also be effective. For instance, the period where the seller's stamp duty is applied now can be lengthened from its current four years, or tax rates can be hiked further.

But whether or not to unleash more draconian measures will be a key decision for policymakers down the road, considering Singapore's reputation as an open and free economy.

The property market is a key plank of the economy and its health is closely intertwined with the wealth of Singaporeans.

Regional countries have introduced outright bans on foreign ownership, capital gains tax on property and even restrictions on the number of properties citizens can own. These are levers Singapore has not contemplated - at least publicly.

But whichever levers it pulls, the Government must continue with its calibrated approach: keep Singapore's economy generally free and open to foreign investment, while keeping the property market on an even keel. That calls for more smart manoeuvring.

Source: The Straits Times – 30 October 2012

Residential Market news Extract - 23 October 2012

Sales begin at Eden Residences Capitol

A low-key by-appointment-only private preview has begun for Eden Residences Capitol, a high-end residential development just across the street from St Andrew's Cathedral.

BT understands that options have been granted for the first few of the development's 39 units, at between $2,900 and $3,100 per square foot (psf); this works out to $6.5 million to $10.4 million per apartment.

The buyers are a mix of Singaporeans and mainland Chinese, disclosed Pua Seck Guan, vice-chairman and president of Perennial Real Estate Holdings, which owns a 24 per cent stake in Capitol Investment Holdings, the consortium developing the Capitol project.

The 99-year leasehold mixed development will incorporate a hotel, retail and entertainment components.

Chesham Properties, a member of Pontiac Land Group, owns a 50 per cent stake in the consortium, and OSIM International founder and chief executive Ron Sim - in his personal capacity - 26 per cent.

Eden Residences Capitol, the project's residential component, includes two garden villas and five penthouses, which have not been released.

The penthouses are all duplexes in three-, four- and five-bedroom configurations, and run from 4,080 sq ft to 6,470 sq ft in size. Each has a swimming pool and a study.

The two garden villas on the third level, each with three bedrooms and a plunge pool, will be between 2,723 sq ft and 3,520 sq ft in size.

The remaining 32 apartments will comprise three bedders, three bedroom-plus-study and four bedroom-plus-study units and range from around 2,100 sq ft to 3,380 sq ft.

All 39 homes will have views of Marina Bay, said Mr Pua.

In a recent interview with BT, he said the goal is to sell no more than a third of Eden Residences Capitol's units this year.

The market is also abuzz about how the nearby South Beach project will stack up. The talk is that a City Developments-IOI tie-up is planning to price the units there at around $4,000 psf on average.

A property agent suggested that, with units in South Beach starting from two-bedders, the project-average psf price would be higher.

Mr Pua, when asked whether the Capitol tie-up may be underselling its project, said: "We're happy to transact the initial units in our project to establish a pricing level. We'll release the next batch of units next year, after the concepts for the hotel and retail components have been launched. Buyers will then be able to better appreciate the potential value of this project."

He added: "Residents will experience an unprecedented lifestyle in Singapore's first integrated development comprising residential, hotel, retail and entertainment components in Singapore's Civic District."

Indeed, residents of Eden Residences Capitol will be in a neighbourhood of restored historical, art and cultural buildings, landmarks and monuments.

The historic Capitol Theatre, Capitol Building and Stamford House are being conserved and restored for adaptive re-use in the mixed development project.

Beyond St Andrew's Cathedral just across the road stand the former City Hall and Supreme Court buildings, which will house the National Art Gallery from 2015.

With Eden Residences Capitol housed from levels three to 12 of a new tower, Basement 2 to Level 2 will be for retail units. B3 to B6 will offer 350 car park spaces, with each apartment allotted two spaces in B4.

Residents will be able to tap into a suite of tailored hospitality services from the luxury hotel within the Capitol development. Marc Dardenne, CEO of Chesham Properties, said residents can choose to engage "lifestyle managers" to fulfil their every need - be it to cook up a meal, do housekeeping or other errands.

An additional draw for buyers is that they may use the services of the hotel to lease out their apartments for one month or longer.

The apartments come kitted with designer mod cons: Each kitchen will be fitted with Poggenpohl cabinets, a Sub-Zero refrigerator and Miele kitchen equipment, including both gas and induction hob and hood.

The bedrooms will have Poliform wardrobes, and the washrooms, Hansgrohe, Duravit and other fittings.

The hotel will have about 160 rooms on Levels 2 to 4 of Capitol Building and Stamford House. Room sizes will be 40, 45 and 65 sq m. The hotel's lobby and all-day dining restaurant will be on the ground level of Stamford House.

As for the project's retail component, Mr Pua says it has received interest from luxury brands with rental offers in excess of $40 psf a month for street-front heritage shops on the ground floor of Capitol Building. "We've also received interest from Michelin-starred and new-to-market restaurants."

Some of these dining concepts will be located in the project's Galleria section, an air-conditioned area below a glass canopy behind Capitol Building/Theatre and Stamford House.

Mr Pua said: "With over 200,000 sq ft of retail and entertainment space featuring an exquisite selection of Michelin-starred restaurants, luxury brands and flagship concept stores, as well as special access to international performances, movie premieres and red carpet events at the Capitol theatre, residents can indulge in life's finer pleasures at their doorstep."

The development is slated for completion in 2014.

Source: Business Times – 23 October 2012

 

Yishun executive condo sold for a record $1.61m

A double-storey penthouse at 1 Canberra in Yishun was sold for $1.61 million, setting a record for new executive condominiums (ECs) and prompting one property consultancy to warn about the affordability of high-priced units.

More than half of the 343 new units that fetched more than $1 million since the EC scheme was relaunched in late 2010 were sold this year.

A growing number of young and affluent buyers are going for bigger and more high-end units that offer perks, such as spacious balconies and unobstructed views.

The rising trend for such luxurious buys could have been triggered by rock-bottom interest rates, rising incomes and many EC buyers escaping unscathed from the latest rounds of property curbs..

The rising prices of resale flats have also deepened the pockets of many HDB dwellers, who saw ECs as the next step in upgrading.

To be sure, the higher prices are largely due to the size of some of these new ECs, analysts said.

For example, the unit price for the 1 Canberra unit, which stands at 2,716 sq ft, was $595 per square foot (psf). A 2,476 sq ft unit at The Rainforest in Choa Chu Kang, which held the previous record price of $1.58 million, has a unit price of $637 psf.

"Nowadays, to meet a variety of needs, EC's come in different sizes," said ERA Realty key executive officer Eugene Lim. "There are larger units as well as smaller units. The larger units sell at about $1 million."

While current interest rates are low, they are likely to go up in the future. Based on calculations, owners who purchased a unit that cost more than $1.1 million may need to top up in cash upwards of $1,400 a month once interest rates rise above 3 per cent.

This assumes a couple earning a combined $12,000 a month, with a monthly repayment based on a 30-year loan at 80 per cent loan-to-value (LTV) ratio and a current interest rate of 1.5 per cent.

But ERA's Mr Lim said that this is a risk that applied to all forms of housing and was not unique to ECs.

Furthermore, interest rate hikes are gradual, he said, so owners have time to make adjustments.

High-priced ECs faced price pressures with more supply coming onto market and competition from new condos in the suburban areas.

Comparatively, there could be value in similarly priced private residences that could be smaller in area but are not subjected to selling or leasing restrictions.

Source: Business Times – 23 October 2012

Residential Market News Extract - 22 October 2012

206 Waterbay units sold on first day

Some 206 of the 383 units available at Chinese developer Qingjian Realty (South Pacific)'s executive condominium (EC) project, Waterbay, were sold by 5pm yesterday, the first day bookings opened. Property consultants had earlier expected it to garner healthy interest from buyers because of its location.

The development, which sits at the junction of Punggol Central and Edgedale Plains, is a seven-minute walk to the Punggol MRT station, Punggol bus interchange and future shopping mall Waterway Point.

According to Qingjian, the three-bedroom and four-bedroom dual-key units were popular with buyers. Demand from second-time buyers was also strong, with all of the units allocated to this section of the market snapped up. According to new Housing and Development Board (HDB) rules, 30 per cent of units at EC projects have to be set aside for second-time buyers.

Donald Ng, senior marketing manager at Qingjian, said that 80 per cent of the dual-key three- and four-bedroom units, and the five-bedroom homes, have been sold. The plan is to build 17 units of each of the three home types at Waterbay.

Prices ranged from $560,000 for a two-bedroom unit and $680,000 for a three-bedroom unit, to $824,000 for a four-bedroom unit and $1.04 million for a five-bedroom unit.

On a per square foot (psf) basis, prices ranged from $688 psf, to $775 psf. The average price psf was $720.

Apartment sizes start at 753 square feet for a two-bedder, to 2,669 sq ft for a five-bedroom apartment.

Earlier, property consultants had predicted strong interest in the project, noting that EC developments in Punggol, Sengkang and Upper Serangoon have been "generally well received" despite the many private housing projects launched in that area.

Heron Bay at Upper Serangoon View, for instance, saw 1,664 interested buyers for its 394 units when it was launched last month.

Source: Business Times – 20 October 2012

 

Price rises likely as homes near completion

Property buyers love to see their new home or investment near completion. But what does it mean for prices?

Experts say that buyer interest in some residential projects slated to be completed within the next year has surged. Prices have risen in tandem, they add. But they warn not all projects enjoy this lift as owner-occupation nears.

Various factors such as the quality of the project, or the nearby amenities, can play a part in just how much upside is likely.

Still, as a general rule, they say that prices tend to rise at projects closer to completion as the physical occupational value of the property is closer at hand.

For investors, there is also less uncertainty over the rentability of the units, they add.

A look at nine projects completed from April to last month such as Beacon Heights, 8 @ Woodleigh, Optima @ Tanah Merah and The Trizon found that their average per square foot price rose by 8.3 per cent in the six months leading up to completion.

Experts warn that prices can dip if the rental market is not favourable when the project is completed or if the finished product does not meet expectations.

However, during an upswing in the market, most properties usually benefit as prices climb on the back of positive sentiment and a sound economy.

As a result, most projects due for completion soon enjoy higher prices than at launch time.

Other factors will be the visceral feel if the vicinity will be congested or appear cluttered. Again, this will become apparent only when the development is almost completed, he said.

Some projects due to be completed by the end of next year include Waterview in Tampines, Stevens Suites in Stevens Close and Concourse Skyline in Beach Road.

It seems developers, however, have held their prices for mid- and high-end homes steady even as the project's completion date draws near.

In fact, those in the city centre and city fringe areas are still going for very similar prices to when they were launched years ago.

But for suburban projects, the comparison is made more difficult as there is little unsold stock left.

Source: The Straits Times – 20 October 2012

 

St Thomas Walk homes highly prized

The market for luxury homes may be languishing in the doldrums recently but at least one enclave has been holding its own.

The cluster of private homes near St Thomas Walk, off the Orchard Road shopping belt, has notched up decent price gains, property consultants said.

The median price of new uncompleted homes in the area was $2,353 per sq ft (psf) as of the third quarter of the year.

That is a 25 per cent gain from that in the same quarter in 2009.

This translates to hefty prices for new projects. For instance, the upcoming 462-unit Twin Peaks was sold for a median price of $2,703 psf last month.

Price gains in the secondary market were even more substantial, with resale prices surging 46 per cent in about three years, narrowing the price gap between those and new homes.

As of the third quarter of the year, resale units in the area averaged $2,084 psf, up from $1,427 psf in the first quarter of 2009.

St Thomas area outperformed the high-end market - known as the core central region (CCR) - as a whole, with overall prices up 0.7 per cent from last year, against the CCR's 0.1 per cent rise.

High-end homes generally refer to those in the CCR, with a higher percentage of foreign buyers. Since the second last round of cooling measures last year, this group of buyers has had to fork out 10 per cent more for property purchases.

The St Thomas area sits behind Somerset MRT station and is home to residents living in more than 2,000 private flats.

Upcoming projects like Espada, Skyline 360 @ St Thomas Walk and The Boutiq will add more than 1,000 units in the next few years.

Interest in these has been healthy - more than half of the units have been sold - with investors likely making up the bulk of buyers, he added. This is partly because many of the upcoming projects have a high proportion of shoebox units, which typically refer to homes of about 500 sq ft and smaller.

But rents are highly variable. Data from the second quarter showed they ranged from just $3 to $6.30 psf monthly.

Investment potential is high for this area, given its proximity to the malls and other amenities in Orchard Road.

Also, new homes here are cheaper than those in the nearby Orchard Boulevard and Anguilla areas, which can cost some $4,100 to $4,300 psf.

Source: The Straits Times – 20 October 2012

 

Price boost for 'limited edition' exec maisonettes

The Government's reiteration that it will not build new executive maisonettes will further boost the prices of such "limited edition" units, said analysts.

These large, two-storey flats have become highly sought-after in the last few years due to a growing price gap between Housing Board flats and private property, and a wave of collective sales that have thrown up cash-rich buyers looking for big spaces.

Some flats in neighbourhoods like Bishan have made headlines for fetching record prices. This year, four of the eight units that broke the $900,000 threshold were executive maisonettes.

HDB stopped building these homes, which range in size from 138 sq m to 243 sq m, in 1995. There are 65,000 executive flats altogether, of which executive maisonettes form one group.

The spotlight on the latter has led to renewed interest on the ground, said Pasir Ris-Punggol GRC MP Gan Thiam Poh. It led him to ask in Parliament if HDB would build them again.

The Ministry of National Development said last Tuesday that it would not, as executive condominiums, which become fully privatised after 10 years, provide a more diverse range of housing options for Singaporeans.

"If they don't build any more," said Mr Gan, "prices for this particular type of flat will keep rising."

Data from the Singapore Real Estate Exchange showed the segment's prices have indeed accelerated recently. Over the last 10 years, median prices of executive flats rose 46.3 per cent compared to 101.8 per cent overall.

But in the last four years, this segment has rapidly caught up. From 2008 until now, median prices of executive flats rose 35.6 per cent, close to the 39.7 per cent of the overall market. In the third quarter, maisonettes were pricier at $631,000, compared to executive apartments at $607,500.

HUDC flats, roomy units which have the option to be privatised, regularly breach the $1 million mark.

The 17-year-old Queenstown flat that went for $1 million translated to $620 per sq ft, compared to about $1,200 psf that private properties and executive condominiums can command.

Some executive maisonettes in more remote locations like Choa Chu Kang or Yishun are still listed for under $400 psf.

Despite the possibility of runaway prices, many argue that the HDB is right to resist calls to build new executive maisonettes.

"HDB should concentrate on providing affordable housing for a lot of Singaporeans. Many buyers are young couples who are seeking to buy their very first flat so a four-room unit is enough for them," said Nee Soon GRC MP Lee Bee Wah.

For current owners, the limited stock works in their favour.

Source: The Straits Times – 22 October 2012

Residential Market News Extract - 10 October 2012

Woodlands EC site draws top bid of $150.2m

Demand for executive condominium (EC) sites in Woodlands remains strong, with a top bid of $150.18 million, or $302 per square foot per plot ratio (psf ppr), submitted for a 99-year leasehold site there.

That bid came from a joint venture between Fraser Centrepoint's unit Opal Star and Lum Chang's unit Binjai Holdings, which have a 70-30 per cent stake in the venture.

The site is on Woodlands Avenue 6 and Woodlands Drive 16, next to another EC development, La Casa.

The tender, which closed at noon yesterday, attracted five bidders - comparable to a site on Woodlands Avenue 5 sold in May which also pulled in five bidders and was sold at $318 psf ppr.

Opal Star and Binjai Holdings' bid was 1.6 per cent higher than the next highest bid put in by the joint venture between Far East Civil Engineering and China Construction.

That bid was $147.777 million, which translates to $297 psf ppr.

When the tender for the site was launched in August, property consultants polled by BT had predicted that the winning bid would be in the $300-350 psf ppr range, and that 3-7 bids would be submitted. The tender outcome was thus within expectations.

ECs are a hybrid of public and private housing, with initial-buyer eligibility and resale restrictions lifted 10 years after the completion of the project.

A Fraser Centrepoint spokesman said yesterday that plans have been made for 447 units in eight blocks of 12 storeys each, and that the units will mainly be three- and four-bedroom ones.

Other bidders for the site were Mezzo Development ($138 million or $277 psf ppr); Verspring Properties ($134.7 million or $271 psf ppr); and CEL Property ($124.399 million or $250 psf ppr).

Source: Business Times – 10 October 2012

 

Mountbatten condo up for collective sale

A 30-year-old condominium in Mountbatten has been put up for collective sale.

The project, Katong Park Towers, sits on 99-year leasehold land with a site area of about 13,077 sq m. The 118-unit condo is still occupied.

But soon, the site could be sold for between $330 million and $340 million, or $1,145 to $1,178 per sq ft per plot ratio (psf ppr), including 10 per cent of balcony space.

The site can be developed into a 24-storey condo with a maximum gross floor area of about 27,462 sq m.

Assuming an average apartment size of about 753 sq ft, the developer will be able to build about 392 units.

The property is near to amenities such as Parkway Parade, 112 Katong, East Coast Park and the upcoming Sports Hub in Kallang.

Eton International Pre-School, Dunman High School, Canadian International School and Chatsworth International School are also nearby.

The sale period opens today and closes on Nov6.

Source: The Straits Times – 10 October 2012

Residential Market News Extract - 8 October 2012

MAS imposes cap on housing loan tenures

Singapore regulators signalled their concerns over still rising home prices yesterday, announcing fresh mortgage curbs to cap upward price pressures caused by low interest rates and fast credit growth.

The Monetary Authority of Singapore (MAS) said it will set an absolute limit of 35 years on the tenure of all residential property loans - both new loans and refinancings. It will also lower loan-to-value (LTV) ratios for new loans with a tenure of more than 30 years. The new rules will apply to both private homes and HDB flats and will take effect today.

"Monetary conditions worldwide are far from normal," said Deputy Prime Minister Tharman Shanmugaratnam, noting that the latest round of quantitative easing (QE3) in the United States and low interest rates have made credit easy, though this will eventually change.

"We are taking this step now to require more prudent lending, and will continue to watch the property market carefully," said Mr Tharman, who is also Finance Minister and MAS chairman. "We will do what it takes to cool the market, and avoid a bubble that will eventually hurt borrowers and destabilise our financial system."

The new rules - Singapore's sixth round of cooling measures - look set to affect not just home buyers and existing owners looking to refinance their mortgages, but also property developers and banks.

According to the central bank, over 45 per cent of new home loans have tenures exceeding 30 years.

MAS will cap the tenure of all new residential property loans at 35 years

For refinancings, the tenure of the refinancing facility and the number of years since the first home loan for that property was disbursed cannot add up to more than 35 years.

Also, MAS will lower the LTV ratio for new home loans to individual borrowers if the tenure exceeds 30 years, or the loan period extends beyond the retirement age of 65 years.

The LTV will be 60 per cent for a borrower with no outstanding residential property loan, compared with 80 per cent previously, and 40 per cent for a borrower with one or more outstanding home loans, compared with 60 per cent before the new rules.

For non-individual borrowers, the LTV ratio for home loans will be lowered to 40 per cent from 50 per cent.

The MAS move comes after the Hong Kong Monetary Authority announced a 30-year limit on the maximum term of all new mortgages last month, following the launch of QE3. With the Federal Reserve looking to pump US$40 billion into the US economy each month until sustained jobs growth kicks in, worries about hot money inflows into Asia and asset price inflation have again emerged.

Stretched tenures

Previous rounds of cooling measures had a moderating effect on home prices in Singapore, and a significant supply of housing will also come onstream in the next two years, MAS noted. "However, prices in both the HDB resale market and private residential property have continued to rise in Q2 and Q3 of 2012."

According to official flash estimates on Monday, HDB resale prices rose 2 per cent in Q3 from Q2, while private home prices gained 0.5 per cent over the same period. Separately, the SRX Residential Property Flash Report yesterday showed resale prices of non-landed private homes rising 3.2 per cent in Q3.

Low interest rates globally and locally are likely to persist and will continue to spur residential property demand, pushing up prices beyond sustainable levels, MAS warned, stressing that "the eventual correction could be painful to borrowers and destabilise the economy".

Meanwhile, financial institutions have stretched the durations of home loans, and long tenure loans pose risks to both lenders and borrowers, the central bank said. The average tenure for new residential property loans climbed to 29 from 25 years over the last three years, it revealed. Also, more than 45 per cent of new home loans granted by financial institutions have tenures exceeding 30 years.

Lower initial monthly repayments from long loan tenures and low interest rates may cause borrowers to overestimate their loan servicing ability and take a bigger loan than they can afford, MAS said. In fact, long tenure loans create a larger debt repayment burden as interest accumulates over a longer period.

"When interest rates eventually rise, borrowers who have overextended themselves will have difficulties repaying their loans," MAS said. "If property prices fall, financial institutions may be caught holding the bad loans."

Banks which offer home loans with a tenure of over 35 years will feel the impact of the new rules almost immediately. DBS and OCBC are among those providing mortgages stretching up to 40 years.

"We will reduce our existing maximum home loan tenure of 40 years to 35 years, with immediate effect," said OCBC group corporate communications head Koh Ching Ching.

A DBS spokeswoman said that most of the bank's home loans have a tenure of under 35 years. "It will take some time to ascertain the impact of the new measures while homebuyers assess the market."

Resale impact

United Overseas Bank (UOB), which introduced 50-year housing loans in July, did not respond to media queries. Some market watchers then had questioned if the product would cause borrowers to overextend themselves, and National Development Minister Khaw Boon Wan subsequently called it a "gimmick".

Maybank said its maximum loan tenure for home loans is 35 years. "With an ageing population and couples marrying and setting up home at a later age, the new rules will have impact on these segments," said Alan Yet, head of lending (consumer banking) for Singapore.

The jury is out on how the new rules will affect the residential property market. The Real Estate Developers' Association of Singapore (Redas) does not expect a significant impact. "Based on past experience, not many buyers take long tenure loans," it said. Just last week, Redas said the property sector does not need more cooling measures - at least not before a thorough review of the impact of earlier policies.

Source: Business Times – 6 October 2012

 

Mortgage limits may deter older investors

The latest changes to mortgage rules could deter many house-hunters from buying a new property - or at least give them serious pause, analysts and property market watchers said yesterday.

Chief among this group will be older investors looking to buy a second or third investment property, they noted.

And HDB upgraders who want to get on the private property ladder will also not be spared.

From today, the Monetary Authority of Singapore (MAS) will cap all new housing loans at a maximum allowable tenure of 35 years.

Tighter rules will also apply to borrowers taking loans longer than 30 years, or have their loan periods extend beyond the retirement age of 65.

If they have no outstanding mortgage, the cash down payment is now 40 per cent of the property's valuation instead of the usual 20 per cent.

If they already have an existing mortgage and want to take another one for another property, the cash down payment is 60 per cent, instead of the current 40 per cent.

For these borrowers, the only way to avoid paying the additional 20 per cent cash down payment is to opt for shorter loan tenures that do not extend past the age of 65.

But this will mean higher monthly installments.

Source: The Straits Times – 6 October 2012

 

Market unlikely to be hit hard: Redas

Many developers seem to feel the new cooling measures will not have a big impact although those with more exposure to the local market could feel the pinch.

The response to yesterday's announcement from the Monetary Authority of Singapore (MAS) of the new rules was low key.

The Real Estate Developers' Association of Singapore (Redas) issued a statement saying that the cap "will not have significant impact on the property market".

"Based on past experience, not many buyers take long tenure loans," it said.

Mr Cheang Kok Kheong, chief executive of Frasers Centrepoint Homes, said: "We have always been supportive of the Government's measures aimed at curbing excessive speculative activities, as we believe in the importance of having a stable and sustainable housing market."

He said the move "is not expected to have a significant impact on the residential market".

A Keppel Land spokesman said: "We believe that there is still genuine demand for homes and well-located properties with good attributes should continue to see healthy sales."

Two other developers which declined to be named also said the new measure was not a big issue.

Far East Organization, City Developments, Hong Leong and CapitaLand declined to comment.

Consultants said the new rule to cap mortgages at 35 years could hit sales as investors and those who are stretching themselves financially will likely stay away from the market.

Source: The Straits Times – 6 October 2012

 

Banks wait to gauge impact

Banks could take a hit from the new rules on mortgage tenure but just how much they will be impacted remains unclear.

The Monetary Authority of Singapore (MAS) announced yesterday that a lower loan-to-value ratio will be imposed on loans with tenure of more than 30 years, or if the loan tenure extends beyond the borrower's retirement age of 65.

Bankers said the measures will certainly affect those taking out new loans and the mortgage-refinancing side of the lending business.

The most practical impact will be seen on older home-buyers. Those over 35 will have to take up a loan tenure of less than 30 years if they do not want to be affected by the lower loan-to-value ratio linked to the retirement age of 65.

Mr Dwaipayan Sadhu, Standard Chartered Bank's head of consumer transaction banking and mortgage for Singapore and South-east Asia, believes the new rules may also impact younger customers. He said: "Their monthly cash outflow would increase should they opt for 30-year loans instead of the current 35."

Maybank Singapore's head of lending business (consumer banking), Mr Alan Yet, agreed the refinancing market will likely be affected, but noted that as with earlier cooling measures, it does take time before the effects are seen.

Other experts think, however, that the impact could be muted.

Source: Business Times – 6 October 2012

 

Non-landed private home resale prices up 3.2%

Resale prices of non-landed private homes rose in the third quarter, even as transaction volumes fell 7.3 per cent.

Overall resale prices gained 3.2 per cent to hit a record $1,156 per square foot (psf), led by a 2.5 per cent month-on-month increase in September, data from the latest SRX Residential Property Flash Report released yesterday showed.

The rest of central region (RCR) posted the strongest quarterly gain of 7.1 per cent for resale non-landed in Q3, hitting an historic high of $1,199 psf. This was followed by a smaller gain of 3 per cent in outside of central region (OCR) to $921 psf, and a muted increase of 0.75 per cent in the core central region (CCR) to $1,738 psf.

Resale transaction volume fell 7.3 per cent to 3,296 transactions from 3,555 transactions in Q2.

RCR recorded the largest drop in transaction volume, by 10.9 per cent to 854 transactions, followed by CCR which saw transactions drop 6.2 per cent to 662 transactions. Transaction volumes in OCR fell 5.8 per cent to 1,780 sales.

Meanwhile, rental volumes fell 5.2 per cent in Q3, to 7,723 transactions. Only RCR posted a marginal 0.25 per cent increase in rental transactions, to 2,423. OCR posted the largest drop of 8.5 per cent to 2,777 transactions while CCR saw rental transactions slip 6.2 per cent to 2,523.

Overall rental prices per square foot rose 2.9 per cent to $3.87 psf in Q3. Rents for CCR were $4.68 psf, $4.01 for RCR, and $3.05 for OCR.

Gross rental yields remained stable at 4 per cent in Q3 due to a corresponding increase in rental prices compared with resale prices.

By comparison, URA's flash estimate released earlier this month showed that home prices had inched up 0.5 per cent in Q3. This took into account new sales, which fell 2.2 per cent. It also did not take into account the last three weeks of September sales. URA uses a different methodology from the average psf pricing approach, which is adopted by the SRX index.

Source: Business Times – 6 October 2012

 

Sentosa Cove bungalow market picks up after post-ABSD freeze

Activity in Sentosa Cove's bungalow market has picked up considerably in the last four to six weeks, following a relatively dry period following last December's introduction of the additional buyer's stamp duty (ABSD) targeting foreign buying of residential properties.

BT understands that owners have issued options to buyers for about a dozen homes in the past two months. The buyers are predominantly foreigners, mostly China nationals.

These bungalows are said to include two homes on Pearl Island, both of which sold at $2,200-plus per sq ft on land area. A unit on Paradise Island went for about $22 million or slightly over $2,380 psf based on land area of 9,236 sq ft; a property on Coral Island changed hands at $16.5 million or $1,743 psf on land area of 9,464 sq ft.

A seafronting property at Cove Grove boasting views of the Southern Islands is believed to have been sold for around $26 million, or $2,600 psf. This is in the neighbourhood of the one BT Weekend reported on Sept 15 as being sold for around $24 million or $2,470 psf.

The same edition of BT also reported two transactions on Cove Drive for units facing the waterway and Tanjong Golf Course at $15-plus million each. One was sold to a Myanmar citizen at $15.3 million or $2,202 psf.

Since then, BT has learnt of another purchase of a property a little further away on the same road, but also facing the waterway and golf course. The price is thought to be $16.8 million or $2,308 psf.

Homes on Sentosa Cove have 99-year leasehold tenure.

Market watchers attribute the recent revival in both viewings and transactions to a cocktail of factors - the stockmarket run-up, which in turn has boosted sentiment, QE3 and a narrowing in the bid-ask gap that kickstarted the first few deals in the latest resurgence.

A point to note, however, is that while there is anecdotal evidence of a string of options for bungalow purchases in the upscale waterfront housing district being granted in recent weeks, evidence of caveats is relatively scarce, as most of the options have yet to be exercised by the buyers.

Caveats were lodged for six Sentosa Cove bungalow purchases in the first half of this year, followed by two more since then. This compares with 25 caveats for the whole of last year.

Sources suggest some foreign buyers may have sought longer than the standard two-week option period with a view to securing Singapore permanent resident (PR) status in a bid to lower their stamp duty outlay.

In addition to the 3 per cent standard buyer's stamp duty payable for all property purchases in Singapore, including those by Singapore citizens, a Singapore PR pays a 3 per cent ABSD for his second and subsequent residential property purchases here.

For non-PR foreigners, a 10 per cent ABSD is payable on all residential property purchases.

Hence, if a foreigner obtains PR status, he would be able to "save" 7 per cent on ABSD, or $1.4 million on a $20 million bungalow purchase on Sentosa Cove, assuming he already owns an existing non-landed residential property here.

But if this PR does not own any other existing residential property here, he does not have to pay ABSD at all - translating to a "saving" of 10 per cent or $2 million.

Word on the Cove is that some foreign buyers have been granted long option periods ranging from six weeks to three months, or even longer. In exchange for this, owners would typically demand a higher option fee, say 5 to 10 per cent of the property price, compared with one per cent in a standard deal.

Typically, a buyer in the resale market who fails to exercise an option would have to forfeit the option deposit.

Some owners who have entered into such deals on Sentosa Cove are keeping their fingers crossed that the options will be exercised.

Market watchers note that the Singapore authorities have tightened criteria for issuing PR status to high-net-worth foreigners.

On unit land price, the highest price achieved this year is $2,787 psf in May, for a seafronting property along Cove Drive.

The record price for a bungalow in Sentosa Cove was set in October 2010, by a seafronting property on Ocean Drive facing Singapore's city container ports. It transacted at $2,989 psf. Among waterway fronting bungalows, the highest price achieved was in September last year - $2,613 psf for a property on Cove Drive.

The recent run-up in deals and QE3 have boosted confidence among some owners, who have started to raise asking prices.

Source: Business Times – 6 October 2012

 

Punggol EC expected to be well received

Yet another executive condominium (EC) is being launched today, the seventh EC to be put on the market this year.

Property consultants expect Waterbay, in Punggol, to garner healthy interest from buyers, thanks, in part, to its location.

Waterbay, a 383-unit project at the junction of Punggol Central and Edgedale Plains, is being built by Chinese developer Qingjian Realty (South Pacific).

The company is behind several other upcoming condos in the area such as River Isles and Riversound Residence.

The smallest unit in Waterbay, a two-bedder, is 753 sq ft and has an indicative price of about $590,000 or about $780 psf.

Unusually for an EC, five-bedders are also available. These 1,496 sq ft units will cost about $1.05 million or about $700 psf.

Dual key units, which allow for multi-generational living or leasing, are also on offer.

Waterbay's launch comes about two weeks after the launch of Heron Bay EC at Upper Serangoon View, where there were 1,664 interested buyers for just 394 units.

Not all launches this year have done well, industry watchers said, noting that buyers have been selective about price and location.

For instance, the 416-unit Watercolours at Pasir Ris was almost twice oversubscribed, but was only 56 per cent sold as of end August.

Interested buyers for Waterbay can submit e-applications between Oct 12 and Oct 16. If demand outstrips supply, a ballot will be held. Successful applicants can choose their units from Oct 19.

Source: The Straits Times – 6 October 2012

 

Watertown in Punggol almost 97% sold

The Watertown integrated development in Punggol is almost 97per cent sold, according to developer Far East Organization yesterday.

The remaining 34 units are mainly those with three or four bedrooms, and range in size from 1,173 sq ft to 1,550 sq ft.

These are among the "best-facing units within the development overlooking the Punggol Waterway", said Far East, which is co-developing the project with Sekisui House.

Watertown is Punggol's first project with both a retail and residential component.

The retail portion, called Waterway Point, will feature a "24-hour basement" level, with a FairPrice Finest supermarket and Shaw Theatres operating round the clock.

FairPrice Finest will occupy about 30,000 sq ft of space at Waterway Point, making it one of the chain's largest outlets here.

Mr Christopher Tang, the chief executive of Frasers Centrepoint Commercial, said yesterday: "We are delighted that NTUC FairPrice Finest has committed to be one of the early anchor tenants.

"We are confident that the mall will be the centre of attraction at Punggol waterfront."

With total development costs estimated at over $1.6 billion, Watertown is the largest private development in the Punggol Central master plan, Far East added.

Shops will occupy 40per cent of Waterway Point, while eateries will take up 30per cent. The rest will be occupied by entertainment and other service providers, such as educational establishments, banks, and civic and community amenities.

In August, Hyundai Engineering & Construction was awarded the main construction contract, worth US$380million (S$466million), for the Watertown development. Construction of the retail component has just started and is scheduled for completion by 2015. The residential component is expected to be completed by 2017.

Separately, Far East said it has sold 96per cent of the units at another of its mixed-use projects, The Hillier at Hillview Avenue.

The 528-unit development was launched in January and 21 units are left.

Source: The Straits Times – 6 October 2012

 

Home buyers unfazed by loan curbs

Despite new restrictions on the length of home loans that took effect yesterday, house hunters did not stay away from condominium showflats islandwide.

At new launches like Riversails along the Punggol waterfront and Cityscape at Farrer Park, showrooms were packed.

At a 748-unit development in Bedok South called eCO, for example, at least 20 units were sold yesterday.

The Monetary Authority of Singapore (MAS) said on Friday that it was capping the length of a home loan at 35 years.

It also lowered the loan limits for those who take loans past 30 years, or which extend beyond the retirement age of 65.

Such buyers can take a loan of only 60 per cent of the property's value, down from 80 per cent, starting yesterday.

This means an upfront payment in cash of 40 per cent of the property's price.

If it is their second or more loan, the loan limit shrinks further to 40 per cent - they must fork out a cash down payment of 60 per cent of the property's value.

House hunters The Sunday Times spoke to yesterday said they were aware of the latest changes but they were undeterred.

Source: The Straits Times – 7 October 2012

 

Showflats continue to see good traffic

Neither the new restrictions on home loans nor the rain kept prospective buyers from condominium showflats over the weekend.

Indeed, it was "business as usual" at newly launched projects Riversails at Upper Serangoon View and Skies Miltonia at Yishun.

According to agents, more than 300 units have been sold at Allgreen Properties' 920-unit Riversails, with at least 20 homes sold over the weekend. Prices of the larger units average slightly over $800 per square foot (psf), while the one-bedroom units average $1,000 psf.

The larger units (three-bedrooms and above) at the 99-year project have been doing well, with quite a few sold to upgraders, noted an agent who did not wish to be named. At the other end of the spectrum, three out of the five stacks of one-bedroom units launched have been sold.

Separately, some 67 per cent of units at the 420-unit Skies Miltonia have found buyers; the developer is offering an 18 per cent discount, and throwing in the option for buyers of certain units to upgrade their flooring to marble.

The 748-unit eCO in Bedok South threw in an additional 2 per cent furniture voucher in addition to an array of discounts offered.

The Monetary Authority of Singapore (MAS) said on Friday that it will set an absolute limit of 35 years on the tenure of all residential property loans. It also lowered loan-to-value (LTV) ratios for new loans with a tenure of more than 30 years.

According to the central bank, the average tenure for new residential property loans jumped from 25 years to 29 over the last three years. Over 45 per cent of new home loans have tenures exceeding 30 years.

Lower initial monthly repayments from long loan tenures and low interest rates may cause borrowers to overestimate their loan servicing ability, warned MAS.

Source: Business Times – 8 October 2012

 

A policy resolve to rein in asset prices

When the Monetary Authority of Singapore (MAS) last Friday announced fresh mortgage curbs to prevent new bubbles from forming in the property market, much of the attention focused on the measures and their impact.

But arguably, what is even more significant is the signal Singapore policy makers are sending to the market.

After the US unveiled a third round of quantitative easing (QE3) last month, a BT article raised the threat of fresh liquidity flows and the likelihood of more cooling measures to keep asset bubbles away. It was, at the time, not the consensus view, with many arguing, as they still do now, that existing policies are sufficient to keep prices in check. This was especially (and not surprisingly) the view of the real estate sector, and as recently as the end of September, the Real Estate Developers' Association of Singapore (Redas) said the property sector did not need another round of cooling measures, and that a thorough review of earlier measures put in place should be done first.

Such views, while reasonable enough in themselves, miss the bigger point. And that is that in any robust policy making framework, the imperative is to stay ahead of the curve. Existing cooling measures may or may not have already reined in property prices, but that does not define current scenarios.

A new situation has arrived with QE3. The Federal Reserve's decision to pump US$40 billion into the US economy each month until sustained jobs growth kicks in, while welcome news for the struggling global economy, also created the risk that loose monetary conditions in the US may push funds into the region in search of yields and fan asset price inflation, with Singapore a likely prime target for such flows. Indeed, QE3 also marks the start of what many see as an extended round of global easing, with all the associated liquidity risks.

It is in this context that the MAS is acting. "Monetary conditions worldwide are far from normal," said Deputy Prime Minister Tharman Shanmugaratnam, noting that the latest round of QE3 in the US and low interest rates have made credit easy, though this will eventually change.

"We are taking this step now to require more prudent lending, and will continue to watch the property market carefully," said Mr Tharman, who is also Finance Minister and MAS chairman.

And Singapore has signalled clearly it will not lag behind the regulatory curve. Hong Kong, notably, moved to introduce mortgage curbs immediately after QE3 was announced. In its fifth round of mortgage-tightening measures, the Hong Kong Monetary Authority announced that it would limit the maximum term of all new mortgages to 30 years. Additionally, mortgage payments for investment properties cannot be more than 40 per cent of buyer's monthly incomes, compared with 50 per cent previously.

There is some debate over whether the MAS could be acting prematurely in the domestic context because property price increases recently have not been so marked. Official data showed that HDB resale prices rose 2 per cent in Q3 from Q2, while private home prices gained 0.5 per cent over the same period. Separately, the SRX Residential Property Flash Report showed resale prices of non-landed private homes rising 3.2 per cent in Q3.

However, it's worth pointing out that the stated policy objective has always been that property values should move in tandem with economic fundamentals. Economists now expect advance estimates for Q3 to show that the economy shrank 1.8 per cent over the July to September period. Add to Q2's seasonally adjusted 0.7 per cent quarter-on-quarter annualised drop in GDP, and Singapore would have suffered a technical recession, or two consecutive quarters of quarter-on-quarter contraction. Viewed in this context, even a modest rise in property prices could be fundamentally out of line.

So far, the property sector's reaction to the new measures has been mixed. The changes include setting an absolute limit of 35 years on the tenure of all residential property loans and tightening loan-to-value (LTV) ratios for certain new loans. Redas said the measures will not have a major impact, and the initial assessments suggest that the new rules will affect mostly older buyers, and those looking to own more than one property. But again, this may not be the most crucial point.

The most important point that the market should take away from the latest MAS measures is the underlying policy resolve to keep asset prices here in check. Singapore regulators have signalled their intention to act, again and again if necessary, to ensure that the runaway prices of the last cycle will not be repeated.

Last Friday's measures may be confined to the residential market and a specific group of buyers, but the evidence is clear enough that policy makers are prepared to introduce more measures to cool prices in non-residential sectors for instance - where there have been some signs of overheating - or to further curb foreign buying interest, if needed. "We will do what it takes to cool the market, and avoid a bubble that will eventually hurt borrowers and destabilise our financial system," Mr Tharman said. That is as explicit as it can get.

Source: Business Times – 8 October 2012