Citizens of 5 countries to pay same stamp duty as S'poreans

CITIZENS of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.

When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday. This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.

Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.

The Additional Buyer's Stamp Duty (ABSD), as the new levy is called, was announced by the Government on Wednesday and hits foreigners hardest. They have to pay an additional stamp duty of 10 per cent when buying a home. But the foreigners from these five countries can apply for remission or relief.

The Inland Revenue Authority of Singapore (Iras) website says they must provide identification, acceptance to option to purchase/sale, the purchase agreement and the ABSD declaration form.

Under the new rules, permanent residents (PRs) buying a second and subsequent property will pay an additional 3per cent stamp duty, while Singaporeans buying their third or subsequent homes must pay an extra 3per cent.

The rule is also that for purchases made by two or more parties with mixed residency status, such as a Singaporean with PR, the higher rate will be imposed.

But Iras also gave examples of situations where remissions can apply. These are in cases where married couples have mixed residency status.

For example, a PR who currently owns a property while his Singaporean spouse owns none can apply for relief from the additional stamp duty when they co-purchase a home.

In another scenario, a PR and a Singaporean spouse co-own a property. When they next jointly buy a property, they can apply to be exempt from the 3 per cent levy.

The relevant documents have to be submitted to Iras.

Relief will also be provided for qualifying developers.

Iras also said that people who want to downgrade from private housing to an HDB flat will be allowed a concessionary period to sell their private residential properties. The application for relief in such cases can be made through the HDB.

Source: The Straits Times – 9 December 2011

Private property prices may slide in next 6 months

The Government's latest round of property market cooling measures – imposing a range of additional buyer's stamp duties on private home purchases – helps most genuine owner-occupier buyers, specifically citizens and permanent residents who may be affected by affordability issues.

More importantly, it gives a clearer direction for the private home market, which had exhibited optimism despite the last round of cooling measures in January and the uncertainty in the external environment. Prices are expected to fall up to 8 per cent in the first half of next year.

Direct impact on foreigners

The most immediate impact of the measures will be a slowdown in foreigner purchases – a natural result of the hefty 10 per cent additional duty. The duty can be considered appropriate as foreigners have had sufficient opportunities to enter the market and have been stepping up purchases of private homes in recent years, with no policies specifically targeted at them.

The measure may also provide some support for the leasing market now that fewer foreigners are expected to buy a private home. There will be some foreigners who will not be put off by the 10 per cent additional duty as Singapore appeals to them as a politically stable and physically safe country. But this group is expected to consist of the really affluent, whose wealth is unscathed by the current economic headwinds from the United States and Europe, and who need a property in a place with excellent fundamentals.

Demand for non-residential property to rise

The January measures sparked a move to strata-titled non-residential property as investors sought out alternatives. The new measures will likely encourage investors to continue to sniff out such non-residential units – i.e. office, retail and industrial spaces.
But it must be highlighted that an excessive run-up in the prices of such properties may also prompt the Government to react as the viability of smaller businesses is challenged. Nevertheless, the shift to non-residential property investments in a bid to avoid the private home buyer stamp duty can be viewed as a positive for an investor as he or she will be diversifying his or her entire property portfolio.

Psychological deterrence

Singaporeans and PRs who are genuine owner occupiers, as well as citizens not buying a third or subsequent home, will not have to pay the additional buyer's stamp duty. While the number of locals who do not "stop at two" may not be large in the first place, the new measures mean that what is left in the pool of private property purchasers will now be strictly first and second home buyers.

Although the Singaporeans or PRs who have to pay the additional buyer's stamp duty will pay a lower rate than foreigners, they may still be deterred. Psychologically, the duty creates a disincentive, for such buyers are indeed paying more than their peers, particularly in the case of developer sales where prices are fairly uniform.

Selective property re-pricing

With the new measures, a persistent demand contraction leading to price falls will be more likely, especially amid global economic challenges. Private home prices may fall by up to 8 per cent in the first half of next year but this is still expected to be fairly property-specific and short-lived as there are many opportunistic buyers looking to purchase their dream property.

The desire for the dream property has intensified as society becomes increasingly sophisticated and individuals aspire to a higher quality of life. Also, as first time private home buyers do not have to pay the additional duty, they may stop hesitating on the purchase decision and realise their dream.

By Ong Kah Seng – director at R'ST Research, an independent property market research firm in Singapore.

New cooling measures: Shifting the goalposts

Are the latest cooling measures – specifically targeted at the private housing market – what many Singaporeans have been waiting for since the General Election in May?

Wednesday's announcement of an additional buyer's stamp duty of 10 per cent for foreigners and 3 per cent for Permanent Residents already owning one or more properties and for Singaporeans already owning two or more properties caught the market by surprise.

The reaction of the Real Estate Developers Association of Singapore (REDAS) was understandably one of deep disappointment. Almost a whole year of residential land sales have been snapped up. Millions of dollars have been poured into these ventures. The sudden introduction of the measures is akin to shifting the goalposts halfway during the game.

The problem is probably one of miscommunication. In all its actions to date, the authorities have not let on that investment buys could be a problem. In fact, all four earlier sets of cooling measures were aimed at reducing speculation and stabilising prices. Now, it seems all of us were fooled. A statement or two indicating otherwise would have been greatly appreciated. At least, some developers would have factored this in as a risk when bidding for sites.

Then again, aren't developers supposed to factor in such risks?
Many analysts have singled out luxury homes as the market segment that stands to lose the most. Are we not forgetting that buyers in this segment are more concerned with the product than its price. Is an outlay of a mere 10 per cent more going to deter the ultra-rich from any of these purchases.

For sure, nobody likes to be discriminated against. All the developer has to do is to raise the price by 10 per cent but offer to absorb the additional stamp duty. The problem is psychological rather than real. Admittedly, sales for this market segment have been slow but it will not be any slower because of the new measures, unless of course, the product is more high-priced than high-end.
Wednesday's announcement came very soon after Minister of National Development Khaw Boon Wan's wish that the HDB first-timers' application rate for the Build-To-Order launch would fall below 2 times was fulfilled way beyond his expectations. Has the focus now shifted to fulfilling citizens' upgrading aspirations? It appears to be so.

The supply of Executive Condominiums (ECs) has been raised for next year. On the Government's Confirmed List of land sales for the first half of next year, five are for ECs. It is also probably recognition of the fact that the latest stamp duty changes would not correct private property prices soon enough or at least not enough to fulfil some of the upgrading aspirations. Depending on demand, we can expect more EC sites to be offered for sale in the coming years.

Apart from what is likely to have been miscommunication, I would say the measures are finally addressing the problem of excessive liquidity and the dangers it could pose for a small open economy like Singapore's.

Compared to the earlier changes in January, where up to 16 per cent in seller's stamp duty may be imposed depending on the timing of the divestment, the current set of changes is actually less drastic but more effective. But will it be enough?

To potential first-time private home buyers expecting a sharp drop in prices, it is too early to cheer. Even if property prices were to start to correct from today, it may be many months before they reach your affordability levels.
Time and time again, I have advised against under-estimating the liquidity challenge. How many of us thought that the cooling measures imposed in January marked the start of a decline of the residential market. I can tell you there were many red faces thereafter, some of them of very prominent market analysts.
How many times have our neighbours played our local investors out by changing the rules mid-way, but has this stopped property investments in these countries? The answer is no.
It is well-known that Hong Kong and Singapore are two favourite property investment destinations for mainland Chinese investors. If you have not been monitoring Hong Kong property prices, take a look now and then look at Singapore's. Then tell me whether the effectiveness of the current measures can be sustained over time.

by Colin Tan – head of research and consultancy at Chesterton Suntec International.

Source: Today - 9 Dec 2011

COOLING MEASURES: A BOLT OUT OF THE BLUE

The announcement of the latest set of cooling measures for the residential market yesterday probably drew extreme emotions from many in Singapore - either cheers or despair, depending on which side you are on.

The emotions - accentuated by the fact that it came right out of the blue - are probably enough to induce a heart attack, some would say.

The new rules were specifically targeted at investment buys, while the announced plans to increase the supply of Executive Condominiums recognises the fact that the majority of potential upgraders have been largely left out of the current market run-up.

The announcement probably came as a shock to many but you could say the warning signs were there, the increased buying from foreigners and the ever shrinking apartment sizes being offered on the market.

However, it does not mean that all investment buys will be affected as the rules left just enough room for some investment buys by Permanent Residents (PRs) and Singapore citizens. PRs buying their first property and citizens their second property onwards are not affected.

Already people are asking me whether the new measures will induce a price correction? It really depends on the reaction of developers and how much of the current purchases are investment buys.

If the majority of buyers have been investors, the measures have the equivalent effect of a sudden price increase of 3 per cent or more on the market.

Sales will be a lot slower in the coming weeks or maybe even months. Investors may stay away while genuine buyers will take their time to commit. Depending on how long this phase drags on, some developers may panic and start offering bigger discounts.

However, if they hold their nerve, there is enough liquidity in the market to overcome this latest set of measures, provided of course, the expected economic slowdown next year does not hit us hard.

Source: Today - 8 December 2011
by Colin Tan, head of research and consultancy at Chesterton Suntec International.

GOVT MOVES TO CURB FOREIGN HOME OWNERSHIP

To curb excessive investment demand on private homes, the Government is imposing additional stamp duties - over and above the existing tax - on certain categories of property purchases from today.

It also announced yesterday that it will inject sites that can potentially yield a total of 14,100 units in the Government Land Sales (GLS) Programme for the first half of next year. Of these, about 7,000 units will be from sites on the Confirmed List.

The imposition of the additional stamp duties surprised analysts and industry players, with the Real Estate Developers' Association of Singapore (REDAS) criticising the timing of the cooling measure which comes as the Singapore economy is headed for a slowdown next year.

Foreigners and corporations will be the hardest hit, needing to pay a 10 per cent Additional Buyer's Stamp Duty (ABSD) on any private residential property.

Singaporeans will pay a 3 per cent ABSD on the third and subsequent properties, while permanent residents (PR) will pay a 3 per cent ABSD on the second and subsequent properties.

Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected.

Some relief will be provided to alleviate the impact on affected Singaporeans, for instance those who marry foreigners or PRs and will be subject to the higher ABSD as a couple.

Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore's international trade agreements.

Details of the reliefs will be provided on the Inland Revenue Authority of Singapore website.
Explaining the move, the Ministry of Finance and the Ministry of National Development said in a joint press statement that "even with the current economic uncertainties, the demand for private residential property remains firm. Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract investors, local and foreign."

It said: "Excessive investment demand will however make the property cycle more volatile, and thus increase the risks to our economy and banking system."

The authorities noted that private home prices are currently 13 per cent above the peak in the second quarter of 1996 and 16 per cent above the more recent peak in the second quarter of 2008.

The joint statement added: "A higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market."
 
Move is 'drastic', say analysts
Property analysts described the cooling measure as "drastic". However, they noted the rising foreign ownership of private homes and increasing prices.

Adding that a very small percentage of Singaporeans own a third home, head of research and consultancy at SLP International Nicholas Mak said: "This is a pre-emptive strike in preventing an increase in buying demand from foreigners, especially the non-residential foreigners."

Mr Chris Koh, director of Dennis Wee Group, noted that foreign ownership of private properties has increased from 30 per cent last year to 33 per cent to date, pushing prices to unrealistic levels.
However, International Property Advisor chief executive Ku Swee Yong felt the measure "aimed at foreigners may be missing the mark".

He argued that the recent spike in private home prices - especially in outside central regions (OCR) areas such as Ang Mo Kio, Pasir Ris and Chua Chu Kang - were driven primarily by Singaporeans.
"I worry that the price index will continue to rise (albeit more slowly) while at the same time we leave foreign investors with a bad taste in their mouths," said Mr Ku. He added: "Many foreigners are here to work and settle their families down and they need to own one home for shelter over their heads."
REDAS said in a press release that it was "disappointed in the lack of consultation on the latest measures". It said: "They came as a surprise as the current market outlook is uncertain. The good take up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market."
It added: "Given that the local economy is expected to slow down next year, we believe these measures are untimely."

On the GLS programme for the first half of next year, the Government said the supply - which is less than the 8,100 units offered under the Confirmed List in the second half of this year - takes into account "the ample pipeline supply and the dampening effect of the ABSD".

The Government added that it will "continue to monitor the property market and adjust our property policies in step with changes in the market and the economy".

Source: Today- 8 December 2011

British property entrepreneur eyeing Singapore luxury market

A property entrepreneur who is behind London's luxurious One Hyde Park project and who has decked out yachts and jets for tycoons is turning his sights to Singapore.

Briton Nicholas Candy told The Straits Times that he sees 'massive opportunities' here.

A mixed-use project possibly comprising a hotel, high-end homes and luxury retail valued at 'hundreds of millions', for example, would be something he would be keen to work on.
'It's finding the right site and the right partner; we wouldn't do it without a local partner,' Mr Candy says.

'We haven't got anything specific today but if we could find something, we would be very happy to. I think in the next year or so, we should be able to hopefully find a site.'

Mr Candy, 38, who set up the interior design and development management firm Candy & Candy with younger brother Christian, also said that he has spoken with some potential partners although nothing has been signed.

The brothers built the One Hyde Park residential development in London's Knightsbridge, where a penthouse unit sold for £136 million (S$274 million) to Ukraine's richest man, tycoon Rinat Akhmetov, in April.

Only 18 apartments in the 80-unit project designed by star architect Richard Rogers remain unsold. The remaining units have been sold for a total of £1.4 billion.

The firm is known for its super-luxury standards and has designed and outfitted yachts, jets, luxury cars and lavish homes for wealthy and famous clients, including royal families, Indian steel magnate Lakshmi Mittal and Hollywood actress Gwyneth Paltrow.

While money has been flowing from Asia to London, especially in the past five years, Mr Candy said he is looking in the opposite direction for expansion.

'Asia already is one of the financial hubs of the world but there are lots more opportunities. Also, it hasn't suffered as badly in the global financial crisis... and seems to be quite resilient.'

Mr Candy said Hong Kong, Singapore and Shanghai, where the firm is working on a project designed by architect Zaha Hadid, are the Asian cities he likes best.
But he added that Singapore seems to be a easier place to do business than Hong Kong, where many established players dominate the purchases of sites.

'What's the great thing about somewhere like Singapore is that you can do things at a very quick speed. What you dream, you can build here,' he added.

Source: The Straits Times – 1 December 2011

Property prices in Asia heading towards correction

Recent reports have signalled that property prices across China and other parts of Asia are heading towards a correction.

But regional developers and market observers say it is not all doom and gloom yet for the sector.
The integrated resorts and international events like the F1 have brought the spotlight on Singapore.

They have also piqued foreign investors' interest to invest in luxury properties, say analysts.

But now investors and analysts are bracing themselves for a looming correction in the property market.
And this time, even luxury properties will not be spared.
Panache Management CEO Alex Schlaen, said: "It will be very minor because the luxury (property market) didn't recover to the heights of 2007, versus the mass market which went way beyond the peak of 2007. This market will see a correction of between 10 and 20 per cent. The correction will probably last for two years and it will probably start recovering back to the new peaks that we haven't seen yet in Singapore."

Now, he reckons that Singapore's property prices still lags Hong Kong and has a lot of room to catch up.

And he says prices in Singapore will only reach at par with Hong Kong in 10 years.

This means investors can potentially make a profit from the Singapore market.

While China's real estate market is seeing more cities with lower property prices, some property developers Channel Newsasia spoke to are still bullish on the property market in China.

Candy & Candy founder Nick Candy, said: "The best locations are in Shanghai. I won't think it will have a 30 per cent drop. If there is a large correction, I believe it would recover quickly again. I am very bullish on China. I believe that China is a great place to invest. I think people will do very very well there."

The Pudong River is where Nick Candy, who made his fortunes developing homes for High Networth Individuals including Hollywood stars, will be making his mark in Asia.

Source : Channel NewsAsia – 29 Nov 2011

21 HDB blocks in Redhill Close chosen for SERS

Twenty-one blocks of HDB flats in Redhill Close have been chosen for the government's Selective En bloc Redevelopment Scheme (SERS).
They are blocks 1 to 3 and blocks 5 to 22, with a total of 878 units.

The Housing and Development Board (HDB) will build about 1,200 units of two-room, three-room, four-room and five-room flats in Henderson Road to re-house the flat owners.

The new blocks, to be ready in 2017, will be built up to 48-storeys high, offering panoramic views of the city skyline.

The current flats, built in 1955, will be more than 60 years old by the time the residents move out.
The HDB said the replacement flats are at a prime location, within walking distance from Redhill and Tiong Bahru MRT stations.

Facilities such as shops, markets and food centres are just a stone's throw away.

Many recreational facilities and spaces such as children's playgrounds and fitness corners for adults and the elderly, a hard court and community garden, as well as a multi-storey car park will be provided. The HDB said these facilities will provide ample opportunities for social interaction.

Eligible flat owners will be invited to register for the new replacement flats in the fourth quarter of 2012.

The HDB will hold an exhibition from December 7 to 13 at Bukit Merah Community Centre to provide more information on the development.

The site is the 76th site to to benefit from SERS, which offers residents the opportunity to move to a brand new flat nearby with a fresh 99-year lease, better design and modern facilities.

Source : Channel NewsAsia – 3 Dec 2011

High-end home deals fewer this year: study

Transactions in Singapore's high-end residential market, such as upmarket apartments/condos in choice districts and bungalows on Sentosa Cove, have fallen this year, but non-permanent resident foreigners' share has gone up for both categories of properties.
Analysts attribute the increase partly to mainland Chinese fleeing restrictions on property buying in their home market and instead parking their monies in Singapore's property market. As well, some investors may be inclined to escape the economic gloom in Western economies and to favour the relatively healthier economies in Asia. Singapore stands out as a property buying destination in Asia for its transparency, political stability and relative safety.

In the first 11 months of this year, 1,285 caveats were lodged for apartments and condos in districts 1, 4, 9, 10 and 11 priced at least $2,000 per square foot of strata area - down 33 per cent from the same year-ago period. The figure for full-year 2010 was 2,156.
However, non-PRs' share of purchases of non-landed homes in these five districts priced at over $1,951 psf (or $21,000 per square metre) has increased from 28.4 per cent last year to 37.8 per cent in the first 11 months of 2011.

The latest figure surpasses the 31.1 per cent in 2007 and 33.2 per cent in 2008 - during the earlier foreign buying frenzy. Based on URA Realis caveats data as of Nov 30, the total foreign buying pool (PRs and non-PRs combined), Indonesians have been the top buyers since 2007.

Their share of the total number of caveats (including purchases by Singaporeans and companies) edged up from 15.4 per cent in full-year 2010 to 16.4 per cent during Jan-Nov 2011. However, the 236 upmarket apartments/condos they have bought this year is about 35 per cent shy of the 363 units they acquired in full-year 2010.

On the other hand, the number of upmarket apartments picked up by mainland Chinese has risen from 136 for full-year 2010 to 170 in Jan-Nov 2011. Their share of total buying also doubled from 5.8 per cent to 11.8 per cent.

A longer-term comparison reflects a similar picture. The number of high-end apartments bought by Indonesians has roughly halved from 438 in 2007 to 236 in Jan-Nov 2011, while the number of caveats lodged by mainland Chinese has quadrupled from 43 to 170.

Indians - who did not even feature among the top five nationalities of foreign buyers in 2007 - were the fourth largest foreign buyers of high-end apartments in Jan-Nov 2011, with 31 caveats or a 2.2 per cent share of total purchases.

Traditionally Indonesians have been the predominant buyers of high-end apartments in Singapore. But recently, the Chinese and Indians have increased their presence in this segment, as wealth levels rise on the back of strong economic growth.

As well, property buying curbs in China are driving some mainland Chinese to park monies in Singapore. Overseas Chinese buyers are also finding that they fit hand-in-glove in Singapore because of the ethnic similarity. When they walk into a showflat here, they find sales people speaking to them in Mandarin, and sometimes even entertaining them with a nice Chilli crab dinner.
Over at Sentosa Cove (where foreigners don't need to be PRs to qualify to buy landed homes), the Chinese are the biggest foreign buyers (PRs and non-PRs combined) of bungalows. They purchased five of the total 20 bungalows transacted in Jan-Nov this year. Singaporeans bought eight bungalows.

As a whole, non-PR foreigners picked up seven bungalows in the upscale waterfront housing district in January-November 2011, giving them a 35 per cent share of total purchases, up from their 33.3 per cent share in full-year 2010.

The average price of bungalows transacted on Sentosa Cove has risen 11.1 per cent from $1,910 psf on land area for full-year 2010 to $2,122 psf for January-November 2011. In absolute dollar quantum, the average price per bungalow transaction has appreciated 7.7 per cent from $17.1 million to $18.4 million. The total number of Sentosa Cove bungalows transacted has slipped from 54 last year to 20 in Jan-Nov 2011.

Transaction activity in Singapore's high-end residential sector is expected to remain subdued in the next few quarters against the backdrop of a turbulent global economy.

But the market should continue to attract regional and global high net worth clientele interest, as they look for safe havens to store their wealth. Singapore is one of the two AAA-rated countries in Asia.

Source: Business Times – 5 December 2011

Good Class Bungalows, high-end condos in district 10 see buyer interest

Good Class Bungalow (GCB) transactions in the prestigious Tanglin Hill are very rare. The most recent, according to a caveat lodged on Nov 3, was for a 21-year-old GCB on a freehold site of 34,585 sq ft. It was sold for $57 million ($1,648 psf) in a private-treaty deal. Both the seller and buyer were Singaporeans. The psf price is just slightly higher than that of a GCB located across the street that was built in 1992 and sits on a 23,982 sq ft plot. This GCB changed hands in April for $38.8 million ($1,618 psf).

Meanwhile, a GCB at Victoria Park Road on a freehold elevated site of 32,077 sq ft was sold for $48 million ($1,496 psf) a fortnight ago. A caveat has yet to be lodged. The last time the property changed hands was just two years ago, when it was sold for $38.67 million ($1,205 psf). Hence, the seller saw a 24% capital appreciation.

Given the rather gloomy economic outlook and market uncertainty, the recent Tanglin Hill and Victoria Park Road deals took about three months to negotiate and close. This is because there aren't too many buyers at this end of the market, given the large quantum price and most of the buyers being owner-occupiers looking to tear down and redevelop the existing property into a luxurious bungalow for their own use. Large GCB plots of at least 30,000 sq ft that can be sub-divided into two smaller GCBs are also becoming increasingly scarce.

Including the recent transaction at Tanglin Hill, there have been only three transactions that have crossed the $50 million mark in the last 12 months.

Smaller GCBs with land areas of 15,000 to 16,000 sq ft in prime districts 10 and 11 (Bukit Timah, Chancery Hill and Bukit Tunggal) that had asking prices of $24 million to $26 million at the beginning of the year have been transacted at $22 million to $23 million. The transaction prices of these GCBs are probably 5% to 8% below what the owners were asking for at the start of the year — an indication that sellers were prepared to adjust their prices downwards to meet buyers' expectations.

HIGH-END CONDOS

In the Tanglin area, there have also been some transactions in the high-end condominium segment. In the Tanglin area is the 46-unit luxury condo 8 Napier, located next to Gleneagles Hospital and Medical Centre and the Singapore Botanic Gardens. According to URA, as at end-October, 27 units in the luxury condo have been sold. The project was completed last year.

Last year, some units purchased for $3,550 psf four years ago were sold on the secondary market at an average of $3,200 psf. From last December to September this year, units sold in the low-rise development ranged from $3,000 psf for second-floor units to $3,527 psf for higher-floor units.
There seems to be interest in old condos with spacious apartments. At the 274-unit freehold Tanglin Park condo developed by City Developments Ltd (CDL) 22 years ago, there were two transactions in the week of Nov 1 to 8, based on caveats downloaded from URA Realis as at Nov 23. A 1,593 sq ft three-bedroom apartment on the eighth level was sold for $3.2 million ($2,009 psf). This is the fifth time the unit has changed hands in the last 16 years (URA's database of caveats go back only to January 1995).

Tanglin Park's main attraction is its location; being in a quiet and exclusive neighbourhood is definitely an advantage.

Another condo that is known for its luxurious and spacious apartments is the 330-unit Ardmore Park by Wheelock Properties that was completed 10 years ago. Ardmore Park is a perennial favourite not only because of its spacious units but also its facilities and landscaping.

The condo attracts a good mix of investors and occupiers, although these days, most of the buyers are looking to buy for their own occupation.

Source : The Edge – 28 Nov 2011

2nd Bedok waterfront project to be launched

Another new waterfront private residential development is about to be launched for sale in the Bedok neighbourhood, hot on the heels of CapitaLand's controversial Bedok Residences project.

Called Archipelago, the 577-unit development is a collaboration between the UOL Group and Singapore Land.

Between 180 and 200 units will be up for sale during the first phase of the launch, with preview sales expected to start from tomorrow.

Situated in Bedok Reservoir Road, facing the reservoir, it is priced below the recently launched CapitaLand project nearby, which sparked debate on its queuing system for applicants.

Average prices for Archipelago are slightly above $1,000 psf. It is understood that the smallest 527 sq ft one-bedroom units will be priced below $600,000, which translates to around $1,138 psf.
Apartments at Archipelago are a mix of one-, two-, three-, four- and five-bedroom units and penthouses.

Units with studies are also available. Homes are larger too, averaging 1,332 sq ft.

The Straits Times was also told bigger units make up a majority of the homes at the development, with two- and three-bedroom apartments making up 63 per cent of the total homes.

Twenty-four strata-titled landed homes are also included. Foreigners will be eligible to buy the three-storey homes of more than 4,000 sq ft, expected to cost above $3 million each.

Source: The Straits Times – 1 December 2011

Is the Singapore property market headed for a fall?

Property has been enjoying a boom like no other in the past two years but if Standard Chartered's experts are right, the good times are coming to an end.

The bank's analysts have turned markedly bearish, with a report predicting residential rents and prices plunging 30 per cent over the next three years.

This will be a painful reversal given that prices surged 18 per cent last year - as Singapore bounced back from the global financial crisis - and a further 6 per cent in the first nine months of this year.

Stanchart sees problems ahead, including slower population growth due to stricter immigration policies and the unprecedented supply of completed homes coming onstream.

Rock-bottom interest rates could also edge up from 2013, further dampening the market. The debt crisis in Europe and concerns of a severe downturn in China could also have a significant impact on demand and prices.

After four rounds of cooling measures since September 2009, the Urban Redevelopment Authority (URA) has found price gains moderating for eight consecutive quarters.

They inched up just 1.3 per cent from the second quarter to the three months to Sept 30.
Transaction volumes also dropped 25 per cent in the third quarter as global uncertainty and stock market volatility took their toll on sentiment.

So with all asset classes said to move in cycles - the classic boom and bust scenario - is the Singapore property market headed for a sustained downcycle and a correction in prices?

Economic outlook

The euro zone crisis is one of the big factors determining where the property market heads, experts note.

Singapore's economy, buffeted by global weakness and uncertainty, is expected to grow at a sluggish 1 per cent to 3 per cent next year but that could worsen if Europe's woes escalate or a full-blown financial crisis erupts.

Experts add that while any contraction in the global economy will hurt Singapore, the extent remains unknown as the European crisis plays out in slow motion.
There are also other mitigating factors in play.

Property markets go through cycles, just like economies. Only if you are in an emerging market where there is a long period of strong economic growth, might you have a long property market upcycle.

Employment and businesses are affected when the economy contracts so this will affect buying sentiment and the ability to buy homes.

Prices will fall if the major global economies deteriorate as Singapore's economic growth will be affected.

DBS economist Irvin Seah said slowing economic growth typically places a heightened risk of depreciating asset values.

But housing demand in Singapore has remained in good shape as unemployment remains low with wages continuing to rise.

The local property market is also known to be fairly resilient, experiencing just a short blip during the global financial crisis before a sharp rebound at the end of 2009, Mr Seah noted.

However, he highlighted the scenario of a hard landing in China - Singapore's largest export market - as possibly impacting the market most severely.

But the risk of a hard landing in China is 'moderate' and not big enough to warrant concern as yet.
A recession coupled with job losses is likely to drag prices down.
The moment when potential buyers feel insecure about their future source of income is when they pull back from buying or begin to divest.

In a downturn, foreign capital could also become defensive and pull back from investing overseas, some experts say.

On the other hand, while another global crisis might also dampen sentiment, it might lead to more money being pumped into the markets as governments act to salvage their economies.

Already, there is talk of a third round of quantitative easing by the United States Federal Reserve.
These high levels of liquidity flooding the market might find their way to Asia and continue to support property prices.

Interest rates

Low interest rates that are making mortgages far more affordable have also helped to support the housing market.

And with the United States Federal Reserve pledging to keep rates low until mid-2013, rates here are also likely to remain flat.

However, Stanchart property analysts say that low borrowing costs are not enough to sustain the market.

The increase in the public housing income ceiling and the lower pricing of new HDB flats - expected to siphon demand from the private sector - should still lead to price falls.

Private home buyers are estimated to spend more than 38 per cent of their monthly gross income on mortgage repayments even though rates are only at 1.1 per cent, the report noted.

This is slightly higher than the Government's target of 30 per cent to 34 per cent. 'If interest rates normalise to the 10-year average of 4 per cent, we estimate the proportion of income spent on mortgage repayments to rise to 50 per cent,' it added.

Rising interest rates are expected to reduce affordability and trim market demand, possibly leading to prices dipping as well.

However, as some experts note, any decision by the US Fed to raise rates will mean that its economy is finally on the mend and that could signal that the global economy is out of the doldrums, which is good news for investors.

Slower population growth
Tighter immigration policies have recently been introduced in response to unhappiness over strained infrastructure and congestion.

The Stanchart report noted that population growth is expected to be halved to 1.5 per cent to 2 per cent for the next three to five years as the Government looks to encourage productivity gains and reduce its reliance on foreign workers.

But this reduction might have a knock-on effect on leasing demand and rents, especially with foreigners - including permanent residents - making up 37 per cent of the population.

Experts note that if demand from tenants falls, rents and correspondingly yields - which are already low at 2.6 per cent to 3 per cent - will fall, with prices following eventually.

But AmFraser Securities equity analyst Lau Wei Chong noted that although the intake of foreigners has slowed, the Government maintains its open door policy to talent, which will see the population continue growing. This continued influx will mitigate any sharp fall in property prices, he said.

Oversupply

The large number of completed units from the bumper supply of state land releases raises the question of whether these homes can be absorbed by the market.
The report noted that the number of homes to be launched for sale is similar to that in 2000, when prices plummeted 20 per cent.

As of the third quarter, 37,400 homes are in the pipeline seeking the required pre-requisite conditions to be launched.
This is similar to the 36,400 units in the first quarter of 2008 and the 37,500 units in the second quarter of 2000.

Prices fell 25 per cent in 2009 and 18 per cent in 2001, the report pointed out.

Completions are also expected to peak in 2015 with a staggering 47,000 units built. This is almost three times the number of private homes developers sold last year, which was itself a record.

The unprecedented supply of new HDB flats - 50,000 in total for this year and next - will also divert buying demand from the private sector.

However, the population has expanded by about 2.8 per cent a year over the past 10 years while the number of completed homes has increased by 2.1 per cent a year.

Given the way the growing population has outpaced the housing stock, this has led to a backlog of demand for homes.
If the economic crisis is not too severe, this will help to mitigate the sharpness of any price correction.

Source: The Straits Times –27 Nov 2011

Opportunistic buying at the high end

Property consultants have noted that there has been some opportunistic buying at the top end of the market. Many of those on the hunt are looking for condominium units for their own stay, and therefore prefer completed projects with spacious units. With the ongoing European debt crisis, and global market uncertainty, people prefer not to flash their wealth and adopt a more conservative outlook.

One such condo that has seen a pick-up in interest is the 164-unit freehold Grange Residences, which was completed in 2004. Older condos that have seen transactions of late are the 39-unit Nassim Jade in Nassim Road, which was completed in 1999 and the 72-unit Nassim Mansion on Nassim Hill that was completed 34 years ago.

Even though these transactions are at their near record-highs, they are still lower than the prices achieved at new luxury condos in the same neighbourhood as these tend to command a premium.

Further up along Nassim Road is the newly completed, fully-sold, 100-unit Nassim Park Residences. Buyers don't mind the older condos in prime locations as these tend to have spacious units. Those who value space but who may not wish to stretch their budgets beyond $10 million for the new offerings in the market tend to look at the three- and four-bedroom units in the older estates, which are generally priced in the $5 million to $10 million range. And they are not necessarily going for the high-profile condos either.

These older condos also represent value as developers of new luxury projects that are completing or recently completed are holding on to their asking prices. Some of these were launched at the peak of the market before the global financial crisis and generally, prices at the top-end of the market are still slightly below the peak in late 2007. Hence, older condos in the same neighbourhood that are priced below these new condos are attracting value-for-money buyers.

Analysts sees more "opportunistic buying interest" in the top-end of the market. Some buyers are hunting for 'fire sales', but most owners are holding on to their asking prices, and that's why there are few transactions.

New condos that are realistically priced are also attracting buyers. One of the newly completed luxury projects that is seeing some buying interest is The Orange Grove with just 72 exclusive units located in Orange Grove Road, just off Stevens Road.

The 120-unit, 999-year leasehold Duchess Residences located in Duchess Avenue was completed recently. It is located within a quiet and established housing estate with mainly semi-detached and detached houses, off Bukit Timah Road. The condo saw two units change hands in sub-sales recently.

Units at Duchess Residences are sought after because of their proximity to good schools such as Chinese High School, Hwa Chong Institution, Nanyang Primary School and National Junior College. It is in a quiet location surrounded by landed homes. Most of the condos in the area tend to be in the main road and are older. So, as the newest development there, Duchess Residences stands out.

Source: The Edge – 21 November 2011

GCBs sold at surprisingly high prices

Two good-class bungalows (GCBs), one in Tanglin Hill and the other in Victoria Park Road, have been sold for a total of S$105 million.

According to The Strait Times, both properties were acquired by Singaporeans. The two-storey Tanglin Hill bungalow was sold for S$57 million (approximately S$1,648 psf). It was completed in 1990 and is located on a 34,579 sq ft site with a built-up area of 8,000 sq ft.

Meanwhile, the bungalow at Victoria Park Road was sold for S$48 million (around S$1,496 psf).
The report said the high prices fetched for the two properties were surprising, as many had expected the property market to cool before the end of the year.

Source : PropertyGuru – 28 Nov 2011

Far East sells 34 units of The Scotts Tower

Far East Organization yesterday said that it has sold 34 units of its 231-unit The Scotts Tower at an average price of around $3,100 per square foot (psf).

Prices for the District 9 property nestled at the intersection of Scotts Road and Cairnhill Road start from $1.94 million for a 624 sq ft one-bedroom small office, home office (SoHo) apartment.

The 103-year leasehold The Scotts Tower is the first project to be rolled out under the Far East SOHO brand, which aims to provide a distinctive collection of modern, new-generation SoHo apartments in Singapore.

Conceptualised by the Red Dot award-winning co-founder and principal architect of UNStudio in Amsterdam, Ben van Berkel, the 31-storey The Scotts Tower consists of one to three-bedroom apartments and four-bedroom penthouses, expansive landscaped gardens, sky terraces, penthouse roof gardens and other recreational facilities.

Far East said that it will bring forward the official launch of The Scotts Tower to tomorrow
 (Dec 7) following the positive response to preview sales which started on Nov 25. A total of 34 units out of the initial 56 one and two-bedroom apartments released for the preview were snapped up.

The developer has sold more than 1,000 SoHo apartments since 2004, when it launched Singapore's first SoHo development at Central, above Clarke Quay MRT station.

Since then, it has also launched two other SoHo-style projects - The Tennery at Upper Bukit Timah and The Cape at Amber Road.

Source: Business Times – 6 December 2011

Private homes launched may hit 10-year high

THE number of new private homes hitting the market this year will likely be the highest in a decade thanks to a surge of launches recently, say analysts.

Experts say about 18,300 new homes could be released this year, surpassing the 16,500 or so last year - the highest so far in a decade - and easily trumping the annual average of 9,900 between 2001 and 2010.

The numbers have been rocketing this quarter as developers rush out homes in what is usually a quiet period.

There were several major launches in October and last month, including Sim Lian's Parc Vera condo in Hougang, City Developments' The Palette in Pasir Ris, and the CapitaLand project Bedok Residences.

More new projects are likely to follow this month, say industry watchers, bucking the festive-season trend for a sales slowdown.
Rushing to release projects earlier allows developers to ride on the prevailing home-buying momentum.

Some developers have managed to expedite the sales preparation process and shorten the period from a typical timeline of between nine and 12 months to between six and nine months.

Pushing homes out for sale now also means getting a head start on the large batch of government land sales sites that were sold this year and which are expected to debut in the market next month.

A UOL Group and SingLand joint-venture started sales of its Archipelago project last Friday with average prices hovering just above $1,000 psf. About 200 homes were expected to be launched in the first phase of sales. The UOL Group declined to reveal sales figures, adding that more details would be released next week.

Far East Organization's 231-unit The Scotts Tower in Scotts Road will be launched next week, two years after plans to reconfigure the then 68-unit luxury development into smaller units were announced.

Far East's The Hillier, a 528-unit project in Hillview Avenue, near the upcoming Hillview MRT station, and the 435-apartment The Nautical in Sembawang being built by MCC Land, will be launched within the next two weeks.

Agents said prices at The Hillier are expected to be around $1,200 psf, with 503 sq ft one-bedroom units to go for about $750,000.

Indicative prices for The Nautical are expected to range between $850 and $1,000 psf.

Source: The Straits Times – 6 December 2011