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Finance for newlyweds in Singapore

Posted by Singapore Property Launch on 25th January 2017 in Blog
wedding couple

Financial alignment is key to a better marriage. 

When talking about finances with your partner, it is important to set financial goals and ensure you both are on the same page. It doesn’t matter if you earn different incomes, but couples need to align themselves on issues like housing, among other expenses. 

By Paul Ho 

Scientists may finally be able to shed some light on love. When you fall in love, the initial stages usually comprise romantic feelings and physical attraction. These are caused by hormones released in the brain that are responsible for strengthening emotional attachment.

Nature has a beautiful and complex way of ensuring the continuation of the species, but this may not be enough to keep couples together in an increasingly materialistic world.

Money values – Talk sooner than later

There’s a saying that money is the root of all evil, but the lack of money may be a bigger evil. So young couples should start talking about their finances.

Things to know about your partner

– Are your families of similar economic status?

– Are your incomes vastly different?

Differences in incomes may mean divergent lifestyles. The both of you need to reach a common understanding.

– Do you buy first and save later, or save first and buy later?

Bad financial habits come from bad personal habits.

– Does your partner smoke, gamble or indulge in alcohol? What about expensive hobbies like fast cars, expensive watches, jewellery or handbags? These affect your future financial well-being.

What are the major expenses for young couples?

– Wedding ring, wedding reception and honeymoon.

– Saving for the down payment of a house.

– Furniture and renovation.

– A newborn baby.

Buying a house in Singapore

If you spend too much money on getting married, I doubt you will have enough cash to buy a property.

Younger couples tend to be in junior positions at work and earn less. If they can move in with their parents, they should do so until they can come up with the down payment for a new house.

If you have already bought your place, phase out your furniture purchase or renovation. What use is a beautiful house that becomes the source of your financial worries, or worse, the root cause of your quarrels.

Scenario: Buying an HDB flat worth $350,000

Husband (Age: 30, $3,000/month salary with 13th month bonus)

Wife (Age: 30, $3,000/month salary with 13th month bonus)

The minimum amount of cash needed is around $22,000, while the CPF OA (Ordinary Account) savings need to be around $55,000. It will take about four to five years each to save up the $55,000 based on the $3,000 monthly salary.

In Singapore, banks will lend more money to those looking to buy more expensive condominiums, but they will not lend them as much for HDB flats. This has led to many people buying condominiums instead of HDB flats. Obviously there is a flaw here.

The main reason for this is the MSR (Mortgage Servicing Ratio) of 30 percent for HDB flats while condominiums are set at 60 percent, resulting in higher loans for condos.

Nonetheless couples should avoid buying a condominium unless they have very strong financial backing, from say their parents. Taking out a large loan from day one also means a heavy interest cost payment and a slow rate of paying down the principal.

In this case, couples earning $3,000 each would be able to secure an HDB flat, and they would not have to worry about mortgage repayment as there is no cash outlay. In fact, their CPF OA can still accumulate if they hold on to their jobs.

Wedding expenses

Spend too much on the wedding of your dreams and you may have to deal with the loans, overdrafts and credit card bills over the next few years.

It is important to spend within your means. Some parents may push for a large wedding, but are they paying for it? Ultimately, you must strike a balance on making them happy and the cost involved.

The cost of a table at a posh hotel will easily set you back $1,000. Don’t forget that you need to allocate half of the tables for each side of the family, so discuss this first before booking the venue.

A “simple” wedding dinner could easily set you back $20,000 to $50,000. That would take between 20 months to 50 months to repay the principal.

Financial planning for the future

Plan for the future by having some basic insurance cover such as hospitalisation cover in case of major illness, mortgage insurance (which will be covered under the HPS) or term insurance, and perhaps a savings plan for a future child. It is okay to have an interim plan and modify it as you go along. It is probably too early to plan for retirement, but there’s no harm talking about retirement goals and the lifestyles you would both like to have, so that you are on the same page.

credits: propertyguru

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UOL to acquire freehold site at 45 Amber Road for S$156mil

Posted by Singapore Property Launch on 24th January 2017 in Blog
Amber Road

Amber Road (Photo: Christopher Chitty)

UOL Group has been granted by Sin Lian Huat Co an option to purchase a freehold site at 45 Amber Road for S$156 million.

Located in District 15, the 69,858 sq ft site has a plot ratio of 2.10 and is within walking distance to the upcoming Tanjong Katong and Marine Parade MRT stations, both of which are expected to be completed in 2023.

UOL has two weeks to exercise the option, during which it will pay S$6.24 million. Thereafter, it will have 12 weeks to complete the sale and purchase of the property.

In an SGX filing, UOL revealed that the “proposed acquisition are in the ordinary course of the group’s business, and would enable the group to replenish its land bank for residential developments in Singapore”.

It noted that the acquisition will be financed via external borrowings and internal resources.

UOL does not expect the acquisition to materially affect the net tangible assets or earnings per share of the group for the financial year ending 31 December 2017.

“The company will make further announcements in relation to the option and proposed acquisition, as and when there are material developments,” it added.

credits: propertyguru

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Kallang River, Sungei Whampoa gets upgrade

Posted by Singapore Property Launch on 23rd January 2017 in Blog
ABC Waters by PUB

The ABC Waters programme brings a rich vibrancy to the areas around the Kallang River (Photo: PUB)

Residents along Kallang River and Sungei Whampoa will now have more spaces to relax. These areas have been spruced up with new spaces and viewing decks, as part of national water agency PUB’s Active, Beautiful and Clean (ABC) Waters programme.

The first ABC project to be opened in 2017, the S$3.8 million upgrading works at Kallang River involved the widening of the promenade from three to 15 m to allow both cyclists and pedestrians to enjoy the recreational space together, reported Channel News Asia.

A ramp has been added to give wheelchair-bound individuals access to the upgraded promenade. Shelters that mimic the masts of vessels that sailed along the Kallang River in the 19th century have also been built, to add a touch of nostalgia to the surroundings.

The area also features rain gardens, which come with specially-selected plants and soil to cleanse rainwater from the promenade before flowing into the river.

Officially opened on Sunday (22 January) by Communications and Information Minister Yaacob Ibrahim, the project targets to bring the community closer to the city-state’s waters.

Its first adopter, Kong Hwa School, for instance, is planning a learning trail for its students.

“The ABC Waters design features, such as the rain gardens, coupled with the tradition and significance of the Kallang neighbourhood, make for great learning opportunities and reinforce character and citizenship education beyond the classroom,” said Jerry Yang, a teacher.

Meanwhile, the S$1.8 million upgrade at Sungei Whampoa saw the rise of lookout decks and a rain garden along the 450-metre stretch of the river. Efforts to green the canal walls have also been made.

The project at Sungei Whampoa will be officially opened in February.

“ABC Waters @ Kallang River and Sungei Whampoa are really about building for the future. Both projects were planned to be integrated with upcoming development works in the vicinity,” said Tan Nguan Sen, Chief Sustainability Officer at PUB.

“As both Kallang River and Sungei Whampoa flow into the Marina Reservoir – a source of water supply, we hope residents will help to play their part in keeping the waters free from litter so that all of us can enjoy cleaner, clearer waters and a better living environment,” added Tan.

credits: propertyguru

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Singapore to benefit from Hong Kong tax hike

Posted by Singapore Property Launch on 20th January 2017 in Blog
Singapore's Skyline

Lower stamp duties in Singapore has made the city-state more attractive for Chinese investors.  

Singapore may benefit from Hong Kong’s recent increase in stamp duty for overseas property buyers, reported Bloomberg.

According to Cushman & Wakefield, Singapore’s three-year slump in house prices could end this year as foreign investors in Hong Kong are expected to divert their attention to Singapore instead.

“The fallout from the stamp duty could be beneficial for Singapore,” said Sigrid Zialcita, Managing Director for Asia Pacific Research at Cushman & Wakefield.

“Singapore is always seen as a place where you can preserve capital and we are expecting interest from foreign nationals to come back.”

Last November, Hong Kong raised its stamp duty for overseas buyers to 30 percent, making Singapore’s 18 percent rate more favourable, especially to mainland Chinese who are looking for overseas investments to protect them from a weakening yuan.

With this, analysts expect property values in Singapore to dip by just 1.5 percent this year, while secondary home prices in Hong Kong are forecast to drop by eight percent.

Desmond Sim, CBRE’s Research Head for Singapore and Southeast Asia, expects prices to stay flat or dip by up to two percent. Savills, on the other hand, has forecast a one percent increase in average home prices.

The city-state has seen housing prices fall by 11 percent since 2013, when the government rolled out its strictest property cooling measures.

credits: propertyguru

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Knight Frank: S’pore prime home prices to increase 2%

Posted by Singapore Property Launch on 19th January 2017 in Blog
Costa Rhu condominium

The recent hike in Hong Kong’s stamp duty may divert home buying interest to Singapore. (Photo: William Cho, Wikimedia Commons)  

Prime residential prices in Singapore are expected to increase by two percent in 2017, according to property consultancy Knight Frank and reported the Financial Times.

This comes as the recent hike in Hong Kong’s stamp duty may divert home buying interest to the city-state.

“With strong economic fundamentals and a stable political climate, Singapore is expected to retain its status as a haven investment destination for both individual and institutional global investors,” said Liam Bailey, Knight Frank’s Global Research Head.

Prime residential prices are expected to hold firm in London, New York and Hong Kong, while Sydney and Paris are expected to post five percent and two percent growth, respectively.

Miami, on the other hand, will see prime residential prices drop by five percent.

Bailey believes the most important factor affecting the prime property market this year will be their domestic economic performance. There will also be a shift in the cost of money and currency, with a gradual transition from record low interest rates to be led by the US.

“The strength of the dollar is also expected to encourage dollar-pegged investors to consider UK or European investment options,” he said.

Bailey noted that tax has also emerged as a growing influence on market performance. In fact, a number of rules targeted at controlling the destination of investment flows have been introduced over the last 12 months.

Australia, for instance, saw three states – Queensland, New South Wales and Victoria – roll out a stamp duty surcharge for foreign home buyers. This is on top of a new 10 percent withholding tax on the sale of high-end Australian property by foreign residents.

Meanwhile, New Zealand introduced a capital gains tax for short-term property investments, while the UK and Vancouver implemented an additional rate of stamp duty on luxury property purchases and an empty-homes tax, respectively.

“Clearly the expansion of so-called cooling measures to control international wealth flows into property shows no sign of easing,” said Bailey.

credits: propertyguru

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New private home sales hits 3-year high

Posted by Singapore Property Launch on 17th January 2017 in Blog
Singapore property

Singapore developers sold a higher number of units last year due to greater affordability of new residential projects.

Sales of new private homes, including executive condominiums (ECs), climbed to a high of 12,408 units last year compared to the 9,026 and 10,199 units transacted in 2014 and 2015 respectively, with ECs accounting for 32.6 percent of the overall figure, according to PropNex Realty citing data from the Urban Redevelopment Authority (URA).

PropNex CEO Mohamed Ismail revealed that one factor behind the high transaction volume last year was the greater affordability of new projects. In fact, sales in the Core Central Region (CCR) spiked by around 67.2 percent, after developers slashed prices at some projects by 20 to 25 percent from their peak to avoid paying extension fees.

In agreement, real estate consultancy JLL said a more realistic pricing for ECs, with median prices falling by around five percent between Q1 2015 and Q4 2016, contributed to a pick-up in transaction volume. In fact, developers moved 4,018 EC units last year, up 57.6 percent from the 2,550 units transacted in 2015.

Desmond Sim, CBRE’s Research Head for Singapore and Southeast Asia, added: “Palatable quantums for both first-time owners and investors have been the key driver for healthy home sales over the past 24 months.”

Excluding ECs, private home sales rose by 9.4 percent to 8,136 units for the whole of 2016 versus the 7,440 units seen in the year before. However, the number of units sold in December slumped by 57.3 percent to 367 units versus November’s 860 units. While transactions during the Christmas month are traditionally slow due to the year-end festivities, it was 4.4 percent lower than December 2015.

“The top-selling private residential projects in December were The Santorini (26 units at a median price of $1,047 psf), Queens Peak (25 units at a median price of $1,652 psf), Parc Riviera (22 units at a median price of $1,240 psf), Riverbank @ Fernvale (17 units at a median price of $964 psf) and The Alps Residences (16 units at a median price of $1,020 psf),” noted JLL.

Meanwhile, the best-selling EC project last month was Sol Acres, with 66 units taken up at a median price of $789 psf. Other EC projects that sold fairly well include The Terrace (33 units at a median price of $790 psf), The Vales (17 units at a median price of $805 psf), Westwood Residences (17 units at a median price of $786 psf) and The Visionaire (14 units at a median price of $814 psf).

Looking ahead, Ismail predicts that developer sales for 2017 are likely to remain similar to last year, with approximately 12,000 units (including ECs) to be sold.

However, Sim reckons it will be slightly lower, given the weak economic outlook coupled with rising interest rates.

credits: propertyguru

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