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Market Barely Had Time To Respond To New Cooling Measures

Posted by Singapore Property Launch on 15th July 2018 in Blog
Panoramic view of the Singapore skyline at dusk

The Singapore government departed from its recent practice of announcing sensitive information on Fridays when it introduced its latest round of cooling measures on 5 July, which is a Thursday – barely giving the market time to think.

In a note, Withers KhattarWong partner Kenneth Szeto said announcements were supposed to be released on Fridays to provide a weekend buffer prior to the stock market reaction, reported Singapore Business Review.

“Buyers and sellers themselves barely had five hours to react to the announcement before implementation, and property launch show flats were immediately flooded, as buyers rushed to issue their sale options before midnight to come within existing rules – to either pay less Additional Buyers Stamp Duty (ABSD) or obtain higher quantum home loans,” he said.

“The ink has barely dried on the rules and regulations, and the usual accompanying tax guides are still being written. For parties who are engaged in ongoing deals, it will be necessary to look carefully at the impact of the new rules, and seek the necessary clarification with the tax authorities on how ongoing deals will be affected.”

Szeto noted that the revised housing loan limits will see first time home buyers fork out an additional five percent cash down payment on their purchases.

He expects this to “rein in buyers’ demand for both new launch properties as well as resale properties, just as the asking prices in the market are starting to gather momentum after four consecutive years of flat-lining or decline”.

So far, the latest round of ABSD rate increases are the highest. Szeto believes the new 25 percent ABSD payable by corporate entities, including property developers, will cool developers’ interest in purchasing en bloc sites for redevelopment.

“In recent months, even before the implementation of the measures, Singapore-based developers have already been observed to be more selective with site selection, and more conservative with bid prices,” he added.

credits: propertyguru

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En Bloc Plans Push Through While Others Put On Hold Amid New Curbs

Posted by Singapore Property Launch on 12th July 2018 in Blog
Dalvey Court crop

Homeowners of Dalvey Court have been advised to extend the tender closing date in light of new cooling measures by the government

Homeowners eyeing to go on en bloc have put their plans on hold or went back to the drawing board to devise new strategies amid the uncertainties brought about by the fresh property cooling measures rolled out by the government.

Described by some analysts as “heavy-handed”, the measures are expected to dampen the en bloc market as land acquisition costs for developers increase – reducing the bullishness of tender bids, reported Channel NewsAsia.

Developers face a non-remissible five percent Additional Buyer’s Stamp Duty (ABSD) when they acquire en bloc properties for redevelopment under the new property curbs.

Aside from this, residential developers also have to contend with a 15 percent to 25 percent increase in remissible ABSD, which can only be waived once all units in the new project are sold within five years from purchasing the site.

“Homeowners are definitely very concerned; one of the first comments I heard was ‘It’s game over’,” said Cushman & Wakefield capital markets director Christina Sim.

With this, her company plans to advise the sales committee for Dalvey Court condominium to have the tender closing date extended by one month. With a price tag of $160 million, the freehold property’s tender is set to end on 2 August.

JLL also plans to suggest a one-month extension in the tender closing period for Horizon Tower, which carries a reserve price of $1.1 billion.

Since developers need more time to digest the new measures, JLL capital markets regional director Tan Hong Boon said it is “prudent for us to advise the owners to extend the tender closing period to ensure sufficient time is given for the developers’ assessments of the market and the site”.

The plan to go en bloc this week for Waterloo Apartments, on the other hand, was shelved, said Cushman & Wakefield’s Sim.

“We were thinking if we should wait for authorities to get back to us on our outline planning permission (OPP) for the site to be zoned for hotel use, or launch it as a residential site as soon as possible,” she said. “I think now, we will most likely wait.”

Meanwhile, some homeowners decided to push through with their plans.

Fortune Park, for instance, will be going ahead with its en bloc attempt on Thursday (12 July), with a reserve price of $126 million.

“We have no plans to hold back the launch or change our tender period,” said Huttons Asia investment sales head Terence Lian.

In fact, the agency will be keeping the tender periods for Blossom Mansions and Jansen Mansion, which are due to end on 31 July and 2 August respectively.

“While we received a lot of enquiries about how these cooling measures will impact the ongoing collective sales, we are not that worried because we think the measures will not affect small- and medium-sized projects,” explained Lian.

“The number of units that a small site can be redeveloped into will be comparatively lesser than a mega site. So even if developers have to pay the additional five percent ABSD, they may be spared the 25 percent penalty since they have a higher chance of clearing the units within five years,” he added.

Fortune Park is a freehold condominium in Kovan with 68 units. Blossom Mansions and Jansen Mansions, are much smaller, with 20 and 12 units respectively.

credits: propertyguru

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No Rationale For New Property Cooling Measures, Says REDAS

Posted by Singapore Property Launch on 10th July 2018 in Blog
No rationale for new property cooling measures, says REDAS

The Real Estate Developers’ Association of Singapore (REDAS) sees no rationale in imposing new property cooling measures considering that the Singapore property market is still in the “early stages of a recovery and the recovery is in line with economic fundamentals”, reported Channel News Asia.

Among the new curbs imposed by the government are a five percentage point increase in Additional Buyer’s Stamp Duty (ABSD) rates for Singapore citizens and permanent residents (PRs) purchasing their second homes and a five percentage point tightening for loan-to-value (LTV) limits for all residential property loans granted by financial institutions.

REDAS noted that Singapore’s property market began to see improved sentiments last year, on the back of brighter economic forecasts. The Singapore economy grew 3.5 percent by end-2017 and 4.4 percent during the first quarter of 2018.

Nonetheless, the sale transaction volume is not high and remained within market expectation given that the property market had been in the doldrums since 2013, it said.

This comes as buyers remained price-sensitive as the existing sizable ABSD (Additional Buyer’s Stamp Duty) and TDSR (Total Debt Servicing Ratio) continued to restrain foreign buyers and Singaporeans.

With this, the industry body feels that the property market “should be allowed time to find its own course and reach a sustained equilibrium”.

REDAS does not also see the need to impose additional measures on developers.

“As is, in the purchase of sites from the GLS (Government Land Sales) programme or private collective sites to replenish their land bank to keep operations going, developers are constrained by a confluence of financial considerations as well as tough and unfriendly business policies including the existing ABSD on developers and the Qualifying Certificate (QC) punitive conditions on majority of developers (who are deemed foreign companies),” it said.

“It is in the interest of the country to have a vibrant real estate industry and a steady growth in real estate value for home owners and investors in the long term.”

credits: propertyguru

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Hong Leong Acquires Hillview Rise Site For $460m

Posted by Singapore Property Launch on 8th July 2018 in Blog
Hong Leong acquires Hillview Rise site for $460m

Aerial view of the residential site at Hillview Rise. (Photo: URA)

A 153,881.94 sq ft private residential site in Hillview Rise that can yield about 535 homes was awarded by the Urban Redevelopment Authority (URA) on Tuesday (3 July) to Hong Leong Holdings for $460 million.

The top bid translates to about $1,044.38 psf based on the 99-year leasehold plot’s gross floor area of approximately 430,879.33 sq ft. It was submitted by Hong Leong subsidiaries Intrepid Investments and Garden Estates.

“We are pleased to be awarded the site at Hillview Rise under the Concept and Price Revenue tender system. This award recognises our experience and readiness to adopt and use innovative construction technologies and methods to achieve high construction productivity and quality outcomes for our projects,” said Hong Leong’s general manager for projects Loke Kee Yeu.

Under this tender system, bidders submit two envelopes. The ones containing the concept proposals will be opened first, followed by the envelopes containing bid prices. But only those with qualifying concept proposals will be considered, with the site going to the highest bidder.

The proposals were evaluated based on the bidder’s construction productivity plan (75 percent), construction management plan (15 percent) and track record (10 percent). The criteria required developers to use the most advanced building methods.

In fact, Hong Leong proposed to extensively adopt Prefabricated Prefinished Volumetric Construction (PPVC), and use Mass Engineered Timber (MET) for the project’s clubhouse. Aside from leveraging on BIM-based scheduling as well as QR code tracking, the developer will also utilise Virtual Design and Construction (VDC).

Overall, the Hillview Rise site was hotly contested thanks to its good attributes, with a consortium consisting of Areca Realty and CDL Constellation submitting the second highest bid of $405.889 million for the 99-year leasehold plot.

“The land parcel is very attractive, as it is close to retail amenities and is within walking distance to the MRT station. Better yet, it has the flavour of a very exclusive and private neighbourhood.  While an increase in supply is expected to come onstream, it is still of limited availability as compared to other areas,” said Knight Frank Singapore’s research head Dr Lee Nai Jia.

“With the successful bid of the site, it is likely we will witness more of such two-envelope bidding for upcoming Government Land Sales (GLS) sites,” he added.

credits: propertyguru

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Horizon Towers Up For En Bloc Sale For $1.1b

Posted by Singapore Property Launch on 6th July 2018 in Blog
Horizon Towers en bloc crop

The reserve price works out to a land rate of $1,964 psf per plot ratio. (Photo: JLL)

Horizon Towers, a 211-unit residential development at Leonie Hill in District 9, has been launched for collective sale with a reserve price of $1.1 billion.

Including the lease top-up premium of about $220 million, the price works out to a unit land rate of about $1,964 psf per plot ratio (psf ppr), revealed marketing agent JLL.

Since there is no development charge or differential premium for site intensification “even for the 10 percent bonus gross floor area due to a high development baseline, the reflected unit land rate is $1,786 psf ppr”, it said.

JLL noted that Horizon Tower’s unit land rate compares favourably with the recent Government Land Sale site at Cuscaden Road, which was sold for $2,377 psf ppr, Park House en bloc sale site at $2,910 psf ppr, the Nassim Road site at $2,744 psf ppr; Pacific Mansions site at $1,987 psf ppr; as well as the Cairnhill Mansions and adjoining sites at $2,311 psf ppr and $2,132 psf ppr respectively.

Built in the late 1970s, the 211-unit development sits on a 1.9ha site, which is zoned residential under the 2014 Master Plan with a height limit of up to 36 storeys. The 99-year leasehold property has an “as-built” gross plot ratio of about 3.28 and may be redeveloped into a high-rise residential development.

It is located near the upcoming Great World MRT station, the Orchard MRT Interchange (Thomson-East Coast Line) as well as Ngee Ann City and Kim Seng Park.

JLL capital markets regional director Tan Hong Boon expects the site to attract “very keen interest from large developers and consortiums…given its unparalleled attributes for a potential residential masterpiece at reasonable pricing”.

“Given the premier address, a sprawling ground in the Orchard Road neighbourhood and its high-rise attributes, it is compelling for a discerning developer and its architect to deliver a luxurious masterpiece with comprehensive amenities and facilities, complete with bespoke services for its future well-heeled residents,” he said.

The tender for Horizon Towers closes on 7 August.

credits: propertyguru

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Private Home Prices In Singapore Up 7.4% In First Half Of 2018: URA

Posted by Singapore Property Launch on 5th July 2018 in Blog
Singapore Condominiums

The property market continues to be driven by high demand from buyers, robust en bloc activity and confident land bids by developers, said PropertyGuru.

Private home prices in Singapore continued to grow in Q2 2018 with a 3.4 percent increase from the previous quarter, according to flash estimates of the Urban Redevelopment Authority’s price index released on Monday (2 July).

“This is the fourth consecutive quarter of increase in the URA Property Price Index since Q3 2017 and following the 3.9 percent increase in Q1 2018,” said Eugene Lim, key executive officer at ERA Realty.

He also noted that private home prices increased by an estimated 7.4 percent in the first half of 2018.

URA data shows that all segments of the market registered positive price changes in Q2, with the Core Central Region witnessing a 1.4 percent increase, the Rest of Central Region (5.7 percent) and the Outside Central Region (2.9 percent).

PropertyGuru’s chief business officer Lewis Ng said this is line with the latest PropertyGuru Property Index, which saw asking prices rise for the fourth straight quarter, by 3.4 percent to 102.6.

“The property market continues to be driven by high demand from buyers, robust en bloc activity and confident land bids by developers,” he said.

With market sentiment still very positive, ERA’s Lim believes the continued increase in prices “signals that the market is on an upswing trend”.

He said more buyers “are buying now for fear of further price increases going forward”, while sellers have taken this opportunity to revise their asking prices upwards.

Average prices at Park Place Residences at Paya Lebar Quarter, for instance, now stand at $2,022 psf, up 12 percent from $1,806 psf during last year’s Phase 1 launch.

Twin Vew at West Coast Vale was launched at $1,399 psf, 19 percent higher than the $1,176 psf launch price of next door’s Parc Riviera in 2016. Meanwhile, Margaret Ville in Queenstown was launched at $1,887 psf, up 16 percent from the launch price of the nearby Queens Peak at $1,632 psf last year.

Buoyed by en bloc sellers in search of replacement homes and the relatively lower prices compared to new launches, the resale market was also very active during the second quarter, said Lim.

In fact, there were 3,879 caveats lodged for resale and subsale transactions from April to 22 June. The figure is already higher than the 3,828 resale transactions in Q2 last year.

Despite this, the government has maintained all the property cooling measures – except for the shorter holding period of three years for the Seller’s Stamp Duty and the strict property financing rules.

Committed to maintaining a sustainable housing market, the government has shown “that it will intervene if necessary to cool the market, and the possibility remains that it may do so in the future; should price increases be excessive and we see the onset of property speculation”.

While uncertainty in the stock market, rising interest rates and the possibility of a trade war between the US and China may slow down the recovery of the property market, Lim still expects to see an overall price increase of 10 to 12 percent this year.

PropertyGuru’s Ng also predicts further rises in property prices in 2018. But he cautioned that there are potential market risks, including rising interest rates and an elevated vacancy rate. “As such, buyers need to be careful not to overstretch their finances,” he said.

credits: propertyguru