01 Sep Singapore Property News: 16th to 31st August 2015
Property Market Activities
Conversion to serviced apartments a costly affair for Newfort Realty (BT, 27 August 2015)
Daunted by the abysmal residential market, the private firm held by five shareholders at the end of 2013 pulled the brakes on a planned 68-unit residential project at 18 Mount Elizabeth Road even though a development charge (DC) of S$3.9 million had already been incurred and the showflat was almost ready. By not following through its intention to develop the property as a residential project for sale, Newfort Realty no longer qualifies for the additional buyer’s stamp duty (ABSD) remission and hence incurred S$10 million for ABSD plus two years of interest (as the property was acquired in 2012). After subsequent appeals to obtain an approval for the conversion from the Urban Redevelopment Authority (URA), it has been committed to keep the freehold property as a serviced residence for at least 50 years. Such conversion of use has been undertaken by other developers before, private developer Far East Organisation converted one block of Orchard Scotts condo to serviced apartments after the project was completed in 2007.
Weak demand seen for two industrial sites put up for sale by JTC (ST, 26 August 2015)
Two sites zoned for heavier industrial use or Business 2 development at Tampines Industrial Drive (Plot 12) and Tanjong Penjuru were launched on Tuesday for sale by public tender, for which consultants are expecting to see weak demand due to their short 20-year tenures. One was a 0.47-hectare site at Tampines Industrial Drive (Plot 6) with 20-year tenure launched by JTC in June, with the top bid of S$4.94 million or S$69.21 per square foot per plot ratio (psf ppr) from Lim Wen Heng Construction Pte Ltd. The other site was a 0.6-hectare B1 land parcel at Ubi Avenue 1 with 30-year tenure launched by Housing & Development Board in June – BP-DC Pte Ltd’s bid of S$19.86 million or S$120.91 psf ppr emerged as top.
MCL Land sells 247 units at Sol Acres (BT, 24 August 2015)
MCL Land, a subsidiary of Hongkong Land, sold 247 units at its Sol Acres executive condominium in Choa Chu Kang Grove as at 5 pm on Sunday. MCL Land offered 707 of Sol Acres’ 1,327 units under the first phase of the marketing launch, at an average price of S$780 per square foot (psf). Three bedders account for the bulk – 330- of the 707 units released in the first phase of sale; there are 185 two-bedders, 100 one bedders, 71 four-bedders and 21 five-bedders. The absolute number of units sold in the launch weekend makes Sol Acres the best-selling EC project so far this year. Sol Acres is the biggest EC development to date and the first to have one-bedroom units, MCL said.
Mortgagee sales of larger homes on the rise (ST, 20 August 2015)
Larger homes are increasingly going up for mortgagee sale, amid higher interest rates and a slumping leasing market. The smaller pool of buyers for such prime properties and the tougher lending rules mean that strapped owners often have no choice but to let the bank step in and put the home up for sale. There were 99 homes put up for mortgagee sale in the first seven months of the year, well up from the 51 in the same period last year and 11 in 2013. Most of the landed properties put up for auction by lenders were on larger sites. Owners find it hard to find tenants for these units because of reduced housing budgets for expatriates, which then lead to difficulties in servicing their loans. Analyst expects the number of mortgagee sales to go up in tandem with the expected rise in interest rates and softening in rents.
Jump in property buyers from China, Malaysia in Q2 (ST, 19 August 2015)
Political and economic uncertainty back home is the likely reason behind the increase in the number of Malaysians and mainland Chinese who bought property here in the second quarter of this year. Analyst reported that Malaysians snapped up 248 private units, 53 percent more than in the first three months of the year, while 234 homes were bought by buyers from China, up 37 per cent. Buyers from Malaysia and China accounted for almost half of the 1,017 purchases made by non Singaporeans in the April-June period. This total was 60 per cent more than in the first quarter but below the 1,298 units sold to foreigners in the second quarter of last year.
New private home sales surge in July, thanks to Fernvale project (ST, 18 August 2015)
New private home sales spiked last month owing to a strong showing at one condo launch, but sales numbers are likely to be muted over the next few months. Developers sold 1,594 new private homes in July, more than four times the 375 homes sold in June. These were the highest sales posted since June 2013, when 1,806 new private homes were sold. July’s new launch, High Park Residences in Fernvale Road, was the star performer. It sold 1,169 units at a median price of $989 per sq ft. Most of the units sold are less than a million dollars each, with about 15 per cent under $500,000.
Khaw says his housing policies have little to do with the general election (BT, 25 August 2015)
To those who say the wide-ranging housing measures benefiting home buyers of different income groups are an election package, Minister of National Development Khaw Boon Wan says his housing policies have little to do with the general election (GE). Mr Khaw says he has focused on specific groups of people in turn; the latest measures target middle to higher-income groups, singles and home renters, now that the Build-To-Order (BTO) backlog for first-timer newly-weds has mostly been cleared. In response to whether the latest policy changes could result in negative consequences, Mr Khaw believes that the market would regulate itself and in any case, the government has levers to pull.
$20,000 grant to help families live closer together (ST, 25 August 2015)
All Singaporean families buying a Housing Board resale flat near or with their parents or married children will receive a new $20,000 grant, regardless of their income levels and whether they have received housing subsidies before. Eligible singles now get $10,000 if they buy a resale flat with their parents. Under the Proximity Housing Grant (PHG), resale buyers receiving a subsidy for the first time get $10,000 more than under the previous Higher-Tier CPF Housing Grant. Singles get $5,000 more than before. The Higher-Tier grant will be discontinued. The PHG is open to previously ineligible buyers, including owners of private property, though they must sell it within six months of buying the resale flat. Buyers can get the PHG only once. Grant recipients and their parents or married children must live near or with each other for at least five years afterwards.
National Day Rally 2015: Income ceilings up for buyers of new HDB flats, executive condos; grants increased (ST, 24 August 2015)
More Singaporean households will be eligible to buy new Housing Board (HDB) flats and executive condominiums (ECs) as income ceilings for both are being raised, Prime Minister Lee Hsien Loong announced in his National Day Rally speech. The household income ceiling will be raised from $10,000 to $12,000 for new HDB flats and $12,000 to $14,000 for ECs. For middle-income households buying a new flat for the first time, more will now qualify for the Special CPF Housing Grant (SHG). Eligibility for this grant will be raised from the current household income of $6,500 to $8,500, increasing beneficiaries of half to two-thirds of all households. Low- and middle-income households covered by the SHG will also get more, as the maximum grant goes up from $20,000 to $40,000. But this varies with income, with lower-income families receiving bigger grants.