Residential

More developers offer discounts in light of ABSD

Far East Organisation is offering additional discounts of up to 4% on projects such as The Seawind at Telok Kurau, SeaHill at West Coast Link and euHabitat at Jalan Eunos; CapitaLand is said to have increased its discounts to 10-15% at 1,715-unit d’Leedon, a luxury condominium at Farrer Road. These are to offset the effects of the increased ABSD rates though such high discount rates will probably be seen only in Q1 2013.

(Source: Business Times)

Chee Hoon Ave GCB bungalow plot up for sale

The 15,184 sq ft plot at 8 Chee Hoon Avenue has been put up for sale by auction. The site with a 37-metre frontage and proximity to Botanic Gardens, Cluny Court and Serene Centre as well as schools such Anglo-Chinese School, Nanyang Primary and Raffles Girls’ Primary can potentially fetch over $23 million. The auction will be held on Feb 27.

(Source: Business Times)

Proportion of foreign purchase to fall in H1

With the increase in ABSD rates in the latest cooling measures, the proportion non-PR foreign purchase of private homes may fall to 3-5% in H1 from 6.3% in 2012, which had in turn, fell from 17.6% in 2011 following the introduction of the ABSD in December 2011. While the proportion of PR purchase of private homes have increased from 13.4% in 2011 to 15.8% in 2012, this may change since a 5% ABSD have been extended to first-time PR buyers, leading to a fall to 5-12% share. This is especially since PRs who own HDB flats now have to sell their flats after purchasing a private home.

In 2012, Singaporeans, PRs and non PRs purchased a total of 24,815, 5,086 and 2,038 private homes respectively, reflecting a 17.7% increase, 20.6% increase and a 63.2% fall respectively. The top three foreign buyers (including PRs) of private homes in 2012 are the Malaysians (accounting for 26.1%), mainland Chinese (22%) and Indonesians (19.4%). As a result of the ABSD, the OCR (where mass market homes are located) accounted for 55% of the 7,124 private homes bought by foreigners in 2012, compared to 49% in 2011. It is likely to increase to 60% this year since the ABSD rates have increased. The OCR proportion of private homes purchased by Singaporeans is also likely to increase to 56% from 51% in 2013.

(Source: Business Times)

Two-year deadline for projects with foreign ownerships stays

The rule that all units in projects with any foreign ownership must be sold within two years of the project receiving its TOP will stay despite developers’ appeal for extension of the deadline. Projects that failed to do so face extension charges based on the proportion of unsold units, of 8%, 16%, and 24% of the property purchase price for the first, second and third extra years respectively. However, projects such as those under SC Global Development may be exempt from the extension charges since its chairman and chief executive Simon Cheong can now privatise the company.

The extension charges would be especially hard on the luxury property market, which has been seeing slow sales. Furthermore, the recent cooling measures had also included an increase in ABSD rates which will affect foreigners and investors, the main sources of demand for this segment of the market. Prices of luxury property market are expected to fall by 5-10% in 2013 as a result of this though some believe otherwise, citing the high liquidity.

(Source: Business Times)

Freehold 21 Anderson Royal Oak Residence up for sale at $250-260m

The 10-storey 34-unit development located in the Ardmore Park residential enclave is asking for $250-260 million. It has 85,552 sq ft of strata area on sits on a 49,048 sq ft site. Nearly 100% of the units are leased out. Features and amenities offered includes private lift lobbies, concierge services, a swimming pool, tennis courts, gymnasium, a BBQ area and a children’s playground. In addition to being located near Orchard Road, it is also near schools such as Raffles Girls’ School, Anglo-Chinese School and the Chinese International School. The expression of interest exercise will close at 3pm on Feb 28.

(Source: Business Times)

Yishun mixed site draws $212.1m top bid

The mixed commercial and residential development site at the corner of Yishun Ring Road and Yishun Avenue 9 attracted a total of 13 bids, with the top bid of $212.1 million or $794.44 psf from a unitof Chip Eng Seng Corporation. The developer could potentially sell the retail and residential components at 3,000-$4,000 psf and $900 psf respectively.

(Source: Business Times)

ABSD payable for companies buying properties via SPV

IRAS has recently stated that companies purchasing residential properties are subject to a 15% ABSD and that it will carry out audits of stamp duty transactions. This meant that buying shares in SPVs would not help in avoiding the ABSD.

(Source: Business Times)

OCR completed condos saw highest gains in Q4 2012

Prices of completed, non-landed private homes in the OCR saw a 5.6% increase in Q4 2012, compared to 2.4% for uncompleted homes in the OCR in the same period. Similarly, prices of completed homes in the CCR saw a 1.5% increase from Q3 to Q4, compared to a 0.4% fall for uncompleted homes. The RCR saw a 1% increase for both completed and uncompleted homes. This brought the prices of completed and uncompleted homes to an overall increase of 3.2% and 1.7% respectively. The overall private home price index which includes both landed and non-landed homes, completed and uncompleted, increased by 1.8% in Q4, bringing the full year increase to 2.8%.   Prices for completed homes in the OCR gained the most with an 8.8% increase, compared to the 4.4% increase in the prices of uncompleted homes in the OCR. This is attributed to the high prices in new launches leading to more demand for completed homes, which in turn drove the prices up.

Looking ahead, the transaction volume in the both the primary and secondary markets are expected to fall by 10-15%.

(Source: Business Times)

Prices of HDB resale flats likely to remain stable

Despite achieving a record breaking figure of 202.9 in Q4 2012 (a 2.5% increase from Q3 and 6.6% increase from 2011), HDB’s Resale Price Index is likely to remain stable in 2013, with an increase of 3-5% though some predicted a decline of no more than 3%. This is especially since the latest round of cooling measures includes an increase of ABSD rates, restrictions on the MSR, rules to ban PR from subletting their entire flat and requiring them to sell their flats after buying private homes; all of which would help control prices. These latest cooling measures would also cause a downward pressure on COVs, which may fall by 10-20% for bigger flats, which would in turn moderate resale prices. The overall median COV saw an 11.67% increase to $33,500 in Q4 2012, with the median COV increasing by 15.15% to $38,000 for five-room flats and 16.67% to $35,000 for four-room flats. These, coupled with the upcoming supply of at least 23,000 BTO flats in 2013, will help to control HDB resale prices. Meanwhile, resale transactions fell by 14% in Q4 to 5,631 from Q3’s 6,560, bringing the total for 2012 to 25,094, a 2% increase from 2011.

(Source: Business Times)

Commercial

Over 90% of 99-year Alexandra Central’s units sold

Alexandra Central, a 99-year leasehold hotel and retail development located at the junction of Alexandra Road and Jalan Bukit Merah has sold 114 of its 116 units ranging from 10-103 sq m (108-1,109 sq ft) at $7,000, $5,600 and $4,400-$4,800 for ground floor units and second- and third- floor units respectively. The hotel and retail development consists of a 13-storey hotel in addition to the retail space on three levels. Located near Ikea @ Alexandra, Queensway Shopping Centre and Anchorpoint Shopping Centre, its popularity is attributed to the diversion of investment from the residential property market as a result of the cooling measures and the scarcity of retail spaces on sale.

(Source: Business Times)

99-year leasehold SBF Center sees healthy interest

The development consists of 197 offices – 192 smaller strata units (592-1,442 sq ft) and five floor plate offices (10,549 sq ft) – and 48 medical suites (614-1,345 sq ft), which are marketed at $3,300-3,500 psf and $3,800-4,000 psf respectively. The office space, in particular the floor plate offices, has seen much interest. Strata office spaces are expected to be popular, with a potential price increase of 10% in 2013. Prices of retail space, however, may remain stagnant. Commercial properties are also likely to be more popular than industrial properties though completed industrial properties with tenants may continue to see interests, especially from long-term investors.

(Source: Business Times)

Office leasing to fall; more demand for small units

Office space leasing activity is expected to fall in the next six months, and driven mainly by demand for smaller units (1,000-5,000 sq ft) as the financial sector, which previously demand large space, are demanding less of such spaces as a result of banks shifting back office operations to suburban regions and the economic slowdown. Rents in the CBD are also expected to fall by 0.5% in Q1 from Q2. Serviced offices, however, are likely to continue seeing strong demand since they are cheaper, being fully fitted and offers monthly renewals rather than two-year tenures.

(Source: Business Times)

Govt will introduce cooling measures in commercial sector if necessary

URA has stated that it would introduce cooling measures in the commercial property sector to moderate investment demand if necessary. This is especially investors had been increasingly diverting their attention to the commercial sector following cooling measures in the residential sector and recently, the industrial sector. Recent projects such as the yet-to-be launched SBF Center on Robinson Road have already seen much interest while the 99-year leasehold hotel-cum-retail development, Alexandra Central, had sold 114 of its 116 strata retail units. However, commercial property such as strata officeit only generates yields of 2-4%, unlike the 8-10% of industrial property. In addition, URA also stated that it would work to ensure that small units do not constitute an overly large proportion of a development.

(Source: Business Times)

Q4 property figures reflects speculation

The primary market of private homes saw 22,197 units in sales volume, compared to the 12,811 units in the secondary market. This reflects speculation since investors prefer purchasing new homes with progressive payments while waiting out the four-year period covered by the SSD. Likewise, the large gap between prices and rents of various properties also suggests that there is speculative demand. Prices of office and shop spaces gained 1.4% and 2% respectively, accompanied by a 1.3% and 0.3% fall in rents. Similarly, the overall private home price index saw an increase of 2.8% with a 2.1% increase in rents while the All Industrial price index increased by 25.8%with a 10.1% increase in rents.Strata factories, followed by shops, saw the highest number of subsale transactions (which are used to measure the level of speculation) in 2012. There were 189 subsale deals of strata factory units in 2012, compared to 70 in 2011, and 54 subsale deals involving shop units in 2012, compared to 11 the year before. Only three subsale deals involved offices.

(Source: Business Times)

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