RESIDENTIAL MARKET
Singapore offers a glimpse of its future
A couple of days after projecting that the population could rise to upto 6.9 million by 2030, the government yesterday revealed how they might be accommodated without Singapore feeling the squeeze.
Reclamation alone will raise the land area by up to 5,200 hectares or 7.3 per cent - much of it in Tuas Port, Pulau Tekong and Jurong Island. Some of the existing 10,000 ha stock of reserve land will be tapped. Old industrial areas and some golf courses will be recycled to achieve higher land productivity. Infrastructure permitting, land use can be intensified.
Singapore's current population of about 5.3 million live on 71,400 ha of land. By 2030, some 76,600 ha could be available.
Analysts have already started debating the impact that this Land Use Plan would have on the property market. The government highlighted that the pace at which land will be rolled out may depend on market conditions.
National Development Minister Khaw Boon Wan said: "As planners, our mantra is . . . 'Prepare for the worst but hope for the best'. . . .The figure 6.9 looks aggressive. But from planners' point of view, we need aggressive figures and projections so that we can prepare for the worst. The worst is if we plan for the best then if the worst comes, then we will be under-providing, as what has happened in the last few years."
The proportion of Singapore's projected land area in 2030 that will be used for housing will be 17 per cent, up from around 14 per cent currently. Industry and commerce's share of Singapore's land supply too will rise from roughly 13 per cent to 17 per cent to power Singapore' economic growth.
The Marina Bay area can support the expansion of the Central Business District by at least another one million square metres gross floor area of prime office space. Currently, the Central Area which includes the CBD (which in turn includes Marina Bay) has six million sq m of prime office space. There will be capacity to increase the figure to more than 11 milion sq m by 2030 in the Central Area - if there is demand. Singapore will develop a "North Coast Innovation Corridor" spanning Woodlands Regional Centre, Sembawang, the future Seletar Regional Centre, and the learning corridor and creative cluster in Punggol.
To support the growth of the manufacturing sector, sufficient land will be set aside in Woodlands, Sengkang West, Seletar, Lorong Halus, Pasir Ris and Tuas. By 2030, Singapore will also develop more commercial centres outside the city, amounting to 13 million sq m to provide more employment and amenities close to where people live.
As part of the plans to boost the island's stock of homes by 700,000 units to 1.9 million by 2030 to support a rising population, the Republic is planning for new housing estates in the Central Region - at the former Bukit Turf Club, Kallang Riverside, the waterfront area around Keppel, and Bukit Brown.
In the longer term, a "Southern Waterfront City" with commercial and housing projects will be developed after the existing container port facilities in the City Terminals and Pasir Panjang Terminal are consolidated and relocated to 1,700 ha of reclaimed land in Tuas Port. This will be one of three major land reclamation sites, along with Pulau Tekong (2,000 ha) and Jurong Island (600 ha). Existing military training areas across the island will be moved to the expanded Pulau Tekong, freeing up land for other uses such as housing.
Increased connectivity is generally seen as a plus factor for property values.
Source: Business Times –1 February 2013
700,000 new homes by 2030: too many or too few?
More homes will be built in the central region, including the former Bukit Turf Club, Kallang Riverside, Bukit Brown, and the waterfront area around Keppel, as part of the government's long-term plan to roll out 700,000 new housing units by 2030.
Of these, almost 200,000 homes, comprising 90,000 private units including executive condominiums, and 110,000 public homes, are expected to be completed by 2016.
According to the Land Use Plan released yesterday, three new towns will be carved out: Bidadari which will have about 11,000 homes (both public and private housing), Tampines North which will have about 21,000 homes, and Tengah which will see about 55,000 homes.
Market watchers generally concurred that the areas highlighted in the plan should see land values increase over time.
About 87,000 new homes are expected from the three new towns created. Build-To-Order (BTO) projects can be expected in Bidadari and Tampines North in the next two to three years while BTO projects in Tengah are expected to come onstream in the next three to five years.
More housing estates are also being planned within the central region. The number of housing units released will depend on various considerations, including achieving a good mix of housing types. The sites will be staged for development by 2030 pending demand.
Separately, Minister for National Development Khaw Boon Wan stressed that prices of new flats sold by HDB are not linked to the resale flat market, adding that BTO prices across HDB's new launches in the past 18 months have been stable even as prices of resale flats have been climbing steadily.
Source: Business Times –1 February 2013
BTO prices not pegged to resale flats
National Development Minister Khaw Boon Wan yesterday made clear he has delinked prices of the Housing Board's Build-to-Order (BTO) flats from resale flat prices to keep new flats affordable, especially to first-timers.
This new pricing policy has been in place since he took over the housing portfolio after the 2011 General Election, he told journalists.
"Although the resale market is going up, I've stabilised BTO prices, by increasing the government subsidy," he said in Mandarin, to back up his assurance that public housing will remain abundant and affordable even with population projections of 6.9 million by 2030.
Mr Khaw also said he has directed HDB to continue with this new pricing policy for as long as "property remains hot".
His remarks confirm what property analysts have suspected for the past 18 months - that the Government has increased its subsidy for new flats.
That is how it has kept BTO prices across HDB's flat launches largely stable, despite the resale price index rising 12.5 per cent since the second quarter of 2011.
Traditionally, new flats are priced at a discount to resale flats in the same area.
HDB's home ownership programme incurs an annual deficit of about a billion dollars due to this practice, a shortfall that the Government covers.
But before this new policy, prices of new flats were still pegged to those of resale flats and rose on the same trajectory. If not, the shortfall that the Government would have to plug would grow indefinitely.
In the current financing framework, the Ministry of National Development (MND) has to buy from the Singapore Land Authority (SLA) the land on which HDB flats are built. Each plot is valued according to several factors, including the price of resale flats in the vicinity. So as the resale flat market rises, so too does the value of the land and what MND has to pay for it.
The money that SLA collects from the land sale is considered part of national reserves.
ERA realtor Eugene Lim called Mr Khaw's promise a step in the right direction for its assurance to home buyers.
But flat buyers should not expect HDB to price units "haphazardly" in defiance of the market, he said.
"The prices of BTO flats in mature estates could very well be 40 per cent more than those in outlying, suburban areas."
Source: The Straits Times –1 February 2013
Three new towns to offer about 90,000 homes
Three new towns will provide some 90,000 homes in the next few years while other sites such as Keppel and Bukit Brown could also be developed in future.
The new estates - Bidadari, Tampines North and Tengah - will offer both private and public housing, according to the Ministry of National Development's Land Use Plan, which was unveiled yesterday.
The Government has committed to a supply of 700,000 new homes by 2030 to house a bigger population.
Bidadari, a former cemetery whose graves were exhumed in 2001, will offer 11,000 units over the next three years.
Concurrently, Tampines North, which now has many open spaces, will also be further developed to yield 21,000 homes.
Tengah, in the west, is now being used as a training ground by the military but some parts will make way for 55,000 homes in about three to five years' time.
Houses could also be built in areas such as the former Bukit Turf Club, Kallang Riverside, Keppel and Bukit Brown to allow more people to live closer to their workplace. This would reduce commuting time and traffic jams, said a ministry spokesman.
She added that these areas could be developed by 2030 but this will depend on demand.
According to the plan, more homes will also be built on vacant land in existing estates.
Eco-town Punggol will become one of the largest HDB towns with 96,000 homes.
In an interview at the HDB Hub yesterday, National Development Minister Khaw Boon Wan said much planning has gone into ensuring that the amenities and design features in the new sites are attractive to home buyers.
For instance, parts of Bidadari's undulating terrain and existing greenery will be retained while Tengah, with its largely un- changed landscape, could be a test bed for new designs.
Of the new towns, property analysts expect high demand for homes in Tampines North and Bidadari.
Tampines North is part of Tampines, which is already well-developed, while Bidadari is only a 15-minute drive to the city.
Said ERA Realty spokesman Eugene Lim: "People have seen how a former cemetery like Bishan has been converted into a bustling town. They might expect the same for Bidadari."
As for the new areas, Mr Lim said Keppel and Kallang Riverside would likely have high-rise buildings while Bukit Brown and the former Bukit Turf Club could support a lower-density housing model.
"There will be something to cater to all needs," he added.
Source: The Straits Times –1 February 2013
Tampines North may pip Tengah in attractiveness
Tampines North and Tengah are slated to be bustling new towns in the coming years, though analysts say the latter could be a harder sell because of its location and current condition.
The two estates are part of the Land Use Plan released this week, to chart out the infrastructure needed to house a projected population of 6.9 million by 2030.
Tampines North, which is near the furniture store Ikea and Giant hypermarket, has a large expanse of open space measuring some 240ha.
It is bounded by Tampines Avenue 10 and Tampines Avenue 9. Over the next three years, the site is expected to offer about 21,000 homes.
Attracting residents to Tengah, a location currently dominated by forests, farmland and military areas, would be a bigger challenge.
Located in the west and bounded by Choa Chu Kang, Bukit Batok and Jurong West, the 700ha site is expected to host 55,000 homes in about three to five years.
But there is potential.
National Development Minister Khaw Boon Wan has said previously that Tengah's wide spaces will give planners "maximum opportunity to plan even better, such as new layouts and new building forms".
Source: The Straits Times –2 February 2013
Island south of Sentosa zoned for housing
In more than two decades, some residents could call Pulau Seringat - a tiny island south of Sentosa - home.
The island, reported as a potential site for a casino resort six years ago, has been zoned for residential use under the Ministry of National Development's (MND) Land Use Plan announced on Thursday.
The six southern islands - Kusu, St John's, the Sisters' Islands, Kias, Lazarus and Seringat - were reportedly set to be clustered into one of the two casino resorts, which were eventually sited at Marina Bay and Sentosa.
Pulau Seringat bore marks of progress when The Straits Times visited yesterday afternoon, with paved roads, covered shelters and a visitors' centre greeting boats docking at a small jetty.
It is open to the public and the island's crown jewel is a sparkling crescent-shaped beach with clear greenish-blue water.
But some parts are still rustic: beachgoers trek through a sandy dirt path to the beach, and the bulk of the island teems with overgrown greenery.
It was a desolate sight at the visitors' centre, with locked toilets, an empty VIP room, and no staff present.
All that is set to change if bulldozers take to the island, which is linked by a bridge to neighbouring St John's Island.
The islands have gas, water, electricity and telecommunication lines from Sentosa.
Visitors take the ferry, which runs between Marina South Pier, St John's Island and Kusu Island, or charter a private boat to reach the island.
It is a spot popular among swimmers and couples who like the rustic scenery for their wedding pictures, said boat captain Junrey Millan, 33. He runs about four trips daily to the island, and brings in maintenance staff twice a week, so that they can clear litter and trim the grass.
Asked about its plans for the area, the MND said that there were no further development plans for Pulau Seringat at this time, and the southern islands would be retained for recreational uses.
Source: The Straits Times –2 February 2013
More home owners 'decoupling' property to avoid hefty duty
Home owners are finding ways to reduce the amount they have to pay after hefty stamp duty increases were introduced two weeks ago.
One way is for families - say a husband and wife, or a parent and child - who bought a house together to transfer one partner's share to the other person.
This creates a sole owner and leaves the other half of the pair free to buy another home without having to pay the additional buyer's stamp duty (ABSD), as that purchase will be seen as his first.
The saving can be substantial. A Singaporean buying a second home will have to pay a 7 per cent ABSD, while permanent residents (PRs) pay 10 per cent.
KhattarWong managing partner Gurbachan Singh told The Straits Times that he has seen more cases where couples "decouple" their property.
The firm has fielded about 10 queries over the past fortnight, and is already acting in two or three decoupling cases.
"It's no longer co-ownership or part ownership. They want to transfer everything to one party so that the other party can buy without the burden of the ABSD.
"Although the Government says this is temporary, we don't know when it's going to be lifted, therefore given that uncertainty... people are taking pre-emptive action," he added.
But the transferring of a half share to one of the co-owners is still subject to the standard stamp duty rate of 3 per cent, as it is considered a transaction, Mr Singh noted.
KhattarWong is also taking more appeals to the taxman over the revised ABSD rates.
One aspect has to do with a will that bequeaths a property with apparent instruction for sale, so that the beneficiary receives the sale proceeds of a property rather than the property itself.
This could entail the executor of the will selling the property and distributing the proceeds to those named in the will. No tax is payable on the distribution of sale proceeds to the beneficiary.
If, however, instead of selling the property, the executor transfers the property to the beneficiary, the Inland Revenue Authority of Singapore's (Iras) position is that stamp duty - and in turn ABSD, if applicable - should be paid, Mr Singh said.
Take a Singaporean who owns a private home, and is then left the proceeds of a property by his deceased parent.
If he opts to keep this property instead of allowing it to be sold as stated in the will, he will have to stump up 10 per cent in stamp duty based on a market valuation. This includes the standard 3 per cent and the additional 7 per cent, as it is a second home.
A PR in the same position has to pay the standard 3 per cent plus the additional 10 per cent.
If the son then sells the inherited apartment within four years, he will also be subject to the seller's stamp duty (SSD) of up to 16 per cent.
"We don't think (having ABSD or SSD levied on such inheritances) is correct, we presently have two instructions to object and to appeal against (Iras') position," Mr Singh said. "If the response from Iras is not satisfactory, we may take a court ruling for it."
Lawyers note that if the will had instructed for the physical property be handed down to the son, no stamp duty applies, thus this same rule should be applied even in these alternative cases.
Mr Singh said the new stamp duty laws are the "most radical" since 1973, when the Residential Property Act was introduced, which prevented foreigners from buying landed homes. "If you look at the ABSD, we seem to give regard to your citizenship status, and I suppose the message is that the Government's interest is to look after Singaporeans first."
Source: The Straits Times –2 February 2013
CapitaLand cuts prices at Alexandra condo
Capitaland has slashed prices at another of its residential projects, this time The Interlace in Alexandra Road.
The Straits Times understands that the developer will offer an additional price discount of 10 per cent of its list price for sales starting from today.
This brings the total discount to 20 per cent, as the company had already been offering a 10 per cent discount previously.
Of the 302 units left unsold at the mega 1,040-unit project as of the end of last year, most are three-bedroom, three-plus-study and four-bedroom apartments.
Prices for typical three-bedroom units of between 1,593 sq ft and 1,905 sq ft, for instance, are now expected to range from about $1.9 million to $2.3 million - or between about $1,100 per sq ft (psf) and $1,300 psf.
The prices for such units were about $2.1 million to $2.5 million before the additional discount.
Designed by renowned German architect Ole Scheeren, The Interlace was launched for sale in 2009 on the site of the former Gillman Heights.
Earlier last month, CapitaLand also offered discounts of up to 15 per cent for the mega 1,715-unit d'Leedon in the former Farrer Court estate. It has seen only moderate sales since its 2010 launch.
It has sold 142 units since the discount was introduced on Jan 19, with total sales at the project said to have hit about 1,000 units now.
When asked if the discounts were introduced because of the cooling measures, a CapitaLand spokesman said: "It is quite common for us to run promotional programmes every now and then for certain units within a development to incentivise buyers."
Experts say CapitaLand offered price cuts mainly for its mega projects of more than 1,000 units to move unsold stock.
The Interlace, for instance, is also expected to be completed this year, and the company might be trying to avoid the cost of holding completed but unsold units.
The land cost for the project is also low, which gives the developer a sufficient buffer to lower prices, the experts add.
Other developers have been deploying similar tactics - slashing prices and offering other sweeteners - in response to the new rules unveiled on Jan 11.
Far East Organization, for example, is offering discounts of up to 4 per cent for some its residential projects such as eCO in Bedok and Seastrand in Pasir Ris.
Frasers Centrepoint also threw in a discount of 5 per cent to 7 per cent for its recent launch Q Bay at Tampines - the first residential project pushed out after the measures - to cushion the impact of the additional buyer's stamp duty.
Source: The Straits Times –2 February 2013
Changi properties ready for take-off
The Changi neighbourhood may adjoin one of the region's busiest airports, but it has long slipped under the radar of property investors - certainly when compared with the nearby mature townships of Tampines and Simei.
Still, the low-key district has witnessed a quiet warming of its non-residential property market with rents and prices registering a slight increase in the past year.
The area is dominated by industrial facilities and business park space, such as Sim Siang Choon Building and Changi Business Park, housing UE BizHub East and Honeywell Building.
While the district does have retail spaces, they are mainly limited to three areas: shopping mall Changi City Point, Changi Airport and Singapore Expo.
Property investors looking to buy industrial units here will find that prices have risen considerably in recent times.
Data from analysts point to the i-Lofts@Changi project as the major source of strata-titled units up for sale. The project is a 30-year leasehold development at Changi North Street 1 and contains 36 units.
Transaction prices have risen, with units fetching an average price of $266 per sq ft in 2012, up 21 per cent from the average $219 psf price in 2011.
Rents have also been on the rise. In the final three months of 2012, median rents of warehouse space in the Changi area stood at $1.80 psf per month, about 6 per cent higher than a year earlier.
While the property market in the area is still far from buzzing, newer developments are expected to whip up more excitement.
UE BizHub East is located at the heart of the Changi Business Park, a business hub in the east.
The development, which has been completed, houses a business hotel with up to 300 rooms as well as office and retail space.
Firms such as Cisco Systems and British Telecom have signed on to lease space within the BizHub development. Just a stone's throw away, several other big-name firms have inked leases at One@Changi City, including Credit Suisse and IT firm EMC.
One@Changi City consists of business park space, the Changi City Point mall and a boutique hotel residence, Capri by Fraser.
These two developments, plus the upcoming Singapore University of Technology and Design campus in Changi South, will no doubt supplement the modest 16,500 residents living in Changi, thereby boosting shopping traffic in the area as well.
But whether Changi will reach its full potential remains uncertain, experts say.
Source: The Straits Times –2 February 2013
Insiders of Alexandra developer took 11 units
Executive directors of Alexandra Central's developer Chip Eng Seng bought retail units at the project before its launch two weeks ago.
Some directors and their family members bought 11 units in all at the mixed development, Chip Eng Seng told the Singapore Exchange (SGX) on Thursday.
They spent about $16.7 million for the units, which were a mix of shops and restaurants.
The Straits Times understands that these units were selected by the executive directors before the Jan 21 official launch.
Chip Eng Seng told the SGX that the executive directors "enjoyed no more favourable purchase terms than were available to third-party buyers".
It added that its audit committee had reviewed the sale terms and decided that they were fair, reasonable and "not prejudicial to the interests of the company and its minority shareholders".
Buyers at the launch had to take part in a ballot due to overwhelming demand for the 99-year leasehold project. Out of the 116 units available, 114 were sold by the end of the day.
The executive directors paid around $7,200 per sq ft (psf) to $7,800 psf for units on the first floor and $5,400 psf to $5,500 psf for those on the second.
Units on the third floor were mostly sold to them at prices from $4,300 psf to $4,500 psf, with the exception of a small unit that went for $3,600 psf.
That unit was sold to two sisters of Chip Eng Seng group chief executive Raymond Chia's. The sisters are not on the board.
The price range roughly fits the $4,000 psf to $8,000 psf range indicated by a spokesman from Chip Eng Seng unit CEL Development on the launch day.
The executive directors who bought units at Alexandra Central, which is next to furniture retailer Ikea on Alexandra Road, were Mr Lim Tiam Seng, Mr Lim Tiang Chuan and Madam Dawn Lim Sock Kiang.These three abstained from the board's review and approval process for the sale, Chip Eng Seng said.
Mr Lim Tiam Seng is executive chairman of Chip Eng Seng. He spent nearly $5.5 million on two third-floor units, in joint purchases with his wife and son.
Mr Lim Tiang Chuan, who is deputy executive chairman and Mr Lim Tiam Seng's brother, bought one $1.7 million restaurant unit on the second floor with his wife.
Madam Lim, who is Mr Lim Tiam Seng's daughter, spent almost $3.3 million in total on three small shop units on the first floor with her husband.
Other members of the Lim family not on the Chip Eng Seng board also bought units.
Madam Lim Sock Joo, Madam Dawn Lim's sister, bought a $2.3 million restaurant space on the first floor, and a small shop on the third floor for $694,000.
Mr Lim Tian Moh, a director of a Chip Eng Seng unit, bought two shops on the first and second storey for $2.6 million in all.
Meanwhile, some buyers of Alexandra Central are already trying to make a quick buck by flipping their units, according to media reports.
At least 19 retail units sold at the launch appeared to be on the market again within six days, The Business Times said on Monday.
Source: The Straits Times –2 February 2013
INDUSTRIAL MARKET
Two JTC industrial sites put up for tender
JTC Corporation has launched two plots of industrial land at Buroh Crescent and Tuas Bay Walk for sale by public tender.
The two plots are the first to be launched out of the 13 sites in the confirmed list under the Industrial Government Land Sales (IGLS) programme for the first half of 2013, JTC said yesterday.
The land parcel at Buroh Crescent has an area of 1.77 hectares (ha) and is zoned for Business 2 use. It has a 30-year lease and a maximum permissible gross plot ratio of 2.5.
The 0.58-ha site at Tuas Bay Walk is also zoned for Business 2 food development. It has a 30-year lease and a maximum permissible gross plot ratio of 1.7.
Earlier this month, JTC awarded a nearby site on Buroh street to a joint venture between Capital Development and ZACD Investments for $82.1 million, or $111.35 psf ppr. This site is bigger at 2.74 hectares.
Tenders for two other nearby sites at Tuas South, also launched by JTC, will close earlier this month, which may put another dampener on bids for this new Tuas Bay Walk site, he added.
Both tenders will close on March 14 at 11am.
Source: Business Times –1 February 2013