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12-08-2011, 02:21 PM
House hunt
Article from Business Times
Published December 8, 2011
Developers fear impact of targeted stamp duty
Extra 10% duty for foreigners set to help cool prices for S'poreans
By KALPANA RASHIWALA
(SINGAPORE) The government yesterday announced significant steps that could bring private home prices back within the reach of Singaporeans. Developers, however, have called these steps, which are expected to hit sales and prices, untimely.
Starting today, foreigners and corporate entities buying private homes in Singapore will have to pay an extra 10 per cent by way of an additional buyer's stamp duty. This duty will also apply to permanent residents (PRs) buying their second or subsequent homes and Singaporeans buying their third residential property or more - though only to the tune of 3 per cent. Overseas properties are excluded from the count of properties owned.
The move is aimed at reining in private property prices, which some felt were slipping beyond the reach of many Singaporeans. Real Estate Developers Association of Singapore (Redas) said, however, that the measures are untimely given that the local economy is expected to slow down next year. 'Redas is disappointed in the lack of consultation on the latest measures. They came as a surprise as the current market outlook is uncertain. The good take-up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market.'
The government also boosted the supply of land for executive condos in H1 2012 as part of its land sales programme.
Though the additional buyer's stamp duty (ABSD) kicks in today, remission will be given for options granted on or before Dec 7 and exercised within three weeks (that is, on or before Dec 28) or the option validity period, whichever is earlier.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said: 'We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.'
A joint release from the Ministry of Finance and the Ministry of National Development yesterday evening said: 'A higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.'
It added: 'Excessive investment demand will . . . make the property cycle more volatile, and thus increase the risks to our economy and banking system.'
Foreign purchases accounted for 19 per cent of all private residential property purchases in H2 2011, up from 7 per cent in H1 2009, it noted.
Credo Real Estate's analysis showed that foreigners' presence is much stronger in the prime and mid-prime districts, where they accounted for nearly a quarter of caveats lodged in Q3 2011 - up from 16 per cent in 2010 and 13 per cent in 2009.
For the suburban mass- market segment (Outside Central Region), the proportion has also been rising, from 5 per cent in 2009 to 7 per cent in 2010 and nearly 15 per cent in Q3 2011.
'The suburban mass market is probably of greater concern as buyers of first private homes would feel threatened by increasing number of foreign purchasers,' said Credo executive director Ong Teck Hui.
DTZ's Southeast Asia chief operating officer Ong Choon Fah said the ABSD is not a blunt policy tool. 'They have made distinctions between foreigners and PRs and whether they are buying for owner occupation or investment. This is very carefully calibrated to strike a balance between the price that Singapore has to pay for being an open economy and ensuring property prices remain within the reach of Singaporeans.'
She reckons developers will take a wait-and-see attitude, evaluate their options and watch how buyers react.
'Prices should fall but activity has to drop significantly first before developers re-price their projects. The likelihood is that some may first take soft measures to mitigate the situation - such as absorbing the additional buyer's stamp duty or giving furnishing vouchers - before resorting to a price cut.'
Knight Frank chairman Tan Tiong Cheng too acknowledged that prices will soften. 'With so much supply coming into the market, developers will either have to revise their prices to move units, or absorb the additional buyer's stamp duty.' The latter will be tantamount to a price cut as far as a developer is concerned, note analysts.
'This set of measures will definitely help to cool prices. The concern has been that foreign buying is pushing up prices,' said Mr Tan. With the 10 per cent ABSD on foreign buyers, the long-awaited recovery in demand in the luxury sector will take even longer, he added.
Standard Chartered Bank said in a research note last night: 'We expect the policy to induce a 20 per cent decline in sales volume in Q1 2012. . . We continue to expect residential prices to fall 20-30 per cent next year.'
Article from Business Times
Published December 8, 2011
Developers fear impact of targeted stamp duty
Extra 10% duty for foreigners set to help cool prices for S'poreans
By KALPANA RASHIWALA
(SINGAPORE) The government yesterday announced significant steps that could bring private home prices back within the reach of Singaporeans. Developers, however, have called these steps, which are expected to hit sales and prices, untimely.
Starting today, foreigners and corporate entities buying private homes in Singapore will have to pay an extra 10 per cent by way of an additional buyer's stamp duty. This duty will also apply to permanent residents (PRs) buying their second or subsequent homes and Singaporeans buying their third residential property or more - though only to the tune of 3 per cent. Overseas properties are excluded from the count of properties owned.
The move is aimed at reining in private property prices, which some felt were slipping beyond the reach of many Singaporeans. Real Estate Developers Association of Singapore (Redas) said, however, that the measures are untimely given that the local economy is expected to slow down next year. 'Redas is disappointed in the lack of consultation on the latest measures. They came as a surprise as the current market outlook is uncertain. The good take-up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market.'
The government also boosted the supply of land for executive condos in H1 2012 as part of its land sales programme.
Though the additional buyer's stamp duty (ABSD) kicks in today, remission will be given for options granted on or before Dec 7 and exercised within three weeks (that is, on or before Dec 28) or the option validity period, whichever is earlier.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said: 'We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.'
A joint release from the Ministry of Finance and the Ministry of National Development yesterday evening said: 'A higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.'
It added: 'Excessive investment demand will . . . make the property cycle more volatile, and thus increase the risks to our economy and banking system.'
Foreign purchases accounted for 19 per cent of all private residential property purchases in H2 2011, up from 7 per cent in H1 2009, it noted.
Credo Real Estate's analysis showed that foreigners' presence is much stronger in the prime and mid-prime districts, where they accounted for nearly a quarter of caveats lodged in Q3 2011 - up from 16 per cent in 2010 and 13 per cent in 2009.
For the suburban mass- market segment (Outside Central Region), the proportion has also been rising, from 5 per cent in 2009 to 7 per cent in 2010 and nearly 15 per cent in Q3 2011.
'The suburban mass market is probably of greater concern as buyers of first private homes would feel threatened by increasing number of foreign purchasers,' said Credo executive director Ong Teck Hui.
DTZ's Southeast Asia chief operating officer Ong Choon Fah said the ABSD is not a blunt policy tool. 'They have made distinctions between foreigners and PRs and whether they are buying for owner occupation or investment. This is very carefully calibrated to strike a balance between the price that Singapore has to pay for being an open economy and ensuring property prices remain within the reach of Singaporeans.'
She reckons developers will take a wait-and-see attitude, evaluate their options and watch how buyers react.
'Prices should fall but activity has to drop significantly first before developers re-price their projects. The likelihood is that some may first take soft measures to mitigate the situation - such as absorbing the additional buyer's stamp duty or giving furnishing vouchers - before resorting to a price cut.'
Knight Frank chairman Tan Tiong Cheng too acknowledged that prices will soften. 'With so much supply coming into the market, developers will either have to revise their prices to move units, or absorb the additional buyer's stamp duty.' The latter will be tantamount to a price cut as far as a developer is concerned, note analysts.
'This set of measures will definitely help to cool prices. The concern has been that foreign buying is pushing up prices,' said Mr Tan. With the 10 per cent ABSD on foreign buyers, the long-awaited recovery in demand in the luxury sector will take even longer, he added.
Standard Chartered Bank said in a research note last night: 'We expect the policy to induce a 20 per cent decline in sales volume in Q1 2012. . . We continue to expect residential prices to fall 20-30 per cent next year.'
12-08-2011, 02:22 PM
Article from CNA
Additional buyer's stamp duty for private property from Dec 8
By Joanne Chan | Posted: 07 December 2011 2003 hrs
Landed property in Singapore
SINGAPORE: The government has imposed an Additional Buyer's Stamp Duty (ABSD) for private property of between 3 per cent and 10 per cent for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market.
The changes take effect on December 8.
Foreigners will pay 10 per cent Additional Buyer's Stamp Duty (ABSD) for any residential property.
Permanent Residents owning one and buying second and subsequent properties will pay 3 per cent ABSD.
Singaporeans owning two and buying a third and subsequent residential properties will pay 3 per cent Additional Buyer's Stamp Duty.
The ABSD will be imposed over and above the current Buyer's Stamp Duty, which are 1 per cent on the first $180,000 of purchase consideration or market value of the property (whichever is higher), 2 per cent on the next $180,000 and 3 per cent for the remainder.
In a joint statement on Wednesday, the Finance and National Development ministries say the government's objective is to promote a sustainable residential property market where prices move in line with economic fundamentals.
They said prices of private residential properties have continued to rise, albeit more slowly in the last two quarters.
Prices are now 13 per cent above the peak in the second quarter of 1996, and 16 per cent above the more recent peak in the second quarter of 2008.
They said that even with the current economic uncertainties, the demand for private residential property remains firm.
Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract local and foreign investors.
They added that excessive investment demand will make the property cycle more volatile, and thus increase the risks to Singapore's economy and banking system.
The government said the higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.
The government said foreign purchases account for 19 per cent of all private residential property purchases in the second half of 2011, up from 7 per cent in the first half of 2009.
For purchases made jointly by two or more parties (eg a Singaporean with a PR, or a PR with a foreigner), the higher applicable ABSD rate will be imposed.
For example, if a citizen purchases a property with a foreigner, the ABSD of 10 per cent will apply.
In the case of a joint purchase by Singaporeans, who each already owns properties, the ABSD of 3 per cent will apply as long as one of the purchasers already owns two properties.
Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam, said: "We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low.
"The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road."
Minister for National Development Khaw Boon Wan said: "We are ramping up the supply of new Executive Condominium units through the Government Land Sales Programme.
"This will help higher-income Singaporeans own private condominium units in an affordable way, as the sale of new EC units is restricted to Singaporean households only."
Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected by the new measure.
Certain reliefs will be provided so that the measure will not impact home occupation demand by residents.
For example, relief will be provided for Singaporean-foreigner/PR married couples buying their homes.
Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore's international trade agreements.
The government will continue to ensure an adequate supply of private housing to meet-medium term demand.
There are 41,000 unsold private housing units in the pipeline.
The government will inject sites that can potentially yield a total of 14,100 units in the 1H2012 Government Land Sales (GLS) Programme, similar to the supply in previous GLS programmes.
Of these, about 7,000 units will be from sites on the Confirmed List.
These numbers take into account the ample pipeline supply and the dampening effect of the ABSD.
The government will also expand the supply of executive condominiums (ECs) in 2012 and is prepared to release sites that can potentially yield 5,000 EC units for the entire year.
Sites for 3,500 EC units will be made available in 1H2012, including 3,000 EC units on the Confirmed List.
The Confirmed List quantum is comparable to the 3,000 EC units from five sites sold for the whole of 2011. More details will be provided in the press release for the 1H2012 GLS Programme on MND's website.
The Government will continue to monitor the property market and adjust our property policies in step with changes in the market and the economy.
- CNA/de
Additional buyer's stamp duty for private property from Dec 8
By Joanne Chan | Posted: 07 December 2011 2003 hrs
Landed property in Singapore
SINGAPORE: The government has imposed an Additional Buyer's Stamp Duty (ABSD) for private property of between 3 per cent and 10 per cent for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market.
The changes take effect on December 8.
Foreigners will pay 10 per cent Additional Buyer's Stamp Duty (ABSD) for any residential property.
Permanent Residents owning one and buying second and subsequent properties will pay 3 per cent ABSD.
Singaporeans owning two and buying a third and subsequent residential properties will pay 3 per cent Additional Buyer's Stamp Duty.
The ABSD will be imposed over and above the current Buyer's Stamp Duty, which are 1 per cent on the first $180,000 of purchase consideration or market value of the property (whichever is higher), 2 per cent on the next $180,000 and 3 per cent for the remainder.
In a joint statement on Wednesday, the Finance and National Development ministries say the government's objective is to promote a sustainable residential property market where prices move in line with economic fundamentals.
They said prices of private residential properties have continued to rise, albeit more slowly in the last two quarters.
Prices are now 13 per cent above the peak in the second quarter of 1996, and 16 per cent above the more recent peak in the second quarter of 2008.
They said that even with the current economic uncertainties, the demand for private residential property remains firm.
Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract local and foreign investors.
They added that excessive investment demand will make the property cycle more volatile, and thus increase the risks to Singapore's economy and banking system.
The government said the higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market.
The government said foreign purchases account for 19 per cent of all private residential property purchases in the second half of 2011, up from 7 per cent in the first half of 2009.
For purchases made jointly by two or more parties (eg a Singaporean with a PR, or a PR with a foreigner), the higher applicable ABSD rate will be imposed.
For example, if a citizen purchases a property with a foreigner, the ABSD of 10 per cent will apply.
In the case of a joint purchase by Singaporeans, who each already owns properties, the ABSD of 3 per cent will apply as long as one of the purchasers already owns two properties.
Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam, said: "We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low.
"The additional buyer's stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road."
Minister for National Development Khaw Boon Wan said: "We are ramping up the supply of new Executive Condominium units through the Government Land Sales Programme.
"This will help higher-income Singaporeans own private condominium units in an affordable way, as the sale of new EC units is restricted to Singaporean households only."
Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected by the new measure.
Certain reliefs will be provided so that the measure will not impact home occupation demand by residents.
For example, relief will be provided for Singaporean-foreigner/PR married couples buying their homes.
Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore's international trade agreements.
The government will continue to ensure an adequate supply of private housing to meet-medium term demand.
There are 41,000 unsold private housing units in the pipeline.
The government will inject sites that can potentially yield a total of 14,100 units in the 1H2012 Government Land Sales (GLS) Programme, similar to the supply in previous GLS programmes.
Of these, about 7,000 units will be from sites on the Confirmed List.
These numbers take into account the ample pipeline supply and the dampening effect of the ABSD.
The government will also expand the supply of executive condominiums (ECs) in 2012 and is prepared to release sites that can potentially yield 5,000 EC units for the entire year.
Sites for 3,500 EC units will be made available in 1H2012, including 3,000 EC units on the Confirmed List.
The Confirmed List quantum is comparable to the 3,000 EC units from five sites sold for the whole of 2011. More details will be provided in the press release for the 1H2012 GLS Programme on MND's website.
The Government will continue to monitor the property market and adjust our property policies in step with changes in the market and the economy.
- CNA/de
12-08-2011, 10:18 PM
Singapore
December 8, 2011, 5.04 pm (Singapore time)
Daiwa sees home prices falling 22-26% from end-2011 to end-2014
By YEO AIQI
Daiwa Securities Capital Markets Co Ltd on Thursday issued a negative call on the Singapore residential property segment, forecasting that home prices are likely to fall by 22 to 26 per cent from end-2011 to end-2014.
Daiwa's analysts David Lum and Tony Darwell stated that the government's new round of cooling measures include a 'potentially punitive additional buyer's stamp duty (ABSD) of 10 per cent'. In addition, government has announced that its land sales programme will make available another 14,100 units in first half of 2012.
The analysts believe the ABSD will reduce excessive investment demand in the residential-property market.
'In view of the more uncertain economic outlook and the implementation of the ABSD, which alone could send an immediate chill through the market, especially at the high-end segment, another robust government land sales programme for first half of 2012 only increases the risk of rising unsold inventory in the presale market and rising vacancies when a potential glut of GLS projects are completed eventually,' Mr Lum and Mr Darwell said.
They also forecast a prolonged downturn in home prices.
December 8, 2011, 5.04 pm (Singapore time)
Daiwa sees home prices falling 22-26% from end-2011 to end-2014
By YEO AIQI
Daiwa Securities Capital Markets Co Ltd on Thursday issued a negative call on the Singapore residential property segment, forecasting that home prices are likely to fall by 22 to 26 per cent from end-2011 to end-2014.
Daiwa's analysts David Lum and Tony Darwell stated that the government's new round of cooling measures include a 'potentially punitive additional buyer's stamp duty (ABSD) of 10 per cent'. In addition, government has announced that its land sales programme will make available another 14,100 units in first half of 2012.
The analysts believe the ABSD will reduce excessive investment demand in the residential-property market.
'In view of the more uncertain economic outlook and the implementation of the ABSD, which alone could send an immediate chill through the market, especially at the high-end segment, another robust government land sales programme for first half of 2012 only increases the risk of rising unsold inventory in the presale market and rising vacancies when a potential glut of GLS projects are completed eventually,' Mr Lum and Mr Darwell said.
They also forecast a prolonged downturn in home prices.
12-09-2011, 11:38 PM
Property measures: Home prices may fall 30%, say analysts
Property stocks hammered, following stamp duty shocker
Published on Dec 9, 2011
Purchase this article for republication
Buy SPH photos
Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted. -- ST PHOTO: ALPHONSUS CHERN
By Yasmine Yahya & Esther Teo
Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted.
This would be a chilling replay of what happened during the global financial crisis in 2008 and 2009, when home prices slid 25 per cent over 12 months.
These sobering warnings arrived on Thursday amid a slew of analyst reports taking stock of the surprise measures to cool Singapore's property market announced on Wednesday night.
Related Links
PRIVATE HOME PRICES
The curbs include an unprecedented extra stamp duty of 10 per cent on any foreigner buying a residential property here.
CIMB Research analysts called the Government's move a 'bazooka' that could shoot down property prices overall by 15 to 20 per cent over the next 12 months.
Goldman Sachs analysts see a 'state of paralysis' for the property market. Their prediction is for private home prices to slide 15 per cent over the next 18 months.
Standard Chartered Bank was the most bearish. A report by the bank last week had already envisioned prices dropping up to 30 per cent over three years. Now the bank expects the same fall to occur within one year.
Stock market investors reacted from the opening bell, sending property stocks into free fall. The worst hit were City Developments and Keppel Land, which lost more than 8 per cent, wiping hundreds of millions of dollars off the traded values of their companies by the end of the trading day. Inside their offices, these and other property developers went back to the drawing board. Some said they were caught off-guard by the measures, and were reviewing their next plan of action.
A City Developments spokesman said: 'The measures will have a dampening effect in the short term so we will have to re-assess the market situation and, if necessary, tweak our strategy.'
Some did not mince their words. A developer who declined to be named said that too many policies and the frequency of their shifts do not reflect well on Singapore as an investment destination.
'If the Government wants to target foreign buyers, then it should also look at the entire spectrum and specifically the increasing presence of foreign developers here who are driving up land prices.'
UBS analysts believe the next move from developers may be to offer a partial absorption or rebates of the additional buyer's stamp duty.
'Launches are likely to see delays as developers would have to spend more time building up a critical mass of buyer interest before having the confidence to launch a project,' they said in a report.
One of the first developers to be jolted into action was UOL Group. According to an internally circulated text message obtained by The Straits Times, it is offering agents a cash incentive of between $5,000 and $15,000 for each unit sold at its Archipelago project in Bedok from now till Sunday.
Those who had secured sales earlier made sure they did not lose them as buyers wavered. On Thursday, property agents were rushing around to make sure that options for deals were signed.
Analysts said anticipated transaction volume and price declines will not be uniform across the whole property market.
The high-end segment will be hit much harder than the mass market sector, as luxury homes tend to attract the highest proportion of foreign buyers.
Sales of private homes in the core central region, which includes prime areas such as Orchard Road and Newton, could plunge 40 per cent as a result of the new measures, said the chief executive of property agency PropNex, Mr Mohamed Ismail.
Foreigners and PRs accounted for 44 per cent of home sales in prime districts, such as Sentosa Cove and Districts 9, 10 and 11.
But the mass market property segment will not go unscathed.Though foreign buying activity in this segment is lower, the expectation of lower prices will cause Singapore buyers to also hold back.
'I would expect transaction volume to fall within the next 30 days as buyers hold back,' said Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia.'If prices ease, buyers might return but this is also conditional on whether the economy improves.'
Mr Ismail expects mass market home prices to slide 10 to 15 per cent in the next six months.
National Development Minister Khaw Boon Wan touched on the measures in an entry on his blog on Thursday, saying they 'will further strengthen, stabilise and sustain our property market'.
But investors who recently bought new properties will likely take some time to absorb the news. 'I am still shocked by what happened. Originally I wanted to hold on to the investment for four to five years, now it looks like I need to have longer staying power,' said a 32-year-old civil servant who wanted to be known only as Mr Lim.
He bought a two-bedroom, $1 million Bedok Residences unit about two weeks ago. 'In a way, I feel lucky that I chose a unit in a good location, which I think will be more resilient to price erosion.'
Property stocks hammered, following stamp duty shocker
Published on Dec 9, 2011
Purchase this article for republication
Buy SPH photos
Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted. -- ST PHOTO: ALPHONSUS CHERN
By Yasmine Yahya & Esther Teo
Property prices could fall by as much as 30 per cent next year as a result of the Government's latest move to cool the market, analysts have predicted.
This would be a chilling replay of what happened during the global financial crisis in 2008 and 2009, when home prices slid 25 per cent over 12 months.
These sobering warnings arrived on Thursday amid a slew of analyst reports taking stock of the surprise measures to cool Singapore's property market announced on Wednesday night.
Related Links
PRIVATE HOME PRICES
The curbs include an unprecedented extra stamp duty of 10 per cent on any foreigner buying a residential property here.
CIMB Research analysts called the Government's move a 'bazooka' that could shoot down property prices overall by 15 to 20 per cent over the next 12 months.
Goldman Sachs analysts see a 'state of paralysis' for the property market. Their prediction is for private home prices to slide 15 per cent over the next 18 months.
Standard Chartered Bank was the most bearish. A report by the bank last week had already envisioned prices dropping up to 30 per cent over three years. Now the bank expects the same fall to occur within one year.
Stock market investors reacted from the opening bell, sending property stocks into free fall. The worst hit were City Developments and Keppel Land, which lost more than 8 per cent, wiping hundreds of millions of dollars off the traded values of their companies by the end of the trading day. Inside their offices, these and other property developers went back to the drawing board. Some said they were caught off-guard by the measures, and were reviewing their next plan of action.
A City Developments spokesman said: 'The measures will have a dampening effect in the short term so we will have to re-assess the market situation and, if necessary, tweak our strategy.'
Some did not mince their words. A developer who declined to be named said that too many policies and the frequency of their shifts do not reflect well on Singapore as an investment destination.
'If the Government wants to target foreign buyers, then it should also look at the entire spectrum and specifically the increasing presence of foreign developers here who are driving up land prices.'
UBS analysts believe the next move from developers may be to offer a partial absorption or rebates of the additional buyer's stamp duty.
'Launches are likely to see delays as developers would have to spend more time building up a critical mass of buyer interest before having the confidence to launch a project,' they said in a report.
One of the first developers to be jolted into action was UOL Group. According to an internally circulated text message obtained by The Straits Times, it is offering agents a cash incentive of between $5,000 and $15,000 for each unit sold at its Archipelago project in Bedok from now till Sunday.
Those who had secured sales earlier made sure they did not lose them as buyers wavered. On Thursday, property agents were rushing around to make sure that options for deals were signed.
Analysts said anticipated transaction volume and price declines will not be uniform across the whole property market.
The high-end segment will be hit much harder than the mass market sector, as luxury homes tend to attract the highest proportion of foreign buyers.
Sales of private homes in the core central region, which includes prime areas such as Orchard Road and Newton, could plunge 40 per cent as a result of the new measures, said the chief executive of property agency PropNex, Mr Mohamed Ismail.
Foreigners and PRs accounted for 44 per cent of home sales in prime districts, such as Sentosa Cove and Districts 9, 10 and 11.
But the mass market property segment will not go unscathed.Though foreign buying activity in this segment is lower, the expectation of lower prices will cause Singapore buyers to also hold back.
'I would expect transaction volume to fall within the next 30 days as buyers hold back,' said Dr Chua Yang Liang, head of research at Jones Lang LaSalle South-east Asia.'If prices ease, buyers might return but this is also conditional on whether the economy improves.'
Mr Ismail expects mass market home prices to slide 10 to 15 per cent in the next six months.
National Development Minister Khaw Boon Wan touched on the measures in an entry on his blog on Thursday, saying they 'will further strengthen, stabilise and sustain our property market'.
But investors who recently bought new properties will likely take some time to absorb the news. 'I am still shocked by what happened. Originally I wanted to hold on to the investment for four to five years, now it looks like I need to have longer staying power,' said a 32-year-old civil servant who wanted to be known only as Mr Lim.
He bought a two-bedroom, $1 million Bedok Residences unit about two weeks ago. 'In a way, I feel lucky that I chose a unit in a good location, which I think will be more resilient to price erosion.'
12-10-2011, 02:51 PM
Citizens of 5 countries to pay same stamp duty as Singaporeans
Published on Dec 9, 2011
By Jonathan Kwok
Citizens of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.
When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday.
This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.
Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.
Published on Dec 9, 2011
By Jonathan Kwok
Citizens of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.
When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday.
This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.
Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.
12-11-2011, 05:26 PM
How low will home prices go?
The cooling measures announced last Wednesday sparked a slew of analyst reports predicting price drops and falling sales volumes. Yasmine Yahya sums up the reactions.
Published on Dec 11, 2011
How low will home prices go? -- ST ILLUSTRATIONS: ADAM LEE
There is one thing all the analysts agree on - property sales will likely fall as a result of the new cooling measures, with prices dropping in the process.
Analysts noted that the measures are aimed at moderating investment demand rather than speculative purchases, as was the case with previous cooling policies.
The new rules are also targeted mainly at foreign buyers. Any foreigner who wants to buy a home will have to pay a stamp duty of 10 per cent on top of the existing buyer's stamp duty of about 3 per cent.
Background story
WHAT ANALYSTS SAY
Standard Chartered: Property prices to plunge by 20 per cent to 30 per cent over the next year.
PropNex: High-end home prices to drop by 15 per cent to 20 per cent and mass-market home prices to fall by 10 per cent to 15 per cent in the next six months.
CIMB: Prices to fall by 15 per cent to 20 per cent next year.
UOB Kay Hian: Prices to weaken by 10 per cent to 15 per cent next year.
Goldman Sachs: Prices to fall by 15 per cent over the next 18 months.
OCBC Investment Research: Prices to soften by 10 per cent to 20 per cent over the next two years.
Background story
A negative surprise
'This announcement is a negative surprise for the market... It is also the first time since 1996 that the Government has imposed stricter residential market measures on foreigners and permanent residents.'
STANDARD CHARTERED'S ANALYSTS
Prompted by home-buying activity
'The recent pickup in the primary home-buying activity may have prompted the Government to take these steps after the review of its housing policies that were a hot issue in the last elections.'
UOB KAY HIAN'S ANALYSTS
The tax will be based on the purchase price or market value of the property, whichever is higher.
Permanent residents who buy a second and subsequent residential property will pay 3 per cent more in stamp duty. Overseas properties will be excluded from this count.
Singaporeans who already have two residential properties will have to pay the extra 3 per cent on their third and subsequent home purchases.
Standard Chartered: New rules will trigger 30 per cent price drop
Standard Chartered's analysts have perhaps the grimmest outlook for the property market.
They already predicted last month that property prices would slide by up to 30 per cent over the next three years due to slower population growth and an unprecedented supply of new homes coming onstream.
The new cooling measures have underscored that view, with the bank's experts believing the 30 per cent drop in prices could happen in just one year.
'This announcement is a negative surprise for the market,' they said in a report last Wednesday.
'It is also the first time since 1996 that the Government has imposed stricter residential market measures on foreigners and permanent residents.'
StanChart also expects the new policy to cause sales volumes to fall 20 per cent in the first quarter of next year.
A potential oversupply of private homes in the next few years could be another factor putting pressure on prices, they said.
On the same day that the stamp duty policy was announced, the Government also unveiled 14 confirmed sites under its land sales programme for the first half of next year.
These sites could accommodate 7,000 private home units in total.
'This is much higher than our expectation of 3,000 units,' StanChart said. 'This adds to the record 37,000 residential units that developers have in the pipeline... which will weigh further on launch prices.'
PropNex: 'A major psychological setback'
PropNex chief executive Mohamed Ismail described the Government's move as 'the harshest cooling measures seen so far', and said the new rules will pose 'a major psychological setback' for the market.
He said the volume of private home sales in the central core region, which includes areas such as Orchard and Newton, will likely dive by 40 per cent, while sales in the mass-market segment will drop by 20 per cent in the next six months.
'This increase in stamp duty, which can amount to $124,600 from an original $24,600 for a $1 million home, is going to dampen the interest in private property investment in Singapore.'
Mr Ismail predicts that in the next six months, property prices will plunge by 15 per cent to 20 per cent in the central core region and 10 per cent to 15 per cent in the mass-market segment.
CIMB: New measures are a bazooka
'The Government has taken out the bazooka,' wrote CIMB Research analysts the morning after the new measures were announced.
They have forecast that a 15 per cent to 20 per cent weakening of property prices next year is 'very conceivable' because of the new policy.
Luxury homes, typically the playground of foreigners and investors, are likely to bear the brunt of slumping prices, but new mass-market units should still see a healthy demand from Housing Board upgraders, they added.
'On a philosophical note, locals may now feel less aggrieved, given a more level playing field,' the analysts said.
UOB Kay Hian: A sharp slowdown in demand
UOB Kay Hian analysts expect that prices will slide by 10 per cent to 15 per cent over the next year.
They also predict that the number of private homes sold each month will slide by 25 per cent to 30 per cent next year.
'The move was unanticipated in the light of the increasingly uncertain global macroeconomic environment,' they noted last Thursday.
'However, the recent pickup in the primary home-buying activity may have prompted the Government to take these steps after the review of its housing policies that were a hot issue in the last elections.'
The move will act as a strong deterrent for foreign buyers as their transaction costs would increase by 10 per cent overnight, UOB Kay Hian added, with the high-end segment likely to be the most affected.
Before these measures were rolled out, it had expected property prices to slide by 8 per cent to 10 per cent next year.
Goldman Sachs: Residential property market will enter a 'state of paralysis'
Goldman Sachs believes private home prices will fall by 15 per cent over the next 18 months, with the high-end segment facing more immediate pressure.
This is because foreign buyers and permanent residents account for 44 per cent of sales in the high-end sector, which includes areas such as Sentosa Cove and Districts 9, 10 and 11.
Each of the important drivers of demand - foreign buying, job creation and credit availability - will likely see signs of softness over the next year, the analysts noted.
'While credit is relatively cheap, it is not as readily available, with banks more conservative on valuations and equity term loans,' they said.
Their conclusion - the residential property market will go into a 'state of paralysis'.
OCBC Investment Research: New measures are 'fairly onerous'
OCBC Investment Research said property market observers had expected the Government to introduce new rules to curb demand for property among foreigners after the election, when both immigration and property prices became hot-button issues.
But as the euro zone debt crisis worsened and economists warned of slower economic growth in Singapore next year, few people thought the Government would push ahead with more property cooling measures.
Now that it has, OCBC analysts forecast that private home prices will fall by 10 per cent to 20 per cent over the next two years.
The measures are 'fairly onerous', they said, given that foreigners and companies accounted for a fifth of all private home sales so far this year.
'We expect a negative knee-jerk share price reaction for the developers,' they added.
yasminey@sph.com.sg
The cooling measures announced last Wednesday sparked a slew of analyst reports predicting price drops and falling sales volumes. Yasmine Yahya sums up the reactions.
Published on Dec 11, 2011
How low will home prices go? -- ST ILLUSTRATIONS: ADAM LEE
There is one thing all the analysts agree on - property sales will likely fall as a result of the new cooling measures, with prices dropping in the process.
Analysts noted that the measures are aimed at moderating investment demand rather than speculative purchases, as was the case with previous cooling policies.
The new rules are also targeted mainly at foreign buyers. Any foreigner who wants to buy a home will have to pay a stamp duty of 10 per cent on top of the existing buyer's stamp duty of about 3 per cent.
Background story
WHAT ANALYSTS SAY
Standard Chartered: Property prices to plunge by 20 per cent to 30 per cent over the next year.
PropNex: High-end home prices to drop by 15 per cent to 20 per cent and mass-market home prices to fall by 10 per cent to 15 per cent in the next six months.
CIMB: Prices to fall by 15 per cent to 20 per cent next year.
UOB Kay Hian: Prices to weaken by 10 per cent to 15 per cent next year.
Goldman Sachs: Prices to fall by 15 per cent over the next 18 months.
OCBC Investment Research: Prices to soften by 10 per cent to 20 per cent over the next two years.
Background story
A negative surprise
'This announcement is a negative surprise for the market... It is also the first time since 1996 that the Government has imposed stricter residential market measures on foreigners and permanent residents.'
STANDARD CHARTERED'S ANALYSTS
Prompted by home-buying activity
'The recent pickup in the primary home-buying activity may have prompted the Government to take these steps after the review of its housing policies that were a hot issue in the last elections.'
UOB KAY HIAN'S ANALYSTS
The tax will be based on the purchase price or market value of the property, whichever is higher.
Permanent residents who buy a second and subsequent residential property will pay 3 per cent more in stamp duty. Overseas properties will be excluded from this count.
Singaporeans who already have two residential properties will have to pay the extra 3 per cent on their third and subsequent home purchases.
Standard Chartered: New rules will trigger 30 per cent price drop
Standard Chartered's analysts have perhaps the grimmest outlook for the property market.
They already predicted last month that property prices would slide by up to 30 per cent over the next three years due to slower population growth and an unprecedented supply of new homes coming onstream.
The new cooling measures have underscored that view, with the bank's experts believing the 30 per cent drop in prices could happen in just one year.
'This announcement is a negative surprise for the market,' they said in a report last Wednesday.
'It is also the first time since 1996 that the Government has imposed stricter residential market measures on foreigners and permanent residents.'
StanChart also expects the new policy to cause sales volumes to fall 20 per cent in the first quarter of next year.
A potential oversupply of private homes in the next few years could be another factor putting pressure on prices, they said.
On the same day that the stamp duty policy was announced, the Government also unveiled 14 confirmed sites under its land sales programme for the first half of next year.
These sites could accommodate 7,000 private home units in total.
'This is much higher than our expectation of 3,000 units,' StanChart said. 'This adds to the record 37,000 residential units that developers have in the pipeline... which will weigh further on launch prices.'
PropNex: 'A major psychological setback'
PropNex chief executive Mohamed Ismail described the Government's move as 'the harshest cooling measures seen so far', and said the new rules will pose 'a major psychological setback' for the market.
He said the volume of private home sales in the central core region, which includes areas such as Orchard and Newton, will likely dive by 40 per cent, while sales in the mass-market segment will drop by 20 per cent in the next six months.
'This increase in stamp duty, which can amount to $124,600 from an original $24,600 for a $1 million home, is going to dampen the interest in private property investment in Singapore.'
Mr Ismail predicts that in the next six months, property prices will plunge by 15 per cent to 20 per cent in the central core region and 10 per cent to 15 per cent in the mass-market segment.
CIMB: New measures are a bazooka
'The Government has taken out the bazooka,' wrote CIMB Research analysts the morning after the new measures were announced.
They have forecast that a 15 per cent to 20 per cent weakening of property prices next year is 'very conceivable' because of the new policy.
Luxury homes, typically the playground of foreigners and investors, are likely to bear the brunt of slumping prices, but new mass-market units should still see a healthy demand from Housing Board upgraders, they added.
'On a philosophical note, locals may now feel less aggrieved, given a more level playing field,' the analysts said.
UOB Kay Hian: A sharp slowdown in demand
UOB Kay Hian analysts expect that prices will slide by 10 per cent to 15 per cent over the next year.
They also predict that the number of private homes sold each month will slide by 25 per cent to 30 per cent next year.
'The move was unanticipated in the light of the increasingly uncertain global macroeconomic environment,' they noted last Thursday.
'However, the recent pickup in the primary home-buying activity may have prompted the Government to take these steps after the review of its housing policies that were a hot issue in the last elections.'
The move will act as a strong deterrent for foreign buyers as their transaction costs would increase by 10 per cent overnight, UOB Kay Hian added, with the high-end segment likely to be the most affected.
Before these measures were rolled out, it had expected property prices to slide by 8 per cent to 10 per cent next year.
Goldman Sachs: Residential property market will enter a 'state of paralysis'
Goldman Sachs believes private home prices will fall by 15 per cent over the next 18 months, with the high-end segment facing more immediate pressure.
This is because foreign buyers and permanent residents account for 44 per cent of sales in the high-end sector, which includes areas such as Sentosa Cove and Districts 9, 10 and 11.
Each of the important drivers of demand - foreign buying, job creation and credit availability - will likely see signs of softness over the next year, the analysts noted.
'While credit is relatively cheap, it is not as readily available, with banks more conservative on valuations and equity term loans,' they said.
Their conclusion - the residential property market will go into a 'state of paralysis'.
OCBC Investment Research: New measures are 'fairly onerous'
OCBC Investment Research said property market observers had expected the Government to introduce new rules to curb demand for property among foreigners after the election, when both immigration and property prices became hot-button issues.
But as the euro zone debt crisis worsened and economists warned of slower economic growth in Singapore next year, few people thought the Government would push ahead with more property cooling measures.
Now that it has, OCBC analysts forecast that private home prices will fall by 10 per cent to 20 per cent over the next two years.
The measures are 'fairly onerous', they said, given that foreigners and companies accounted for a fifth of all private home sales so far this year.
'We expect a negative knee-jerk share price reaction for the developers,' they added.
yasminey@sph.com.sg
12-28-2011, 04:56 PM
Property market outlook for 2012
By http://www.MoneyMatters.sg | Property Blog – Mon, Dec 26, 2011
Email
Print
The additional buyers' stamp duty may be the straw that breaks the camel's back in Singapore's property market. (AFP photo)
The additional buyers' stamp duty may be the straw that breaks the camel's back in Singapore's property market. …
By Mr. Propwise
As 2011 comes to an end (how time flies!), we polish our crystal ball, take stock of the key takeaways from some of our previous articles, and try and peer into 2012 to see what the new year will bring for the Singapore property market.
Worrying trends in 2011
In a previous article Worrying Trends in the Singapore Property Market I highlighted four disturbing trends in the Singapore market:
HDB prices are rising faster than private property prices
Private home buyers are in a cautious mood, especially in the high end segment
Developers are turning cautious too
Investors are going into industrial and commercial properties
I think these trends are signalling that we are near a turning point in the property bull market. The insiders are turning cautious while the "man on the street" average investors are still rushing in. Middle income families are rushing to buy high-priced HDB flats and mass market residential properties and small-time investors are snapping up "shoebox" industrial units with a fairly ambiguous rental market.
At the same time the wealthy and developers (the "insiders") are turning cautious on the market, and the weakening global economic situation means that the yields of the industrial and commercial properties could be at risk. Which group do you think has a better grasp of what is going on in the market?
Property market turning point likely in 2012
The argument that we are reaching a turning point in the market is also backed up by the eight straight quarters of decelerating growth in the URA's Property Price Index till 3Q11, which is likely due to concern over the slowing economy, worrying global economic situation especially with the troubles in Europe and weak growth in the US, combined with the dampening effect of the government measures.
We had previously seen this decelerating price growth trend preceding the property bear markets that began in 3Q2000 and 3Q2008 (but not the one in 3Q1996).
Property consultant and developer Getty Goh is also calling for a property bear market based on his proprietary Ascendant Assets Indicator. To recap, the basic premises of the AAI are (1) there is a lead-lag relationship between the stock and property market and (2) we are able to tell how the property market is performing by analysing the correlation between the stock and property market.
Based on the URA's 3Q11 numbers the AAI has dropped, indicating a change in market sentiments. Simplistically speaking, we can observe that the URA PPPI index in the yellow zone after each green zone has contracted during the last two cycles (red boxes), and it is probable that it will do so going forward.
And I believe that the government's recent announcement of the Additional Buyer's Stamp Duty (ABSD) will be the straw that breaks the camel's back. The impact of the ABSD is that the transaction cost for investors will increase substantially, killing investment demand. Thus transaction volumes will fall and prices are likely to be impacted. Foreigners will shrink as a percentage of all buyers, with the impact on the high-end market larger than for the other segments.
How much will prices fall?
Beyond just the price movement, we have to worry about things like the large upcoming supply of completed private and public housing that may "flood" the market and global economic uncertainty due to the troubles in the U.S. and Europe.
So while I'm pretty confident that property prices will not increase significantly (if at all) in 2012, it is much harder to predict the amount of downside in the market. There are also supportive forces in the market, including the current low interest rate environment, and foreign investor perception of Singapore as a "safe haven" to park their money in.
Thus while we can know with some certainty what the medium term supply is going to look like, the big unknown is demand. Demand is influenced by many factors — market sentiment, unemployment levels, immigration policy of the government, etc. In fact, some analysts have argued that the upcoming surge in supply will not cause property prices to fall. So if you're expecting prices to fall significantly, don't hold your breath as it may not happen.
Getty Goh thinks that the best-case scenario is that private property prices remain stable while non-residential property prices could still increase, but it is possible in the worst-case scenario for Singapore property prices for all sectors to tank.
As I have been doing for a while, I caution all investors to study the market carefully before and do your sums before committing your hard earned cash and credit to a property investment. The outlook for 2012 may seem especially uncertain, but for the well-prepared investor, it may be a year of great bargains as well!
Posted courtesy of http://www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner's and Buyer's Guide.
By http://www.MoneyMatters.sg | Property Blog – Mon, Dec 26, 2011
The additional buyers' stamp duty may be the straw that breaks the camel's back in Singapore's property market. (AFP photo)
The additional buyers' stamp duty may be the straw that breaks the camel's back in Singapore's property market. …
By Mr. Propwise
As 2011 comes to an end (how time flies!), we polish our crystal ball, take stock of the key takeaways from some of our previous articles, and try and peer into 2012 to see what the new year will bring for the Singapore property market.
Worrying trends in 2011
In a previous article Worrying Trends in the Singapore Property Market I highlighted four disturbing trends in the Singapore market:
HDB prices are rising faster than private property prices
Private home buyers are in a cautious mood, especially in the high end segment
Developers are turning cautious too
Investors are going into industrial and commercial properties
I think these trends are signalling that we are near a turning point in the property bull market. The insiders are turning cautious while the "man on the street" average investors are still rushing in. Middle income families are rushing to buy high-priced HDB flats and mass market residential properties and small-time investors are snapping up "shoebox" industrial units with a fairly ambiguous rental market.
At the same time the wealthy and developers (the "insiders") are turning cautious on the market, and the weakening global economic situation means that the yields of the industrial and commercial properties could be at risk. Which group do you think has a better grasp of what is going on in the market?
Property market turning point likely in 2012
The argument that we are reaching a turning point in the market is also backed up by the eight straight quarters of decelerating growth in the URA's Property Price Index till 3Q11, which is likely due to concern over the slowing economy, worrying global economic situation especially with the troubles in Europe and weak growth in the US, combined with the dampening effect of the government measures.
We had previously seen this decelerating price growth trend preceding the property bear markets that began in 3Q2000 and 3Q2008 (but not the one in 3Q1996).
Property consultant and developer Getty Goh is also calling for a property bear market based on his proprietary Ascendant Assets Indicator. To recap, the basic premises of the AAI are (1) there is a lead-lag relationship between the stock and property market and (2) we are able to tell how the property market is performing by analysing the correlation between the stock and property market.
Based on the URA's 3Q11 numbers the AAI has dropped, indicating a change in market sentiments. Simplistically speaking, we can observe that the URA PPPI index in the yellow zone after each green zone has contracted during the last two cycles (red boxes), and it is probable that it will do so going forward.
And I believe that the government's recent announcement of the Additional Buyer's Stamp Duty (ABSD) will be the straw that breaks the camel's back. The impact of the ABSD is that the transaction cost for investors will increase substantially, killing investment demand. Thus transaction volumes will fall and prices are likely to be impacted. Foreigners will shrink as a percentage of all buyers, with the impact on the high-end market larger than for the other segments.
How much will prices fall?
Beyond just the price movement, we have to worry about things like the large upcoming supply of completed private and public housing that may "flood" the market and global economic uncertainty due to the troubles in the U.S. and Europe.
So while I'm pretty confident that property prices will not increase significantly (if at all) in 2012, it is much harder to predict the amount of downside in the market. There are also supportive forces in the market, including the current low interest rate environment, and foreign investor perception of Singapore as a "safe haven" to park their money in.
Thus while we can know with some certainty what the medium term supply is going to look like, the big unknown is demand. Demand is influenced by many factors — market sentiment, unemployment levels, immigration policy of the government, etc. In fact, some analysts have argued that the upcoming surge in supply will not cause property prices to fall. So if you're expecting prices to fall significantly, don't hold your breath as it may not happen.
Getty Goh thinks that the best-case scenario is that private property prices remain stable while non-residential property prices could still increase, but it is possible in the worst-case scenario for Singapore property prices for all sectors to tank.
As I have been doing for a while, I caution all investors to study the market carefully before and do your sums before committing your hard earned cash and credit to a property investment. The outlook for 2012 may seem especially uncertain, but for the well-prepared investor, it may be a year of great bargains as well!
Posted courtesy of http://www.Propwise.sg, a Singapore property blog dedicated to helping you understand the real estate market and make better decisions. Click here to get your free Property Beginner's and Buyer's Guide.
02-20-2012, 04:51 PM
Four 99-year leasehold sites released for sale
Three flagged for EC development; analysts divided on price impact
By MINDY TAN
Four 99-year residential sites, expected to yield 2,070 units, was released for sale under the government land sales programme yesterday.
Three parcels - of which two are for executive condominium (EC) development - were launched for sale under the confirmed list. The third site is flagged for strata landed housing or condominium/flats development. The fourth parcel - available for application under the reserve list - too is flagged for EC development.
While analysts concur that there has been a surge in EC supply, they remain divided over the potential impact on prices.
'We feel that there will be a mismatch in supply and demand for ECs in 2012. With HDB pushing out more BTO flats for first timers and possibly increasing the percentage allocated to second timers, the HDB resale, DBSS, and EC markets will be affected,' said Lee Sze Teck, senior manager at DWG Research and Consultancy. 'Buyers are increasingly spoilt for choice. Unless the EC development offers something unique, they are likely to wait for the next launch. Hence, we expect EC prices to soften by around 5 per cent in 2012.'
Mohamed Ismail, chief executive of PropNex Realty, agreed: 'It is an unprecedented move to increase the supply of ECs (by so much) within a year, compared to the approximately 15,000 ECs introduced the last 15 years.'
He expects the price of ECs to moderate from the current range of $750 psf to $700 psf 'in the coming months'.
'This is definitely lower than current mass market condominiums which average approximately $900 psf,' he added.
Other analysts point to an increased pool of eligible buyers - the income ceiling for eligible applicants was raised from $10,000 to $12,000 in August last year - as a supporting factor.
Credo Real Estate executive director Ong Teck Hui added: 'As almost all of last year's EC sites have been launched for sale, the current tenders are a replenishment of fresh EC sites to provide continuity in supply.'
Two 99-year EC sites were launched under the confirmed list yesterday.
The first, a 142,533 sq ft site at Punggol Central/Edgefield Plains, has a plot ratio of 3.0, which translates to a maximum GFA of 427,600 sq ft. It is expected to yield some 395 units.
The second site, at Fernvale Lane, has a site area of 236,804 sq ft and a plot ratio of 3.5, which translates to a GFA of 828,816 sq ft. It is expected to yield some 770 units.
Analysts expect both sites to attract moderately healthy interest from developers.
'Notwithstanding ample new housing supply in the north-eastern part of Singapore, it is essentially a well-positioned growth corridor, holding much possibilities and potential in the longer term, especially when all the exciting thematic, lifestyle features are eventually in place,' noted Ong Kah Seng, director of R'ST Research.
He expects the top bids for the two sites to come in between $250-$290 psf ppr.
Credo's Mr Ong said: 'Of the two sites, the one at Fernvale is more attractive as it overlooks the private housing estate in Seletar Hills, and is more accessible to town and nearby amenities.'
He expects seven to 10 bidders for the site, with a top bid in the range of $280-$310 psf ppr.
Nicholas Mak, executive director of SLP International's research and consultancy arm, said: 'By the time the two new EC developments are launched for sale in late 2012 to early 2013, the EC primary market can expect increasingly stiff competition . . . This situation of heavy supply will very likely be compounded by the drying up of pent-up demand for ECs from first-time homebuyers.'
Mr Mak expects the site at Punggol to fetch a winning bid of between $280-$320 psf ppr, and the site at Fernvale Land to fetch a bid of between $270-$310 psf ppr.
'Both sites could attract moderately healthy interest, possibly about four to eight bids each,' he added.
The tenders for the sites at Punggol Central and Fernvale Lane are expected to close on March 29 and April 3 respectively.
The last site on the confirmed list - located at Elias Road/Pasir Ris Drive 3 - has a site area of 251,036 sq ft and a plot ratio of 1.4. Zoned for strata landed housing or condominium/flats, it is expected to host some 345 units.
'(This site) is abutting a landed housing estate and near amenities such as Elias Mall and Pasir Ris Park. As Pasir Ris is a popular housing location, we could see eight to 12 bidders for this site, with a top bid coming in between $420-$470 psf ppr,' said Credo's Mr Ong.
Added Mr Mak: 'The site is likely to attract big-name developers, as companies like Far East Organisation and City Developments Limited already have significant investment stakes in the locality. Although strata-landed housing is permitted on this subject site, the future development is likely to consist mostly of non-landed housing units, with a few landed houses to maximise site efficiency.'
'This site can be expected to fetch a winning bid of about $126 million to $144 million, or $360-$410 psf ppr) in today's market,' he added.
The tender for the site will close on April 11.
On the reserve list, a 99-year EC plot at Punggol Way/Punggol Walk, which has a site area of 201,327 sq ft and GPR of 3.0, is expected to yield some 560 units.
Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable. By contrast, land parcels under the confirmed list are sold according to scheduled dates.
'The site may not be triggered for tender due to a potential supply glut in the EC market, especially in the north-eastern region of Singapore,' said Mr Mak.
'Should this EC site be triggered for tender, it can be expected to fetch approximately $157 million to $181 million, or $260-$300 psf ppr,' he added.
Credo's Mr Ong added: 'The Punggol Central EC site is a typical site within a HDB estate surrounded by public housing. Less interest is expected for this site . . . with a winning bid of between $250 to $280 psf ppr'.
Three flagged for EC development; analysts divided on price impact
By MINDY TAN
Four 99-year residential sites, expected to yield 2,070 units, was released for sale under the government land sales programme yesterday.
Three parcels - of which two are for executive condominium (EC) development - were launched for sale under the confirmed list. The third site is flagged for strata landed housing or condominium/flats development. The fourth parcel - available for application under the reserve list - too is flagged for EC development.
While analysts concur that there has been a surge in EC supply, they remain divided over the potential impact on prices.
'We feel that there will be a mismatch in supply and demand for ECs in 2012. With HDB pushing out more BTO flats for first timers and possibly increasing the percentage allocated to second timers, the HDB resale, DBSS, and EC markets will be affected,' said Lee Sze Teck, senior manager at DWG Research and Consultancy. 'Buyers are increasingly spoilt for choice. Unless the EC development offers something unique, they are likely to wait for the next launch. Hence, we expect EC prices to soften by around 5 per cent in 2012.'
Mohamed Ismail, chief executive of PropNex Realty, agreed: 'It is an unprecedented move to increase the supply of ECs (by so much) within a year, compared to the approximately 15,000 ECs introduced the last 15 years.'
He expects the price of ECs to moderate from the current range of $750 psf to $700 psf 'in the coming months'.
'This is definitely lower than current mass market condominiums which average approximately $900 psf,' he added.
Other analysts point to an increased pool of eligible buyers - the income ceiling for eligible applicants was raised from $10,000 to $12,000 in August last year - as a supporting factor.
Credo Real Estate executive director Ong Teck Hui added: 'As almost all of last year's EC sites have been launched for sale, the current tenders are a replenishment of fresh EC sites to provide continuity in supply.'
Two 99-year EC sites were launched under the confirmed list yesterday.
The first, a 142,533 sq ft site at Punggol Central/Edgefield Plains, has a plot ratio of 3.0, which translates to a maximum GFA of 427,600 sq ft. It is expected to yield some 395 units.
The second site, at Fernvale Lane, has a site area of 236,804 sq ft and a plot ratio of 3.5, which translates to a GFA of 828,816 sq ft. It is expected to yield some 770 units.
Analysts expect both sites to attract moderately healthy interest from developers.
'Notwithstanding ample new housing supply in the north-eastern part of Singapore, it is essentially a well-positioned growth corridor, holding much possibilities and potential in the longer term, especially when all the exciting thematic, lifestyle features are eventually in place,' noted Ong Kah Seng, director of R'ST Research.
He expects the top bids for the two sites to come in between $250-$290 psf ppr.
Credo's Mr Ong said: 'Of the two sites, the one at Fernvale is more attractive as it overlooks the private housing estate in Seletar Hills, and is more accessible to town and nearby amenities.'
He expects seven to 10 bidders for the site, with a top bid in the range of $280-$310 psf ppr.
Nicholas Mak, executive director of SLP International's research and consultancy arm, said: 'By the time the two new EC developments are launched for sale in late 2012 to early 2013, the EC primary market can expect increasingly stiff competition . . . This situation of heavy supply will very likely be compounded by the drying up of pent-up demand for ECs from first-time homebuyers.'
Mr Mak expects the site at Punggol to fetch a winning bid of between $280-$320 psf ppr, and the site at Fernvale Land to fetch a bid of between $270-$310 psf ppr.
'Both sites could attract moderately healthy interest, possibly about four to eight bids each,' he added.
The tenders for the sites at Punggol Central and Fernvale Lane are expected to close on March 29 and April 3 respectively.
The last site on the confirmed list - located at Elias Road/Pasir Ris Drive 3 - has a site area of 251,036 sq ft and a plot ratio of 1.4. Zoned for strata landed housing or condominium/flats, it is expected to host some 345 units.
'(This site) is abutting a landed housing estate and near amenities such as Elias Mall and Pasir Ris Park. As Pasir Ris is a popular housing location, we could see eight to 12 bidders for this site, with a top bid coming in between $420-$470 psf ppr,' said Credo's Mr Ong.
Added Mr Mak: 'The site is likely to attract big-name developers, as companies like Far East Organisation and City Developments Limited already have significant investment stakes in the locality. Although strata-landed housing is permitted on this subject site, the future development is likely to consist mostly of non-landed housing units, with a few landed houses to maximise site efficiency.'
'This site can be expected to fetch a winning bid of about $126 million to $144 million, or $360-$410 psf ppr) in today's market,' he added.
The tender for the site will close on April 11.
On the reserve list, a 99-year EC plot at Punggol Way/Punggol Walk, which has a site area of 201,327 sq ft and GPR of 3.0, is expected to yield some 560 units.
Under the reserve list system, the government releases a site for sale only if an interested party submits an application with a minimum price that is deemed acceptable. By contrast, land parcels under the confirmed list are sold according to scheduled dates.
'The site may not be triggered for tender due to a potential supply glut in the EC market, especially in the north-eastern region of Singapore,' said Mr Mak.
'Should this EC site be triggered for tender, it can be expected to fetch approximately $157 million to $181 million, or $260-$300 psf ppr,' he added.
Credo's Mr Ong added: 'The Punggol Central EC site is a typical site within a HDB estate surrounded by public housing. Less interest is expected for this site . . . with a winning bid of between $250 to $280 psf ppr'.
02-20-2012, 05:04 PM
I see some adjustments to the property because
1. the ceiling has been raised to $12K, so couples with combined of less than $12K will go for EC which means there will be lesser buyers for mass market
2. the recent launches and land sales have mostly been EC and Condo, this will drive prices down when these projects TOP in 2 years time
3. Stamp duty of foreign buyers increase to 10% so this will put off buyers and they will lower their expectations. Over time prices will come down
4. HDB Cov has come downwards so this will also affect the baseline for mass market Condo valuation over time
5. The possibility of more cooling measures by the government but this may not be a easy decision because our govt don't expect houses to go underwater overnight and thus affect the banks mortgages
1. the ceiling has been raised to $12K, so couples with combined of less than $12K will go for EC which means there will be lesser buyers for mass market
2. the recent launches and land sales have mostly been EC and Condo, this will drive prices down when these projects TOP in 2 years time
3. Stamp duty of foreign buyers increase to 10% so this will put off buyers and they will lower their expectations. Over time prices will come down
4. HDB Cov has come downwards so this will also affect the baseline for mass market Condo valuation over time
5. The possibility of more cooling measures by the government but this may not be a easy decision because our govt don't expect houses to go underwater overnight and thus affect the banks mortgages
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