URA releases 2 residential sites for sale

Two land parcels were released for sale on Wednesday (Sept 30) by the Urban Redevelopment Authority (URA).

 Source: URA

Source: URA

The parcel at Alexandra View is next to Redhill MRT station. Launched for sale under URA's ‘Confimed List,’ it can accommodate 400 units, with the first storey slated for commercial space.

 Source: URA

Source: URA

The tender for the  8,400 sq m parcel with a maximum gross floor area of 41,153 sq m will close at 12 pm on Nov 12.

 

 

 

The other site located at Jalan Kandis, near Sembawang Park is made available for sale under the "Reserve List."  It will be put up for sale if a developer's indicated minimum price is acceptable to the Government.

The 7,047 sq m parcel with with a maximum gross floor area of 9,866 sq m can yield about 115 residential units.

Both sites, which come under the 2nd Half 2015 Government Land Sales Programme, have 99-year leases.

 

Source: Straits Times

Clubs gets leases through to 2030 and 2040 except for Keppel Club

Ministry of Law (MinLaw) announced in a statement on Sunday that Keppel Club will not get its lease renewed when it runs out in 2021 but the seven other clubs, whose leases run out in less than a decade, are through with new lease extensions till 2030, 2035 or 2040.

Golf Clubs

The 44 hectares of land which Keppel occupies will be needed for housing development.

Keppel Club will be the first private golf club in Singapore not to get its lease renewed.

Clubs with extended new leases renewal include Singapore Island Country Club (SICC), Tanah Merah Country Club and Sentosa Golf Club, and several others.

SICC, will be offered a new lease for three of its four 18-hole courses. The fourth one will be run as a public course when the lease of Marina Bay Golf Course expires in 2024.

 Orchid Country Club will only get its lease extended by seven years till 2030 after which the 107ha site will make way for housing needs.

The announcement ends months of speculation provoked by the Government's indication early last year that some golf club land might be taken back for other uses.

Clubs details

Ministry of Law (MinLaw) announced in a statement on Sunday that Keppel Club will not get its lease renewed when it runs out in 2021 but the seven other clubs, whose leases run out in less than a decade, are through with new lease extensions till 2030, 2035 or 2040.

The 44 hectares of land which Keppel occupies will be needed for housing development.

Keppel Club will be the first private golf club in Singapore not to get its lease renewed.

Clubs with extended new leases renewal include Singapore Island Country Club (SICC), Tanah Merah Country Club and Sentosa Golf Club, and several others.

SICC, will be offered a new lease for three of its four 18-hole courses. The fourth one will be run as a public course when the lease of Marina Bay Golf Course expires in 2024.

 Orchid Country Club will only get its lease extended by seven years till 2030 after which the 107ha site will make way for housing needs.

The announcement ends months of speculation provoked by the Government's indication early last year that some golf club land might be taken back for other uses.

source: Sunday Times - 16 Feb 2014

CapitaLand to delay condo launch

Developers with deep pockets have the luxury of timing their new property launches to respond suitably to market sentiments.

With the beaten down state of the property market, this is what one major developer has chosen to do - watch the market response to the Total Debt Servicing Ratio (TDSR) phenom and delaying its planned launch of a condominium.

The TDSR hits a buyer's ability to afford a property by capping a borrower's total debt repayments at 60 per cent of gross monthly income.

According to Straits Times, the CEO of CapitaLand Residential Singapore, Mr Wong Heang Fine said it will reschedule its 124-unit Marine Parade project launch slated for late last year to this year, with no specific time frame set. He also hopes that the time frame allocated to developers to sell units can be relaxed, giving the market enough room to equilibrate demand and supply without the risk of having wild swings in prices.

Other CapitaLand projects gear for this year launch are the Coronation Road landed housing development and an Iskandar condo development in Danga Bay, Johor.

CapitaLand allocates less than 10 per cent of its portfolio to residential properties in Singapore.

source: Straits Times

The Current State Of The Singapore Property Market

[Singapore] A few good conversational pieces can make social lunches entertaining if not worthwhile. The hot topic is of course property. Depending on who you talk to, there is always a different angle to a given topic. OK, let's open up the topic a little wider to add more perspective and entertainment.

Norway Is Tycoon Next Target |  'take my money', it needs a home.
After his US$200 million resort and mountain park buying adventure in Iceland has been blocked, China property tycoon's dollars is screaming all the way to Norway for attention.
Sounds lucrative to me - 'paper currency for mountains'

Malaysia has bulk buying investment clubs to gain an edge in discounts and smaller down payments.

These days, some people evolve strategies to game the system. It is the norm and the  theme of 'making your money work harder, smarter and come out of it a little better' has no expiry date.

As far as housing goes, the new refrain making its rounds everywhere in sales pitches is 'affordable'. There is no doubt about that. 'Look, my house just shrunk. Of course it has to be affordable. How else can I buy'.

There was a time when the authorities came out to say it is not building 2-room HDB flat any more, as public expectations have changed.

Given a few short years, how quickly this position has reversed. And now smaller and smaller homes seem to be the in thing. Japan and Hong Kong type housing, anyone?

So when we hear a little public hollering, the hue and cry just goes to tell 'the policy' is hitting its mark and that goes for housing too.

A new refrain from industry circle has just begun which is another way of saying that the pain inflicted on the property market is starting to tell.

With the property sector almost strait-jacketed, a property developer has metaphorised the residential property market to a stringed-up crab with all eight legs strung tight. No way to move, so to speak.

Seven rounds of cooling measure and one TDSR leaves little room for the property market to manoeuvre.

Though the TDSR, or total debt servicing ratio, is not represented as a property cooling measure, it is by far the most effective instrument in curbing momentum.

TDSR requires banks to thoroughly compute into account a borrower's total debt obligations which is set at a maximum of 60 per cent of a buyer's gross monthly income, before a new home loan can be granted. Total debt includes other mortgages and car loans as part of the deal.

The combined weight of a string of cooling measures which include a lower loan-to-value ratio, shorter loan term, additional buyer's stamp duty (ABSD) and seller's stamp duty (SSD) and the TDSR framework have finally succeeded to stall the residential market dead in its tracks, said industry analysts.

The question to ask is ‘Is the property market stabilising or is it going to go under? If so, by how much?'

The measures have curtailed transaction volumes significantly and led to a moderation in home prices.

Prior to the implementation of the TDSR, buying sentiment for private homes in particular were fleetingly cautious, only to move on in a frenzy, until the next successive cooling measure came along.

What is noticeable were short intervals of up and down adjustments in transaction volumes, with the lull coming immediately after each introduction and the upswing after developers introduced counter moves to offset the effect, in new launches.

However, ever since the TDSR framework was introduced on 29 June 2013, new home sales are down drastically across the board, including those in the mass market segment taking a major hit.

Observed the TDSR effect before and after its implemention.

Before the measures, developers shifted 9,950 private homes in the first half of 2013.

After the measures, developers sales were down about half, with 5,065 units sold

Industry Response

With the entire residential market affected, responses from industry leaders are coming in thick and fast.

Respected helmers in the banking and property industry have taken it upon themselves to speak out for the property sector and call for an easing of the cooling measures.

On the sidelines of the Real Estate Developers' Association of Singapore (Redas) Spring Festival lunch two weeks back, City Developments executive chairman Kwek Leng Beng suggested that the time may be ripe for the Government to mull over the lifting or tweaking of some of the cooling measures, in the light of concerns over the global economy.

DBS Bank chief executive Piyush Gupta predicted last week that home prices this year would fall by 10 to 15 per cent.

Shrinking volumes and price moderations, just when these measures are starting to bite will not prompt the Government to roll back the cooling measures at this point in time. The truth is a ­gradual deflation in prices may well be what the doctor ordered.

In fact the government may just have resolved one of the sticky issues most disgruntled Singaporeans have over high property prices and unaffordability issues.

Prices almost unchanged

The fall in private home prices has been small and shallow as Urban Redevelopment Authority data shows, dipping a mere 0.9 per cent in the fourth quarter of last year.

This was the first time that overall prices had fallen since the first quarter of 2012.

But look again, see this graph. Jan 2014, the average price has moved back up ever so slightly.

Although there is some merit in calls for a scaling down of the cooling measures, the latest numbers just show that it is still early days to make any rational move. Latest news portray good class bungalow market making a comeback and limited office spaces likely to boost rents this quarter.

Additionally, key drivers fuelling the property buying spree - like high liquidity, low unemployment, low interest rates, inflationary pressure and rising income among the more affluent - have not abated.

So while some developers are hurting, the evidence does not support an imminent lifting of cooling measures.

Addressing a looming over supply

Some analysts are concerned with a looming massive supply of public and private homes.

From 2014 to 2016, more than 97,000 new Housing Board flats will be completed. The private home segment, including executive condo will contribute another 77,000 units.

"It is not going to be easy calibrating the property market for a soft landing because the real estate market is imperfect on both the supply and demand side," said Savills research head Alan Cheong.

"The best one can do is to ensure that the macro variables like interest rates and policies are not either overly restrictive or loose. Within that framework, the Government should accept some degree of volatility."

The general concensus is that a 10% drop in prices over the next 12 months is generally accepted as not too excessive, given the run-up over the past five years.

But there is a Savills article that bucks the prevailing trend. See Savills report, “Savills sees private property prices rising 2%, not falling as expected”

Public Housing

The simmering issue of public housing has been significantly addressed by the housing authorities ramping up the supply of Build- To-Order flats to meet demand of first-time buyers at subsidised and ‘affordable’ prices, alongside with its various housing schemes introduced to make public housing even more available to a wider scope of buyers.

The ‘3 Generation flats in Yishun’ initiative and the ‘Parenthood Priority Scheme’ & ‘Parenthood Provisional Housing Scheme’ were public housing policies to support social objectives.

Monitoring the market

The Government is undoubtedly keeping a close tap on the property market, monitoring it closely to avoid being wrong-footed should there be a drastic change in market conditions

Industry watchers believe that the Additional Buyer Stamp Duty (ABSD) and Seller Stamp Duty (SSD) have somewhat achieved their objectives of keeping over-exuberant property investors and speculators at bay.

In fact it doesn’t pay to speculate these days, with runaway home prices, property supply overhang and a potential upward revision in interest on borrowings.

The punitive seller’s stamp duty with rates of up to 16 per cent imposed on home owners who resell their property within four years have effectively driven speculators out of the market.

Will the authorities loosen up on restrictions?  All will be likely done in due course, as the market equilibrates itself.

However managing the property market is not an exact science because property is very much sentiment driven. When there is a crowd, everybody wants in. When no one is buying, nobody wants to make the first move.

This is where sales campaigns all over the world use sentiment-driven concepts to drive sales. Weave a yarn and form a web-cobbled trap. Watch your steps or be blithefully entrapped.

source: Straits Times

Too early to roll back cooling measures

Cut in state land sales, Fed stance on low interest rates could mean private home prices more likely to rise

Too early to roll back cooling measures.jpg

THE Ministry of National Development's decision to cut state land sales for private housing development for the first half of next year reflects official caution about an oversupply building up. Not only has MND chopped supply on both the confirmed and reserve lists but it will be pushing out mostly not-so-hot sites on the confirmed list to prevent benchmark bids from being set and hence pushing up prices of other sites.

The industry is bracing itself for record numbers of private housing completions. And with the introduction of the total debt servicing ratio (TDSR) framework in late June, developers' private housing sales have, on the whole, slowed. CBRE estimates that 2013 will end with around 15,000 units (excluding executive condominiums) sold - down from last year's record of 22,197. Next year, the figure is likely to shrink further to 10,000-12,000.

With sales down, some developers have started trimming prices. The goal is to launch projects as soon as possible - on fears of worsening sentiment as a housing glut builds up. In the public housing market too, prices of HDB resale flats have begun to soften. If the trend continues, that will clip HDB flat owners' capacity to upgrade to a mass-market private condo.

Against this backdrop, there have been suggestions from some quarters that the government may begin to roll back some of the property cooling measures in 2014. However, that may be overlooking some factors that could potentially spark a resurgence in private residential property prices.

Firstly, there is no sign that the price of land - the most vital factor of production in property development - is coming down. New market entrants and even some local players hungry for replacement land have been stoking up land bids at government land sale (GLS) tenders. If developers pay higher land prices, they will obviously do their best to sell the projects at higher prices.

No doubt, MND will be launching mostly "inferior" sites on the confirmed list of the first-half 2014 GLS Programme, but there are many plum ones on the reserve list that may be triggered and which could result in benchmark prices being set at tender.

Savills Singapore research head Alan Cheong highlights that three projects that have done well post-TDSR due to relatively attractive pricing - The Inflora in Upper Changi, The Tembusu in Tampines Road, and Duo in Ophir Road - are coming up on sites that have low historical land cost. These will be exceptions.

Most developers have paid top dollar for mass-market condo sites at state tenders and would be loath to price projects below market as this could entail a loss.

Another reason prices will be sticky going south is that developers mostly have strong financial reserves. Mr Cheong argues that by now, they have probably realised that they can afford to hold prices of mass-market and mid-tier projects, and still finish developing and selling them out within the five-year timeline from the date of award of the site (to qualify for upfront remission of the 15 per cent additional buyer's stamp duty or ABSD).

"If project sales simmer down - after the initial launch hype - to a rate of 2-2.5 per cent of the number of units in a development per month, developers will still be able to sell out their inventory over a reasonable time without resorting to price cuts," Mr Cheong said.

He based his prognosis on monthly sales patterns of projects launched following the introduction of TDSR.

In any case, developers may be constrained from slashing prices because of covenants stipulated by lenders in their project financing agreements.

As for the HDB market, the government has already stated that it will begin tapering supply of new build-to-order (BTO) flats from next year. That should mitigate a potential glut and downward price pressure on the HDB resale market. In turn, this should provide stable support for mass-market private condos.

On the demand side, sentiment towards real estate is likely to improve following the United States Federal Reserve's recent pronouncement that short-term interest rates will stay near-zero for a longer time.

Taking into account all these factors, along with the cut in the H1 2014 GLS Programme, one could argue that there is a higher likelihood of prices going up than plunging. Of course, there may be some unknown factor(s) that could rock confidence in Singapore's property market. If that happens, price cuts may no longer be met with buyers quickly mopping up supply.

For now, however, it may be a little early to roll back the property cooling measures.

source: Business Times - 27 Dec 2013