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28 August 2012

28th August, Tuesday




Residential DC rates poised to climb

Source: Business Times

Development charge (DC) rates are set to increase from 1 September for non-landed residential use, say property consultants. This is based on land sales in the past six months at prices above land values implied by prevailing DC rates.

Most also forecast higher DC - payable for enhancing the use of some sites or building a bigger development on them - for industrial use, again citing winning land bids at state tenders.

However, rates are predicted to remain either flat or increase only slightly for landed residential and commercial use. Nevertheless, commercial DC rates may rise in locations where there have been brisk sales of strata offices or shops, suggests an analyst. These could include Shenton Way (where Oxley Tower and Eon Shenton's office and shop units sold like hot cakes earlier this year), Changi and Upper Changi Roads - shop units at East Village proved to be popular - as well as Upper Serangoon and Upper Paya Lebar.

The increases are likely to be concentrated in geographical sectors such as 100 (which includes Punggol, Sengkang and Buangkok) and 99 (covering Pasir Ris and Loyang), where four 99-year leasehold state land parcels have been sold in the past half-year at 42-64 per cent above land value implied by prevailing 1 March 2012 non-landed residential DC rates in the respective geographical sectors.

A rate hike is also expected in geographical sector 113, which covers Hillview, where a plot was sold at a state tender at 79 per cent above the DC-rate implied land value. Three other private housing plots - on Boon Lay Way, Bright Hill Drive and in Tanah Merah - fetched premiums of 52, 55 and 81 per cent above their respective DC-rate implied land values.

For commercial use, the average DC rate appreciated 6 per cent in the March revision. However, come 1 September, "commercial DC rates are expected to be flat on average, despite falling office rents, as prices have held up with strong investor interest as a result of residential cooling measures", says an analyst.

For the upcoming revision of DC rates for industrial use, expectations are running high for a rate hike - on the back of evidence of "strong demand, leasing and sales markets, and unrelenting price appreciation". The most telling increases are expected in the mature locations of Ubi and Kaki Bukit, and Upper Paya Lebar and Tai Seng.


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Foreign buyers returning to S'pore property

Source: Business Times

Foreign interest in non-landed private residential properties is returning, following a slump in interest after the Additional Buyer's Stamp Duty (ABSD) was introduced in December last year.

Looking at the four largest groups of foreign purchasers by nationality, Malaysians made up the largest portion of foreign purchasers in 2Q, at 6.3 per cent, followed by Indonesians at 4.7 per cent, Mainland Chinese at 4.4 per cent, and Indian nationals, at 3.0 per cent.

Indonesians accounted for the biggest jump in transactions, from 247 in 1Q to 391 in 2Q, followed closely by Malaysians from 398 in 1Q to 521 transactions in 2Q. Mainland Chinese transactions rose to 365 in 2Q from 311 the previous quarter while transactions done by Indian nationals rose from 173 in 1Q to 252 in 2Q.

For the period from July to Aug 23, mainland Chinese demand perked up, accounting for 6.2 per cent of foreign purchases, just behind that of Malaysians at 7 per cent. This was followed by buyers from India and Indonesia, which constituted 4.2 and 3.7 per cent respectively.

Malaysians were involved in 120 transactions between July and Aug 23, followed by mainland Chinese (107), Indian nationals (72), and Indonesians (63).


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Rents for private housing climb to new high

Source: The Straits Times

Private housing rents have kept climbing to hit a fresh high last month, as a growing number of small apartments drove up prices in per sq ft (psf) terms.

A report by a property consultancy found median rents for non-landed homes were up 7 per cent to $3.60 psf a month while rents for landed homes rose 2 per cent to $2.81 psf a month.

Across the board, rents for last month came in at a record $3.52 psf a month. This is higher than the previous record of $3.46 psf a month in May.

Leasing volumes have also risen in both the landed and non-landed segments, with 4,717 contracts inked last month - 11 per cent more than in June.

In the first seven months of the year, contracts were up 5 per cent to 27,932, compared with the same period last year.

This led to total transactional value reaching $137 million - 8 per cent more than the $126 million recorded in the same period last year, the report noted.

Although newly arrived expatriates appear to have more constrained rental budgets, rents as measured on a psf basis have increased as these tenants lean towards smaller homes, said the report.

The number of leases is expected to stay high, although overall rents are expected to fall. "At the moment, we are not yet witnessing the completion of the bulk of small-format homes sold from 2010 onwards, and this has the effect of keeping the rental indices up," the report noted.


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Allow singles to buy but …

Source: Today

Allow singles to buy a new Build-to-Order (BTO) flat with another single friend or relative. Limit the sizes of the flats that singles can buy directly from the HDB and restrict them to buying units in non-mature estates. Place singles in the same queue as second-time buyers for BTO projects.

Extend the Top-up Grant to singles who buy BTO units. Currently, this scheme allows singles above 35 who bought resale flats to qualify for more subsidies after they tie the knot.

These were some of the suggestions floated by property analysts TODAY spoke to, in light of Prime Minister Lee Hsien Loong's announcement during Sunday's National Day Rally that the Government is considering allowing singles to buy flats directly from HDB.

Currently, singles who are above 35 can only buy flats in the resale market.

However, views were divided among the property analysts on whether HDB should make it easier for unwed mothers to buy BTO flats as compared to singles, given that unwed mothers would have greater need for a home. Those not in favour felt that doing so could send a wrong signal.

One suggestion was to allow singles to buy only BTO flats of limited size and to reserve larger flats for married couples.

The property analysts felt that, ultimately, any new policy will focus on encouraging singles to tie the knot, even after getting the keys to their new flats.


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Tampines Industrial Crescent site receives four bids

Source: Business Times

A site at Plot 3 Tampines Industrial Crescent received four bids at the close of the Industrial Government Land Sales programme on Friday, with a top bid of $55 million, or $77.47 per sq ft per plot ratio (psf ppr).

The top bid, submitted by Oxley Bliss, beat the second-highest bid of $36.3 million, or $51.11 psf ppr, which was put in by Soilbuild Group Holdings.

The site, which has an area of 3.88 ha, has a lease of 30 years, with a maximum permissible gross plot ratio of 1.7, and is zoned B2.

The bids received are reflective of the various restrictions placed on the site, one of which is that the site cannot be strata subdivided, noted an analyst.

Soon Hock Group put in a bid of $18.8 million, or $26.48 psf ppr. Capital Development Pte Ltd and ZACD Investments Pte Ltd put up a joint bid of $17.7 million, or $24.93 psf ppr.


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Investment Sales


Two strata floors of The Octagon up for sale

Source: Business Times

Two consecutive strata floors of The Octagon have been put up for sale via an expression of interest.

The ninth and 10th floors of the 25-storey freehold office building at 105 Cecil Street are on the market at an indicative price of $28 million, which works out to $2,262 per sq ft (psf).

With a plate size of 6,189 sq ft each floor, the property is well suited for mid-range space requirements.

Buyers are entitled to a purchase option of a single floor or both consecutive floors, which span 12,378 sq ft in floor area.

The Octagon, which sits at the junction of Boon Tat Street and Cecil Street in the Central Business District, is set to enjoy greater accessibility when Telok Ayer MRT Station on the Downtown Line begins running after its expected completion in 2013.

The building is accessible via the Raffles Place and Tanjong Pagar MRT stations as well as the Central Expressway and Ayer Rajah Expressway.

Offers for the property ends at 3pm on 18 September.


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