28th December, Friday
Residential
Retirement income schemes given a boost Source: Business Times The enhancements made to the Silver Housing Bonus (SHB) and Lease Buyback scheme (LBS), which will enable elderly Singaporeans to top up less of their net sale proceeds and get more in cash, may drive up activity in the resale market, say some consultants. Under the original SHB scheme, all net sale proceeds (monies left from the sale of the existing flat after deducting outstanding loans and expenses) are channelled to top up the CPF Retirement Accounts (RA) to the prevailing minimum sum. The $20,000 bonus given to the household comprised $15,000 in cash and $5,000 CPF top-up. Under the enhanced scheme, the top-up requirement is lowered to $60,000 per household (subject to a $100,000 cap on cash proceeds for those who have not achieved the prevailing minimum sum). The $20,000 bonus is entirely disbursed in cash. Assuming the net sale proceeds are between $60,000 and $160,000, the household will need to use $60,000 to top up any lessee's RA. The household will be able to retain the remaining proceeds of up to $100,000 in cash. For transactions where net proceeds exceed $160,000, the remaining proceeds will be used to further help the lessee with the lowest RA balance meet the prevailing minimum sum. Lee Sze Teck, senior manager, training, research and consultancy, at DWG said that he expected this enhancement to make HDB studio apartments more popular. "In 2012, the average subscription rate for BTO studio apartments was around 2.0. This could go up to 3.0." However, this scheme may not be suitable for all elderly households, said another analyst. "I think this scheme is attractive for senior citizens who need to monetise their flats but do not need a lot of cash immediately," he said. "The government is basically encouraging them to put their money in their CPF accounts as a form of savings . . . Another type of senior citizen who may not be attracted to this scheme is those who are very confident in their investment capabilities." The LBS - which allows the lower-income elderly living in three-room or smaller HDB flats to sell the tail-end lease of their flats to the government to boost their retirement income - also saw a host of enhancements. The LBS bonus will be increased from $10,000 ($5,000 if the household previously owned a four-room or bigger flat) to $20,000 cash bonus for all households. In addition, the eligibility criteria has been relaxed to allow more of the elderly to qualify. This includes households that enjoy more than one housing subsidy, former private property owners, and households with a more than $5,000 outstanding loan. The top-up requirement was also lowered, allowing households to withdraw excess proceeds in cash after topping up their RA. Analysts were divided over the potential impact on the market. Singstats numbers showed that some 474,000 aged 55 and above live in four-room and larger flats. Assuming that these flats are co-owned and that 20 per cent of these flats are sold to leverage the SHB, there is a potential supply of 47,440 flats for the resale market. "Over time, this additional supply of resale flats will help address the supply crunch and therefore help to stabilise resale prices and COVs," said an analyst. But one analyst said that the excess money from the schemes may be fed back into the system in the form of inflated cash-over-valuations (COVs). "There is a high probability that excess money from the schemes may dribble to the younger generation to use as COV, driving up activity in the resale market." While some impact might be felt in the HDB resale market, analysts did not expect it to filter to the private residential segment. "The number of the elderly adopting this option may not see a major spike and more resale flats on offer will cater to the burgeoning demand for such flats. Buyers of private residential properties generally have different requirements ... so even if more choices are available in the HDB resale segment, it doesn't necessarily shift demand." Analysts said that the take-up of these schemes will be low. "It is critical that HDB provide adequate supply of two, three-room flats as well as studio apartments in both mature and non-mature estates to provide a choice for those who wish to take up this scheme and downgrade. Prices of studio apartments should be kept affordable (under $100,000) to encourage more to take up such units." Applications for both schemes can be submitted from 1 February 2013. The LBS will continue to be available to interested applicants under existing terms until 31 January 2013. Eligible elderly households with pending LBS applications submitted on or after 17 February 2012 can opt for the enhanced LBS by submitting a fresh application from February next year.
Links to the story: http://www.businesstimes.com.sg/print/382257 http://www.straitstimes.com/st/print/707233 http://www.straitstimes.com/st/print/707267 http://www.channelnewsasia.com/stories/singaporelocalnews/print/1244734/1/.html
Woodlands EC draws keen interest Source: The Straits Times Another executive condominium (EC) project, Forestville in Woodlands, has attracted strong interest from buyers. When online applications closed earlier this week, the development at the junction of Woodlands Avenue 5 and Woodlands Drive 16 had received 1,201 applications for its 653 units. That is a subscription rate of 1.8 times. Average prices are expected to be $700 per sq ft with sales starting today. It will be the first EC to be launched in Woodlands since La Casa in 2005.
Link to the story: http://www.straitstimes.com/st/print/707515
Interest growing over $2m EC unit Source: The Straits Times The $2 million-plus price tag does not seem to have dampened interest among potential buyers for a spacious executive condominium (EC) that hits the market tomorrow. At least 12 people have expressed interest in the "presidential suite" at CityLife @ Tampines, according to the marketing agent. Other large apartments at the 514-unit project also garnered healthy interest Thursday, the second day of the showflat preview. Bookings open tomorrow, with average prices of $770 per sq ft (psf). Potential buyers of such units The Straits Times spoke to are mostly Housing Board upgraders or young couples receiving financial assistance from their parents. Many also indicated they are planning for multi-generational living.
Link to the story: http://www.straitstimes.com/st/print/707261
Investment Sales
Goldman heads for S'pore property market exit Source: Business Times NTUC Income, which early last year acquired a 49 per cent stake in 16 Collyer Quay from Goldman Sachs, is now believed to be stitching a deal to buy out the remaining 51 per cent in the 999-year leasehold office tower from the US bank to gain full ownership of the asset. Business Times understands that the transaction values the office tower at around $660 million, or close to $2,400 per sq ft on net lettable area of 278,356 sq ft. Income's acquisition last year valued the property at about $626 million or $2,250 psf on NLA. When Goldman sells its remaining 51 per cent in Savu Investments, which owns the 37-storey office tower, it will mark the divestment of its last major Singapore real estate asset, say market watchers.
Link to the story: http://www.businesstimes.com.sg/print/382266
Industrial
JTC releases 3 industrial sites for public tender Source: Business Times JTC Corporation has put up for public tender the final batch of sites in the Confirmed List under the Industrial Government Land Sales programme for the second half of this year. The latest three plots, among 16 released over that period, are in Ubi Avenue 4, Tuas South Avenue 10 and Tuas South Street 8. The Ubi site is zoned for Business 1 development, usually intended for light and clean industrial use, while the Tuas sites are zoned for Business 2 development, which allows for heavier industrial use. The plot in Ubi Avenue 4 is 0.35 ha in size with a lease of 30 years and a maximum permissible gross plot ratio of 2.5. Analysts say this site is of note because of its favourable location and fair proximity to the Tai Seng and MacPherson MRT stations. They expect offers ranging from $110 to $160 per sq ft per plot ratio (psf ppr) from between five and 10 bidders. The land parcel in Tuas South Avenue 10 is a 3.96-ha plot with a tenure of 30 years and a maximum permissible gross plot ratio of 1.4. Top bids could come in at $50 to $95 psf ppr, market watchers noted, with three to eight offers. The analysts mostly expect interest from developers. The final plot, a 0.3-ha parcel in Tuas South Street 8 referred to as Plot 10, will have a lease of 22 years five months and a maximum permissible gross plot ratio of 1.0. Analysts expect bids of between $55 and $70 psf ppr with keen interest, going by the recent bidding activity for land in the area. Predictions ranged from five to 18 bidders. The latest tender will close on 7 February at 11am.
Links to the story: http://www.businesstimes.com.sg/print/382252 http://www.channelnewsasia.com/stories/singaporebusinessnews/print/1244681/1/.html
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