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09 April 2013

9th April 2013, Tuesday




Blank cheque practice ahead of property launches set to be regulated

Source: Business Times

The practice of property agents collecting blank cheques from prospective private home buyers as a form of advance booking ahead of a project's launch will come under greater scrutiny.

New rules under the Housing Developers (Control and Licensing) (Amendment) Bill 2013 empower the Minister for National Development to regulate such activities, if there is a need to do so in the future, though developers will retain flexibility in their marketing and promotional activities, said Senior Minister of State for National Development Lee Yi Shyan.

In his speech in Parliament, Mr Lee also said that the amendments to The Housing Developers Act will require developers to provide accurate information on residential transactions to the Controller of Housing "in the same way they would to the Monetary Authority of Singapore for the purpose of loan applications".

"In other words, they will need to disclose any price discount, rebate, or any other benefit, including the reimbursement of any stamp duty or tax granted to home-buyers."

In addition, the amendments arm the Controller with legal power to collect and publish information on building projects, units sold and made available for sale by developers, and sales transactions. "Data collected will be published in an aggregated manner, as frequently as weekly, to aid home-buyers in timely decision-making," said Mr Lee.

The grounds on which the Controller can revoke or suspend a housing developer's licence are being expanded to include the developer's failure to furnish information on the project, its sale and sales transactions.

Developers are also required to accurately depict homes through showflats. All structural walls of a showflat should be built in the same thickness as the final product. Using a glass panel in lieu of a solid brick wall would be misleading. All "add-ons", such as furnishings and interior fittings, must be duly labelled and made known to buyers.

Besides suspension and revocation of licences and fines, deterrent measures in the amended Act include imprisonment.


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Steps to ensure transparency in home sales

Source: The Straits Times

Private home buyers will get better protection against unscrupulous developers with new stiffer laws to ensure "what you see is what you get", in terms of actual prices and the appearance of homes.

When reporting prices, developers must now reveal all discounts, including furniture vouchers and stamp duty reimbursements. This ensures transacted prices for new projects are not artificially inflated - a practice that misleads prospective buyers.

Also, showflats can no longer be made to look more spacious than the finished product, such as through the use of higher ceilings or glass panels in place of brick walls.

These were among the amendments to the Housing Developers (Control and Licensing) Act, approved by Parliament Monday.

The maximum penalty for flouting the law has been raised. Developers can be fined $100,000 - up from $20,000 - and can now be jailed for up to three years.

The Bill also bars anyone convicted of fraud or dishonesty from becoming a director, manager or secretary in a housing developer for five years.


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No delays in construction of BTO flats so far: Khaw

Source: Business Times

Construction timelines for Build-To-Order (BTO) flats have not been delayed so far by a further tightening of foreign labour, even as the Housing and Development Board (HDB) girds itself for the changes.

To that end, National Development Minister Khaw Boon Wan told Parliament Monday that HDB will consider replacing contractors unable to cope with the tighter policies.

It may allow another contractor to take over under a new contract if the original one is unable to proceed. The agency may also terminate non-performing contractors and hire a new one to finish the remaining work.


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Condo sales taper off but interest still strong

Source: The Straits Times

The frenetic pace of a few weeks ago might have eased but sales at new condominium projects are still healthy.

Hundreds of units flew off the shelves during the initial launches of a string of new suburban projects last month and buyers are still in the hunt although sales have tapered off.

The 582-unit Urban Vista next to Tanah Merah MRT station has moved 40 units over the past two weeks, bringing total sales to 370 apartments since its launch last month. Average prices range from $1,400 to $1,550 per sq ft (psf) for the one- to four-bedroom units, said developers Fragrance Group and World Class Land.

Sim Lian Group's Hillion Residences condominium in Bukit Panjang has also enjoyed healthy sales, with 204 units in the 546-unit project sold at an average price of $1,370 psf.

The Hong Leong Holdings development in Bartley Ridge in Mount Vernon also continued to receive healthy interest from buyers, with more than 400 units sold at the 868-unit project. About 260 units went during its initial launch weekend about two weeks ago.

Buyers have now claimed about 730 units of the 912 homes at D'Nest in Pasir Ris since its preview launch on March 15 where 500 units were snapped up within a matter of days.

Roxy-Pacific Holdings has moved about 70 apartments at Jade Residences - comprising 171 homes and two shop units in the Lorong Lew Lian area - since its launch last Friday. Prices work out to $1,416 psf on average, with a two-bedroom 527 sq ft unit going for about $845,000.

But sales at 512-unit Kingsford Hillview Peak are believed to be slow, with market sources saying that fewer than 100 units have been sold since its launch over a week ago.

Other developments gathering interest now include the Twin Fountains executive condominium in Woodlands, Sant Ritz in Potong Pasir and the mixed-use development on the former King Albert Park site.


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BTO flat prices stable despite rising resale prices: Khaw

Source: Today

Prices of HDB’s new Build-to-Order (BTO) flats have remained stable even though resale prices have risen, said National Development Minister Khaw Boon Wan.

He illustrated this with three examples — Punggol, Sengkang and Tampines — in response to a question from Hougang Member of Parliament Png Eng Huat, who asked about the average prices for new flats in mature and new estates a year before and after HDB de-linked BTO flat prices from resale market prices.

In Tampines, prices of flats that were launched in 2011 and 2012 remained at between S$180,000 and S$240,000 for a three-room flat; between S$290,000 and S$360,000 for a four-room flat; and between S$370,000 and S$440,000 for a five-room flat.

As for flats in Punggol, prices for three-room flats and five-room flats have remained stable between 2010 and 2012. Three-room flats ranged between S$150,000 and S$210,000, while five-room flats were between S$330,000 and S$410,000. Prices for four-room flats in Punggol, however, witnessed a slight increase from between S$240,000 and S$330,000 in 2010, to between S$260,000 and S$340,000 in 2011. The prices remained stable in the subsequent year.

BTO prices are not identical as every project is unique, with differences in location and flat attributes, said Mr Khaw. “But by and large, we have kept the BTO prices steady, even though resale prices have risen. And we will continue to do so, until the market stabilises,” he added.


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Parenthood Provisional Housing Scheme extended to all first-time married couples

Source: Today

The Parenthood Provisional Housing Scheme (PPHS) has been extended by the Housing and Development Board (HDB) to include all couples who are married for the first time. The scheme previously only covered first-time married couples who had young children, but under the extended scheme, families with a citizen child under the age of 16 will still be given priority in the allocation of flats.

The scheme was first introduced in January this year to provide an affordable housing option for first-time couples with young children who needed temporary housing while waiting for the completion of their new HDB flats.

HDB said it restricted the scheme to first-time married couples with young children initially as the group had more pressing housing needs, and the supply of rental flats was also limited. Now that there are flats remaining after meeting the demand from the initial target group, HDB has decided to expand the scheme to all first married couples and allow more families to benefit from the scheme.

HDB also launched 900 flats today, which will be available for rental under the scheme. PPHS flats are vacated Selective En-bloc Redevelopment Scheme (SERS) flats that are not immediately needed for redevelopment.

HDB said today that it is carrying out retrofitting works in the flats, and that the flats will be ready for occupation from mid-2013. Monthly rentals for the flats will range from S$800 to S$1,900, depending on the flat type and location.

Applications for flats under the scheme can be submitted from 8 to 29 April this year via HDB InfoWeb or ekiosks at HDB Hub branches.


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Industrial property sales plunge in Q1

Source: Business Times

Even as sales volume of strata-titled factories fell sharply in 1Q, following the introduction of a seller's stamp duty (SSD) in January, prices remained relatively stable.

According to a quarterly research report, sales volume in 1Q plunged 62.3 per cent quarter-on-quarter to 319 caveats, from the 847 lodged in 4Q last year. Compared with a year earlier, sales volumes in 1Q, typically a sluggish period for sales, are 26.5 per cent lower.

Bearing the brunt of the imposition of the SSD on industrial property is the sale of new uncompleted projects. New sale and sub-sale transactions registered a 71.3 per cent decline to 138, from 480 in the preceding quarter, hit by weaker buying interest after the SSD came into place.

Resale transactions of strata-titled factory units fared slightly better, with a 50.7 per cent fall to 181 from 356 three months ago.

The sharp fall in sales volume was not replicated in property prices, though. The full impact of the market-cooling measures could kick in in the two subsequent quarters as price trends "generally exhibit a lagged effect to regulations and measures".

Prices of new strata factory units with a 30-year tenure slipped 4.2 per cent from the previous quarter to $345 per sq ft (psf), by 4 per cent to $425 psf for units with a 60-year lease, by 1.6 per cent to $876 psf for 99-year leases, and by 3.5 per cent to $956 psf for freehold units.

The effect on industrial prices in the secondary market was mixed. Prices of strata-titled factory units with a 30-year lease fell 10.7 per cent quarter-on-quarter to $219, while that on 60-year leases improved 3.8 per cent to $390. The price of 99-year tenured factory units dipped 0.6 per cent to $551 psf, and that of freehold units climbed 3.3 per cent to $634 psf.

Though islandwide industrial gross rents rose 5 per cent quarter-on-quarter to $2.13 psf, this year's supply of 24.12 million sq ft of new factory spaces is expected to cap the rental increase of industrial spaces.

The appreciation of industrial property prices over the past two years should also taper off in the next few quarters following a drop in demand.


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Business parks see flight to quality

Source: Business Times

The business and science park market is thriving and as in the commercial office market of today, there has been a flight by tenants to new buildings with quality specifications and in better locations.

A real estate consultant observes that tenants have been taking advantage of competitive rents in these new developments and consolidating their operations.

With the business park market continuing to record positive net absorption in 1Q 2013, new buildings with quality specifications saw an increased take-up in the quarter, in places such as one-north, Mapletree Business City, and Changi Business Park.

The vacancy rate has fallen to 6.4 per cent from 7.2 per cent last quarter, with the key drivers of demand coming from the financial, pharmaceutical, media and IT industries.

Average rents have levelled out at $3.80 per sq ft per month since the third quarter of 2012.

With around 750,000 sq ft of 2013's new supply yet to be pre-let, the forecast supply of 1.55 million sq ft and competitive rents in the Grade B office market and light industrial markets should keep rental increases in check, despite expected healthy demand this year.

The market could also see further movement in stock in the coming years as more developments are expected to be enhanced or redeveloped.


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