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15 January 2013

15th January, Tuesday




Khaw lauds EC scheme but will stay vigilant to prevent abuses

Source: Business Times

The executive condominium (EC) scheme is a "wonderful" one and should continue, as the government addresses prior abuses, Minister for National Development Khaw Boon Wan said Monday.

However, he said the scheme had been taken advantage of by some developers and buyers, which prompted new measures targeted at this segment of the residential market.

Developers had taken to building super-sized ECs, Mr Khaw said, and in some instances had exploited planning rules.

Mr Khaw also explained the move to restrict new dual-key ECs to multi-generational families.

He said some buyers had taken advantage of the concept, meant to offer privacy, to instead rent units out for immediate yield.

Overall, the abuses had led to families that can afford private properties entering the EC market.

"So now that we have fixed this rule, I will continue to be vigilant and see, and if indeed the abuse continues on, we may have to think of other ways of fixing this problem," he added.


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Home sales will fall, even prices may slide

Source: Business Times

In what could be the first rumblings of a long-raging storm, property counters fell while analysts predicted that private home sales would drop and even prices may dip.

The more dire estimates expect property prices, which have climbed despite previous cooling measures, to fall by up to 10 per cent and for transaction volumes to crash by up to 50 per cent.

Analysts have also warned that more measures could be in the works.


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Private home rentals seen remaining stable

Source: Business Times

Private property rentals are likely to remain stable as the latest property cooling measures take effect, analysts have said.

The pool of potential buyers may be shrunken by measures such as a greater minimum upfront cash required from second-time and subsequent home buyers, a higher additional buyer's stamp duty and tighter loan-to-value (LTV) limits on individuals with one or more outstanding housing loans, said an analyst.

But analysts do not expect a corresponding rise in rentals.

Market watchers said other factors may apply downward pressure on prices and rents over the next two to three years, such as a cautious economic outlook and a strong pipeline of projects near completion.


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Little change to property launch prices, dates

Source: Business Times

A number of developers appear to be standing their ground on the dates of their property launches and the prices for their recently launched or soon-to-be launched projects.

A straw poll of eight property agents and developers Monday, the first full working day after the unveiling last Friday of a slew of measures designed to cool down the property market, appeared to indicate this.

Business Times spoke to property agents involved in the sale of private condominiums such as Trilinq, Kingsford @ Hillview Peak, Liberte and Spottiswoode Suites.

Agents for Kingsford @ Hillview Peak think that the developer, Kingsford Development, will get round to offering more attractive pricing when the condominium is launched late next month or in early March.

However, they noted that because the development is targeted at first-time local homeowners, the majority of these buyers are unlikely to be hit by the measures, which are designed to curb property speculation and are aimed at those buying their second or subsequent property for investment.

A 5-7 per cent reduction in prices is expected at the Saturday launch of the 630-unit Q Bay Residences, a joint venture by Frasers Centrepoint, Far East Organization and Sekisui House in Tampines Avenue 10.


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9 in 10 first-timers opt for new HDB flats

Source: The Straits Times

Almost all first-time buyers of public housing are now opting for a brand new Housing Board flat instead of a resale unit.

The HDB said Monday that while 55 per cent of first-timers had gone for new flats in 2009, this figure had shot up to 92 per cent last year. The rest had bought a resale flat with a housing grant.

Property analysts attribute this to the ramped-up supply of new Build-to-Order (BTO) flats - including in mature estates popular with buyers - and a higher monthly income ceiling of $10,000 for applicants.

Some first-timers eyeing resale units have also been put off by rising prices and high cash-over-valuation (COV), which requires stumping up a cash quantum above the property's valuation.

Coupled with grants which can go up to $60,000, first-timers last year on average used less than a quarter of their monthly income to pay off their housing loans, said the HDB. This debt-service ratio, between 21 per cent and 24 per cent, has remained relatively stable in the past four years.


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New home sales, property stocks dip

Source: The Straits Times

The latest round of property cooling measures has taken a fairly heavy toll on weekend new home sales and property stocks.

Share prices of property developers were dragged down across the board Monday as investors worried that the measures could hit the profits of these firms.

Some home buyers were willing to brave the weekend market.

Still, numbers were well down as new home buyers digested this seventh round of measures - the most extensive so far - including tighter loan restrictions.

At 810-unit La Fiesta next to Sengkang MRT station, fewer than 5 per cent of the 400 launched units were bought at the weekend, said EL Development's managing director Lim Yew Soon.

A City Developments spokesman said weekend visitorship to its Echelon showflat next to Redhill MRT station was healthy.

Far East Organization sold a modest 22 units over the weekend despite offering a 5 per cent discount at all its projects in response to the measures. It had sold 38 units on Friday.

Meanwhile, the Controller of Housing issued a circular to developers and solicitors yesterday warning them against backdating options to purchase for homes.

"The Controller takes a serious view of this offence," it said.


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Singles policy 'being finalised'

Source: The Straits Times

In the last 10 years, 18,000 singles aged 35 to 40 bought HDB resale flats. Of these, 3,800 later got married.

National Development Minister Khaw Boon Wan released these figures Monday, in a written reply to Nominated MP Tan Su Shan.

He also said that his ministry is finalising its policy to allow singles to buy new HDB flats for the strict purpose of owner occupation. "We aim to get it implemented this year," he added.

Mr Khaw also said that the minimum age of 35 supports the Government's promotion of marriage and parenthood.

In the revision of policies to allow singles to buy new HDB flats, "there are no plans to lower the minimum age, as marriage rates are highest between the ages of 25 and 34", Mr Khaw said.


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COV for resale flats could drop by 30% after cooling measures: analysts

Source: Channelnewsasia

Some housing analysts said the property market has slowed since the government announced its seventh round of cooling measures on Friday.

One analyst said the Cash-Over-Valuation (COV) for larger public housing resale flats could come down by about 30 per cent in coming weeks.

The median cash premium for a five-room or executive flat has hovered around S$40,000 to S$50,000. But with tighter Mortgage Servicing Ratio, observers said this may change.

Analysts added that the attitudes of sellers may also be shifting, as they realise buyers are more cash strapped.

But there have been some concerns on the ground. Among the new measures announced on Friday, Singaporeans will now have to pay a seven per cent Additional Buyer's Stamp Duty for their second property, and analysts said this could lead to some transitional issues in the future.

Observers said some home buyers may choose to sell off their first property before buying their second property to avoid paying the stamp duty. This poses an interim problem for those currently living in HDB flats.

Some sellers of these houses who are upgrading enter into a bilateral arrangement or extension so as to facilitate and all these things are deemed illegal in the eyes of the HDB. Some may even ask for longer completion time.

This would not be an issue for those in the private housing market. Sellers could reach an agreement with their buyer to rent the property until the new unit is ready.


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Private property market likely to be quiet as buyers assess trend

Source: Channelnewsasia

The property market is likely to see a quieter period after the latest round of cooling measures.

Market experts told Channel NewsAsia both buyers and developers should be taking their time before taking their next steps.

First-time property buyers should be the main targets of developers' now.

Developers are also expected to be more prudent in their sales strategies to attract new buyers.

Just like how the launch of Watertown just weeks after the tough cooling measures announced on December 2011 had excited the market, analysts said upcoming property launches could revive buying interest again.

Low borrowing rates and investors looking for safe havens could see more money going into property buying.


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New curbs could benefit office, retail space

Source: Business Times

The commercial property sector could benefit from the latest cooling measures, analysts believe, as investors look for alternative places to park their money.

The residential market bore the brunt of the latest moves by the Government to curb buoyant prices and demand, with measures that affect all residential properties as well as those specific to public housing and the hybrid executive condominium (EC) market that mostly took effect from Saturday.

As for the industrial sector, a Seller's Stamp Duty has been put in place for the first time.

That means potential investments meant for these two sectors may spill over to the commercial sector, in the form of demand for strata-titled office and retail units.

But an analyst believes it is unlikely that the authorities will come down on the office and retail sector just yet. "I think the government will not intervene in the commercial sector unless prices are moving up too fast and developers are carving up very small units to cater to investment demand rather than occupier demand," she said.

Investors could also start to look beyond Singapore for growth opportunities as their options become more limited, analysts said.

The Iskandar region in Johor, Malaysia; London; Melbourne and Sydney were some of their picks to see an influx of hot money.


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