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31 July 2013

New BTO launch attracts many singles

Five applications from singles for every 2-room flat set aside for them

Source: Straits Times 
By Daryl Chin Property Correspondent

WITHIN hours of yesterday's Build-To-Order (BTO) launch, the Housing Board received five applications from singles for every two-room flat that had been set aside for them.

Property analysts, reversing their previous expectation of a poor take-up, said numbers will rise because the latest offer is too good to pass.

Yesterday's launch marked the first time singles, who had previously been restricted to the resale market, were allowed to buy new two-room flats, starting with those in Sengkang and Yishun.

Up to a third of the 519 flats will be reserved for singles.

But making it even sweeter are grants which are now being offered to low-income singles to buy new two-roomers.

The Government announced yesterday that those earning $1,125 a month or less can get as much as $30,000 in subsidies. It rises to as much as $60,000 if two singles apply under the Joint Singles Scheme.

National Development Minister Khaw Boon Wan yesterday made clear his concern for helping the lower-income become home owners. "With housing grants of up to $60,000, these two-room flats will only cost as little as $16,000 for low-income families... We are on the right track."

PropNex chief executive Mohamed Ismail said singles now have an alternative to having to fork out cash premiums paid above a resale flat's valuation in the open market.

"Another pull factor is that some of the flats are already being built, and would be ready soon."

The 108 two-roomers in the Orchid Spring @ Yishun, for instance, are expected to be completed by the end of next year.

Civil servant Fiona Tan is keen on the new 35 sq m and 45 sq m units in Yishun, where prices start from $76,000, saying the grants are attractive. But she is hesitant due to their small size.

"Ideally I would want something bigger," said the 42-year- old single, who currently lives in a rental flat in Queenstown.

Mr Khaw added yesterday that the number of two-room flats available to singles this time round is just "a start", and that other types of flats may be made available in future.

The Government yesterday also extended the Additional CPF Housing Grant of up to $20,000 to singles who are looking to buy a resale flat, but have a monthly income ceiling of $2,500 or less.

Low-income singles buying a property under the Joint Singles Scheme get double the amount.

This is on top of the $15,000 all singles earning less than $5,000 get when buying their first flat in the resale market.

"There is a small group of buyers who have fallen through the cracks. The added funds would help mitigate the impact of cash premiums, and would push for home ownership," said SLP International's head of research Nicholas Mak.



More qualify as first-timer couples for new flats

Source: Straits Times 

SECOND-TIME buyers will stand more chance of bagging a flat under the new rule changes.

Those who have bought a Housing Board unit in the past and want to do so again with a new partner will now be treated as first-timers.

This means they move up in the queue.

The policy change, which kicked in yesterday, will help divorcees and those who have previously bought a flat with a sibling or parent.

In the past, they would have been considered second-timers and less likely to get a unit during a launch.

Project engineer Zheng Kai Ling said that she and her fiance were at a disadvantage when they applied for a flat together last year, because he was a divorcee on his second purchase.

"It was quite unfair," added the 30-year-old.

"I was a first-timer, but we were categorised as second- timers.

"In terms of priority we were far behind first-timer couples, so we were left with flats which were not in good locations."

In the end, they managed to get a new unit in Sengkang's Rivervale Delta, which was not one of the most popular projects.

"It's too bad for me that this move didn't come sooner, but I think it's good for couples in similar circumstances," said Ms Zheng.

Yesterday's new Build-To- Order exercise is due to close next Monday.

CHARISSA YONG

Improvements over the years

REGULAR reviews have been carried out over the years to ensure that housing policies for single people have remained relevant to Singaporeans.

1990 - Introduction of the Joint Singles Scheme (JSS), which allowed two to four singles to pool together and purchase a resale flat.

1991 - The Single Singapore Citizen Scheme meant that singles could buy their own resale flats.

However, these were restricted to three-room flats or smaller, in all but the central areas.

There was no income ceiling.

1998 - Singles could get a grant of $15,000 for resale flats, if they had not received a housing subsidy before and if they earned $3,000 or less a month.

Two singles could get up to $30,000 under the JSS.

2001 - Singles could now buy any three-room or smaller resale flat in any location.

2004 - They were allowed to buy resale flats of any size. But to qualify for a Housing Board loan, their monthly income could not exceed $3,000 and their flat of choice could not be larger than a five-roomer.

2011 - The income ceiling for singles to qualify for the grant was raised from $3,000 to $5,000 a month.

2013 - First-time buyers who are single and earn no more than $5,000 a month can apply for new two-room, Build-To-Order flats in non-mature estates.

They also qualify for the additional housing grants and special housing grants, although the amount allowed will be half of that which families receive.

They will also get an additional housing grant of up to $20,000, if they opt to buy a resale flat in the open market.

However, they would need to earn less than $2,500 a month to qualify.



Jurong EC site draws record bid price

Source: Straits Times 
By Melissa Tan

RECORDS were smashed when 16 developers fought it out for an executive condominium (EC) plot in Jurong.

The top bid of $272.8 million for the 20,213 sq m site on Yuan Ching Road translates to $418 per sq ft (psf) per plot ratio (ppr), a new high for an EC site.

The number of bidders was also a record for an EC site.

The top bid came from a consortium of Evia Real Estate, BBR Development, CNH Investment and OKP Land, and was just 1.8 per cent above the second-highest offer of $267.9 million, or $410 psf ppr, lodged by Greatview Development.

The previous record for an EC tender was $392 psf ppr for the Tampines Trilliant site.

The remarkable contest dramatically underlined just how bullish developers still are on the sector despite recent cooling measures.

The tender process had also ended on the same day - yesterday - bids closed on two other EC sites, under a move to offer similar sites at the same time.

The reasoning behind this is that closing tenders on the same day can help moderate tender bids and, in turn, future property prices. But analysts said that this attempt seems to have failed.

"The three-in-one tender exercise does not seem to have an effect in tempering tender participation as well as bid prices for all the three sites offered," said Jones Lang LaSalle Singapore research director Ong Teck Hui.

Analysts said developers were likely encouraged by pent-up demand and strong sales at the nearby J Gateway condo launch in Jurong late last month.

Evia Real Estate Management managing director Vincent Ong said the consortium was "confident of the EC market due to the burgeoning 'sandwiched class' and its increasingly sophisticated" taste in homes.

It plans to build 500 units on the Yuan Ching Road site.

Analysts put the break-even cost at $740 psf to $802 psf, and launch price at $882 psf.

The other two EC site tenders that closed yesterday attracted less frenetic bidding and fewer contestants, though prices were still relatively high.

A 24,065 sq m site at Punggol Drive fetched a top bid of $312.8 million or $355 psf ppr, lodged by Peak Square in a six-way contest.

And a 13,564.8 sq m plot at Punggol Central drew a top bid of $156 million or $356 psf ppr, lodged by a consortium comprising Master Contract Services and Keong Hong Construction. There were eight bids.

OrangeTee research head Christine Li said the Punggol bids were "slightly more conservative because of the potential policy risk that the $30,000 EC grants for first-timers might be removed before developers could launch the projects".

Still, both top bids exceeded the previous high of $351 psf ppr for a Punggol EC set by the Waterwoods project last December.

Analysts estimated break- even costs of $665 psf to $726 psf for the Punggol Drive site and $665 psf to $728 psf for Punggol Central.

Both are expected to launch at $740 psf to $800 psf.

melissat@sph.com.sg



Turning point looms in property cycle: Redas chief

Source: Straits Times | Money 
By Melissa Tan

SINGAPORE'S property market has been achieving record prices recently. But it could soon face a turning point, a top official from the industry body said yesterday.

"We are approaching an important inflection point in the real estate cycle," said Mr Chia Boon Kuah, president of the Real Estate Developers' Association of Singapore (Redas).

Mr Chia, who is also chief operating officer at Far East Organization, said property has "become a strong magnet as a store of wealth to investors and end-users alike".

He said this was the result of high levels of liquidity and effectively negative real interest rates - that is, where inflation is higher than interest rates.

But risks remain in the Singapore property market, he told a Redas Property Prospects Update seminar held at Grand Copthorne Waterfront Hotel.

Mr Chia cited, for instance, a possible easing in monetary stimulus by the United States, leading to a rise in interest rates, and China recalibrating its domestic policies.

He also pointed to the pipeline of expected property completions here and the physical supply of real estate that will hit the market within the next four years.

"Against this backdrop of increased market volatility and a maturing real estate cycle, prudence and a long-term perspective are essential for the health of the property market."

Mr Chia added that property developers would stay invested here, noting that the private sector invested $12.6 billion in sites released under the Government Land Sales (GLS) programme last year. This was up from $12 billion in 2011 and $10 billion in 2010.

International Property Advisor director Ku Swee Yong, another speaker at the Redas seminar, said that to stop home prices from continuing to grow, the Government should boost the available supply of completed Housing Board flats.

Public housing prices have risen at a faster pace than private housing prices, he said, adding that home prices have been rising despite a "patchwork" of cooling measures.

He noted that tightened foreign worker inflows have led to lengthier construction periods, meaning that HDB flats take longer to reach the market.

"Focus on physical, completed, available supply. It's about TOPs (temporary occupation permits), not GLS or launches," he said.

Mr Ku suggested that the Government temporarily allow construction firms to hire more foreign labour to complete HDB flats faster.

Other speakers at the Redas seminar included analysts from property consultancies DTZ, CBRE, Savills and Knight Frank as well as OCBC Bank.

melissat@sph.com.sg



DBS offers 'protection' for home owners

Source: Straits Times | Money

THE public's concerns that interest rates could start rising have prompted DBS Bank to introduce a product offering to help protect home owners in case their instalments start increasing.

The DBS Interest Guard acts like an insurance policy for new and existing mortgages that are pegged to the interbank rate, which will increase if global rates rise.

The product means a borrower can cap his interest rate for a set period no matter what happens to rates in the open market.

It will cost from $5 to $23 a month for every $100,000 of the loan, depending on the form of protection.

Protection can be bought for only two or three years. After that the borrower will have to pay instalments at the new interest rate.

Customers can choose when their protection kicks in.

One option starts when the local interbank rate hits 1.5 per cent.

The more expensive option is triggered when the interbank rate hits 1 per cent, providing a lower interest rate cap for the borrower.

JONATHAN KWOK





New 2-room BTO flats for singles