Real News‎ > ‎2013‎ > ‎June 2013‎ > ‎

18 June 2013

New home sales stabilise; more land on the way

Source: Straits Times
By Fiona Chan

SALES of new homes in Singapore are showing signs of stabilising, with transaction volumes holding steady last month and more land being released to meet residential demand this month.

Developers sold 1,455 units last month, 5.4 per cent more than in April, the Urban Redevelopment Authority (URA) said yesterday. This breaks a 12-month streak of double-digit swings in new home sales. It comes despite new launches jumping 31 per cent last month, data showed.

While demand could have been dented in the last week of May by the stock market dip, analysts said steady sales show buyers and developers are adjusting after property curbs in January.

"The steady transaction level could be due to robust demand from genuine first-time home buyers as well as competitive pricing put out by developers to entice potential home buyers," said PropNex chief executive Mohd Ismail.

Ms Chia Siew Chuin, director of research and advisory at Colliers International, noted that demand nearly matched supply last month, with sales close to the 1,521 units launched.

"This provides some indication that pent-up demand is gradually being met, while cooling measures are also slowly working through the market," she said.

Including executive condominiums (ECs), the sales tally last month was 1,912 units, up 23.2 per cent from April, URA said.

This was largely due to Twin Fountains in Woodlands, which sold 316 units last month at an average price of $741 per sq ft (psf).

While most of the buying demand continued to focus on affordable suburban homes, interest also returned to pricier ones.

About 40 per cent of the units sold last month were located in city-fringe areas, the highest proportion since August 2010, said Knight Frank associate director and head of research Alice Tan.

She attributed this to some popular launches in these areas as well as rising suburban home prices, which are narrowing the gap with city-fringe homes.

In the prime central districts, the number of new homes sold fell to 125 last month from 178 in April. These included three units that sold for more than $5,000 psf - one in Hamilton Scotts and two in TwentyOne Angullia Park - for the first time since September last year, said Maybank Kim Eng analyst Wilson Liew.

Analysts expect sales to stay steady this month as concerns over the economy and financial market turmoil balance out some anticipated new projects, including J Gateway in Jurong.

Meanwhile, the Government said yesterday it would put up five new sites for sale this month, yielding 3,600 homes in all. Two are EC sites, at Punggol Drive, and Yuan Ching Road in Jurong, which were launched for sale yesterday.

A condo site at Mount Sophia will be launched for sale on June 28, as will a commercial cum residential site at Yishun Central 1. A similar mixed site at Meyappa Chettiar Road will be made available for application on June 28 as well.

Backdated forms at heart of row

Key point raised after buyers take case to court when owner pulls out of $3.7m deal

Source: Straits Times
By K. C. Vijayan Senior Law Correspondent

A WOMAN'S refusal to go through with a deal to sell her $3.68 million house to a couple has called into question at the High Court whether backdating property documents is lawful.

Madam Ting Siew May was sent an "option to purchase" (OTP) form by an agent acting for Madam Boon Lay Choo and her husband Law Khim Huat, who sought to buy her landed property in Jalan Angin Laut in Simei.

Madam Ting signed the form on Oct 13 last year but it had been backdated to Oct 4 - two days before tougher new loan rules kicked in.

This meant Madam Boon could apply for a mortgage under the older, less stringent rules.

Under "property cooling" rules introduced by the Monetary Authority of Singapore (MAS), the loan-to-value ratio for new residential property loans was reduced to 60 per cent if the borrower's loan period extended beyond the retirement age of 65 years, among other things.

Prior to the Oct 6 cut-off date, Madam Boon and her husband, who are in their 50s, would have been eligible for a loan of up to 80 per cent of the property's value.

The couple, who had already paid the 1 per cent deposit, are seeking a High Court order to compel Madam Ting to complete the option to purchase exercise.

At issue is whether a backdated option to purchase form signed by the seller is valid, or whether the court will intervene to make the deal valid or quash it altogether.

Madam Ting is declining to sell her property and in so doing, is arguing that she did not know about the new MAS regulations when she signed the backdated OTP because she was in Indonesia with her son at the time.

Court papers filed by her lawyer P. Balagopal said she came to know of the MAS rules through her son Francis only when she returned to Singapore on Oct 19.

She made it clear she did not agree to the backdating of the OTP at all and any backdating was of no benefit to her.

Madam Ting told her lawyers to abort the sale as she found it was illegal to get around the MAS rules by backdating the OTP.

She denied claims by the buyers in court documents filed that she reneged on the deal because she believed her house was worth more than the $3.68 million they had originally agreed on.

But the buyers, represented by lawyer Ng Lip Chee, made clear in court documents filed that they are prepared to buy the property on the basis that the OTP was signed on Oct 13, with the backdated version cancelled.

This would redress any alleged irregularity and also mean that their loan eligibility would be lowered in line with the new MAS rules.

The High Court hearing, which began in April, is due to continue later this week before Judicial Commissioner Lionel Yee. The court is expected to clarify the law on backdating of property deal documents.

The case will also make clear whether the court is prepared to step in and cleanse the contract by allowing the date signed to be the actual date of the deal instead of the previous one.


Property rules in Beijing get stricter

New construction requirements as home prices continue rising

Source: Straits Times | Asia 

BEIJING - Beijing is tightening rules for real estate projects as local officials seek new measures to contain a rebound in home prices.

The city will require non-residential projects and residential developments bigger than an average 1,506 sq ft to meet requirements on construction progress before applying for presale permits, the local housing bureau said.

The move follows a June 6 rule ordering presale proceeds to be managed by banks and paid to developers gradually as construction progresses.

The Chinese capital has introduced the country's strictest property curbs to deter speculators, including minimum down payment requirements of 70 per cent for second homes and a ban on single-person households buying more than one residence.

New-home prices in Beijing increased 2 per cent last month from April, when they rose 3.1 per cent, the biggest gain among China's four first-tier cities, according to SouFun Holdings.

The new measures, which will increase builders' funding needs before sales begin and restrict their flexibility in using the presale proceeds, "are putting pressure on developers to accelerate new market supplies", Mr Hu Jinghui, a vice-president of Bacic & 5i5j Group, Beijing's second-biggest property broker, said.

The city "aims to increase developers' risk factors and interfere with their expectations for higher home prices".

China requires developers to obtain presale permits from local housing authorities before they can sell apartments under construction.

Builders also need to get other documents, including land-use rights and construction permits.

Developers cannot apply for presale permits for buildings with fewer than seven floors until the main structure is completed, or until half of the stories are done for taller projects, according to the June 14 statement on the local housing bureau's website.

The requirements apply to all non-residential projects whose land is bought after Aug 1.

Beijing's stricter presale rules "imply housing policies may become more localised," Mr Du Jinsong, a property research analyst at Credit Suisse Group in Hong Kong, said.

"While this new measure should not have near-term impact on Beijing's housing supply, some may view it as a sign of further tightening measures to come."

The failure of official curbs to stem price hikes in Beijing highlights the government's struggle to keep housing affordable as urbanisation sends rural workers into China's largest cities.

In one of his last policies, former premier Wen Jiabao called on city governments to "decisively" curb real estate speculation after home prices surged the most in two years in January.

Beijing followed with the toughest curbs among the 35 provincial-level cities that responded with price-control targets, becoming the only region to raise the minimum down payment on second homes from 60 per cent and to enforce a 20 per cent capital-gains tax on existing homes.

Still, prices of new homes in the city of 19.6 million jumped 10.3 per cent in April from a year earlier.

A 1,679 sq ft three-bedroom apartment in Vanke Park No. 5, on the north border of Beijing's central business district, has risen to about 6.4 million yuan (S$1.3 million).

That compares to about 2.8 million yuan five years ago.

Up 128%

A 1,679 sq ft three-bedroom apartment in Vanke Park No. 5, in the north of Beijing's central business district, now costs 6.4 million yuan (S$1.3 million), up from about 2.8 million yuan five years ago.

Up 2%

New-home prices in Beijing increased this much last month from April, when they rose 3.1 per cent, the biggest gain among China's four first-tier cities, according to SouFun Holdings.


While this new measure should not have near-term impact on Beijing's housing supply, some may view it as a sign of further tightening measures to come.

- Mr Du Jinsong, a property research analyst at Credit Suisse Group, Hong Kong

5 sites on sale can yield 3,600 homes

2 EC tenders to close on same day in bid to moderate bids

Source: Straits Times | Money By Cheryl Ong

FIVE government sites that could yield up to 3,600 homes in all were put up for sale yesterday with tenders for the two executive condominium (EC) sites closing on the same day next month.

The move by the Urban Redevelopment Authority (URA) to have the tenders for land with similar characteristics close together was revealed by The Straits Times in March.

The aim is to prevent the top tender for one site being used as a benchmark for a second similar or neighbouring site as it may lead to more aggressive bids.

The URA said back then: "Many have suggested that batching land tenders may help to moderate tender bids and hence subsequent property prices."

Apart from the EC sites in Punggol Drive and Yuan Ching Road, a private home plot in Mount Sophia that many residents had hoped would be preserved and two mixed-use parcels, at Yishun Avenue2 and Meyappa Chettiar Road, were released. All are on 99-year leases.

Four of the five sites are on the confirmed list of the Government Land Sales programme, while the land in Meyappa Chettiar Road is on the reserve list.

The tender results for the sites will be closely watched as "all are rather attractive with their special characteristics", said ERA Realty key executive officer Eugene Lim.

The 24,065 sqm EC site at Punggol Drive is expected to draw strong interest from developers due to its proximity to MyWaterway@Punggol.

R'ST Research director Ong Kah Seng noted: "EC buying interest in Punggol is highly supported by the waterway-living concept, and there will still be buyers who appreciate ECs here so long as they are priced attractively."

Experts expect five bids for the site, with the top one between $310 and $340 per sq ft per plot ratio (psf ppr), estimated Mr Ong.

That would price the site at up to $299 million. About 825 units can be built on the site, with sales prices expected at $700 to $740 psf.

The EC plot at Yuan Ching Road is on 20,213 sqm and also tipped to draw strong interest, with up to 10 bidders expected given the shortage of such sites in the Jurong area, said Ms Alice Tan, associate director and head of research at Knight Frank Singapore. The site could yield about 610 units.

Westmere, which received Temporary Occupation Permit status in 1999, was the last EC launched there, added OrangeTee's head of research and consultancy, Ms Christine Li.

Mr Lim also noted that the site is near facilities such as the JCube, Jem and Westgate malls in the upcoming Jurong Gateway commercial hub.

The top bid is tipped to come in at $320 to $350 psf ppr, with the selling price of the eventual development in the range of $730 to $780 psf.

Yesterday's land release included some plum spots on the private property front.

The Mount Sophia site, which appeals because of its central location, is expected to draw about 10 to 15 bids, said Ms Tan.

"(It) is located within a short walking distance of Dhoby Ghaut MRT Interchange and the newly-renovated Plaza Singapura," she noted.

The 23,771 sqm site, which can yield about 500 units, also has historical significance as it once accommodated the Methodist Girls' School (MGS) at 11 Mount Sophia, Trinity Theological College at 7 Mount Sophia and the Nan Hwa Girls' School.

Some had urged that the site remain as an arts enclave, while some MGS old girls wanted all the school buildings on the site to be conserved.

Developers are also expected to be keen on the 41,073 sqm mixed-use site at Yishun Avenue2, due to its location next to Yishun MRT station and Northpoint Shopping Centre.

"Mixed developments next to MRT stations are a proven success formula," noted Mr Lim, adding that upgraders from Housing Board flats in Yishun would be attracted to the new development.

Developers will be attracted to the mixed-use site at Meyappa Chettiar Road by its proximity to Potong Pasir MRT station and the nex and City Square malls.

Land on the reserve list is put up for tender once a developer makes an acceptable initial offer.

Mr Ong noted that projects in the area scheduled for completion over the next few years include Nin Residence, 18 Woodsville, Sant Ritz and Sennett Residence.

The commercial space that can be developed on the Meyappa Chettiar Road site will cater to the needs of the new residents, adding to the amenities in Potong Pasir, he said. The site can accommodate about 765 units.

Tenders close on July30 for both EC sites and on Aug7 for the Mount Sophia plot.

Bids for the Yishun Avenue2 site must be in by Sept5.