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28 June 2013

Larger mangrove areas for Punggol

Source: Straits Times
By Kash Cheong

HUGE swathes of freshwater mangroves and floating wetlands will be planted at Punggol Waterway to benefit future residents and visitors.

The Housing Board began "greening" the area in June 2011 by planting 160 sq m of mangroves. This is set to grow massively to about 6,000 sq m of freshwater mangroves and 500 sq m of floating wetlands.

"The plants absorb nitrates from the water, therefore acting as a natural filter," said the HDB's principal architect Alan Tan. "Freshwater mangroves also strengthen the embankments. The greenery has attracted 80 species of birds so far."

Some 50 sq m of floating wetlands have been successfully test-bedded at Sunrise Bridge on the eastern side of the 4.2km waterway.

The expansion of mangroves and floating wetlands, which will take place over the next three to five years, will cost about $2.65 million in total. Funding has been secured by the Ministry of National Development, Mr Tan said.

Mangroves covered about 13.5 per cent of Singapore's land area in the 1960s but due to urbanisation, this has become reduced to around 0.5 per cent now.

Mr Christopher Chong, who will move into his Punggol Waterway flat in 2015, said: "I do not disagree with the principle of spending money to replace at least some of the greenery we remove. However, I hope the Government can be more transparent about why the projects cost $2.65 million."

Said Punggol resident Tan Kang Sheng, 24: "The expansion is quite a good move. Punggol could be a model for future towns - sustainable, green and aesthetically appealing."

Additional reporting by Chan Huan Jun

Havelock Road site up for sale for boutique hotel
Plot with 60-year tenure expected to attract small hotel developers

Source: Straits Times | Money 
By Cheryl Ong

DEVELOPERS have been invited to consider buying a plum site for a small boutique hotel fronting the Singapore River.

The 16,536 sq ft plot in Havelock Road has three conserved warehouses, to be restored for use as a hotel by the successful bidder for the site.

Details of sale conditions for the site, with a maximum gross floor area of 23,089 sq ft, were released yesterday under the first half-year Government Land Sales (GLS) programme.

The site is on the reserve list, which means a land parcel is put to tender only if a developer first commits to buy the plot for a sum acceptable to the Government.

"The land parcel at Havelock Road consists of three conserved warehouse buildings which shall be restored for hotel use. Together with its prominent location fronting the Singapore River, the conserved buildings are envisaged to be transformed into a distinctive boutique hotel," the Urban Redevelopment Authority said yesterday.

Experts said the plot is unique given its warehouse buildings and its 60-year tenure, compared to the usual 99 years.

The development will sit among a cluster of riverside hotels, such as the Riverview Hotel, The Gallery Hotel and the Grand Copthorne Waterfront Hotel.

R'ST Research director Ong Kah Seng said that the site would attract investors interested in boutique hotel developments.

"If this site is launched for sale, the tender for this site will likely attract several small hotel developers and operators as the total investment amount is not excessive," added SLP International executive director of research and consultancy Nicholas Mak. He expects a tender, if triggered, to attract about seven to 14 bids.

However, experts pointed out that the conservation status of the warehouses also means that developers will be restricted by existing building specifications and reconditioning costs.

Bigger hotel developers are also unlikely to be interested in the site because of the small number of hotel rooms - only 35 - that can be built, noted Mr Mak.

On Tuesday, the authorities withdrew a plot on Victoria Street - made available last November - from the reserve list of hotel sites as part of the GLS programme for the second half of the year, saying that use of the land was under review.

Two other hotel sites that were also carried over from the first half of the year are on the reserve list. Together with the Havelock site, an estimated 955 hotel rooms can be built.

Mr Ong expects the site to be triggered for sale within a year, with a winning bid of $850 to $980 per sq ft per plot ratio - or $19.6 million to $22.6 million.


The land parcel at Havelock Road consists of three conserved warehouse buildings which shall be restored for hotel use. Together with its prominent location fronting the Singapore River, the conserved buildings are envisaged to be transformed into a distinctive boutique hotel.

- Urban Redevelopment Authority

MAS Introduces Debt Servicing Framework for Property Loans

Source: MAS
Singapore, 28 June 2013

The Monetary Authority of Singapore (MAS) will introduce a Total Debt Servicing Ratio (TDSR) framework for all property loans granted by financial institutions (FIs) to individuals1. This will require FIs to take into consideration borrowers’ other outstanding debt obligations when granting property loans. They will help strengthen credit underwriting practices by FIs and encourage financial prudence among borrowers.

2 MAS will also refine rules related to the application of the existing Loan-to-Value (LTV) limits on housing loans. These refinements seek to ensure the effectiveness of the LTV limits that were put in place to cool investment demand in the housing market. In particular, they aim to prevent circumvention of the tighter LTV limits on second and subsequent housing loans. 

Introduction of TDSR framework

3 MAS conducted a thematic inspection of banks’ residential property loan portfolios in 2012. While banks generally had in place sound policies to assess the credit worthiness of borrowers, the inspection and subsequent surveys revealed uneven practices with respect to the application of debt servicing ratios and highlighted areas for improvement in credit underwriting practices.

4 The TDSR framework will provide FIs a robust basis for assessing the debt servicing ability of borrowers applying for property loans, taking into consideration their other outstanding debt obligations. FIs will be required to compute the TDSR, or the percentage of total monthly debt obligations to gross monthly income, on a consistent basis.2

5 The coverage of the TDSR framework will be more comprehensive than FIs’ current practice. The TDSR will apply to loans for the purchase of all types of property, loans secured on property,3 and the re-financing of all such loans.4

6 The methodology for computing the TDSR will be standardised. FIs will be required to:

take into account the monthly repayment for the property loan that the borrower is applying for plus the monthly repayments on all other outstanding property and non-property debt obligations of the borrower;
apply a specified medium-term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when calculating the TDSR;5
apply a haircut of at least 30% to all variable income (e.g. bonuses) and rental income; and
apply haircuts to and amortise the value of any eligible financial assets taken into consideration in assessing the borrower’s debt servicing ability, in order to convert them into ‘income streams’ in computing the TDSR.
7 FIs will be required to verify and obtain relevant documentation on a borrower’s debt obligations and income used in the computation of the TDSR.

8 MAS expects any property loan extended by the FI to not exceed a TDSR threshold of 60% and will regard any property loan in excess of a 60% TDSR to be imprudent.6 The threshold is set at 60% for a start to allow both the FIs and borrowers to familiarise themselves with the TDSR framework and its computation methodology. MAS will monitor and review the 60% threshold over time, with a view to further encouraging financial prudence. 

Refinement of rules related to application of LTV limits

9 MAS will refine certain rules related to the application of the existing LTV limits on housing loans granted by FIs. In particular, MAS will require:

borrowers named on a property loan to be the mortgagors of the residential property for which the loan is taken;
“guarantors” who are standing guarantee for borrowers otherwise assessed by the FI at the point of application for the housing loan not to meet the TDSR threshold for a property loan to be brought in as co-borrowers; and
in the case of joint borrowers, that FIs use the income-weighted average age of borrowers7 when applying the rules on loan tenure.8
Measures for the long term

10 The new rules will take effect from 29 June 2013.

11 The TDSR framework and refinements to the rules relating to the application of LTV limits are structural in nature, and will be in place for the long term. They aim to encourage prudent borrowing by households and strengthen credit underwriting standards by FIs. 

12 They do not involve changes to the LTV limits on housing loans themselves, which were last tightened in January 2013 as part of the government’s package of measures to promote stable and sustainable conditions in the housing market.9 The current LTV limits are not permanent, and will be reviewed depending on the state of the property market.

13 Please refer to the FAQs on MAS’ website for further details.


1 This includes sole proprietorships and vehicles set up by an individual solely to purchase property. 

2 In the case of a joint application for a property loan, the TDSR shall be computed based on the aggregate total monthly debt obligations and aggregate gross monthly incomes of the joint borrowers.

3 Where a loan is secured by a pool of collateral including property, the TDSR rules will apply if the market value of the property is 50% or more of the value of the total pool of collateral.

4 Existing borrowers who are seeking to refinance their housing loans will be exempted, provided they meet the specific conditions set out in MAS’ Guidelines on the Application of TDSR for Property Loans under MAS Notices 645, 1115, 831 and 128.

5 3.5% for housing loans and 4.5% for non-residential property loans.

6 Property loans in excess of the TDSR threshold of 60% should be granted only on an exceptional basis. The board of directors of the FI (or senior management in the case of an FI incorporated outside of Singapore) will have to approve policies and procedures relating to such exceptions. In addition, cases exceeding the threshold will need to be approved by the FI’s credit committee.

7 The income-weighted average age will be based on the borrowers’ gross monthly income.

8 Lower LTV limits apply to a loan granted for the purchase of a residential property, where the loan period extends beyond the retirement age of 65 years or the tenure exceeds 30 years.

9 In January 2013, MAS lowered the LTV limits for housing loans to individuals with one outstanding housing loan from 60% to 50%, and to individuals with two or more outstanding housing loans from 60% to 40%. Loans with longer tenure faced even tighter LTV limits. The LTV limit for housing loans to non-individuals was also reduced to 20%.