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08 March 2013

8th March, Friday




Sales at Sennett Residence brisk; slower at The Trilinq

Source: Business Times

It was a day of contrasts for two 99-year-leasehold private condo releases Thursday. They both had a similar sort of average pricing - in the $1,400-$1,500 per sq ft (psf) band - but one is in a city-fringe location, next to Potong Pasir MRT Station, while the other is in the suburbs, in Clementi. As expected, the project closer to town drew more buyers.

Tuan Sing, which decided to begin sales at its 332-unit Sennett Residence project yesterday evening - instead of on Saturday as earlier planned - had already sold 175 units by 10.30pm Thursday. Tuan Sing's CFO Chong Chou Yuen said the group had collected nearly 500 cheques and seeing there was "more than enough demand", decided to bring forward the launch date.

The average price is $1,450 psf after upfront discounts of 10 per cent plus 8 per cent.

IOI Group, which opened the doors at its Trilinq condo showflat in Clementi in the late-morning as planned, had sold 85 units by 2pm, according to the company. Business Times (BT) understands the final tally Thursday evening had not changed much from that. So far, the group has released 200 of the project's 755 units.

The developer did not provide BT with an average psf price but sources suggest it could be somewhere around $1,400-$1,500 psf. Unit prices vary from $1,200 psf to $1,800 psf depending on whether the units have void space, which is counted as part of the strata area.

IOI's top brass are also thought to have adopted a strategy of taking a longer period to sell out the 755-unit project, say over its construction period of three to 3 1/2 years, instead of gunning for a more immediate sell-out say in a month.

Another reason for the relatively slow first-day sales at The Trilinq is thought to be the Malaysian group's decision to process options only for buyers who were physically present at the showflat. IOI did not make any sales to proxies, adopting a more conservative approach than typical Singapore developers.

Earlier Thursday, SMSes from property agents were flying furiously about an impending imposition of a prescriptive 30 to 40 per cent mortgage servicing ratio (MSR) cap for private homes supposedly to be effective as early as today.

Separately, BT understands that the government is not planning to introduce a prescriptive MSR cap for private home purchases in the immediate future.


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Big drop in HDB resale deals as new rules bite

Source: The Straits Times

The number of Housing Board resale flats changing hands dropped drastically last month - a sign that the new cooling measures announced at the start of the year are beginning to kick in.

There were around 750 resale deals last month, the lowest activity in any month since the Singapore Real Estate Exchange (SRX) started tracking prices in 2007. This is less than half the 1,740 transactions in February last year.

The data also showed that overall median resale prices of Housing Board flats have dipped slightly, reversing the rising trend in the final quarter of last year.

While the Chinese New Year period usually sees a slowdown, property analysts also attributed last month's dip to the market adjusting to January's measures - especially the new rules governing loans for Housing Board flats.

To prevent buyers from overstretching their finances, the Government capped mortgage payments to banks at 30 per cent of a borrower's monthly income, and 35 per cent if they took a Housing Board loan. Previously, there were no caps for bank loans, which saw some borrowers spend as much as 60 per cent of their monthly pay on mortgages.

An analyst noted that the new cap affected those looking for larger properties more.

For example, a couple with a combined income of $8,000 who opt for a 30-year-loan would only be able to borrow around $570,000, given an interest rate of 3 per cent. This is half of what they could borrow in the past. This couple may then have difficulty getting a centrally located five-room unit, which costs around $800,000, not including the cash premium paid above the flat's valuation.

Another analyst highlighted another factor - the 5 per cent additional buyer's stamp duty for permanent residents (PRs) purchasing their first home.

Dennis Wee Group spokesman Lee Sze Teck added that this latest trend may mean fiercer competition for smaller flats, while cash premiums for larger flats could come down by up to 10 per cent.


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57,000 investment homes face higher taxes

Source: The Straits Times

About a third of Singapore's 169,000 investment homes will face higher property levies once the Budget's new tax structure takes full effect in 2015.

Owners of such units with an annual value of more than $30,000 - or about 57,000 homes - will pay higher taxes, the Ministry of Finance (MOF) told The Straits Times Thursday. The progressive tax rates range from 12 per cent to 20 per cent of a property's annual value.

The other investment homes - about 112,000 properties - have annual values of $30,000 and below, so the existing property tax rate of 10 per cent will continue to apply.

The annual value is the estimated annual rent the property may fetch. An annual value of $30,000, for instance, could apply to a suburban condominium.

Experts say the changes will affect mostly high-end homes, especially with the removal of the property tax refund concession for vacant properties next year.

Properties that are vacant despite reasonable efforts by owners to find a tenant, for instance, can get a full property tax refund for the duration of the vacancy. But from the start of next year, they will be taxed at prevailing property tax rates.

As far as owner-occupied homes go, 97.8 per cent of owners will enjoy lower property taxes, 1 per cent will continue paying no tax while the remaining 1.2 per cent will face higher taxes, the MOF spokesman noted.

Owners of homes with an annual value of $6,000 and less - there are about 9,600 owner- occupied homes in this category - will continue to pay no property tax under both tax structures. These homes include one- and two-room Housing Board flats.


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5-room resale flat sold for S$945,000

Source: Today

More five-room resale flats are breaking through the S$900,000 mark especially in estates like Redhill, Queenstown, Toa Payoh and Marine Parade.

A 10-year flat measuring 1,184 square feet at Block 23 Jalan Membina, near Tiong Bahru MRT station, was sold for S$945,000.

This means that on a per sq ft basis, its price of S$800 is similar to suburban executive condominiums but half the price of condominiums in the area.

According to the HDB - just in the first two months of this year alone, 10 resale flats were sold at more than S$900,000.

And the Singapore Real Estate Exchange said prices have risen by 5 per cent in the past year.

Senior manager for training, research and consultancy at DWG, Lee Sze Teck said: “These areas are mature estates, the BTO supply is limited, also because of the high private property prices in these areas. We expect the resale market to remain stable, because the government is going to build a lot more BTO flats. We only expect resale flat supply to increase in second half of 2013.”


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Investment Sales


Kum family sells Ibis Novena for $150m

Source: Business Times

The Kum family behind the proposed M&L Hospitality Trusts that was to have been floated last year has sold Ibis Novena at Irrawaddy Road for $150 million or about $622,000 per room.

In the latest transaction, property funds managed by Keppel Land unit Alpha Investment Partners are buying the freehold hotel.

The property, which opened in April 2011, is at the corner of Balestier and Irrawaddy roads.


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