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11 March 2013

11th March, Monday




Keeping HDB homes affordable

Source: Business Times

Will the HDB one day return to the policy where public flats can be sold only back to the board?

Such a move is among several the government is looking at in its push to drive down prices of new flats.

Minister for National Development Khaw Boon Wan said that other measures being considered to keep flat prices affordable include lengthening the minimum occupation period and shortening leases.

Mr Khaw cited these as "reasonable" options that will be discussed further to consider their impact on the market.


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Cap on foreign tenants may push up private home rents

Source: The Straits Times

Private property rents may go up slightly in some segments as a result of the cap on the number of foreign tenants in each Housing Board block, analysts said Sunday.

Suburban condominiums and older private apartments in the city fringe and suburbs may see rents rise by 5 per cent to 8 per cent.

But since foreign tenants who rent Housing Board flats may be price-sensitive, the cap may also just redistribute them across Housing Board estates rather than pushing them over to private property, they said.

Property consultants said yesterday that rents for lower-end private property could rise as a result.

DWG senior manager Lee Sze Teck thinks rents for suburban private apartments would probably go up 3 per cent to 5 per cent while the rest of the private rental market is likely to be unaffected. This is because some apartment rents are closer to Housing Board rents, and some foreign tenants may want assurance of a longer tenancy contract, he said.

But Mr Lee added that many foreign tenants were likely to be on one-year or two-year work passes, so the tenancy cap would probably not make a difference to most of them.

Housing Board flats are usually rented out for less than $3,000 a month while suburban condo rents are at least $3,000.

Given that the difference between Housing Board and private unit rents for comparable locations and unit sizes could be about $1,000 a month, many foreign tenants are likely to try to continue renting Housing Board units, said an analyst. A select few who are more affluent may opt for suburban condos but most foreign tenants may just redistribute themselves among HDB estates.


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HDB income rule for singles may be tweaked

Source: The Straits Times

The income-level criterion for singles who can buy new flats from the Housing Board may be adjusted upwards, depending on whether the demand is manageable, said Minister for National Development Khaw Boon Wan Sunday.

Mr Khaw said the restrictions are part of a "first step".

"I hope it (the subscription rates) is manageable. Then we can look to raising the income level."

In the case of singles, he added that his priority should be those who earn less than others at the higher end of the wage bracket.


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Demand cools for industrial space

Source: Business Times

Speculative demand for industrial properties has eased, following the seventh round of cooling measures, arresting the problem of spiralling prices.

According to a report, demand for strata factories moderated following the introduction of the seller's stamp duty (SSD).

Specifically, demand for strata factory units slipped from 133 in the 28-day time-frame before the introduction of the seventh cooling measure to 118 in the period after.

The monthly average demand for strata factories also fell, to 173 transactions in the period from Jan 12, after hitting a high of 321.8 transactions per month on average in the second half of 2012 to Jan 11, 2013.

While the measures have given speculators pause, end-users are still buying. "There is real demand, and for people prepared to hold for more than three years, this means a willingness to ride out the SSD. This is especially in the secondary market since units can be rented out immediately. So these are not people buying to flip, but buying to collect rental as an investment," the report said.

Another factor drawing investors to the secondary market is that sellers are more flexible about adjusting their prices.

According to an analyst, the number of transactions seen post-measures is within expectations given that cooling measures typically result in a knee-jerk reaction as potential buyers stay on the sidelines to assess the impact of the measures. This was further intensified with the slowdown in activities due to the approaching Chinese New Year holidays then, he added.


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Industrial carparks being used as offices

Source: The Straits Times

Cubicles have squeezed out cars in some industrial buildings as tenants try to maximise the use of their space amid rising business costs.

A check by The Straits Times of a few strata industrial projects found that some tenants had converted the private parking spaces in their units into glass-fronted offices.

Industrial strata units typically have two private carpark spaces included in each unit. They are behind metal roller shutters at the unit's entrance.

The conversion of these private parking spaces into offices could be a violation of usage guidelines laid down by the Urban Redevelopment Authority (URA).

"Conversion of these (carpark) lots to independent offices is not allowed as industrial premises are intended to serve industrial activities," the URA told The Straits Times last week.


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