12th March, Tuesday
Residential
Singles BTO scheme to benefit 8 in 10 Source: Business Times More than 80 per cent of singles above the age of 35 are eligible to buy new Build-to-Order (BTO) flats, said National Development Minister Khaw Boon Wan, even as he revealed that the government might look at raising the income cap. This follows Mr Khaw's announcement on Friday that first-timer singles earning $5,000 or less will be able to buy new two-room flats in non-mature estates directly from the Housing & Development Board (HDB) with effect from the July BTO exercise. The first BTO exercise for singles will be in Sengkang. "If you set too high a salary ceiling, what it means is when you have to ration and through balloting, then it is luck of the draw and you may end up offering units to those who are earning $10,000 while depriving those who are earning $4,000 or $3,000 who may need it more badly and have fewer options," he said. That said, if subscription rates are manageable, the government will definitely consider raising the income ceiling, said Mr Khaw.
Links to the story: http://www.businesstimes.com.sg/archive/tuesday/print/489193 http://www.todayonline.com/print/84286 http://www.channelnewsasia.com/stories/singaporelocalnews/print/1259173/1/.html
Housing players spooked by talk of changes Source: The Straits Times Alarm and uncertainty are permeating property agencies after National Development Minister Khaw Boon Wan floated three suggestions on how he might reboot the public housing system. While some fear that the changes could cause redundancies in the industry, others worry that they might produce the opposite of the desired result. On Sunday, Mr Khaw said reverting to the pre-1971 system of allowing flats to be sold back only to the Housing Board, with minimal capital gains, could be one way of bringing down the prices of new flats. He has pledged to reduce these by some 30 per cent. If applied to all existing flats, this would effectively shut down the resale market, property analysts said. "Okay, we can all close shop already," said one analyst, referring to the reactions from the 5,000 agents in his company. But DWG senior manager Lee Sze Teck said reverting completely to the older system is "unlikely because of the repercussions". Foremost is the redundancies that would be created from the real estate, finance and legal industries. If Mr Khaw leaves the current public housing market alone and applies this rule only to a new class of flats - 30 per cent cheaper, but not to be resold on the open market - some say it might worsen the income divide. "Public housing has become an asset class, and Singaporeans make money and upgrade because of the capital gains from their flats," said another analyst. If a type of non-appreciating flat is now introduced, such flat owners - likely to be lower- income Singaporeans - will be left out of the "Singapore Dream" of property appreciation, he said. Mr Khaw's two other ideas - shortening flat leases from the current 99 years, and lengthening the minimum occupation period (MOP) so buyers must wait longer before they can sell their flats - also drew mixed reactions. Extending the MOP, currently at five years, would stop people from treating flats as asset classes to sell for profit. But in the short term, it might actually cause resale flat prices to spike as a longer MOP means fewer flats put up for sale, said an analyst. As for selling cheaper flats with shorter leases, this would mimic the situation in the private property market, where there are 99-year-leasehold developments and freehold ones, with the latter type of unit about 20 per cent more expensive. "This is being seriously considered because it is the one measure that will not upset the market," said another analyst. "The flat is being sold for less, but you are also getting less for what you pay." But it might just be kicking the can down the road, he said. "It may be administratively easier, but you won't actually be bringing prices down. You are just creating a new type of flat that will still rise in value with the rest of the market."
Link to the story: http://www.straitstimes.com/archive/tuesday/st/print/900483
Government to increase supply of rental flats by 20% to 60,000 Source: Channelnewsasia The government will ramp up the supply of rental flats to 60,000, a 20 per cent increase from the 50,000 last year. Announcing this in Parliament on Monday, Senior Parliamentary Secretary for National Development Maliki Osman said the government has always been committed to helping the weak and vulnerable victims of circumstances. Dr Maliki also stressed that although market rents have increased significantly, the public rental structure has not increased since 2006. He added that the government also has no plans to do so. In administering the public rental scheme, Dr Maliki said there are rules in place to focus help on the vulnerable while ensuring that imprudent behaviour is not encouraged, and the work ethic is not eroded. But he added that in the application of these rules, the government will consider the merit of each case and exercise flexibility and compassion to help those in dire need.
Link to the story: http://www.channelnewsasia.com/stories/singaporelocalnews/print/1259160/1/.html
Commercial
Investors turning to commercial properties Source: Business Times Restrictive government measures and a fear of inflation are prompting investors to shift from residential to commercial properties. Research carried out by a property consultancy firm showed that the value of transactions in the commercial property market has increased three times over the past four years. This is in line with a global trend where more high net worth individuals (HNWIs) are investing in commercial property.
Link to the story: http://www.businesstimes.com.sg/archive/tuesday/print/489264
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