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Providing you with the latest Singapore Property News relating to residential, commercial and industrial properties. We keep you updated with the latest real estate developments and analysis.

Government sell state land to HDB at a fair market price by chief valuer

January 21, 2023 0 0

A state land meant for HDB BTO flats cannot be sold at historical price as it will be a case of undervaluation which is detrimental to the national reserves.  When a state land is sold to HDB, HDB must put back into the reserves the fair market value of the land. A healthy national reserves will help the future generations of Singaporeans. What is a fair price for HDB to pay for a state land? When selling state land to HDB for public housing developments, the fair market value is determined independently by the Chief Valuer in accordance with market conditions and established valuation principles. The chief valuer considers relevant public housing transactions and the specific parameters of the site. "The fair market value is determined independently by the Chief Valuer in accordance with market conditions and established valuation principles, HDB said that it does not take into account provision for a profit margin. HDB subsidies for BTO flats benefit Singaporeans In order to keep the price of BTO flats relatively stable, HDB study transactions of resale flats that are comparable before applying the appropriate subsidies and grants. MND explained that market subsidies are not directly comparable across projects, launches and years, as they depend on prevailing market conditions, attributes of the BTO projects offered and the prevailing household incomes. HDB said that with many BTO projects launched every year in different housing estates, new flat selling prices will not be constant, and will have to take into account the different attributes and location of the flats on offer. It then applies a "significant subsidy" to the assessed market values to ensure that new flats remain affordable for BTO flat buyers. The total development cost, which includes construction and land costs, cannot be fully covered by the selling prices of flats as the latter is highly subsidised. Although construction costs had jumped by nearly 30 per cent, HDB has kept BTO flat prices in check through the various subsidy. As a result, HDB incurs significant deficits every year in its Home Ownership Programme, which are evident from its annual reports. In the latest FY2021/22, HDB recorded a deficit of about S$3.85 billion in its Home Ownership Programme. The land sold by URA for private residential development is carried out by open tender through the Government Land Sales (GLS) programme. The property developer with the highest bid will be awarded the land for development.  Nevertheless, transactions for land sold for private housing developments are not used to value land sold to HDB for public housing developments.

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Delayed completion for new condo and compensation for late TOP

January 06, 2023 0 0

The last thing a buyer wants is that their new home will be delayed for another 6 months after waiting for so many years since the project launch date.  Not many buyers have an existing home to fall back on while waiting for the completion of their new launch condominium. Unless they are staying with their parents while waiting for the Temporary Occupation Permit (TOP) of the project. Therefore, most of these new launch buyers would have signed at least a two years lease to rent an apartment at a public HDB flat or a private residential property.  The Tre Ver in Potong Pasir and Avenue South Residence in Silat Avenue had their TOP date delayed by approximately 4 to 6 months. Its property developer, UOL Group, attributes the delayed completion to shortage of construction materials and foreign labour amid the supply chain disruptions as a result of COVID-19 pandemic.  Given the sky high rental since the pandemic, some of these homeowners might regret buying a new launch project instead of a resale private property. Firstly, a resale condo is definitely cheaper than a new launch in terms of per square foot (PSF) by a few hundred dollars.  Secondly, the standard legal completion for a resale condo is 10 to 12 weeks or up to 3 months. So, you save the unnecessary overheads to rent a house elsewhere which can easily amount to $100,000 for two to three years lease. This savings could be translated into major renovation to turn your resale unit into a brand new home.  Buying a new launch condo does not mean that you do not need to renovate the house. It is a basic house with flooring, kitchen cabinets, wardrobe, sanitary fittings as well as genric white goods such as oven and stove. There will be no lights and curtains. Most homeowners spend at least a month to rectify the defects for the newly TOP projects. In the worst case scenario, there might be water seepage between units. Defects check is a cumbersome and time consuming process. Your renovation works cannot commence until the property developer has rectified your house defects. Else, they will assume that your contractor caused the defects. From the day you collect the keys from the developer till the day you move into your house after renovation, it will take approximately 3 months. Therefore, any delay in the date of vacant possession will be disastrous for any homeowners.  If the TOP date was on time, the new homeowners would not need to wait until 2023 to sign a renovation contract and paying one per cent more in Goods and Service Tax (GST) rate. One of the owners from The Tre Ver lamented the delays meant that she had to move between rental accommodations not once but twice, resulting in a higher rent and unnecessary mover cost.  For short term six months lease, the rent premium is often 25% higher than a two years lease. Most landlords prefer a long term lease to lock in the high rent while it lasts.  How to check the legal completion date for my condo? Refer to your Sale & Purchase Agreement (S&PA) and look for Vacant Possession Date. This is the legal deadline by which property developers must deliver a newly completed unit to you. Do not rely on “Expected Date of Vacant Possession” or “Expected Date of Completion” in the marketing brochure for the new launch projects. How to seek compensation for delayed completion to my new condominium? The property developer may be liable to pay to the Purchaser liquidated damages if vacant possession of the Property is delivered to the Purchaser after the Vacant Possession Date mentioned in Sale & Purchase Agreement (S&PA). The liquidated damages is computed on a daily basis at the rate of 10% per annum on the total sum of all the instalments paid by the Purchaser towards the Purchase Price, and are payable commencing on the start date until vacant possession of the Property is delivered to the Purchaser. The S&PA contracts in Singapore are approved by the Controller of Housing (COH) to protect the interest of new home buyers.  Contact your conveyancing lawyer to seek professional advice to claim compensation for delayed completion.

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Will property prices drop in 2023?

January 02, 2023 0 0

PropertyForSale analyst predicts resale HDB and private property prices to moderate in 2023 amid a strong supply of new homes and macroeconomic risk. In 2023, there will be more than 20,000 landed, non-landed, and executive condominiums to be completed. It could help to stabilise Singapore property prices as buyers have more choices. HDB will launch more than 8,000 BTO flats for sale in first half of 2023. Some of these BTO flats will have shorter waiting time and draw buyers away from the resale HDB market. Macroeconomic risk Macroeconomics takes a high-level look at the overall behavior, performance and structure of an economy. It focus on activities including monetary policy changes, political or civil unrest, population migration and shifts in tax regimes. The three major factors of macroeconomic are national output, unemployment, and inflation which has a varying degrees of influence on your real estate portfolio. Singapore economic growth is expected to slow to moderate further with sharp slowdowns expected in the United States and Europe. For 2023, semiconductor manufacturing is expected to be hit by a global fall in demand, as a result the manufacturers will cut back on capital spending, adversely affecting the machinery and systems segment of precision engineering. It will depress Singapore’s manufacturing sector’s most active segments of electronics and chemicals. Trade agency Enterprise Singapore predicted trade growth of negative 2 per cent to 0 per cent for 2023. Singapore may avoid a full-year recession in 2023 but there is a real risk of a technical recession – two consecutive quarters of negative growth – in the first half. Enterprise SG said non-oil domestic exports (NODX) will shrink by 2 per cent in 2023 which pales in comparison to 6 per cent NODX growth in 2022. NODX fell by 5.6 per cent in October 2022, the first decline in 22 months. High interest rate for housing loans The persistent rising interest rates could dampen the interest of home buyers. Although HDB loans are pegged to 2.6% fixed rate, the banks and financial institutions are offering their fixed rate home loans as high as 4.25% for two years lock-in period. Property Cooling Measures The number of million-dollar flat transactions should reduce in 2023 as the 15-month wait-out period property cooling measures targets private homeowners whom are aspiring to downgrade and own executive flats. More than 340 HDB flats were resold for at least S$1 million in the first 11 months of 2022. It broke the record of 259 deals done in the whole of 2021.

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Ming Arcade sold to Royal Group for S$172 million or S$3,125 psf ppr

December 16, 2022 0 0

Ming Arcade, a freehold commercial site completed in 1982, has been sold to Royal Group for S$172 million by public tender. The sale price of S$172 million translates to S$3,125 per square foot per plot ratio (psf ppr) which exceeded the reserve price of S$140 million when it was put up for sale in mid November by the exclusive marketing agent Savills Singapore. Ming Arcade’s owners are represented by Thomas Toh, solicitor of CTLC Law Corporation. The buyer is the Royal Group of Companies, a Singapore-based, single-family office founded by its chairman Asok Kumar Hiranandani. They own Sofitel Singapore Sentosa Resort & Spa and Singapore’s upcoming second Raffles Hotel in Sentosa which will house an exclusive 62 villas’ only luxury hotel. Ming Arcade sits on a plot of approximately 12,132 square feet and is zoned ''commercial'' under the 2019 Master Plan. Therefore, Royal Group will not have to pay additional buyer's stamp duty (ABSD). There are 88 units in the seven-storey commercial complex built by a subsidiary of People's Park Development owned by the late Ho Kok Cheong. It has three basement levels and an existing verified development baseline of 55,046 square feet, equivalent to a plot ratio of 4.54. It has a height control of up to 20 storeys according to URA. Back in the 1980s, Ming Arcade was popular for its music scene, housing the Rainbow Lounge - the first theatre-disco lounge and music venue in Singapore. Ming Arcade is only ten minutes walk from Orchard MRT station which appeals to Asian ultra-high-net-worth buyers and family offices. 

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New private home sales drop to record low in November is a red flag

December 16, 2022 0 0

New private home sales in November tumbled to a record low of only 259 units sold excluding executive condominiums (ECs), according to URA. The core central region (CCR) had 148 units sold. This was followed by 73 units in the Rest Central Region (RCR) and 38 units sold in Outside Central Region (OCR). November marked the second consecutive month of drop in new private home sales. It was a 17.3 per cent decrease from October new home sales of 313 units. Most analysts cited a lack of new property launches and year-end holiday season to the disappointing sales figures. Propertyforsale managing director Chia Jin Tai has a word of caution ahead of New Year 2023.  "It was only back in December 2014 when Singapore new home sales was much lower at 230 units. We attributed this to a slew of property cooling measures including Additional Buyer Stamp Duty (ABSD), Loan to Value (LTV) and Total Debt Servicing Ratio (TDSR) implemented in 2013," he said. "The Government intervened because new launch property prices was extremely high and it eventually peaked. As a result, Singapore property prices dropped from 2015 to 2018," he added. The 3 month SIBOR rate is now at 4.25% which is the highest since 2000 and it is poised to rise further in tandem with US Federal reserve interest rate hike. In contrast, during the new private home sales all time low in December 2014, the 3 month SIBOR was only 0.45%.  "If low interest rate fail to lure buyers into the property market, why would high mortgage rate will? Moreover, there have been talks of a global recession in 2023 or 2024," said Mr Chia. The boutique property developments of 38-unit Sophia Regency, 34-unit Kovan Jewel and 72-unit Hill House were launched for sale in November. However, only 16 units were sold.

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Workplace death at the construction site of Copen Grand executive condominium EC in Tengah

December 14, 2022 0 0

The Singapore Police Force (SPF) and the Singapore Civil Defence Force (SCDF) were alerted to a workplace accident at the construction site of Copen Grand EC at Tengah Garden Avenue on Tuesday about 4.35pm. A 32-year-old Indian foreign worker and his colleagues were unloading steel bars from a lorry crane. During the process, the boom of the lorry crane fell abruptly and struck the Indian foreign worker. He was pinned against the lorry bed, said the Ministry of Manpower (MOM). He was pronounced dead on site by a SCDF paramedic. A 45-year-old man was arrested for allegedly causing death by a negligent act, SPF said. The main contractor and builder, Woh Hup, has been ordered by MOM to stop all lifting operations involving lorry cranes. There have been 44 workplace fatalities this year and MOM takes a serious view of workplace safety breaches. The developer of the executive condominium is Taurus Properties SG, a joint venture between City Developments Limited (CDL) and MCL Land.  Copen Grand is a 99 years leasehold Executive Condominium at Tengah Garden Walk with a total of 639 units. There are 12 blocks with 14 storeys high. The expected Temporary Occupation Permit (TOP) of Copen Grand is December 2027. 

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