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S’Porean Buyers Lead Prime Property Sales as Foreign Demand Wanes Amid Stamp Duty Hike

Aaron Maxwell — Mon, 01 Jan 2024 01:18:53 +0000

SINGAPORE – The hike in the additional buyer’s stamp duty (ABSD) for property has resulted in a steep fall in demand from foreigners, with analysts expecting the dampening effect to persist for an extended period.

In January 2023, foreign buyers accounted for 5 per cent of non-landed private resale home transactions, before falling to 3.7 per cent in May after the ABSD for foreigners was increased from 30 per cent to 60 per cent on April 27, noted PropNex Research.

The figure fell further to 1.2 per cent in September, and, by October, had slipped to 1.1 per cent, or nine transactions.

PropNex head of research and content Wong Siew Ying said that of the nine transactions linked to foreigners, seven involved buyers from the United States, and one each from Switzerland and Oman.

Ms Wong expects Singaporean and Singapore permanent resident (PR) buyers to continue to dominate resale condo sales.

She said that according to Urban Redevelopment Authority (URA) Realis data, foreigners from non-exempted jurisdictions accounted for 104 out of 165 resale condo transactions by foreigners from January to April, compared with 42 transactions from May to Nov 24.

Under existing free trade agreements, buyers from the US, Iceland, Liechtenstein, Norway and Switzerland do not need to pay ABSD for their first residential home in Singapore.

They have to fork out the extra stamp duty for subsequent residential properties.

“Overall, we would expect the punitive ABSD rate for foreigners to weigh on the sales of high-end homes,” said Ms Wong.

However, she added that anecdotal feedback indicates that there will still be some big-ticket property purchases, “perhaps among foreigners holding a US passport”.

“Foreigners who are looking at long-term residency in Singapore may also consider buying for their own use,” she said.

The higher ABSD was introduced as part of cooling measures to promote a sustainable property market, the Government said in April.

Ms Wong said fewer resale units were sold to foreigners in the core central region (CCR) and outside central region after the ABSD hike.

The number of units sold to foreigners in the rest of central region ticked up slightly.

Ms Tricia Song, CBRE head of research for Singapore and South-east Asia, said: “The largest impact obviously was in the CCR segment, given that traditionally it has the highest foreigner ratio.”

The number of foreign buyers in the CCR fell from 162 units in the first three months of 2023, to 39 units from July to September.

Six luxury apartments with quantums of $10 million and above, from developments such as Nassim Park Residences and Ardmore Park, were transacted between July and September.

This compares with 19 luxury apartments sold in the previous three months, said Ms Song, who expects the dampening effect on the luxury residential sector to persist in the first half of 2024.

Sculptura Ardmore at 8 Ardmore Park. PHOTO: SC GLOBAL

She said that besides the impact of the property cooling measures, other factors like macroeconomic uncertainties and elevated interest rates could also impact sales in the luxury sector.

“Activity could pick up in the second half of 2024 when the economy picks up more confidently and interest rates stabilise.

“Prices are unlikely to fall significantly, with limited new supply. In the longer term, Singapore remains an attractive safe haven for most investors,” added Ms Song.

Market observers said Singaporean buyers are poised to take centre stage in prime markets, as seen in the preview sale of Watten House in Bukit Timah on Nov 18.

More than half of its 180 units were snapped up, at an average price of $3,230 per square foot.

Artist’s impression of Watten House. PHOTO: COURTESY OF WATTEN HOUSE

Based on transactions done by PropNex agents, the majority were Singaporean buyers and Singapore permanent resident buyers, with only one non-PR foreign buyer from the US, said Mr Dominic Lee, head of luxury team at PropNex.

Singapore citizens buying their second residential property currently have to pay 20 per cent ABSD, and 30 per cent for their third and subsequent property.

PRs pay 5 per cent ABSD for their first residential property, 30 per cent for their second, and 35 per cent ABSD for third and subsequent properties.

Mr Lee said the transacted prices at Watten House ranged from $3.06 million to about $14.5 million, according to URA Realis data.

The purchases at the development showed local buyers have the liquidity to pick up prime, luxury units, he added.

“In 2024, we expect Singaporean buyers and Singapore permanent residents to continue to account for the majority of home sales, across the different sub-markets,” said Mr Lee.

Impact of ABSD

Ms Wong said foreigners accounted for 22.9 per cent of purchases of new sales and resale non-landed properties in December 2011, but the figure fell sharply to 7.3 per cent in January 2012, after the ABSD was first introduced on Dec 8, 2011.

She added that for the rest of 2012, the proportion of foreign buyers stayed below 10 per cent.

PropNex’s Mr Lee said the ABSD has been effective in bringing down the number of homes sold to foreigners.

He noted that between October and December 2011, foreigners purchased 1,236 non-landed new and resale private homes.

The highest number of such sales to foreigners in a single quarter was 634 transactions, between April and June 2012.

Mr Lee said foreign buyers used to return to the market a few months after each ABSD revision.

But with the soaring property prices seen in recent years, many foreign buyers have been hesitant to pay the 60 per cent rate.

Still, sales and buying interest will depend on the specifics of a project and whether it is priced sensitively, Mr Lee said.

If the project is good and well located, and the pricing is right, then it should still do well, he added.

Source : TheStraitsTimes

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Redevelopment of Turf Club Will Support Plans to Turn Woodlands into Regional Hub: Property Analysts

Billy Day — Mon, 19 Jun 2023 03:15:02 +0000

Building housing at the Singapore Turf Club site in Kranji will support the development of Woodlands Regional Centre as Singapore’s largest northern economic hub, said property analysts on Monday.

The Government had announced that the site now occupied by the club will be returned to the state by March 2027, and be developed for housing – including public flats – and other uses such as leisure and recreation.

PropNex Realty chief executive Ismail Gafoor said housing developments on the site of around 120ha will enlarge the population catchment for commercial developments in the area, and provide more workers for businesses and industries in areas such as Lim Chu Kang and Senoko.

At a press conference on Monday, Second Minister for National Development and Finance Indranee Rajah said the site’s redevelopment is “in line with a broader plan to develop the northern region”.

Citing greenery in nearby areas such as Mandai and Sungei Buloh, she said planners will “plan in the context of the place”.

“As we develop the northern area, we want it to have a unique identity, a unique appeal and defining characteristics of its own,” she said.

Diagonally across the turf club’s site will be the Agri-Food Innovation Park, part of previously announced plans to rejuvenate the Sungei Kadut industrial estate, as well as introduce new spaces for business, industry, and research and development in the Woodlands area.

Farther away, the Lim Chu Kang area will be redeveloped into a high-tech agri-food cluster.

Mr Gafoor and other analysts noted that the turf club site – located next to Kranji MRT station on the North-South Line – is currently lacking in amenities, which are necessary to make the area suitable for homes.

The Government must provide retail, food and beverage, and childcare options, he said, while Dr Lee Nai Jia, PropertyGuru Group’s head of real estate intelligence, data and software solutions, said schools would also be needed to provide for young families moving into the area.

At 124ha, the area freed by the club’s closure is larger than newer developments such as the 93ha Bidadari estate, which was previously reported to comprise about 11,000 homes, but much smaller than the 700ha Tengah town, which will yield about 42,000 homes.

Huttons Asia senior director of research Lee Sze Teck noted that much of the land to the north of the racecourse site is zoned for industrial use.

Planners will likely want to insert a buffer between these industrial sites and future homes, and non-residential buildings could be used for this purpose, he said.

On developing an identity for the precinct, Mr Lee suggested that planners look to the turf club’s history in drawing up plans, and take inspiration from the nearby Kranji War Memorial.

Mr Tan See Nin, the Urban Redevelopment Authority’s senior director for physical planning, said at the press conference that master planning for the site has only just begun, and will take another two to three years.

He said the authorities will carry out a stock-take of the structures, buildings and vegetation on site, which will inform development plans.

“We won’t rule out the possibility of keeping some structures if it makes sense to keep them or repurpose them for other uses,” Mr Tan added.

As for the location of future homes, ERA Realty key executive officer Eugene Lim said these could be inserted in the western and eastern areas of the site, as an extension of existing housing types nearby.

For instance, plots for low-rise condominiums or landed homes could be inserted in the western area, said Mr Lim, referencing existing freehold landed properties near the area.

Flats could be built on the eastern end of the site, he said, highlighting a cluster of Housing Board flats in Woodlands Street 41 that is separated from the site of the racecourse by the Bukit Timah Expressway.

The authorities had also said on Monday that leisure and recreational uses are being studied for the site.

PropertyGuru’s Dr Lee said that with Mandai Wildlife Reserve still undergoing expansion – a new rainforest-themed park and a resort are in the works – hotels could be added to the turf club site to cater to visitors to the zoo and other parks.

Source: The Straits Times

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Singapore Super-Prime Residential Sales Rebound in Q1, Face Slower Sales Ahead: Knight Frank

Lorenzo Joe Hamilton — Fri, 16 Jun 2023 02:54:06 +0000

Sales of super-prime residential property in Singapore rebounded 60.9 per cent in the first quarter of 2023 to 37 deals, after a relatively slow Q4 of 2022 which chalked up 23 sales, according to data collected by real estate consultancy Knight Frank.

The consultancy counts transactions valued at over US$10 million to be in the super-prime category.

The number of Singapore transactions closed in Q1 was the same level as the year-earlier period. However, the average sale price of super-prime category deals here fell about 12.4 per cent to US$15.6 million in Q1 2023, from US$17.8 million in Q4 2022. The average sale price was also down 15.2 per cent year on year, from S$18.4 million in Q1 of 2022.

By volume, Singapore’s super-prime residential property transactions in the first quarter of this year surpassed sales in cities such as London and Geneva.

In Knight Frank’s Global Super-Prime Intelligence report released on Monday (Jun 5), Singapore ranked fifth out of 12 markets.

Knight Frank noted that the hike in Additional Buyer’s Stamp Duty (ABSD) for foreigners buying residential property in Singapore to 60 per cent is set to impact demand for prime properties in future quarters.

There were a total of 417 transactions across the 12 markets. Dubai led markets with 88 super-prime sales in Q1, followed by Hong Kong (67), New York (58) and Los Angeles (46).

While total sales volume in Q1 increased by 11 per cent from 376 sales the previous quarter, the total aggregate value of top-end residential sales fell 4 per cent to US$7.2 billion.

The average super-prime sale value was highest in Geneva at US$23.8 million, followed by London at US$20.4 million.

On an annualised basis, super-prime residential sales slowed over recent quarters as global housing markets were hit by roiling interest rate rises, said Knight Frank.

From the full year ended March 2023, 1,645 sales were recorded. This represents a 28.5 per cent fall from 2,298 sales for the full year of 2021 during the pandemic property boom.

The aggregate value of residential sales also fell 26 per cent to US$32.2 billion for the full year ended March 2023, from US$40.7 billion in 2021.

Super-prime sales in Singapore for the year to end-March 2023 stood at US$2.1 billion, down from a peak of US$4.6 billion in 2021.

Dubai topped the list for annual residential sales with 274 sales, followed by London (233), New York (219), Los Angeles (210) and Hong Kong (166). Singapore ranked sixth with 125 sales.

Knight Frank Singapore’s head of private office Nicholas Keong expects transactions for super-prime residential properties to total between US$25 billion and US$27 billion for 2023.

“However, the recovery in growth in the global economy later this year will aid transactions in 2024 with a return to sales in excess of US$30 billion and above,” he added.

Source: The Business Times

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Singapore’s Rent Growth Set to Cool

Fred Aguilar — Sun, 04 Jun 2023 13:05:31 +0000

Rental growth in Singapore is expected to moderate for the rest of this year on more supply and macroeconomic headwinds, providing some respite for tenants struggling with soaring housing costs.

Residential rental growth could slow to less than 5% in the second half, with an overall annual increase of between 10% and 15%, said Bloomberg Intelligence analyst Ken Foong. This comes after an almost 30% jump in 2022 and a 7.2% increase in the first quarter. The market remains underpinned by the city-state’s economic recovery and resilient job market, he said.

Rents and home prices in the financial hub have surged since the Covid-19 pandemic on an influx of wealth, creating a headache for the government to quell discontent among residents. Authorities raised taxes on property purchases in late April, mainly targeting foreign and second-home buyers in a bid to maintain affordability.

The government said earlier this month that it expects signs of easing in the rental market and already sees indications that demand is “abating”. It expects 40,000 home completions this year – the highest in the last five years – and about 100,000 by 2025. Households temporarily renting while waiting for their new homes to be finished will move out of their units, it said.

“While there is still robust demand for rental properties, there are telltale signs that tenants are becoming more resistant to rental price increases,” according to a report by real estate marketplace PropertyGuru. “With supply being slowly restored and the increase in the number of rental listings, rental prices are expected to gradually stabilise.”

Foreigners, who now have to pay an additional 60% tax on a property purchase, would have to turn to renting, said Colliers’ head of research Catherine He. However, this too will be negated by the deluge of new homes coming onto the market, she said.

Source: Bangkok Post

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Buyers from China are Snapping Up Luxury Singapore Property at a Record Rate

Dave Howard Edwards — Sat, 03 Jun 2023 13:13:46 +0000

The number of luxury condominium units bought by foreigners rose to the highest in almost a decade before Singapore doubled taxes on purchases by the demographic.

Foreigners bought 159 non-landed, luxury homes in Singapore’s core central region in the first quarter, according to a report by OrangeTee & Tie Pte. That’s up from 71 units a year earlier.

The number of luxury condominium units bought by Chinese buyers increased to 111 units, up 158 per cent year on year, the property agency said.

Singapore authorities last month doubled property levies for foreigners to 60 per cent, the highest among major global cities, as part of efforts to cool the housing market. The government has said that the policy is a preemptive move as investment demand for residential property is likely to continue to grow otherwise.

“The cooling measures may not affect buyers’ perception of Singapore as one of the best places for property investment,” said Christine Sun, a senior vice president at OrangeTee, citing economic fundamentals.

“Some high-net-worth individuals may continue to park their wealth here as luxury properties are pricey in many other cities.”

More Chinese investing in Singapore homes, ‘politically stable’ environment

Singapore’s home sales surged 80 per cent in April from a month earlier to a seven-month high as more projects were launched, government figures showed Monday.

Foreigners bought 70 units in April, the most since May 2022, according to Lee Sze Teck, senior director of research at Huttons Asia Pte. Most purchases were in the S$2 million (US$1.5 million) to S$5 million category, he said.

Geopolitical tensions may have led more foreigners to buy Singapore properties as a safe-haven asset, he added.

Source: South China Morning Post

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CDL to launch The Myst at Upp Bukit Timah in 2H2023

Cecil Vega — Fri, 02 Jun 2023 13:09:18 +0000

Singapore-listed property group City Developments Ltd (CDL) announced on May 19 that it would launch The Myst, a new 99-year leasehold, 408-unit project at Upper Bukit Timah Road sometime in 2H 2023. The private condo is within a five-minute walk of the Cashew MRT station on the Downtown Line.

On the other hand, CDL has rescheduled the preview for Newport Residences, initially slated for April 29. The freehold, 246-unit Newport Residences is part of a mixed-use development that includes offices, serviced apartments and F&B and retail. It’s a redevelopment of the former Fuji Xerox Towers commercial building on Anson Road in Tanjong Pagar in District 2 of the Core Central Region (CCR).

CDL deferred the preview following the rollout of the latest round of property cooling measures that came into effect on April 27, 2003. The additional buyer’s stamp duty (ABSD) for foreigners buying residential property doubled from 30% to 60%. The ABSD for Singapore citizens buying their second and third or subsequent residential property increased to 20% and 30%, respectively, while that of Singapore Permanent Residents (PRs) increased to 30% and 35%, respectively.

“The Group will monitor the market conditions closely and launch the project [Newport Residences] at the appropriate time,” says CDL.

‘Minimal impact’ on mass and mid-tier segments

In the near term, CDL expects the latest property cooling measures to impact projects with a higher proportion of foreign demand, typically high-end/luxury properties in prime districts or CCR.

The group expects “minimal impact” on the mass and mid-tier segments where most buyers are locals and PRs, as evidenced by the launch of EL Development’s Blossoms By The Park at one-north, where 75% of 275 units sold on the first day of launch on April 29 at an average price of $2,423 psf. The launch of the 816-unit, freehold The Continuum by Hoi Hup and Sunway Property the following weekend saw 211 units sold (26%) at an average price of $2,730 psf. Meanwhile, the 732-unit The Reserve Residences at Jalan Anak Bukit, by a joint venture between Far East Organization and Sino Group, will launch on May 27.

Analyst at RHB, Vijay Natarajan, notes in his report on May 19 that the impact of the cooling measures on CDL’s residential portfolio “is manageable”, as the group has sold 88% of its launched inventory in Singapore as of April.

Natarajan estimates the group could recognise about $5 billion in unbilled residential sales over the next three years. CDL has four projects with about 1,500 units ($2 billion in gross development value) in the launch pipeline. He says that 80% of the unsold units are in the mid-tier and mass-market segments, less impacted by the latest cooling measures aimed mainly at foreigners and investors.

“While we expect a slight moderation in new launch prices post measures, margins are unlikely to see significant compressions and remain in an 8-20% range,” says Natarajan in his report.

The group has residential developments in Australia too. As of 1Q2023, construction of the 198-unit The Marker in West Melbourne has been completed. To date, it is 92% sold. The 60-unit apartment project, Fitzroy Fitzroy, in Melbourne, is 40% presold ahead of its completion in 1Q2024. In Brisbane, its 215-unit Brickworks Park is 49% presold. The 97-unit Treetops at Kenmore, a JV project in Brisbane, is also 49% presold.

Palais Renaissance is 100% occupied as at end March 2023 (Photo: CDL)

Commercial portfolio – strong occupancy

CDL reported that its office portfolio had a committed occupancy of 94.3% as at 1Q2023 – above the island-wide occupancy of 88.8%. Republic Plaza, the group’s flagship Grade-A office building, is 93.2% occupied, with a positive rental reversion of 8.9% in 1Q2023. CDL’s other office assets, City House and King’s Centre, registered committed occupancies of 96.7% and 100%, respectively.

The group’s retail portfolio had a committed occupancy of 97.6%, higher than the island-wide occupancy of 92.4%. City Square Mall’s occupancy was 95% in 1Q2023, while Palais Renaissance, Waterfront Plaza and The Venue Shoppes are 100% leased. Rental reversions at City Square Mall and Palais Renaissance increased 7.9% and 7.5% in 1Q2023, respectively.

Increased shopper traffic and the return of tourists are helping the recovery of the retail sector. However, retailers remain cautious due to inflation challenges, utility costs and rising interest rates, CDL comments.

In March, the group completed its acquisition of St. Katharine Docks, a landmark 23-acre freehold mixed-use marina estate in Central London, for £395 million (about $636 million) [Photo: CDL]

Overseas acquisitions

In March, the group completed its acquisition of St. Katharine Docks, a landmark 23-acre freehold mixed-use marina estate in Central London, for £395 million (about $636 million) or £751 psf ($1,209 psf) on the existing net lettable area. The estate comprises over 500,000 sq ft of Grade A office, F&B, retail and residential arranged across four main buildings and supporting ancillary spaces, including a marina with berths for up to 185 yachts. The office component currently enjoys a strong occupancy rate of 90% with a well-diversified tenant base across sectors such as consulting, shipping, education and co-working spaces.

The acquisition of St. Katharine Docks adds to the group’s portfolio of prime commercial assets in the UK, boosting its total value to over £1 billion. Besides enhancing the group’s recurring income stream, the acquisition complements its fund management strategy, allowing the group to inject its UK assets into listed or unlisted platforms at an opportune time, says CDL.

The group, through its wholly-owned hotel subsidiary Millennium & Copthorne Hotels (M&C) and in a 50:50 joint venture with its New Zealand-listed subsidiary M&C Hotels New Zealand, agreed to acquire the 416-room Sofitel Brisbane Central hotel for A$177.7 million (about $159.2 million), or A$427,000 ($383,000) per key in March. Following the completion of the acquisition in 2H2023, CDL will benefit from this five-star hotel with the most extensive conference facilities in the heart of Brisbane CBD, the group’s third hotel in Australia.

The acquisitions of St. Katharine Docks and Sofitel Brisbane increase CDL’s fund management’s assets under management to US$4 billion, notes RHB’s Natarajan. CDL has a target of US$5 billion by the end of 2023. “The fund management’s business growth has been one of its key strategies to improve its weak core ROE [return on equity],” he comments.

The 48-unit Pregio Joto Chuo in Osaka (left) and the 78-unit City Lux Yokohama in Yokohama (right), are among the freehold residential buildings in CDL’s Japan PRS portfolio, which has 714 units to date and occupancy above 95% (Hong Leong Hi Life website)

PRS, PBSA portfolio boost

In April, CDL acquired two assets in Osaka’s private rented sector (PRS) for ¥31.5 billion ($314.1 million). With 201 units, they bring the total number of PRS units in Japan to 714. The average occupancy of its Japanese assets is above 95%. CDL states that strong demand from residents and corporates will drive leasing momentum in 1H2023 as border restrictions ease and foreigners return.

According to CDL, the group’s UK PRS portfolio continues to be “a counter-cyclical asset class” post-pandemic. Leasing is ongoing for The Junction, the Group’s PRS development in Leeds, which obtained practical completion for three out of five blocks (307 out of 665 units).

In the UK, the group has a purpose-built student accommodation (PBSA) portfolio of 2,400 beds across five cities, with committed occupancy of 98% for the academic year 2022/2023. With high demand and post-pandemic recovery, CDL expects “significant rental growth” in the next academic year.

Source: CDL 1Q2023 business update

Hotel portfolio RevPAR rebounds

CDL’s hotels registered global revenue per available room (RevPAR) growth of 65.4% to $13.2 for 1Q2023, up from $79.3 y-o-y, fuelled by the strong recovery from Asia and Australasia.

In 1Q2023, Singapore hotels recorded an 88.9% y-o-y increase in RevPAR, mainly due to higher average room rates. As travel restrictions have gradually lifted for the rest of Asia, these hotels recorded 150.2% y-o-y RevPAR growth propelled by the strong performance in Taipei and Beijing.

The group opened the 294-room M Social Suzhou hotel in April, marking its first M Social property in China. The M Social Suzhou is within Hong Leong City Center, the group’s integrated development next to Jinji Lake in Suzhou Industrial Park.

According to CDL, the hotels in Australasia achieved strong RevPAR growth of 126.8% to $112.5 in 1Q2023 due to higher occupancy and room rates.

In Europe, CDL’s hotels recorded a 40.9% increase in RevPAR in 1Q2023 to $138.9. London hotels achieved an average room rate of $248.7, 22.3% higher than last year, resulting in a 39.7% growth in RevPAR.

The US hotels recorded a 38.4% y-o-y increase in RevPAR in 1Q2023, driven primarily by the New York hotels. The higher average room rate and the continued focus on cost management enabled the New York hotels to achieve a lower gross operating loss than Q1 2022.

The group opened the 294-room M Social Suzhou hotel in April, marking its first M Social property in China (Photo: CDL)

Net gearing ratio at 55%, cash reserves at $1.9 bil

The group’s net gearing ratio stood at 55% as of March 31, 2023, following the acquisition of St. Katharine Docks. Interest cover is 3.1 times, with cash reserves of $1.9 billion. CDL maintains a “liquid position” comprising cash and available undrawn committed bank facilities totalling $3.6 billion. According to the group, its debt expiry profile “remains healthy”.

“The recent property cooling measures in April serve as a continued reminder that the group should not be overly reliant on a specific country or asset class,” says CDL. “The Group’s geographically diversified portfolio across its various business segments enables it to maintain stability while embracing growth.”

Source: Edge Prop

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Townhouse at Yong an Park Sold for $4.5 Mil Profit

Billy Day — Thu, 01 Jun 2023 13:04:17 +0000

The sale of a townhouse unit at Yong An Park, a freehold development on River Valley Road in District 9, was the most profitable condo resale transaction recorded during the week of May 2 to 9. A caveat was lodged on May 5 for the sale of the 7,718 sq ft property for $14.08 million ($1,824 psf). The unit had changed hands previously for $9.58 million ($1,241 psf) in February 2008. As such, the seller raked in a gain of $4.5 million on the transaction, or a 47% capital gain after holding the property for over 15 years.

The sale comes a month after the last resale transaction at Yong An Park. A four-bedroom unit measuring 3,434 sq ft on the 10th floor changed hands for $8.1 million, or $2,359 psf, on April 6. The seller bought the unit for $6.02 million ($1,753 psf) in March 2012. Thus, they clocked a gain of $2.08 million (35%) over a holding period of 11 years.

The 7,718 sq ft townhouse at Yong An Park was sold for $14.08 million on May 5 (Picture: Samuel Isaac Chua/The Edge Singapore)

Completed in 1986, Yong An Park has a total of 288 residences. Typical units comprise one- to four-bedders between 1,023 sq ft and 3,778 sq ft. There are three- to five-bedroom penthouses with sizes from 3,466 sq ft and 6,878 sq ft respectively, as well as a collection of six-bedroom, strata-titled townhouses from 7,718 sq ft. The development is a five-minute walk to the Great World MRT Station on the Thomson-East Coast Line.

New Futura, another freehold development in District 9, saw the second-most profitable condo resale transaction during the period in review. A caveat was lodged for the sale of the 2,691 sq ft unit, located on the 24th floor, on May 3 for $12.5 million. At $4,645 psf, it marked a new psf-price high for the 124-unit, freehold development by City Developments that was completed in 2017. The seller bought the unit from the developer in January 2018 for $9.1 million ($3,395 psf). Hence, they made a gain $3.37 million (37%) after holding the unit for over five years.

This is the most profitable resale transaction to occur at New Futura to date. It beats the previous record set in December 2022, when a 2,691 sq ft unit was sold for $12 million ($4,459 psf), with the seller reaping a gain of $2.96 million. It is also the second unit to change hands at the development to date this year. In February, a 1,098 sq ft unit fetched $4.4 million ($4,008 psf), with the seller netting a gain of about $314,000.

A 2,691 sq ft unit at New Futura was sold for $12.5 million, netting the seller a $3.37 million gain (Picture: Samuel Isaac Chua/The Edge Singapore)

New Futura, located along Leonie Hill Road, is a twin 36-storey tower residential development designed by American architecture firm Skidmore, Owings and Merrill, the design architect for luxury developments Wallich Residence and Skywaters Residences in Tanjong Pagar. Units at New Futura comprise a mix of two-bedroom apartments of 1,098 sq ft to four-bedroom apartments of 2,691 sq ft with double-volume ceilings. There are also two 7,836 sq ft penthouses — one at the top of each tower.

Meanwhile, a one-bedroom unit sold at V On Shenton was the most unprofitable transaction during the period in review. The 484 sq ft unit was sold for $1.13 million ($2,333 psf) on May 2. The seller purchased it for $1.33 million ($2,738 psf) from the developer in November 2012. Hence, they made a loss of $196,000 or 15% over a 10½-year holding period.

Based on caveats lodged, V On Shenton has seen three other transactions this year that have occurred below their respective purchase prices. On Jan 16, a 484 sq ft unit fetched $1.04 million ($2,143 psf), with the seller making a $250,000 loss. On March 1, a 1,098 sq ft unit was sold for $1.94 million ($1,767 psf), with the seller making a $35,000 loss. On March 10, a 1,528 sq ft unit changed hands for $3.09 million, with the seller making a $254,000 loss.

A one-bedder at V On Shenton was sold for $1.13 million, with the seller making a loss of $196,000 (Picture: Samuel Isaac Chua/The Edge Singapore)

V On Shenton is a 99-year leasehold condo on Shenton Way in District 1 developed by Singapore Land Group. The 510-unit condo in the CBD is the residential component of a mixed-use development that comprises a 54-storey residential tower and a 23-story office tower. The entire development was completed in 2017.

Source: Edge Prop

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PAP, Opposition MPs File Questions on Ridout Road State Properties

Aaron Maxwell — Wed, 31 May 2023 23:56:26 +0000

Workers’ Party (WP) chief Pritam Singh has filed parliamentary questions regarding the large bungalows at Ridout Road occupied by Cabinet ministers, with the party on Thursday (May 18) urging authorities to “release all relevant and material facts in advance” to facilitate a meaningful debate in Parliament.

This includes more information about the guide rent for both colonial bungalows at 26 Ridout Road and 31 Ridout Road that were tenanted to Law and Home Affairs Minister K Shanmugam and Foreign Affairs Minister Vivian Balakrishnan respectively, the party said in a Facebook post.

Separately, three parliamentarians from the ruling People’s Action Party (PAP) have stated on their respective social media accounts that they have filed parliamentary questions on the matter as well.

The Singapore Land Authority (SLA) confirmed earlier this month that two colonial bungalows on Ridout Road were rented by both Cabinet ministers. It said on May 13 that the ministers have bidded above the “guide rent”.

SLA, which is a statutory board under the Ministry of Law, said that the rentals were “performed in full compliance with the relevant SLA procedures”.

The SLA statement was issued in response to a series of online articles published by opposition Reform Party’s chief Kenneth Jeyaretnam, where he called on the statutory board to “shed some light” on the auction process for the properties and questioned if the ministers were “paying less than the fair market value”.

Referring to the prime location of the area and the assumed size of the properties, he said: “It is difficult to see how (Dr Balakrishnan or Mr Shanmugam) could afford to pay the market rent for such a pricey property.”

In its Facebook post on Thursday, WP said that many members of the public have expressed concern over the circumstances surrounding the ministers tenanting “the exceptionally large” bungalows.

The statement added that Mr Singh, who is the Leader of the Opposition, has filed two parliamentary questions about the issue for the next sitting, which is slated to be in July. The questions are directed to the Prime Minister’s Office.

In its post, WP said that the questions are:

Why the Government did not call a press conference to address public allegations regarding the properties
How the Government will assure the public that the Cabinet ministers occupying the bungalows did not receive any privileged information pertaining to the lease of the properties

Mr Singh also asked whether there are any rules or conventions to ensure that Cabinet ministers do not take advantage of privileged information received in the course of their duties in regard to the lease of government properties.

The party added that it will still continue studying the matter and other MPs from the party may also file questions on the matter as more information becomes available.

“As questions continue to be asked in the public domain about the circumstances behind the leasing of both properties to Cabinet ministers, we call on the Singapore Land Authority to release all relevant and material facts in advance, such as the guide rent for both properties, so as to make for a fuller and more meaningful debate in Parliament,” the statement read.

The three PAP Members of Parliament (MPs) who said that they have filed questions for Parliament on the matter are Bukit Batok MP Murali Pillai, Potong Pasir MP Sitoh Yih Pin and Mr Zhulkarnain Abdul Rahim, MP for Chua Chu Kang Group Representation Constituency.

Mr Murali on Thursday said that he has filed four questions regarding the properties earlier this week on May 16.

Among others, he asked whether Mr Shanmugam was “involved in his official capacity” in any decisions relating to the rental of these properties, and what measures have been put in place to ensure that any bidder is not provided with any advantage over other bidders.

Mr Sitoh asked for the rental rates for the properties, SLA’s standard tenancy operating procedures and whether the statutory board has followed the procedures.

Mr Zhulkarnain asked for the circumstances under which the properties came to be rented to the ministers and how had SLA marketed the bungalows.

In response to TODAY’s queries on WP’s request, SLA reiterated that more details will be announced in July.

In its statement on May 13, the statutory board said that “more details on this issue” would be provided during the next parliamentary session in July.

It added that 26 Ridout Road had been vacant for more than four years before it was tenanted to Mr Shanmugam in 2018, and that the minister had notified a “senior Cabinet colleague” that he was making a bid for the property.

It also said that Mr Shanmugam was the only bidder and his offer, made through an agent, was higher than the guide rent — which was not disclosed to him.

Mr Shanmugam renewed the tenancy for another three years in June 2021, it added.

As for 31 Ridout Road, SLA said that the property had been vacant for more than six years before it was tenanted to Dr Balakrishnan.

He put in a bid in November 2018 that was above the guide rent, which was also not disclosed to him.

SLA said that Dr Balakrishnan was the highest bidder. His tenancy was granted with effect from October 2019, and renewed three years later.

Ridout Road is off Holland Road and near the Dempsey Hill lifestyle and entertainment area.

According to SLA data, the property at 31 Ridout Road has a land area of 136,101sqft.

Information on the property at 26 Ridout Road could only be found within a lot that included 24 and 31 Ridout Road, with a total land area of 525,171sqft.

Source: Today Online

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Owning an HDB Flat and Condo at The Same Time in Singapore: 6 Factors to Consider

Javier Valdez — Mon, 22 May 2023 01:36:19 +0000

“Can I buy a condo if I own an HDB flat”, “Can an HDB owner buy a condo?”, and “Can I buy private property if I own an HDB flat?” are some common questions among homeowners and property investors. Primarily, these questions seek to answer if homeowners can own an HDB flat and a condo simultaneously.

Furthermore, in Q1 2023, HDB resale prices increased but at a slower pace of 0.9%. On the other hand, according to URA Q1 2023 statistics, private property prices went up by 3.3%.

Considering the September 2022 property cooling measures, the current high interest rate environment and the new Additional Buyer’s Stamp Duty (ABSD) rates brought on by the April 2023 property cooling measures, how will these factors impact HDB flat owners who aspire to purchase a private condo? Let’s find out.

Can an HDB Owner Buy a Private Property? Here Are the Key Considerations

If you’re an HDB flat owner and want to buy a private property, you’ll need to take into account the following rules and guidelines, in addition to taxes that need to be paid.

1. Minimum Occupation Period (MOP)

When you purchase a Build-to-Order (BTO) unit directly from the Housing and Development Board (HDB) or a resale HDB flat from the open market, you are required to comply with the Minimum Occupation Period (MOP).

Within this period, you are not allowed to:

Rent out the residential property
Dispose of the HDB BTO unit or an HDB resale flat via the open market
Acquire any private property, either in Singapore or abroad

The MOP starts from the date you receive the keys to the HDB BTO unit or HDB resale flat. It excludes any period when you did not live in the property, like when the whole property is rented out or when there has been a violation of the MOP. However, please note that you risk paying fines of up to $50,000 or getting the HDB flat compulsorily acquired by the Government if you flout the MOP rules.

Notably, the duration of the MOP depends on the purchase mode, unit type and the date when you applied to purchase the flat. For details, please see the table below.

Flat bought directly from HDB (includes HDB BTO)	Five years
New HDB flats under the HDB Prime Location Housing (PLH) Model	10 years
Design, Build and Sell Scheme (DBSS) flat bought from a developer	Five years
Executive condominium (EC) bought from a developer	Five years
Flat purchased under the Selective En bloc Redevelopment Scheme (SERS)	Five years after receiving the keys*
Flat bought under SERS with Portable SERS Rehousing Benefits	Five years after receiving the keys*
HDB Resale flat bought from the open market with/without CPF Housing Grant	Five years
1-room HDB resale flat bought from the open market without CPF Housing Grant	No MOP
2-room or larger flat bought from the open market without CPF Housing Grant	Five years
Flat bought under the Fresh Start Housing Scheme	20 years

*For SERS flats announced on/after 7 April 2022, the MOP will be subjected to the amended guidelines. However, the MOP for SERS flats before 7 April 2022 will either be seven years from the date of selection or five years from the date of key collection.

Note: When buying ECs for the first time, buyers need to comply with a five-year MOP. After that, it can be sold to Singapore Citizens and Permanent Residents (PRs). After 10 years EC will be privatised and can be sold to foreigners. Buyers of resale ECs do not have to comply with the MOP rule.

2. Citizenship or Residency Status

If you’re a Permanent Resident (PR) wondering, “Can I buy a condo and if I own an HDB flat?” the answer is no.

According to the HDB, even if they have fulfilled the MOP, PRs who own an HDB flat and their essential family members who occupy the unit must dispose of their HDB flat within six months of buying a completed or off-plan private residential property in Singapore.

Only Singapore Citizens have the privilege of owning an HDB flat and a private condo at the same time. But they still need to comply with the MOP before they are allowed to purchase private residential property. They also can’t do it the other way, which is to buy private housing first and then an HDB flat, as they need to sell the private property after completing their purchase of an HDB unit.

However, not many Singapore Citizens are capable of buying private property while owning an HDB flat due to the large expenses involved. That’s because you’ll have to pay a 17% ABSD tax on top of BSD if you want to have these two properties at the same time.

3. Buyer’s Stamp Duty (BSD)

Whether you’re a Singapore Citizen, PR or foreigner, you will need to pay Buyer’s Stamp Duty (BSD) when you buy a property in Singapore.

This tax will be computed depending on the purchase price stated in the document to be stamped, or the property’s market value, whichever is higher.

If you obtained a monetary discount in the selling price, it will be taken into account when calculating the BSD, provided that the net worth still reflects the property’s actual market value.

Please keep in mind that the cash discount must be stated in the instrument to be stamped, otherwise, it won’t be taken into account when calculating the buyer’s stamp duty.

Purchase price/Market value	Rates for residential properties	Rates for non-residential properties
First $180,000	1%	1%
Next $180,000	2%	2%
Next $640,000	3%	3%
Next $500,000	4%	4%
Next $1.5 million	5%	5%
In excess of $3 million	6%	5%

The BSD tax is rounded down to the nearest dollar. For example, if you’re a Singapore Citizen buying a condominium valued at $1 million, your BSD calculation would be:

$1,800 (for the first $180,000) + $3,600 (for the next $180,000) + $19,200 (for the next $640,000) = $24,600.

You could also use our stamp duty calculator to work out your duties payable on your new home.

4. Additional Buyer’s Stamp Duty (ABSD)

If you intend to keep an HDB flat and private condo at the same time, you will also have to consider the ABSD payable.

ABSD was originally introduced on 8 December 2011 by the authorities to rein in the strong property investment demand by Singapore Citizens and foreign buyers. Another reason for its imposition is to maintain the affordability of residential properties for locals and to let home prices increase sustainably along with economic fundamentals.

Buyer profile	ABSD amount
SCs buying their first property	–
SCs buying their second property	20%
SCs buying their third and subsequent properties	30%
SPRs buying their first property	5%
SPRs buying their second property	30%
SPRs buying their third and subsequent properties	35%
Foreigners buying any property	60%
Entities (companies or associations) buying any property	65%
Trustee buying any residential property	65%
Housing developers for any residential property	35% (additional 5% if the entity is a housing developer; non-remittable)

For instance, say a property is valued at $1 million but the selling price is $1.1 million. Assuming that you’re a Singapore Citizen who has an HDB flat and is now buying a condo, you will be subjected to an ABSD rate of 20%. The ABSD amount that you’ll need to pay is $1.1 million x 20% = $220,000.

5. Total Debt Servicing Ratio (TDSR)

The Monetary Authority of Singapore introduced the Total Debt Servicing Ratio (TDSR) framework to prevent home buyers from loaning too much to finance the purchase of a property. The rules apply to all residential mortgages granted by all financial institutions in the city-state, including by banks, moneylenders, insurance firms and others.

For property loans where the OTP is granted on or after 16 December 2021, homebuyers can only loan up to 55% of their gross monthly income. The cap also takes into consideration all outstanding debts you have like car loans, personal loans, credit card balances and student loans. Banks even include small financial obligations such as gym memberships and monthly payments for appliances, when computing the amount it can lend you for a home purchase.

Basically, your monthly housing loan repayments plus ALL of your other monthly financial obligations cannot surpass 55% of your monthly income.

For example, if your monthly salary is $10,000 and you have no existing debts, then you can spend up to $5,500 to service your monthly instalments for a housing loan.

But if you currently spend $2,000 to repay outstanding debts, you can only borrow up to $3,500 if you want to buy a private condo.

6. Loan-to-Value (LTV) Limit

The LTV limit is adjusted based on the number of outstanding loans a person has. According to the latest rules from MAS, you can only borrow up to 75% if the loan term doesn’t exceed 30 years, 55% if the loan tenure surpasses 30 years or if the maturity happens when the borrower is more than 65 years old. That’s just for the first housing loan.

Rules on LTV Limits and Minimum Cash Down Payment

Outstanding housing loans	LTV Singapore limit	Minimum cash down payment
0	75% or 55%*	5% (for LTV of 75%); 10% (for LTV of 55%)
One	45% or 25%*	25%
Two or more	35% or 15%*	25%

*Take the lower LTV limit only if the loan tenure exceeds 30 years (or 25 years for HDB flats), or if the loan period extends past the borrower’s age of 65.

If you have a current residential mortgage and want to take out another loan to buy a second property, then the LTV is either 25% or 45%. This means that if you are still currently paying the loan for your HDB flat and you want to buy a private condo costing $1 million, you can only loan up to $250,000 or $450,000. The remainder of $550,000 or $750,000 must be paid through either cash or CPF savings. Ouch.

To give you more detailed calculations of how the above rules and taxes impact you if you really are strongly considering buying a private condo, in addition to your existing HDB flat, we laid out some examples.

What Is the Most Affordable Option?

Let’s assume that Mr A and Mrs B, who are married Singapore Citizens, presently own a five-room HDB flat in Bedok costing $580,000. They have resided there for six years and took out a $475,000 loan with a tenure of 20 years from HDB.

If the happy couple wants to buy a private condo costing $1 million as a retirement home, below is the financial breakdown of such a transaction, including the minimum condo down payment with an LTV of 45%:

Minimum condo down payment (assuming bank loan with an LTV of 45%)	$250,000
BSD	$24,600
ABSD	$220,000
Overall upfront cost	$494,600

Based on the above table, the total amount the couple needs to spend upfront is nearly half a million dollars.

Although you can tap your CPF savings to pay for the minimum cash down payment component, please bear in mind that you can’t use all of it. You still need to set aside a Basic Retirement Sum of $99,400 for members who turned 55 on or after 1 January 2023. For more details, please check out the CPF website.

This means you need to have lots of savings if you want to buy a condo, while you are still paying for your HDB loan.

On the other hand, you can get more LTV of 55% or 75% from banks if you have finished paying first for the HDB loan. If you take this route, your upfront cost will be significantly lower. Here is a breakdown including the minimum condo down payment with an LTV of 75%:

Minimum condo down payment (assuming bank loan with an LTV of 75%)	$50,000
BSD	$24,600
ABSD	$220,000
Overall upfront cost	$294,600

As shown by the above two examples, the best way of purchasing a condo is to finish repaying first your HDB loan, as your initial investment for the private property will be more bearable.

Source: Yahoo! Finance

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BT Explains: Why The Latest Property Cooling Measures May Not Lower New Home Prices

Sean Potter — Tue, 16 May 2023 08:12:15 +0000

There’s been a lot of buzz about property prices and cooling measures since the Government announced higher additional buyer’s stamp duty (ABSD) rates for residential property, effective April 27.

If you’ve just returned from a holiday in Japan, here’s a catch-up on the changes announced on April 26.

Singapore citizens buying their second residential property now must pay 20 per cent ABSD, up from 17 per cent. They will pay 30 per cent ABSD, an increase from 25 per cent, for their third and subsequent properties.
Singapore permanent residents (PRs) will see ABSD raised from 25 per cent to 30 per cent on their second property, and from 30 per cent to 35 per cent for their third and subsequent properties.
For foreigners, ABSD on any residential property purchase doubles from 30 per cent to 60 per cent. A 65 per cent rate will apply to residential properties bought by entities or in trust, up from 35 per cent.

The new rates are expected to impact about 10 per cent of all private residential property transactions, based on 2022 data.

Why is the Government doing this?

The short answer, from National Development Minister Desmond Lee: It wants to dampen investment demand – both foreign and local – which is driving up housing prices and affecting Singapore citizens looking for homes to live in.

The last time the ABSD was hiked was in December 2021, alongside a tightening of borrowing. Further restrictions on housing loan limits followed in September 2022. These changes are only the most recent in a long history of the Government tweaking the rules to ensure property prices do not run ahead of fundamentals. Here’s a summary of Singapore’s property cooling measures: 1996 to present day.