singapore property weekly issue 35
TRANSCRIPT
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Issue 35Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTSp2 Singapore Property News This Week
p8 Additional Buyers Stamp Duty Clarifications
and Initial Impact
p12Resale Property Transactions(December 31 January 6)
p13Singapore Property Classifieds #24
Welcome to the 35th edition
of the Singapore Property
Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
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Singapore Property This Week
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Residential
First-timers have high chances of getting
BTO flats
The first-time application rates for Build To
Order (BTO) flats launched in January this
year is 1.5, close to 1.6 in the November
BTO, meaning that most will likely get to
choose a flat from the 4,000 units available in
this January launch. For second-timers, the
application rate is 23.9, compared to 25.9 in
the previous launch. The BTO balloting rulesmay be changed to offer second timers more
chances in the March BTO launch.
99-year leasehold residential site at Kovan
draws 11 bids with top bid of $194.6m
A 99-year 1.7 hectares leasehold residential
site located at Kovan Road/Simon Road has
attracted 11 bids, with the highest of $194.6
million or $507 psf ppr from a consortium ofHoi Hup Realty, Investment Focus, and
Oriental Worldwide Investments. The
consortium has plans to develop the site into
a condominium project with below 400 Soho-
style and townhouse units, which will be
launched this year. The site, which is locatednear Kovan MRT station and a landed
housing estate, has access to retail shops
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located in the Heartland Mall and Hougang
HDB estate. This, added to the fact that there
had not been any major condominium
development near the MRT station, will likely
draw buyers, which may explain the interest in
the site. The number of bidders and the top
bid comparable to that of other attractive
suburban residential sites shows that
developers are still confident enough to bid for
attractive sites despite the ABSD.The site has a GFA of 384,142 sq ft and is
estimated to have a breakeven cost between
$900 and $1,000 psf with a selling price of
$1,100 to $1,200 psf, given the attractiveness
of the site.
Former private home owners, not PRs, are
the cause of high COVs
According to National Development Minister
Khaw Boon Wan, the highest median cashover valuations (COV) of $45,000 were made
by former private home owners in Q4 2011.
The next highest is $34,000 paid by second-
timers, followed by $33,000 paid by first-
timers, $32,000 by PRs and the lowest of
$31,000 by singles. He also stated that thefigures for HDB resale prices are monitored
and published for potential buyers and sellers.
However, analysts said that the data was not
sufficient in explaining the cause of high
COVs.
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Looking at the number and types of flats
made by each group of buyers would provide
a clearer picture. The higher COVs paid by
private property owners may be becausethey tend to purchase bigger flats and the
lower COVs paid by singles may be because
the flats they purchase are smaller. The data
also fails to consider other causes for the
higher COVs since the data is fairly recent
and does not take into account the past
years when the COV started to rise.
Nonetheless, the higher COVs paid by
private home owners might also be explained
by the high private property prices which they
might have benefited from when they sold
their private property and possibly higher
profits made from en-bloc sales.
Two 99-year leasehold residential sites
released under the GLS
The residential site located at Hillview
Avenue has a 136,000 sq ft site area and a
2.8 plot ratio, resulting in a maximum GFA of
more than 380,000 sq ft which can yield 370
units. Being located near the upcoming
Cashew and Hillview MRT stations and
amenities in The Rail Mall and The HillV2, the
site is expected to be highly popular, drawing
eight to 13 bidders and achieving a top bid of
$500 - $550 psf ppr.
The other site located at Upper Serangoon
Road comes with a higher maximum GFA of
over 466,000 sq ft, a result of its 3.5 plot ratio
and 133,000 sq ft site area.
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The site can yield 435 executive
condominiums (ECs) units. Despite offering
views of the Serangoon river, it is expected to
be less popular than the Hillview site since the
nearest MRT station is a good 1.5 km away.
Furthermore, with a total of 14 residential sites
in the 2012 H1 confirmed list, five of which
being EC sites, some developers may choose
to wait and bid for other sites. Hence, the
expected number of bids is between five and10, with a range of $220 to $300 psf ppr.
While the general belief is that demand for
ECs will remain strong, it depends on the
situation in the private residential market.
Should the prices for private homes fall,
buyers may purchase a private condominium
unit or the price of ECs will also have to fall as
well to continue attracting buyers,.
The tenders for the former and the latter will
close on March 6 and March 1 respectively.
Commercial
First tenant of UE Bizhub East likely to be
Cisco Systems
The first tenant of UE Bizhub East at Changi
Business Park is likely to be CISCO Systems,
which will move into a space of around
110,000 sq ft after moving out of its current
space at Capital Tower at Robinson Road
when its lease ends in 2013. The move is
likely due to the savings it will gain since a
renewal of the lease at Capital Tower would
cost 9-10 psf compared to the $4 psf it is likely
to pay at UE Bizhub East. This is a part of a
growing trend of MNCs shifting their
operations to the suburbs because of the
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lower costs and the relative stability of rental
rates.
UE Bizhub East, which will receive its
Temporary Occupation Permit in a couple of
months, is located near Expo MRT Station.
The development includes a 423,216 sq ft
nine-storey business park component
consisting of two linked blocks, 251 hotel
rooms and serviced suites, 100,000 sq ft of
retail space and convention/exhibition and
auditorium space.
Other developments in Changi Business Park
have also drawn much interest in recent
years, with financial institutions like Standard
Chartered, DBS, CitiBank and Credit Suisse
taking up over one million sq ft of space.
With a larger supply of office space, rents
for Grade A office space falls
Both the average monthly gross rental rate
and the occupancy rate for Grade A office
space in the Raffles Place and New
Downtown micro-market fell in Q4 2011, with
the former decreasing by 4.3% to $10.31 psf
per month, and the latter falling from 90.9%
to 88%. Rents in the Marina and City Hall
micro-market and the Beach road micro-
market has also decreased by 2.3% and
0.8% respectively. The average overall
Grade A office rents decreased by 1.6% to
$8.93 psf pm. The expected slow take-up of
office space may be due to firms holdingback on expansions as a result of the
uncertain economic outlook and relocating
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part of their operations to the suburbs, which
now offers more office and business park
developments with amenities comparable to
those in Grade A office buildings.
Nonetheless, the average capital value in the
Raffles Place and New Downtown micro-
market remained fairly stable, with $2,459 psf
in Q4 2011 and $2,460 psf in Q3. The
average capital value for the whole year wasup by 17.8% from 2010 but this may change
as rents may fall as there is an upcoming 11
million sq ft supply of office space over the
next four years.
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Additional Buyers Stamp Duty Clarifications and Initial Impact
By Mr. Propwise
Its still early days, but in this article we look
at the early impact of the ABSD on sales in
December 2011, and also some clarifications
by the tax authorities on the finer details of
whom it applies to.
Clearer guidelines on ABSD
With the revision of the e-Tax Guide by
Inland Revenue Authority of Singapore
(IRAS), several points of confusion over the
ABSD were clarified.
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Does ABSD apply on the pre-discount or
post-discount price?
As many developers have started to offer
cash rebates and vouchers to attract buyers,
one question involves the amount of stamp
duty that a foreigner has to pay 10% of the
discounted price or of the pre-discount price.
The answer to this is that if not all buyers had
received the discount and the final price paid
is lower than what most other buyers paid,
the foreign buyer will have to pay the ABSD
based on the pre-discount price.
Will the ABSD be levied on sites with unclear
zoning?
On whether the ABSD will be levied on sites
with unclear zoning, it was stated that the
ABSD will only be levied for sites that are
zoned residential in the Master Plan. If the
land was rezoned residential when it was not
originally so in the Master Plan, the ABSD will
have to be paid for the development chargepaid for rezoning and remissions will not be
applicable. Companies purchasing industrial
or commercial buildings that sit on a land
zoned residential will also have to pay the
ABSD.
Questions on the remission of ABSD
On whether remission will be granted, IRAS
stated that remission of the ABSD for sites
that yield four or less units may be allowed
on a case-by-case basis if the developer is
developing the residential properties for sale
and is a firm lawfully carrying on the
business of housing development.
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Previously, only licensed developers
developing projects yielding five or more
units were allowed remission. Should
developers purchase more plots of land to
amalgamate with their first and the ABSD
was not levied on the first plot purchased,
whether remission will be granted on the
second plot will be considered on a case-by-
case basis.
Other clarifications
The ABSD will also not be levied on
development charges since there is no
buyer's stamp duty (BSD). Inheritance is no
longer considered a means of acquiring
property, and the date range for a developerto maintain a majority stake in its subsidiary
to qualify for remission of ABSD is also
qualified.
Fewer private home sales in Dec 2011
With the introduction of the ABSD in early
December 2011, private home sales,
excluding Executive Condominiums (ECs),have fallen by 63% to 632 units versus
November 2011. Including ECs, private
home sales fell by 63.9% from the previous
month.
The introduction of the new stamp duty alsocreated some buyers remorse, as about 100
units (including ECs) were returned to
developers, up from 70 in November.
Nonetheless, a record of 18,920 units was
sold in 2011, up from 17,344 in 2010. If ECs
are excluded from the figure, the total sales
for 2011 will be 16,027 units, slightly below
the 16,292 units in 2010.
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2011 was a record year for home sales, but
if December is anything to go by, 2012 will
be a much tougher year. The strength of
sales in the Year of the Dragon will depend
on the economic situation (not looking good
at the moment with the lowered guidance
given the precarious global situation), the
prices set by developers (still unwilling to cut
prices aggressively) and the foreign demand(the unknown factor).
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Non-Landed Residential Resale Property Transactions for the Week of Dec 31 Jan 6
NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 THE SAIL @ MARINA BAY 657 1,520,000 2,315 99
1 PEOPLE'S PARK COMPLEX 409 467,000 1,142 99
4 THE PEARL @ MOUNT FABER 1,389 1,525,000 1,098 99
5 CLEMENTIWOODS CONDOMINIUM 560 688,000 1,229 99
8 MERA SPRINGS 1,044 1,230,000 1,178 FH
9 ORCHARD SCOTTS 1,647 4,183,479 2,540 99
10 FIFTH AVENUE CONDOMINIUM 1,615 2,368,888 1,467 FH
14 MILL CREEK 753 888,000 1,179 FH14 THE SUNNY SPRING 1,195 950,000 795 FH
15 THE VIEW @ MEYER 667 1,048,000 1,570 FH
16 STRATFORD COURT 1,098 975,000 888 99
17 ESTELLA GARDENS 1,593 1,270,000 797 FH
23 THE DAIRY FARM 1,518 1,430,810 943 FH
23 HILLTOP GROVE 1,485 930,000 626 99
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Singapore Property Classifieds #24For Sale
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