Top 10 property investment tips

Singapore – October 31st, 2010

One of the main themes to come out of the iProperty.com Expo was the importance of knowing what makes a good investment opportunity. Below, we look at the top ten criteria to help you decide whether a property would be a good investment or not.

1. Location
It’s important to reiterate how important this is. The location will determine a property’s price, risk and returns. An average property, for example a three bedroom HDB, in Holland Village, can expect to fetch more on the resale market than a two-floor mansionette that’s twice the size in Jurong West.

2. Developer’s philosophy and standards
Does the developer have a track record of producing quality products? If it’s a new project, do your homework and tour previous developments built by them. Don’t be overawed by a big name. A travel writer acquaintance of mine stayed in a new five-star villa resort in Bali recently, and reported that, while beautiful, the unit’s fittings were substandard with tiles falling off the bath and sockets loose in the wall.

3. Management
What level of oversight will be provided by the management of the development? If you’re staying in the property as an owner-occupier, this is less critical, but as a landlord, especially in absentia, it’s vital.

4. Future prospects
For property as an investment, the bottom line is how much income it can generate for you. Again, research the market, getting different opinions on what the capital appreciation and rental returns will be for this property.

5. Practicality / Design / Layout / Usability / Desirability
Who is this property going to appeal to? I looked at the Urban Lofts project, located on Rangoon Road next to Farrer Park MRT. While its location is fantastic and the lower floor flats had their own hot tubs, the extremely limited floor space would make it unsuitable for any but childless couples and singles. Always consider who would live here before you purchase?

6. Comparative prices for comparable product
If you can, try and see how similar properties in the area have done in the past in terms of price per square foot and capital appreciation in order to compare and work out whether the property is an attractive investment opportunity.

7. Connectivity / Convenience
We have written before on the importance of a condominium’s proximity to schools, work places, and shopping and leisure facilities – but transport links are often the biggest drivers of value. Research has shown that condos near MRT stations often gain the most capital appreciation in Singapore.

8. Security
Less of an issue in Singapore, where crime rates are amongst the lowest in the world, in Malaysia and Indonesia – while crime levels are perhaps overstated by the media – the range of a development’s security options – gated communities, 24-hour guards, first-response alarms, etc – are an important factor.

9. Facilities
A property’s facilities do add value to a unit – a landed property with a pool, for example, can add around 8% to the value of the property – while many condo facilities now include gyms, spa facilities and games rooms.

10. Rentability
A rented property can produce a greater passive income than simply investing it in a bank but you need to ensure that is attractive to renters.

COUNCIL FOR ESTATE AGENCIES STARTS OPERATIONS ON 22 OCTOBER 2010

COUNCIL FOR ESTATE AGENCIES STARTS OPERATIONS ON 22 OCTOBER 2010

1 The Council for Estate Agencies (CEA), a new statutory board established under the Estate Agents Act 2010¹, will commence operations on 22 October 2010.

Council for Estate Agencies

2 Mr Greg Seow, Chairman of AMP Capital Investors (Singapore), is appointed as President of the Council. The Executive Director of CEA is Mr Chionh Chye Khye. The list of other Council members and the functions and duties of the Council can be found at Annex A.

New Regulatory Framework

3 The new regulatory framework seeks to raise the professionalism of the real estate agency industry and to enable consumers to better safeguard their interests. Key elements of this framework include enhanced licensing conditions for estate agents, registration of salespersons, regulation on the conduct of estate agency work, mechanisms for discipline and dispute resolution, and public education.

4 The immediate focus for CEA is to prepare the estate agents and salespersons to meet the higher standards of the enhanced licensing and new registration framework. CEA has been working closely and will continue to work with the industry associations to ensure a smooth transition to the new framework. The timeline for transition is summarised in Annex B.

5 To ensure high standards, there will be a code of conduct, ethics and practice which the Council will issue for estate agents and salespersons to follow. The CEA will investigate complaints and take firm action against errant estate agents and salespersons. From 2011 onwards, CEA can subject errant estate agents and salespersons to disciplinary action, with potential penalties such as warnings, fines, suspension or revocation. Court prosecution may also be undertaken for serious cases.

6 In addition, CEA will also be developing a public education campaign to educate consumers on their responsibilities, rights and expectations in a property transaction.

7 Mr Mah Bow Tan, Minister for National Development commented, “The establishment of the CEA is a major milestone to raise professionalism in the real estate agency industry and protect consumer interest. I encourage CEA to work closely with the industry and other stakeholders to achieve this. ”

Application for License and Registration

8 New and existing estate agents can apply to CEA for a new license from 1 November 2010. Existing estate agents are also required to register their existing salespersons who have met the transitional conditions (see Annex C), prior to the formation of the Council with the CEA by 30 November 2010. They are encouraged to submit their applications early to avoid any delay in registration and obtaining their license.

Contact Us

9 With effect from 22 October 2010, the public can visit CEA’s website at www.cea.gov.sg for more details including the new regulatory framework, to provide feedback or lodge complaints. The public can also contact the CEA at:

1. Email: contact_us@cea.gov.sg;
2. Toll free Customer Service Line: 1800 643 2555 begin_of_the_skype_highlighting 1800 643 2555 end_of_the_skype_highlighting; or
3. CEA’s Office:
   490 Lorong 6 Toa Payoh,
   HDB Hub Biz 3, #05-10 (Lift Lobby 1),
   Singapore 310490
   (The operating hours are from 8.30 am to 5pm, Monday to Friday)

Top five tips on choosing the right mortgage

Choosing a mortgage can be confusing.

There are so many options to think about: fixed or floating interest rates, loan term, lock-in periods, subsidies, penalties and other special features. There isn’t one “best” mortgage out there – it all depends on your needs and preferences.

Here are the main options you need to consider when making your decision:

1) Loan amount

The local banks usually give a loan of up to 80 percent of the property value for first time homebuyers, but the actual amount will depend on their assessment of your ability to repay the loan. They typically look at a debt servicing ratio of 35 percent – 50 percent as a ceiling.

To calculate this ratio, they sum up your long-term liabilities (including the potential mortgage payment) and divide that by your monthly income. You can check out the affordability and mortgage payment calculators at LoanGuru to estimate the maximum amount that you can borrow and your potential monthly payment.

Also note that the bank will only lend you up to 80 percent of the LOWER of your purchase price or their own internal valuation. So if your purchase price is above their valuation, you will have to top up the difference in cash.

As a best practice, you should always get an indicative valuation and in-principle approval from a bank before you commit to a purchase.

2) Loan term

The loan term is the duration of time that you take to completely repay the loan. Loan terms usually range from 10 to 35 years. The longer your loan term, the smaller the monthly repayment you need to make, but the higher the total amount of interest you will eventually pay.

Also note that your age may be a limiting factor – banks will typically cap the maximum term up to the age of 65. So if you’re 50 years old, you may only be given a loan term of up to 15 years. Young buyers looking to maximise the amount they can borrow will usually select a 35 year loan term.

3) Fixed or floating rate

Fixed rates offer the borrower security and stability as the rate does not change over a certain period. As interest rates are currently very low, if they rise, you will be protected from upward adjustments of your monthly mortgage payment. But this comes at a price – fixed rate packages usually charge higher interest than floating rate packages.

Borrowers who believe that interest rates will fall or remain low for a long period of time can go for floating rate packages as they can get lower interest rates up front and their monthly payments will fall if interest rates fall.

For floating or variable rate packages, they are typically linked to either of the two major benchmark rates: Sibor and the Swap Offer Rate (SOR).

These rates are mainly affected by US interest rates and Singapore banking system liquidity. But do not assume that they will always stay at the lows they currently are at (e.g. the SIBOR is around 0.5 percent now) – in 2007 they were as high as 3.6 percent!

As a rule of thumb, you should look at your monthly payments using rates of 4 percent to make sure you can still service your mortgage in case rates spike up.

4) Other special features

Some loans have an interest offset feature, where deposits at the bank can be used to offset the loan amount so you only pay the interest on the difference. For borrowers with large amounts of cash that they want to keep available for other uses at a moment’s notice (e.g. investing in the stock market) this could be a good option.

Some banks also offer interest-only packages, usually on a case-by-case basis. For these loans, you only pay the interest amount for a specified period of time, and after that the loan will revert to a normal interest plus principle loan. This option may be suitable for investors who want to minimise the cash outflow during the interest only period.

5) Subsidies, lock-in period and penalties

Most loans come with some subsidies including the legal, valuation and fire insurance fees. When comparing mortgages, borrowers should check what the various fee subsidy amounts are. For example, there is usually a cap of $2,000 – $2,500 on the legal fee, and if your legal fees exceed those, you will have to top up the difference.

The lock-in period you should choose depends on your expectation of when you will sell the property and also on your view of where interest rates are going.

Typically the shorter the lock-in period, the higher the interest rate. But if you repay the mortgage within the lock-in period, you typically have to pay a penalty of anywhere from 0.75 percent to 1.5 percent, which is substantial.

Some banks can waive the penalty if you are selling your house (as opposed to just repaying the mortgage), so make sure you check if they will include this clause.

If you feel overwhelmed by all the different options above, you can also consider engaging the services of a mortgage broker, who will help to filter the right packages for you based on your requirements.

You should not have to pay them any fee as they will get a commission from the bank if they can successfully arrange a loan for you.

Happy mortgage shopping!

Real Estate

Newspaper Article:

Top Cop To Police Real Estate Agencies
CPIB director to be seconded to help head new regulatory body.

HDB quarterly resale prices hit new record but analysts say prices stabilising

Channel NewsAsia - Saturday, April 24

SINGAPORE: HDB resale prices have hit a fresh record in the first quarter of this year rising by 2.8 per cent compared with the previous quarter. But the latest figures show signs of a market that’s finally stabilising after months of runaway prices.

Some analysts expect demand to continue to rise in the next few months but said cash premiums are unlikely to go much higher than the current median of S$25,000.

The official figures confirm estimates released earlier this month.

Resale transactions have dipped by about five per cent while median cash premiums, or COVs, have risen at a much slower pace than in previous quarters.

They went up S$1,000 in the last three months compared to the jump of S$12,000 between the third and fourth quarters last year.

They now stand at S$25,000, with flats in Bishan fetching the highest COVs, of about S$32,000.

Strong demand for newer estates has also translated into high premiums.

Towns like Punggol and Sengkang are seeing premiums of about S$30,000.

Eugene Lim, associate director, ERA Asia Pacific, said: "If you compare Punggol, Sengkang prices vis—a—vis mature HDB estates, they are still cheaper. Even though with high COVs of around S$30,000, you find that S$30,000 actually is the average COV nowadays for most flats. So, if you’re paying thereabouts, why not get something newer versus something older?

Analysts said measures to cool the market have worked including the launch of more HDB projects.

Other measures include restricting the cash portion of the second concessionary home loan, channeling the loan through the buyer’s CPF account.

Moving forward, ERA’a Eugene Lim said the government may consider further measures to ease demand.

And while some observers say possible interest rate increases later this year will hit buyers’ pockets, others disagree.

Jeffrey Hong, executive director, HSR International Realtors, said: In general they don’t look at, At the end of 30 years of loan, how much do I actually pay for my flat? The first—time buyers are more concerned about how much they pay on a monthly basis. So if the increase in the interest is not much, the increment of the monthly payment is probably S$20 to S$50 a month more."

In the rental market, demand between January and March increased sharply, with transactions up 69 per cent over the previous quarter.

The HDB said subletting transactions went up from 3,902 in the last three months of 2009, to 6,606 cases.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves.

However, rents remain relatively stable, with median prices for four— and five—room flats hovering just under S$2,000 a month.

Analysts said this is partly driven by foreigners returning to Singapore to work as the economy improves while the HDB said the spike is also due to an increase in renewals of rental flats.

In the last three months, 2,323 flatowners applied to continue renting their flats, 19 per cent more than the previous quarter.

The HDB added that more homeowners are also aware that they have to apply to the HDB for approval which could add to the increase.

However, rents remain relatively stable with median prices for four— and five—room flats hovering just under S$2,000 a month.

ERA’s Eugene Lim said strong demand will not likely translate into escalating rents because the supply of flats that can be subletted is high.

Under HDB rules, flats can be sublet after a minimum of three years.

But analysts said there is no similar jump in demand in the private rental market, suggesting that rental budgets remain low.

In the private residential market, prices were up 5.6 per cent, marginally higher than the 5.1 percent hike initially estimated. — CNA/vm

Tiong Aik and CDL condo projects gearing up for preview

Apr 13, 2010 - PropertyGuru.com.sg

Property developers are preparing to launch private residential projects, to meet demand from buyers before competition sets in, including those on new sites being sold by the government.

Tiong Aik group is expected to preview its freehold Starlight Suites at River Valley Close this week at an average price of about $2,050 psf. Sizes of units range from 560 sq ft for a studio to 3,401 sq ft for a penthouse.

City Developments Ltd (CDL) has also revealed some details of its upcoming condo at the corner of Chestnut Avenue and Petir Road, which it will preview by the end of the month.

The 99-year leasehold project, which will be called Tree House, is intended for families. It will have 429 units, comprising of two- to four-bedroom apartments and penthouses.

“The development will offer a panoramic view of the nature reserves and have extensive and unique recreational facilities,” said a spokesperson for CDL. She, however, refused to give an indication of pricing.

The site was acquired by CDL for $280 psf ppr. The breakeven cost of the project is expected to range from $600 psf to $700 psf.

Meanwhile, developers continued to record varying results for recent property launches.

While projects in the mass and mid-segments continue to receive good response, demand is cooler for higher-end developments, particularly those without smaller units.

UOL Group is said to have sold over 100 units at its 99-year leasehold Waterbank at Dakota condo project at the weekend, taking total sales to around 370 units.

Prices are also believed to have increased slightly – between one percent and three percent. Prices of typical units range from “above $1,000 psf to above $1,300 psf.”

UOL is said to have launched more than 400 units of the 616 units in the project, which faces the Geylang River and is next to Dakota MRT Station.

In preparation for the official launch of the project on Saturday, the showflats will be closed today and tomorrow.

The buzz about UOL's project has also benefited the neighbouring Dakota Residences, where another 15 units, comprising four-bedroom units facing the river, have changed hands. The average price is close to $1,050 psf. Only about 40 units are left unsold in the 348-unit condo now. This development is a joint venture between Ho Bee and NTUC Choice Homes.

TID, a tie-up between Japan's Mitsui Fudosan and Hong Leong Group Singapore, sold seven more units of the freehold Nathan Suites last week.

According to a spokesperson for Hong Leong, high-net-worth Singaporeans comprise the bulk of buyers.

CDL, Hong Leong Group’s listed property arm, says it marketed The Residences at W Singapore Sentosa Cove in Hong Kong at the weekend.

“The interest level is good and our marketing staff are awaiting telegraphic transfers for some units, while a number of prospective buyers have made arrangements to conduct on-site visits,” said CDL's spokesperson.

The group, which expects to do roadshows in Jakarta and Shanghai in the next few weeks, refused to give sales updates in the meantime.

CDL is selling the 99-year leasehold condo at $2,500 psf to $3,000 psf. Sales in Singapore are said to be tepid.

Property developers become homebuyers

Apr 14, 2010 - PropertyGuru.com.sg

With the hot property market in Singapore, many property developers are snapping up units in their own projects, particularly high-end properties.

The Singapore Exchange filings showed that at least four listed property developers have sold units in their residential projects to relatives or “interested parties”, which can be a director, a controlling shareholder, a chief executive or an associate.

Madam Cecilia Kok, wife of City Developments (CDL) executive chairman Kwek Leng Beng, acquired a third-floor unit in the Residences at W Singapore Sentosa Cove for about $4.6 million, after a 22-percent discount.

Members of the public were also given a 20-percent discount at the time the option to purchase was granted.

According to CDL’s statutory filing, an additional two percent discount was given to its directors, including their spouses and children, under the company’s preferential discount scheme for buying units in its projects.

Mr. Chua Thian Poh, chairman and chief executive of Ho Bee Investment, and his wife, Madam Ng Noi Hinoy, have both purchased units in the Seascape at Sentosa Cove condo project. A 2,164-sq-ft unit costs around $5.6 million, while one 2,164-sq-ft unit went at $7.6 million.

The couple also received an additional two percent discount over the price offered to the public.

Nine units at the 229-unit The Laurels project were also acquired by interested parties from its developer, Sing Holdings, with a three-percent discount.

The buyers included Sing Holdings chief executive Lee Sze Hao and his wife Madam Susan Soh, and controlling shareholders Lee Yit and Lee Sze Siong, both Mr. Lee’s siblings. Prices of the units ranged from $1.4 million to $4.9 million.

Mr. Colin Tan, research and consultancy director at Chesterton Suntec International, said that purchases made by interested parties can be a developer’s marketing strategy to kickstart sales when a development is released.

“But if it’s a good unit in a good development location, then it also makes for a good investment that usually pays off for family members who have first pickings,” said Mr. Tan.

Mr. David Gerald, president of the Securities Investors Association of Singapore, also said that statutory filings allowed property developers to be transparent and above board in their dealings.

“Stakeholders need to be informed that this is a fair transaction…since too many of these sales at too steep a discount might affect the bottom line of the firm,” he noted.

Sales to interested parties must be approved by the company’s audit committee and considered fair, reasonable and not prejudicial to the company’s interest or to its minority shareholders.

Over $500m of GCBs snapped up in Q1, says CBRE

Apr 14, 2010 - PropertyGuru.com.sg

Property consultancy firm CBRE said that more than $500 million worth of Good Class Bungalows (GCBs) have been sold during the first quarter of 2010.

Based on CBRE’s analysis of URA Realis caveats, 29 deals were made in Q1 2010, amounting to $470.33 million. In addition, Mr. Douglas Wong, director for luxury homes at CBRE, confirmed that he brokered a $36.3 million transaction in March, which has yet to be included in the caveats.

According to market watchers, additional caveats for deals made last month may be captured over the next few weeks.

The 14 Bishopsgate deal brokered by Mr. Wong would be the biggest in dollar quantum during the first three months of the year. The single-storey conservation bungalow, which is being sold by members of the Wong family, who once controlled Tien Wah Press, is more than 50 years old and has a land area of 32,405 sq ft.

Market watchers say that transactions will continue to stream in this month, including a $23-million sale at Victoria Park with a land area of 21,190 sq ft and a $23.5-million sale at Ladyhill Road with a land area of slightly over 16,000 sq ft. However, with the number of deals this year expected to drop amid rising prices, they generally do not expect a repeat of last year’s $1.72-billion record of transacted GCBs.

Mr. William Wong, managing director of RealStar Premier Property, said: “Current GCB prices are about 10-20 percent higher than a year ago, depending on location of the bungalows. Those in prime areas such as Tanglin have gone up as much as 20 percent.”

Agreeing, Mr. Wong of CBRE said that properties in the Jervois/Chatsworth/ Bishopsgate areas fetched around $1,000 psf in the 2007 property boom. “Today, people are asking $1,200-1,400 psf, and even $1,500 psf.”

A spokesperson for FRN Properties said that the asking price in locations like Brizay Park and King Albert Park, ranged from $900 psf to $1,000 psf, compared with the $500 psf to $700 psf during the 2007 to 2008 period.

The sale of a property at Binjai Park was among the interesting GCB deals done in Q1. The bungalow is said to have been sold by Mr. Sudhir Gupta of Amtel Group to Sareen Gajendra Singh, another entrepreneur who owns Omni United (S) Pte Ltd.

With the stringent planning requirements of GCBs, they are the creme de la creme of the housing market, at least on mainland Singapore. Only about 2,400 such bungalows are in the 39 gazetted GCB areas.

Real estate agents cited anecdotal evidence of high net-worth mainland Chinese, Indians and others who have taken up citizenship and who are purchasing GCBs.

Local players have also been active in the GCB market, noted KH Tan, managing director of Newsman Realty. These include investors who own several GCBs and those upgrading from smaller homes.

Real estate agencies urge agents to go back to school

Property agencies are sending their agents back to school, as they are preparing for tighter rules in their industry.

Some are even urging their agents to take existing accreditation tests and attend preparatory courses to improve their chances of passing the mandatory industry examination, which the government will introduce sometime this year.

The talk is that agents who have already gained accreditation would no longer need to take the new examination later.

Chris Koh, director of Dennis Wee Group, said, “It's only safe” to do so, as no one knows what the exact rule changes will be.

The government unveiled a set of proposals in October 2009 intended to lift the standards of real estate agents. One of the major reasons for such a move is the growing number of complaints against agents.

Some of the suggestions focused on introducing a compulsory entrance examination for agents and setting up a new accreditation body. Details of the changes were slated to be released early this year.

Given that it is currently not compulsory for agents to pass any standard test before starting to work, the new entrance examination would have a significant impact on the industry.

Typically, new agents would only receive training from their managers and attend courses run by their agencies.

Agents who opt to gain accreditation can select from the Common Examination for House Agents (CEHA), Common Examination for Salesperson Scheme (CES) or the Certification for Estate Agents (CEA) course.

Property agencies are now encouraging their agents to take one of these three tests before the new industry framework kicks in.

For instance, ERA Asia-Pacific has sent around 2,000 agents to take CES since September 2009. It has about 3,000 active agents in all.

Mr. Eugene Lim, associate director of ERA, said that the government has sent out a clear message about getting agents assessed. “There is more urgency now than previously.”

CES is being administered by the Singapore Accredited Estate Agencies body. Candidates have to pass two exams, on topics ranging from agent responsibilities and property rights to real estate financing, according to the CES website.

C&H Realty has sent more than 250 agents out of about 1,000 agents to obtain the CES or CEA certification. According to Mr. Albert Lu, managing director of the agency, there are other agents who have decided to wait for the new entrance examination.

Agents at Dennis Wee Group have been gearing up for the CES, CEA or CEHA tests. About 50 percent of the firm's 4,000 agents have taken the tests, said Mr. Koh.

The Workforce Development Agency subsidized the cost of some of these courses

UPDATE ON POLICY CHANGES 2009-2010 April

i) In Sept 09, the Government introduced few measures to temper the exuberance in the private residential market.

- Removal of Interest Absorption Scheme and Interest-Only housing loans

- Resumption of Confirmed List under Government Land Sales Programme in 1H 2010

- Non-extension of property-related measures in Budget 09

ii) On 13 Jan10, HDB announced a policy change to sub-letting of HDB rooms.

- Room rental does not require HDB’s approval, no change

- For sub-letting of rooms from 1 Feb 10, owners must register with HDB within 7 days from the starting date of the tenancy

- For sub-letting commenced before 1 Feb 10, owners are given 6 months from 1 Feb 10 to register the sub-letting

- Owners must register any new tenancy, renewal, termination, or any change to the particulars of the sub-tenants

- Registration of sub-letting can be done online or at the branch office

iii) On 19 Feb 2010, two measures were announced by the MND, MOF and MAS, to promote a stable and sustainable property market.

- Seller’s Stamp Duty (SSD) on residential properties/lands sold within 1 year
• Properties bought before 20 Feb 2010 will not be subject to the SSD.
• SSD applies to transfer or disposal of interest (including sale and gifts)

of residential units/lands (whether completed or uncompleted).
• Resale ECs and HUDCs are not subject to MOP, hence SSD will apply to them.
• All HDB flats are subject to MOP of at least 1 year, hence SSD will not apply.
• Date of purchase to compute holding period for SSD is the date of exercising OTP or signing S&P, whichever is earlier. The date of resale of the property is the date of exercising OTP or signing S&P by the subsequent buyer, whichever is earlier.
• SSD must be paid within 14 days from date of exercising OTP or signing S&P. If the Agreement is executed overseas, within 30 days from such dates.
• Objective of SSD is to discourage short-term speculative activity, not targeted at the purchase of properties for owner-occupation or longer term investment.

- Lowering of Loan-to-Value (LTV) limit to 80%, from 20 Feb 2010
• Applicable to housing loans granted by financial institutions for private residential properties, ECs, HUDCs, HDB flats and DBSS with bank loans.
• HDB flats and DBSS with HDB loans will still have 90% LTV as they are already subject to other criteria to prevent speculation and encourage financial prudence.
• The 80% LTV limit will apply to transactions where OTP was granted on or after 20 Feb 2010; or if there is no OTP, the date of S&P falls on or after 20 Feb 2010.
• The date of purchase for the lower LTV is the date of OTP; while the date of purchase for the levying of the SSD is the exercise date of the OTP.

iv) BUDGET 2010: for property tax payable from Jan 11, the GST Rebate will be replaced by progressive property tax regime for owner-occupied residential property:

- 0% for the first $6000 of Annual Value (AV);
- 4% for the next $59,000 of AV;
- 6% for the balance of AV in excess of $65,000.

10% on non owner-occupied residential properties and other properties remain.

v) Changes to HDB Policies announced on 5 Mar 10

1) On subsidy for SC+PR family
- SC+PR buying resale flat
CPF grant will be reduced by 10k (i.e.20k for family grant, near parents 30k), the 10k will be restored if the PR or 1 child becomes SC (to apply within 6 months)

- SC+PR buying new flat
They must pay 10k premium on the purchase price, the 10k will be refunded if the PR or 1 child becomes SC (to apply within 6 months)

- No Change to the Amount under Additional CPF Grant for Low Income Family

2) On Ethnic Integration Policy (EIP)
- Originally 3 ethnic groups, Malays, Chinese, and Indians/Others.
- New group added, the Non-Malaysian PR Group

3) Minimum Occupation Period (MOP)
- Subsidised flat (Brand new or Resale with CPF Grant) = 5 years, no change
(Owners are not allowed to buy any property during the 5 year MOP)

- Resale HDB with HDB loan, MOP is now 3 years (2-1/2 years before 5 Mar 10)

- Resale HDB without HDB Loan, MOP is now 3 years (1 year before 5 Mar 10)

4) Non-Upgraders taking 2nd HDB Concessionary Interest Rate Loan
- Not allowed if they had or going to purchased a subsidised flat, before 5 Mar 10

- Now, they are allowed 2nd HDB loan but they have to fulfil the following,

- They are allowed to retain only 50% of cash proceeds or $25k, whichever is higher, from the sale of existing house

- The balance sale proceeds and all CPF in the ordinary account must be used to pay for the house before the loan is granted

**Apply to all buyers taking 2nd HDB concessionary interest rate loan.**

New HDB Resale Rulings 2010

New HDB Resale Rulings-> 1) Sellers without grant can only sell after 3 yrs regardless of HDB or BANK LOAN 2) Buyers can get 2nd HDB loan even if they DOWNGRADE their flat 3) Buyers 1 Singaporean+1PR grant will be reduced by $10k.

Check Out -> http://www.hdb.gov.sg/fi10/fi10297p.nsf/ImageView/A-C/$file/A+-+c.pdf

Real estate developers to bring forward property launches

Channel NewsAsia - Friday, February 26

SINGAPORE : Singaporeans can look forward to more property launches. The Real Estate Developers’ Association of Singapore (REDAS) on Thursday announced that its members will be bringing forward property launches.

REDAS added that its efforts are only limited by the land available and hence the long—term solution to a stable market is still adequate supply.

The association celebrated the Lunar New Year, riding on an upbeat mood.

Joining in its Spring Festival was Finance Minister Tharman Shanmugaratnam, and the association shared with him its views on his recent Budget Statement.

Simon Cheong, president, Real Estate Developers’ Association of Singapore, said: "REDAS was hoping for more cash in our ang pows (red packets) from you, Minister. But when we opened the ang pow, we were disappointed there was not much inside for developers.

"Nonetheless, we are happy with your long—term productivity ang pow, as what is good for Singapore’s economy in the long run must also be good for the Singapore property market. It is what REDAS calls a deferred payment ang pow."

REDAS said that its members are surprised with the speed with which Singapore’s property market has recovered. But they added that they are prepared to live with the current problems rather than the problems faced by the property market last year.

However, in the interest of a stable property market, REDAS said its members are committed to a fast—track supply to satisfy demand. This would also minimise excessive speculation in the property market.

Mr Cheong said: "Given the unexpected return of an active property market, developers over the next few months would also be actively bidding for more land to position for the future supply.

"As such, REDAS, unlike the situation in the preceding 12 months, is now looking forward to more sites in the confirmed list for developers to replenish their land bank."

Just last week, the government introduced two more measures to cool the property market and pre—empt a bubble from forming in the private homes sector. — CNA/ms

Singapore property tycoon Ng Teng Fong dies

Channel NewsAsia - Wednesday, February 3

SINGAPORE: Singapore billionaire property tycoon and Far East Organization chairman Ng Teng Fong, 82, died on Tuesday morning.

Far East Organization said in a statement that Mr Ng suffered brain haemorrhage on January 23. He was taken to hospital where he underwent an operation.

Mr Ng was ranked Singapore’s richest man by Forbes magazine last year. His family’s net worth was estimated at US$8 billion in 2009.

He was said to have made his fortune on the property market, and owned at least a quarter of Singapore’s private housing market.

Mr Ng set up Far East Organization in 1960 and by the 1980s, he was known as the "King of Orchard Road".

The company had its beginnings in residential developments. Watten Estate, in the prime Bukit Timah residential area where Mr Ng lived, was one of its earliest projects.

Over the years, the property giant developed over 700 malls, condominiums and hotels in Singapore and Hong Kong, including Singapore’s Fullerton Hotel.

The family also owns Hong Kong’s Sino Group and is also one of Hong Kong’s largest real estate developers.

Mr Ng was born in 1928 in Putien in China’s Fujian province, and came to Singapore when he was six.

Mr Ng was known for his frugal lifestyle, and till his death, still lived in his Watten Estate home of 30 years.

Mr Ng leaves behind his wife and eight children. His younger son Philip runs the Singapore business, while older son Robert is in charge of the Hong Kong one.

In a statement, the Ng family expressed its gratitude to friends and business associates for their condolences and concern.

Industry veterans said Mr Ng’s death is an immense loss. Mr Kwek Leng Beng, executive chairman of Hong Leong Group, said Mr Ng had an innate talent in the field.

Mr Kwek said: "Mr Ng was a doyen of the property sector. He was a proven authority, with a deep understanding of real estate and an innate talent of looking at the property market in a different way.

"Not only did he build Far East Organization from a small company to a property giant, he was also instrumental in building Sinoland in Hong Kong to a great success that it is now a distinctive and proud achievement by a Singaporean.

"I knew Mr Ng for a long time and had the privilege of working closely with him especially when we were active in REDAS in the 1980s. I valued his views and benefited from his insights.

"He was a man who worked extremely hard, day and night. We used to study the property market together at his office while we were dealing with property matters. More often than not, we would find that we were still deep in discussion long after the official REDAS meetings were over and everyone else had left. His passing is indeed an immense loss for the industry and for Singapore."

CapitaLand’s president and CEO Liew Mun Leong called Mr Ng an exceptional entrepreneur and a pioneer of the real estate industry. "We speak with high regard of how he has successfully steered his business through several major crises over the decades and built an impressive business empire.

"He has been equally successful in his foray into Hong Kong, a very mature and competitive market, decades ahead of others in Singapore. Such initiatives place Mr Ng Teng Fong as an exceptional property veteran whose entrepreneurship far exceeds many of us in Singapore. Even the largest property companies in Hong Kong take their hats off to his company in Hong Kong where it enjoys a high standing. Singapore has lost a truly inspirational entrepreneur."

Mr Ng’s wake will be held from Tuesday evening at his mansion at No.2, Watten Estate, and a nightly service will be held at 8pm. The funeral will be held on Saturday.

— CNA/sc/ir

HDB reviewing rules to weed out speculators & rental investors

Channel NewsAsia - Friday, January 29

SINGAPORE: The Housing and Development Board (HDB) is reviewing its rules to curb speculation and illegal subletting in the public housing market.

National Development Minister Mah Bow Tan said the move is to ensure prices are not being artificially inflated.

The review comes amid fresh concerns over the affordability of public housing sparked off by HDB’s latest data that showed resale flat prices continued to climb in the fourth quarter of last year.

In addition, the median cash premium that home owners have to pay upfront doubled to S$24,000, prompting calls for the government to step in.

But Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a "willing buyer, willing seller" basis.

He said: "Now, if you are a buyer, you feel anxious because you want prices to be low. But if you are a seller, you want prices to be high. So it’s not possible for the government to set the resale prices.

"If you were to interfere in the COV (Cash—Over—Valuation), or the resale flat market, essentially, you are saying the government should set the resale flat prices which I think both parties will be unhappy. Why? Because the buyer may be happy today, but today if he’s a buyer, tomorrow he would be a seller. Then when we set the prices and he wants to sell, he will be unhappy."

While promoting a free market, Mr Mah drew the line at speculation and stressed that HDB flats are for "owner—occupation, not speculation or rental investment."

As such, Mr Mah said the housing board is relooking rules to ensure that prices are not being artificially inflated.

"If somebody is coming in and buying because they hope to make money, through flipping or selling the flats later on, or to buy to rent without staying in there, I think that’s not possible. That’s not the idea of HDB flats," he said.

Mr Mah declined to say which rules are being studied. But he noted that the review will be completed in a few months’ time.

How much impact will the review have? Housing analysts said speculators are not the main problem, because prices are not rising fast enough to lure them in.

ERA’s Asia—Pacific associate director Eugene Lim noted that for speculators to be lured into the market, prices have to be moving up very fast. But that’s not happening in the public housing market. For example, prices of HDB flats only increased by 8.2 percent in the past year.

He added that the mandatory holding period before you can sell your flat — one year if you’ve taken a bank loan; 2.5 years for those who borrowed from HDB — also acts as a deterrent against flipping.

Mr Lim said: "It’s basically a case of demand more than supply, because there are probably more people with immediate housing needs now, who cannot wait for the three years for new flats to be built. There is also an increasing population of PRs. They’re not allowed to buy from HDB direct, so they have to go to the resale market."

But Mr Lim noted that while business from PRs now accounts for 25 percent of his firm’s business, up from 20 percent previously, that is still considered small. He added the review of rules is a sign that HDB is "leaving no stone unturned".

But demand is being pushed up partly by those who buy flats to earn rent.

Mr Lim said: "If an investment gives you 7 to 8 percent (returns), it is certainly very attractive to look at. Because it’s quite easy to rent out HDB flat. It doesn’t cost much — with $300,000 or $400,000 you can get a HDB flat, you can get good returns, it does attract a fair number of people to look at this option."

Latest HDB figures showed that between January 2008 and December last year, 56 homeowners were caught renting out their flats illegally.

And recent reports suggested that some flat owners at the newly completed Pinnacle@Duxton had rented out their entire units without a minimum occupation period. This is illegal under HDB’s housing rules.

Home buyers who received a grant from HDB must stay in their flat for a minimum of five years before they can sublet their entire unit. For those who do not use a grant, there’s a minimum occupation period of three years.

Offenders face a fine of between S$1,000 and S$21,000 and may even have their flats repossessed.

Mr Mah said: "I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive but anecdotally you do hear one or two cases. So we want to make sure that this is not happening."

But observers said many of these transactions are done under the table. So even if rules are tightened, enforcement will be difficult.

However industry players like Chris Koh of Dennis Wee Realty noted that new rules requiring homeowners to report the details of their tenants are an incentive for them to be honest.

But he felt that there is scope to increase the penalties further, and to penalise agents who facilitate illegal transactions.

And to help curb demand, analysts suggested tweaking rules on how flats are financed.

Currently, a buyer can take out a loan to pay for up to 90 percent of the purchase price of a new or resale flat.

Analysts suggested HDB lower that quantum and make buyers fork out a larger down—payment. This could force them to reassess just how much they can afford, thereby serving as a check on escalating prices.

— CNA/ir

Hot properties in 2009

HDB considering imposing a quota on PRs in resale flats

Channel NewsAsia - Thursday, January 28

SINGAPORE: The Housing & Development Board (HDB) is considering imposing a quota on Permanent Residents buying resale HDB flats. This could be done in the same way that racial quotas are imposed to prevent ethnic enclaves.

The issue came up in a dialogue session on public housing with Minister Mentor Lee Kuan Yew where questions on affordability and aspirations were brought up.

Public housing has come a long way from where it started 50 years ago. Still, issues remain. This includes how foreigners are perceived to affect pricing of flats.

Mr Lee said over the next five years, the intake of foreigners will slow down but that meant Singaporeans would have to increase their productivity.

Going further, dialogue moderator Professor Tommy Koh asked if more could be done to integrate those already here, in much the same way that the Ethnic Integration Policy was introduced in 1989 in public housing estates to get races mingling.

MM Lee said: "Could the same approach be adopted towards integrating new Singaporeans? We are not allowing new Singaporeans whether from China, India, Malaysia or whatever to congregate in the same tower blocks which they are already beginning to do. They buy second hand flats and they congregate. So we have a record of how many new citizens living where and we keep their numbers dispersed. It’s a very valuable tool of communal harmony."

HDB later clarified that a quota policy on PRs for resale flats was being considered.

One other issue that came up during the dialogue is that of affordability which has come up repeatedly. One suggestion was to have HDB provide more rental housing units.

MM Lee said: ’I completely disagree with that policy. It will lead us into all kinds of problems. You are getting a dependency group — dependent on the government on constant subsidies, whereas our philosophy is 'I give you this asset, I will increase the value of the asset as the economy grows but it is yours and you look after it. And we do not have run down public housing like other countries which are rental.’”

Mr Lee was also asked for his take on a recent media report that at least three opposition parties were eyeing National Development Minister Mah Bow Tan’s ward with the aim of making public housing affordability an election issue.

He explained: “What is affordabilty? From the point of view of the buyer? And the government that is subsidising you? The government has to price it at a level that is fair to the revenue it is collecting and fair to the individual, not only the present buyer but past and future buyers. If Mr Mah is unable to defend himself, he deserves to lose.

“No country in the world has given its citizens and families an asset as valuable as what we have given every family here. And if you say that policy is at fault, you must be daft."

Mr Lee was speaking before some 500 delegates from 20 countries at a housing conference. — CNA/vm

77% who used housing agents saw "bad service" of some sort: survey

Channel NewsAsia - Tuesday, January 26

SINGAPORE: A survey has found that almost eight in 10 people who used housing agents here encountered "bad service" of some sort.

The survey by Ngee Ann Polytechnic found that 77 per cent of respondents said they met with bad service from their agents.

Some of the respondents’ top grouses were that their agents failed to negotiate a good price, that they gave the wrong advice and that they were late for appointments.

Other less common bad service complaints include aggressive property agents, negligent agents and agents who were dishonest or unfamiliar with the transaction procedures.

Generally, however, respondents were content about their agents’ services, with 65 per cent being either satisfied or very satisfied.

At the same time, 73 per cent of those surveyed felt that accreditation of the profession is necessary.

In addition, 97 per cent of those who indicated that accreditation is necessary for every agent also wanted some form of government intervention.

1,041 people took part in the survey. — 938LIVE/vm

New housing ahead for Hougang, Choa Chu Kang and Woodlands

Channel NewsAsia - Tuesday, January 5


Singapore: A pair of new Build—to—Order (BTO) projects have been launched by the HDB in Choa Chu Kang and Hougang.
Called Limbang Green and Buangkok Vale, the flats will cost from a low of $64,000 for a Studio flat to a high of $288,000 for a 4—room unit.
The Housing and Development Board said in a news release Tuesday that the new flats are priced below their equivalent market prices and most of the 2—4 room flats will be set aside for first—time buyers.
The latest BTO project will offer a total of 1,291 standard flats with 646 units being 4—room flats and the rest being Studio Apartments (276 units), 2—room flats (128 units) and 3—room flats (241 units).
The development in Choa Chu Kang called Limbang Green will have 592 standard flats, comprising 276 Studio Apartments, 128 units of 3—room flats and 188 units of 4—room flats.
The selling price for the Limbang Green flats range from $64,000 to $89,000 for a Studio Apartment; $140,000 to $169,000 for a 3—room flat; and $226,000 to $278,000 for a 4—room flat.
At Hougang, the Buangkok Vale project offers 699 standard flats, comprising 128 units of 2—room flats, 113 units of 3—room flats and 458 units of 4—room flats.
The Buangkok Vale units are priced from $88,000 to $111,000 for a 2—room flat;$142,000 to $182,000 for a 3—room flat; and $231,000 to $288,000 for a 4—room flat.
The HDB said that it aims to keep public housing affordable for first—time homebuyers, and that the market prices take into account the prices of resale flats in the area, adjusted for factors such as location, flat attributes, project design and prevailing market conditions, as determined by professional valuers.
In a month’s time, the HDB also plans to launch another 1,500 flats in Punggol and Woodlands and if there is sustained demand, more BTO projects can be expected, bringing the number of new BTO flats to about 12,000 this year.
In addition, tenders are being called for the sale of two Executive Condominum (EC) housing sites at Buangkok Drive and Yishun Ave 11.
Introduced in 1995, the Executive Condominium Housing Scheme (ECHS) offers households with income of up to $10,000 a month, strata—titled apartments with facilities comparable to private condominiums but with initial eligibility and ownership restrictions similar to public housing.
The Urban Redevelopment Authority (URA) has meanwhile put up for sale by public tender, its first residential site to be sold in 2010 through the Confirmed List under the Government Land Sales (GLS) Programme.
The residential site at Choa Chu Kang Road / Woodlands Road is earmarked for an integrated commercial and residential development, that is co—located with the Ten Mile Junction LRT station.
A 3—storey podium block comprising commercial space and the Ten Mile Junction LRT station is already built and in operation.
The current sale will only include the existing commercial development andthe future residential development to be built above the podium.
— CNA/sf

Prices of HDB flats at record high in Q4 2009

Channel NewsAsia - Monday, January 4

SINGAPORE: Prices of Housing and Development Board (HDB) flats are at their highest on record.
According to preliminary estimates from the HDB on Monday, the Resale Price Index of public flats stood at 150.7 in the fourth quarter of 2009 — highest on record since data was compiled in 1990.
Estimates show that prices of resale flats rose 3.8 per cent in the last three months of 2009, the fastest pace of growth since the third quarter of 2008. For the whole of last year, prices of resale flats rose about 8 per cent.
HDB said flat buyers can look forward to 1,300 build—to—order (BTO) flats in Choa Chu Kang and Hougang, which will be offered for sale on Tuesday.
The housing board said it will continue to launch more BTO projects this year if there is sustained demand for new flats, and will ensure that there is an adequate supply of flats to meet prevailing housing needs.
The HDB is due to release detailed resale price data and public housing data for the fourth quarter on January 22.
— CNA/so

Dawson estate Build—To—Order flats get overwhelming response

Channel NewsAsia - Thursday, December 17

SINGAPORE: The Build—To—Order flats at the popular Dawson estate in Queenstown have received an overwhelming response from home buyers.
The HDB received 2,300 applications for the 1,718 units available, just two days after they were launched.
Four—room flats at SkyVille and SkyTerrace@Dawson were the most popular, with 1,400 home buyers vying for 1,100 flats.
Five—room flats were two times over—subscribed, with about 500 applications for the 200 units available.
Young home buyers say they like the flexi—layout scheme, which allows them to change the flat’s layout to suit their preferences.
But real estate experts said that home buyers must consider the resale value of their flat when choosing the layout.
David Poh, PropNex Realty’s senior group district director, said: "Most home buyers will prefer a three—room layout because this is the most suitable for families. So when you are thinking of re—selling the flat in future, I think having a three—room layout, probably, would be the most popular among home buyers."
Under the multi—generation living scheme, 65 studio apartments are paired with four— or five—room flats to allow children to stay close to their parents.
HDB received 44 applications for such paired flats.
Currently, owners of such homes can sell the attached units separately after living there for five years.
Analysts said that if this rule changes, which means both units have to be sold together, the potential pool of buyers may be limited.
The other two BTO projects in Sembawang and Bukit Panjang were also well—received.
Four—room flats at both places were over—subscribed, while over 100 units of the two— and three—room flats are still available.
Applications for the flats end on 28 December.
— CNA/ir