Sunday, September 12, 2010

The Edge: Done Deals, Braddell View and Gardens at Bishan (11th Sept 2010)


I was featured in The Edge on special write up on Braddell View. For full abstracts, kindly drop me an email at marshe_inc@yahoo.com.sg

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
Email: marshe_inc@yahoo.com.sg
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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Saturday, September 11, 2010

CNA: HDB sellers more willing to negotiate lower cash premiums: analysts

By Hoe Yeen Nie | Posted: 11 September 2010 1825 hrs 
 
 
Photos1 of 1
HDB flats
  
 

SINGAPORE : Analysts have said the recent changes concerning the HDB resale market have spooked sellers, and the sellers are more willing to negotiate a lower cash premium to sell off their flats, as they feel that prices may fall amid a smaller pool of buyers.

For the past few months, Michelle Yow has been hunting for a three-room HDB flat in Toa Payoh and Boon Keng.

But she has been put off by high cash premiums - or cash-over-valuation (COV) prices - some as high as S$80,000.

Since new rules kicked in on August 30, things have turned in her favour.

One seller even lowered her asking COV from S$45,000 to S$30,000 in a day.

Ms Yow said: "Previously, homeowners were only willing to go down maybe a few thousand dollars, now I see homeowners actually going down by up to S$15,000.

"We kind of sense that there is more of an urgency for homeowners to sell their flats at this point, because they are more willing to negotiate for a lower cash top-up value."

Many expect the pool of buyers of resale flats to shrink as a result of the changes, although genuine buyers will not likely be deterred.

Some analysts estimate that the changes will remove about 30 per cent of demand in the HDB open market, mostly coming from investors.

These include private property owners who now have to sell off their properties within six months of purchasing an HDB flat.

Donald Yeo, who is Head of Marketing, Recruitment & Training at HSR International Realtors, cited an example of an HDB flat owner who recently bought a private condominium. The apartment was still under construction, and he would only get his keys in the middle of next year, which is when he would have to start servicing his mortgage. The owner had intended to sell his HDB flat at some point to help finance his condominium, but decided to do it sooner than later.

Mr Yeo noted: "His worry is, what is going to happen in the next nine months? What if another rule comes on? What if I decide to put my flat back into the market, but the pool of buyers has been diluted?"

Eugene Lim, who is associate director at ERA Asia-Pacific, said: "Before the announcement, where prices were accelerating, most sellers tended to be, I would say, a little bit arrogant. They probably thought, 'this is my price and if you do not want, then it is okay'.

"Over the last two weeks, we have seen a gradual shift in attitude. Not price-cutting, but more open and more negotiable. They also realise that if I want to sell my house when it is still at a high price, which is now, I should be open to reasonable offers.

"Currently, if you ask me, there is still a slight standoff between buyers and sellers, because everybody is actually waiting for the other person to make a move."

The wait-and-see approach is also being taken by some Permanent Residents.

Mr Yeo said: "If you own an overseas property and you want to own a HDB property in Singapore, you will have to sell your overseas property within six months of buying the public flat. But the question is, how to check?

"But of course, if they were to kick off these rules, they must have areas that they can spot this, whether the purchaser owns overseas properties or not..."

Most experts agree that the latest changes are aimed at stabilising the HDB resale market, but this does not mean that prices will necessarily fall. As long as the economy and employment continue to grow, prices will still increase, just at a much slower rate. And for that reason, it is unlikely that median cash premiums, which now stand at about S$30,000, will fall to the old levels of S$3,000 or even S$6,000.

As for the private resale market, analysts said the cautious mood prevails, although transaction activity is still healthy.

And with more supply being planned, buyers in the open market will be more discriminating about their choices. - CNA/ms 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400
www.marshe.net

Measures to Maintain a Stable and Sustainable Property Market

1      The Government announced today the following measures to maintain a stable and sustainable property market:
  1. Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.
  2. For property buyers who already have one or more outstanding housing loans1 at the time of the new housing purchase:

    1. Increase the minimum cash payment from 5% to 10% of the valuation limit2; and
    2. Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.
        The measures will take immediate effect on 30 August 2010.

2      The Government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. The property market is currently very buoyant. While the rate of price increase of private residential properties has moderated in the last 3 quarters, prices have still increased significantly by 11% in the first half of 2010, and price levels have now exceeded the historical peak in the second quarter of 1996.

3      While Singapore has enjoyed strong economic growth in the first half of 2010, our economic growth is expected to moderate in the second half of the year. There are also still uncertainties in the global economy. Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole. Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves. Therefore, the Government has decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties Sold from 1 Year to 3 Years 


4      The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties3 on or after 20 February 2010 and sell them within a year of purchase.

5      For residential properties bought4 on or after 30 August 2010, SSD will be imposed if these properties are sold within three years of purchase. Specifically, the SSD levied on residential properties will be revised to as follows:
  1. Sold within the first year of purchase, i.e. the property is held for 1 year or less from its purchase date – The full SSD rate (1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance) will be imposed.
  2. Sold within the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.
  3. Sold within the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.
        No SSD will be payable by the vendor if the property is sold more than 3 years after it was bought. Please see Annex for examples of how the SSD will be computed.

6      The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

7      IRAS will be releasing an updated e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-tax guide will be available atwww.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.

Increase the Minimum Cash Payment from 5% to 10% of the Valuation Limit for Property Purchasers with one or more outstanding Housing Loans 8      
Previously, property buyers have to make cash payment of at least 5% of the valuation limit5.  With effect from 30 Aug 20106, the cash payment is increased from 5% to 10% of the valuation limit7.  


This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats) who are taking housing loans from financial institutions regulated by MAS and who already have one or more outstanding housing loans at the time of applying for a housing loan for the new property purchase.

Decrease the LTV limit for housing loans granted by financial institutions regulated by MAS from the current 80% to 70% for Property Purchasers with one or more outstanding Housing Loans


9      The LTV limit is lowered from 80% to 70% with effect from 30 Aug 20108 for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase.  Borrowers who do not have any outstanding housing loans continue to have an LTV cap of 80%.  These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

10      Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.  Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is in line with HDB's home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.

11      Financial institutions' lending standards have remained prudent and the asset quality of housing loans has stayed robust, with the non-performing loans ratio at less than 1% as at Q2 2010. Nonetheless, there are signs that more housing loans are originating at higher LTV bands of above 70%.  In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers already servicing one or more outstanding housing loans.

Adequate Supply in the Pipeline 


12      The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme.  We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.

13      Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.

14      The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.

*****
1 Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the buyer has an outstanding housing loan at the time of applying for a housing loan for the new property purchase. For joint buyers, if either buyer has an outstanding housing loan, the joint buyers will be considered as having an outstanding housing loan.
2 This is in addition to the cash over valuation amount that has to be paid in cash.
3 The SSD will apply to the transfer or disposal of interest (including sale and gifts) of residential lands and residential units (whether completed or uncompleted).
4 The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier. The date of resale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.
5 The amount of CPF monies plus housing loan taken for the purchase of the property cannot exceed 95% of the valuation limit (defined as the lower of property value or property price).
6 The 10% minimum cash payment will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.
7 Therefore, the amount of CPF monies plus housing loan that can be used for the purchase of the property will be reduced from 95% to 90%.
8 The 70% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.
9 These refer to new development and redevelopment projects with planning approvals, i.e. either a Provisional Permission (PP) or Written Permission (WP).
10 These refer to private residential developments with Housing Developer Licence and Building Plan Approval. Under the Housing Developer (Control and Licensing) Act, a sale licence must be obtained for a project with more than 4 units, if the developer intends to sell uncompleted residential units in the development. However, the sale of the residential units can only commence with the approval of the building plans of the development.
11 These refer to uncompleted private residential developments without pre-requisites for sale but with WP or PP granted. The sale licences could be obtained within 5 working days and building plan approvals could be obtained within 7 working days from the date of application for cases where clearances from various technical agencies are obtained and relevant documents are in order during formal submissions.


Issued by:Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
Date:30 August 2010

Revision of Development Charge Rate

1      The Ministry of National Development has revised the development charges (DC) rates for the period from 1 September 2010 to 28 February 2011.  The review is carried out on a half-yearly basis, in consultation with the Chief Valuer.

2     The DC rates for Group A (Commercial) have increased by an average of 1%, with the largest increase of 25% in Sector 112 (Jurong Lake District).

3       For Group B1 {Residential (landed)} the DC rates have on average increased by 13%, with the largest increase of 36% in Sector 117 (Sentosa).

4      The DC rates for Group B2 {Residential (non-landed)} have also increased by an average of 13%. The largest increase is 28% in Sect

5      For Group D (Industrial Use), there is an increase of 10% in DC rates on average, with the largest increase of 16% in Sector 115 (Woodlands / Yishun area).

6      The DC rates for Group I (Business zone commercial use) have not changed significantly on average. The rates for 11 sectors have increased with Sector 112 (Jurong Lake District) being the highest, while the rates for 107 sectors have decreased.  The DC rates for Group C (Hotel / Hospital) and the remaining four use groups are unchanged. (See Appendix 1 for Table of DC rates and Appendix 2 for the list of use groups.)

7      There are no changes to the Use Groups and the number of geographical sectors.

8    The revised DC rates, to be read in conjunction with the Use Group Table and the set of Geographical Sector maps (Map A and Map B), will be effective from 1 September 2010.  The new rates will apply to cases which are granted Provisional Permission (PP) or 2nd and subsequent extension to the PP on or after the effective date.

9      If there is any disagreement over the DC payable for any development proposal, calculated based on the rates under Use Groups A-H, developers and owners can opt for a case-by-case valuation by the Chief Valuer, as provided for in the Planning Act.

10    For any enquiries on DC sectors and use groups, please contact Mr Chin Koon Fun from URA at 6321 6575. For enquiries on valuation matters, please contact Ms Loh Chye Ling from IRAS at 6351 4138.


Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400
www.marshe.net