Wednesday, October 31, 2012

Sentosa bungalow believed to have set new record psf price


The Business Times
Wednesday, Oct 31, 2012

SINGAPORE - A new record price in terms of per square foot of land area is believed to have been set for a bungalow on Sentosa Cove.

According to caveats evidence, a bungalow on Ocean Drive with views of the Pulau Brani container terminal was recently sold for $32.5 million, which works out to $3,214 psf on land area of 10,111 sq ft.

This busts the record set in late 2010 for a property just a few doors away that fetched $2,989 psf on land area of 9,436 sq ft, amounting to $28.2 million.

In the latest deal, the seller is a seasoned Singaporean bungalow investor, while the buyer is understood to be a Malaysia citizen.

Homes on Sentosa Cove have a 99-year leasehold tenure.

Some market watchers point out that the property was last transacted in November last year at $24.5 million, which means the seller would be forking out the maximum 16 per cent seller's stamp duty (SSD) payable for the sale of properties involving a holding period of a year or less.

The SSD on the $32.5 million sale would thus amount to $5.2 million. That, along with around $730,000 for the standard 3 per cent buyer's duty on the $24.5 million purchase price, would mean the owner's gain would be slightly over $2 million, before taking into account commissions, interest and other expenses.

Newsman Realty managing director KH Tan confirmed there has been a sudden pick up in bungalow deals in Singapore's upscale waterfront housing district in the past two to three months, accompanied by a strengthening in prices.

Last month, there were two separate deals involving the sale of two adjacent prime seafronting bungalows along Cove Grove boasting views of the Southern Islands - at $25.5 million or $2,524 psf based on land area of 10,102 sq ft, and nearly $24 million, reflecting a price of $2,468 psf on 9,725 sq ft land area.

A caveat has also been lodged for a bungalow along Cove Drive with waterway and golf course views, sold for $2,202 psf in August.

However, there seems to be more anecdotal evidence of bungalow transactions on Sentosa Cove than caveats lodged, suggesting that in most cases, options have yet to be exercised by the buyers.



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)

| www.marshe.sg | www.marsheproperties.com.sg | www.hudcsg.blogspot.com |
| www.hausatserangoon.sg | www.8riversuites.com | www.newagents.sg |

ABSD reins in foreigners' foray into private homes


The Business Times
Wednesday, Oct 31, 2012

SINGAPORE - The introduction of the additional buyer's stamp duty (ABSD) last December has had its intended effect of shrinking non-permanent resident foreigners' share of total private-home purchases in the first three quarters of this year.

Conversely, Singaporeans have seen a 10.6-percentage point jump in their share of the home-buying pie. PRs' share has risen slightly.

According to Knight Frank's analysis of URA Realis caveats data, foreigners who were not Singapore PRs accounted for just 6.2 per cent of the 23,312 caveats lodged for private homes excluding executive condos in the first nine months - down from their 17.5 per cent share in full-year 2011. In 2010, they accounted for 11.9 per cent of home purchases.

PRs' share has risen slightly in Jan-Sept this year to 15.6 per cent from 13.4 per cent in 2011 and 13.1 per cent in 2010. PRs pay 3 per cent ABSD when buying their second and subsequent residential property here.

For non-PR foreigners, a 10 per cent ABSD rate is payable on all residential property purchases. The same applies to companies.

Singapore citizens also foot 3 per cent ABSD, but only on their third and subsequent residential property. Between January and September this year, they bought 77.4 per cent of private homes transacted, a significant increase from their 66.8 per cent share in 2011 and also surpassing their 72.1 per cent share in 2010.

Knight Frank's analysis also showed that companies picked up just 0.8 per cent of private homes sold in the first three quarters of this year - down from 2.3 per cent in 2011 and 2.8 per cent in 2010.

Commenting on the findings, International Property Advisor CEO Ku Swee Yong said: "The ABSD is doing its job." He also noted that following its introduction, some developers held back launches of luxury residential projects and that may also have led to the thinning in foreign buying this year.

Mr Ku argues that, with the 10 per cent ABSD, the numbers often don't stack up in terms of investing in Singapore property even for foreigners with deep pockets.

"I had a foreigner who told me that paying an additional 10 per cent on the price is equivalent to renting a luxury property, where rental yields are around 2 per cent, for five years. So he continued to rent a GCB instead of buying a luxury condo. He's in Singapore most of the time."

BT Weekend reported recently that in the Sentosa Cove upscale waterfront housing district - the only place in Singapore where non-PR foreigners may buy a landed home, albeit with government approval - some prospective buyers have asked sellers for long option periods of several months in the hope of becoming a Singapore PR and thus qualifying for the lower 3 per cent ABSD rate. Or they would not even have to pay any ABSD if they don't own any other existing residential property here.

Looking ahead, IPA's Mr Ku hopes that the ABSD will soon be terminated by the authorities "now that it has done its job", or at least the 10 per cent ABSD rate for non-PR foreigners will be trimmed to 3 per cent, in sync with the rate for PRs and Singaporeans.

However, Knight Frank chairman Tan Tiong Cheng reckons that the authorities are unlikely to head this way anytime soon as the original intention of introducing ABSD - to prevent runaway housing prices by curbing foreign buying driven by the large pool of external liquidity - still remains today.

"Interest rates are still low and, with QE3, liquidity has increased. Moreover, Singapore remains an attractive safe-haven for foreigners, at least for now," he added. "So unless an oversupply situation develops or the property market goes into a slump, I don't think the Government will be in a hurry to remove ABSD."

He also argues that for foreign buyers who believe in Singapore's mid-term prospects, ABSD will not be a deal breaker.

Knight Frank's analysis, which was based on URA Realis data downloaded on Oct 19, showed that 6,881 caveats were lodged for private home purchases in Q3 2012, down 28.9 per cent from 9,676 in the preceding quarter and 9.1 per cent lower than the 7,566 in Q3 last year. The final figure for Q3 2012 is expected to be higher as more caveats stream in over the next few weeks.

Singaporeans acquired 5,190 homes in July-Sept 2012, down 31.3 per cent Q-on-Q but up 5.1 per cent y-on-y. PRs bought 1,159 units in Q3, down 19.2 per cent quarter on quarter but up 12.4 per cent y-on-y. As for non-PR foreigners, the 451 units they acquired in Q3 is down 29.6 per cent q-on-q.

It was also just about 32 per cent of the 1,415 units they bought in Q3 last year.

Non-PR foreigners' share of private home purchases was 6.6 per cent in Q3, unchanged from the preceding quarter. As for PRs, their contribution to the home-buying pie rose from 14.8 per cent in Q2 to 16.8 per cent in Q3.

Singaporeans' share fell from 78 per cent to 75.4 per cent. Companies' share rose from 0.5 per cent to 1.2 per cent.




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)

| www.marshe.sg | www.marsheproperties.com.sg | www.hudcsg.blogspot.com |
| www.hausatserangoon.sg | www.8riversuites.com | www.newagents.sg |

China nationals' private home purchases down 48%


The Business Times
Wednesday, Oct 31, 2012

SINGAPORE - The number of private homes in Singapore bought by Chinese citizens in the first nine months of this year has fallen to half the figure for the same period last year. Malaysians and Indonesians - the other two major groups of foreign home buyers - have seen smaller declines.

Knight Frank's analysis, based on URA Realis caveats data on Oct 19, shows that, in all, Chinese citizens picked up 1,066 private homes in Singapore in the first nine months of 2012, down 48 per cent from 2,046 units in the same period last year.

Along with the smaller Chinese contingent in the Singapore property market, their buying patterns have also changed.

"Chinese buyers used to be more active in the prime districts 9, 10 and 11 prior to the introduction of the additional buyer's stamp duty (ABSD) - with 17 per cent of the total number of homes picked up by China buyers (comprising both Singapore permanent residents and non-PRs) in 2009 located in these three districts.

"The proportion declined to 15 per cent in 2010, 12 per cent last year and only 10 per cent in the first nine months of 2012," said Knight Frank's research head Png Poh Soon.

Similarly, Chinese buyers were much more active in District 15 (which covers the Katong and Meyer Road areas) prior to 2012. In 2009, 2010 and 2011, 11 per cent, 14 per cent and 11 per cent respectively of the number of private homes they bought in Singapore were in District 15.

This figure dropped to 7 per cent in the first nine months of 2012.

And taking the mid-market Districts 14, 15 and 16 together, Knight Frank found that, prior to 2012, they accounted for a higher proportion of purchases by Chinese buyers compared with Districts 18, 19 and 23, which are mass-market locations. District 18 includes Tampines and Pasir Ris. District 19 covers Serangoon, Hougang and Punggol, and District 23 Hillview, Bukit Panjang and Choa Chu Kang.

However, the situation reversed in the first nine months of this year, when a higher proportion of properties bought by Chinese citizens were in Districts 18, 19 and 23 (33 per cent) than in Districts 14, 15 and 16 (21 per cent).

District 14 includes locations such as Geylang and Eunos; District 16 includes places such as Bedok, Upper East Coast Road and Kew Drive.

Chinese buyers have been drawn to new launches that have been progressively released this year in Districts 18, 19 and 23, particularly those near MRT stations and amenities.

International Property Advisor CEO Ku Swee Yong notes that some developers have been aggressively marketing suburban project launches in China and this could also have drawn Chinese investors to diversify from the mid and prime segments.
Adding weight to this trend, says Mr Png, is the increased total buying cost arising from the hefty ABSD introduced last December on foreign buyers.

Foreigners who're not Singapore PRs pay 10 per cent ABSD on any residential property purchase here.

PRs pay 3 per cent ABSD on their second and subsequent home purchase. Singaporeans pay the same rate but only for their third and subsequent property. Those on tighter budgets moved their interest to lower-priced homes in mass-market areas as the investment quantum is lower.

Some high net-worth Chinese may have decided against investing in Singapore's high-end property sector following the abolition of the Financial Investor Scheme (which facilitated securing PR status) this year, as well as tighter immigration rules in Singapore, Mr Png suggests. China's slowing economy would also have contributed to an overall slowdown in their property-buying sprees in Singapore.

This decline sent Chinese buyers to second spot in terms of the major foreign buyers of Singapore private residential properties in the first nine months of 2012. In 2011, Chinese were the top buyers.

Conversely, Malaysians moved up from the No 2 to the No 1 spot. They snapped up 1,394 private homes here in Jan-Sept 2012, down 7.5 per cent year-on-year.

"Singapore remains a preferred destination to buy properties among Malaysians due to the two countries' geographical proximity and cultural similarity," said Mr Png. "Malaysian investors also view Singapore as a safe bet for long-term investment."

Districts 19 and 18 were the two most popular locations among Malaysians in Q3 this year.

Indonesians remained the third largest foreign buyers in Jan-Sept 2012, although the 942 private homes they bought was down 25 per cent y-on-y.

As always, their top pick was District 9. They bought more homes in District 9 than any other nationality in the first nine months of 2012.

However, since Q4 last year, Indonesians have also turned their attention to District 19 due mainly to a surge in new condo launches in Punggol, said Knight Frank.

Indians remained the fourth biggest foreign buyers, despite the 685 homes they picked up in Jan-Sept 2012 being 22 per cent lower y-on-y.

Since the start of this year, US citizens have surfaced as the fifth largest group of foreign buyers, replacing UK citizens.

They acquired 122 homes in Jan-Sept 2012, up 15 per cent from 106 units in the same year-ago period.

This is most likely because US citizens - along with nationals and PRs of Switzerland, Liechtenstein, Norway and Iceland - are accorded the same treatment as Singapore citizens for the ABSD due to their respective countries' FTAs with Singapore.

In Q3 2012 alone, Americans picked up 43 private homes in Singapore, or 2.7 per cent of the 1,610 units purchased by foreigners (comprising Singapore PRs and non-PRs).

Malaysians were in top spot, with a 25.3 per cent share, followed by Chinese citizens (21.7 per cent), Indonesians (17.8 per cent) and Indians (15.2 per cent).



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)

| www.marshe.sg | www.marsheproperties.com.sg | www.hudcsg.blogspot.com |
| www.hausatserangoon.sg | www.8riversuites.com | www.newagents.sg |

Property cooling measures in HK unlikely to affect S'pore: experts


SINGAPORE: The recent property cooling measures introduced in Hong Kong will not have an impact on Singapore property prices. Experts said foreign property investors are unlikely to switch their portfolio from Hong Kong to Singapore.

Besides being leading international financial centres, both Singapore and Hong Kong hold some of the world's most expensive homes.

Hong Kong tops the list, according to research from real estate agency Savills, while Singapore -- the fourth most expensive in the world -- continue to see private home prices soaring to new highs.

Both cities have introduced a series of cooling measures to dampen prices.

Hong Kong introduced its third set of measures in two months last Friday, requiring foreign buyers to pay 15 per cent tax. This is more than Singapore's Additional Buyer's Stamp Duty of 10 per cent - introduced in December 2011.

Analysts said the move will unlikely cause foreign investors to move to Singapore and boost its property prices higher.

To cool its property market, Singapore has capped the home loan tenure, the sixth cooling measure in recent years. However, with high liquidity in the global market, analysts said new measures would be more frequent, with one to two measures a year being the norm in the years to come.

Singapore has also beefed up the supply of private homes -- an assurance that should help investors make measured decisions.

Colin Tan, head of research at Chesterton Suntec International, said: "At the moment, the perception is that HK is trying to fight fire... At the same time, they are trying to fight the free market status. We have committed to supply as much as demand, whereas they have not yet said so."

Still, market watchers forecast home prices to remain hot in Singapore.

Alan Cheong, head of research at Savills Singapore, said: "Developers will ultimately have to pass the land cost to the buyers. You have a case where land cost has risen by 15 to 30 plus per cent over the past six months.

"Come next year, with land being about 60 per cent of development cost, developers will probably have to raise prices by 10 to 15 per cent for certain areas, particularly in the suburbs."

While Hong Kong and Singapore are considered safe havens for property investing, some analysts said investors may look to second-tier Asian markets which have less government intervention.


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)

| www.marshe.sg | www.marsheproperties.com.sg | www.hudcsg.blogspot.com |
| www.hausatserangoon.sg | www.8riversuites.com | www.newagents.sg |