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8/13/2019 Singapore Property Weekly Issue 143
1/14
Issue 143Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
http://www.propwise.sg/http://www.propwise.sg/8/13/2019 Singapore Property Weekly Issue 143
2/14
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CONTENTS
p2 Exemption of the TDSR Rules Tweaking orLoosening?
p7 Singapore Property News This Week
p13 Resale Property Transactions
(January 29 February 4)
Welcome to the 143th edition of the
Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
mailto:[email protected]://www.propwise.sg/advertise/http://www.propwise.sg/advertise/mailto:[email protected]8/13/2019 Singapore Property Weekly Issue 143
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SINGAPORE PROPERTY WEEKLY Issue 143
Page | 2Back to Contents
By Property Soul (guest contributor)
On February 10 2014, the Monetary Authority
of Singapore (MAS) issued a press release to
broaden the existing exemption from the Total
Debt Servicing Ratio (TDSR) rules introduced
in June last year. Market watchers havedebated whether this just a tweak or a sign
that the government is loosening its cooling
measures due to the recent weak market
sentiment.
Fine-tuning financing restrictions a norm?
Financing restrictions introduced by MAS
under the context of prudent borrowing are
usually made effective the following day.
However, it is not uncommon to see
Exemption of the TDSR Rules Tweaking or Loosening?
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subsequent fine-tuning after the
announcement.
Motor vehicle loans are a good example:
- On 25 February 2013, MAS imposedfinancing restrictions on car loans that cap
maximum loan-to-value to 50 or 60 percent
and loan tenure to five years.
- On March 8, after carefullyconsidering the
feedback received from different groups,the
physically disabled and their caregivers are
exempted from such restrictions.
- On April 5, after taking into account the
distinct conditions in the used car market,a
grace period of 60 days was granted for the
purchase of used cars that were inventorybefore February 25.
The TDSR framework was announced in
June 2013. But it was not until eight months
later that some details were fine-tuned after
receivingfeedback from borrowers who face
challenges refinancing loans for owner-
occupied properties.
Anyway, all lenders and borrowers are now
used to MAS being the modifying authorityof
financing restrictions introduced in Singapore.
Although MAS stands firm on their policies,
they know do tweak some terms and
conditions based on public feedback.So the question is: Are more fine-tuning
announcements on the way?
What is the exemption this time?
With immediate effect, any borrower who
bought his owner-occupied residentialproperty before 29 June 2013 is exempted
from the TDSR rules during refinancing of this
property, even if he owns more than one
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property and has other outstanding property
loan. He can also enjoy the same remaining
tenure in his refinanced loan.
Refinancing of all investment property loansabove the 60 percent TDSR threshold is
allowed during the transition period until 30
June 2017, provided that:
1. The option to purchase was granted before
29 June 2013;
2. The borrower commits to a debt reduction
plan with the financial institution (FI) during
refinancing; and
3. The borrower fulfils the FIs credit
assessment.
How can property owners benefit from the
exemption?
The exemption is meant to enable home
owners to refinance their properties when
interest rates go up. On the other hand,
property investors are given sufficient time to
right-sizetheir loans when the 4-year lock-in
period of their loans expires in 2017, so they
will be able to service or refinance their loans
andwontsuffer a huge loss in a forced sale.
With interest rates still around two percent
now, not many property owners will bother to
refinance their properties. For those who
bought their properties recently, their housingloans are most likely still under the lock-in
period of 2 to 4 years. As the saying goes,
you only cross the bridge when you come to
it.
It is only when interest rates shoot up to over
3 or 4 percent that owners will start feeling
the pain. In 2006 and 2007, banks would
inform borrowers of a revised interest rate
and a higher monthly repayment every few
months, to be effective the following month.
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Foreign banks were even more aggressive in
updating their interest rates.
Mortgagors should be aware of the fact that
applications for refinancing or re-pricing takes
time. When the new loan package is finally
approved, it can only be made effective three
months later.
Who doesnt benefit much from the
exemption?
1. Developers, agents and sellers
It is an exemption, not an abortion. And the
exemption doesntapply across the board to
include all new property purchases. Buying
new projects launched by developers or
resale units in the market after 29 June 2013are still subject to the limit of the TDSR rules.
2. Other buyers
Buyers who unfortunately bought after the
magic date of 29 June 2013 or have
purchased commercial properties still have to
go through the tedious TDSR evaluation
process during refinancing.
Buyers waiting on the sidelines are unlikely to
see many units selling at depressed prices
due to failure in securing refinancing. There
may not be a drastic drop in property prices
this year.
3. Financial institutions
FIs are relieved that they can probably meet
their sales quota on refinancing of home
loans now. But not the quota on new housing
loans.
Even if the target group of the TDSRexemption fails to pass the stress test, FIs
are now unable to hold them hostage to
monthly repayments with higher and higher
interest rates.
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Well, there is no clear definition and guideline
on debt-reduction plan and credit
assessment. At least the FIs do not have to
give up too much business from their
overleveraged mortgagors with no holding
power, especially after toiling for weeks with
all that paperwork!
By guest contributor Property Soul, a
successful property investor and enthusiast
who shares her experiences and knowledgeonher blog.
SINGAPORE PROPERTY WEEKLY I 143
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Singapore Property This Week
Page | 7Back to Contents
ResidentialA b r eat her f o r h o m eo w n er s w h o b o u gh t
b e f o r e la st Ju n e 2 9
With immediate effect from Feb 10 this year,
the Monetary Authority of Singapore (MAS)
has announced that refinancing of loans for
homes bought before June 29, 2013 will be
exempted from the total debt servicing ratio
(TDSR) cap of 60 percent. The cap means
that a borrower's monthly installments for all
debt servicing including mortgage payments
cannot exceed 60 percent of gross monthlyincome. This is a breather from the strict debt
rules governing mortgages for homeowners
who are considering refinancing of their
mortgages. Before this, owner-occupiers with
an intention to refinance their loans could only
be exempted from this rule if they owned no
other property and had no other home loan.
Banks are also likely to welcome this policy
tweak because it may revive the refinancing
market, after the sharp decrease in new
home loan sales since the introduction of the
TDSR framework.
(Source: Business Times)
Ri ver ban k @ Fer nv ale p ro jec t d raw s
s t r o n g i n t e re s t
UOL Development's newest condominiumdevelopment Riverbank @ Fernvale is
reported to be gaining strong interest from
buyers. It has received more than
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500 cheques since its showflats opened for
preview a week ago. The 555 residential
units prices will be above $1,000 psf on
average. Anthony Wong, UOL's deputy
general manager (marketing) said that hesaw strong interest across all unit types.
(Source: Business Times)
H o m e o w n e r s h i p a k e y s o c i a l p i l l ar
Minister for National Development Khaw
Boon Wan said that home ownership remains
a key social pillar for Singapore, and that the
government will continue to help
Singaporeans realize their dreams of owning
a home in a post on his blog. Mr Khaw wrote
that HDB estates are lasting intangibles
where Singaporeans build homes, start
families and form strong bonds with their
neighbors and communities. Feb 12 marked
the 50th anniversary of the Housing &
Development Board's Home Ownership for
the People Scheme the programmed that
offers subsidized mortgages to buyers of
HDB flats and has culminated in the
Republic's high home ownership rate.
(Source: Business Times)
TDSR t w eak a l if el in e f o r s tr u gg li ng
o w n e r s
Following the MASs decision to exempt
owner-occupiers from the TDSR cap of 60
percent, analysts are reported to say that the
tweak is targeted at a small group of stressed
households struggling to get mortgage
refinancing. This revision to the rule may
mean that the group of households with a
debt-servicing ratio (DSR) of 40-60 percent
may be larger than expected earlier.
However, analysts also said that the tweak is
not likely to indicate a rollback of property
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cooling measures. In fact, the measures are
expected to stay, and a reversal may only
happen next year.
(Source: Business Times)
A n ch or val e Cr es cen t EC s ite at tr ac ts
st r o n g in t e r e st
The 99-year leasehold site at Anchorvale
Crescent attracted 12 bids at the close of its
tender period on Feb 13. The top bid was
$192.89 million, or $366.91 psf ppr, by
SingHaiyi Group's Phoenix Real Estate. The
second highest bid was $191 million, or
$363.32 psf ppr, by MCL Land (Brighton).
Ong Teck Hui, national director, research and
consultancy, at Jones Lang LaSalle said that
the site has attracted a particularly strong
interest with 12 parties contesting and the top
six bidders within a 4.8 percent margin. This
reflects developer's confidence in demand for
EC homes, and demand for ECs in the
Sengkang area has been encouraging
recently.
(Source: Business Times)
D BS: h o m e p r ice s t o f a l l 1 0- 15 % t h is ye a r
Speaking at DBS's Q4 results briefing, DBS
Bank chief executive Piyush Gupta expects
home prices to decrease 10 to 15 percent in
2014, more than the 10 percent forecast by
property consultants. Yet he said that such
decline would not make a material impact on
the bank's loan book. As for the higher
interest rates expected with the shrinking of
monetary stimulus policy by the US, he was
not expecting it to have any effect on DBS.
DBSs own stress tests in the past have
shown that DBS can easily withstand a 20
percent reduction in Singapore property
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prices without material impact on their
portfolio.
(Source: Business Times)
Jans r es al e o f n o n -l an d ed h o m e s d o w n
70 %
Resale transactions of non-landed private
residential homes decreased 70.2 percent to
310 in Jan 2014 from 1,039 deals of last year.
Flash estimates from the Singapore Real
Estate Exchange (SRX) also indicated that
the number of resale deals last month was
9.1 percent lower than 341 transactions in
December. However, resale prices measured
by the SRX index increased 2.3 percent from
the December level. Analysts said the lower
number of transactions in Jan might have
caused the overall price index more sensitive
to deals that changed hands at a higher price.
(Source: Business Times)
R iv er tr ees p r ic i ng s et t o t op n ex t-d o o r
R ive r b a n k' s
Rivertrees Residences is expected to be
launched at a premium of $50-100 psf,
topping its next-door competing project, UOL
Development's Riverbank @ Fernvale.
Rivertrees is a project jointly developed by
Frasers Centrepoint, Far East Orchard and
Sekisui House. Prices for the units will start
from $950 psf when the project is open for
booking on Feb 22, with the average price for
the initial phase likely to be within $950-
$1,150 psf. Chief executive Cheang Kok
Kheong noted that Rivertreess advantage
over Riverbank is that it offers the waterfront
view, and its slight premium to the other isconsidered fair. Riverbank @ Fernvale has
an average price indication of slightly more
than $1,000 psf.
(Source: Business Times)
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Commercial
Ke p p e l C lu b a n d o n e SI C C co u r se a f f e ct e d
b y r e vie w
Under the government's plans for land use,Keppel Club may not be able to keep its golf
course when its lease expires in seven years,
and at least one of the Singapore Island
Country Club's (SICC) locations may be
affected. The fate of these and other golf
courses has long been discussed before 16Feb, when representatives from government
agencies meet the members of four clubs -
Keppel, SICC, Tanah Merah Country Club
(TMCC) and the National Service Resort &
Country Club (NSRCC) - at separate briefing
sessions. The Ministry of Law said that therewould be no new land allocations for golf
courses, and that some of the golf courses
would have to be phased out and the greens
put to other uses.
(Source: Business Times)
K H K ea P ro p er ti es s eek i ng p ar tn er t o
d e v e lo p b u i l d i n g
KH Kea Properties Pte Ltd is seeking a joint-
venture partner to tap on the best use of its
small building next to Bras Basah Complex
with McDonald's as tenant on the lower floors
- the nine-storey building at 333 North Bridge
Road. The building's existing gross floor area
(GFA) is 29,049 sq ft, or an equivalent plot
ratio of 7.145 which exceeds the 5.2 plot ratio
allocated for the site under Master Plan 2008.
The company is controlled by an Indonesian
family with business interests across Asia. It
also owns an adjacent 635 sq ft piece of land
along Cashin Street. Both properties have
balance lease tenure of 812 years,
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are zoned for commercial use, and yield a
total of 32,351 sq ft GFA.
(Source: Business Times)
F a r E a s t t o b e g i n s a l e s f o r T u a s f a c t o r y
c o m p l e x n e x t w e ek
Far East Organization is expected to begin
sales at a 30-year leasehold strata factory
project, The Index in Tuas South Avenue 3
next week. The expected average price ofthe factory units is around $330-350 psf. 98
strata factories as well as a staff canteen will
be on sale. There will be three unit types:
Type A (32,754 sq ft to 33,615 sq ft), Type B
(10,613-14,574 sq ft) and Type C (2,195-
8,697 sq ft). The Indexsaverage price is a
bit lower than the $360 psf average for the
groupsnearby project The Westcom in Tuas
South Avenue 6. The group has sold about
92 percent of the 144 warehouse and factory
units in The Westcom. The Westcom is on a
site with a remaining 41 years on its 60-year
lease term.
(Source: Business Times)
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Non-Landed Residential Resale Property Transactions for the Week of Jan 29 Feb 4
NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
5 VARSITY PARK CONDOMINIUM 1,345 1,590,000 1,182 99
9 PATERSON RESIDENCE 1,313 2,830,000 2,155 FH10 THE MONTANA 614 1,286,710 2,097 FH
10 BALMORAL 8 2,928 4,900,000 1,674 FH
10 ONE JERVOIS 2,777 4,600,000 1,656 FH
11 PARK INFINIA AT WEE NAM 1,464 2,400,000 1,639 FH
11 HILLCREST ARCADIA 926 1,050,000 1,134 99
11 CHANCERY COURT 2,271 2,520,000 1,110 99
14 THE WATERINA 635 834,388 1,314 FH
14 THE WATERINA 1,066 1,230,000 1,154 FH
14 LE CRESCENDO 3,391 3,480,000 1,026 FH15 POSHGROVE EAST 1,238 1,767,000 1,427 FH
15 RIVEREDGE 1,518 1,750,000 1,153 99
15 MABELLE 1,119 1,250,000 1,117 FH
15 THE VESTA 1,561 1,580,000 1,012 FH
18 RIS GRANDEUR 1,539 1,400,000 910 FH
21 SPRINGDALE CONDOMINIUM 1,130 1,280,000 1,133 999
21 PINE GROVE 1,755 1,539,000 877 99
26 THE CALROSE 1,249 1,570,000 1,257 FH
26 CASTLE GREEN 1,281 1,100,000 859 9926 CASTLE GREEN 1,152 950,000 825 99
27 YISHUN SAPPHIRE 1,399 1,020,000 729 99
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