New property cooling measures
SINGAPORE: The Government announced on Thursday (Jul 5) that it is raising Additional Buyer’s Stamp Duty (ABSD) rates and tightening loan-to-value (LTV) limits on residential property purchases, in an effort to “cool the property market and keep price increases in line with economic fundamentals”.
The move comes several days after official data showed that private home prices had risen to its highest point in four years in the April to June quarter, with analysts predicting that prices could soon recover to 2013 peak levels.
“The government has been monitoring the property market closely. We are very concerned that prices are running ahead of economic fundamentals,” said Mr Lawrence Wong, Minister for National Development on Thursday.
“There is a large supply of units coming on stream and interest rates are going up. We want to avoid a severe correction later, which can have more destabilising consequences. Hence we are acting now to maintain a stable and sustainable property market,” he added.
The ABSD will be raised by 5 percentage points for citizens and permanent residents (PRs) buying second and subsequent homes, and by 10 percentage points for entities, said the the finance and national development ministries, as well as the Monetary Authority of Singapore (MAS) in a joint release.
There will be no change in the rates for citizens and PRs purchasing their first residential property.
An additional ABSD of 5 per cent, which is non-remittable under the Remission Rules, will also be introduced for developers purchasing residential properties for housing development.
Authorities said that for purchases jointly made by two or more parties of different profiles, the highest applicable ABSD rate will apply.
However, full ABSD remission will continue to be provided for joint purchases of the first residential property by married couples with at least one spouse who is a Singapore citizen, they added.
Married couples with at least one Singapore citizen spouse who jointly purchase a second home together can continue to apply for an ABSD refund, as long as they sell their first home within six months after the date of purchase of the second property, or by the issue date of the Temporary Occupation Permit or Certificate of Statutory Completion of the second property – whichever is earlier.
The new rates are effective Jul 6, but there will be a transitional provision for cases where an Option to Purchase (OTP) has been granted by sellers to potential buyers on or before Jul 5.
Meanwhile, LTV limits will be tightened by 5 percentage points for all housing loans granted by financial institutions, the release stated. The revised limits will not apply to loans granted by the Housing & Development Board.
Before the change, individual borrowers were able to borrow up to 80 per cent, or 60 per cent if the loan tenure is more than 30 years or extends past age 65. With the adjustment, borrowers will now only be able to borrow 75 per cent, or 55 per cent if the loan tenure is more than 30 years or extends past age 65.
The new limits will apply to loans for properties where the Option to Purchase is granted on or after Jul 6.
Authorities said that in line with this, LTV limits for mortgage equity withdrawal loans will also be tightened – 75 per cent for a borrower with no outstanding housing loan for the purchase of another residential property and 45 per cent for a borrower with an outstanding housing loan for the purchase of another residential property.
STICKING TO ECONOMIC FUNDAMENTALS
Authorities cited the recent sharp rise in private residential prices as the reason behind these moves.
“After declining gradually for close to four years, private residential prices began rising in the third quarter of 2017. Prices have increased sharply by 9.1 per cent over the past year. Demand for private residential property has also seen a strong recovery, as transaction volumes continue to rise,” the release stated.
Earlier this month, analysts observed that the market was on an “upswing trend”. One cited the large number of en bloc sales as a factor, while another expected many upcoming projects to launch at “new benchmark prices owing to the higher land costs”.
The “euphoria” in the market calls for caution, MAS managing director Ravi Menon said on Wednesday, after the release of the central bank’s annual report.
While the resurgence in property prices and rise in the number of transactions over the past year is welcome, it should not decouple from economic fundamentals, he also said.
“The sharp increase in prices, if left unchecked, could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply,” authorities said in the press release.
The Government said that to maintain a stable and sustainable property market, it would continue to monitor it and adjust its policies as necessary.
Leonie Gardens up for collective sale at $800m
The Leonie Gardens condominium is up for collective sale with a reserve price of $800 million.
The price translates to $2,104 per sq ft based on existing gross floor area (GFA), or $2,021 per sq ft per plot ratio (psf ppr) if a 10 percent balcony space is included, subject to approval.
The tender closes at 3pm on June 21.
Leonie Gardens in Leonie Hill in District 9 has 71 years left on its 99-year lease.
It has 138 units, with a total strata area of 324,972.90 sq ft, a gross floor area of 410,431.80 sq ft and a plot ratio of 2.8.
Marketing agent Huttons Asia said it can be developed into around 540 units of about 70 sq m each, or 380 units of about 100 sq m each.
It may be possible to have a 10 percent balcony space added, increasing the area to 449,031.63 sq ft.
No development charge is payable as its existing baseline is above the current plot ratio of 2.8. But a charge of about $44 million will be levied if the additional 10 percent balcony space is utilised.
Meanwhile, the 120-unit Lakeside Apartments in the Jurong Lake District has also joined the collective sale fray with a reserve price of $240 million.
This translates to around $1,057 psf ppr after adding the estimated $58 million lease top-up quantum and development charge.
These fees are subject to confirmation, said marketing agent SLP International.
The tender will likely begin early next month, with the tentative closing date on July 17.
Lakeside Apartments, which is in Yuan Ching Road, has a land area of 134,176 sq ft and a gross plot ratio of 2.1. SLP International said the site could accommodate a development of 24 storeys. The 99-year leasehold property was completed in the 1970s.
Sources by The Straits Times
Leonie Gardens launched for sale en bloc with $800m reserve price; as is Lakeside Apartments at $240m
Huttons Asia announced on Friday (May 25) that it is launching Leonie Gardens for collective sale by tender with a reserve price of $800 million.
The reserve price translates to $2,104 per sq ft based on existing gross floor area, or $2,021 per sq ft per plot ratio (psf ppr) if a 10 percent balcony space is included, subject to approval.
The tender will close at 3pm on Thursday, June 21.
Leonie Gardens, located at 23, 25 and 27 Leonie Hill in District 9, has 71 years remaining on its 99-year leasehold, which expires on Sept 14, 2089.
The condo consists of 138 units, with a total strata area of 324,972.90 sq ft and a gross floor area of 410,431.80 sq ft.
The site is zoned residential under the Urban Redevelopment Authority Master Plan 2014, with a plot ratio of 2.8. According to Huttons, it can be developed into 544 condominium units averaging at about 70 sq m each, or 380 condominium units at about 100 sq m each.
Subject to approval, it is possible to have a 10 percent balcony space added, increasing the area to 449,031.63 sq ft.
No development charge is payable as its existing baseline is above the current plot ratio of 2.8. However, a development charge of about $44 million will be levied if the additional 10 percent balcony space is utilised.
Meanwhile, Lakeside Apartments has also joined the collective-sale fray with a reserve price of $240 million, which translates to around $1,057 psf ppr after adding the estimated $58 million lease top-up quantum and development charge.
The estimated lease top-up and development charges are subject to confirmation, said marketing agent SLP International.
The agent added that the public tender would likely begin in early June, with the tentative closing date set for July 17.
Lakeside Apartments, located in Yuan Ching Road in the Jurong Lake District, has a land area of 134,176 sq ft and consists of 120 units in two towers.
It is zoned for residential use with a gross plot ratio of 2.1.
SLP International said the site has the potential development height of 24 storeys, subject to approval. The 99-year leasehold property was completed in the 1970s.
Sources by The Straits Times
Balestier Regency up for collective sale at $218m
Balestier Regency, a 72-unit condominium complex off Balestier Road, was launched for collective sale by tender yesterday, with a minimum expected price of $218 million, Teakhwa Real Estate said.
The indicative price translates to a land rate of $1,264.90 per square feet per plot ratio (psf ppr), including a development charge of $1.35 million.
The land price will fall to about $1,220.90 psf ppr if the 10 per cent bonus balcony area is included, Teakhwa said.
The 61,952 sq ft freehold residential site has a plot ratio of 2.8, and an allowable height of up to 36 storeys.
If approved by the authorities, the maximum allowable gross floor area of 173,409 sq ft could potentially yield about 230 apartments, with an average size of 753 sq ft per unit for the new condo development, Teakhwa said.
The property is located next to Shaw Plaza, a five-storey shopping mall that houses Shaw Theatres, a FairPrice supermarket, and fast-food outlets like McDonald’s.
It is also located within 1km of Hong Wen School, and within 2km of St Joseph’s Institution (Junior) and CHIJ Toa Payoh. The nearest MRT stations are Novena and Toa Payoh MRT stations.
Mr Sieow Teak Hwa, managing director of Teakhwa Real Estate, said: “For its central city location, freehold tenure, huge land size and undemanding land rate expectation, we can expect strong developer interest for this attractive site.”
The tender for Balestier Regency closes on June 21.
Sources by The Straits Times