singapore property weekly issue 35

8/3/2019 Singapore Property Weekly Issue 35

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Issue 35Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.
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CONTENTSp2 Singapore Property News This Week

p8 Additional Buyers Stamp Duty Clarifications

and Initial Impact

p12Resale Property Transactions(December 31 January 6)

p13Singapore Property Classifieds #24

Welcome to the 35th edition

of the Singapore Property

Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 35

Singapore Property This Week

Page | 2Back to Contents

Residential

First-timers have high chances of getting

BTO flats

The first-time application rates for Build To

Order (BTO) flats launched in January this

year is 1.5, close to 1.6 in the November

BTO, meaning that most will likely get to

choose a flat from the 4,000 units available in

this January launch. For second-timers, the

application rate is 23.9, compared to 25.9 in

the previous launch. The BTO balloting rulesmay be changed to offer second timers more

chances in the March BTO launch.

99-year leasehold residential site at Kovan

draws 11 bids with top bid of $194.6m

A 99-year 1.7 hectares leasehold residential

site located at Kovan Road/Simon Road has

attracted 11 bids, with the highest of $194.6

million or $507 psf ppr from a consortium ofHoi Hup Realty, Investment Focus, and

Oriental Worldwide Investments. The

consortium has plans to develop the site into

a condominium project with below 400 Soho-

style and townhouse units, which will be

launched this year. The site, which is locatednear Kovan MRT station and a landed

housing estate, has access to retail shops


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located in the Heartland Mall and Hougang

HDB estate. This, added to the fact that there

had not been any major condominium

development near the MRT station, will likely

draw buyers, which may explain the interest in

the site. The number of bidders and the top

bid comparable to that of other attractive

suburban residential sites shows that

developers are still confident enough to bid for

attractive sites despite the ABSD.The site has a GFA of 384,142 sq ft and is

estimated to have a breakeven cost between

$900 and $1,000 psf with a selling price of

$1,100 to $1,200 psf, given the attractiveness

of the site.

Former private home owners, not PRs, are

the cause of high COVs

According to National Development Minister

Khaw Boon Wan, the highest median cashover valuations (COV) of $45,000 were made

by former private home owners in Q4 2011.

The next highest is $34,000 paid by second-

timers, followed by $33,000 paid by first-

timers, $32,000 by PRs and the lowest of

$31,000 by singles. He also stated that thefigures for HDB resale prices are monitored

and published for potential buyers and sellers.

However, analysts said that the data was not

sufficient in explaining the cause of high

COVs.
http://www.valueinvestingsummit.com/propwise.html


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Looking at the number and types of flats

made by each group of buyers would provide

a clearer picture. The higher COVs paid by

private property owners may be becausethey tend to purchase bigger flats and the

lower COVs paid by singles may be because

the flats they purchase are smaller. The data

also fails to consider other causes for the

higher COVs since the data is fairly recent

and does not take into account the past

years when the COV started to rise.

Nonetheless, the higher COVs paid by

private home owners might also be explained

by the high private property prices which they

might have benefited from when they sold

their private property and possibly higher

profits made from en-bloc sales.

Two 99-year leasehold residential sites

released under the GLS

The residential site located at Hillview

Avenue has a 136,000 sq ft site area and a

2.8 plot ratio, resulting in a maximum GFA of

more than 380,000 sq ft which can yield 370

units. Being located near the upcoming

Cashew and Hillview MRT stations and

amenities in The Rail Mall and The HillV2, the

site is expected to be highly popular, drawing

eight to 13 bidders and achieving a top bid of

$500 - $550 psf ppr.

The other site located at Upper Serangoon

Road comes with a higher maximum GFA of

over 466,000 sq ft, a result of its 3.5 plot ratio

and 133,000 sq ft site area.


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The site can yield 435 executive

condominiums (ECs) units. Despite offering

views of the Serangoon river, it is expected to

be less popular than the Hillview site since the

nearest MRT station is a good 1.5 km away.

Furthermore, with a total of 14 residential sites

in the 2012 H1 confirmed list, five of which

being EC sites, some developers may choose

to wait and bid for other sites. Hence, the

expected number of bids is between five and10, with a range of $220 to $300 psf ppr.

While the general belief is that demand for

ECs will remain strong, it depends on the

situation in the private residential market.

Should the prices for private homes fall,

buyers may purchase a private condominium

unit or the price of ECs will also have to fall as

well to continue attracting buyers,.

The tenders for the former and the latter will

close on March 6 and March 1 respectively.

Commercial

First tenant of UE Bizhub East likely to be

Cisco Systems

The first tenant of UE Bizhub East at Changi

Business Park is likely to be CISCO Systems,

which will move into a space of around

110,000 sq ft after moving out of its current

space at Capital Tower at Robinson Road

when its lease ends in 2013. The move is

likely due to the savings it will gain since a

renewal of the lease at Capital Tower would

cost 9-10 psf compared to the $4 psf it is likely

to pay at UE Bizhub East. This is a part of a

growing trend of MNCs shifting their

operations to the suburbs because of the


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lower costs and the relative stability of rental

rates.

UE Bizhub East, which will receive its

Temporary Occupation Permit in a couple of

months, is located near Expo MRT Station.

The development includes a 423,216 sq ft

nine-storey business park component

consisting of two linked blocks, 251 hotel

rooms and serviced suites, 100,000 sq ft of

retail space and convention/exhibition and

auditorium space.

Other developments in Changi Business Park

have also drawn much interest in recent

years, with financial institutions like Standard

Chartered, DBS, CitiBank and Credit Suisse

taking up over one million sq ft of space.

With a larger supply of office space, rents

for Grade A office space falls

Both the average monthly gross rental rate

and the occupancy rate for Grade A office

space in the Raffles Place and New

Downtown micro-market fell in Q4 2011, with

the former decreasing by 4.3% to $10.31 psf

per month, and the latter falling from 90.9%

to 88%. Rents in the Marina and City Hall

micro-market and the Beach road micro-

market has also decreased by 2.3% and

0.8% respectively. The average overall

Grade A office rents decreased by 1.6% to

$8.93 psf pm. The expected slow take-up of

office space may be due to firms holdingback on expansions as a result of the

uncertain economic outlook and relocating

SINGAPORE PROPERTY WEEKLY I 35


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part of their operations to the suburbs, which

now offers more office and business park

developments with amenities comparable to

those in Grade A office buildings.

Nonetheless, the average capital value in the

Raffles Place and New Downtown micro-

market remained fairly stable, with $2,459 psf

in Q4 2011 and $2,460 psf in Q3. The

average capital value for the whole year wasup by 17.8% from 2010 but this may change

as rents may fall as there is an upcoming 11

million sq ft supply of office space over the

next four years.

SINGAPORE PROPERTY WEEKLY I 35
http://www.moneymatters.sg/


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Additional Buyers Stamp Duty Clarifications and Initial Impact

By Mr. Propwise

Its still early days, but in this article we look

at the early impact of the ABSD on sales in

December 2011, and also some clarifications

by the tax authorities on the finer details of

whom it applies to.

Clearer guidelines on ABSD

With the revision of the e-Tax Guide by

Inland Revenue Authority of Singapore

(IRAS), several points of confusion over the

ABSD were clarified.



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Does ABSD apply on the pre-discount or

post-discount price?

As many developers have started to offer

cash rebates and vouchers to attract buyers,

one question involves the amount of stamp

duty that a foreigner has to pay 10% of the

discounted price or of the pre-discount price.

The answer to this is that if not all buyers had

received the discount and the final price paid

is lower than what most other buyers paid,

the foreign buyer will have to pay the ABSD

based on the pre-discount price.

Will the ABSD be levied on sites with unclear

zoning?

On whether the ABSD will be levied on sites

with unclear zoning, it was stated that the

ABSD will only be levied for sites that are

zoned residential in the Master Plan. If the

land was rezoned residential when it was not

originally so in the Master Plan, the ABSD will

have to be paid for the development chargepaid for rezoning and remissions will not be

applicable. Companies purchasing industrial

or commercial buildings that sit on a land

zoned residential will also have to pay the

ABSD.

Questions on the remission of ABSD

On whether remission will be granted, IRAS

stated that remission of the ABSD for sites

that yield four or less units may be allowed

on a case-by-case basis if the developer is

developing the residential properties for sale

and is a firm lawfully carrying on the

business of housing development.



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Previously, only licensed developers

developing projects yielding five or more

units were allowed remission. Should

developers purchase more plots of land to

amalgamate with their first and the ABSD

was not levied on the first plot purchased,

whether remission will be granted on the

second plot will be considered on a case-by-

case basis.

Other clarifications

The ABSD will also not be levied on

development charges since there is no

buyer's stamp duty (BSD). Inheritance is no

longer considered a means of acquiring

property, and the date range for a developerto maintain a majority stake in its subsidiary

to qualify for remission of ABSD is also

qualified.

Fewer private home sales in Dec 2011

With the introduction of the ABSD in early

December 2011, private home sales,

excluding Executive Condominiums (ECs),have fallen by 63% to 632 units versus

November 2011. Including ECs, private

home sales fell by 63.9% from the previous

month.

The introduction of the new stamp duty alsocreated some buyers remorse, as about 100

units (including ECs) were returned to

developers, up from 70 in November.

Nonetheless, a record of 18,920 units was

sold in 2011, up from 17,344 in 2010. If ECs

are excluded from the figure, the total sales

for 2011 will be 16,027 units, slightly below

the 16,292 units in 2010.



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2011 was a record year for home sales, but

if December is anything to go by, 2012 will

be a much tougher year. The strength of

sales in the Year of the Dragon will depend

on the economic situation (not looking good

at the moment with the lowered guidance

given the precarious global situation), the

prices set by developers (still unwilling to cut

prices aggressively) and the foreign demand(the unknown factor).

http://www.propwise.sg/secretsofsingaporepropertygurus/


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Non-Landed Residential Resale Property Transactions for the Week of Dec 31 Jan 6

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 657 1,520,000 2,315 99

1 PEOPLE'S PARK COMPLEX 409 467,000 1,142 99

4 THE PEARL @ MOUNT FABER 1,389 1,525,000 1,098 99

5 CLEMENTIWOODS CONDOMINIUM 560 688,000 1,229 99

8 MERA SPRINGS 1,044 1,230,000 1,178 FH

9 ORCHARD SCOTTS 1,647 4,183,479 2,540 99

10 FIFTH AVENUE CONDOMINIUM 1,615 2,368,888 1,467 FH

14 MILL CREEK 753 888,000 1,179 FH14 THE SUNNY SPRING 1,195 950,000 795 FH

15 THE VIEW @ MEYER 667 1,048,000 1,570 FH

16 STRATFORD COURT 1,098 975,000 888 99

17 ESTELLA GARDENS 1,593 1,270,000 797 FH

23 THE DAIRY FARM 1,518 1,430,810 943 FH

23 HILLTOP GROVE 1,485 930,000 626 99

http://www.valueinvestingsummit.com/propwise.html


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Singapore Property Classifieds #24For Sale



Soho@Central, #09- ,soho1/w

loft/635sf/vacant/mgt fee $975/quart/ask$2280psf/avail for rent 5.5$K(neg). CallS.Ganesh 91732881 for viewing!

Off@Central,#19-/3246sf(apx),tnted/rent25k/maint $2,268pm/ask $2950psf neg.View of Marina Bay Sands. Call S.Ganesh91732881 for viewing!

Luma/New/1153sf/3br+balcony/8F/rent

$5,500(low asking)/partial/nego/also availfor sale $2000psf neg/Call S.Ganesh91732881 for viewing!

For Rent
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singapore property weekly issue 35

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