Parliament discusses buyback plan
Members of Parliament (MPs) raised additional questions on the enhancement to the Lease Buyback Scheme (LBS) during the Parliament session on 8 September. Some MPs requested information on how the Government derived the valuation of the eligible flats, while others cited various scenarios for the Government to clarify, for example, should a flat on the LBS be put up for en bloc. Hougang Member of Parliament Png Eng Huat also proposed easing LBS’ sales and subletting restrictions and minimum length of occupation. In response to Mr Png, National Development Minister Khaw Boon Wan replied that rules will remained unchanged as the LBS is primarily for individuals who wish to continue staying in their existing homes.
Mr Khaw clarified other concerns by explaining that home owners under the scheme would get a bigger payout when the Housing and Development Board (HDB) buys the lease back and reiterated that the computation of LBS earnings is made by deducting the remaining lease’s value and any unresolved loan amount from the flat’s total market value with its outstanding lease. As for LBS flats that go under the HDB’s Selective En Bloc Redevelopment Scheme, owners would have the option to accept monetary compensation calculated on the remaining years of the lease, or to purchase a brand new flat with the same number of remaining years of the lease for their LBS flat, or a new 99-year flat that is subsidised. Mr Khaw also confirmed that individuals are allowed to take any outstanding proceeds of up to S$100,000 in a lump sum if their CPF Retirement Accounts satisfy the Minimum Sum requirement.
Development plans for Bidadari, Tampines North and Punggol Northshore revealed
Green and sustainable living is the latest trend as HDB unveiled plans for public housing projects in Bidadari, Tampines North and Punggol Northshore. Aside from parks and landscaped decks, the housing projects at Bidadari and Tampines North will be equipped with roof gardens, garden courtyards and sheltered walkways. The Punggol Northshore housing project will feature smart technology that involves car park, lighting and waste systems to aid cutting waste. With a waterfront location and smart technology, Northshore is the first district in Punggol to have different heights to ensure a maximised sea view, as well as first to have direct connections to an LRT station. Applications for Bidadari and Punggol Northshore will open next year, while applications for Tampines North will be in November this year.
New launches from September and confidence in ECs
Regardless of market sentiment, developers are expected to launch more private residential homes from this month onwards following the end of the Hungry Ghost Month. Keppel Land’s 500-unit Highline Residences at Tiong Bahru, as well as M+S Pte Ltd’s Marina One Residences at Marina South, are some of the projects to be launched. Project prices are said to be $2,000 per square foot (psf) and $2,600 psf respectively.
On the Executive condominium (EC) front, two ECs at Woodlands Avenue 5 and Anchorvale Crescent in Punggol are likely to launch at the end of the month, while three in Punggol and Jurong West are likely to launch in November. According to a Today report, observers noted that the ECs are “likely to be popular with those who plan to buy private homes”, but indicated the importance of pricing the projects competitively, due to a backlog of 700 unsold EC units from previously launched projects. Developers continued to display confidence in Executive Condominiums (EC), as eight bids were received for the EC site at Choa Chu Kang Drive, with Sim Lian Land putting up the highest bid of $207.4 million. Overall, the amount of bids and close margins represent good prospects for the EC market, with subsequent bids for the Choa Chu Kang EC considered relatively high.
More property market mixed signals
A 0.4 per cent month-on-month rise in resale prices of non-landed private homes was recorded in the Hungry Ghost month of August. This followed four months of falling prices, according to the recent flash report by the Singapore Real Estate Exchange (SRX). Overall resale prices of HDB flats however fell 1.1 per cent, the lowest level recorded since January 2012, largely contributed by three- and four- room flats. Prices of three- and four-room flats fell respectively by two per cent and 0.9 per cent.
The rising and falling of prices do not indicate market improvement according to Mr Alan Cheong, Senior Director of Research and Consultancy at Savills Singapore, when interviewed by TODAY. His sentiments were shared by Mr Eugene Lim, Key Executive Officer at ERA, who indicated low buyer sentiment, as the price increase was not accompanied by a rise in demand. Various property curbs such as the Mortgage Servicing Ratio (MSR), Total Debt Servicing Ratio (TDSR) and Additional Buyer’s Stamp Duty (ABSD) were cited as reasons for continued low demand.
Bank of America Merrill Lynch’s (BAML) reported that long term economic restructuring and curbs in property and loans will likely result in Singapore home prices falling by 20 per cent from now to 2016.
Overseas developers setting foot in Singapore
Property developers from the United States have set up offices in Singapore with an aim to attract Singaporean investors to the US. According to Mr John Stinson, Cushman and Wakefield’s Executive Managing Director of Capital Markets in the Asia-Pacific, in an interview with Today, “The markets showing the most appeal have been New York, San Francisco and Los Angeles … The US markets are generally coming off a low base in almost every sector; interest rates are historically low and the US dollar has again become a safe-haven currency.”
Mr Sean Tan, General Manager of iProperty.com Singapore commented to Today that “The US is so far away; investors may not be familiar with the market so they may buy into areas that are not so good … but cities such as San Francisco and Boston are not bad as their economies are quite promising.”