PROPERTY NEWS

18 February 2021

DPM Heng flags risks of low interest rates on housing market

The Straits Times, 18 Feb 2021, Thu

Singapore's Deputy Prime Minister and Finance Minister Heng Swee Keat warned that low interest rates can lead to distortions in asset prices, amid speculation that the Government may take fresh steps to cool the housing market.

"Interest rates today are ultra-low, and in some cases even negative, so this can lead to a significant mispricing of asset prices and a significant risk of investing in the wrong places," Mr Heng said in an interview with Bloomberg Television yesterday.

"When individuals commit to buying a property, they are making a big part of their life savings in it and we want to make sure that it is something that's sustainable," he said, a day after delivering the Budget speech.

Singapore's residential property market has made a rapid recovery, fuelling speculation that the authorities could impose cooling measures for the first time since July 2018. Government ministers, including Mr Heng, have warned that they do not want the market to run ahead of economic fundamentals.

When asked if it is too early to ease the current property curbs, Mr Heng said: "It is certainly premature, and in fact I should say that we have to watch this."

Read more at: https://www.straitstimes.com/business/property/dpm-heng-flags-risks-of-low-interest-rates-on-housing-market

Good Class Bungalows still seen as a sure bet by the ultra-rich. Are there risks ahead?

The Business Times, 18 Feb 2021, Thu

By Leslie Yee

 IN SPITE of the economic damage wrought by Covid-19, Singapore's Good Class Bungalow (GCB) market had a stellar 2020 with transaction value up 35 per cent from a year ago to S$1.05 billion. Market watchers expect positive momentum to carry through this year.

As it is, caveats have been lodged for 11 GCBs worth S$302 million between Jan 1 and Feb 1 this year, data from List Sotheby International Realty showed.

Globally, much has been written on the top 1 per cent - or indeed the top 0.1 per cent - taking much of the spoils of economic growth. Singapore is not immune to this. Wealth continues to be generated, be it from businesses tapping into a growing Asia or in gaining from the thriving sectors such as technology and pharmaceuticals. Wealth is also being created through exposure across various asset classes, including stocks on Wall Street that have surged in an ultra-low interest rate environment.

Safe haven

Amid global geopolitical uncertainties, Singapore's safe haven status is ever more valued. Family offices continue to set up in Singapore, the most recent being that of Google co-founder Sergey Brin. It demonstrates the confidence that the uber wealthy have in Singapore.

The rich have always been drawn to put their money into luxurious abodes, be it mansions in London's Mayfair, townhouses around Central Park in New York, or villas in Hong Kong's The Peak.

Wealth created in whatever areas, be it finance, technology, or consumer goods, invariably gets channelled into luxury residential homes. These homes provide an oasis of tranquility, comforts for the family, a great venue to entertain friends, and a powerful status symbol.

The pandemic has likely increased the draw of the GCB. Jet-setting lifestyles are now substantially curtailed and work from home is a large part of life today. The wealthy have the means to spend more time at home in a GCB with high specifications and the privacy of one's own garden.

Given these factors, some think buying a GCB here is a one-way bet with prices going up and up.

GCBs are arguably the most exclusive segment of the Singapore residential market and can be found in addresses such as Nassim Road, Leedon Park and Queen Astrid Park. Members of Singapore's old money live in GCBs and they have been joined by the new rich such as Haidilao's Zhang Yong.

GCBs are typically restricted to Singapore citizens. This is unlike the case for landed homes in Sentosa or high-end condominium units anywhere in Singapore, where foreigners are not restricted from buying. GCBs also trump homes in Sentosa by typically having freehold status and larger land plots. Homes on Sentosa are sold with original land leases of 99 years.

Critically, GCBs command scarcity value. There are only about 2,500 GCBs in Singapore and supply cannot grow by much. Large GCB plots can be subdivided but such plots are not that easily available in the market and a buyer may not wish to have any such plot subdivided.

In the luxury condominium market, supply is more elastic as old apartments in choice locations can be potentially redeveloped into new luxury condominium developments with more units.

Moreover, eye-popping prices paid for GCBs of S$20 million or S$30 million or more need to be seen in perspective.

It takes a minimum net worth of around S$820 million to be considered among Singapore's 50 richest, says the 2020 Forbes Singapore Rich List. For a patriarch with this net worth, buying three GCBs, with one for himself and one each for his two children, at around S$30 million each works out to having just over 10 per cent of wealth tied up with Singapore residential property. Such proportion of capital allocation to residential property would be lower than for many Singaporeans.

When it comes to keeping price growth in private residential property under control, expect the government to be less concerned with how the GCB market is doing, than with prices of mass to mid market condominium units.

Wealth tax

Should the wealthy channel monies away from homes towards investing in business ventures that create jobs in a climate where job creation is critical?

Whether money should be used for more productive purposes is a moral question. But if enough of the wealthy choose to spend more on investing in businesses, social enterprises and philanthropy, then luxury residential prices including those of GCBs may take a hit.

More pertinently, the risks to GCB prices are likely to come from government actions. In land-scarce Singapore, authorities may decide that GCB areas can be shrunk with parts of certain GCB areas zoned for more intensive housing uses such as semi-detached houses or low-rise condominiums.

Monetary compensation should accrue to owners of the affected plots. But to those able and eager to retain their plots for bungalow use, a change in the character of the enclave can nevertheless hurt the land's value.

The big risk though, is likely to come from aggressive measures taken to fight inequality such as the use of a wealth tax, as advocated by economists such as Joseph Stiglitz and Thomas Piketty.

A tax of 2 per cent per annum on a S$30 million GCB translates to S$600,000. This should be affordable to many GCB owners but could hurt the holding power of those with weaker net cash inflow. The signalling mechanism of such a tax may well lead to the wealthy reducing investment in luxury property.

Source: https://www.businesstimes.com.sg/real-estate/good-class-bungalows-still-seen-as-a-sure-bet-by-the-ultra-rich-are-there-risks-ahead

Jansen Mansion makes second en bloc attempt at lower reserve price

The Business Times, 18 Feb 2021, Thu

By Vivienne Tay

THE owners of 999-year leasehold condominium Jansen Mansion are making a second attempt at a collective sale on Thursday, this time at a lowered reserve price of S$19.8 million, from S$22 million in 2018.

The new reserve price translates to a land rate of S$879 per square foot per plot ratio, inclusive of development charge and 7 per cent bonus balcony space.

Located in the Kovan area, the 12-unit Jansen Mansion sits on a land plot spanning 16,592.7 square feet (sq ft). Its 999-year leasehold tenure started from Sept 1, 1876.

The site is zoned for residential use with a plot ratio of 1.4 under the Urban Redevelopment Authority's Master Plan 2019.

Its gross floor area is 23,229.8 sq ft, or a total of 24,855.9 sq ft inclusive of bonus balcony space

Tracy Goh, PropNex's head of investment and collective sales, said subject to relevant approvals, the successful tenderer will be able to build 21 new residential units on the plot.

PropNex believes Jansen Mansion's land rate is "very attractive" compared to the firm land bids tabled in public land tenders in 2020, she noted.

"Given the site's bite-sized quantum and good location attributes, we expect to see healthy interest from developers and new entrants who are looking to replenish land inventory as well as create a boutique housing development that will appeal to local buyers, including HDB upgraders," Ms Goh said.

The property is well-served by Kovan MRT station and has access to the Central Expressway, Pan Island Expressway and the Kallang-Paya Lebar Expressway.

Amenities and eateries nearby include Heartland Mall, NEX shopping mall, Chomp Chomp Food Centre, as well as Serangoon Stadium.

Schools in the vicinity include Zhonghua Primary School, Yangzheng Primary School, Rosyth School, St Gabriel's Primary School, Nanyang Junior College, Hillside World Academy, Australian International School in Singapore and the International French School.

The collective sale tender will close on March 23, 3pm.

Source: https://www.businesstimes.com.sg/real-estate/jansen-mansion-makes-second-en-bloc-attempt-at-lower-reserve-price

发展商销售数据与实际销量差距上季明显缩小 收紧新私宅选购权书措施初见成效

Lianhe Zaobao, 17 Feb 2021, Wed

By 陈紫筠

政府收紧新私宅选购权书的措施初见成效,去年第四季的发展商销售数据与实际销量的差距明显缩小,意味着大多买家最终都有能力购房。

从去年9月28日起,市区重建局开始限制发展商一再向要购买同一单位的买家重新发出选购权书(option to purchase,简称OTP),也就是禁止他们将OTP期限一再延长。这旨在鼓励买家在经济不景时谨慎购房,同时遏制私宅销售数据被炒高的情况。

合登(Huttons)房产集团研究主管李思德提供给《联合早报》的数据显示,去年第四季,发展商预估售出2645个单位,与最终发布2603个的实际销量相近,仅相差42个或少了1.6%。

所谓OTP,是买家和发展商双方在签署买卖契约前,必须事先办理的一道程序。一般上,当买家看中某个私宅单位时,他会支付一笔定金(一般为屋价的5%)向发展商预订单位。发展商会发出OTP,买家必须在下来三星期内签署买卖契约。

延长OTP以往是形成私宅销售数据高于实际销量的因素之一。因为很多交易还未真正完成,买家随时可改变主意不买房。例如,在2019年第三季,发展商预估卖出3572个单位,但当局公布的最终销量为3281个,两者相差达291个,或少了8.1%。

根据合登整理的资料,从2019年第一季至去年第三季,预估私宅销售和实际销量的数据差距介于2.8%至8.1%。

李思德说:“限制一再延长OTP期限的措施初见成效,没有行使选购权书的数量大幅度下跌。这意味着接近99%的买家是有财务能力置产。”

博纳产业(Propnex)总裁伊斯迈(Ismail Gafoor)指出,这项新措施可能影响一小部分的潜在买家,以致一些真正的政府组屋提升者无法买下心仪的私宅项目单位。他们可能来不及卖掉手上的组屋或筹不到足够的资金。

不过,据他观察,大部分买家其实都在期限内行使OTP。他说:“我们相信展望更加乐观、利率处于低水平以及市场资金流动充裕,都有助于推动销售。在私宅需求保持良好的同时,买家预计也会对价格敏感,并继续谨慎购房。”

新私宅销量近期走俏,主要由去年底陆续推出的The Linq@Beauty World、鼎瑞苑(The Landmark)、翠宁苑(Ki Residences at Brookvale)、悦文荟(Clavon)、鑫悦府(Normanton Park),以及The Reef At King's Dock等新项目带动。

伊斯迈强调,限制OTP期限一再延长不算是楼市降温措施,因为它的目的是鼓励买家加强财务纪律。

尽管我国去年陷入历来最严重的衰退,但私宅市场仍表现坚韧,价格全年上升2.2%。政府已表明密切关注楼市走势,确保市场表现不会超越经济基本面。

房地产分析师王伽胜认为,今年第一季或上半年的楼市走势极为关键,如果价格不断上涨,当局可能最迟在年中实施降温措施,包括收紧总偿债率顶限(TDSR)或调高额外买方印花税(ABSD)。

Source: https://www.zaobao.com.sg/finance/singapore/story20210217-1124676

 

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