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News Roundup (February 2017)

 

Our top Singapore property stories.

Higher demand expected for HDB resale flats: experts

HDB resale flats have become more appealing for first-time buyers in light of the higher CPF housing grants announced as part of Budget 2017, said Eugene Lim, Key Executive Officer at ERA Realty Network.

“Buyers who are sitting on the fence may very well tilt towards a resale flat with this announcement, as resale transaction time is a fraction of the three-year waiting period for a Build-To-Order (BTO) flat,” he noted.

However, he doesn’t expect HDB resale prices to rise anytime soon, as many HDB flats are largely similar in design and space, among other attributes. If some sellers were to increase their prices rashly, prospective buyers could easily turn to those offering similar flats at lower prices, he said.

Meanwhile, JLL’s National Director for Research and Consultancy, Ong Teck Hui, expects the hike in CPF housing grants to help sustain growth in HDB resale volumes, which rose by 7.8 percent year-on-year in 2016, while resale prices, which have remained largely flat since Q3 2015, are projected to stabilise or rise slightly due to better demand.

In his budget speech on 20 February, Finance Minister Heng Swee Keat announced that CPF housing grants would be raised from $30,000 to $50,000 for first-timers looking to buy 4-room or smaller HDB flats on the resale market. For 5-room or bigger flats, the grants will be increased from $30,000 to $40,000.

Likewise, grants for single first-time buyers will go up from $15,000 to $25,000 for those planning to purchase 4-room or smaller resale flats. For larger units, it will be raised from $15,000 to $20,000.


Property firms eager to become master developers

Many developers in Singapore have expressed their eagerness to participate in a private-public partnership model that will see them master planning new districts, reported the Straits Times.

In recommending the “master developer” model, the Committee on the Future Economy said the government should provide more flexibility in land use to enable developers to take a more integrated approach in developing districts.

Currently, the government conducts the master planning of precincts, before offering the land to property developers on a plot-by-plot basis.

“The opportunity for private developers to participate in master planning raises exciting possibilities for the real estate landscape,” said Christopher Tang, CEO of Frasers Centrepoint Singapore.

However, the tender award for such a model should not be based solely on the highest bid, but also on the developer’s master plan proposal, track record and financial commitment, noted Wen Khai Meng, CEO of CapitaLand Singapore.

In addition, given the longer development horizon and fluid nature of large precinct developments, option pricing may also be considered by the government to ensure business viability, he added.

Incentives such as lower development charge rates and additional gross floor area may also encourage the development of underground space, said industry players.

Christine Li, Research Director at Cushman & Wakefield, noted that while a significant portion of the master developer’s resources, including human capital and financial capital, is tied up to the project during its duration, the project’s success would “boost the master developer’s reputation and enable it to reap substantial profits”.


Condos pass by-laws to curb short-term rentals

In light of the growing number of homes offered for short-term rentals, the management committees of some condominiums have taken matters into their own hands by passing by-laws aimed at preventing the misuse of apartments, reported TODAYonline.

The measures taken include forcing residents to present tenancy agreements, placing notices of short-term rental guidelines at lifts and lift lobbies, and limiting access to the condominium through the main lobby.

In February, Parliament passed laws disallowing the use of private homes for short-term stay, effectively making it illegal for owners to rent out their property via online homestay portals like Roomorama and Airbnb, reported Channel NewsAsia.

National Development Minister Lawrence Wong, however, revealed plans to create a new building-use category for private homes whose owners wish to offer their property for short-term rent. He noted that the authorities are also looking at reducing the six-month minimum rental period.

“But whatever adjustments we may make to this minimum period, it is clear that we will not accommodate residential homes that are put up for daily rental,” said Wong.

“Such premises which are rented out daily ought to be regulated more like hotels rather than residential homes, and should be subject to relevant license and conditions to ensure proper standards.”

In a separate report by Channel NewsAsia, Airbnb said while it is “committed to working with the government to adopt a model of home-sharing that works for Singapore”, it was disappointed that discussion on the issue has not moved forward.


Luxury apartments in Singapore
Luxury apartments in Singapore

Wooing Chinese investors

Despite the tough cooling measures put in place to curb speculation and foreign demand, mainland Chinese buyers continue to have an insatiable appetite for Singapore residential property, revealed experts.

Analysis of pageviews between January to June 2016 on Juwai.com showed that China remains their most preferred location when searching for property at 82.8 percent, but Singapore is their top overseas destination at 9.4 percent, ahead of the US and Hong Kong at 1.2 percent each.

Data from the Chinese international property portal also revealed that the number of enquiries for Singapore properties surged by almost 99 percent from Q4 2015 to Q1 2016, translating to a total enquiry value of US$692.6 million. Further information showed that the median enquiry price was about US$633,000.

Experts noted that there are three main reasons for why Chinese investors continue to park their money in Singapore. These include the motivation to educate their children in the city-state, an increase in Chinese tourist arrivals, and more affordable luxury housing compared to other global cities like Hong Kong, London and New York.

Meanwhile, PropertyGuru Group, Asia’s leading online property group, has joined forces with Juwai.com to help Chinese investors find the right investment in Singapore.

Juwai sees about two million Chinese consumers from around the world visiting its website each month. Ranked as the number one real estate portal by Chinese internet ranking firm CNZZ, it has 2.5 million property listings from 89 countries displayed on its site and mobile app.

 

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