ST : Why raise property tax

Nov 22, 2009
Why raise property tax
By Sue-Ann Chia SENIOR POLITICAL CORRESPONDENT



Mr Lui pointed out that the Government is taking steps to soften the impact of the tax rise early next year. -- ST PHOTO: CHEW SENG KIM

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason on Sunday when he was asked, at a dialogue with Aljunied-Hougang residents, whether the Government could have delayed it since the recession has just started to ease.

Noting that the adjustment had been delayed once, in 2008, Rear-Admiral (NS) Lui said: 'The problem is the longer you defer it, the larger the increase will be in the property taxes if HDB prices continues to go up.'

He also pointed out that the Government is taking steps to soften the impact of the tax rise early next year.

It is giving HDB homeowners a one-off rebate, set at 50 per cent of the property tax payable and capped at $120. This means low-income families with homes whose property tax is $50 and less will not have to pay any such tax next year.

Singapore homeowners pay a tax set at 10 per cent of the property's value, which has been rising as HDB flat prices continue to climb despite the downturn.

ST : Offset for corporate tax fall

Nov 23, 2009
Offset for corporate tax fall
By Alvin Foo

A PROJECTED fall in government revenue from a corporate tax cut here will be more than offset by steps taken in recent years to raise revenue from other sources, said Second Minister for Finance and Transport Lim Hwee Hua on Monday.

Her comments coincided with the passing of the Income Tax (Amendment) Bill on Monday, which gave effect to pro-business tax measures announced during the Budget speech in January.

Among other things, the new law exempts companies from paying tax on foreign-sourced income for one year, and allows businesses to claim losses against three previous years of income instead of just one.

It also cuts the corporate tax rate from 18 per cent to 17 per cent, bringing Singapore's rate closer to that of key rival economy Hong Kong, where the rate is 16.5 per cent.

Mrs Lim, who is also Minister in the Prime Minister's Office, said this reduction will cost the Government between $400 million and $500 million a year.

But she assured members of the House that earlier steps - including the raising of the goods and services tax (GST) from 5 per cent to 7 per cent in 2007 - will more than make up for this fall.

ST : PRs own under 5% of flats

Nov 23, 2009
PRs own under 5% of flats
By Jeremy Au Yong



Mr Mah said PRs were already subjected to the same rules as Singaporeans, and that includes the Ethnic Integration Policy (EIP). -- PHOTO: ZAOBAO

PERMANENT residents occupy less than 5 per cent of all Housing Board flats, and are living in estates across the island.

Nevertheless, the Government will keep an eye on the situation to ensure that no PR and foreigner enclaves develop.

National Development Minister Mah Bow Tan said this when responding to Dr Lim Wee Kiak (Sembawang GRC). Dr Lim wanted to know the distribution of PRs across Housing Board estates, as well as whether the Government would consider expanding the current ethnic quota scheme to include PRs.

Mr Mah said PRs were already subjected to the same rules as Singaporeans, and that includes the Ethnic Integration Policy (EIP).

'The EIP was introduced to achieve a healthy racial mix in HDB estates and prevent the formation of ethnic enclaves, regardless of whether they are citizens or PRs,' he said. As of June 30 this year, PRs owned 42,800 flats - or just 4.9 per cent of the nearly 900,000 HDB flats islandwide.

While public housing policies are for the benefit of Singaporeans, Mr Mah stressed that PRs also needed a place to live: 'PR families are not eligible for housing subsidies that Singaporeans enjoy. They are not allowed to buy a new flat from HDB or enjoy any housing grant. However, PRs need to have a home in Singapore. Therefore, they are allowed to buy properties from the open market, including HDB resale flats.'

ST : 12,000 homes over 5 years

Nov 23, 2009
12,000 homes over 5 years
By Jessica Cheam



Mr Mah noted that HDB had responded quickly to the spike in demand for flats this year by upping its planned flat supply of 6,000 for the year initially, to offering 13,500 flats in total for 2009. -- PHOTO: BT

THE Housing Board (HDB) will offer an estimated 10,000 to 12,000 flats yearly for the next five years to meet growing demand and ensure sufficient housing, said National Development Minister Mah Bow Tan on Monday.

But this number is a projection, he emphasised. 'What actually happens a few years down the road is unknown. Also, demand is not constant; it varies from year to year, depending on economic and other factors,' he said.

This medium-term projection serves as a guide for HDB's build-to-order (BTO) scheme, which is flexible, transparent and responsive to actual demand, said Mr Mah.

Mr Mah was addressing a range of housing issues in Parliament on Monday.

He noted that HDB had responded quickly to the spike in demand for flats this year by upping its planned flat supply of 6,000 for the year initially, to offering 13,500 flats in total for 2009.

For the first time, Mr Mah also revealed on Monday that although HDB's policy is not to deliberately have a buffer of ready flats for home buyers, it does have a stock of ready flats making up about 10 per cent of flat supply.

ST : Cool, not crash property market

Nov 23, 2009
Cool, not crash property market
By Jessica Cheam



Such schemes included the Interest Absorption Scheme and the Interest-Only Loans, which allowed home buyers to defer the bulk of the payment on their home purchase. -- ST PHOTO: DESMOND FOO

MEASURES to cool the property market appear to have had some effect in tempering market exuberance for private homes, said National Development Minister Mah Bow Tan on Monday.

But the government's intention is to 'cool the market, not crash it', said Mr Mah, who did not rule out restoring some of the disallowed schemes in the future.

Such schemes included the Interest Absorption Scheme and the Interest-Only Loans, which allowed home buyers to defer the bulk of the payment on their home purchase.

These schemes were banned with immediate effect in September, when the Government also announced the resumption of the Government Land Sales (GLS) programme to put supply on the market.

Mr Mah noted in Parliament on Monday that latest figures from the Urban Redevelopment Authority (URA) show that sales of private homes by developers fell month-on-month by 37 per cent in September, and a further 29 per cent in October.

'The Government will continue to monitor the property market closely and assess the market's response to the measures introduced before deciding whether further measures are necessary to promote a stable and sustainable property market,' he said.

ST l Interest rates to stay low

Nov 23, 2009
Interest rates to stay low
Annual average savings rate this year likely to fall below last year's 0.22%
By Francis Chan



The rates of savings accounts are unlikely to rise - at least in the next six months, experts say. -- ST PHOTO: KUA CHEE SIONG

SAVINGS accounts have seen miserly interest rates of below 1 per cent per annum since 2001 - and people hoping for better yields ahead will be disappointed.

The rates are unlikely to rise - at least in the next six months, experts say.

Monthly average savings rates have been on a downward trend from January to last month. This means the annual average rate for this year is likely to dip below last year's already paltry 0.22 per cent.

Rubbing salt into savers' wounds - inflation is likely to rise next year.

Based on figures from 10 banks and financial institutions compiled by the Monetary Authority of Singapore (MAS), savings accounts earned an average of 0.22 per cent a year in January, before holding at just 0.16 per cent from July to last month.

This is a far cry from the 1.28 per cent savers used to get in 2000, which was the last time interest rates exceeded 1 per cent.

ST : Early boost to Sentosa IR

Nov 23, 2009
Early boost to Sentosa IR



The biggest event, the 11th World Chinese Entrepreneurs Convention, will see 4,000 business leaders gather at the Sentosa integrated resort. -- PHOTO: RESORTS WORLD SENTOSA

IN AN early boost ahead of its opening, Resorts World at Sentosa (RWS) has secured 30 bookings for events to be hosted at the integrated resort starting next year.

The biggest event, the 11th World Chinese Entrepreneurs Convention, will see 4,000 business leaders gather at the Sentosa integrated resort for a corporate pow-wow from Oct 5 to 7.

Securing such business events, known in the industry as meetings, incentives, conventions and exhibitions (Mice), are important as business travellers are bigger spenders and a target group that Singapore Tourism Board wishes to grow.

RWS director of Mice Elena Arabadjieva, said: "As the world's economy recovers, we are getting strong interest from organisers for events from 2010 to as far ahead as 2014 and that gives us great confidence in Singapore's meetings and incentive travel sector in the mid to long term."

Events secured by RWS include the Asia Pacific Retailers Convention in 2011 and the 10th Asia Pacific Congress of Endoscopic Surgery in 2011. Besides inking the 30 contracts, the IR is also in talks with another 150 organisers for events up to 2015.

Marina Bay Sands, too, has been signing up Mice events. The events being lined include the 3rd Sea Asia Conference and Exhibition in 2011, the Industrial Fabrics Association International Expo Asia in 2011 and the 77th UFI Congress by the Global Association of the Exhibition Industry next year.

BT : Curbs on property speculation 'have had some effect': Mah Bow Tan

Business Times - 23 Nov 2009


Curbs on property speculation 'have had some effect': Mah Bow Tan

By EMILYN YAP

The anti-speculative measures implemented by the government in September to cool the property market have worked, said National Development Minister Mah Bow Tan in Parliament on Monday.

'These measures appear to have had some effect in tempering the exuberance in the private housing market,' he noted.

The government on September 14 announced a package of measures to prevent a property bubble from forming. One of these measures was the removal of the Interest Absorption Scheme and the Interest-Only Loans (IOL).

Another was the resumption of land sales on the Confirmed List for the first half of 2010.

BT : HDB does not price flats on cost plus profit basis: Mah Bow Tan

Business Times - 23 Nov 2009


HDB does not price flats on cost plus profit basis: Mah Bow Tan

By EMILYN YAP

The Housing and Development Board (HDB) does not price its flats on a cost-plus-profit basis, but on 'market price less a generous discount', said National Development Minister Mah Bow Tan in Parliament on Monday.

He shared that the total cost of building flats varies depending on when, where and what HDB builds. The cost includes the cost of land as well as the constuction costs of flats and ancillary services. The total cost can vary from $230,000 for a 3-room flat in Punggol to $530,000 for a 5-room flat in Tiong Bahru.

'Together with the Additional Housing Grant which varies from $5,000 -$40,000... on average the subsidies amount to about 20 per cent of the market price for 4-room flats. It will be even more for smaller flats. This is the subsidy given to all first-time buyers, to keep the flats affordable.'

ST : Bugis office block sold to private school

Nov 23, 2009

Bugis office block sold to private school

By Joyce Teo



An artist's impression of the ERC campus in North Bridge Road, which will house state-of-the-art classrooms, a library and cafes. -- PHOTO: ERC INSTITUTE

A DULL-LOOKING office block just behind Bugis Junction has been sold and will be renovated for use as a campus for private school ERC Institute.

ERC Holdings, which owns the school, bought nearly all of the 999-year leasehold building in North Bridge Road for

$46 million earlier this month from City Developments. With 60 units, or 38,534 sq ft, ERC now owns 91.3 per cent of the strata-titled development.

It plans to spend between $3.5 million and $5 million to renovate the six-storey block, said ERC Holdings chief executive Andy Ong.

The price, which works out to about $1,194 per sq ft based on strata area, is considered fair as such space is hard to find in the city, said Mr Shaun Poh of DTZ, who sealed the deal. Mr Ong said he took 15 months to find the space.

Currently, ERC Institute, which has 2,000 students, operates out of two sites: a campus in River Valley Road and an office unit in Robinson Centre. Its most popular programme covers entrepreneurship.

Come September next year, when its long-term lease at Robinson Centre ends, ERC Holdings will give up that space and move to the Bugis building, tentatively named ERC Complex.

'By 2012, we hope to get 6,000 to 8,000 students, of which 3,000 to 4,000 will be in Singapore,' said Mr Ong.

ERC has started operations elsewhere in the region, including in Indonesia.

After the renovation, the new building will offer better facilities than the existing campuses, said Mr Ong.

It will have at least two cafes serving a variety of cuisines, a library, a student rest area and a recreation area.

About 30 to 40 state-of-the-art classrooms will be spread over three levels.

One floor will be reserved for the corporate office of ERC Holdings.

The ground floor has retail space, currently taken by a hair salon and a noodle shop. This Fashion has just moved out.

Nearby, another small office block, Premier Centre, could also be transformed. Budget hotel operator Fragrance Group bought it in July for $18 million, or $1,076 per sq ft, from a Hong Leong Group unit, and might turn it into a hotel.

ST : Timing of HDB tax hike 'avoids bigger increases later'

Nov 23, 2009

Timing of HDB tax hike 'avoids bigger increases later'

By Sue-Ann Chia, Senior Political Correspondent

THE property tax of HDB flats is being raised next year partly to avoid having to introduce a bigger increase later should home prices continue to rise, said Acting Minister for Information, Communications and the Arts Lui Tuck Yew.

He gave the reason yesterday, after being asked at a dialogue with Aljunied-Hougang residents whether the Government could delay it, as the recession has just started to ease.

Noting that the adjustment had been delayed once, Rear-Admiral (NS) Lui said: 'The problem is, the longer you defer it, the larger the increase will be...if HDB prices continue to go up.'

He also pointed out that the Government is taking steps to soften the impact of the tax rise early next year. It is giving HDB homeowners a one-off rebate, set at 50per cent of the property tax payable and capped at $120. This means low-income families with homes whose property tax is $50 and less will not have to pay any such tax next year.

The property tax rate is 10 per cent of a property's annual value, although homes that are owner-occupied enjoy a concessionary 4 per cent tax rate. The annual value has increased with rising property prices.

HDB resale prices have risen a hefty 31.2per cent in the past two years, and a further 3.8per cent in the first nine months of this year.

Hence, the Government has decided to raise the property tax 'to reflect the prevailing movement of HDB prices and also to give rebates', said Rear-Adm Lui.

He also addressed residents' concerns about the affordability of HDB flats.

Noting that existing owners gain from their asset's increasing value, he said: 'If they eventually need to sell...(it) releases more money for their old age.'

But the anxieties of those planning to buy a flat are not lost on him. He assured them that an HDB flat would not be beyond their means, saying that the Ministry of National Development has matched the prices of different flat types against the salaries of different groups of people in the population. 'It tries to make sure that for every group, there is a flat type that meets their needs,' he said.

In doing so, it aims for homeowners to pay no more than 30per cent of their salary every month towards their home loan.

More than 75per cent of HDB dwellers use only the contributions to their CPF savings to make their monthly loan payments, he said, urging residents to buy what is affordable.

BT : Subsales in past 2 quarters among highest since 1995

Business Times - 23 Nov 2009


Subsales in past 2 quarters among highest since 1995

Completion of large condo projects near MRT stations helps to boost demand

By KALPANA RASHIWALA

(SINGAPORE) The number of subsales in the second and third quarters of this year were among the six highest quarterly figures since 1995 - reflecting the build-up in subsale activity that led to the government announcing measures on Sept 14 to cool property prices.

The completion of several condos this year - many of them large projects, close to MRT stations or near new projects launched this year - helped to boost their demand in the subsale market.

As well, the rise in private home prices this year has given sellers an incentive to let go units bought earlier.

Savills Singapore's analysis of caveats captured by URA's Realis system as at Nov 17 showed that 1,249 caveats were lodged for subsales of private apartments and condos in Q3 this year, a tad below the 1,300 caveats in Q2.

Since 1995 (when the Realis caveats database was first set up), there had been four other quarters when subsales of condos/apart- ments exceeded the 1,000 mark - during the 1996 and 2007 property market highs.

In Q2 and Q3 2007, subsales hit 1,857 and 1,534 respectively; in Q1 and Q2 1996, subsales were 1,238 and 1,650.

Projects that topped the subsales charts in Q2 and Q3 this year had generally been launched a few years ago and many of them were completed this year. Examples include Rivergate in the Robertson Quay area, Casa Merah near Tanah Merah MRT Station, City Square Residences along Kitchener Road, The Metropolitan Condo in the Alexandra Road area, The Centris in Jurong and Botannia in West Coast.

Projects that have been recently completed or which are nearing completion offer added appeal to potential buyers keen to move in or rent them out soon.

Giving a seller's perspective, Knight Frank chairman Tan Tiong Cheng said: 'If they bought their properties with the intention of leasing them out and if they find today's rental market challenging, it may make sense to simply cash out, especially if they can make a profit.'

Savills' lists of the most popular projects in the subsale market in Q2 and Q3 2009 did not include developments launched this year, with the exception of The Quartz, which was relaunched this year.

'Those who bought projects launched this year would find it harder to flip because their entry price may already be very high,' says Lee Hon Kiun, owner of Landmark Property Advisers.

Subsales refer to secondary market transactions in projects that have yet to receive Certificate of Statutory Completion. This can take place three to 12 months after Temporary Occupation Permit (TOP).

While subsales are often tracked as a gauge of speculative activity, Mr Lee hesitates to equate the increase in subsales in Q2 and Q3 this year with speculation. 'Those who bought two to three years ago and sold this year... in the Singapore context, that's a very long time,' he chuckled. 'Speculation is when people buy a property and flip it within six months to make a profit,' he added.

Savills senior manager (research and consultancy) Christine Sun said new property launches by developers also fuelled subsale interest for nearby projects released a few years ago. For example, the release of Alexis, Ascentia Sky and Interlace in the Alexandra Road area could have helped subsales at The Metropolitan Condo nearby, which was completed this year.

Agreeing, Landmark's Mr Lee said buyers can pick up more attractive buys in the subsale market for earlier launched projects than at new launches in the same area.

A developer said: 'Personally, I advise friends to buy in subsale projects as prices are discounted to new launches.'

HDB upgraders bought 39 per cent of the 1,300 private apartments/condos transacted in the subsale market in Q2 this year, although the figure has slipped to 36.6 per cent in Q3 and 33.7 per cent in October. Nonetheless, these figures are higher than HDB residents' 20.8 and 23.1 per cent share of subsale purchases during the property bull market in Q2 and Q3 2007.

Analysts say the jump in HDB resale flat prices has narrowed the price gap with private housing and made it easier for HDB dwellers to upgrade to a private home; and the subsale market offers a ready supply of recently completed homes that are ready for occupation.

Secondly, existing HDB flat dwellers looking for a bigger home may be deterred from picking one up from the HDB resale market because of high prevailing cash over valuation premiums. 'If they fork out a little more cash, they could foot the downpayment for a private condo in the subsale market instead,' said the developer.

Savills also provided monthly subsales data for non-landed private homes, which showed that for this year, the figure peaked at 596 in June.

It has since declined to 483 in July, 441 in August, 325 in Sept and just 184 in October - as at Nov 17 when Savills extracted the Realis data. It also observed an increase in the number of foreigners (including permanent residents) snapping up condos and apartments in the subsale market. Their share of purchases in the subsale market rose to about 31 per cent in Q3 this year and 33 per cent in October - from 21 per cent in Q1 2009.

Between 2007 and the first 10 months of 2009, Indonesians were the top buyers in the subsale market, followed by Malaysians, mainland Chinese, Indians and UK nationals.

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