Feb 23, 2010
Property stocks fall in wake of govt measures
FTSE ST Real Estate Index down 7.30 points to close at 629.40
By Joyce Teo, Property Correspondent
PROPERTY shares fell yesterday in the wake of Government steps to cool the real estate market although buyers were still out in force at the weekend.
Losses were felt across the board with industry leaders CapitaLand down 14 cents to $3.76, City Developments off 52 cents to $10.30 and Keppel Land down seven cents to $3.30. Wing Tai fell nine cents to $1.68.
Among the smaller firms, Ho Bee closed six cents down at $1.69, GuocoLand inched down two cents to $2.01. Allgreen shares dipped by just one cent to $1.13.
The FTSE ST Real Estate Index lost 7.30 points to close at 629.40.
Investors bailed out of the sector after the Government announced two measures last Friday evening to let some air out of a potential property bubble.
A stamp duty to deter short-term speculators will require sellers to pay a levy of about 3 per cent if they offload a property within a year of purchase.
The Government also lowered the loan-to-value limit of housing loans from 90 per cent to 80 per cent. This means buyers will have to fork out more downpayment to buy a property.
National Development Minister Mah Bow Tan said on Sunday that there was 'high risk' of a bubble forming and it was acting now with a small step, rather than later when harsher ones may be needed.
Some analysts saw yesterday's selldown as a knee-jerk reaction that has created buying opportunities.
A DMG & Partners Securities report said the Government's actions reflect 'a very cautious approach and strike a more serious tone' as compared with the market-cooling measures last September.
It reckoned the measures came out so quickly because the Government's confirmed list sales method - which increases supply as sites are tendered out according to a schedule - appears ineffective.
Developers have continued to bid aggressively for sites, with prices that suggest they may have to sell for 10 per cent to 30 per cent more than completed neighbouring projects.
HDB resale prices are also at a record high and still rising, despite increased supply of build-to-order flats.
DMG said the sector-wide kneejerk correction of share prices may last for more than a day and is likely to have a greater impact on developers with higher exposure to the mass market sector.
It continues to favour the shares of high-end developers, as it sees them prospering on the back of the better economy, potential for higher prices for their flats and relatively more attractive valuations.
OCBC Investment Research is also relatively upbeat. It said the impact of the moves may not as be as significant as the cooling measures put in last September.
'We believe the pre-emptive measures are to prevent more people from speculating...when (the market) continues to pick up for the rest of the year,' it said.
'Despite the measures, our fundamental view...remains unchanged as we believe that genuine demand will not be affected and interest from foreigners will continue to drive demand higher.'
But some are not as optimistic.
'If the measures have minimal impact, it heightens the policy risk and potential impact from future policies; if the measures work better than expected, valuations would decline,' said a DBS report.
An analyst who declined to be named told The Straits Times: 'There is negligible impact from the measures alone, but clearly the message is that there will be more measures if volumes and prices continue to shoot up.'
He said the Government is clearly concerned about the entire residential market as it mentioned the January sales spike of new, private homes as one danger sign. Nearly half of the sales were in prime areas.
Unless you are a really long-term investor, it is risky to start buying property stocks, he said.
Meanwhile, Far East Organization said visitorship was hit but keen buyers were mostly undeterred.
Wing Tai said it sold more than 70 per cent of the 48 flats released at the 147-unit L'viv in Newton Road at the weekend at an average of $2,000 per sq ft, or $1.25 million to $2.3 million for units ranging from 614 sq ft to 1,001 sq ft.
'Our L'viv clientele are genuine buyers seeking...long-term value; hence the new rules do not seem to have affected (them),' said a Wing Tai spokesman.
An industry observer said small projects, particularly those packed with compact units and in suburban areas, are likely to feel the heat from the measures.
'Speculators do go for these smaller units as they are easier to flip,' he said.
joyceteo@sph.com.sg
Tuesday, February 23, 2010
ST : HDB sticking with build-to-order scheme
Feb 23, 2010
HDB sticking with build-to-order scheme
By Jeremy Au Yong
THE build-to-order (BTO) scheme introduced in 2001 by the Housing Board has reduced uncertainty for both flat buyers and the Government.
Applicants are now in a good position to plan for when they will get their flats, while the Government has a better gauge of demand.
National Development Minister Mah Bow Tan made these points in Parliament yesterday when responding to Madam Ho Geok Choo (West Coast GRC). She had asked if the Government would consider reverting to the previous Registration for Flat System.
Under that system, the HDB would build flats according to the number of applicants on its waiting list.
For the BTO scheme, however, flats are built only when there is sufficient take-up of flats in a project and down payments have been made. The HDB uses 70 per cent as a guide for the required take-up rate.
Mr Mah said the old system led to a situation in the 1990s when the Government was at one point left with 31,000 unsold flats. 'HDB took five years to clear its stock of unsold flats. Having such a large stock of unsold flats is a waste of public money,' he said.
This happened because under the old system, it was difficult to discern how much of the demand was genuine.
Mr Mah said: 'You are anticipating demand based on the length of the queue, and you don't know whether that is genuine demand or not because there is no commitment to buy.'
At the height of the property boom in the mid-1990s, there were about 150,000 applicants on the HDB's waiting list. The waiting time was between six and seven years. Then, in the wake of the Asian financial crisis in 1997, applicants dropped off the list and the HDB found it had no buyers for the flats.
Mr Mah said that with the BTO system now in place, the average waiting time for buyers was around 31/2 years: Processing applications and administrative work could take up to six months, and construction would take three years.
The main cause of delays in previous years - applicants having to wait for a successful ballot - has also been addressed as there has been an increase in construction. The HDB announced plans to build some 12,000 flats this year.
'Under the current speed of rolling out BTO projects, which is once a month now, the chances of the person being successful is actually very high,' Mr Mah said. He added that the vast majority of those applying for BTO flats in non-mature estates succeed within two tries.
Asked by Madam Cynthia Phua (Aljunied GRC) and Mr Yeo Guat Kwang (Aljunied GRC) if the stipulation, that roughly 70 per cent of a project must be sold before construction can start, added to the delay, Mr Mah said this hurdle was often easily cleared. 'This hurdle rate of 70 per cent is not difficult to achieve. On the other hand, it does give us fairly comfortable assurance that if we proceed to build, there will not be oversupply,' he said.
According to the HDB, since the BTO scheme began, only four projects did not draw enough buyers.
Punggol Vista BTO flats under construction. Under the BTO scheme, flats are built only when there is sufficient take-up and down payments have been made. -- ST PHOTO: ALPHONSUS CHERN
HDB sticking with build-to-order scheme
By Jeremy Au Yong
THE build-to-order (BTO) scheme introduced in 2001 by the Housing Board has reduced uncertainty for both flat buyers and the Government.
Applicants are now in a good position to plan for when they will get their flats, while the Government has a better gauge of demand.
National Development Minister Mah Bow Tan made these points in Parliament yesterday when responding to Madam Ho Geok Choo (West Coast GRC). She had asked if the Government would consider reverting to the previous Registration for Flat System.
Under that system, the HDB would build flats according to the number of applicants on its waiting list.
For the BTO scheme, however, flats are built only when there is sufficient take-up of flats in a project and down payments have been made. The HDB uses 70 per cent as a guide for the required take-up rate.
Mr Mah said the old system led to a situation in the 1990s when the Government was at one point left with 31,000 unsold flats. 'HDB took five years to clear its stock of unsold flats. Having such a large stock of unsold flats is a waste of public money,' he said.
This happened because under the old system, it was difficult to discern how much of the demand was genuine.
Mr Mah said: 'You are anticipating demand based on the length of the queue, and you don't know whether that is genuine demand or not because there is no commitment to buy.'
At the height of the property boom in the mid-1990s, there were about 150,000 applicants on the HDB's waiting list. The waiting time was between six and seven years. Then, in the wake of the Asian financial crisis in 1997, applicants dropped off the list and the HDB found it had no buyers for the flats.
Mr Mah said that with the BTO system now in place, the average waiting time for buyers was around 31/2 years: Processing applications and administrative work could take up to six months, and construction would take three years.
The main cause of delays in previous years - applicants having to wait for a successful ballot - has also been addressed as there has been an increase in construction. The HDB announced plans to build some 12,000 flats this year.
'Under the current speed of rolling out BTO projects, which is once a month now, the chances of the person being successful is actually very high,' Mr Mah said. He added that the vast majority of those applying for BTO flats in non-mature estates succeed within two tries.
Asked by Madam Cynthia Phua (Aljunied GRC) and Mr Yeo Guat Kwang (Aljunied GRC) if the stipulation, that roughly 70 per cent of a project must be sold before construction can start, added to the delay, Mr Mah said this hurdle was often easily cleared. 'This hurdle rate of 70 per cent is not difficult to achieve. On the other hand, it does give us fairly comfortable assurance that if we proceed to build, there will not be oversupply,' he said.
According to the HDB, since the BTO scheme began, only four projects did not draw enough buyers.
Punggol Vista BTO flats under construction. Under the BTO scheme, flats are built only when there is sufficient take-up and down payments have been made. -- ST PHOTO: ALPHONSUS CHERN
BT : BUDGET 2010: PROPERTY - What they say
Business Times - 23 Feb 2010
BUDGET 2010: PROPERTY
What they say
'As expected, the 2010 Budget is rather soft on the property market given the run-up in the residential market. The restructuring of the property tax system is unlikely to have an adverse affect on the residential sector given that the impact of these changes is limited to only a very small proportion of the market. Any cool off in the residential market in the forthcoming months is more likely to be a direct response to the recent spate of anti-speculative measures rather than a reaction to this property tax restructuring.'
- Chua Yang Liang, South-east Asia research head, Jones Lang LaSalle
'The adjustment to the property tax system is fair. It will make more people happy, and those who have to pay more should not be significantly affected by the 2% increase on their net annual value of their homes.'
- Choo Eng Chuan, tax partner, Ernst & Young Solutions LLP
'The REIT market faced considerable challenges during the recent financial crisis and this very positive move to extend the tax incentives for REITs to March 31, 2015, strengthens the confidence of investors and REIT sponsors that Singapore will continue to be the hub for REIT listings in the region. The dampener, however, is the introduction of a sunset clause for exemption of foreign sourced income for REITs which takes effect for such income received after March 31, 2015.'
- Leonard Ong, executive director, KPMG Tax Services
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BUDGET 2010: PROPERTY
What they say
'As expected, the 2010 Budget is rather soft on the property market given the run-up in the residential market. The restructuring of the property tax system is unlikely to have an adverse affect on the residential sector given that the impact of these changes is limited to only a very small proportion of the market. Any cool off in the residential market in the forthcoming months is more likely to be a direct response to the recent spate of anti-speculative measures rather than a reaction to this property tax restructuring.'
- Chua Yang Liang, South-east Asia research head, Jones Lang LaSalle
'The adjustment to the property tax system is fair. It will make more people happy, and those who have to pay more should not be significantly affected by the 2% increase on their net annual value of their homes.'
- Choo Eng Chuan, tax partner, Ernst & Young Solutions LLP
'The REIT market faced considerable challenges during the recent financial crisis and this very positive move to extend the tax incentives for REITs to March 31, 2015, strengthens the confidence of investors and REIT sponsors that Singapore will continue to be the hub for REIT listings in the region. The dampener, however, is the introduction of a sunset clause for exemption of foreign sourced income for REITs which takes effect for such income received after March 31, 2015.'
- Leonard Ong, executive director, KPMG Tax Services
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Eyes on Estuary for impact of anti-speculation moves
Business Times - 23 Feb 2010
Eyes on Estuary for impact of anti-speculation moves
This week's preview of MCL condo could indicate if demand has been dented
By KALPANA RASHIWALA
ALL eyes in the property market are on MCL Land's preview this week of its Yishun condo to see if demand has been dented by last Friday's anti-speculation measures.
One and two-bedroom units - which have typically been popular among some speculators at property launches over the past year - make up nearly 40 per cent of the total 608 units in the project, The Estuary.
The Hongkong Land subsidiary will preview about 200 units in the 99-year leasehold condo at an average price of about $750 per sq ft (psf), said MCL chief executive Koh Teck Chuan.
Property industry watchers will be focusing on the demand for smaller units - especially the 85 one-bedders which range from 590-603 sq ft. Smallish apartments have often been targets for speculators over the past year as the lump sum outlay is relatively more affordable. And for developers, smallish units can achieve the highest psf price.
MCL is pricing its one-bedders at $835 psf on average, translating to a lump sum investment of about $500,000.
Meanwhile, property giant Far East Organization said last Friday night's government announcement of measures to cool the market had affected the number of show-flat visitors at the weekend.
The group's chief operating officer, property sales, Chia Boon Kuah, said: 'We have seen some impact on visitors. The weekend launch of Altez (in Tanjong Pagar) received about 600 groups of visitors. So far we have sold a total of 140 out of 155 units released.
'Across our other show flats, we noticed a slowdown in visitorship, though the number of units sold remain comparable over a typical weekend.
'The majority of Far East's buyers are owner-occupiers or investors with a mid to long-term investment horizon. We will continue to meet demand from this segment and expect to proceed with our planned launches this year, while keeping a close watch on market reactions.'
As for Yishun, where MCL is gearing up to preview The Estuary, Mr Koh said: 'We believe our buyers will comprise mostly owner-occupiers and will not be affected by the government's measures. There hasn't been any private condo launch in Yishun for many years.'
The development, in blocks of 15-17 storeys, is near Khatib Station and overlooks Lower Seletar Reservoir.
Last Friday night, the government announced the introduction of a seller's stamp duty for those buying residential properties from Feb 20 and selling them within a year, in a bid to curb short-term speculation. The new seller's stamp duty is in addition to the buyer's stamp duty.
As well, the loan-to-value limit for all housing loans provided by financial institutions will be reduced from 90 per cent to 80 per cent to foster greater financial prudence.
Some property consultants say the second measure could have an impact on some buyers of entry-level private condos.
'That can be quite a challenge for some HDB upgraders as effectively it could mean having to come up with 20 per cent cash downpayment, since their CPF savings would be tied up in their existing flats,' said Knight Frank managing director (residential services) Peter Ow.
'And schemes like interest absorption and deferred payment - which helped such buyers tide over the construction of their new homes - are no longer available.'
The Estuary's two-bedroom units range from 904 to 926 sq ft and have an average price of $780 psf. Its three-bedders (1,184 to 1,302 sq ft) cost $722 psf on average, while the four-bedders (1,453-1,528 sq ft) have an average price of $689 psf.
Savills Singapore's analysis of URA Realis caveats information as of yesterday showed 191 caveats for sub-sales - sometimes seen as a proxy for speculative activity - of non-landed private homes were lodged last month and 10 for February. The highest monthly figure last year was in June, when 597 sub-sale caveats were lodged. During the 2007 bull run, the highest monthly figure was in July, with 867 caveats.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The Estuary: One and two-bedroom units make up nearly 40 per cent of the total 608 units in the project. Some 200 units in the 99-year leasehold condo will be previewed at an average price of about $750 per sq ft
Eyes on Estuary for impact of anti-speculation moves
This week's preview of MCL condo could indicate if demand has been dented
By KALPANA RASHIWALA
ALL eyes in the property market are on MCL Land's preview this week of its Yishun condo to see if demand has been dented by last Friday's anti-speculation measures.
One and two-bedroom units - which have typically been popular among some speculators at property launches over the past year - make up nearly 40 per cent of the total 608 units in the project, The Estuary.
The Hongkong Land subsidiary will preview about 200 units in the 99-year leasehold condo at an average price of about $750 per sq ft (psf), said MCL chief executive Koh Teck Chuan.
Property industry watchers will be focusing on the demand for smaller units - especially the 85 one-bedders which range from 590-603 sq ft. Smallish apartments have often been targets for speculators over the past year as the lump sum outlay is relatively more affordable. And for developers, smallish units can achieve the highest psf price.
MCL is pricing its one-bedders at $835 psf on average, translating to a lump sum investment of about $500,000.
Meanwhile, property giant Far East Organization said last Friday night's government announcement of measures to cool the market had affected the number of show-flat visitors at the weekend.
The group's chief operating officer, property sales, Chia Boon Kuah, said: 'We have seen some impact on visitors. The weekend launch of Altez (in Tanjong Pagar) received about 600 groups of visitors. So far we have sold a total of 140 out of 155 units released.
'Across our other show flats, we noticed a slowdown in visitorship, though the number of units sold remain comparable over a typical weekend.
'The majority of Far East's buyers are owner-occupiers or investors with a mid to long-term investment horizon. We will continue to meet demand from this segment and expect to proceed with our planned launches this year, while keeping a close watch on market reactions.'
As for Yishun, where MCL is gearing up to preview The Estuary, Mr Koh said: 'We believe our buyers will comprise mostly owner-occupiers and will not be affected by the government's measures. There hasn't been any private condo launch in Yishun for many years.'
The development, in blocks of 15-17 storeys, is near Khatib Station and overlooks Lower Seletar Reservoir.
Last Friday night, the government announced the introduction of a seller's stamp duty for those buying residential properties from Feb 20 and selling them within a year, in a bid to curb short-term speculation. The new seller's stamp duty is in addition to the buyer's stamp duty.
As well, the loan-to-value limit for all housing loans provided by financial institutions will be reduced from 90 per cent to 80 per cent to foster greater financial prudence.
Some property consultants say the second measure could have an impact on some buyers of entry-level private condos.
'That can be quite a challenge for some HDB upgraders as effectively it could mean having to come up with 20 per cent cash downpayment, since their CPF savings would be tied up in their existing flats,' said Knight Frank managing director (residential services) Peter Ow.
'And schemes like interest absorption and deferred payment - which helped such buyers tide over the construction of their new homes - are no longer available.'
The Estuary's two-bedroom units range from 904 to 926 sq ft and have an average price of $780 psf. Its three-bedders (1,184 to 1,302 sq ft) cost $722 psf on average, while the four-bedders (1,453-1,528 sq ft) have an average price of $689 psf.
Savills Singapore's analysis of URA Realis caveats information as of yesterday showed 191 caveats for sub-sales - sometimes seen as a proxy for speculative activity - of non-landed private homes were lodged last month and 10 for February. The highest monthly figure last year was in June, when 597 sub-sale caveats were lodged. During the 2007 bull run, the highest monthly figure was in July, with 867 caveats.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The Estuary: One and two-bedroom units make up nearly 40 per cent of the total 608 units in the project. Some 200 units in the 99-year leasehold condo will be previewed at an average price of about $750 per sq ft
BT : New scheme to maximise land use benefits 9 sectors
Business Times - 23 Feb 2010
BUDGET 2010: PROPERTY
New scheme to maximise land use benefits 9 sectors
By UMA SHANKARI
THE government has decided to do away with a tax allowance scheme for businesses introduced in the 1940s to encourage Singapore's industrialisation. The axed scheme will be replaced by one designed to enhance land productivity - but only companies from nine chosen sectors will benefit from the new scheme.
Singapore should promote the intensification of industrial land use and move towards more land-efficient and higher value- added activities, Finance Minister Tharman Shanmugaratnam said yesterday.
'The Industrial Building Allowance (IBA) has met its objective but is no longer adequate or relevant to meet our current priorities,' he said. 'It does not distinguish between efficient and inefficient uses of industrial land.'
In its report earlier this year, the Economic Strategies Committee said Singapore has to support the intensification of industrial land use as there are now greater demands on the country's limited land resources.
The IBA gave tax allowances to companies for capital expenditure on the construction or purchase of an industrial building or structure.
Its replacement, the Land Intensification Allowance (LIA), similarly allows companies to claim for capital expenditure incurred to construct a qualifying building or structure.
But only companies from nine sectors - pharmaceuticals, petrochemicals, petroleum, chemicals, semiconductor-wafer fabrication, aerospace, marine and offshore engineering, solar cell manufacturing and other 'speciality' industries - will qualify for the LIA.
These sectors have been singled out as part of the government's long-term plans to move Singapore's manufacturing sector up the value-added chain.
The building or structure will also have to meet the gross plot ratio (GPR) benchmark relevant to the industry sector of the building user. To encourage intensification, the benchmarks for each industry sector will be set around the 75th percentile of actual GPRs for the sector.
Qualifying firms will be granted a first-time allowance of 25 per cent, then 5 per cent each year for qualifying expenditure on the construction of buildings.
Analysts are surprised by the switch, as fewer companies will now qualify.
'The old IBA did not restrict the benefits to only a few sectors,' said David Lee, executive director of tax services for KPMG. 'At the end of the day, if those (nine industry) sectors are the ones they are encouraging, they can always give them incentives instead.'
He pointed out that the new scheme means that companies in some of Singapore's biggest industries - such as electronics manufacturing and equipment manufacturing - will be missed out.
Ernst & Young tax director Helen Bok said: 'Many companies will be disappointed that the IBA will be phased out because this is a significant deduction for those carrying on qualifying activities. This will increase their cost of doing business in Singapore.'
But pegging the tax allowances to building plot ratios will encourage building owners to maximise land use, which is a good move for land-scarce Singapore, said Colliers managing director Dennis Yeo.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BUDGET 2010: PROPERTY
New scheme to maximise land use benefits 9 sectors
By UMA SHANKARI
THE government has decided to do away with a tax allowance scheme for businesses introduced in the 1940s to encourage Singapore's industrialisation. The axed scheme will be replaced by one designed to enhance land productivity - but only companies from nine chosen sectors will benefit from the new scheme.
Singapore should promote the intensification of industrial land use and move towards more land-efficient and higher value- added activities, Finance Minister Tharman Shanmugaratnam said yesterday.
'The Industrial Building Allowance (IBA) has met its objective but is no longer adequate or relevant to meet our current priorities,' he said. 'It does not distinguish between efficient and inefficient uses of industrial land.'
In its report earlier this year, the Economic Strategies Committee said Singapore has to support the intensification of industrial land use as there are now greater demands on the country's limited land resources.
The IBA gave tax allowances to companies for capital expenditure on the construction or purchase of an industrial building or structure.
Its replacement, the Land Intensification Allowance (LIA), similarly allows companies to claim for capital expenditure incurred to construct a qualifying building or structure.
But only companies from nine sectors - pharmaceuticals, petrochemicals, petroleum, chemicals, semiconductor-wafer fabrication, aerospace, marine and offshore engineering, solar cell manufacturing and other 'speciality' industries - will qualify for the LIA.
These sectors have been singled out as part of the government's long-term plans to move Singapore's manufacturing sector up the value-added chain.
The building or structure will also have to meet the gross plot ratio (GPR) benchmark relevant to the industry sector of the building user. To encourage intensification, the benchmarks for each industry sector will be set around the 75th percentile of actual GPRs for the sector.
Qualifying firms will be granted a first-time allowance of 25 per cent, then 5 per cent each year for qualifying expenditure on the construction of buildings.
Analysts are surprised by the switch, as fewer companies will now qualify.
'The old IBA did not restrict the benefits to only a few sectors,' said David Lee, executive director of tax services for KPMG. 'At the end of the day, if those (nine industry) sectors are the ones they are encouraging, they can always give them incentives instead.'
He pointed out that the new scheme means that companies in some of Singapore's biggest industries - such as electronics manufacturing and equipment manufacturing - will be missed out.
Ernst & Young tax director Helen Bok said: 'Many companies will be disappointed that the IBA will be phased out because this is a significant deduction for those carrying on qualifying activities. This will increase their cost of doing business in Singapore.'
But pegging the tax allowances to building plot ratios will encourage building owners to maximise land use, which is a good move for land-scarce Singapore, said Colliers managing director Dennis Yeo.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Anti-speculation moves dent property counters
Business Times - 23 Feb 2010
Anti-speculation moves dent property counters
Capital gains tax could be next, says RBS, since govt keen to avoid bubble
By OH BOON PING
(SINGAPORE) Singapore property counters took a hit yesterday, after the government's latest moves to quell speculation.
CapitaLand lost 14 cents to $3.76, City Developments fell 52 cents to $10.30, and Keppel Land slipped 7 cents to $3.30.
The falls came after the government last week introduced a seller's stamp duty (SSD) on all residential land and property bought after Feb 19 and sold within a year, and cut the loan-to- value (LTV) limit for all private housing loans to 80 per cent, from 90 per cent.
Citi economist Kit Wei Zheng believes the impact of the lower LTV ratio will be limited, since fewer than 10 per cent of housing loans are granted at an LTV of more than 80 per cent.
And the SSD, designed to discourage the marginal would-be speculators, 'is clearly less drastic than similar measures implemented in 1996, when the minimum holding period was three years', he said.
'One can also argue that the seller stamp duty rate - 3 per cent minus $5,400 - is not large enough to act as a serious deterrent at this stage.'
Still, Citi considers the moves prudent, since high sales in prime districts 'raise the possibility that buyers of such units could be highly-leveraged middle income households buying for investment or speculative purposes, rather than genuine first-time home buyers'.
'Although households have been deleveraging since 2003, the recent surge in property transactions and mortgage lending would probably be of concern to regulators,' Citi says.
'Thus, it is not just from a political but also prudential perspective that the government may have decided to act quickly in the latest episode.'
Royal Bank of Scotland (RBS) thinks property gains tax could be next, as the government has stated that more measures will be implemented if necessary to prevent a property bubble.
These tools include tweaking credit rules, and land supply and tax policies in extreme cases.
'Given that supply and credit rules have been tweaked, we believe property gains tax is next, albeit at rates lower than implemented in 1996. This is because the government hopes to introduce calibrated measures to avoid a crash in the property market.'
DMG believes the fundamentals and outlook for Singapore property remain healthy, especially in the high-end segment.
'Our mid-cap and small-cap top picks within the overweight property sector remain Wing Tai and SC Global respectively,' it says.
On the economics front, Citi feels the first quarter was mixed, with disappointing non-oil domestic exports (NODX) and a continued recovery in services coupled with official caution over the second-half outlook.
Indicators to look out for include NODX and industrial production momentum, tourism activity (especially from the opening of the integrated resorts), and wage and imported inflation pressures.
Citi also feels the Singapore dollar may have limited room to appreciate, given the US dollar's strength, even though an unwinding of short euro positions could drive the euro up in the near term, in turn allowing the Sing dollar to strengthen in a similar time frame.
'At the same time, the pressure for MAS to tighten in April has likely eased, though we would still expect it to tighten by October at the latest,' it says.
'In any case, any downward pressure on US$-S$ from MAS tightening would probably be limited, given the S$ net effective exchange rate (NEER) is already at the strong side of the policy band, while a change in slope allows for only incremental gains in the S$ NEER in the near term.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Anti-speculation moves dent property counters
Capital gains tax could be next, says RBS, since govt keen to avoid bubble
By OH BOON PING
(SINGAPORE) Singapore property counters took a hit yesterday, after the government's latest moves to quell speculation.
CapitaLand lost 14 cents to $3.76, City Developments fell 52 cents to $10.30, and Keppel Land slipped 7 cents to $3.30.
The falls came after the government last week introduced a seller's stamp duty (SSD) on all residential land and property bought after Feb 19 and sold within a year, and cut the loan-to- value (LTV) limit for all private housing loans to 80 per cent, from 90 per cent.
Citi economist Kit Wei Zheng believes the impact of the lower LTV ratio will be limited, since fewer than 10 per cent of housing loans are granted at an LTV of more than 80 per cent.
And the SSD, designed to discourage the marginal would-be speculators, 'is clearly less drastic than similar measures implemented in 1996, when the minimum holding period was three years', he said.
'One can also argue that the seller stamp duty rate - 3 per cent minus $5,400 - is not large enough to act as a serious deterrent at this stage.'
Still, Citi considers the moves prudent, since high sales in prime districts 'raise the possibility that buyers of such units could be highly-leveraged middle income households buying for investment or speculative purposes, rather than genuine first-time home buyers'.
'Although households have been deleveraging since 2003, the recent surge in property transactions and mortgage lending would probably be of concern to regulators,' Citi says.
'Thus, it is not just from a political but also prudential perspective that the government may have decided to act quickly in the latest episode.'
Royal Bank of Scotland (RBS) thinks property gains tax could be next, as the government has stated that more measures will be implemented if necessary to prevent a property bubble.
These tools include tweaking credit rules, and land supply and tax policies in extreme cases.
'Given that supply and credit rules have been tweaked, we believe property gains tax is next, albeit at rates lower than implemented in 1996. This is because the government hopes to introduce calibrated measures to avoid a crash in the property market.'
DMG believes the fundamentals and outlook for Singapore property remain healthy, especially in the high-end segment.
'Our mid-cap and small-cap top picks within the overweight property sector remain Wing Tai and SC Global respectively,' it says.
On the economics front, Citi feels the first quarter was mixed, with disappointing non-oil domestic exports (NODX) and a continued recovery in services coupled with official caution over the second-half outlook.
Indicators to look out for include NODX and industrial production momentum, tourism activity (especially from the opening of the integrated resorts), and wage and imported inflation pressures.
Citi also feels the Singapore dollar may have limited room to appreciate, given the US dollar's strength, even though an unwinding of short euro positions could drive the euro up in the near term, in turn allowing the Sing dollar to strengthen in a similar time frame.
'At the same time, the pressure for MAS to tighten in April has likely eased, though we would still expect it to tighten by October at the latest,' it says.
'In any case, any downward pressure on US$-S$ from MAS tightening would probably be limited, given the S$ net effective exchange rate (NEER) is already at the strong side of the policy band, while a change in slope allows for only incremental gains in the S$ NEER in the near term.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Developers come under pressure
Business Times - 23 Feb 2010
Top Stories for Front Page
Developers come under pressure
STI ends flat after govt announces fresh set of anti-speculative property measures over weekend
By R SIVANITHY
SENIOR CORRESPONDENT
PRESSURE on property developers was one of the main features of trading yesterday after the government announced a fresh set of anti-speculative measures over the weekend.
The other factor at work was a weak opening for Europe, probably in anticipation of a soft Wall Street. The end result was that the Straits Times Index first added 15 points but ended just 0.32 of a point higher at 2,757.46.
The unspectacular finish was perhaps not as much as might have been expected given the 2.4 per cent bounce in Hong Kong, but this was probably because the STI had, on Friday, first dropped 40 points before ending with just a 12-point loss, with the bulk of this bounce coming in the final few minutes that day.
As for the government's Budget, brokers said that as was the case most of the time, there was little or no impact.
Over the weekend the government announced its second set of property cooling measures, namely a sellers' stamp duty of 3 per cent for properties sold within a year of purchase and a lowering of the loan-to-value limit from 90 to 80 per cent. CapitaLand lost 14 cents at $3.76, City Developments dropped 52 cents to $10.30 and Wing Tai lost nine cents at $1.68.
UBS Investment Research said that it believes that more measures will be introduced if 1) prices rise more than 5-7 per cent per quarter, 2) new sales volume rises above 1,000 per month, 3) sub-sales make up over 25 per cent of total sales and 4) other jurisdictions tighten policies which could result in inflows into Singapore assets. It said that investors have probably been caught by surprise by the measures and so it expects a short-term correction in prices of residential developers.
Citi Investment Research said that it thinks that like the first batch of measures announced last September, the new measures will have little real impact. 'They simply reinforce the earlier government message to speculators, that is, it is monitoring the situation and will act when deemed necessary,' said Citi.
Credit Suisse, in the meantime, maintained an 'overweight' on the sector and recommended buying on dips.
Genting Singapore proved to be the market's other focal point when it rose three cents to 97 cents after releasing its Q4 2009 results last Friday, which included mainly revenue drops and net losses.
OCBC Investment Research described the results as disappointing, reduced its fair value for the stock from $1.35 to $1.04, but retained a 'buy'.
Credit Suisse, on the other hand, said that Genting's 2009 results were largely irrelevant as the company was still in the process of rolling out its Sentosa project and so Q4 figures were weighed down by pre-operating costs. However, it called an 'underperform' with a 94-cent target because it described Genting as one of the world's most expensive gaming stocks. 'If Genting were to trade in line with the Singapore market, this would suggest a value of 46 cents. The experience from Macau has been for an 11-29 per cent drop in share prices after new casino openings.'
OCBC rose two cents to $8.56 after releasing its results last Friday. Analysts responded with a mixed bag of recommendations - JP Morgan called an 'overweight' with a target price of $11 using a dividend-discount model while Deutsche Bank called a 'hold' with $9.10 as the target.
Morgan Stanley however, retained an 'underweight' on OCBC, pointing to an unexciting growth outlook and uncompelling valuations. Its target is $8.54.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Top Stories for Front Page
Developers come under pressure
STI ends flat after govt announces fresh set of anti-speculative property measures over weekend
By R SIVANITHY
SENIOR CORRESPONDENT
PRESSURE on property developers was one of the main features of trading yesterday after the government announced a fresh set of anti-speculative measures over the weekend.
The other factor at work was a weak opening for Europe, probably in anticipation of a soft Wall Street. The end result was that the Straits Times Index first added 15 points but ended just 0.32 of a point higher at 2,757.46.
The unspectacular finish was perhaps not as much as might have been expected given the 2.4 per cent bounce in Hong Kong, but this was probably because the STI had, on Friday, first dropped 40 points before ending with just a 12-point loss, with the bulk of this bounce coming in the final few minutes that day.
As for the government's Budget, brokers said that as was the case most of the time, there was little or no impact.
Over the weekend the government announced its second set of property cooling measures, namely a sellers' stamp duty of 3 per cent for properties sold within a year of purchase and a lowering of the loan-to-value limit from 90 to 80 per cent. CapitaLand lost 14 cents at $3.76, City Developments dropped 52 cents to $10.30 and Wing Tai lost nine cents at $1.68.
UBS Investment Research said that it believes that more measures will be introduced if 1) prices rise more than 5-7 per cent per quarter, 2) new sales volume rises above 1,000 per month, 3) sub-sales make up over 25 per cent of total sales and 4) other jurisdictions tighten policies which could result in inflows into Singapore assets. It said that investors have probably been caught by surprise by the measures and so it expects a short-term correction in prices of residential developers.
Citi Investment Research said that it thinks that like the first batch of measures announced last September, the new measures will have little real impact. 'They simply reinforce the earlier government message to speculators, that is, it is monitoring the situation and will act when deemed necessary,' said Citi.
Credit Suisse, in the meantime, maintained an 'overweight' on the sector and recommended buying on dips.
Genting Singapore proved to be the market's other focal point when it rose three cents to 97 cents after releasing its Q4 2009 results last Friday, which included mainly revenue drops and net losses.
OCBC Investment Research described the results as disappointing, reduced its fair value for the stock from $1.35 to $1.04, but retained a 'buy'.
Credit Suisse, on the other hand, said that Genting's 2009 results were largely irrelevant as the company was still in the process of rolling out its Sentosa project and so Q4 figures were weighed down by pre-operating costs. However, it called an 'underperform' with a 94-cent target because it described Genting as one of the world's most expensive gaming stocks. 'If Genting were to trade in line with the Singapore market, this would suggest a value of 46 cents. The experience from Macau has been for an 11-29 per cent drop in share prices after new casino openings.'
OCBC rose two cents to $8.56 after releasing its results last Friday. Analysts responded with a mixed bag of recommendations - JP Morgan called an 'overweight' with a target price of $11 using a dividend-discount model while Deutsche Bank called a 'hold' with $9.10 as the target.
Morgan Stanley however, retained an 'underweight' on OCBC, pointing to an unexciting growth outlook and uncompelling valuations. Its target is $8.54.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Property tax gets a welcome tweak
Business Times - 23 Feb 2010
BUDGET 2010: PROPERTY
Property tax gets a welcome tweak
More progressive system will benefit more owners, won't hit high-end demand
By KALPANA RASHIWALA
MOST market watchers have welcomed Finance Minister Tharman Shanmugaratnam's move towards a progressive property tax regime for owner-occupied residential properties as a fairer system.
Currently, owner-occupied residential properties are taxed at a flat rate of 4 per cent of annual value (AV) or the estimated annual rent of a property, excluding the rent for furniture, fittings and service charge.
But for property tax payable on such properties from January 2011, there will be three tiers of tax rates. The first $6,000 of AV will be exempted from property tax. The next $59,000 AV will be taxed at 4 per cent and the balance of AV above $65,000 will be taxed at 6 per cent.
'The new system ... will benefit most Singaporeans ... all HDB flat owners and the large majority of private property owners will pay lower taxes compared to the current system,' Mr Tharman said.
'...our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals,' he added.
All owner-occupied homes will enjoy tax savings of $240 as a result of the exemption of the first $6,000 of AV, according to Mr Tharman.
'Owners of high-end properties with AVs of more than $77,000 will see a small increase in tax payable, as their effective tax rates will be higher than the current 4 per cent. They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore.
'Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year. A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year,' he added.
The move will cost the government about $230 million a year initially.
Knight Frank managing director (residential services) Peter Ow welcomed the change, describing it as 'taxing the rich to give the poor. It's a fairer system'.
He does not expect the higher property tax rate payable for higher AV properties to dent demand for residential properties bought for owner occupation. 'The 2 per cent will not hurt the pockets of owners in this bracket. A property with $65,000 AV would probably be worth around $2.5 million to $3 million.'
Leonard Ong, executive director, KPMG Tax Services, said: 'We think it is a good way for Government to help owner occupiers of residential properties in Singapore. The bulk of them will be in the lower band of property tax; only a minority, those who own higher-value properties, will be in the upper tax band. This benefits more people than the current structure, which is a flat rate system.'
The property tax for non-owner-occupied residential properties as well as other properties will remain at a flat rate of 10 per cent of AV.
Inland Revenue Authority of Singapore determines the AV of a property by analysing rents of similar properties.
Currently, in addition to the 4 per cent concessionary tax rate, owner-occupied residential properties with AVs below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AVs of the properties. The rebates, introduced together with the Goods and Services Tax, are aimed at supporting the lower- and middle-income groups. 'It has significantly reduced property tax payable by HDB flat owners. However, as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time,' Mr Tharman said.
The government provided special additional rebates last month to mitigate increases in tax payable as a result of higher rentals and hence AVs of HDB flats over the past two years.
However, the need for a longer-term solution that provides a fair and balanced system for all property owners led Mr Tharman to announce the progressive property tax schedule for owner-occupied residential property.
Market watchers also noted that there were no property tax rebates for commercial and industrial properties in the latest Budget statement.
Earlier in his Budget speech when he covered the fiscal position for FY2009, Mr Tharman also revealed that a strong recovery in the volume of transactions in the property market boosted stamp duty collections which ended up $1.3 billion higher than initially estimated.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Fair: The need for a longer-term solution that provides a fair and balanced system for all property owners led Mr Tharman to announce the progressive tax schedule
BUDGET 2010: PROPERTY
Property tax gets a welcome tweak
More progressive system will benefit more owners, won't hit high-end demand
By KALPANA RASHIWALA
MOST market watchers have welcomed Finance Minister Tharman Shanmugaratnam's move towards a progressive property tax regime for owner-occupied residential properties as a fairer system.
Currently, owner-occupied residential properties are taxed at a flat rate of 4 per cent of annual value (AV) or the estimated annual rent of a property, excluding the rent for furniture, fittings and service charge.
But for property tax payable on such properties from January 2011, there will be three tiers of tax rates. The first $6,000 of AV will be exempted from property tax. The next $59,000 AV will be taxed at 4 per cent and the balance of AV above $65,000 will be taxed at 6 per cent.
'The new system ... will benefit most Singaporeans ... all HDB flat owners and the large majority of private property owners will pay lower taxes compared to the current system,' Mr Tharman said.
'...our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals,' he added.
All owner-occupied homes will enjoy tax savings of $240 as a result of the exemption of the first $6,000 of AV, according to Mr Tharman.
'Owners of high-end properties with AVs of more than $77,000 will see a small increase in tax payable, as their effective tax rates will be higher than the current 4 per cent. They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore.
'Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year. A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year,' he added.
The move will cost the government about $230 million a year initially.
Knight Frank managing director (residential services) Peter Ow welcomed the change, describing it as 'taxing the rich to give the poor. It's a fairer system'.
He does not expect the higher property tax rate payable for higher AV properties to dent demand for residential properties bought for owner occupation. 'The 2 per cent will not hurt the pockets of owners in this bracket. A property with $65,000 AV would probably be worth around $2.5 million to $3 million.'
Leonard Ong, executive director, KPMG Tax Services, said: 'We think it is a good way for Government to help owner occupiers of residential properties in Singapore. The bulk of them will be in the lower band of property tax; only a minority, those who own higher-value properties, will be in the upper tax band. This benefits more people than the current structure, which is a flat rate system.'
The property tax for non-owner-occupied residential properties as well as other properties will remain at a flat rate of 10 per cent of AV.
Inland Revenue Authority of Singapore determines the AV of a property by analysing rents of similar properties.
Currently, in addition to the 4 per cent concessionary tax rate, owner-occupied residential properties with AVs below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AVs of the properties. The rebates, introduced together with the Goods and Services Tax, are aimed at supporting the lower- and middle-income groups. 'It has significantly reduced property tax payable by HDB flat owners. However, as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time,' Mr Tharman said.
The government provided special additional rebates last month to mitigate increases in tax payable as a result of higher rentals and hence AVs of HDB flats over the past two years.
However, the need for a longer-term solution that provides a fair and balanced system for all property owners led Mr Tharman to announce the progressive property tax schedule for owner-occupied residential property.
Market watchers also noted that there were no property tax rebates for commercial and industrial properties in the latest Budget statement.
Earlier in his Budget speech when he covered the fiscal position for FY2009, Mr Tharman also revealed that a strong recovery in the volume of transactions in the property market boosted stamp duty collections which ended up $1.3 billion higher than initially estimated.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Fair: The need for a longer-term solution that provides a fair and balanced system for all property owners led Mr Tharman to announce the progressive tax schedule
BT : Impact of speculation curbs open to debate
Business Times - 23 Feb 2010
Impact of speculation curbs open to debate
IN a move that took some people by surprise, the government last Friday unveiled two measures designed to cool speculation in the property market. But the imposition of a seller's stamp duty on sale of properties sold within a year after purchase and the lowering of the loan-to-value ratio should not really have come as a surprise to anyone, given that home sales had more than tripled in January to 1,476 units, from 481 units in December.
Similar measures were taken in September last year in response to a 16 per cent surge in home sales during the July-September quarter. The immediate impact of that move to kill off innovative interest absorption home loan schemes was a halving of the home price rise to 7.4 per cent, quarter on quarter, during the October-December 2009 period. Under the latest measures, anyone selling property within 12 months of purchase will pay a 3 per cent stamp duty. And home buyers can now borrow only up to 80 per cent of a property's purchase price, versus up to 90 per cent previously. If the somewhat muted reaction of property stocks yesterday is any indication, the market appears to be taking Friday's measures in its stride. In contrast, property stocks plummeted by more than 15 per cent in September.
The general consensus is that the latest measures will not have an impact on genuine property buyers or long-term investors, most of whom take loans of less than 80 per cent of value and hold on to their properties for several years at least. The measures also appear to have been calibrated so as not to impact home prices in a big way - a critical consideration given that residential property accounts for the bulk of Singaporeans' wealth.
But the extent to which these measures will reduce speculative activity in the mid to high-end segment of the property market - where much of the speculation is said to be focused - is open to debate. Here is why: Singapore's reputation as a vibrant first world city in a buoyant and developing region has attracted a significant tide of funds into its premium properties. This inflow of offshore funds - whether for investment or speculation, from buyers from Greater China, South-east Asia and South Asia - continues unabated, and is unlikely to be affected by a 3 per cent stamp duty or a cap on borrowing.
In an environment of abundant liquidity and improving consumer confidence underpinned by a global economic recovery, it is natural for property prices - especially the premium segment - to trend upwards in a land-scarce and developed island-state such as Singapore.
Still, the latest measures, coming just five months after the previous set of calibrated moves, are a necessary reinforcement of a message from the government that it will not sit idly by if speculation in one segment of the property market endangers the broader economy. Presumably, more will be done, should the need arise.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
__._,_.___
Impact of speculation curbs open to debate
IN a move that took some people by surprise, the government last Friday unveiled two measures designed to cool speculation in the property market. But the imposition of a seller's stamp duty on sale of properties sold within a year after purchase and the lowering of the loan-to-value ratio should not really have come as a surprise to anyone, given that home sales had more than tripled in January to 1,476 units, from 481 units in December.
Similar measures were taken in September last year in response to a 16 per cent surge in home sales during the July-September quarter. The immediate impact of that move to kill off innovative interest absorption home loan schemes was a halving of the home price rise to 7.4 per cent, quarter on quarter, during the October-December 2009 period. Under the latest measures, anyone selling property within 12 months of purchase will pay a 3 per cent stamp duty. And home buyers can now borrow only up to 80 per cent of a property's purchase price, versus up to 90 per cent previously. If the somewhat muted reaction of property stocks yesterday is any indication, the market appears to be taking Friday's measures in its stride. In contrast, property stocks plummeted by more than 15 per cent in September.
The general consensus is that the latest measures will not have an impact on genuine property buyers or long-term investors, most of whom take loans of less than 80 per cent of value and hold on to their properties for several years at least. The measures also appear to have been calibrated so as not to impact home prices in a big way - a critical consideration given that residential property accounts for the bulk of Singaporeans' wealth.
But the extent to which these measures will reduce speculative activity in the mid to high-end segment of the property market - where much of the speculation is said to be focused - is open to debate. Here is why: Singapore's reputation as a vibrant first world city in a buoyant and developing region has attracted a significant tide of funds into its premium properties. This inflow of offshore funds - whether for investment or speculation, from buyers from Greater China, South-east Asia and South Asia - continues unabated, and is unlikely to be affected by a 3 per cent stamp duty or a cap on borrowing.
In an environment of abundant liquidity and improving consumer confidence underpinned by a global economic recovery, it is natural for property prices - especially the premium segment - to trend upwards in a land-scarce and developed island-state such as Singapore.
Still, the latest measures, coming just five months after the previous set of calibrated moves, are a necessary reinforcement of a message from the government that it will not sit idly by if speculation in one segment of the property market endangers the broader economy. Presumably, more will be done, should the need arise.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
__._,_.___
BT : Prime office rents continue to dip: Cushman
Business Times - 23 Feb 2010
Prime office rents continue to dip: Cushman
By EMILYN YAP
PRIME office rents continued to soften going into 2010 and could slip another 2-3 per cent this quarter, says Cushman & Wakefield.
In a mid-first quarter report, the property consultancy noted that monthly rents at Raffles Place Grade A buildings had fallen to $7.62 per sq ft (psf), down 1.6 per cent from $7.74 psf in Q4 2009.
In the Shenton area, monthly rents of prime office space also dropped to $5.82 psf - 1.5 per cent lower than the $5.91 psf in Q4.
'Extrapolating from the mid-quarter read, we therefore expect prime rents to decline by a modest 2-3 per cent for the first quarter of 2010,' Cushman & Wakefield says.
While rents dipped, the vacancy rate across prime office space improved slightly to 6.9 per cent from 7.4 per cent in Q4.
Cushman & Wakefield research director Ang Choon Beng expects new commercial developments to have a better year ahead, compared with existing ones. 'A bifurcation of the prime office market is taking place,' he says.
New offices coming up this year include those at the first phase of Marina Bay Financial Centre and 50 Collyer Quay.
The new buildings have so far been able to attract tenants and achieve relatively high pre-commitment levels, Mr Ang says. This leads the consultancy to believe that rents of these developments could bottom out soon, probably by the second half of the year.
For instance, the recently-completed Straits Trading Building managed to attain a 90 per cent occupancy rate and an average rent of $9 psf.
On the other hand, rents of existing office developments may continue slipping until the end of the year, Mr Ang reckons.
'The relocations of office tenants from existing to new buildings will exert pressure on rents in existing buildings,' he says. 'We believe prime rents would remain soft over the first half of 2010.'
According to reports from various consultancies, Grade A office rents in Singapore dropped most significantly in Asia-Pacific in 2009 by more than 40 per cent year-on-year. This has raised the country's cost competitiveness compared with other cities such as Hong Kong and Tokyo.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Prime office rents continue to dip: Cushman
By EMILYN YAP
PRIME office rents continued to soften going into 2010 and could slip another 2-3 per cent this quarter, says Cushman & Wakefield.
In a mid-first quarter report, the property consultancy noted that monthly rents at Raffles Place Grade A buildings had fallen to $7.62 per sq ft (psf), down 1.6 per cent from $7.74 psf in Q4 2009.
In the Shenton area, monthly rents of prime office space also dropped to $5.82 psf - 1.5 per cent lower than the $5.91 psf in Q4.
'Extrapolating from the mid-quarter read, we therefore expect prime rents to decline by a modest 2-3 per cent for the first quarter of 2010,' Cushman & Wakefield says.
While rents dipped, the vacancy rate across prime office space improved slightly to 6.9 per cent from 7.4 per cent in Q4.
Cushman & Wakefield research director Ang Choon Beng expects new commercial developments to have a better year ahead, compared with existing ones. 'A bifurcation of the prime office market is taking place,' he says.
New offices coming up this year include those at the first phase of Marina Bay Financial Centre and 50 Collyer Quay.
The new buildings have so far been able to attract tenants and achieve relatively high pre-commitment levels, Mr Ang says. This leads the consultancy to believe that rents of these developments could bottom out soon, probably by the second half of the year.
For instance, the recently-completed Straits Trading Building managed to attain a 90 per cent occupancy rate and an average rent of $9 psf.
On the other hand, rents of existing office developments may continue slipping until the end of the year, Mr Ang reckons.
'The relocations of office tenants from existing to new buildings will exert pressure on rents in existing buildings,' he says. 'We believe prime rents would remain soft over the first half of 2010.'
According to reports from various consultancies, Grade A office rents in Singapore dropped most significantly in Asia-Pacific in 2009 by more than 40 per cent year-on-year. This has raised the country's cost competitiveness compared with other cities such as Hong Kong and Tokyo.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
TODAY Online : Property stocks take a beating
Property stocks take a beating
05:55 AM Feb 23, 2010
by Ephraim Seow ephraimseow@mediacorp.com.sg
SINGAPORE - Property stocks were battered and ended the trading day in a sea of red ink on the Singapore Exchange yesterday.
Dealers said that investors were unloading these counters on dented sentiment amid the Government's latest measures to cool an overheating property sector.
Shares of property giants such as City Developments fell 4.8 per cent to $10.30, while CapitaLand shed 3.6 per cent to close at $3.76. Wing Tai and Keppel Land were also not spared as their shares dropped 5.1 per cent to $1.68, and 2.1 per cent to $3.30, respectively.
Overall, the FTSE ST Real Estate Index closed 7.3 points or 1.1 per cent lower at 629.4 points.
Last Friday, the Government had imposed a Seller's Stamp Duty on residential property and land sold within one year and capped the loan-to-value ratio to discourage short-term speculative activity in the market.
Analysts believe more cooling measures are ahead if property prices and sales volumes do not revert to "sustainable levels".
DBS Vickers property analyst Adrian Chua said this presents a "Catch-22" situation.
"If the measures have minimal impact, it heightens the policy risk and potential impact from future policies; if the measures work better than expected, valuations would decline," he said.
Analysts also reckon that sentiment on property stocks may continue to be weak until signs emerge that the sale of residential properties has reached sustainable levels.
Cushman and Wakefield's managing director Donald Han said that a sustainable level for private property sales in the market should be between 800 and 900 units a month, much lower than the 1,476 units sold in January.
Yet, some upbeat analysts said investors will probably continue to see investing in property as a good long term solution, given the higher risks in the stock markets now.
Meanwhile, Mr Han advises investors not to engage in panic selling, but to start accumulating property stocks because these companies are fundamentally sound and have announced good profits for the last quarter.
CapitaLand and UOL remain DBS Vickers' top picks. It also favours those companies with less unsold property in their land bank like Wheelock Properties and Ho Bee.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Feb 23, 2010
by Ephraim Seow ephraimseow@mediacorp.com.sg
SINGAPORE - Property stocks were battered and ended the trading day in a sea of red ink on the Singapore Exchange yesterday.
Dealers said that investors were unloading these counters on dented sentiment amid the Government's latest measures to cool an overheating property sector.
Shares of property giants such as City Developments fell 4.8 per cent to $10.30, while CapitaLand shed 3.6 per cent to close at $3.76. Wing Tai and Keppel Land were also not spared as their shares dropped 5.1 per cent to $1.68, and 2.1 per cent to $3.30, respectively.
Overall, the FTSE ST Real Estate Index closed 7.3 points or 1.1 per cent lower at 629.4 points.
Last Friday, the Government had imposed a Seller's Stamp Duty on residential property and land sold within one year and capped the loan-to-value ratio to discourage short-term speculative activity in the market.
Analysts believe more cooling measures are ahead if property prices and sales volumes do not revert to "sustainable levels".
DBS Vickers property analyst Adrian Chua said this presents a "Catch-22" situation.
"If the measures have minimal impact, it heightens the policy risk and potential impact from future policies; if the measures work better than expected, valuations would decline," he said.
Analysts also reckon that sentiment on property stocks may continue to be weak until signs emerge that the sale of residential properties has reached sustainable levels.
Cushman and Wakefield's managing director Donald Han said that a sustainable level for private property sales in the market should be between 800 and 900 units a month, much lower than the 1,476 units sold in January.
Yet, some upbeat analysts said investors will probably continue to see investing in property as a good long term solution, given the higher risks in the stock markets now.
Meanwhile, Mr Han advises investors not to engage in panic selling, but to start accumulating property stocks because these companies are fundamentally sound and have announced good profits for the last quarter.
CapitaLand and UOL remain DBS Vickers' top picks. It also favours those companies with less unsold property in their land bank like Wheelock Properties and Ho Bee.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY Online : A more nuanced, fairer property tax
A more nuanced, fairer property tax
Except for rich minority, nearly all will pay less
05:55 AM Feb 23, 2010
by Neo Chai Chin
SINGAPORE - From next year, if the flat or private property you live in and own has an annual value of $65,000, you will pay up to $240 less in property taxes.
The new progressive property tax system, announced yesterday to the surprise of many, will see owner-occupiers exempted from tax on the first $6,000 of the annual value - that is, the estimated rent - of their homes.
The trade-off? The $25-to-$150 in GST rebates, which owners of properties with lower annual values have been enjoying since 1994, will be scrapped.
The more nuanced tax system for owner-occupied residential properties will benefit all Singaporeans except the ultra-rich - those living in properties with over $77,000 annual value. They comprise only 0.4 per cent of all owner-occupied homes in Singapore, and only 3 per cent of private owner-occupied homes here, said Finance Minister Tharman Shanmugaratnam, who also noted that the change would cost the Government $230 million initially.
Currently, all owner-occupied residences are taxed a flat rate of 4 per cent, while investment residential properties are taxed at 10 per cent.
This "does tax the wealthy more than others", said Mr Shanmugaratnam, but there was "scope" for a more progressive system.
One reason for the rethink: HDB homes have been appreciating in value over the years, meaning a growing tax bill for flat-owners, and while rebates over the years - the latest being in January - have helped mitigate this increase, "we need a longer-term solution that provides a fair and balanced system for all property owners", said the Finance Minister.
Homes with an annual value of about $80,000, therefore, will see a tax increase of "slightly less than $100" a year.
"However, our property tax rates, even for the high-end, will remain lower than in most international cities," Mr Shanmugaratnam stressed.
"That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike."
Binjai Park resident Mr Philip Goh, 61, said that as a retiree, "anything helps". His semi-detached house's annual value is about $31,000, and he forked out $1,250 in property tax last year.
The change in tax structure will have minimal impact on the property market, analysts believe, given the tiny minority that will be negatively affected.
Those likely to be taxed "slightly more" were the luxury properties priced above $4 million in prime districts, said real estate lecturer Nicholas Mak of Ngee Ann Polytechnic. And as taxes for non-owner-occupied residential properties remain at 10 per cent, he added, there should be no impact on those who buy for investment.
Nonetheless, as annual values continue to go up, "the question is whether the Government will increase the upper limit of the annual value bracket where the property tax is 4 per cent", said Mr Mak.
Does this signal that the Government might go further down the path of taxing the rich more, something it has argued against overdoing? NUS Business School Associate Professor Ho Yew Kee: "What the Government probably thinks is that the extremely asset-rich ... have to carry a little bit of burden, and contribute a bit more. 0, 4, 6 per cent is trivial - if I have an $8-million house, I'd pay $2,000 more in property tax a year. It's not a lot."
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Except for rich minority, nearly all will pay less
05:55 AM Feb 23, 2010
by Neo Chai Chin
SINGAPORE - From next year, if the flat or private property you live in and own has an annual value of $65,000, you will pay up to $240 less in property taxes.
The new progressive property tax system, announced yesterday to the surprise of many, will see owner-occupiers exempted from tax on the first $6,000 of the annual value - that is, the estimated rent - of their homes.
The trade-off? The $25-to-$150 in GST rebates, which owners of properties with lower annual values have been enjoying since 1994, will be scrapped.
The more nuanced tax system for owner-occupied residential properties will benefit all Singaporeans except the ultra-rich - those living in properties with over $77,000 annual value. They comprise only 0.4 per cent of all owner-occupied homes in Singapore, and only 3 per cent of private owner-occupied homes here, said Finance Minister Tharman Shanmugaratnam, who also noted that the change would cost the Government $230 million initially.
Currently, all owner-occupied residences are taxed a flat rate of 4 per cent, while investment residential properties are taxed at 10 per cent.
This "does tax the wealthy more than others", said Mr Shanmugaratnam, but there was "scope" for a more progressive system.
One reason for the rethink: HDB homes have been appreciating in value over the years, meaning a growing tax bill for flat-owners, and while rebates over the years - the latest being in January - have helped mitigate this increase, "we need a longer-term solution that provides a fair and balanced system for all property owners", said the Finance Minister.
Homes with an annual value of about $80,000, therefore, will see a tax increase of "slightly less than $100" a year.
"However, our property tax rates, even for the high-end, will remain lower than in most international cities," Mr Shanmugaratnam stressed.
"That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike."
Binjai Park resident Mr Philip Goh, 61, said that as a retiree, "anything helps". His semi-detached house's annual value is about $31,000, and he forked out $1,250 in property tax last year.
The change in tax structure will have minimal impact on the property market, analysts believe, given the tiny minority that will be negatively affected.
Those likely to be taxed "slightly more" were the luxury properties priced above $4 million in prime districts, said real estate lecturer Nicholas Mak of Ngee Ann Polytechnic. And as taxes for non-owner-occupied residential properties remain at 10 per cent, he added, there should be no impact on those who buy for investment.
Nonetheless, as annual values continue to go up, "the question is whether the Government will increase the upper limit of the annual value bracket where the property tax is 4 per cent", said Mr Mak.
Does this signal that the Government might go further down the path of taxing the rich more, something it has argued against overdoing? NUS Business School Associate Professor Ho Yew Kee: "What the Government probably thinks is that the extremely asset-rich ... have to carry a little bit of burden, and contribute a bit more. 0, 4, 6 per cent is trivial - if I have an $8-million house, I'd pay $2,000 more in property tax a year. It's not a lot."
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
CNA : HDB committed to build sufficient, affordable housing for citizens
HDB committed to build sufficient, affordable housing for citizens
By Evelyn Choo, Channel NewsAsia | Posted: 22 February 2010 2049 hrs
SINGAPORE : The Housing and Development Board (HDB) is committed to providing sufficient and affordable flats to first-time Singaporean homebuyers, and it will make no distinction between indigenous and new citizens.
Senior of Minister of State for National Development, Grace Fu, said this in Parliament on Monday in reply to a question on how many new citizens rented homes, compared with those who bought properties.
Ms Fu said the government does not track the type of properties rented or owned by new citizens.
"As a policy, we do not distinguish between indigenous and new citizens. Our commitment in housing is to provide sufficient and affordable flats for first-time Singaporean homebuyers, whether new citizens or otherwise. I wish to reassure the House that HDB continues to uphold this commitment," she said. - CNA /ls
By Evelyn Choo, Channel NewsAsia | Posted: 22 February 2010 2049 hrs
SINGAPORE : The Housing and Development Board (HDB) is committed to providing sufficient and affordable flats to first-time Singaporean homebuyers, and it will make no distinction between indigenous and new citizens.
Senior of Minister of State for National Development, Grace Fu, said this in Parliament on Monday in reply to a question on how many new citizens rented homes, compared with those who bought properties.
Ms Fu said the government does not track the type of properties rented or owned by new citizens.
"As a policy, we do not distinguish between indigenous and new citizens. Our commitment in housing is to provide sufficient and affordable flats for first-time Singaporean homebuyers, whether new citizens or otherwise. I wish to reassure the House that HDB continues to uphold this commitment," she said. - CNA /ls
HDB Circular: Measures To Ensure A Stable And Sustainable Property Market
Date : 20 Feb 2010
Mr Jeffhery Foo
President, Institute of Estate Agents
Dear Mr Jeffhery Foo,
MEASURES TO ENSURE A STABLE AND SUSTAINABLE PROPERTY MARKET
The government has announced the following measures to ensure a stable and sustainable property market, to take effect from 20 Feb 2010:
a. Introducing a Seller’s Stamp Duty (SSD) on all residential properties and residential lands that are bought from 20 Feb 2010 and sold within 1 year from the date of purchase; and
b. Lowering the Loan-to-Value (LTV) limit to 80% for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore (MAS).
EFFECT OF MEASURES ON HDB FLATS
(A) SELLER'S STAMP DUTY (SSD)
2 The SSD will not be applicable to HDB flats (including flats sold under the Design, Build and Sell (DBSS) Scheme), as they are already subject to a minimum occupation period of at least one year. It will apply to Executive Condominiums and HUDC flats that are purchased on the resale market, as they are not subject to a minimum occupation period.
(B) LOWERING OF LOAN-TO-VALUE (LTV) LIMIT TO 80% FOR HOUSING LOANS
3 The 80% LTV limit will apply only to housing loans taken from banks/financial institutions, for transactions where the Option to Purchase (OTP) was granted on or after 20 Feb 2010, or if there is no OTP, where the date of the sale and purchase agreement falls on or after 20 February 2010.
4 Housing Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%.
PRESS RELEASE
5 Details of the measures are in the attached Press Release:
http://www.mnd.gov.sg/newsroom/newsreleases/2010/news19022010.htm
6 Please disseminate the information to your members.
Thank you.
Head, Resale Planning Unit
Housing & Development Board
Mr Jeffhery Foo
President, Institute of Estate Agents
Dear Mr Jeffhery Foo,
MEASURES TO ENSURE A STABLE AND SUSTAINABLE PROPERTY MARKET
The government has announced the following measures to ensure a stable and sustainable property market, to take effect from 20 Feb 2010:
a. Introducing a Seller’s Stamp Duty (SSD) on all residential properties and residential lands that are bought from 20 Feb 2010 and sold within 1 year from the date of purchase; and
b. Lowering the Loan-to-Value (LTV) limit to 80% for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore (MAS).
EFFECT OF MEASURES ON HDB FLATS
(A) SELLER'S STAMP DUTY (SSD)
2 The SSD will not be applicable to HDB flats (including flats sold under the Design, Build and Sell (DBSS) Scheme), as they are already subject to a minimum occupation period of at least one year. It will apply to Executive Condominiums and HUDC flats that are purchased on the resale market, as they are not subject to a minimum occupation period.
(B) LOWERING OF LOAN-TO-VALUE (LTV) LIMIT TO 80% FOR HOUSING LOANS
3 The 80% LTV limit will apply only to housing loans taken from banks/financial institutions, for transactions where the Option to Purchase (OTP) was granted on or after 20 Feb 2010, or if there is no OTP, where the date of the sale and purchase agreement falls on or after 20 February 2010.
4 Housing Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%.
PRESS RELEASE
5 Details of the measures are in the attached Press Release:
http://www.mnd.gov.sg/newsroom/newsreleases/2010/news19022010.htm
6 Please disseminate the information to your members.
Thank you.
Head, Resale Planning Unit
Housing & Development Board
CNA : Waiting time for flats cut by half under BTO compared with Build-To-Sell
Waiting time for flats cut by half under BTO compared with Build-To-Sell
Posted: 22 February 2010 1646 hrs
SINGAPORE: Flat buyers get their new flats much faster under the current Built-To-Order (BTO) system, saving about half the time that it would take under the previous Build-to-Sell mode.
National Development Minister Mah Bow Tan said that under BTO, buyers wait for three years for their flats to be ready.
Under the Build-to-Sell mode or Registration for Flats system, the wait was six to seven years.
Mr Mah was replying in Parliament to MP for West Coast GRC Ho Geok Choo, who wanted to know if there are plans to return to the Build-to-Sell mode.
She was concerned that the waiting time for BTO flats would affect many new applicants' resources and plans to start a family.
Mr Mah gave this assurance: "The subscription rate that we are getting now, although it appears large, does not seem to indicate there is such a large pent-up demand, contrary to what many of us think."
He said the BTO system is more flexible, and can also test demand.
"If the answer is there are not enough flats, we will just keep rolling it out," he said.
He also cited figures to show why the current system is more feasible.
At the height of the property boom, the Build-To-Sell system saw 150,000 applicants in the queue for new flats.
But during the Asian Financial Crisis, the government was saddled with 31,000 unsold flats.
It took five years to clear the unsold flats, which Mr Mah described as a "waste of public money". - CNA/vm
Posted: 22 February 2010 1646 hrs
SINGAPORE: Flat buyers get their new flats much faster under the current Built-To-Order (BTO) system, saving about half the time that it would take under the previous Build-to-Sell mode.
National Development Minister Mah Bow Tan said that under BTO, buyers wait for three years for their flats to be ready.
Under the Build-to-Sell mode or Registration for Flats system, the wait was six to seven years.
Mr Mah was replying in Parliament to MP for West Coast GRC Ho Geok Choo, who wanted to know if there are plans to return to the Build-to-Sell mode.
She was concerned that the waiting time for BTO flats would affect many new applicants' resources and plans to start a family.
Mr Mah gave this assurance: "The subscription rate that we are getting now, although it appears large, does not seem to indicate there is such a large pent-up demand, contrary to what many of us think."
He said the BTO system is more flexible, and can also test demand.
"If the answer is there are not enough flats, we will just keep rolling it out," he said.
He also cited figures to show why the current system is more feasible.
At the height of the property boom, the Build-To-Sell system saw 150,000 applicants in the queue for new flats.
But during the Asian Financial Crisis, the government was saddled with 31,000 unsold flats.
It took five years to clear the unsold flats, which Mr Mah described as a "waste of public money". - CNA/vm
CNA : Govt to introduce progressive property tax schedule for owner-occupied residences
Govt to introduce progressive property tax schedule for owner-occupied residences
By May Wong, Channel NewsAsia | Posted: 22 February 2010 1715 hrs
SINGAPORE: All HDB flat owners and a majority of private property owners can expect to pay lower taxes through a new progressive property tax system introduced for owner-occupied residential property.
The new system will apply for property tax payable from January 2011.
Finance Minister, Tharman Shanmugaratnam said that this will replace the current scheme of property tax rebates introduced in 1994.
The new property system will see three tiers of tax rates of zero percent, four per cent and six per cent.
The first S$6,000 of Annual Value will be exempted from property tax.
The next tier of S$59,000 will be taxed at four per cent.
And the balance of Annual Value in excess of S$65,000 will be taxed at six per cent.
Mr Tharman said all owner-occupied homes will enjoy tax savings of S$240 as a result of the exemption of the first S$6,000 of Annual Values.
Owners of high-end properties with Annual Values of over S$77,000 will see a small increase in tax payable.
This is because their effective tax rates will be higher than the current four per cent.
This group makes up the top three per cent of private owner-occupied residential properties or the top 0.4 per cent of all owner-occupied homes in Singapore.
Homes with Annual Values of about S$80,000 will see a small increase in tax of less than S$100 a year while a property with an Annual Value of $150,000, will have to fork out another $1,500 in property tax annually.
These are within the top 0.5 per cent level of private owner-occupied homes, which are large properties in the central districts.
Mr Tharman said this new system of property taxes will cost the government about S$230 million a year initially.
The property tax structure of non-owner occupied residential properties and other properties will see no changes.
Mr Tharman said: "Our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike. This new progressive system of property taxes for owner-occupied homes will lower taxes for the vast majority of Singaporeans." - CNA/vm
By May Wong, Channel NewsAsia | Posted: 22 February 2010 1715 hrs
SINGAPORE: All HDB flat owners and a majority of private property owners can expect to pay lower taxes through a new progressive property tax system introduced for owner-occupied residential property.
The new system will apply for property tax payable from January 2011.
Finance Minister, Tharman Shanmugaratnam said that this will replace the current scheme of property tax rebates introduced in 1994.
The new property system will see three tiers of tax rates of zero percent, four per cent and six per cent.
The first S$6,000 of Annual Value will be exempted from property tax.
The next tier of S$59,000 will be taxed at four per cent.
And the balance of Annual Value in excess of S$65,000 will be taxed at six per cent.
Mr Tharman said all owner-occupied homes will enjoy tax savings of S$240 as a result of the exemption of the first S$6,000 of Annual Values.
Owners of high-end properties with Annual Values of over S$77,000 will see a small increase in tax payable.
This is because their effective tax rates will be higher than the current four per cent.
This group makes up the top three per cent of private owner-occupied residential properties or the top 0.4 per cent of all owner-occupied homes in Singapore.
Homes with Annual Values of about S$80,000 will see a small increase in tax of less than S$100 a year while a property with an Annual Value of $150,000, will have to fork out another $1,500 in property tax annually.
These are within the top 0.5 per cent level of private owner-occupied homes, which are large properties in the central districts.
Mr Tharman said this new system of property taxes will cost the government about S$230 million a year initially.
The property tax structure of non-owner occupied residential properties and other properties will see no changes.
Mr Tharman said: "Our property tax rates, even for the high-end, will remain lower than in most international cities. That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike. This new progressive system of property taxes for owner-occupied homes will lower taxes for the vast majority of Singaporeans." - CNA/vm
CNA : Land Intensification Allowance to replace allowance for industrial buildings
Land Intensification Allowance to replace allowance for industrial buildings
By Desmond Wong,Channel NewsAsia | Posted: 22 February 2010 1700 hrs
SINGAPORE: A new Land Intensification Allowance (LIA) will replace the current Industrial Building Allowance (IBA) with qualifying firms being granted a first-time allowance of 25 per cent, then five per cent annually for qualifying expenditures on the construction of buildings.
Structures from the pharmaceutical, petrochemical, petroleum, chemical, semi-conductor, aerospace, marine & offshore, as well as solar cell manufacturing and other speciality industries are currently the nine sectors that qualify for the LIA.
These buildings must also be built on land zoned as Business 1 or Business 2 under the URA's Master Plan.
Buildings must also meet the Gross Plot Ratio benchmark relevant to their industry sector, and will be set at the 75th percentile of GPRs for the sector.
The new allowance will be in place for five years, starting from July this year (2010), and will be administered by the Economic Development Board.
The measure to improve land use were announced in Parliament on Monday during the Finance Minister's Budget speech.
Finance Minister Tharman Shanmugaratnam, said: "The new Land Intensification Allowance or LIA will apply to nine sectors identified to have large land take. It will give business in these sectors tax allowances on their building costs if they meet or exceed the Gross Plot Ratio bench marks set for each sector. To encourage land intensification, these benchmarks will be set around the 75th percentile of actual GPRs for each of these sectors. Businesses that meet this bench mark will receive more generous allowance than are currently offered under the IBA." -CNA/vm
By Desmond Wong,Channel NewsAsia | Posted: 22 February 2010 1700 hrs
SINGAPORE: A new Land Intensification Allowance (LIA) will replace the current Industrial Building Allowance (IBA) with qualifying firms being granted a first-time allowance of 25 per cent, then five per cent annually for qualifying expenditures on the construction of buildings.
Structures from the pharmaceutical, petrochemical, petroleum, chemical, semi-conductor, aerospace, marine & offshore, as well as solar cell manufacturing and other speciality industries are currently the nine sectors that qualify for the LIA.
These buildings must also be built on land zoned as Business 1 or Business 2 under the URA's Master Plan.
Buildings must also meet the Gross Plot Ratio benchmark relevant to their industry sector, and will be set at the 75th percentile of GPRs for the sector.
The new allowance will be in place for five years, starting from July this year (2010), and will be administered by the Economic Development Board.
The measure to improve land use were announced in Parliament on Monday during the Finance Minister's Budget speech.
Finance Minister Tharman Shanmugaratnam, said: "The new Land Intensification Allowance or LIA will apply to nine sectors identified to have large land take. It will give business in these sectors tax allowances on their building costs if they meet or exceed the Gross Plot Ratio bench marks set for each sector. To encourage land intensification, these benchmarks will be set around the 75th percentile of actual GPRs for each of these sectors. Businesses that meet this bench mark will receive more generous allowance than are currently offered under the IBA." -CNA/vm
BT : Don't sell your homes prematurely for a quick buck: PM Lee
Business Times - 22 Feb 2010
Don't sell your homes prematurely for a quick buck: PM Lee
Govt concerned over market's exuberant mood
By ONG BOON KIAT
(SINGAPORE) Please take good care of your home and don't sell it prematurely to make a quick buck.
It is an important investment for the future. It can help see Singaporeans through their old age. And it can be passed on to one's children or grandchildren.
That's the message from Prime Minister Lee Hsien Loong to the 1,300 residents attending the gala annual Teck Ghee Chinese New Year dinner in Ang Mo Kio yesterday.
'I have seen so many residents come to see me at my meet-the-people sessions, who have sold their houses, who have used the proceeds to pay debts or to do something else, and now their money has run out and they are in trouble and they want help.'
He said that the government has been closely watching the property market and has announced recent moves to prevent a speculative bubble from forming so that more drastic measures will not be needed later.
'The prices have risen very sharply over the last six months,' Mr Lee noted. 'It has not yet reached a dangerous level. But the trend has been so fast and the mood has been so exuberant that we were worried that people will get carried away and they will go beyond what is wise and we will have a bubble.'
The government cannot control property prices to the tee. 'But what we can do is to make sure that for all Singaporeans, homes remain affordable,' he said.
The Prime Minister is also worried that not enough Singaporeans are starting families and that they are not reproducing enough. He noted that Singapore's Total Fertility Rate fell to a record low of 1.23 last year, and the rate among the Chinese is even lower at 1.09.
He urged Singaporeans to have babies this year, notwithstanding the Chinese superstition that babies born in the Year of the Tiger will take on the fearsome attributes of the Chinese Zodiac animal. 'Tigers are good animals, and Tiger babies are good babies,' he quipped.
'So have a Tiger baby and have a new member to your family and a new member to the Singapore family.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Don't sell your homes prematurely for a quick buck: PM Lee
Govt concerned over market's exuberant mood
By ONG BOON KIAT
(SINGAPORE) Please take good care of your home and don't sell it prematurely to make a quick buck.
It is an important investment for the future. It can help see Singaporeans through their old age. And it can be passed on to one's children or grandchildren.
That's the message from Prime Minister Lee Hsien Loong to the 1,300 residents attending the gala annual Teck Ghee Chinese New Year dinner in Ang Mo Kio yesterday.
'I have seen so many residents come to see me at my meet-the-people sessions, who have sold their houses, who have used the proceeds to pay debts or to do something else, and now their money has run out and they are in trouble and they want help.'
He said that the government has been closely watching the property market and has announced recent moves to prevent a speculative bubble from forming so that more drastic measures will not be needed later.
'The prices have risen very sharply over the last six months,' Mr Lee noted. 'It has not yet reached a dangerous level. But the trend has been so fast and the mood has been so exuberant that we were worried that people will get carried away and they will go beyond what is wise and we will have a bubble.'
The government cannot control property prices to the tee. 'But what we can do is to make sure that for all Singaporeans, homes remain affordable,' he said.
The Prime Minister is also worried that not enough Singaporeans are starting families and that they are not reproducing enough. He noted that Singapore's Total Fertility Rate fell to a record low of 1.23 last year, and the rate among the Chinese is even lower at 1.09.
He urged Singaporeans to have babies this year, notwithstanding the Chinese superstition that babies born in the Year of the Tiger will take on the fearsome attributes of the Chinese Zodiac animal. 'Tigers are good animals, and Tiger babies are good babies,' he quipped.
'So have a Tiger baby and have a new member to your family and a new member to the Singapore family.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Speculation: 'More steps if needed'
Business Times - 22 Feb 2010
Speculation: 'More steps if needed'
Measures aimed at HDB market may be on the way: Mah
By UMA SHANKARI
(SINGAPORE) The government will take more measures to curb speculative activity in the property market if it has to, Minister for National Development Mah Bow Tan said yesterday.
Measures targeted at the HDB (Housing & Development Board) market could also be on the way. These could be announced during the Budget Debate and Committee of Supply sessions following today's Budget announcement, Mr Mah added.
'Going forward, we will monitor the market closely and if there is a need to, we will take further measures,' Mr Mah said. 'I think that there are a few other measures that can be taken.'
Mr Mah, who was speaking to reporters at a community event last night, added that it is better not to speculate on what those measures might be and instead 'see what happens' first.
The government on Friday announced two new property policies to curb speculation and encourage financial prudence.
A seller's stamp duty will be levied on those who buy a residential property and sell it within a year. Currently, stamp duty is levied only for the purchase of a property and not its sale.
Also, the loan-to-value limit on housing loans will be lowered from 90 per cent to 80 per cent.
The two measures, which come on top of previous policies announced in September last year to cool the market, are not expected to hit prices and the volume of private property sales, market watchers said.
Mr Mah said that the government is taking very measured moves - which are designed to have a minimal impact on genuine homebuyers - as it tries to pre-empt a property bubble from forming.
Measures are being implemented in steps this time around, unlike in 1996 when many measures were introduced at one go.
'We have to weigh very carefully what are the measures we want to take, such that we don't cause the market to collapse, but at the same time, we let a little bit of air out of the bubble,' Mr Mah said.
And as for the HDB market, 'we are looking at something', he added.
Mr Mah said in late January that HDB is checking to see if buyers are using government-subsidised flats to speculate in the property market - even as resale flat prices hit a new high in the fourth quarter of 2009.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Speculation: 'More steps if needed'
Measures aimed at HDB market may be on the way: Mah
By UMA SHANKARI
(SINGAPORE) The government will take more measures to curb speculative activity in the property market if it has to, Minister for National Development Mah Bow Tan said yesterday.
Measures targeted at the HDB (Housing & Development Board) market could also be on the way. These could be announced during the Budget Debate and Committee of Supply sessions following today's Budget announcement, Mr Mah added.
'Going forward, we will monitor the market closely and if there is a need to, we will take further measures,' Mr Mah said. 'I think that there are a few other measures that can be taken.'
Mr Mah, who was speaking to reporters at a community event last night, added that it is better not to speculate on what those measures might be and instead 'see what happens' first.
The government on Friday announced two new property policies to curb speculation and encourage financial prudence.
A seller's stamp duty will be levied on those who buy a residential property and sell it within a year. Currently, stamp duty is levied only for the purchase of a property and not its sale.
Also, the loan-to-value limit on housing loans will be lowered from 90 per cent to 80 per cent.
The two measures, which come on top of previous policies announced in September last year to cool the market, are not expected to hit prices and the volume of private property sales, market watchers said.
Mr Mah said that the government is taking very measured moves - which are designed to have a minimal impact on genuine homebuyers - as it tries to pre-empt a property bubble from forming.
Measures are being implemented in steps this time around, unlike in 1996 when many measures were introduced at one go.
'We have to weigh very carefully what are the measures we want to take, such that we don't cause the market to collapse, but at the same time, we let a little bit of air out of the bubble,' Mr Mah said.
And as for the HDB market, 'we are looking at something', he added.
Mr Mah said in late January that HDB is checking to see if buyers are using government-subsidised flats to speculate in the property market - even as resale flat prices hit a new high in the fourth quarter of 2009.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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