ST : Before you make your next move...

Sep 5, 2010

Before you make your next move...

Here's what the new property rules imply for buyers and sellers

By Fiona Chan



Last week's biggest news was the raft of cooling measures that the Government announced on Monday to dampen demand in the sizzling housing market.

The curbs are aimed mainly at deterring property speculators and investors - especially those who may be overstretching themselves financially - from dominating the market and pushing up home prices.

But the nature of some of the restrictions means that many genuine home buyers who are looking for a new place to live in may also find themselves affected by the new rules.

Whether you are a first-time buyer, property investor or aspiring upgrader, The Sunday Times walks you through what the latest changes might mean for you.

1 If you are a property investor or if you want to buy an additional property but have yet to pay off your existing mortgage

You must now pay double the amount of cash upfront and probably take more from your Central Provident Fund (CPF) account as well. The maximum home loan you can obtain will also be smaller.

Previously, if you wanted to buy a home for $1 million - the rough cost of a three-bedroom suburban condo or a studio in the city - you would have to put a 20 per cent down payment, at least 5 per cent of which had to be in cash.

This works out to at least $50,000 in cash and $150,000 in cash or CPF. You could borrow the rest, 80 per cent of the property's price.

These financing rules were the same whether you were buying the home for your own stay or for investment.

But under the new rules, if you have an outstanding home loan, you must put down 30 per cent upfront for any property you buy. The cash portion of the down payment has also doubled, to at least 10 per cent.

This means you now have to fork out a minimum of $100,000 in cash and $200,000 in cash or CPF for your down payment - an increase of $100,000 upfront.

The maximum loan you can take now is capped at 70 per cent of the property's price, or $700,000.

2 If you haven't paid off your mortgage and are planning to upgrade, downgrade or move house

The new regulations will mean a more cumbersome process that will require you to get your timing just right.

To avoid the stricter financing rules for your new home, you will have to sell your current house first and provide proof of the sale.

Selling a house usually takes three months to complete, but you can buy a new home during that time and obtain 80 per cent financing for it as long as you show the following documents:

· For sellers of private property, the signed sale and purchase agreement for the house being sold, as well as a certificate from the Inland Revenue Authority of Singapore (Iras) stating that the buyer of the house has paid the stamp duty.

· For sellers of HDB flats, an approval letter from the HDB within two weeks from the date of the first sales appointment.

Then there's the problem of timing. Unless you manage to buy your new home right after selling the old one, you will probably have to find somewhere to stay in between the transactions.

One way around this is to ask for a longer completion period for the home you are selling so that you can stay in it while the new one is being readied. Alternatively, you could speed up the completion period for the home you are buying so that you can move into it quickly.

3 If you want to buy a newly launched property

Unless you are a first-time buyer or you have paid off all your mortgages, buying an uncompleted property will now become trickier.

It will mean either selling your current home first - in which case you need to find somewhere to live for the three years or so that it takes to complete a new project - or forking out more money upfront under the tighter financing rules.

Effectively, this means new launches will be pretty much limited to first-time buyers; people who have paid off all their home loans; and those who can afford to put a 30 per cent down payment with 10 per cent in cash.

It is a sea change from the past when new property launches, especially of suburban condominiums, were the province of aspiring HDB upgraders such as Mr Christopher Low.

The 30-year-old civil servant, who lives in a five-room flat with his wife, daughter and mother, was planning to buy a bigger place with at least four bedrooms to accommodate the additional children he and his wife plan to have, as well as a maid to help take care of his mother.

But now, he will have to think twice.

'It feels like I'm being penalised for wanting a bigger family because first I have to sell before I buy, and the timing will be very difficult,' he said.

'To me, it contradicts the very message of having more children that the Government has been preaching. At this rate, I'll just stop at one.'

4 If you own an HDB flat and want to buy a private property for investment

You can continue to do so, but only after you have lived in your flat for five years.

Also, unless you have paid off the loan for your HDB flat, you will be subject to the new rules of a higher down payment and a smaller loan for your investment property.

Even if all this does not bother you, there is another issue to bear in mind before snapping up that investment condominium you have your eye on.

If you ever need to move from your current HDB flat to another one, the sale of your existing flat will leave you with just the condominium to your name, classifying you as a de facto private property owner.

This means that when you buy the next HDB flat to live in, you will need to dispose of your private home within six months. If not, HDB can compulsorily take back the flat.

5 If you own a property in another country

You will not be able to buy an HDB resale flat in Singapore, regardless of whether you plan to live in the flat or not.

If you buy a resale flat here, you will have to sell your overseas property within six months - even if it is an inherited property, has your family members living in it, or was bought for your retirement.

However, you can still buy a private property in Singapore under the old rules, provided you have no outstanding mortgage on any other property in Singapore.

That is, you will be required to put a down payment of only 20 per cent of the price of the property you want to buy, and you can take a loan from a bank of up to 80 per cent.

While this may cheer some, the new curb on resale flat ownership has angered some retirees and permanent residents (PRs), many of whom own homes overseas.

Mr Lee Chiu San, 64, wrote in a letter to The Straits Times forum that the rules seem to be sending the message that PRs and retirees should either 'learn to lie or leave town'.

He said that many of his generation have acquired landed properties in Malaysia, Indonesia, Australia and America at prices less than the cost of a resale HDB flat.

However, with strong family ties and business connections here, they might also be looking at buying HDB flats for their frequent visits back.

'(The new rules) will cause those retirees and permanent residents who are honest to make the hard decision as to whether or not to make Singapore their primary home,' said Mr Lee, a retiree and a Singaporean.

6 If you are a first-time home buyer

The new rules do not affect you much in any direct way, but they now make it more important than ever that you right-size your property from the start.

Many first-time buyers are drawn to 'mickey mouse' private apartments that are just a few hundred square feet in size, because the price of these small units is more affordable.

But with the new rules, you must be confident that you can hold on to your home for at least three years - whether that means making sure it is big enough for your family or attractive enough to draw a tenant.

This is essential because if you resell a property within three years of buying it, you will have to pay a penalty in the form of a sellers' stamp duty. Previously, this was applicable only to those who resold their home within a year of buying it.

For HDB flat buyers, you must be prepared to live in your home for at least five years now, even if it is a resale flat that you bought at market price without a concessionary loan from HDB.

This 'minimum occupation period' has always been five years for brand-new HDB flats. But for non-subsidised flats, it has been raised twice in the last six months: from one year to three years in March, and then to five years now.

7 If you are looking for a home to buy, anticipating that property prices will fall after the measures

What you will want to know is: Which segments of the market are likely to crumble the most and the fastest?

Property consultants such as DTZ's head of South-east Asia research, Ms Chua Chor Hoon, say HDB resale flats and private mass market condominiums are expected to take the biggest hit as would-be buyers of these homes will be the ones most affected by the new rules.

This is welcome news to hopeful homebuyers such as Mrs Michelle Cheong, 26, and her husband, who have been living with his parents while balloting unsuccessfully for a new flat.

The couple's income recently breached $8,000 a month after Mr Cheong changed jobs, and they decided to buy a resale flat to move into immediately because they have a baby on the way.

'We were quite happy to hear about the changes, because we've been debating what to do for some time now, with HDB flat prices so high and still rising,' said Mrs Cheong, a teacher.

'We hope the measures will cool the resale market so flats will become more affordable.'

8 If your household income falls between $8,000 and $10,000 a month

You now have more options for your first home. Previously, buyers falling in this 'sandwiched class' category could purchase only private properties or executive condominiums (ECs). They could not buy any other HDB flats, for which the income ceiling is $8,000 a month.

Now, their choices have been extended to flats under the Design, Build and Sell Scheme (DBSS), which are premium HDB flats built by private developers and have better finishes and design.

This will effectively double their chances to secure an HDB flat as there are 2,445 EC units and 2,280 DBSS flats in the pipeline.

DBSS projects are usually located in sought-after established residential areas - such as The Peak at Toa Payoh and Natura Loft in Bishan - and are priced at about $500,000 for a typical four-room flat.

9 If you agreed to sell or buy a property just before the rules were announced on Monday

Say you bought your dream home just the previous week, with no inkling that these measures would be introduced almost immediately after. Will you be affected?

The good news is that the tighter financing rules for those with existing mortgages will not apply to private property buyers who were granted their option to purchase before Monday, even if the option has not yet been exercised.

However, for private home sellers, what matters is the exercise date. They will not be able to escape the sellers' stamp duty for selling their home less than three years after buying it, if the option to purchase had been granted before Monday but not yet exercised.

For buyers of HDB resale flats, they will be subject to the new rules if HDB received their applications on or after Monday, regardless of whether their options to purchase were already granted and exercised well before that.

However, HDB has said that it will consider appeals on a case-by-case basis if the option to purchase had been granted or exercised before Monday but the resale application had not been submitted by then.

It is commonly said that in buying property, the only three things that matter are location, location and location. But as the latest rules clearly show, the most important factor of all may be timing.

fiochan@sph.com.sg

ST : Don't sell that HDB flat

Sep 5, 2010

small change

Don't sell that HDB flat

With new rules, it has become something that sometimes money can't buy

By Dennis Chan

The anti-speculation measures to cool the property market, particularly with regard to public housing, have turned some conventional wisdom about buying a Housing Board flat on its head.

A few months ago, I wrote a column encouraging first-time buyers to be less choosy and to go ahead and get that new flat directly from the HDB; never mind if it is located in far-flung estates like Sengkang and Punggol.

Now I'm not so sure.

Changes in the rules on public housing last week mean that it is imperative for buyers to take extra care in selecting their flats, as there are longer-term implications to their choice than was the case previously.

Before I go on, let's recap the key changes in order to understand how far-reaching the impact they may have on HDB prices as well as on the psychology of home buyers and home owners.

The new restrictions are:

· Private property owners who buy an HDB flat must dispose of their private home within six months of buying the flat.

· If you are an HDB flat owner, you must have lived in your flat for at least five years before you can buy a private property.

· You must live in your HDB flat for five years before you can sell it, regardless of whether you bought directly from the HDB or in the open market. The lock-in is known as the minimum occupation period.

· Buyers with outstanding loans must put down

30 per cent of home valuation, of which 10 per cent must be in cash.

So what are the implications?

First off, the mobility of HDB home owners has been curtailed sharply.

Consider the situation at the start of the year. If you had bought a non-subsidised resale flat and did not take a loan from the HDB, you could sell it after one year.

In March, the time bar was raised to three years. It's now five, effective from last Monday. This change has no impact on first-time buyers who receive a housing subsidy as they have been required all along to occupy their flat for five years.

But it has a big impact on upgraders and downgraders.

The extended minimum occupation period will take away much of the speculative activity, effectively removing a layer of demand from the market.

Another source of demand - that from private property owners - has also been filtered out.

In the past, one in 10 resale flat buyers also owns private property. This is not an insignificant number, given that such buyers tend to gravitate towards the more affluent segment of the HDB market. They prefer flats in popular estates like Bishan, Marine Parade, Central and Queenstown, where prices and rentals are among the highest on the island.

Without the support of cash-rich private property owners, the days of a buyer paying an astronomical sum over and above a flat's valuation are over.

The slackening demand should lead to a moderation in resale flat prices. They could even fall if buyers are spooked badly.

However, it's not all a one-way street on the demand side. If prices were to fall to a level affordable to a first-time buyer, new demand may form as people who were previously put off by the high prices start to shop around again.

This takes me back to my earlier point: Is it still worthwhile for a first-time buyer to buy a new flat?

For the majority, the answer is 'yes' as the incentives for first-time buyers remain attractive. Flat selection priority given to first-time buyers, a generous loan quantum of up to 90 per cent, flat prices significantly below the market level, fresh 99-year leases, and zero cash premium over valuation are some of the advantages of buying new flats.

But for a small group of first-timers, it may be better to consider buying resale instead of new flats, if prices fall to affordable levels.

The extension of the minimum occupation period and the broadening of its use to encompass private property purchases mean that settling for a less-than-ideal home could cramp future housing and investment options.

Take, for example, the life cycle of an upwardly mobile couple.

A well-trodden path for them would be to buy a subsidised new flat and then upgrade to a bigger resale flat, before moving on to owning a private home.

This three-step upgrading plan can be realised through a combination of rising home equity, increased savings and improved earning power as their careers progress.

Prior to March, it could have been achieved in six years - by living five years in the first flat and putting up another year in the second flat.

Now, they will have to wait at least 10 years if they take this path. Perhaps even longer, if the HDB market grows sluggishly as a result of too many ownership restrictions.

It gets more complicated if they want to buy an uncompleted property as they will not be able to execute a sell-and-buy deal back to back that will allow them to take an 80 per cent loan on their new home.

Buying a condo during its launch, for instance, will mean stumping up more cash upfront as banks can lend up to only 70 per cent.

Therefore, if you buy from the resale market, make sure you choose your flat wisely since it is a place that you will have to be content with for the long haul. That means keeping the flat beyond the minimum occupation period.

Bear in mind the high opportunity cost each time you move house due to the five-year lock-in rule.

So don't move house if you are currently an HDB home owner and have plans to invest in a private property in the near future.

As far as possible - I know this can be hard - avoid flats that may be picked for the Government's Selective En Bloc Redevelopment Scheme because the replacement flat that you get in exchange will lock you in on a fresh five-year term.

Also, you should not sell your HDB flat if you currently own a private property as well, unless you intend to say goodbye to public housing ownership for good.

Once you sell your HDB flat, you are allowed to buy another one only if you are prepared to give up private property ownership for five years - a pretty drastic outcome.

Under the circumstances, it's better to rent out your HDB flat than to sell it, even if you were to receive an enticing offer.

After all, rental return from an HDB flat is generally superior to what private residences can achieve.

Whether for your own stay or rental income, one should not give up owning an HDB flat as it keeps its value better than a leasehold private apartment or condo.

The bottom line is: Do not sell that prized HDB flat. Thanks to the new rules, it has become something that money can't buy, if you are a private property owner and intend to remain one.

Either that or hope for a reversal of this rule in the future.

dennis@sph.com.sg

ST : Er, what is a bridging loan?

Sep 5, 2010

FINANCIAL QUOTIENT

Er, what is a bridging loan?



Where do you see this?

In loan documents and property-related articles.

What does it mean?

A bridging loan is a short-term loan with a tenor ranging from a fortnight to a few years.

It provides interim financing for an individual or business till a longer-term financing can be secured.

It is often used for residential and commercial real estate purchases to help close a property deal.

Why is it important?

Bridging loans are typically more expensive than conventional financing to compensate for the additional risk of the loan. On the other hand, they are arranged quickly with relatively little documentation.

Let's assume you need help on the initial cash down payment on your property purchase. A bank can extend a bridging loan to you while you are in the process of selling your HDB flat or private property.

Banks typically allow you to borrow up to 15 per cent of the purchase price or fair market value (whichever is lower) at about 6.5 per cent per annum. The maximum tenor of the loan is typically six months.

During the tenor of the loan, you can choose to service the interest only. You repay the principal amount once you have received the cash proceeds from the sale of your existing property.

So you want to use the term. Just say...

'I plan to buy the condo with a combination of cash, my retirement funds and a $150,000 bridging loan.'

Lorna Tan

ST : Many backing out of planned home purchases

Sep 5, 2010

Many backing out of planned home purchases

By Jessica Cheam

Home buyers have already begun to retreat from planned purchases since new government rules to cool the property market kicked in last Monday.

Property agency bosses and agents told The Sunday Times the early effects of the new measures are emerging as buyers back out of option to purchase (OTP) agreements - especially for Housing Board (HDB) flats.

The new regulations include tighter lending rules for home owners with existing mortgages looking to buy another property. They can borrow up to only 70 per cent of the value, down from 80 per cent.

Those who buy an HDB resale flat on or after Aug 30 must also dispose of their private property - including any held overseas - within six months of the HDB purchase.

Those having second thoughts about home purchases either no longer qualify for an 80 per cent loan, or believe that prices are going to crash following the measures, said DTZ's head of South-east Asia research Chua Chor Hoon.

Then there are the private property owners who bought HDB flats and have no intention of selling their private homes.

ERA Asia Pacific associate director Eugene Lim estimates that 10 per cent to 20 per cent of buyers of HDB resale flats belong to this group.

On average, about 3,000 resale flats change hands each month. This means up to 600 sales are at risk of buyers backing out, depending on which stage of the sales process they were at when the rules were announced, said Mr Lim.

'The dust is still settling. Buyers are checking whether they can appeal and they will have to make some hard decisions,' he added.

Dennis Wee Group director Chris Koh said agents have already reported cases where buyers of HDB flats have walked away from deals, choosing to lose the $1,000 option fee instead of going ahead.

These are buyers who have been granted an OTP but have not exercised it. Those who have exercised their options are legally required to complete the purchase.

Malaysian permanent resident May Lee, 30, is one buyer caught in a bind. She had saved for 11 years to buy an HDB resale flat and last week had finally paid the option fee to buy a $260,000 three-room HDB flat in Aljunied.

But as she owns a private property in Malaysia - which she cannot sell because her parents are living there - she now has to give up the HDB flat and lose $1,000.

'The new rules are very unfair as PRs are drastically affected,' she said. 'I cannot ask my parents in Malaysia to move, and yet, my dream to have a permanent HDB home in Singapore for my family has been shattered.'

Ms Lee intends to appeal.

When contacted, the HDB told The Sunday Times that buyers who have already been granted or exercised their OTP but have yet to submit an application 'may approach HDB's Resale Office to see how best they could be assisted'.

The new rules apply to resale applications submitted on or after Aug 30, but many buyers, such as Ms Lee, would have already committed to a purchase although their resale application would not have reached HDB by Aug 30.

HDB said it is 'prepared to exercise flexibility... depending on the merits of each case'.

It added that by last Thursday, it had received about 4,000 inquiries and 100 appeals related to the policy changes.

The ramifications of the new rules have also hit the private property segment.

ERA agent Cindy Chew, 44, said she had a buyer of a private property who had paid the option fee of $14,600 for a unit but had cancelled the cheque when news of the measures broke last Monday.

'Buyers now think prices are going to come down, so they are changing their minds,' said Ms Chew.

Cancelling the cheque, however, is not allowed technically, and the case is now being referred to the lawyers, she said.

DTZ agent Leslie Chan said two of the last 10 buyers who bought HDB flats through him recently have backed out of their deals.

'Buyers think the $1,000 fee is cheap, in the light of prices falling potentially,' he said. 'But I expect that in the next few months, sales volumes will actually increase because sellers will become more realistic and cash-over-valuation amounts will also drop. Thus, there will be a matching of expectations between buyers and sellers.'

ST : Few bright spots in Bras Basah-Bugis area

Sep 5, 2010

Few bright spots in Bras Basah-Bugis area

The Bras Basah-Bugis district seems to have stayed out of the limelight so far, compared with areas like Marina Bay and Orchard Road.

URA's 2006 lighting masterplan had conceptualised the area as brimming with youthful energy for the arts, culture, learning and entertainment.

Schools there, like the Lasalle College of the Arts and the Nanyang Academy of Fine Arts (Nafa), provide the critical mass.

The planners had marked out several gateways along Selegie Road, Victoria Street and Bencoolen Street for illumination, and suggested putting up signage and 'luminous street elements'.

Last week, The Sunday Times did not find any such prominent gateway. The facade of a number of buildings marked out in the masterplan appeared to be lit not by design but by the yellowish glare of street lamps.

These included: Elias Building, Stansfield College and the Tamil Methodist Church along Short Street; and Nafa's campus along Bencoolen Street.

But some bright lights did beckon, like the Iluma shopping mall at Bugis Junction and the Wilkie Edge offices and residences along Selegie Road. Both facades lit up with moving and changing colours.

Also aglow is the Maghain Aboth Synagogue along Waterloo Street, the earliest Jewish synagogue here and the oldest in Southeast Asia.

The URA, meanwhile, issued a circular to professional institutes on Aug 2, marking out buildings under its masterplan that are required to provide night lighting for their facades, crowns and spires, based on its guidelines.

It said classic-style buildings such as national monuments and conservation buildings should use lights of a warmer colour temperature; contemporary-style buildings should go for cooler colours.

Building owners must also turn on the night lights on Fridays, Saturdays and Sundays, from 7pm to 11pm, as well as for national events and district-wide festivals.



The facade of Wilkie Edge all lit up with bright LED lights. -- PHOTO: PATRICK BINGHAM HALL

ST : 'Rainbow connection' at Singapore River

Sep 5, 2010

'Rainbow connection' at Singapore River

The nightly kaleidoscope of lights at the Singapore River is being joined by snapshot-pretty lanterns.

These lanterns, depicting animal characters and Chinese legends, will illuminate the river for this month's Mid-Autumn Festival.

The temporary festive decorations complement the permanent upgrade over the last two years to light up the riverside, a popular spot for diners and camera-toting tourists.

A 2006 masterplan had envisaged night lighting to infuse a warm and inviting ambience for the area.

There was indeed a rainbow connection of colours, when The Sunday Times dropped by last week.

Various bridges across the river were lit up. Hues of soft blue adorned Coleman Bridge, next to Clarke Quay. Beams of light were also cast on the waters below, while riverboats carrying tourists plied beneath the bridge.

Tiny rainbow-coloured lights lined the length of Elgin Bridge, on the way to Boat Quay.

Stops for the boats were also lit - a luminous purple and blue. Even an underpass connecting Clarke Quay to Boat Quay had lights that changed from purple to blue.

Ms Ong Swee Hong, a lecturer of environment design at Temasek Polytechnic, liked the night lighting in the Boat Quay and Clarke Quay areas. Saying it complemented the activities there well, she added that a fillip has been provided by new snazzy features, such as light emitting diodes.

Mr Romeo Millares Jr, 29, a staff member operating the Hippo river tour, remembers the bridges being left in darkness more than two years ago.

Said the Filipino, who has been in Singapore for five years: 'The river now comes alive because of the lights. Tourists are now raring to take pictures here.'



Lanterns will complement the lights along the river during this month's Mid-Autumn Festival. -- ST FILE PHOTO

ST : Orchard Road: Funky or distracting?

Sep 5, 2010

Orchard Road: Funky or distracting?

The lights are so much brighter there... so go downtown...

So goes a hit song of the Sixties.

Today, the downtown Orchard shopping belt, with malls like Ion Orchard and Orchard Central, are aglow come night-time.

These two malls especially stand out - with their towering facades of moving, coloured displays of flashy lights, images and digital art.

They are in sync with the Urban Redevelopment Authority's lighting masterplan that calls for exciting shopfronts and vibrant facades.

Its spokesman told The Sunday Times the plan for Orchard Road 'focuses on creating a revitalising and delightful shoppers' experience'.

But glitzy facades will have their detractors. Architect Aamer Taher, 48, is one. The Singapore Institute of Architects council member felt both malls have overdone the lighting in their bid to attract shoppers.

'It's all right if we are in Disneyland but a city should be soothing and pleasant. It should be more a glow and not a glare.'

Both malls have defended their facades, saying they add vibrancy to the streets and create ambience for shoppers.

For instance, the LED wall on Ion Orchard's curvy facade of glass and metal broadcast the National Day Parade and the Youth Olympic Games opening ceremony. Free popular movies are screened on the last Saturday of every month.

'During Christmas last year, snowflakes patterns lit up the facade, while National Day saw the entire exterior enveloped in fireworks and the national red and white colours,' a spokesman added.

Taking a contrary view to Mr Aamer's is Singapore Institute of Architects president Ashvinkumar Kantilal, 49, who likes the facades.

'They are funky and add character,' he said.

The URA's masterplan also provided for the lighting up of the streets and trees to create a sequential experience, its spokesman said.

New street lights were part of a $40 million makeover of Orchard Road completed early last year.



Love it or hate it, Orchard Central's glitzy facade stands out. -- ST FILE PHOTO

ST : City lights, a wondrous sight

Sep 5, 2010

City lights, a wondrous sight

The blueprint for the city's night lighting shapes up. Goh Chin Lian finds out how this was done

Light up, Singapore, went the masterplan's message.

And it has. The city's skyline has never looked so dazzling at night.

On special occasions like last month's Youth Olympic Games' opening and closing ceremonies, and the National Day Parade, shimmery beams shot the light fantastic from the top of buildings across Marina Bay and into the clouds.

This month's Formula One night race will also see buildings brightly lit for TV viewers here and around the world.

New buildings and structures designed to look good at night have also added a permanent sparkle to the bayfront skyline and nearby Central Business District (CBD).

They include the Marina Bay Sands integrated resort, Marina Bay Financial Centre and The Helix bridge, with programmable lights accentuating its double-helix steel structure. Also shining is the row of buildings forming the Fullerton Heritage dining and hotel belt, such as the Customs House and Clifford Pier.

The four-year-old night lighting masterplan is shaping up, an Urban Redevelopment Authority (URA) spokesman said.

She told The Sunday Times: 'The masterplan has succeeded in enhancing the night-time image of the city and in guiding the lighting of buildings and public spaces to be tasteful and elegant.'

Tastefulness and elegance are the agency's two guiding posts in approving lighting plans for the area, in contrast to some cities that may be more liberal in lighting up their buildings, she said.

Good lighting practices in the URA's books boil down to not flooding a building with light, but using the beams and colours to create interest or emphasise architectural features while playing with light and shadow.

And while it cautions discretion in using coloured lights which tend to lose their wow factor over time, it suggests cool colours (like white and blue) for high-rise office buildings, and warmer hues (like red and yellow) for low-rise structures.

It has approved 40 night lighting proposals so far, with a few more being assessed.

Architects interviewed feel the masterplan has been realised in the Marina Bay area.

Ms Ong Swee Hong, a lecturer of environment design at Temasek Polytechnic, said: 'We are now seeing a skyline that's very well-defined by lights.'

Other areas covered by the 2006 masterplan are the Singapore River, Orchard Road and Bugis-Bras Basah.

Ms Ong noted Singapore's increasing regard for lighting not only for safety and navigation, but also aesthetics. A turning point was the 1995 lighting plan for historic and institutional buildings in the civic district. Most of them, 105 in all, have been lit, the URA said.

They include the Fullerton Hotel, and the former City Hall and Supreme Court.

Singapore Institute of Architects president Ashvinkumar Kantilal lauded the coordinated approach taken early on to light up buildings fronting Marina Bay. Otherwise, a person hoping to appreciate the skyline would be bombarded with glare and blinking lights.

'When you are looking at a water-edge promenade from a distance, your eyes get distracted if the lights flicker in the background,' he said. 'It's difficult for the human eye to adapt to different levels and colours of lighting all at the same time.'

The amount of energy to light up a city is an environmental concern, but architect Chan Ee Mun, 35, thinks it is a matter of finding a balance.

'It's necessary to identify our city as we progress and to beautify the structures around us. It does bring a certain amount of excitement and joy,' said Mr Chan, a senior associate at design and architecture firm Woha.

The URA guides building owners and developers to use energy-efficient lights like compact metal halide lamps, LEDsand electrodeless lamps.

Architect Aamer Taher, a Singapore Institute of Architects council member, thinks that popular districts like Little India and Geylang could be better lit too. 'Seedy districts could take on a new life. Maybe Geylang should have more red lights,' he quipped.

Parks can gain from better lighting design too so they can be used at night, suggested Ms Ong. 'Our parks and public spaces are often badly illuminated, or perhaps, visually monotonous,' she said.

The National Parks Board's (NParks) lighting considerations include the theme of the park, maintenance costs and sensitivity to wildlife.

It said it has used creative lighting in Bedok Reservoir Park, one-north Park, as well as the Henderson Waves and Alexandra Arch bridges at the Southern Ridges.

To raise awareness of lighting design, Ms Ong will hold a lighting workshop next month at the Esplanade Park as part of Archifest, an annual architecture festival organised by the Singapore Institute of Architects.

Official financial support also fuelled the change that the masterplan provided for the skyline: Building owners in the CBD and Marina Bay areas received incentives to light up their buildings from the rooftop to the facade and sky gardens.

The incentives were additional gross floor area and cash grants capped at $500,000.

They have been given to 14 developments so far, including 78 Shenton Way and Maybank Singapore, the spokesman said.

Maybank spent about $3 million on LED lights that run on the outer edges of its 32-storey Battery Road building.

Out of several developments whose plans have been approved, the bank is the only one that has completed installing permanent lights that can be programmed for festive celebrations, the URA said.

While the lights for special occasions have wowed spectators, Mr Ashvinkumar warned against overkill, especially cannon lights that are so powerful they can be seen as far as Toa Payoh. 'It should not be done all year around, or you'd feel Batman is going to appear any moment,' he said.

chinlian@sph.com.sg

ST Forum : Have an exit clause in property transactions

Sep 4, 2010

Have an exit clause in property transactions

THE Government has frequently introduced policies to cool the property market, which have implications on affordability.

Given this, it is worthwhile to introduce into legislation an exit clause in Option to Purchase agreements, so that sellers and buyers can avoid the costly legal process when one side has to back out as a result of a change in government policy.

Patrick Sio

ST Forum : Don't penalise genuine upgraders

Sep 4, 2010

Don't penalise genuine upgraders

I REFER to Ms Tan Tien Li's letter on Thursday ("Dream home, genuine upgrader's worry").

I applaud the Government for giving the public another option to purchase Design, Build and Sell Scheme flats from the HDB (besides the executive condominiums), but I am concerned about the latest property policies.

I, too, have the genuine upgrader's dream. I want to move to an executive condominium with facilities for the children. However, with the recent announcement of policies to curb speculation, I will be penalised. Given the 70 per cent loan-to-value limit, I must sell off my current executive maisonette in order to enjoy the 80 per cent loan rate.

While the aim of curbing property speculation is good and welcomed, we have to also consider the interests of those who are sincerely looking to improve their families' living standards.

I urge the Government to review these policies to differentiate between speculators and genuine upgraders.

Teo Mui Mui (Ms)

ST Forum : Nothing wrong in having it both ways

Sep 4, 2010

PROPERTY

Nothing wrong in having it both ways

ASSISTANT money editor Fiona Chan analysed the Government's tough measures to cool the red-hot property market well in her commentary on Tuesday (''Targeted' cooling has wider implications').

Her assessment suggests that almost every home owner - upgraders, downgraders or simply people who want to make an HDB-to-HDB flat switch - is affected bar two categories: the wealthy and owners who own only one home and stay in it for the rest of their lives.

Most of us are not in the wealthy club and many of us move home at least once, for several reasons.

The multiple restrictions on home ownership affect most Singaporeans. Most of us aspire to own a dream home and we work for it.

A dream home could be a luxurious condominium or a modest HDB flat located near parents or children's schools.

The new property measures, as Ms Chan pointed out, target those who already own a home and are buying another for investment or speculative purposes.

Is it fair to inconvenience the majority of us who are not speculative?

What if we have plans to use property investment for future retirement or future educational funds for our children?

Should such plans be discouraged?

With the influx of foreigners increasing the pressure on housing, demand may well negate the economic gain ordinary Singaporeans should enjoy because of the new restrictions.

Why shouldn't Singaporeans be allowed to use property investment as a vehicle for growing wealth for future needs while living a modest life as an HDB dweller?

Many of us who are not wayward speculators will not benefit from the many restrictions on home ownership.

Joan Teo (Ms)

ST Forum : Rule applies to local and overseas properties

Sep 4, 2010

Rule applies to local and overseas properties

WE THANK Mr James Koh for his letter on Wednesday ('Unfair'). Mr Koh commented that it is unfair for permanent residents to be able to own private properties overseas during the minimum occupation period for HDB flats while Singaporeans cannot own local private properties during the minimum period. The measure to disallow the concurrent ownership of private properties and non-subsidised HDB flats during the minimum occupation period introduced on Monday applies to local and overseas private properties.


Lily Wong Jee Choo (Mrs)
Deputy Director (policy and property

ST : New rules 'unlikely to hit luxury homes'

Sep 4, 2010

New rules 'unlikely to hit luxury homes'

Prices of high-end projects have not peaked and are still reasonable, says developer

By Harsha Jethnani

THE new rules aimed at cooling the property market are not likely to affect high-end homes, according to a local developer.

Wing Tai Holdings deputy chairman Edmund Cheng said yesterday: 'Looking at today's prices, the high-end market and prices of very luxurious projects have not reached the last peak yet.'

He also believes there will be buyers, both locally and especially from overseas, for pricey properties.

'I think that we are still very reasonable,' he said, when comparing local prices with those in Hong Kong or Beijing, especially considering the economic and living standards in Singapore.

Mr Cheng said the new measures were 'timely', as the price rises of mass-market homes were not sustainable.

But significant price falls may not occur as low interest rates pose fewer difficulties for financing, he added.

Mr Cheng said that, unlike in the past, price bids from developers for future tenders could adjust downwards. So far, developers have been bidding at very high prices that cannot allow for margins of error.

He was speaking at a briefing to announce the upcoming launch of remaining units at Wing Tai's resort-style Belle Vue Residences in Oxley Walk. A soft launch of the development had taken place over a year ago.

'There is no better timing than now,' he said of the upcoming launch.

A total of 109 units have been sold so far at the 167-unit development at prices between $2,000 per sq ft (psf) and $2,700 psf. The remaining units will be set at $2,300 psf to $2,800 psf.

Mr Cheng told the briefing that foreigners, mainly Chinese, Malaysians and Indonesians, had taken up about 52 per cent of the units sold.

Sizes of a three-bedroom unit start from 1,600 sq ft, and those of four-bedroom units are from 2,000 sq ft.

The development is designed by Japanese architect Toyo Ito and will be ready for occupation in the coming weeks, Wing Tai said.

harshamj@sph.com.sg

ST : Errant flat buyers face stiff penalties

Sep 4, 2010

Errant flat buyers face stiff penalties

Lying about ownership of overseas properties could land one in jail

By Esther Teo

PEOPLE who buy resale HDB flats face stiff penalties, including jail time, if they make false declarations about other property they own overseas.

The Housing Board (HDB) said yesterday that dishonest owners could be fined up to $5,000, jailed for up to six months or have their flats compulsorily acquired.

The penalties are part of sweeping new ownership rules announced on Monday.

Anyone who buys an HDB resale flat on or after Aug 30 must sell any additional private property - owned here or offshore - within six months.

Owners of non-subsidised HDB flats are affected as well. If they have not met the minimum occupation period (MOP) of five years, they will not be allowed to buy a private property here or overseas.

Applicants for an HDB resale flat who own or have an interest in any other property - here or overseas - must declare that interest in their application form.

If the property is overseas, applicants must show that it has been sold within six months of buying the HDB resale flat.

Even before the new rules, subsidised flat buyers had to declare that they did not own homes here or abroad. They were also barred from owning an HDB flat and private property - local or overseas - within the MOP as well.

'To ensure parity in the treatment of all HDB flat buyers, we subject buyers of non-subsidised flats to the same rule with effect from Aug 30 this year,' the HDB said.

'This helps to reinforce the long-term owner-occupation objective of HDB flats. All flat owners are allowed to buy a private property after their MOP.'

Breaking the rules could be costly. Making a false declaration could bring fines of up to $5,000 or up to six months in jail.

If the false declaration is discovered before the sale closes, the HDB can cancel the application and the sellers can seek redress from the buyer.

If the false declaration is discovered after the sale has been completed, the HDB can compulsorily acquire the flat.

These penalties are similar to existing ones homeowners face if they are found to own both a private property and a subsidised flat - such as a build-to-order home - concurrently during their MOP.

The HDB said it will be flexible on a case-by-case basis.

Experts say that while the penalties will be a deterrent, tracking homes bought overseas during the MOP would be difficult.

'The world out there is very different from Singapore and the question is how to enforce these rules overseas,' said HSR chief executive Patrick Liew.

He added that the rules also penalised Singaporeans from capitalising on good investment opportunities overseas.

A potential home buyer might have to place his $50,000 savings in a bank even though he might be able to invest in real estate in countries like Malaysia or the United States, he said.

esthert@sph.com.sg

ST : Police raids mop up sleaze in Duxton area

Sep 4, 2010

Police raids mop up sleaze in Duxton area

Eclectic mix of tenants now hope area will regain its vibrancy

By Teh Joo Lin & Mavis Toh

THE sleaze that oozed out of the pubs, lounges and karaoke clubs in the Duxton area has just about been cleaned up.

Those public entertainment outlets, which began congregating there about five years ago, have been sent packing, following a slew of police raids.

At the peak, around 2008, about 110 such establishments filled the precinct between Neil and Maxwell roads.

As at July, only about 60 were left.

In their place, an eclectic mix of tenants have moved in - restaurants, cafes and dance studios among them.

When contacted, police spokesman Lau Kian Keong said about 50 public entertainment licences, required for the nightspots to operate, were revoked after 'breaches in licensing conditions'.

The police did not specify the nature of those breaches, but nightspot operators are required to keep the nocturnal fun clean on their premises.

It is apparent many did not.

On a typical evening three years ago, scores of Filipinas would be milling about. Valets enjoyed brisk business. Pushing through the doors of any pub there, customers - overwhelmingly male - would be ambushed by bevies of women. Behind those doors, women were summarily exposing their breasts. At least seven Filipinas were caught doing so between 2008 and last year and were fined.

Booze-fuelled fights and din were common, and neither the area's residents nor Member of Parliament Christopher de Souza liked what they saw.

He was moved to report to Parliament that an evening drive along Duxton Road and Duxton Hill made it clear that prostitutes were operating 'well beyond the artificial borders of Geylang'.

Now, 21/2 years on, he is glad the place has been cleaned up, given that it sits next to the Central Business District, and that thousands of residents have moved into the nearby 50-storey public housing development, Pinnacle@Duxton.

With the unsavoury bits gone, he said he hoped to see the area, with its two- and three-storey conserved shophouses, resume its vibrancy.

This may take time.

When The Straits Times visited the place this week, 'For Rent/Sale' banners hung from at least six shopfronts.

Mr Ricky Chua, the president of the Tanjong Pagar Business Association and owner of a pub in Duxton, said some rogue nightspot operators had allowed vice in their premises.

But with there having been as many as three police raids a week, 'Duxton is now peaceful and there hasn't been a fight for an entire year', he said.

But the bad image seems to have stuck. The takings of pubs which are still there have plunged by up to 70 per cent.

Another pub owner who has been in Duxton for a decade said the frequent raids have turned customers off: 'We're struggling to get by. Every day, the place is quiet. The only busy day is Friday.'

Rentals have dipped. A 2,100 sq ft unit which used to cost $21,000 to rent in 2008, when the influx of girly bars drove rentals up, can now be leased for $8,000 a month, said property agents.

Even with lower rentals, some businesses are wary about moving in and being housed between bars. Retail tenants are worried about low human traffic.

But some businesses do want in.

They include advertising agencies, fine-dining restaurants, cafes and a traditional Chinese medicine (TCM) outlet.

TCM physician Zhang Mao Ji, who opened Long Zhong, a Chinese medicine clinic, a year ago in what used to be a bar, said Duxton's location near Chinatown and Tanjong Pagar drew him there.

His manager Sharon Tham, 47, said: 'The place is decent now and you don't see raids at all. That's why we dare to use a glass door for the shopfront. Previously, we would have been warned that a glass door would be smashed in a brawl.'

Ms Celina Tan, owner of Celina's GastroBar, which moved in 11 months ago, is another tenant who is upbeat about the future of the area post clean-up: 'The area is quaint. There are fewer bars now and an interesting mix of businesses.'

She said the working crowd in Tanjong Pagar and Shenton Way now made up Duxton's clientele base.

As the Duxton landscape changes, the pubs which were there before the sleazy bars came in hope they will not get squeezed out of business.

Mr Chua said: 'I can understand the concern of residents five years ago because too much mayhem was going on. Since then, it has been cleaned up.'

He said the level of sleaze is now negligible and the last few errant pubs are on the verge of closure, adding: 'We hope the authorities can give us the space to breathe and do business. It's not fair for the rest that, because of one or two bad apples, everyone suffers the consequences. We're still living on a knife's edge.'

joolin@sph.com.sg

mavistoh@sph.com.sg



The vice may be gone, but the bad image seems to be stuck. The takings of pubs in the Duxton area which are still there have plunged by up to 70 per cent. -- ST PHOTO: NEO XIAOBIN

ST : HDB flat dilemma for PRs and Singaporeans with property abroad

Sep 3, 2010

HDB flat dilemma for PRs and Singaporeans with property abroad

By Esther Teo & Jessica Cheam



PERMANENT resident (PR) Michael Lim is keen to upgrade to a larger HDB flat but the new rules on dual property ownership have put him in a pickle.

Mr Lim's problem is that he also owns a condominium in Kuala Lumpur that he inherited when his father died. Previously, this would not have hindered his purchase of a resale flat. But now it will.

The HDB announced on Monday that people who buy an HDB resale flat on or after Aug 30 must dispose of their private property - including any held overseas - within six months of the HDB purchase.

The intention is to ensure that HDB flats go to owner occupiers first and are not viewed as an investment. This means Mr Lim, who has been living in Singapore for 10 years, must sell the condo in Kuala Lumpur if he wants to upgrade from a four-room to a five-room HDB flat to fit his family of four.

But his mother-in-law is living in the condo and he has no plans to sell it.

Mr Lim, 33, hopes the HDB will make an exception in his case, given that he did not buy the condo as an investment.

'Malaysia is also our home and it's weird if we go back and do not have a place to stay... It's not fair to make me choose when I have ties to both countries.'

Ms Bhavani Prakash, 40, a PR from India who has a home in Chennai, said the new rules will also deter her from buying an HDB flat.

'The measures are quite draconian. Whether someone owns a property overseas really does not have an impact on the Singapore market... There are other ways to counter speculation,' she said.

There are many other PRs who could find themselves in a similar dilemma.

Experts say a significant number of PRs still have homes in their native countries since overseas properties are often cheaper than real estate here and are not as great a financial burden. A number of them may also have families back home living in those properties.

Ms Prakash's Chennai condo cost her between $200,000 and $300,000 - a quarter of the cost of a suburban condo in Singapore.

ECG Property chief executive Eric Cheng estimates that 40 per cent of PRs - especially those from Malaysia - own homes abroad, while PropNex chief executive Mohamed Ismail puts the figure at up to 30 per cent.

ERA Asia Pacific associate director Eugene Lim believes that more than half of the PRs arriving over the past few years would still have properties back home.

The curbs could also catch out Singaporean retirees with property offshore that they had bought for rental income or retirement. With strong family ties and business connections here, they might also be looking at buying HDB flats for their frequent visits here.

Now, if they want to buy a resale HDB flat, they will have to dispose their overseas real estate or risk penalties by trying to dodge the new rules.

Despite the tougher measures aimed at cooling the property market, a 99-year luxury project, Dorsett Residences, above Outram MRT Station was sold out in one day when it was launched at an average price of $1,800 per sq ft yesterday. But The Straits Times understands that 40 per cent of the 68-unit project was bought by a single buyer.

ST : Genuine upgrader's worry

Sep 2, 2010

DREAM HOME

Genuine upgrader's worry

THE latest property policies reported on Tuesday ('Govt acts to curb speculators') will see the loan-to-value (LTV) limit adjusted from 80 per cent to 70 per cent for home buyers with existing housing loans.

The report quotes the Government as stating that the new policies are aimed at discouraging speculation in the property market, and genuine home buyers should not be affected.

I am a genuine home buyer and a potential HDB upgrader. I am a Singaporean whose dream is to work hard and improve my family's living standards.

I dream of upgrading to an executive condominium or private property one day, and I have saved enough for the 20 per cent down payment.

I am willing to sell my HDB flat and live in a new home.

So I counted the days to the launch of the new executive condominiums, which suit the sandwich class I belong to.

I almost realised my dream - until the latest changes to curb speculators.

The new policies do not help home owners like me who have an existing HDB housing loan to service.

For one thing, we must fork out 30 per cent in down payment to qualify for the 70 per cent LTV rate.

We are not speculators but we are being penalised in the Government's bid to stabilise the booming property market.

I was advised to sell my HDB flat first if I wanted to enjoy an 80 per cent loan rate. But with a one-year-old baby, where can I stay while the executive condominium is being built?

Besides, can selling our home first assure us of a unit at the executive condominium?

Genuine home upgraders like my family are being penalised and inconvenienced. I hope the authorities will consider home buyers in our position.

Tan Tien Li (Ms)

ST : More teeth in regulating real estate deals

Sep 2, 2010

More teeth in regulating real estate deals

I APPLAUD the appointment of Mr Soh Kee Hean as the deputy executive director of the new Council for Estate Agencies (CEA) ('Top cop to police real estate agencies'; Tuesday).

As the top man at the Corrupt Practices Investigation Bureau, Mr Soh has experience in tackling corruption-related offences and will help establish a no-nonsense approach in regulating the real estate industry.

Many consumer complaints about the real estate industry arise out of the absence of fair and widely accepted written agreements. It is easy for real estate agents to promise the sky and lead consumers to make decisions based on their words.

I recently complained about the conduct of an agent from an accredited real estate company. After hearing my complaint over the phone, the company's senior director was reluctant to initiate a meeting for the parties involved. He said it was a case of my word against his agent's, and that he could do little to help.

With the formation of the CEA and Mr Soh's appointment, I am hopeful again that many such 'verbal' cases can be resolved. Unlike most crimes that present physical evidence, prosecuting offenders in corruption-related offences often involve only verbal testimonials and other collaborating facts. I hope the landscape in which real estate agents ply their trade can be reshaped with the authorities coming in hard and fast.

Henry Ong

ST : Owners of foreign homes not exempt

Sep 2, 2010

Owners of foreign homes not exempt

They must sell overseas home within six months of buying HDB flat

By Esther Teo

PEOPLE who own a home overseas will still have to comply with the tough new rules on property ownership if they want to buy an HDB resale flat.

The clarification yesterday came amid uncertainty over who might or might not be exempt from the rules announced on Monday.

The new regulations state that if you buy an HDB resale flat you must dispose of any additional private property within six months of the HDB purchase.

That rule also applies to people who own homes offshore, according to the HDB yesterday. This means an overseas property must be sold within six months of buying an HDB resale flat.

And an owner of a non-subsidised HDB flat who has yet to meet his minimum occupation period (MOP) of five years will also not be allowed to buy a private property locally or abroad.

How new financing rules affect owners of homes offshore was also made clearer yesterday.

Under the revised regulations, a buyer with a mortgage on a local property must stump up a downpayment of 30 per cent when buying an additional property. This is up from 20 per cent previously.

And at least 10 per cent of this deposit must be in cash - up from 5 per cent before - with the rest coming from his Central Provident Fund (CPF) accounts.

But the Monetary Authority of Singapore (MAS) said that a buyer with a home loan for an overseas property will not be subject to these financing rules if buying an additional property here.

However, the MAS said it 'expect(s) financial institutions to take into account the borrower's outstanding loans when making their credit assessment'.

Industry players say that the new rules effectively delineate the HDB resale market as 'public housing', reserved for those whose HDB flat will be their only property, whether here or abroad.

They will also put pressure on permanent residents (PRs) who might own a home in their native country to choose where they want to be based permanently.

PRs make up about one in five resale flat buyers, and some Singaporeans have blamed the influx of PRs in recent years for the soaring prices of these homes.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said the new rules were similar to an income ceiling. 'Basically, it seems to be saying: If you can afford to own a private property then you don't deserve to own an HDB flat,' he said.

While the new rules are aimed at keeping HDB flats for owner occupiers and not for investment purposes, Mr Tan felt that exceptions should be made for genuine cases such as retirees looking to monetise their overseas assets through renting out an offshore property.

But enforcement and implementing penalties for those who flout the rules would be a challenge, say experts.

Mr Steven Tan, executive director of residential at OrangeTee agency, said enforcement would be difficult when buyers pay for overseas property all in cash.

He added that the new rules could be an extension of an existing one that prevents owners of build-to-order flats and executive condominiums from buying private property during the five-year MOP.

Ms Flora Lam, 32, a PR from Malaysia, said the rules had placed her in a tough spot as she would now have to sell her Malaysian home if she wanted to buy a resale flat. 'I feel like I have to decide now where I want to be based and it's a tough call to make. Maybe I'll continue renting before I make up my mind,' she said.

esthert@sph.com.sg

ST : Bid for prime site exceeds expectations

Sep 2, 2010

Bid for prime site exceeds expectations

A PRIME site in Bedok New Town slated for a retail and residential development has drawn a bumper bid from two units of South-east Asia's biggest developer.

A 50:50 joint venture between CapitaLand Residential Singapore and CapitaMalls Asia lodged an offer of $788.89 million for the land, or nearly $841 per sq ft per plot ratio (psf ppr).

Its offer was well above analyst tips and 21 per cent above the second-highest bid of $650.89 million from a joint venture between Singapore Press Holdings' Moon Holdings and United Engineers' UED Capital Venture.

Analysts had expected bids of $500 to $700 psf ppr. The 24,902 sq m site, which attracted nine bids, is next to an MRT station and will be integrated with a new bus interchange.

A CapitaLand spokesman said its development will comprise about 500 apartments above a shopping mall and would have direct access to the Bedok MRT station and the upcoming bus interchange.

Property experts noted that the site is rare and that there is a lack of retail mall space in the mature town of Bedok.

CBRE Research's executive director, Mr Li Hiaw Ho, said the site allows for a mall with a net lettable area of up to 250,000 sq ft.

Average retail rents for a suburban mall on this land could be $16 to $18 psf a month on a stabilised basis while condo units could possibly sell for above $1,000 psf, he said.

JOYCE TEO

ST : Newton condo up for sale again - at lower price

Sep 2, 2010

Newton condo up for sale again - at lower price

Owners seeking $48m, down from 2008 level; another site off Balestier sold below asking price

By Joyce Teo

THE collective sale scene is seeing more launches but prices are certainly not going through the roof, as the Melrose Court and Maison Royale cases show.

The Melrose Court sale was signed and sealed last week, but at a level below the asking price, while the Maison Royale condo is again up for offers after coming up short in 2008.

Owners at freehold Maison Royale in Newton are now asking for $48 million for the 20-unit estate - down from the asking price of $50 million two years ago.

The 2008 tender closed without attracting a bid above the reserve price.

The new asking price works out to about $1,220 per sq ft per plot ratio (psf ppr). Owners could reap about $2.2 million to $2.59 million each, depending on unit sizes.

Marketing agent Urban Front Real Estate said the owners have obtained 80 per cent approval. It said the signature-collecting process started last month and the slightly lower asking price is just a marketing strategy to entice developers.

The site can be redeveloped into a project with 40 units averaging 988 sq ft, said Urban Front.

'This is a small plot and it is freehold, so the risk for developers is small,' said associate director Victor Tng. He added that interest rates are low and developers are running low on their land banks.

'The recent measures would have a short-term impact on the market and may not affect developers' interest in good collective sale sites,' Mr Tng said.

Meanwhile, freehold Melrose Court was offloaded last week for $44 million - below the $48 million asking price but about 5 per cent to 10 per cent above the reserve, said Colliers International, which brokered the sale.

The land price for the site off Balestier Road works out to about $665 psf ppr, including an approximate development charge of $277,235 based on a gross plot ratio of 2.8.

The buyer is Melrose Land, formed by a group of investors. The sale is subject to the approval of the Strata Titles Board.

If it goes through, each owner will reap gross proceeds from $1.129 million to $2.261 million, depending on unit sizes, said Colliers International.

Its executive director of investment sales, Mr Ho Eng Joo, said the cooling measures announced on Monday will not affect price expectations for en bloc deals as owners cannot revise their reserve price during the sale process, but they could affect the sentiment of some potential buyers.

Nevertheless, 'buying land is different from buying a completed product because it takes several months to a year or more for a development site to be launched for sale', said Mr Ho. 'By then, market conditions might have changed.'

joyceteo@sph.com.sg



Marketing agent Urban Front Real Estate says the freehold Maison Royale site in Newton can be redeveloped into a project with 40 units averaging 988 sq ft. -- PHOTO: URBAN FRONT REAL ESTATE

ST : Home buyers must prove sale to get higher loan

Sep 2, 2010

Home buyers must prove sale to get higher loan

By Jessica Cheam

HOME owners wanting to move and hoping for an 80 per cent loan on a new property will now have to produce evidence that they have sold their existing home.

The proof must come in the form of a signed sale and purchase agreement and a certificate showing that the buyer of their current property has already paid the stamp duty for the deal, said the Monetary Authority of Singapore (MAS) yesterday.

The Government unveiled on Monday a range of measures designed to dampen property speculation, including tighter lending rules for home owners with existing mortgages looking to buy another property.

They will now have to fund a 30 per cent downpayment for the new property, up from 20 per cent previously, and can borrow up to only 70 per cent of the value, down from 80 per cent.

The moves prompted questions from many home owners unsure whether they would qualify for 80 per cent financing if they intended to sell their existing property - or were in the process of doing so - and move into a new one.

The MAS clarified yesterday that borrowers who have sold their existing homes, but are still in the process of completing the sale, will still qualify for an 80 per cent loan provided they have supporting evidence of the sale.

For private property, this includes a signed sale and purchase agreement and a certificate from the Inland Revenue Authority of Singapore (Iras) showing that stamp duty has been paid by the buyer of the existing home.

For HDB flats, the MAS requires an approval letter from the Housing Board to the seller within two weeks from the date of the first sales appointment.

The home owner should also provide additional information, such as a letter from the bank providing the current housing loan, stating that the borrower will discharge his outstanding loan by the time the property sale is completed.

Industry analysts predicted yesterday that the stricter lending rules will mean lengthier negotiations between buyers and sellers.

PropNex chief executive Mohamed Ismail said that while it usually takes about 12 weeks for a sale to be completed, sellers may now negotiate for 14 to 16 weeks.

'This gives them time to look for a new home, get a loan and move out of their property,' he said.

HDB home owners are required to move out of their existing home upon completion of its sale, usually eight weeks after the first sales appointment.

But sellers may negotiate mutual agreements with buyers that allow them to stay beyond the sale completion date as a condition for selling the flat, said a 40-year-old property agent who declined to be named.

Banks that The Straits Times spoke to yesterday said they had been sent a new set of home loan rules by the MAS.

A circular issued on Tuesday by the MAS stipulated that banks had to 'conduct comprehensive checks' on borrowers with credit bureaus and the HDB.

OCBC Bank head of consumer secured lending Phang Lah Hwa confirmed that the bank could offer 80 per cent financing 'to genuine home buyers who have sold their existing homes... provided these customers can show evidence of the sale of the existing property at the point of loan application'.

Home owner Ming Fang Goh, 30, who is looking for an investment property, has mixed feelings about the new rules, but thinks they could be a 'blessing in disguise'.

'If the cooling measures help to bring prices down by 10 per cent, then even with a 30 per cent downpayment, some investment homes could become more affordable.'


--------------------------------------------------------------------------------

Supporting documents

WHAT home owners need to have to qualify for an 80per cent loan if they already have an outstanding loan:

· For private property, the supporting documents must include the signed sale and purchase agreement indicating the borrower has sold his existing property, and a certificate from the Inland Revenue Authority of Singapore showing stamp duty has been paid by the person who bought the existing property from the borrower.



· For HDB flats, the supporting documents must include the approval letter from the HDB to the seller within two weeks from the date of the First Appointment.

The borrower should also provide supplementary information, such as a document from the financial institution that provided the outstanding housing loan, stating the outstanding loan will be discharged on that existing property by the completion of the property sale.

Source: MAS

ST Forum : Don't deny investors a choice

Sep 1, 2010

Don't deny investors a choice

THE slew of measures announced to curb uncontrolled escalation of property prices are generally well thought-through and welcomed. However, the new requirement for existing private property owners to dispose of their private property within six months of purchasing an HDB flat in the resale market seems unreasonable.

While the Government should play a role in ensuring price stability in the property market, it should not introduce measures that deny individual investors and occupiers a fundamental choice.

A blanket "ban" on private property owners retaining their private property after buying a resale flat from the open market, without enjoying any form of government subsidy, seems unjustified. This is especially so if the private property is used as a long-term investment, in sharp contrast to speculative flipping of properties.

Most of the market-cooling measures, such as limiting the use of financial leverage in property purchases, still allow a degree of personal discretion in the context of a free-market economy. It is harsh to require existing private property owners to sell off their biggest asset investment upon purchasing a resale flat.

It should be highlighted that not all private property owners are really rich. Many were "forced" to buy their private property in their younger days because their household income exceeded the income ceiling set for HDB purchases, and when no other options like executive condos and Design, Build and Sell Scheme flats were available.

Over the years, this "sandwiched" class of private property owners worked hard to pay for their homes with the intention to move to an HDB flat during retirement. The private property could then be rented out to provide a stream of retirement income. The new requirement has effectively killed the hopes of many such people.

Chloe Loke (Mrs)

ST Forum : Big relief for first-time home buyers

Sep 1, 2010

STEPS TO COOL MARKET

Big relief for first-time home buyers

I REFER to yesterday's report ('Govt acts to curb speculators'). I am glad that the Government has taken the appropriate steps to rein in speculators in the red-hot property market.

Hopefully, this will prevent the property market from overheating and allow genuine buyers to come in.

Unfortunately, those who have bought their flats recently may curse their ill-timed purchase.

A friend of mine, who was looking for her first resale Housing Board flat, but was held back by the snowballing cash-over-valuation (COV) demand for many months, can start looking for her matrimonial home with confidence now.

Many recently married couples have had to rent a place or live separately in their own family homes as they could not afford the high COV.

The fast and continual appreciation of home prices would have created an asset bubble and destabilised our whole economy in the long run if it had been left unchecked.

I remember how many people chased after and bought properties at sky-high prices in 1996 - they had to sell at a massive loss when the market turned.

It is always wise to stay away from a runaway property market when everyone is chasing after it.

Gilbert Goh


--------------------------------------------------------------------------------

Wise move

'The real estate prices will grow at a much more sustainable rate and young couples will have a home to start a family.'

MR ADAM TAN: 'In one coordinated move, the Government has acted to supply more flats for needy buyers. With the latest measures, the real estate prices will grow at a much more sustainable rate and young couples will have a home to start a family. Diligent real estate agents will still have opportunities to earn a decent living.'

Caught in a bind

'It would be more equitable if a resale flat buyer who had signed the OTP prior to the changes is allowed to complete the transaction under the old rules.'

MR ALVIN TOH: 'The revised rules governing the purchase of an unsubsidised Housing Board resale flat do not take into consideration buyers who had signed the option to purchase (OTP) prior to the announcement ('Govt acts to curb speculators'; Aug 31), but have yet to submit the completed transaction to HDB. Such buyers would have started the purchase under one set of rules but would be governed under a totally different set of rules by the time the transaction is submitted to HDB for processing, so much so that the right to purchase itself may no longer be valid. A buyer who chooses not to exercise the OTP due to no fault of his own will be unduly penalised, with the deposit placed with the seller forfeited. Therefore, it would be more equitable if a resale flat buyer who had signed the OTP prior to the changes is allowed to complete the transaction under the old rules.'

Unfair

'A PR owning an HDB flat can buy a private property in his own country whereas a Singaporean owning an HDB flat cannot do the same here.'

MR JAMES KOH: 'One of the new measures is flawed as it runs contrary to the Prime Minister's promise to put Singaporeans first. A permanent resident (PR) owning an HDB flat can buy a private property in his own country whereas a Singaporean owning an HDB flat cannot do the same here.'

ST : PR numbers almost double in 10 years

Sep 1, 2010

PR numbers almost double in 10 years

Indians see twofold rise; Most ethnic Chinese PRs are from Malaysia

By Elgin Toh

THE number of Singapore permanent residents has almost doubled in the last 10 years, from 287,500 in 2000 to 541,000 this year.

Most of the increase is accounted for by immigrants from Malaysia and the Indian subcontinent, according to census data released by the Department of Statistics yesterday.

The share of Indians in the PR ethnic mix climbed from 14.9 per cent in 2000 to 20.4 per cent this year.

In absolute numbers, they more than doubled, from 42,700 to 111,000.

The share of Chinese in the PR ethnic mix dropped from 76.1 per cent to 61.4 per cent, although the total number increased from 218,800 to 332,000.

For PRs of Malay ethnicity, the share dropped from 4.1 per cent to 3 per cent, although actual numbers went up from 11,800 to 16,000.

Most of the ethnic Chinese PRs in Singapore hail from Malaysia.

Over the 10-year period, the number of Malaysia-born Chinese in Singapore - permanent residents and Singapore citizens combined - went up by 81,000, while that of China-born Chinese went up by just 13,000.

Analysts noted that the new data may help correct a misperception on the ground.

Said political observer Eugene Tan of Singapore Management University: 'This whole idea that we are being overwhelmed by mainland Chinese has no basis. The numbers should tell us that many from China are here only as foreign workers and, as the Prime Minister has said, we have to distinguish them from new immigrants.'

As for the large number of Malaysia-born Chinese PRs, Mr Tan said this could be due to the fact that many Chinese in Malaysia are 'dissatisfied with the state of affairs there', and see Singapore as a more ideal place to live.

Commenting on the surge in PRs from India, Dr Terence Chong of the Institute of Southeast Asian Studies suggested that this could have something to do with the fact that Singapore has 'more openings in professions that see higher Indian convergence, perhaps due to language competencies or specific industry training.'

The IT industry is one which attracts a large number of Indians.

On the whole, experts agreed that the increase in the number of PRs was significant and had implications for social cohesion.

It shows that 'the complexion of Singapore society is changing fairly rapidly', said Mr Tan.

'We were already seeing it in schools, in the public transport system, and in the housing market. The figures confirm it.'

Dr Chong was not optimistic about the implications for social harmony, since those qualifying as PRs, he argued, have a higher income and education level than working-class Singaporeans.

He said: 'All this will invariably lead to higher rates of misunderstanding, resentment and suspicion in the years to come. They (citizens and PRs) will have to find ways of bridging the gulf between them.'

elgintoh@sph.com.sg

ST : 3,032 new HDB flats on market

Sep 1, 2010

changes to property rules

3,032 new HDB flats on market

It's the largest single launch ever; five private developer sites for sale

By Joyce Teo

THE largest number of new HDB flats in a single launch was released yesterday, while five sites for private developers were put up for sale by the Government.

The moves to bump up new home supply come a day after measures were unveiled to curb property speculation.

The 3,032 new flats comprise 1,408 build-to-order (BTO) units in Yishun and 1,624 balance homes spread over 10 non-mature towns or estates.

PropNex chief executive Mohamed Ismail expects the BTO flats to be five to six times oversubscribed, and says the balance units will be at least eight times oversubscribed.

The supply of balance flats comes from differing sources, including flats left over from earlier BTO exercises.

They are popular with buyers as they have either been completed or have shorter waiting periods, or are in more mature estates, said Mr Ismail.

There are 1,081 four-room balance flats priced from $190,000 to $380,000. The rest are two- to five-roomers and executive units. Prices start from $104,000 to $126,000 for a two-roomer.

The flats are in a range of estates, including Hougang, Punggol and Sengkang.

The BTO flats are in Yishun Riverwalk. The 254 studio apartments will cost $63,000 to $87,000. The rest are three- to five-room flats, with the 652 four-roomers priced at $214,000 to $268,000.

The HDB expects high application rates for the balance homes based on the previous sale, so people will have a greater chance of success if they target a BTO flat. The first sale of balance flats was held last October, with 2,132 units offered.

The launch yesterday brings the total number of new HDB flats offered this year to 12,876. The HDB will offer more than 16,000 new flats this year and up to 22,000 next year.

The private sector was catered for as well yesterday, with one confirmed site placed for sale in Petir Road and four other plots made available if developers are keen. All the sites are near projects that have been launched in the past year or so.

The 2.3ha Petir Road site has a maximum gross floor area of 47,763 sq m and can yield about 430 flats. It is next to the fully sold Tree House, launched in April.

An industry expert said the site may attract bids ranging from about $320 to $355 per sq ft per plot ratio, which works out to $164.5 million to $183 million.

One of the other sites is at the junction of West Coast Link and West Coast Crescent and next to the fully sold The Vision condo, which was launched earlier this year.

An Alexandra Road site is beside Ascentia Sky, which was launched last year, while a plot in Tanah Merah Kechil Road is near Optima@Tanah Merah, which sold out in three days in August last year.

A plot at the junction of Pasir Ris Drive 3 and Elias Road is near Oasis@Elias, which was launched last year.

Experts told The Straits Times that while most of these sites are attractive, their sale may not be triggered just yet as the cooling measures would have dampened sentiment.

'Developers will adopt a wait-and-see approach. They will want to observe the responses to the upcoming launches before they act on these land tenders,' said Jones Lang LaSalle's South-east Asia research head Chua Yang Liang.

joyceteo@sph.com.sg

ST : Fees to enhance residential sites go up

Sep 1, 2010

Fees to enhance residential sites go up

Govt raises DC rates by 13% on average amid buoyant market

By Joyce Teo

RECENT property market exuberance has prompted the Government to hike the fees that developers pay to enhance the use of residential sites.

The Ministry of National Development (MND) announced yesterday that from today, such fees - called development charges (DC) - for the landed and non-landed homes sectors will climb by an average of 13 per cent.

The charge is adjusted every six months and closely reflects changes to land and property values.

It is paid if a developer wants to intensify the use of a site, for instance by redeveloping an existing project into a larger one.

In the landed homes segment where prices have seen strong increases, the largest rise of 36.4 per cent was registered in Sentosa.

And, in the non-landed homes sector, the largest rise of 28 per cent is in the Tanjong Rhu area as well as the Farrer Park and Balestier areas.

Property experts said the impact of the MRT Circle Line - particularly in the Braddell, Bartley, Upper Aljunied and Woodleigh areas as well as the Bishan and Ang Mo Kio areas - had been factored into the DC rate hikes.

These two localities, said Jones Lang LaSalle, will see strong increases of approximately 20 per cent for landed homes, with non-landed homes seeing an increase of about 15.6 per cent.

Commercial sites in these two areas will see rises of 7.3 to 7.5 per cent, it said.

Colliers International's director of research and advisory, Ms Tay Huey Ying, said the new DC rates were reflective of the market during the review period, given the pick-up in interest for development land amid Singapore's strong economic recovery.

But, she added, the upward DC adjustments, combined with the recent market cooling measures, could dampen developer sentiment and depress land price threshold levels.

She said this could 'further widen buyers and sellers' price expectations in the collective sale market'.

The MND also announced yesterday that the DC for industrial land will climb 10 per cent on average. And, in the commercial sector, which has seen limited sales activity, the DC will rise on average by 0.8 per cent, with the largest rise of 25 per cent in Jurong Lake District.

CBRE Research noted this was the first time since March 2008 that average DC rates for the commercial segment had increased, reflecting the turnaround in the economy as well as buoyant land values.

There is no change in the DC rates for the hospitality sector.

The MND sets the rates every March and September in consultation with the Chief Valuer.

joyceteo@sph.com.sg

ST : Buyers advised not to backdate options

Sep 1, 2010

Buyers advised not to backdate options

By Esther Teo

SOME home buyers who signed their option to purchase on Aug 30 or after this year may try to escape the brunt of tighter financing rules by bending the rules.

Experts, however, have warned against this as they may fall foul of the law.

Unlike those who signed their options before Monday, buyers with one outstanding home loan on Aug 30 or after will have to make a down payment of 30 per cent of the property's price, in contrast to the 20 per cent that previously applied.

And at least 10 per cent of their down payment must be in cash - up from 5 per cent before - but the remainder can come from their Central Provident Fund (CPF) accounts.

Property agents contacted by The Straits Times yesterday report that some buyers are delaying the exercise of their option in the light of the new rules.

Some are considering backdating their option to purchase so that they are covered by the old rules.

Unlike exercising an option, there is no need for a lawyer to be present when an option to purchase is signed, making collusion between buyer and seller possible, said PropNex chief executive Mohamed Ismail.

But the window to do so is small, since a buyer is usually given 14 days from signing the option to decide whether he wants to proceed with the purchase by exercising the option.

Mr Ismail said that PropNex had a clear stance of not backdating options to purchase.

Mr Steven Tan, executive director of residential at

OrangeTee agency, also said that he discouraged any form of backdating as it could lead to legal complications.

The changes to tighten home financing were announced by the Ministry of National Development (MND) on Monday. Also announced was an extension of the period in which sellers' stamp duty applies, to within three years of a home purchase, up from one year previously.

The amount of duty will be staggered, with those selling their property sooner having to pay more.

The full duty imposed for a sale within one year is 1 per cent for the first $180,000, 2 per cent for the second $180,000 and 3 per cent for the balance.

A sale in the third year would incur one-third of these charges.

The seller's holding period will be based on the time that elapses between the seller first buying the property and a buyer exercising an option to purchase or signing a sale and purchase agreement, whichever is earlier.

ST : Developers may delay condo launches

Sep 1, 2010

Developers may delay condo launches

By Jessica Cheam

PROPERTY developers are widely expected to delay their new launches, now that buying sentiment is likely to be hard hit by the slew of market-cooling measures.

The Government announced new rules on Monday that strongly discouraged speculation on homes, such as extending a seller's stamp duty from one year to three years.

The measures also require home owners with outstanding mortgages to fork out at least 30 per cent of the purchase price upfront, rather than the 20 per cent that previously applied.

Some industry analysts said yesterday that the changes could dent sales, especially for new launches in the mass-market segment.

DMG and Partners property analyst Brandon Lee said the measures would 'dampen buying sentiment across all residential segments and cause developers to delay their launches'.

However, he felt that prices were likely to stay firm, due to developers' strong holding power in view of robust sales and low funding costs.

'We believe speculative purchases will be curbed, particularly within the mass-mid segment, where small units of low price absolute quantum but higher prices per square foot continue to generate strong take-ups,' he said.

Property developer City Developments (CDL), which was slated to launch two new projects - NV Residences in Pasir Ris and Copthorne Orchard in Bukit Timah - in the third quarter of the year, said yesterday that the launches will be timed 'according to market conditions'.

Prior to the announcements, industry watchers had noted that developers were lining up projects for launch after the traditionally superstitious Hungry Ghost Festival ends next Tuesday.

Hoi Hup Sunway was said to be launching the 473-unit Vacanza@East - a freehold project in Lengkong Tujoh in the east, near the Pan-Island Expressway.

And Chip Eng Seng's Oasis@Elias in Pasir Ris was slated for relaunch at higher prices, after those at the condo rose to about $740 per square foot recently, compared to an average of $670 per sq ft in July last year.

Now, industry watchers are unsure if the launches will go ahead. Many developers may hold off until the effects of the new rules are more certain.

A CDL spokesman told The Straits Times yesterday that 'as the new measures have just been released, the market will take time to absorb the news'.

OCBC Bank head of treasury research and strategy Selena Ling said that the impact on market sentiment 'may be significant', given the array of measures in both the public and private markets.

Given that prices have now exceeded the historical peak set in 1996, she felt the measures were a 'sobering reminder against further froth in the domestic property market'.

'The risks are twofold as cited by the Government, namely potential capital losses should growth falter, and higher interest rates,' she said.

CBRE Research executive director Li Hiaw Ho noted yesterday that the changes ensured that only people with strong cash positions would be able to enter the residential market for investment purpo-ses.

'Going forward, we expect that developers will be less bullish in their bids for development sites and increases in home prices will be more moderated,' he said.