The Principal Garden condo

663unit condo to come up on city’s fringe

unnamedThe Principal Garden condominium on the city fringe in the Alexandra area will be launched at the end of the month with average prices of around $1,600 per square foot.

The 663-unit project in Prince Charles Crescent has four 24- storey blocks and is next to the Alexandra Park Connector that extends 4km towards the Central Business District. It is also within a 10-minute walk from the Redhill MRT Station.

It comprises 182 one-bedroom, 304 two-bedroom and 69 three- bedroom units, as well as 66 three- to five-bedroom apartments with private lifts.

The smaller units in the 99-year leasehold project are seen as being particularly appealing to investors, according to the joint developers, UOL Group and Kheng Leong Company.

“Being near the city, the investment angle is strong and some parents (living nearby) may want to get a unit for their children,” UOL deputy group chief executive Liam Wee Sin said at a showflat viewing yesterday.

The one-bedders range from 484 to 506 sq ft, the two-bedroom units are 764 to 807 sq ft while three-bedders are between 1,076 and 1,195 sq ft. Units with private lifts range from 1,238 to 2,347 sq ft.

Prices are around $1,600 per sq ft, making one-bedders cost around $770,000, two-bedders around $1.18 million, and three-bedders around $1.7 million.

The showflats will be open for public viewing from next Saturday, for about two weeks.

Mr Liam said the units will be launched in phases, with around 250 being made available initially.

“We secured the Prince Charles Crescent site last year at a reasonable bid price (at $821 psf per plot ratio), by which we are now able to pass on value and savings to buyers,” he said.

“We believe buyers can see the strong upside potential.”

Analysts noted that the development has attributes that could sit well with investors – competitive pricing, a good location as well as a large number of smaller units, especially the popular two-bedders.

Adapted from: The Straits Times, 10 October 2015

New rules to protect home buyers

New rules to protect home buyers

Prospective buyers of private homes can look forward to a more transparent property market when changes to the Housing Developers (Control and Licensing Act) kicks in from 25 May 2015, revealed the Ministry of National Development (MND).

The new rules for residential developers will ensure more comprehensive information on prospective property purchases while showflats must accurately depict the housing units offered for sale.

Here is the full statement from MND:

In April 2013, Parliament approved amendments to the Housing Developers (Control and Licensing) Act to improve and update legislative safeguards for buyers of uncompleted private residential properties. The amendments will enhance market transparency by providing the public with more comprehensive and timelier information on the private residential property market.

Since then, MND has worked on the subsidiary legislation, the Housing Developers Rules, to effect these policy changes. The effort includes the implementation of a new set of rules on show units, the Housing Developers (Show Unit) Rules.

The legislative amendments, which were finalised through a series of consultations with members of the public and industry stakeholders, are now ready to take effect. The amendments will enable prospective home buyers to make better-informed purchasing decisions.

 

Weekly collection and publication of transaction data

From 25 May 2015, housing developers must submit detailed transaction information to the Controller of Housing every week. This information will include sales volumes and transacted prices of individual units in their building projects, and the value of any benefits extended to buyers.

Developers will be required to submit this information to the Controller within five days of the end of each preceding week. This information will be published on the Urban Redevelopment Authority (URA) website weekly from 5 June 2015.

 

More comprehensive information in transaction documents

The Option to Purchase and Sale & Purchase Agreement, which are standard forms prescribed under the Housing Developers Rules, will also be amended  to enhance the safeguards for purchasers of private residential properties. For example, developers must indicate the value of any benefits (such as cash rebates, absorption of legal fees or stamp fees, rental guarantees and furniture vouchers) offered to buyers.

The amendments to both forms will take effect on 20 July 2015. This is to provide developers sufficient time to comply with the amendments.

 

Ensuring the accuracy of show units

MND is introducing the Housing Developers (Show Unit) Rules to ensure that all show units provided by developers are accurate depictions of housing units offered for sale.

For example, one rule requires the floor area of the show unit to be the same as that of the actual housing unit. Another rule requires all external and structural walls to be built in the actual unit to be depicted in the show unit.

These Rules will take effect on 20 July 2015 to provide developers sufficient time to comply with the new requirements. For more information, go to: http://bit.ly/1Hr1g73

Source: propertyguru

Jurong’s rise boosts condo sales

jurong property

The housing market in the vicinity of Jurong Gateway is expected to heat up in the coming months after recent news on the upcoming terminus for the much-anticipated Singapore-Kuala Lumpur high speed rail (HSR) project, revealed Knight Frank and reported in the media.

Given the bullish projection, developers will likely launch more units at residential projects close to the terminus site at the current Jurong Country Club, the consultancy said.

“New units are expected to be rolled out in projects situated within the vicinity of the terminus, as developers look to capitalise on the positive developments in the area,” noted the report.

These include Waterfront @ Faber with 30 yet-to-be released units and Lakeville with 246 unlaunched units. Both developments are about two kilometres from the future HSR terminus.

Source: Propertyguru

Why Mature HDB Estates Retain Their Value Better

In an era of whiz kids, Millennials and twenty-something Internet millionaires, maturity often gets short-changed. Not so in HDB property.

Mature HDB estates have outperformed youthful estates during the Cooling Measures.

Both types of estates have lost market value since the peak of the HDB market. However, the impact on homeowners in non-mature flats has been far more severe.

According to SRX Property, HDB estates have lost an estimated total of $6.6 billion in market value, as measured by the X-ValueTM, since April 2013.

The market value for non-mature estates has declined about $4.4 billion.

This translates to an average loss of $58,371 per flat for homeowners.

In contrast, mature estates have experienced a $2.2 billion decline in market value.

This means homeowners in mature HDB estates have lost an average $40,708 per flat or about $18,000 less than their counterparts in non-mature estates.

Typically, mature estates are better at weathering Cooling Measures and other external shocks (i.e., a financial crisis) because their fundamentals are well-established.

Mature estates tend to be located in areas that are well-developed with easy access to public transportation, established shopping areas, and mature neighborhoods with parks, popular schools, and other amenities.

In other words, they are like a blue chip stock or an experienced manager. They are predictable and stable.

Non-mature estates, however, are located in new areas in which the surrounding infrastructure is still developing. There hasn’t been enough time for their neighborhoods to establish a track record of predictability and stability. In the case of brand new estates, we don’t know how they will react to different economic conditions.

In addition, when the government introduces built-to-orders, they are usually located near non-mature estates. More supply means more competition in the resale market and prices decline faster.

Is all hope lost for the younger generation?

Of course not. Eventually they will grow up, mature, and settle into similar patterns as the older estates.

But, in the short run, the data shows that non-mature estates are more vulnerable to Cooling Measures and other shocks to the market.

For more information, on the numbers used in this article, see SRX Research.

HDB resale prices gain 0.6% in January 2015

HDB resale prices gain 0.6% in January

Observations:

  1. HDB resale prices showed slight pick-up in January. HDB resale prices picked-up by 0.6% in January 2015 compared to December 2014.  The price increase was driven by HDB 4 and 5 Room flats whose resale prices increased by 1.1%, and 1.5%, respectively. On the other hand, the resale prices for HDB 3 Room and Executive flats saw a decrease of 0.9% and 0.6%, respectively.

According to the SRX Property Price Index for HDB Resale:

  • The last time HDB resale prices posted an increase was in January 2014;
  • Year-on-year, prices have dropped 5.7%, compared with January 2014;
  • Prices have declined 9.4% since the peak in April 2013;
  • Price change in Dec 2014 has been revised from a 0.4% decrease to a 0.3% decrease;

 

According to the SRX Property Price Sub-Indices for HDB Resale:

  • The increase of HDB Resale prices in January was seen by both mature and non-mature estates;
  • In Jan, HDB resale prices increased 0.5% and 0.7% in mature and non-mature estates, respectively;
  • Year-on-year, prices in mature estates have declined 3.0% from Jan 2014;
  • Year-on-year, prices in non-mature estates have declined 7.8% from Jan 2014;

  1. Resale volume dropped slightly. According to HDB resale data compiled by SRX Property, 1,255 HDB resale flats were sold in January 2015, a 3.1% decrease from 1,295 transacted units in December 2014.
  • Year-on-year, resale volume increased by 15.3% compared with 1,088 units resold in January 2014;
  • Resale volume is down 65.6% compared to its peak of 3,649 units in May 2010.

  1. Overall median Transaction Over X-Value (T-O-X) improved but stayed negative. According to SRX Property, HDB prices continue to face downward pressure and negative market sentiment in January 2015.  The median T-O-X for HDB measures whether people are overpaying or underpaying the SRX Property X-Value estimated market value.
  • Overall Median T-O-X was NEGATIVE $1,000 in January 2015, a $3,000 improvement from NEGATIVE $4,000 in December 2014;
  • Median T-O-X for HDB 3 and 4 flats were negative while 5 room and Executive flats saw a neutral and positive median T-O-X, respectively.

  1. Geylang posted the highest median T-O-X. For HDB towns having more than 10 resale transactions with T-O-X in January 2015, Geylang reported the highest median TOX of $8,400, followed by $8,000 in Bukit Merah and Kallang/Whampoa.

This means that majority of the buyers in these towns has purchased units above the computer-generated market value.

5. Among relatively active towns, Clementi posted the most Negative median T-O-X. Among HDB towns having more than 10 resale transactions with T-O-X in January 2015, the lowest median T-O-X were in Clementi, Bukit Batok, and Toa Payoh, at NEGATIVE $ 15,500, NEGATIVE $10,500, and NEGATIVE $7,500, respectively.

This means that majority of the buyers in these towns has purchased units below the computer generated market value.

Source: http://www.stproperty.sg/articles-property/singapore-property-news/hdb-resale-prices-gain-06-in-january/a/198919

RESIDENTIAL MARKET:TDSR tweak a lifeline for stretched owners: analysts

This week’s tweak in the total debt servicing ratio (TDSR) framework is targeted at a small group of stressed households that are struggling to get mortgage refinancing, analysts said in reports yesterday.

They were referring to the move on Monday by the Monetary Authority of Singapore (MAS) to exempt owner-occupiers from the TDSR cap of 60 per cent – specifically those looking to refinance the homes they bought before TDSR took effect last June 29.

The cap mandates that a borrower’s monthly instalments for all debt-servicing – including mortgage payments – must not cross 60 per cent of his gross monthly income.

Analysts commented that the revision to the rule, designed to prevent people from over-extending themselves, may suggest that the group of “fringe households” – those with a debt-servicing ratio (DSR) of 40-60 per cent – may be larger than earlier anticipated.

However, they say that in light of the small numbers affected, the tweak hardly foreshadows a rollback of property cooling measures. Instead, they expect the measures to stay, with some predicting a reversal only next year.

The exemption also applies to investment property loans, though the borrowers must go through with refinancing by June 30, 2017, and commit to a debt-reduction plan at the point of refinancing.

Last year, the MAS said that 5-10 per cent of borrowers here risk being over-leveraged – defined as having a DSR of more than 60 per cent – and that this proportion could rise to between 10 and 15 per cent if mortgage rates edge up three percentage points.

HSBC analyst Pratik Ray said in a report: “Refinance holds will be problematic if the TDSR framework is applied – and an increase in interest rates or loan margins would increase their repayment burden, resulting in possible forced sales.”

Citi analyst Adrian Chua said in a note that stretched borrowers have been held to ransom by lenders in the post-TDSR period.

Credit Suisse analysts Yvonne Voon and Anand Swaminathan, concurring, wrote in a report: “Post-TDSR, banks raised their spreads, taking the view that the borrower would have no choice but to stay with the current bank”, given that refinancing could mean a breach of TDSR.

Credit Suisse estimates that 40 per cent of property-owners qualify for the TDSR exemption, which took effect immediately on Monday. However, under 20 per cent of them are actually hit, because, given the low interest rates in the last three years, most of them would have already refinanced their loans.

Mortgage rates typically have a lower spread to the Singapore interbank offered rate (Sibor) in the first two or three years, but jump from the fourth year, noted Citi economist Kit Wei Zheng in a report. This has prompted borrowers to undertake refinancing in the third year to enjoy “teaser” rates again.

He questioned whether there was a larger proportion of borrowers deep in debt than earlier envisioned. The MAS had said this year that one in five borrowers (20 per cent) has a DSR of 40-60 per cent.

Mr Kit believes the proportion to be higher; as much as 25-30 per cent of existing borrowers may already have a DSR of more than 40 per cent at the current low interest rates, he said.

“Even if household balance sheet data suggests more cash than debt on aggregate, the new exemption may hint at a skewed distribution of debt.”

As a whole, analysts predict that regulators would create a cushion for a “soft-deleveraging”. Since short-term interest rates are still low, any “meaningful policy reversal” would come only late next year, HSBC said.

Looking at the impact on banks, Credit Suisse analysts said that the TDSR tweak should boost refinancing volumes – which has historically made up a third of the new-loan market – but may also hit the banks’ margins.

Source: Business Times – 12 February 2014