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BTO flat supply to taper in 2017: Lawrence Wong
The government will gradually taper the supply of Build-To-Order (BTO) flats in 2017, with the HDB launching around 17,000 units, down from the 18,000 units launched this year, revealed National Development Minister Lawrence Wong in a recent blog post.
“Once again, we will offer a good spread across the mature and non-mature estates. This will give buyers a range of choices, including young couples who wish to live near their parents or the elderly who want to right-size and age in place,” he said.
“At the same time, we will continue to monitor the market, make adjustments to our building programme, and review our schemes to meet the housing needs of Singaporeans.”
In fact, the waiting time for some new sites may become shorter.
This comes after the Minister received feedback from young couples to make the waiting time for BTO flats shorter.
“So I’ve asked (the) HDB to plan and prepare the land for several new sites which can subsequently be put out as BTO units with shorter waiting time. These units will not be ready next year, but I hope we can begin to offer them by 2018,” shared Mr Wong.
He noted that public housing prices were kept stable in 2016, while the BTO application rate for first-timer families applying for three-room or bigger flats in non-mature estates also remained stable and manageable; at 1.5 times in November, and an average of two times for the whole of 2016.
“From experience, this means that BTO applicants will be able to get a flat within their first or second try, and most definitely by the third try. Hence, I always advise young families to apply for BTO flats in non-mature estates to increase their chances of success.”
Moreover, this year’s higher income ceiling has enabled around 2,200 more households to buy subsidised flats, while the enhanced Special CPF Housing Grant and Proximity Housing Grant benefitted 4,100 and 6,000 households, respectively.
At the start of December, the HDB also opened applications for the Fresh Start Housing Scheme, which aims to help second-timer families with young children living in public rental housing own a home again.
“All of these demonstrate our commitment to keep home ownership within reach of all Singaporean families,” said Mr Wong.
“But our work is not complete. We will press on with our mission to house a nation, and to help Singaporeans own a home that meets their budget and needs.”
S’pore home prices down 2% from year ago
Home prices in Singapore fell two percent year-on-year in Q3 2016, while most countries in the world registered strong price growth, revealed a Knight Frank report.
In fact, 44 of the 55 countries tracked in the report recorded an increase in prices, with Turkey posting the highest growth.
Housing prices in Turkey increased 13.9 percent year-on-year in Q3 2016, followed closely by New Zealand and Iceland with annual growth of 13.5 percent and 12.9 percent, respectively.
Over in the US, the expected slowdown in home prices in the run up to the presidential election failed to materialise. The 0.8 percent month-on-month rise in September was the biggest monthly rise since August 2013, contributing to an annual increase of 5.5 percent, noted the report.
“September marked a new high for US house prices, which have now exceeded their previous peak recorded in July 2006,” said Kate Everett-Allen, Partner, International Residential Research at Knight Frank.
UK house prices proved to be resilient following the EU referendum, underpinned by ultra-low mortgage rates and a lack of supply. Average house prices climbed 1.3 percent in the three months following the referendum, and 5.4 percent in the year to September.
Knight Frank also noted that resurgent home prices in China and Hong Kong have prompted new regulation and taxes to control price inflation. China’s resurgent prices are most evident in its biggest cities, where price inflation has been driven by pent-up demand and a lack of supply.
Despite dropping 5.5 percent year-on-year, home prices in Hong Kong rose 4.8 percent between June and September. Affordability concerns forced authorities to increase the stamp duty to 15 percent for residents as well as non-residents, except for first-time buyers.
Looking ahead, Knight Frank expects 2017 to be a bumpy ride both economically and politically, with stimulus coming in the form of fiscal rather than monetary policy.
“That said, low rates are likely to persist in Europe at least, but hikes in the US will result in a stronger dollar with implications for global capital flows and emerging markets,” noted the consultancy.
Property auction sales up significantly in Q4
Property auction sales for the fourth quarter of 2016 exceeded expectations, with total sales at $47.2 million, or 51 percent of this year’s tally, said property consultancy JLL.
The figure is more than three times the $10.83 million sales value registered in Q4 2015, and more than double the sales value in Q3 this year.
JLL revealed that fourth quarter performance was boosted by the sale of three vacant plots of land within the prime Swiss Club estate for $15.22 million, and the $12.3 million sale of a landed property at 4 Jalan Bahasa via liquidator’s sale.
The sales of these properties shows “there are keen buyers in the market on the lookout for sites with such potential”.
Several other large quantum residential properties were also sold via auction during the period under review, including non-landed units at Seascape in Sentosa and Orchard Scotts, as well as a landed unit at Daffodil Drive in District 20. JLL noted that the quarter saw a good mix of property types and seller profiles.
To date, total auction sales stands at $92.2 million.
“This, however, is still almost 10 percent shy of 2015’s total sales value of $102.3 million,” said JLL, noting that while more properties were sold by auction in 2016, last year witnessed more transactions of a bigger quantum.
Mok Sze Sze, Head of Auctions at JLL Singapore, highlighted a year-on-year increase in the number of properties sold during auction since 2013, when the Total Debt Servicing Ratio (TDSR) was introduced.
“This suggests that buyers have, over time, come to terms with the cooling measures and are more willing to commit, as opposed to adopting a wait-and-see attitude. In addition, more transactions taking place during auctions also illustrates the meeting of price expectation between buyers and sellers,” she said.
Looking ahead, JLL expects mortgagee sales “to increase by 10 to 20 percent in 2017, considering that Singapore is going through a protracted cyclical downturn, and the economy is expected to stay sluggish next year”.
Govt willing to shorten MOP for families in HDB’s Fresh Start Housing Scheme
The government is open to allowing families in the Fresh Start Housing Scheme to shorten the 20-year Minimum Occupation Period (MOP) should their family and financial circumstances improve, reported Channel NewsAsia.
“There’s MOP for commitment, but also there’s a flexibility to look at things at a case-by-case basis. So this I think, will motivate, incentivise and inspire them, so that they can work on (the 20 years) as a first milestone,” said Minister of State for Defence and Foreign Affairs Maliki Osman on the sidelines of a visit to the Adapt & Grow career fair held at Bedok on 3 December.
Dr Maliki, who also chairs the Fresh Start Advisory Committee, noted that the MOP gives families an assurance and a “sense of contracting” since they will be receiving a housing grant from the government for the second time.
Despite being under stable employment for the past few years, Mdm Jamnah was not eligible for a second housing grant to own a house. The former homeowner currently lives in a 2-room public rental flat with her teenage daughter and eight-year-old son.
With the Fresh Start Housing Scheme, however, Mdm Jamnah now has the chance to own a home again.
The 43-year-old revealed that her family wants to “to have a very nice kitchen, with cabinets, so everything will all be arranged nicely”.
This sense of ownership is what the government hopes to give to rental flat families through the new scheme.
Around 1,000 public rental families are expected to qualify for the scheme. Dr Maliki revealed that various agencies such as the Community Development Councils, the Ministry of Social and Family Development and Workforce Singapore will work with those who may not qualify at the moment to help them qualify in the future.
Singapore, Malaysia sign landmark HSR deal
The Kuala Lumpur-Singapore High Speed Rail (HSR) project is now a step closer to reality, after the bilateral agreement for the much-anticipated project was officially signed in December, reported Channel NewsAsia.
Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart Najib Razak witnessed the signing ceremony in Putrajaya, with Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan and Malaysian Minister in the Prime Minister’s Department Abdul Rahman Dahlan as the signatories.
According to PM Lee, Singapore and Malaysia both have a strong political will to ensure the success of the HSR, adding that the monumental project will improve how the two countries interact and do business.
“It gives both sides greater stake in keeping relations strong and positive,” he said.
The HSR is targeted to be completed by 2026, and both countries are committed to this deadline, said Mr Najib.
Both parties will soon call for a joint tender for an international firm to operate the KL-Singapore express service and the cross-border shuttle service from Iskandar Puteri, while Malaysia will appoint a firm to run the local service within the country.
In 2017, the two countries will also call another tender for a privately financed assets company to run and maintain the rail assets. A committee comprising representatives from both sides of the causeway will also be formed to oversee aspects of the HSR project that might affect cross-border services.
Furthermore, each government will be responsible for constructing and maintaining the civil infrastructure and stations within their own territories. For Singapore, this will be undertaken by the Land Transport Authority, while Malaysia will tap its MyHSR Corporation.
Tech firms among major office tenants: CBRE
The technology, media, and telecom (TMT) sector emerged as the second biggest office occupiers in Singapore since 2015, just behind financial institutions, according to a CBRE report.
From 2015 to Q3 2016, the industry accounted for around 658,000 sq ft of office space, either in the form of newly rented premises or relocations primarily in the central business district. Although this excludes business park space, the consultancy noted that TMT companies contribute to significant leasing activity in such properties.
“The sector continues to be a key contributor to office leasing demand in Singapore,” said Moray Armstrong, CBRE’s Managing Director for Advisory & Transactions in the city-state.
He shared that TMT firms tend to prefer office space in the downtown core and CBD fringe areas as they have been able to take advantage of attractive leasing deals on offer, given the current market conditions.
In fact, there has been a marked increase in leasing activity driven by flight-to-quality and tenants seeking attractive terms. These opportunistic deals were mainly concentrated in new developments such as Guoco Tower in Tanjong Pagar, where tech firms like Amadeus, Agoda, Palo Alto, Unity Technologies and OpenLink have all pre-committed space. Consequently, these firms now make up a large percentage of the building’s total occupancy.
“By locating offices in the CBD, small to medium-sized tech, media and telco players, in particular, gain competitive edge in attracting and retaining talent,” Moray explained.
“These trends are also evidenced in the growing fintech sector, where we are seeing healthy leasing demand as Singapore positions itself as the centre for this activity,” he added.
Meanwhile, CBRE’s Asia Pacific TMT Sector Trends 2016 report revealed that the healthy market for these firms’ services, alongside the strong growth of internet users and mobile devices, continue to fuel the industry’s demand for office space.
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