Our top SIngapore and regional property stories.
Maids can’t use pools, other condo facilities
Some condominiums in Singapore continue to enforce strict rules preventing domestic helpers from using facilities such as swimming pools and gymnasiums, citing that are meant for homeowners’ use only.
PropertyGuru understands that this is a long-standing practice implemented by a number of Management Corporation Strata Titles (MCSTs), also known as condo managing agents, due to complaints arising from residents.
Take the case of Mary (not her real name), a Filipino domestic helper who has worked in Singapore for more than 20 years. A few months ago, she began working for an American expat family who live in the ultra-posh Four Seasons Park condominium near Orchard Road.
The 43-year-old shared that a staff member at the management office told her that she could not use the condo’s pool as those were the rules in case the facilities were damaged. “The lady I spoke to was nice, and she did say (the practice) was not right or fair, but this is how they do things here,” said Mary.
She added that the management would only allow domestic helpers to use the pool if their employers were also present. PropertyGuru reached out to the managing agent of Four Seasons Park, but did not hear back.
Not all condominiums in Singapore enforce such restrictions. One condo manager at a project in Woodlands, speaking on condition of anonymity, said they do not stop domestic helpers from using the pool. “Such situations would only occur if the employers did not allow it, or if there were instances of damages due to misuse. Besides that, there are no restrictions,” he said.
He explained that introducing these rules are not practical, especially when the employer’s children use the pool. “If there is a drowning, then who is responsible? The helpers have to be with them as condos normally don’t employ lifeguards.”
In Singapore, MCSTs come under the purview of the Building and Construction Authority (BCA). Responding to media queries, a BCA spokesperson said that under the legal framework for the management of strata-titled properties, such as condominiums, “there are no prescribed by-laws that restrict or prohibit certain groups of people from using the common property”.
But the spokesperson added that MCSTs can make additional by-laws on top of the prescribed ones with regard to the use of common facilities, which are in the interests of the residents.
TDSR rules on refinancing fine-tuned
The Monetary Authority of Singapore (MAS) announced on 1 September that refinancing rules under the Total Debt Servicing Ratio (TDSR) framework will be tweaked to enable borrowers to better manage their existing debts.
Under the new rules, which take immediate effect, borrowers who bought properties for their own stay after the introduction of the TDSR on 28 June 2013 will no longer be limited by the TDSR threshold of 60 percent, or the Mortgage Servicing Ratio (MSR) limit of 30 percent at the time of refinancing.
Previously, only owner-occupied properties bought before the implementation of the TDSR were exempted from the TDSR framework.
At the same time, the MAS will allow borrowers to refinance their investment property loans above the TDSR threshold, regardless of when the properties were purchased, but two conditions must be met:
1) Borrowers must commit to a debt reduction plan with their financial institution to repay at least three percent of the outstanding balance over a period of not more than three years.
2) Fulfil the financial institution’s credit assessment.
In a statement, the MAS said refinements to the rules were made in response to feedback from some borrowers who were unable to refinance their existing property loans due to the TDSR threshold.
MAS Deputy Managing Director, Ong Chong Tee, said: “The TDSR is a structural measure to encourage prudent borrowing by households. The adjustments announced today will help borrowers to refinance their existing property loans at lower interest rates and better manage their debt obligations over time.”
The MAS added that this does not represent a relaxation of the property cooling measures, and the TDSR framework will still apply to new property loans. Meanwhile, analysts welcomed the latest revisions to the TDSR, which will help ensure a stable property market.
“In view of the recent weaknesses in the oil and gas and financial services sectors, retrenchment and pay cuts could affect the homeowners’ ability to refinance existing home loans. While the mortgage rates are still low, the inability to refinance under the old TDSR rules could result in some foreclosures, where homeowners are forced to sell their properties in a down market,” said Christine Li, Director of Research at Cushman & Wakefield.
Tengah new town to be built right into nature
Singapore’s 24th HDB town, Tengah, will be the first forest town in Singapore with a car-free town centre, as shown in the masterplan that National Development Minister Lawrence Wong unveiled at the HDB Awards ceremony on 8 September.
Located in the western part of Singapore, Tengah is bounded by major roads and expressways. It will be located next to the city-state’s futuristic industrial district, Jurong Innovation District. Featuring five housing districts — the Plantation District, Garden District, Park District, Brickland District and Forest Hill District — the area will contain about 42,000 new homes, of which some 30,000 will be public housing units and the rest private units.
The HDB revealed that the first batch of flats will be launched in the Plantation District from 2018.
One of Tengah’s main attractions will be a 5km-long forest corridor, which will form part of the larger network of greenery that connects the Central Catchment Nature Reserve and the Western Water Catchment Area.
Tengah town centre, which will be designed amidst a lush park, will offer a car-lite environment with vehicles plying underneath the town centre. It will also have dedicated walking and cycling paths on both sides of the road.
A large central park, about the size of Ang Mo Kio Town Garden West, will be complemented by canals and ponds to provide lush greenery and water features, while community farms will allow for urban farming and community gardening.
Road networks within the town will be designed to meet future needs and could support future forms of mobility, such as autonomous vehicles or self-driving cars.
Surge in supply may drag down home prices
Private home prices in Singapore are expected to be dragged down by the large upcoming supply of 10,262 units in the second half of this year and 14,578 units in 2017, according to Singapore Business Review, citing a report from CIMB Research.
“We expect private home prices to continue declining and keep our projection for a mid-single digit dip in 2016,” said the bank. In addition, around 45 percent of the incoming supply is located in the suburbs, and this could exert downward pressure on property prices.
“This will continue to drag on price outlook in these areas,” noted CIMB Research, adding that the situation could be exacerbated by rising vacancies and the declining pool of potential tenants.
To recap, sales of new private homes, excluding executive condominiums (ECs), plunged 56 percent to 473 units in August from 1,091 units in the previous month, according to data from the Urban Redevelopment Authority (URA).
On a yearly basis, sales slid around seven percent from the 513 units recorded in August 2015. Experts blamed the sales slump last month on the lack of new major launches due to the Hungry Ghost Festival, which is regarded as an inauspicious time to buy property.
UK home prices up 0.1% amid muted market conditions
Home prices in the UK rose by 0.1 percent in August to £292,921 (S$527,510), pushing prices up by 4.3 percent from the previous year, reported Bloomberg, citing a report by Acadata and LSL Property Services.
The slight increase in prices comes as the property market continues to witness lacklustre recovery following the shock of the Brexit vote and a tax increase.
The UK has seen home prices slow sharply since the spring, with the decision to leave the European Union in June adding pressure to a market that is already feeling the brunt of a stamp-duty surcharge on investment properties introduced two months earlier.
London was hardest hit, with prices there falling for a fifth month in July, revealed fresh data.
In August, the number of residential transactions climbed by 2.6 percent to 78,000, but it is still down by 6.8 percent from the previous year. Overall average prices are down by 1.4 percent from February’s record.
According to the groups, London home values dropped by 0.5 percent in July as declines in the most expensive boroughs outweighed gains seen in the more affordable outer areas.
Singapore prime office rents to drop further
Prime office rents in Singapore are expected to drop by 14 percent from the fourth quarter of 2015 to the fourth quarter of 2019, said Knight Frank in its Global Cities 2017 report.
This is weakest growth forecast among the surveyed markets in the Asia Pacific region. The city-state saw prime office rents fall for six consecutive quarters to Q3 2016, which analysts attribute to the economic headwinds and cautious business sentiment in the Singapore market.
“The high influx of about six million sq ft GFA (gross floor area) of office spaces island-wide for 2016 and 2017 are envisaged to weigh on rentals in the short term,” said Knight Frank Singapore Director and Head of Consultancy & Research, Alice Tan.
Nonetheless, the medium-term prospect of Singapore’s office market is expected to “improve beyond 2018, as new supply tapers off substantially and (thanks to) demand potentially supported by Singapore’s rising status as a key global financial and business hub”.
The report also noted that three of the five costliest cities in the world to own prime office space are in the Asia Pacific region. Hong Kong has the highest capital values for prime central office space, followed by Tokyo followed in second place, then Singapore in fifth place.
“The flurry of big-ticket transactions made by foreign investors (the sale of trophy office asset Asia Square Tower 1 and Straits Trading Building) testifies to Singapore’s appeal in office asset ownership and confidence in the Singapore’s long-term stability,” said Knight Frank Singapore Executive Director and Head of Investment and Capital Markets, Ian Loh.
“Long-term capital preservation and appreciation would be the main selling point for Singapore’s office assets,” Loh added.
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