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Credit Suisse: Time is ripe to ease property cooling measures
Credit Suisse believes that the time is ripe for an easing of some of the property cooling measures, given that several of its objectives have been met.
Speculative activities, for instance, have significantly dropped as monthly sub-sales now stand at just two percent of total volumes. Foreign demand has also been curbed significantly with overall foreigner buying at seven percent of total volumes, while housing affordability has improved substantially with incomes having outpaced home prices, both on a short-term and long-term perspective.
The financial services firm revealed that achieving a sustainable and stable property market has been the government’s main objective ever since it rolled out eight rounds of property curbs since 2009.
“While it is imperative to retain the Total Debt Servicing Ratio (TDSR) framework and loan-to-value restrictions to ensure financial prudence amongst households, we believe that stamp duty measures, such as the Additional Buyers Stamp Duty (ABSD) and Sellers Stamp Duty (SSD), add extraneous frictional costs in the current soft property, economic and labour market,” it said.
“Given the weakening macro outlook, further adjustments to property cooling measures would be one of the range of policies the government can use to combat a slowdown.”
Credit Suisse noted that an easing of the SSD measures would allow “stretched households to offload their investment properties and alleviate their financial situation, while an easing of the ABSD could allow those who are financially able to re-enter the market to support such sellers”.
Over 12,000 new homes may rise in East Coast
The authorities are considering building a new Bayshore district, with more than 12,000 new homes along the East Coast, reported the Straits Times.
The article cited tender documents published by the Urban Redevelopment Authority (URA), that invited consultancy firms to craft a master plan for the area sited on reclaimed land, which is currently mostly occupied by private homes.
“The number of public and private housing units has been projected as 6,000 public units and 6,500 private units, and is still under study,” said a URA spokesperson.
The documents show that the new 60ha Bayshore district, approximately two-thirds the size of Bidadari, is bounded by Bedok Camp, Bayshore Road, East Coast Parkway and Upper East Coast Road, with some portions of it currently occupied by a forest.
Situated between two upcoming MRT stations, Bayshore and Bedok South on the future Thomson-East Coast Line (TEL), the site is expected to come with amenities like shops, schools, and an integrated transport hub.
Although the winning consultancy will submit its final proposal in December 2017, the spokesperson added that the new district will not be developed “in the near future”, but the two MRT stations are targeted to be operational by 2024.
The last time HDB flats were constructed there was when the old-generation flats in Marine Parade were built in the 1970s, with some of these units sold on the resale market for more than $900,000 in recent months.
More developers dangling carrots to move units
More condo developers are offering incentives, such as deferred payment schemes to lure home buyers, following its success in moving units last year, reported the Straits Times.
Among the latest projects to offer such marketing schemes include TG Development’s The Peak @ Cairnhill II, Wheelock Properties’ Ardmore Three and CapitaLand’s Sky Habitat.
Also offering incentives are two projects marketed by ERA Realty Network. One Balmoral is offering a 13 percent discount on prices of all units, while Corals at Keppel Bay is dangling a $50,000 discount on prices of selected units.
Last year, OUE’s creative marketing schemes, which included deferred payments for its Twin Peaks project, received good response, prompting other developers to follow suit. In fact, CapitaLand’s own version of the scheme, called the stay-then-pay programme at The Interlace and d’Leedon, was also “well-received”.
But while more completed projects are likely to offer innovative sales schemes, analysts do not expect this to affect demand for newly launched condos.
This is because completed projects account for “a very small percentage of the primary sales market”, explained Eugene Lim, Key Executive Officer at ERA Realty.
One Tree Hill Garden put up for sale
One Tree Hill Garden, a freehold landed residential redevelopment site bounded by One Tree Hill, Jalan Arnap and Jalan Kelawar, has been put up for sale by tender, with the owners expecting offers of above $72.8 million ($1,864 psf), revealed marketing agent Knight Frank.
With a site area of around 39,063 sq ft, the three-storey residential development comprises six maisonettes and seven apartments. It is zoned residential, two-storey semi-detached under the 2014 Master Plan, and could potentially be redeveloped into 13 detached and semi-detached houses.
The regular shaped site is within proximity to the Orchard Road shopping belt and the upcoming Orchard Boulevard MRT station.
Knight Frank noted that the site is located within a residential estate comprising landed properties as well as high-end condominium and apartment developments.
“We continue to see very strong interest for redevelopment opportunities – in the past two months alone, three prime residential redevelopment sites at Grange Road, Cuscaden Walk and Hullet Road were transacted,” said Ian Loh, Executive Director & Head, Investment and Capital Markets, Knight Frank.
“In addition, sizeable residential redevelopment sites for landed homes are rarely available, thus One Tree Hill Garden is expected to attract strong interest in view of its location and relatively affordable investment size.”
The tender for One Tree Hill Garden will close on 28 February.
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