Still, industry watchers said that prices will have room to move upwards over the next two years.

This is because interest rates in Hong Kong continue to be low, and high-end property prices in Singapore are still below their peak.

Private home prices in Singapore rose by 24 per cent in the second half of last year, causing the government to step in.

Over in Hong Kong, the government also announced measures to avoid an asset bubble - after property prices rose by some 30 per cent last year.

The Chinese government is also doing its part to cool its red-hot property sector by tightening credit.

Analysts said these moves will limit price growth this year, but overall, they still expect prices to move upwards, even if at a slower pace.

Donald Han, managing director, Cushman & Wakefield, said: “With the introduction of these measures, and the fact that the government is keeping a lookout on the market, they may continue to intervene.

“We would expect the market currently to come down to between 8-15 per cent, depending on what market you are in in Asia Pacific. So it would probably come down by a few percentage points in terms of price increases.”

Analysts note that Singapore’s high-end residential market remains below 2008 peaks by some 20 per cent.

Meanwhile - they also say, the measures are only aimed at moderating the price increases.

Karamjit Singh, managing director, Credo Real Estate, said: “The measures that were announced by the Singapore government on February 19 do not address the root cause of the problem yet. The root cause of the problem is a short-term supply crunch at the lower end of the market, but it definitely helps mitigate the risk of bubbles being formed in the future.”

Experts said the factors set to drive prices higher this year are investors searching for higher yields, continuing hot money inflows and continuing low interest rates causing lower borrowing costs for buyers.

Source: Channelnewsasia.com

The new progressive property tax system, announced on Monday to the surprise of many, will see owner-occupiers exempted from tax on the first S$6,000 of the annual value - that is, the estimated rent - of their homes.

The trade-off? The S$25-to-S$150 in GST rebates, which owners of properties with lower annual values have been enjoying since 1994, will be scrapped.

The more nuanced tax system for owner-occupied residential properties will benefit all Singaporeans except the ultra-rich - those living in properties with over S$77,000 annual value. They comprise only 0.4 per cent of all owner-occupied homes in Singapore, and only 3 per cent of private owner-occupied homes here, said Finance Minister Tharman Shanmugaratnam, who also noted that the change would cost the Government S$230 million initially.

Currently, all owner-occupied residences are taxed a flat rate of 4 per cent, while investment residential properties are taxed at 10 per cent.

This “does tax the wealthy more than others”, said Mr Shanmugaratnam, but there was “scope” for a more progressive system.

One reason for the rethink: HDB homes have been appreciating in value over the years, meaning a growing tax bill for flat-owners, and while rebates over the years - the latest being in January - have helped mitigate this increase, “we need a longer-term solution that provides a fair and balanced system for all property owners”, said the Finance Minister.

Homes with an annual value of about S$80,000, therefore, will see a tax increase of “slightly less than S$100″ a year.

“However, our property tax rates, even for the high-end, will remain lower than in most international cities,” Mr Shanmugaratnam stressed.

“That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike.”

Binjai Park resident Mr Philip Goh, 61, said that as a retiree, “anything helps”. His semi-detached house’s annual value is about S$31,000, and he forked out S$1,250 in property tax last year.

The change in tax structure will have minimal impact on the property market, analysts believe, given the tiny minority that will be negatively affected.

Those likely to be taxed “slightly more” were the luxury properties priced above S$4 million in prime districts, said real estate lecturer Nicholas Mak of Ngee Ann Polytechnic. And as taxes for non-owner-occupied residential properties remain at 10 per cent, he added, there should be no impact on those who buy for investment.

Nonetheless, as annual values continue to go up, “the question is whether the Government will increase the upper limit of the annual value bracket where the property tax is 4 per cent”, said Mr Mak.

Does this signal that the Government might go further down the path of taxing the rich more, something it has argued against overdoing? NUS Business School Associate Professor Ho Yew Kee: “What the Government probably thinks is that the extremely asset-rich … have to carry a little bit of burden, and contribute a bit more. 0, 4, 6 per cent is trivial - if I have an S$8-million house, I’d pay S$2,000 more in property tax a year. It’s not a lot.”

Source: Channelnewsasia.com

REDAS added that its efforts are only limited by the land available and hence the long-term solution to a stable market is still adequate supply.

The association celebrated the Lunar New Year, riding on an upbeat mood.

Joining in its Spring Festival was Finance Minister Tharman Shanmugaratnam, and the association shared with him its views on his recent Budget Statement.

Simon Cheong, president, Real Estate Developers’ Association of Singapore, said: “REDAS was hoping for more cash in our ang pows (red packets) from you, Minister. But when we opened the ang pow, we were disappointed there was not much inside for developers.

“Nonetheless, we are happy with your long-term productivity ang pow, as what is good for Singapore’s economy in the long run must also be good for the Singapore property market. It is what REDAS calls a deferred payment ang pow.”

REDAS said that its members are surprised with the speed with which Singapore’s property market has recovered. But they added that they are prepared to live with the current problems rather than the problems faced by the property market last year.

However, in the interest of a stable property market, REDAS said its members are committed to a fast-track supply to satisfy demand. This would also minimise excessive speculation in the property market.

Mr Cheong said: “Given the unexpected return of an active property market, developers over the next few months would also be actively bidding for more land to position for the future supply.

“As such, REDAS, unlike the situation in the preceding 12 months, is now looking forward to more sites in the confirmed list for developers to replenish their land bank.”

Just last week, the government introduced two more measures to cool the property market and pre-empt a bubble from forming in the private homes sector.

Source: channelnewsasia.com - Real estate developers to bring forward property launches

Packed showrooms and fast-rising prices have become a concern for authorities, who introduced new measures on Friday to cool the property market before things got out of hand.

A Seller’s Stamp Duty is imposed on all residential properties sold within one year of purchase, while loans from financial institutions are capped at 80 per cent.

At a Lunar New Year dinner at Teck Ghee in his constituency of Ang Mo Kio, Mr Lee said that while the government cannot control property prices, it can ensure prices remain affordable.

Mr Lee said: “Please take good care of it. Do not think of selling it prematurely, or making a quick buck. Because if you sell it and you can’t find another house to stay or you do not have a nest egg for your old age, that is big trouble.”

Mr Lee said that one’s home is a long-term investment, whether as a buffer against old age, or to be passed on to one’s children or grandchildren.

But this brought him to another concern - that Singaporeans are not reproducing enough.

Mr Lee noted that Singapore’s low birth rate is a reflection of fundamental changes taking place across Asia.

The Total Fertility Rate fell to 1.23 last year - with the rate among Chinese Singaporeans even lower at 1.09.

In China for instance, some young adults even advertise for make-believe girlfriends and boyfriends to hold off family pressure over the Lunar New Year.

Mr Lee said: “It is amusing but it is also sad. I am relieved that I have not heard of any reports of boyfriends or girlfriends for rent in Singapore. I hope it does not happen. But I know that young people do feel some pressure.”

Mr Lee added that some social pressure may be useful, but it is family support that will give young Singaporeans a nudge in the right direction.

Source: Channelnewsasia.com

A Seller’s Stamp Duty will be imposed on all residential properties bought on Saturday and sold within one year, while housing loans from financial institutions will be capped at 80 percent of property value.

Are they taking the buzz out of the property market? Not yet - at least not for those who are buying for the long-term.

It was business as usual at one property showroom on Saturday, as a steady stream of visitors checked out the units available.

Sales of units at the Altez condominium - located just opposite Tanjong Pagar MRT station - are moving fast.

One woman in her 30s snapped up four units - two to stay in and two to rent out.

The condominium’s developer said they could still sell an entire floor of units within an hour.

Some home buyers said the reduction in the home loan limit did not make much of a difference.

Home buyer Raphael Tan said: “The banks have been very strict, anyway. So I think we will still be on track for our financing.”

And those who are buying for the long-term are not worried about the new Seller’s Stamp Duty.

Doris Chia, another home buyer, said: “Although it’s quite pricey now, I think this is a good location and for long-term investment.”

Analysts expect developers to launch more high-end properties in the first half of this year.

These properties typically sell at S$2,000 per square foot and attract buyers and investors who are less price-sensitive.

Donald Han, managing director of Cushman and Wakefield, said: “A lot of the high-end investors are typically not bound by any limitation. They don’t go for maximum loan-to-value ratio. In some cases, they just go for 40 to 50% of loan-to-value ratio. In some cases, they even buy on a cash basis.”

Analysts said the mood to buy won’t change much as the measures are meant to flush out speculators, who make up a small percentage of the market.

Meanwhile, Senior Minister of State for National Development Grace Fu said that now is the time to introduce measures to control the private property market.

She said the authorities have been studying the property market closely and that it is best to introduce the measures before the property bubble forms.

“We would think that it may deter speculative buying and we want our investors to basically be on the more solid ground when they invest in properties. It should not deter genuine buyers who have the financial resources to hold the property.”

Source: Channelnewsasia.com

The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.

From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller’s Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.

The housing loan limit will also be capped at 80 per cent - down from the current 90 per cent.

This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.

Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.

The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.

The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.

Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.

Eugene Lim, associate director, ERA Asia Pacific said: “We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery.”

Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.

Donald Han, managing director, Cushman & Wakefield said: “It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.

“Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation.”

The Real Estate Developers’ Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.

Source: Channelnewsasia.com

The survey by Ngee Ann Polytechnic found that 77 per cent of respondents said they met with bad service from their agents.

Some of the respondents’ top grouses were that their agents failed to negotiate a good price, that they gave the wrong advice and that they were late for appointments.

Other less common bad service complaints include aggressive property agents, negligent agents and agents who were dishonest or unfamiliar with the transaction procedures.

Generally, however, respondents were content about their agents’ services, with 65 per cent being either satisfied or very satisfied.

At the same time, 73 per cent of those surveyed felt that accreditation of the profession is necessary.

In addition, 97 per cent of those who indicated that accreditation is necessary for every agent also wanted some form of government intervention.

1,041 people took part in the survey. - 938LIVE/vm

Source: channelnewsasia.com - 77% who used housing agents saw bad service of some sort survey

Prices of resale HDB flats rose 3.9 per cent between October and December, bringing the full year increase to 8.2 per cent.

The latest statistics from the Housing Board show that 93 per cent of resale transactions in the fourth quarter were above valuation.

And the median cash-over-valuation (COV) paid by home buyers jumped by 100 per cent - from $12,000 in Q3 to $24,000 in Q4.

Real Estate lecturer at Ngee Ann Polytechnic, Mr Nicholas Mak, said the increase may be due to more sales involving larger flats.

“There seems to be more families that are going in to buy larger flats — your four-room and five-room flats. As a result, these larger flats also come with higher cash-over-valuation amount which, in a way, pulls up that median cash-over-valuation.”

But this increase is unlikely to continue indefinitely.

The HDB noted that the median COV amount had stabilised in recent months.

The cash premium for the first half of this month (subs: Jan) has come down slightly to $22,000.

Some analysts believe this may indicate that the market is approaching a limit.

Mr Mak said: “Our salary is still not catching up at such a high rate, there will be a certain time when the affordability issue will come into play.

“As the sellers start to demand higher and higher COV … there may come a stage when there will be some buyer resistance.”

Efforts by the Government to raise the supply of new homes will also gradually help to cool the market once the flats are completed, said Mr Colin Tan, head of Research for Chesterton Suntec International.

“The Government’s efforts at pushing out the BTOs (build-to-order) and DBSS (Design, Build and Sell Scheme), and all the executive condos, that may have helped to allay some of the panic buying. And this probably resulted in some people actually shifting the demand from the resale market to the new flats,” Mr Tan added.

To meet demand, the HDB said that it will be offering nearly 7,000 new flats in the first half of this year. The flats will be built in areas such as Sengkang, Sembawang, Punggol, Yishun and Jurong West.

Source: http://www.todayonline.com/Singapore/EDC100123-0000259/Median-COV-in-Q4-doubles-to-$24,000

Data released on Friday by the Urban Redevelopment Authority (URA) showed that just 481 units were sold in December, the fifth straight month of decrease. The figure was a 20 per cent drop from the previous month’s sale of 600 units.

It was also the second lowest number of monthly sales in 2009, after January’s low, which saw only 107 uncompleted homes sold. However, last month’s figure was still better than the 131 units sold over the same period a year ago.

Despite a seemingly fast-cooling property market, property developers still pushed out 734 launches in December, down from the 923 units unveiled in November.

The fall in sales came in the wake of government measures implemented in September to prevent a property asset bubble in Singapore. Such measures include the removal of the Interest Absorption Scheme and Interest-Only Housing Loans.

As was the trend in previous months, higher-end projects were more popular. The Shore Residences at Amber Road, which has a median price of S$1,144 per square foot, saw the most number of units sold at 79.

Coming in close behind is Urban Suites at Hullet Road, which sold all 59 units launched for sale last month at a median price of S$2,521 per square foot.

The most expensive unit sold last month was at Nassim Park Residences, a development at Nassim Road, which went for S$3,477 per square foot.

Source: channelnewsasia.com - Singapore’s private property market shows 5th straight month of decline

Savills is forecasting that prices in the luxury segment will rise 15 per cent in the year ahead.

However, prices in the mass market and mid-end properties could see values move up by about five per cent.

Last year, despite the deep economic recession, private property transactions nearly surpassed the highs of 2007.

Going into 2010, Savills believes the rising trend will continue, but at a more moderate pace.

Savills said the underlying demand would come from the completion of the two integrated resorts as well as attractive office rentals which are expected to bring in more overseas investments.

Michael Ng, managing director, Savills Singapore, said: “We do see strong demand because of the population growth. Again a lot more foreign workers are expected to come in over the next 12 months, so I don’t think there will be a correction downwards in that sense. But certainly not the same kind of growth as seen last year, more moderated, but healthier.”

“I think the prices in terms of luxury is still some 20 to 25 per cent off the peak. In terms of the high net worth individuals, I think a lot of confidence is coming back to the market. There is a lot of liquidity around that’s pushing them back into real estate.” - CNA/vm

Source: channelnewsasia.com - Property prices in S’pore to continue to move upwards in 2010