Home Latest News Property stamp duty collection surge 73.6% in FY2021, Construction firms face manpower crunch despite easing of border restrictions and more

Property stamp duty collection surge 73.6% in FY2021, Construction firms face manpower crunch despite easing of border restrictions and more

by admin
Property stamp duty collection surge 73.6% in FY2021, Construction firms face manpower crunch despite easing of border restrictions and more, svg%3E
Property stamp duty collection surge 73.6% in FY2021, Construction firms face manpower crunch despite easing of border restrictions and more

10th May to 16th May 2022

Singapore’s stamp duty collection surged 73.6% to $6.76 billion during the financial year 2021, from $3.9 billion in FY2020. While the reopening of borders saw more construction workers enter Singapore, construction firms pointed out that many workers are also leaving, affecting productivity and output.

 

1) Property stamp duty collection surge 73.6% in FY2021

Singapore’s stamp duty collection surged 73.6% to $6.76 billion during the financial year 2021, which covered the periods between April 2021 and March 2022, from $3.9 billion in FY2020, reported The Business Times citing data from the Accountant-General’s Department.

Lee Sze Teck, Senior Director of Research at Huttons, noted that the hike in stamp duty collected was bigger than the increase in transaction volume. In FY2021, the total number of properties transacted rose 19.9% year-on-year to 63,914.

“This is due to more higher-value transactions in the residential luxury market and Good Class Bungalows (GCBs), an active commercial and industrial investment market and developers acquiring land for development,” said Lee.

Related article: Commercial Property Singapore: How to Get a Commercial Loan (2022)

However, stamp duty collections for the first three months of 2022 declined 4.8% to about $1.5 billion from the $1.58 billion posted in Q1 2021.

Cushman & Wakefield’s Head of Research Wong Xian Yang attributed the decline to seasonal factors and to buyers holding back following the roll-out of new cooling measures in December 2021.

 

2) Construction firms face manpower crunch despite easing of border restrictions

188 Construction Sites Ordered To Close For Breaching COVID-19 SOP, svg%3E

While more construction workers are entering Singapore following the reopening of borders, construction firms said many workers are also leaving to visit home for the first time in two years, reported TODAY.

Notably, the construction sector was badly affected by manpower shortages during the pandemic as the flow of migrant workers into Singapore was restricted, resulting in delays in the completion of projects.

CHH Construction System’s Managing Director Nelson Tee noted that while the situation has improved, the new workers are rookies and less experienced, hence, have to be sent for training.

“So during this period, the skilled people go back and the new come in, so productivity and output will still be affected.”

Akbar Kader, Nan Guan Construction’s Managing Director, said the construction firms are still feeling the pinch.

“It’s a double whammy (with) the backlog of projects, second is the sheer number of projects going into the market due to pent-up demand… We are hoping that in six months or so that maybe things will stabilise,” he said.

Aside from the movement of foreign labour, more expatriates are expected to return to Singapore. This may cause a spike in rental demand, further fuelling the already red-hot rental market. Possibly, this demand may spill over to the co-living movement, as more seek affordable options as rental prices continue on an upward trend.

Related article: Renting in Singapore (2022): 3 Upcoming Trends for the HDB and Private Rental Market

 

3) New ABSD rule on trusts not to affect broader property market

While the new Additional Buyer’s Stamp Duty (ABSD) rule on the transfer of residential properties into a living trust will plug a gap in the existing system, it is not expected to significantly affect the broader property market, reported Channel News Asia.

This comes as the new rule will only affect a limited number of well-heeled buyers acquiring property through trusts structured in a specific way.

Related article: Why Do People Buy Property In Singapore Under Their Children’s Names, and Should You? (2022)

Lam Chern Woon, Edmund Tie’s Head of Research and Consulting, said the move levels the playing field among buyers.

“While it is the intention of parents to leave an advance legacy for their children, some have bemoaned that this runs the risk of exacerbating the state of inequality,” he said.

The new ABSD rule will see a 35% tax imposed on “any transfer of residential property into a living trust”. However, there are still several ways you can legally ‘avoid’ paying ABSD, such as decoupling or buying a dual key unit.

 

4) Thomson View relaunched for collective sale with price unchanged at $950mil

thomson view, svg%3E

Source: Google Maps

Thomson View Condominium has been relaunched for en bloc sale with the guide price unchanged at $950 million, reported Channel News Asia citing OrangeTee Advisory.

This works out to a land rate of $1,294 per sq ft per plot ratio (psf ppr) after taking into account the additional 7% bonus gross floor area for the private outdoor spaces, the $288.8 million estimated differential premium for intensification and around $332.3 million in upgrading premium.

During the launch of its previous tender in November last year, the development was the largest residential en bloc sale effort by price quantum and attracted several inquiries as well as site visits by interested parties.

“However, due to the small window of less than one month between the announcement of property cooling measures in December 2021 and the tender close in January 2022, the prospective buyers decided to hold back on their acquisition decisions,” said Marcus Oh, Managing Director at OrangeTee Advisory.

The tender for Thomson View closes on 8 June.

Thomson View Condominium offers its residents easy access to green spaces such as Lower Peirce Reservoir Park and MacRitchie Reservoir Park. It is also nearby Thomson Plaza and the newly-opened Upper Thomson MRT station on the Thomson-East Coast Line.

 

5) Baywind Residences launch previews, prices start below $2mil

Baywind Residences, svg%3E

Baywind Residences, a freehold boutique project at Telok Kurau, started previews on 14 May, with guide prices starting below $2 million, reported The Business Times.

Featuring a total of 24 units, the five-storey project is developed by Baywind Properties, which is a consortium comprising ABR Holdings and Lim Wen Heng (LWH) Holdings.

The three-bedroom units, which span between 969 sq ft and 1,066 sq ft, were priced from $2,038 per sq ft (psf) or a quantum of below $2 million. The four-bedroom units range from 1,270 sq ft to 1,313 sq ft and are priced from $1,953 psf or about $2.5 million.

“Since the COVID-19 pandemic, urban living has evolved, and people now crave for more space within their homes. Every unit type comes with a universal space that can be used as a study room or home office, a hobby room or an expansion to the main living area,” said Jason Lin, Director of Baywind Properties.

The property is a five-minute walk to the upcoming Marine Terrace MRT station on the Thomson-East Coast Line and near popular primary schools such as Tao Nan School, CHIJ Katong Primary and Ngee Ann Primary.

 

6) HDB receives about 1,000 complaints on renovation contractors per year

The Housing and Development Board (HDB) has received an average of 1,000 complaints per year on renovation contractors over the last three years, revealed the Ministry of National Development (MND) in a written reply to Parliament.

Notably, homeowners who are renovating their flats are required to engage contractors that are listed in the HDB Directory of Renovation Contractors (DRC).

Related article: 9 HDB Renovation Permits and Guidelines You Need When Renovating Your Home

And since a renovation contractor’s engagement is a private arrangement, homeowners are advised to approach the Consumers Association of Singapore (CASE) or Small Claims Tribunal in the event of any dispute on service as well as on the quality or timeliness of works.

Renovation contractors who are found in breach of HDB’s terms will be penalised under the Demerit Points System, which may result in the company’s suspension from the DRC and thus, inability to take on HDB renovation projects,” said MND.

HDB has penalised around 200 errant contractors over the past three years, with infringements including dirtying the common area, working beyond the permitted hours, and failing to send written notices to neighbours informing them of the renovation work.

 

7) About 350 households hit by BTO completion delays offered interim rental housing

Tampines GreenCourt, svg%3E

Tampines GreenCourt, one of the BTO projects affected by a fresh round of BTO construction delays. Source: HDB

About 350 households affected by Build-To-Order (BTO) completion delays have been assisted by the Housing Board with Interim Rental Housing (IRH), said MND.

The ministry explained that pandemic-induced disruptions have caused significant delays to many construction projects, both in the private and public sectors.

“As IRH flats are intended primarily for people with urgent housing needs, it is also important to balance the use of these flats across different rental schemes to meet the needs of different groups, prioritizing the most needy,” it said.

MND noted that the application rate for rental flats under the Parenthood Provisional Housing Scheme (PPHS) has dropped significantly to about half the scheme’s earlier rate since August 2021.

In fact, about 45% of PPHS applicants who were invited to select a flat opted not to do so, indicating that most of them have other housing options.

The fresh round of BTO construction delays and long BTO construction waiting times continue to push young families into the resale market. Those who have chosen not to cancel their BTO flat application either rent from the open market or seek out alternative arrangements like living with their family while waiting for their homes to be fully built.

 

8) 22 strata office units at 20 Cecil Street on sale for $75.88mil

A portfolio of 22 strata office units spanning across four levels in 20 Cecil Street has been put up for sale via expression of interest (EOI) with a guide price of $75.88 million, revealed marketing agent CBRE.

This works out to $3,100 per sq ft (psf) based on the total strata area of about 24,477 sq ft.

20 Cecil Street is a 28-storey Grade A office building that enjoys dual frontages along Church Street and Cecil Street. With direct sheltered access to Raffles Place MRT station, it also features 86 car parking lots and an exclusive sheltered drop-off point.

“Given the building’s hi-specs quality, accessibility and strategic location, we expect strong interest from both investors and owner-occupiers for this portfolio,” said Michael Tay, CBRE Singapore’s Head of Capital Markets.

The EOI exercise for the office units closes on 14 June.

 

9) Orchard rent to increase 1% to 2% by end-2022

orchard road singapore, svg%3E

Singapore saw prime retail rents in both suburban and Orchard areas increase 7% and 0.4% quarter-on-quarter, respectively, in the first quarter of 2022, revealed Colliers.

This is an improvement from the 0.5% and 0.1% hike seen during the fourth quarter of 2021. Colliers noted that the hike comes amid a recovery in consumption, tourist arrivals and rising wages.

“In the coming quarters, consumer footfall and tenant sales are likely to increase with the lifting of travel curbs and safe management measures (e.g., no limits on group sizes and employees returning to the office), and a resumption of live performances and the reopening of nightlife businesses. This augurs well for retail operators, especially those located in Downtown Core and Orchard,” it said.

With retailers expected to be more confident with their expansion plans, Colliers expect rents for the Orchard area to grow by around 1% to 2% by end-2022.

 

10) Commercial real estate market registers highest first-quarter investment activity in over 10 years

Singapore’s commercial property market saw investment activity increase 22% year-on-year to $3.2 billion in the first quarter of 2022 – marking its highest first-quarter investment activity in more than 10 years, reported Singapore Business Review citing Real Capital Analytics.

For the first time, Singapore emerged as the most traded Central Business District (CBD) office market within the Asia Pacific in a single quarter, surpassing Tokyo, Sydney and Seoul.

In its Asia Pacific Commercial Property Market Starts 2022 report, Real Capital Analytics also listed Singapore as the fifth most active metro during Q1 2022.

This comes as commercial property activity was boosted by “a surge of overseas capital, including buyers from Japan, Germany, Hong Kong, the U.K., and the U.S.”, said Real Capital Analytics.

 

Looking for a property in Singapore? Visit PropertyGuru’s ListingsProject Reviews and Guides.

Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.

You may also like