14th June to 20th June 2022
The Housing and Development Board (HDB) has revised its minimum occupancy rule for replacement flats under Selective En Bloc Redevelopment Scheme (SERS). Meanwhile, sales for new private homes more than doubled in May, rising 105.5% to 1,356 units last month from 660 units in April.
1) HDB revises occupancy rule for SERS replacement flat
Under the latest changes, buyers of replacement flats can only sell their units on the open market five years from the date of key collection.
Previously, they could choose to sell their unit seven years from the date of selection of the replacement flat or five years from the date of the key collection – which means some were able to sell their flats even before they lived in the HDB flat for five years.
The new rule applies to SERS sites announced on or after 7 April or from the Ang Mo Kio Drive SERS site.
Lee Sze Teck, Senior Director for Research at Huttons Asia, said the new rule “will put all HDB buyers on the same level playing field”.
Over 600 households in Ang Mo Kio are affected by the latest SERS exercise, with some residents voicing discontent that they have to fork out a significant sum (up to $100,000) for a similar-sized unit in today’s resale market. HDB is following this closely.
2) Ang Mo Kio SERS: Analysts are not surprised by the additional funds for a new flat of comparable size
The news that residents of flats at a public housing estate in Ang Mo Kio, which was chosen for SERS, will have to cough up extra money for a similar-sized replacement flat came as no surprise to property analysts.
Wong Siew Ying, Head of Research and Content at PropNex, explained that SERS is not a “one-for-one exchange”, adding that owners have to top up money for a similar-sized flat given the high cost of Build-to-Order (BTO) launches within mature estates.
HDB also pointed out that the replacement flats come with a fresh 99-year lease, which is longer than that of their old flats, reported TODAY.
Their comments come after some Ang Mo Kio owners have expressed concern over the need to top up money for similar-sized flats.
“Where will the money come from? I won’t have any money left if I pay this. I’m no longer working,” said Mdm Yong, a retired teacher.
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- HDB Single Scheme: Should You Buy a New Launch HDB BTO or Resale Flat in 2022?
3) New private home sales in Singapore more than doubled, reaching a six-month high in May
Sales for new private homes in Singapore more than doubled in May, rising 105.5% to 1,356 units last month from 660 units in April, showed Urban Redevelopment Authority (URA) data.
Wong Siew Ying, Head of Research and Content at PropNex Realty, said it is the highest monthly new home sales since November 2021 when 1,547 units were sold.
“The rebound in new home sales last month was not unexpected as two Rest of Central Region (RCR) launches Piccadilly Grand and Liv @ MB were popular with buyers – contributing to about 41% of May’s transactions,” she added.
On an annual basis, new home sales rose 51.5% in May.
Meanwhile, Catherine He, Head of Research for Singapore at Colliers, attributed the robust sales performance in May to pent-up demand for well-located properties, buyers locking in mortgage rates ahead of further interest rate hikes and strong HDB resale prices.
She noted that the number of new sales to permanent residents (PRs) and foreigners jumped by about 70% to 226 units in May from 133 units in April, despite the heavier stamp duties.
As predicted by the PropertyGuru Singapore Property Market Report Q2 2022, the launch of Piccadilly Grand and Liv @ MB brought some cheer to the non-landed private property market. This is a marked improvement in sales volume, after a slow start to the year, due to the lack of new launches in Q1 2022.
4) Pine Grove, Dunman Road residential sites awarded to the highest bidder
The tenders for the state-owned sites at Dunman Road and Pine Grove have been awarded to the highest bidders, revealed URA.
Sing-Haiyi Jade clinched the 25,234.3 sq m site at Dunman Road for $1.28 billion, or $14,536.62 per sq m (psm) of gross floor area (GFA).
The Pine Grove site, on the other hand, was awarded to United Venture Development, which is an entity of UOL, for $671.5 million or $14,189.73 psm of GFA. It was higher by just $800 than the second-highest bid – making it one of the closest fights in state land tenders.
Zoned for residential use, both sites have a leasehold tenure of 99 years.
The GLS sites for 2H2022 has been released. The six sites on the Confirmed List are Tampines Avenue 11, Marina Gardens Lane, Lentor Gardens, Tengah Plantation Loop (EC), Hillview Rise, and Bukit Timah Link.
5) Elizabeth Towers relaunched for en bloc sale at $630mil
Elizabeth Towers has been relaunched for collective sale carrying a reserve price of $630 million, revealed sole marketing agent Edmund Tie & Company.
This works out to a land rate of about $2,400 per sq ft per plot ratio (psf ppr), after taking into account an 8% bonus floor area.
Situated at 12 and 14 Mount Elizabeth, the freehold residential development occupies a 54,317 sq ft site that is zoned for “Residential” use under the 2019 Master Plan with a building height limit of up to 36 storeys.
Edmund Tie noted that the District 9 site can be redeveloped “up to its verified existing gross floor area of 252,438 sq ft or at a plot ratio of 4.65”.
The tender for Elizabeth Towers, which is just 200m to Orchard Road, closes on 25 July.
According to the PropertyGuru Singapore Property Market Report Q2 2022, small- and medium-sized sites are likely to be favoured in the en bloc market. However, larger projects such as Lakepoint condo and Thomson View have been put up for collective sale at $640million and $950 million, respectively.
6) Fed raises interest rates by 75bps – its highest since 1994
The United States Federal Reserve has unveiled its biggest interest rate hike since 1994, raising interest rates by 75 basis points in a bid to curb rampant inflation.
In fact, Federal Reserve Chairman Jerome Powell revealed that another 75-basis point or 50-basis point hike was likely at the next meeting of the Federal Open Market Committee.
“Clearly, today’s 75-basis point increase is an unusually large one and I do not expect moves of this size to be common,” he said as quoted by Bloomberg.
Reuters noted that the hawkish commitment of the Fed to control inflation has “touched off a broad tightening of credit conditions being felt in US housing and stock markets, and is likely to slow demand throughout the economy – the Fed’s intent”.
Powell explained that the central bank does not “seek to put people out of work” nor try to “induce a recession”.
“Our objective really is to bring inflation down to 2% while the labour market remains strong… What is becoming more clear is that many factors that we don’t control are going to play a very significant role in deciding whether that is possible or not,” he said.
In December 2021, noting rising interest rates in 2022 and beyond, MAS released an advisory cautioning households in Singapore to exercise financial prudence. As it is, fixed interest rates have almost doubled since the start of the year.
7) Frasers Property proposes to privatise Frasers Hospitality Trust
Frasers Property has proposed to privatise its wholly-owned unit, Frasers Hospitality Trust (FHT), via a trust scheme arrangement at $0.70 per scheme stapled security.
The scheme consideration represents a premia of 45.4%, 48.5%, 47.7%, and 43.8% over the volume-weighted average prices of $0.482, $0.471, $0.474 and $0.487 per stapled security respectively to the one-month, three-month, six-month and 12-month period, said Frasers Property in a joint release.
“Following our proactive strategic review to unlock value for our Stapled Securityholders and having considered the long-term challenges facing FHT, we believe that the proposed Trust Scheme is the best option and represents a credible opportunity for our Stapled Securityholders to realise their investments at an attractive valuation,” said Eu Chin Fen, CEO of the FHT Managers.
Notably, FHT’s small size has limited it to enjoy the benefits of a continued listing.
8) Standalone island of five shophouses at Club Street sold for $25.9mil
A standalone island site with five shophouses at Club Street has been sold for $25.9 million to Singapore-listed food services and property development firm ABR Holdings Limited reported Singapore Business Review citing Savills Singapore.
The price works out to $3,582 per sq ft (psf) based on the blended floor area.
Located at 1, 3, 5 as well as 7 and 9 Club Street, the five shophouses occupy a combined land area of about 3,557 sq ft, with an estimated built-up area of 7,225 sq ft.
Citystate Properties owns 1, 3 and 5 Club Street, while Citystate Properties’ shareholder Dr Ling Ai Ee owns 7 and 9 Club Street.
9) Industrial development at 42H Penjuru Road on sale for $20mil
A single-storey warehouse with a three-storey ancillary office, a jetty and an open yard at 42H Penjuru Road has been put up for sale for $20 million, revealed exclusive marketing agent CBRE.
With a total gross floor area of about 102,231 sq ft, the industrial development occupies a 155,313 sq ft site that is zoned for “Business 2” use under the 2019 Master Plan with a plot ratio of 1.0. The site also has direct access to a dedicated jetty size of 6,535 sq ft.
CBRE noted that the new owner can potentially increase the built-up area of the development to about 155,313 sq ft.
The single-storey warehouse currently spans 20,000 sq ft, featuring a 14.9m ceiling height and a floor loading of 30 to 40 kilonewton per sq m. It also “connects directly to the yard space with multiple overhead crane fixtures ranging from 20 to 50 tones”.
The property comes with a fully fitted modern office, which is served by a passenger lift and 13 car park lots.
10) Demand for flexible workspace rose 13% in 2021
Demand for flexible workspaces increased 13% in 2021 from pre-pandemic levels, amid a hike in business registrations, reported Singapore Business Review citing property consultancy firm The Instant Group.
On an annual basis, however, flexible workspace demand dropped 14% last year from 2020.
The supply of flexible working spaces rose 10% in 2021 from 2019 and 6% in 2020.
Singapore Government data showed that the number of firms registered within the city-state increased 11% to 4.6 million in 2021 from 4.1 million in 2019 and 5% from 4.4 million in 2020.
Downtown Singapore emerged as the most expensive location, with flexible workspace costing $876 per month. Tampines offered a more affordable option, with flexible workspace costing $613 per month.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: email@example.com.