Singapore property market finally sees slight easing – and a new stamp duty
Singapore announced on Friday targeted tweaks to property market measures and a new stamp duty – moves that observers said are in response to recent developments in the property market and the wider economy. The release by government agencies said that Singapore will lower the seller’s stamp duty (SSD) by four percentage points for each tier and shorten its holding period. The Total Debt Servicing Ratio (TDSR) will also no longer apply to mortgage equity withdrawal loans with loan-to-value ratios of 50 per cent and below. But even as the government eased these measures, a new stamp duty called the Additional Conveyance Duties (ACD) was introduced to plug a loophole in residential property transactions undertaken via transfer of shares in property-holding entities.
Property stocks surge on tweaks to cooling measures
Property counters surged on Friday in reaction to the government’s easing of its property cooling measures, with the FTSE ST Real Estate Holding and Development Index closing 2.38 per cent up at 826.71. The government said that the holding period for the seller’s stamp duty (SSD) would be shortened from four years to three, and the rate would also be lowered by four percentage points for each tier. The Total Debt Servicing Ratio framework will also no longer apply to mortgage equity withdrawal loans with loan-to-value (LTV) ratios of 50 per cent and below.
Singapore not an ideal test-bed for global innovation
Despite a commonly held view that Singapore could aspire to be a test-bed for global innovation, some veteran entrepreneurs say local companies would do better to focus instead on global markets, or internationalisation, from the get-go. Tan Min-Liang, chief executive officer of Razer, a San Francisco-based gaming hardware company, said: “While it might seem like common wisdom to first test (an idea) in Singapore, and then take it regionally and to the world, with all due respect to the government, I think it doesn’t make sense in today’s world.”
Changes to Companies Act take effect March 31
Significant changes to the law governing companies will come into effect in just a matter of weeks. Singapore will be implementing changes to its Companies Act – which will include making the beneficial ownership of business entities more transparent – come March 31. Senior Minister of State for Finance and Law Indranee Rajah announced this in her speech on the second reading of the Companies (Amendment) Bill to Parliament last Friday. The Bill was passed on the same day.
Retail firms collectively post weaker quarterly earnings
Major Singapore Exchange-listed retail companies turned in a poorer report card for the quarter ended Dec 31, 2016, as the collective bottom line fell 43 per cent year on year against the backdrop of a challenging retail environment. The combined profits for key retail firms with local operations totalled S$55.21 million, while revenue was nearly flat for the quarter at S$881.82 million.
Singapore Real Estate
Borrowing money against property easier now for retirees
The Government is relaxing loan limit rules for anyone wanting to borrow money using their residential property as collateral. It is tweaking the total debt servicing ratio (TDSR) framework which stipulates that all of a borrower’s debt repayments – including mortgage, credit cards and car loans – should not top 60 per cent of monthly income. The move is set to help retirees, along with others wanting to cash out using the value of their home.
Banks say loan repayment ability still key even with easing of total debt servicing ratio
The government’s easing of the debt ratio will give flexibility to home owners looking to monetise their property but borrowers need to think of their repayment ability, banks said on Friday. The total debt servicing ratio (TDSR) will no longer be applied from March 11 for mortgage equity withdrawal loans that have a loan-to-value (LTV) ratio of 50 per cent and below, the government said.
Targeted approach likely to have muted market impact
With the government seen taking a targeted approach to adjusting the seller’s stamp duty (SSD) and the total debt servicing ratio (TDSR) framework, market players believe the impact on the property prices and transactions will be muted. But it is highly debatable as to whether the move signals the start to a gradual unwinding of property cooling measures, with most observers perceiving the government’s stance as largely unchanged. As things stand, it is not only retaining the current additional buyer’s stamp duty rates (ABSD) and loan-to-value limits, but also imposing new taxes on transfer of shares in residential-property-holding entities to mimic the ABSD on direct residential transactions.
Keen interest at 2 property launches after govt eases cooling measures
Buying interest moved up a notch at two residential projects launched over the weekend, one day after the government announced the easing of some property cooling measures. Close to 170 units of the total 497 units at Qingjian Realty’s executive condominium (EC) project iNz Residence – the first EC to be launched this year – were sold on the first day of booking on Saturday. Meanwhile, crowds thronged the showsuite of Lendlease’s condominium Park Place Residences at PLQ, which also opened on Saturday.
Singapore eases property rules in diverging path from Hong Kong
Whether you look at prices or policy, the property markets in Singapore and Hong Kong are marching resolutely in opposite directions. Singapore has eased some rules in its property market, after more than three years of home price declines. Hong Kong in November tightened some restrictions, after prices rallied following a short-lived dip last year. The curbs in Hong Kong have had little impact so far, with existing home prices rising to all-time highs amid brisk demand from buyers.
Light at the end of the privatisation tunnel
It has been an 18-year wait for the residents of Braddell View for the privatisation of their HUDC estate. The other 17 estates had taken just two to three years to complete their privatisation processes – all largely painless. But the story is a little different for Braddell View, the last such estate standing. What has stalled Braddell View’s progress has been a “historical quirk” that needed to be fixed, the need to “harmonise” the leases of two separate plots of land that make up the estate. The sprawling 106,120 square-metre development is the only HUDC estate completed in two phases. It thus sits on two land parcels under two state leases, each with different expiry dates that are precisely two years, two months and 27 days apart.
Standards of governance and accountability raised for town councils
Town councils in Singapore must abide by higher standards of governance and transparency, after Parliament on Friday passed amendments to existing laws to give the government greater oversight over how they are run. Among the many changes, town councils must now submit audited financial reports to the Ministry of National Development (MND) within six months of the end of the financial year. They also have to publish the statements for public access and viewing. On the area of governance and accountability, town council staff must maintain a registry of conflict of interest disclosures from its staff.
Makeover for Chinatown street market
The Chinatown Street Market will finally be getting a makeover, after several years of delay. The Chinatown Business Association (CBA) announced yesterday that refurbishment works, involving all 159 stalls along Pagoda, Sago, Smith and Trengganu streets, will begin on May 15 and are expected to conclude by the end of next year. Plans to give the street market a facelift and improve fire safety were mooted as early as 2013.
Kampong Bugis set for major makeover
A plot of waterfront land that was once home to the Kallang Gas Works and left mostly vacant for years is set to be transformed into a vibrant private residential district as part of government plans. Residents and businesses in the vicinity cheered the move, hoping that the made-over Kampong Bugis will inject some excitement to an area viewed by some as old and predominantly occupied by elderly residents. lon”It’s mostly old people living around here now,” said Madam Yang Xiu Ling, 49, who has been running a hair salon at a nearby housing estate for the past 17 years.
Savills IM setting up more funds to tap demand
Despite lower returns becoming a new norm across asset classes, Savills Investment Management is sanguine about demand for real estate investments and is raising several funds this year to tap that demand. These include two European-centric funds of about one billion euros (S$1.5 billion) each, a Nordic fund of 500 million euros, a Japan fund of more than S$600 million and an Asian fund of about US$1 billion in targeted gross sizes.
Sing Holdings sells SHR stake to S’pore entity
Property development and investment company Sing Holdings Limited sold 100 per cent of its stake in Sing Holdings (Robin) (SHR) last Friday to a Singapore entity not related to the company, its directors and controlling shareholders, allowing it to avoid not only hefty qualifying certificate (QC) charges on unsold homes and additional buyer’s stamp duty (ABSD), but also a new stamp duty which came into effect the next day, on March 11. The consideration was arrived at on a willing buyer, willing seller basis, taking into account the agreed property value of S$72.7million for 29 strata units in Robin Residences located at Robin Drive, a freehold condominium developed by SHR.
The making of a global developer
Oxley has come a long way since its roots as a Singapore-based property developer. Incorporated in 2010, it now has a presence in 10 markets across Asia, Australia and the UK, and most recently, made a foray into the hospitality business. The company’s chief executive officer Ching Chiat Kwong tells The Business Times: “Oxley has undergone a marvellous transformation from a Singapore-based developer to a global developer.”
Saizen Reit to be liquidated after proposed RTO falls through
The transaction process on a proposed reverse takeover (RTO) deal between Saizen Real Estate Investment Trust (Reit) and Sime Darby Property Singapore, which has been brewing since August 2016 and twice delayed, has fallen through and the Reit will be liquidated. Saizen Reit’s manager, Japan Residential Assets Manager Limited, said on Friday in a filing to Singapore Exchange about half an hour before markets closed, that “it is not possible to complete the proposed RTO transaction by the long-stop date of the implementation agreement, being March 31, 2017”.
Views, Reviews & Forum
Surprise tweaks in property cooling measures seen signalling further unwinding
The government’s unexpected move to make “calibrated adjustments” to a couple of the residential property cooling measures amid a recovery in private housing sales volumes has baffled many market watchers. Could it be that the authorities were just getting tired of grumbles by individuals and decided to respond to ground feedback? If so, how really impactful can the latest announcements be? There is little doubt that, at the margins, they will benefit segments of homeowners.
Property: Don’t get too excited
On Friday morning, the government sparked a property stock rally as it announced a series of tweaks on the residential property market. One notable change is in the seller’s stamp duty (SSD) measures, last tightened in 2011. Homeowners who buy houses from today only need to wait three years instead of four to avoid the SSD when they sell their properties. If they can’t wait, they will also pay less in tax – some four percentage points less, compared to homeowners who bought their properties yesterday.
Some property curbs eased: But what do TDSR, LTV, SSD and ABSD mean?
The Government announced tweaks to property cooling measures on Friday (March 10). With effect from Saturday (March 11), changes to the Seller’s Stamp Duty (SSD) and Total Debt Servicing Ratio (TDSR) framework will take effect, but current rules on Additional Buyer’s Stamp Duty and the general loan-to-value (LTV) limits will stay the same. Not sure what all this means? Read our quick explainer below.
Restrict number of shoebox units in condos
Many buyers of small or shoebox units do so due to affordability and the prospect of renting out the unit as an investment and passive income source (Paya Lebar condo aims to score home run; March 10). However, several issues related to short-term leases and illegal subletting are, as yet, unresolved. Until these are settled, the authorities should consider limiting the number of shoebox units offered at future developments to, perhaps, 15 per cent of the project.
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Additional Articles of Interest – Local & Overseas Real Estate
Local & Overseas Real Estate – Full Article