Increase in DC rates to have impact on en-bloc sales?

The government is raising development charge or DC rates for non-landed residential use by 13.8 per cent on average. The areas which have seen private-sector collective sales and bullish land bids at state tenders in recent months will see some of the biggest hikes in DC rates.

The government is also increasing DC rates by an average of 3.8 per cent for commercial use and 0.3 per cent for landed residential use. The latest changes are for the period Sept 1, 2017 to Feb 28, 2018. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc LifeSignature at Yishun,  Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC,  The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

DC is payable for enhancing the use of some sites or to build bigger projects on them.

The Ministry of National Development, in consultation with the Chief Valuer (CV), revises DC rates twice a year, on March 1 and Sept 1. The rates are based on CV’s assessment of land values and take into consideration recent land sales and other property transactions. DC rates are stated according to use groups across 118 geographical sectors in Singapore.

MND said on Thursday evening that DC rates remain unchanged for industrial use as well as the use groups that cover hotels/hospitals, place of worship/civic and community institution, and three other use groups.

For the non-landed residential use group, DC rates are being increased in 116 of the 118 geographical sectors by between 6 per cent and 29 per cent. The biggest increase of 29 per cent applies to Sector 100 (Tampines Road/Hougang/Punggol/Sengkang). This is the sector where Rio Casa, which was sold through a collective sale in May this year, is part of.

Sector 101 which includes Eunosville, another development that has been sold through an en bloc sale, saw a 28 per cent DC rate hike. Sector 103, where a 99-year leasehold private housing site along Woodleigh Lane was sold at a state tender, also saw a 25 per cent rate hike. Sector 111, where a 99-year leasehold site along Stirling Road was sold at a state tender, saw a 25 per cent rate hike.

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New station to incorporate more open public spaces

SINGAPORE – The North-East Line extension will open in 2023 – seven years ahead of its expected opening date of 2030.

The one-station extension will span about 1.6km. It will serve the Punggol North area and the station is likely to be called Punggol Coast station. This will benefit near by executive condo residents such as those from The Terrace EC. Upcoming executive condo launches include Hundred Palms Residences, Anchorvale Lane EC,  while existing ones include Parc Life, Signature at Yishun,  Brownstone EC, Visionaire ECInz Residence, The Criterion EC and Northwave EC, The Terrace EC,  The Vales EC, Sol Acres EC and The  Bellewoods EC. Hundred Palms Residences details and Hundred Palms EC show flat will be available shortly.

Second Minister for Transport Ng Chee Meng announced this on Wednesday (June 7) at the Boon Lay station while visiting an exhibition about the Tuas West Extension on the East-West Line, which will open later this month (June).

“This will benefit residents and students in the Punggol town area, especially in the northern part of Punggol,” said Mr Ng.

The Land Transport Authority had said earlier that the extension of the North-East Line will be built in tandem with the developments there so that future residents in Punggol North will have train access to the city centre as well as other parts of Singapore.

Punggol North will be a mixed-used area and is slated to be an “enterprise district” housing digital and cyber-security industries.

It will also be the first district where new planning concepts will be applied and a master developer – in Punggol North’s case, the JTC Corporation – will be appointed to take charge of the entire district.

The district will include the new Singapore Institute of Technology campus which will be located next to JTC’s business parks.

In response to feedback from commuters, the LTA said the new station will also incorporate more “open public spaces” where activities can be held, as well as a dedicated space to showcase exhibitions.

“We envision the station to be a vibrant community hub that brings commuters together in the heart of Punggol North,” said LTA deputy chief executive for public transport, policy and planning Jeremy Yap.

The LTA will call tenders for the construction of the NEL extension this month (June), with construction expected to begin in the first half of next year (2018).

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Bringing Punggol residents together

Located near Waterway Point shopping centre, the new Punggol Town Square launched yesterday has a standing capacity of 1,000 people, providing a space for the community to take part in activities together.

The 1,620 sq m town square, which is partly sheltered, also offers vantage views of the water. A 280-seat food and beverage outlet, Starker Q, located within the town square will open its doors in April. This will benefit nearby residents such as those from The Terrace EC in Punggol. Upcoming executive condo launches include Hundred Palms Residences EC, Anchorvale Lane EC,  while existing ones include Parc Life, Signature at Yishun,  Brownstone EC, Visionaire ECInz Residence, The Criterion EC and Northwave EC, The Terrace EC,  The Vales EC, Sol Acres EC and The  Bellewoods EC. Hundred Palms Residences details and Hundred Palms EC show flat will be available shortly.

Deputy Prime Minister and Coordinating Minister for National Security Teo Chee Hean, who was at the launch, said in the last decade, more than 26,000 Housing Board homes and 5,800 private housing units have been added to Punggol Town.

“This town square is part of our latest efforts to bring Punggol residents together.

“It is a good place for residents to gather and bond – located in the heart of Punggol,” said Mr Teo.

Among the activities residents can look forward to are mass exercise sessions, mini concerts and art exhibitions.

Over the next week, residents will be able to take part in eco-workshops, handicraft sessions, a movie screening and picnic session, as well as cultural performances.

Separately, the Punggol Discovery Cube was also opened yesterday. This is the first visitor centre to be built in a housing town. There, residents will get to learn more about how Punggol has developed.

The opening of the Punggol Town Square and Punggol Discovery Cube are the latest projects under the Remaking Our Heartland (ROH) programme led by HDB, which aims to spruce up HDB towns.

Since the first public housing project in Punggol was completed in 2000, HDB has completed some 43,000 flats in the town as of the end of last year.

Over the next three years, another 6,500 units in Punggol will be completed.

The residential population in Punggol today has more than doubled since the announcement of ROH plans in 2007, growing from 52,700 in 2007 to 118,100 in 2016.

Other developments such as the Punggol Regional Sports Centre and other neighbourhood centres are expected to be completed within the next few years.

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Time to ease property curbs, say developers

The head of the property developers’ body here says it is time to wind back property cooling measures given an oversupply of housing and a fragile economy.

Stepping up similar calls he made last year, Mr Augustine Tan said the measures had already succeeded in reducing home prices and sale volumes – and that it was timely to look at calibrating them. Upcoming executive condo include The Visionaire EC , Wandervale EC and Parc Life EC while existing ones include The Terrace EC, Brownstone EC, Waterwoods EC, Signature at Yishun, Skypark Residences, The Vales EC, The Criterion EC, Bellewaters EC, Bellewoods EC.

“With safeguards in place such as the continuation of the prudent TDSR (total debt servicing ratio) measures together with the current economic situation, property prices will be kept in check,” said Mr Tan, president of the Real Estate Developers’ Association of Singapore (Redas).

In July last year, the Monetary Authority of Singapore said it was premature to lift property curbs, as the price correction had been modest.

Mr Tan noted that the real estate market is reeling from the compounding effects of oversupply, rising vacancy rates, weak demand and rising interest rates amid economic challenges. “There is therefore an urgent need for action to bring stability and ensure a soft landing to prevent further damage to the fragile economy,” he said.

Private residential prices here fell for the ninth straight quarter in the October to December period last year, easing 0.5 per cent, bringing the full-year fall to 3.7 per cent.

Mr Tan was speaking at the association’s annual Spring Festival lunch yesterday held at the St Regis Singapore.

Singapore’s private residential market had a supply pipeline of over 60,000 units and a record 26,500 vacant units as at the end of last year.

“Furthermore, should the ongoing volatility of the stock market persist, which is a real risk, this could severely impact the property market,” Mr Tan warned.

It could pile more pressure on developers affected by the qualifying certificate (QC) rules and the additional buyer’s stamp duty (ABSD).

He said about 700 unsold units across 13 developments will be hit by QCs this year, with estimated charges of close to $100 million.

The QC rules require developers with at least one foreign shareholder or director, to complete construction within five years, and to sell all units within two years of completion. Developers that need more time have to pay extension charges.

The ABSD rules – introduced in December 2011 – mean developers here have to develop and sell all new units within five years.

If not, they must pay the 10 per cent ABSD. The levy was later raised to 15 per cent for sites acquired from Jan 12, 2013 onwards.

“The kick-in at end 2016 of the ABSD remission claw-back for developments with unsold units will put further pressures on prices,” Mr Tan said.

About 6,000 unsold units in 33 developments – excluding executive condominiums – are set to be hit by the ABSD remission claw-back next year and in 2018, he said.

Analysts The Straits Times spoke to agreed with Redas’ assessment of the property market.

“We are quite close to a perfect storm with everything pointing downwards. There is oversupply in practically every segment of the market and rents are coming down,” noted Chesterton Singapore managing director Donald Han.

Given the weaker economic outlook, Mr Han said “it is good for the Government to start looking at pre-emptive measures, rather than wait for blood to be on the street”.

Knight Frank Singapore head of research and consultancy Alice Tan said the Government could consider relaxing the ABSD rate of 7 per cent for Singaporeans buying a second residential property.

Another suggestion was to scrap the Seller’s Stamp Duty (SSD) for residential property – introduced in 2010 to curb speculation.

“With falling prices and the property market remaining weak, the concern of speculation is much reduced. So the SSD removal or relaxation should not have the unintended effect of price rebound,” she noted.

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Need for action to bring stability and ensure soft landing

SINGAPORE: With developers facing potential charges for unsold private residential units that could amount to S$100 million, the Real Estate Developers’ Association of Singapore (REDAS) renewed its call on Thursday (Feb 18) for the Government to review the property cooling measures.

Mr Tan, who is also the executive director for property sales at Far East Organization, noted that as at the end of last year, there is a supply of more than 60,000 units in the pipeline and a record 26,500 vacant units. Upcoming executive condo include The Visionaire EC , Wandervale EC and Parc Life EC while existing ones include The Terrace EC, Brownstone EC, Waterwoods EC, Signature at Yishun, Skypark Residences, The Vales EC, The Criterion EC, Bellewaters EC, Bellewoods EC.

“The real estate market is reeling from the compounding effects of an oversupply situation, rising vacancy rates, weak demand and increasing interest rates,” REDAS president Augustine Tan said at the association’s Spring Festival Lunch.

“There is therefore an urgent need for action to bring stability and ensure a soft landing to prevent further damage to the fragile economy,” he added, citing weak global growth, turmoil in financial markets and Singapore’s own restructuring journey as risks to the economy.

In addition to the building supply, developers are also facing pressure from measures such as the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate (QC).

The ABSD, first introduced in 2011 and revised upwards in 2013, is a tax levied on both individual property purchasers and developers.

The amount of ABSD individuals have to pay depends on their residency status and the number of properties they own, while developers are required to pay 10 to 15 per cent of land cost unless they build, complete and sell all units within five years of the date of the land acquisition.

On top of ABSD, developers with foreign holdings also have to meet QC rules which stipulate that they must complete construction within five years of buying the land and sell all dwelling units in the next two years. Those who need more time to meet these requirements are required to pay extension charges pro-rated to the proportion of leftover, unsold units. Land sold through the Government Land Sales programme and on Sentosa Cove do not need QC.

S$100 MILLION CLAWBACK

In his speech, Mr Tan estimated that about 700 unsold units across 13 developments will be affected by QC in 2016 with charges amounting close to S$100 million.

The ABSD remission clawback for developments with unsold units will also kick in at the end of this year and is likely to put further pressure on prices. He said about 6,000 units remain unsold in 33 developments, which will be affected by the ABSD remission clawback in 2017 and 2018.

Several real estate industry players have been lobbying for the removal of the ABSD, which is part of the slew of curbs that have slowed down buying activity in the domestic market.

These players often argue that the Total Debt Servicing Ratio (TDSR) framework will ensure buyers make purchases within their means even if the ABSD is removed. TDSR limits the amount borrowers can spend on debt repayments to 60 per cent of their gross monthly income.

“Since 2009, the successive introduction of the Government’s property measures has cooled the market, bringing down transactions and prices. With safeguards in place such as the continuation of the prudent TDSR measures together with the current economic situation, property prices will be kept in check,” Mr Tan said. “It is therefore timely to consider a calibration of the cooling measures.”

Private property prices have fallen 8.4 per cent by the last three months of 2015 since the peak in the third quarter of 2013, data by Urban Redevelopment Authority (URA) showed. However, the nine consecutive quarters of decline is still shy of the more than 60 per cent increase in prices after the global financial crisis.

The Government has repeatedly said the time is not yet right to tinker with the measures. In October, Minister for National Development Lawrence Wong said that even though the market is stabilising, the price adjustments so far had been moderate compared with the price increase in earlier years and the Government did not want to “risk a premature market rebound”.

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New Bus Services to be Launched

Four new bus services will be launched later this month as part of the nation’s five-year plan to ease the peak-hour squeeze and boost connectivity.

They will serve areas such as Sembawang, Bukit Panjang and Changi.

Service 117, which will operate from Punggol and Sembawang bus interchanges, will pass areas including Piccadilly, Jalan Kayu and Canberra Link. This will benefit nearby executive condo residents such as those from The Brownstone EC, The Visionaire EC, Parc Life EC, Skypark Residences and Signature EC at Yishun.

Three of the services – 47, 117 and 118 – will start on Dec 20. The fourth – loop service 979 – will begin operations on Dec 27, the day the MRT Downtown Line 2 opens.

A new bus terminal at Changi Business Park will also begin operations on Dec 20, said the Land Transport Authority and transport companies SMRT and SBS Transit yesterday.

Service 47 will run between Changi Business Park and Marine Parade, stopping at locations such as Parkway Parade, Victoria School and Changi City Point.

Service 118 will ply between Punggol Bus Interchange and Changi Business Park. It will go to Changi General Hospital, Temasek Polytechnic and Simei Avenue, among other stops.

Loop service 979 at the Bukit Panjang Temporary Bus Park will traverse Upper Bukit Timah Road, Petir Road and Jelebu Road.

Commuters can use it to switch to the Downtown Line, connecting Bukit Panjang LRT to Beauty World, Little India and Bugis.

In addition, service 983, which currently operates from Choa Chu Kang Bus Interchange and loops at Choa Chu Kang Avenue 5, will be extended to Bukit Panjang.

The extended route includes new housing areas in Keat Hong and covers more of Choa Chu Kang.

Under the Bus Service Enhancement Programme, 54 new and amended bus services and routes have been rolled out since 2012.

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Stringent Quality Checks in Place for Flats: HDB

SINGAPORE: The Housing and Development Board (HDB) applies a stringent framework of quality assurance and checks to ensure that “quality flats” are delivered to home buyers, it said in a media release on Sunday (Dec 20).

This framework includes quality standards set out at the start of the project, a list of recommended building materials and equipment suppliers that contractors are required to adhere to and civil and structural audits. It also includes timber mock-ups for toilets, kitchens, air-con ledges and services yards, and the preparation of sample units for different flat types to serve as quality benchmarks.

HDB also said it performs regular inspections of contractors’ work. It deploys a Central Audit Team that performs checks on all projects at different stages of construction, while HDB project directors conduct regular inspections on the quality of work to ensure that work completed is consistent with the approved specifications and work methods.

Building Service Centres (BSC), which have been set up in all new HDB housing projects since 2005, provide on-site advice and assistance to new flat owners. The BSCs operate for the one-year Defects Liability Period, after which flat owners can still report any defects to the HDB Branches managing their estate.  Executive condominiums also have defects liability period. Existing executive condo in the market include The Terrace EC, Waterwoods EC, Bellewaters EC, Bellewoods EC, The Vales ECSkypark Residences ,The Brownstone EC, Signature EC At Yishun while upcoming ones include Parc Life EC and The Visionaire EC and Wandervale EC.

“In the past few years, HDB has ramped up projects – close to 100,000 flats. This is equivalent to building a new Clementi town,” said Mr Loo Yow Khoon, HDB’s Deputy Director of Building Quality Group.

A “comprehensive” programme is in place to manage quality, said Mr Loo, starting from as early as the design stage to the implementation stage to final checks when the unit is nearly completed by a Building Inspection Team, which combs the entire flat for imperfections or defects.

HDB’s statement comes after questions about the quality of Build-To Order (BTO) flats arose earlier this year. Residents at BTO flats in Punggol for instance, complained about hairline cracks in the walls and that rainwater was flooding their homes. More recently this month, a family who collected the keys to their flat in Sengkang in October claimed to have found up to 156 defects in the unit.

“IMPERFECTIONS ARE NOT DEFECTS”

HDB said it recognised that some flats may not meet the expectations of residents and there could be issues to be addressed even after the completion of construction. However, it said that the bulk of feedback received pertained to “surface imperfections” such as hairline cracks, scratches on timber flooring or uneven tile joints. These can be rectified easily and quickly, and do not affect the structural integrity of the building, HDB stated.

It added that since not all construction processes can be fully automated and manual labour is still required, imperfections such as uneven tile joints can arise due to inconsistencies in workmanship of individual workers.

“Real defects that we talk about are things like defective lock sets, hollow tiles or damages to the window panels – those are the common things we receive,” Mr Loo said.

Also, some reports for “defects” turned out to be imperfections arising from the nature of the products or manufacturing processes. For example, some owners complained of colour inconsistencies in timber floors, which are inevitable as timber is a natural organic product. Residents have also complained of minor variations in floor tiles, which may differ slightly from batch to batch according to HDB.

Notwithstanding these “minor variations”, HDB said it would ensure all materials and workmanship comply with industry standards.

Some residents, however, demand repairs or replacement beyond industry standards, it said. It cited a case where more than 100 defects were reported after the flat owner examined his flat for floor and wall imperfections using an LED torch light.

HDB said its checks showed most of the imperfections were “minor, such as paint stains on tiles, and excess sealant and paint stains on the parquet”. Although it had attended to the resident’s feedback numerous times and kept him updated on the progress of rectification works, the resident was not satisfied, it said.

It added that it is not industry practice to scrutinise certain elements such as parquet flooring and floor tiles for scratch marks and inconsistent tile joints, although its contractors have rectified such imperfections out of goodwill.

BTO WARRANTY “A MARK OF OUR COMMITMENT TO QUALITY”

HDB offers homebuyers a warranty scheme called Assure 3, for all BTO flats launched from 2005. Under this scheme, buyers enjoy a 5-year warranty against external wall seepage and ceiling leakage, and a 10-year warranty against spalling concrete.

It said this was a mark of its commitment to quality, and is complemented by improvements in building technology and methods.

One of these improvements is the use of unplasticized polyvinyl chloride pipes, which are cast together with the floor slabs rather than using mortar, to prevent water seepage. Window frames are also now precast, rather than installed on-site, eliminating the need for joints between the window frames and wall panels that allow water to seep through.

In addition, HDB said it also uses higher grade and denser concrete to provide better protection from carbonation, minimising the occurrence of spalling concrete.

HIGH LEVEL OF OVERALL SATISFACTION: HDB SURVEY

The average Construction Quality Assessment System (CONQUAS) score of HDB flats was 88.6 in 2014, above the current national average of 88.2, the statutory board reiterated.

CONQUAS is an indicator by the Building and Construction Authority which measures the quality of buildings. HDB said the 2014 score puts the quality of HDB flats on par with private housing developments.

Reported defects are generally rectified within two weeks, HDB said, unless there are unusual factors such as an unavailability of materials, in which case flat owners are informed of the expected completion date.

HDB conducted surveys among residents of newly completed BTO projects from 2010 to 2014, and the responses showed a high level of overall satisfaction with the BSC’s services, it added.

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How School Proximity Affects House Prices in Singapore

Singapore parents will go to great lengths to get their children into popular schools. Primary 1 registration begins in the second half of each year.

The findings of our study confirm that homes located within a 2km radius of popular primary schools command large price premiums. Singapore is not the only country where such price discrepancies exist. This applies to executive condo as well. Existing executive condo includes The Terrace EC, Brownstone EC, Bellewaters EC, Skypark ResidencesSignature EC at Yishun while upcoming ones include Visionaire EC, Parc Life EC and Wandervale EC.

The Ministry of Education’s allocation system consists of seven phases. The first three phases – 1, 2A(1) and 2A(2) – assign priority to students affiliated with schools, which include children with siblings currently studying in the schools, whose parents and siblings are alumni of the schools, whose parents are members of advisory and management boards of the schools, or whose parents are teaching staff in the schools.

Prioritisation based on the distance between a child’s home and the primary school is used in the next two phases known as 2B and 2C.

The distance-based rules assign places sequentially to children living within a 1km radius of the school, followed by children living between 1km and 2km from the school. If there are more children living between the 1km and 2km boundary than available places, balloting is conducted to assign places in these two phases.

In a study jointly conducted with two other researchers at the National University of Singapore (NUS), Dr Satyanarain Rengarajan and Miss Yang Yang, a PhD student at the Department of Real Estate, we tested the extent to which distance-based school allocation rules influence families’ home-buying decisions. In this study, we used 16 primary school relocation events between 1999 and 2009 in Singapore to test the effects of school relocation on housing prices.

Our main results showed that such events caused significant price declines of 2.9 per cent for private non-landed houses located within 1km of the old school relative to comparable houses located outside the 2km zone, in the six months before the actual move.

Larger price declines of 5.5 per cent and 6.9 per cent associated with the loss of a school are found for houses located 1km and 1km to 2km from the school locations 12 months before the actual relocation.

In the public housing market, we also found that school relocations cause significant but smaller losses of between 0.7 per cent and 1.4 per cent for house prices within the 1km school zone.

The effects were amplified in the areas affected by relocations of popular primary schools in the top 50 ranking, based on the excess subscription rate in Phase 2C and academic performance.

In the private housing market, the loss of a top 50-ranked school caused housing prices to decline by 8.5 per cent and 12.2 per cent for the 1km and 1km to 2km school zones, respectively.

The comparable declines in public housing prices are estimated at 5.1 per cent and 2.4 per cent for the 1km and 1km to 2km old school zone, respectively.

We found that the prioritisation rule as represented by the 1km school zone is more relevant in the private housing market than in the public housing market.

We also find that in more densely built Housing Board estates, families living within 200m from the schools are more likely to be affected by negative externalities associated with school noise and congestion.

We also tested the effect of a school’s move on house prices in the new school location, and found that such re-sitings increase both HDB and private housing prices in the new school zones after six months of the relocation.

In Beijing, China, a study found a premium of 7.2 per cent for houses located within the attendance zone of key primary schools.

The phenomenon is also not unique to Asian societies; there is evidence showing that families pay higher prices for houses located within school attendance zones in the United States, Canada, Britain and France.

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NParks Launches New 36km Park Connector

SINGAPORE — The National Parks Board (NParks) marked 25 years of the birth of its Park Connector Network (PCN) with the launch yesterday (Sept 20) of the new Central Urban Loop at the Pelton Park Connector.

The latest loop gives visitors easier access to popular spots such as Bishan-Ang Mo Kio Park and Punggol Waterway Park. The Hougang Ave 3 Park Connector also provides a direct link to the North-Eastern Riverine Loop for Hougang and Macpherson residents, and to the Eastern Coastal Loop for Punggol residents. This will benefit Punggol executive condominium residents such as those from The Terrace EC and Waterwoods EC.

The 36-kilometre loop was completed after the addition of the 4.4-km Hougang Ave 3 Park Connector this month, and is the fifth loop in NParks’ plan to have seven PCN loops.

In a blog post, Minister for National Development Khaw Boon Wan said that in the next three years, an additional 30km of park connectors will be completed in Ang Mo Kio, Lorong Halus, and Ulu Pandan.

The Urban Redevelopment Authority is now working with consultants to minimise several obstacles along the Kallang Park Connector, such as overhead bridges, which requires cyclists to dismount and push their bicycles.

executive condo and punggol cycling path

While bicycle gutters have been added, older visitors might find the process challenging. Visitors can, however, use alternative routes along the loop for a smoother journey to their destination. “Our park connectors have become well-loved green spaces. Volunteers have organised guided rides and cycle-in movies to liven up the PCN,” Mr Khaw noted.

NParks has now hit its goal of 300km of Park Connectors five years ahead of time. It aims to reach the next target of 360 km by 2020 as part of the Government’s Land Transport Masterplan, which foresees a 700-km PCN by 2030. NParks has also begun plans for an Island-wide Loop that snakes along the coast of Singapore in the near future.