Property2020
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PROPERTY 2020 The Business Times | Thursday, November 19, 2020 PHOTO: BLOOMBERG Singapore housing market a safe haven amid pandemic OME sales in Singapore so far In the past, OTP validities could be extended months of this year. (Executive condominiums said Ms Sun. This is much higher than the 38 units in this pandemic-ravaged year for up to eight weeks, or reissued upon expiry. are considered public-private housing hybrid.) sold in Q2 and 58 units sold in Q1 of this year. have exceeded expectations Consultants say the projects most affected by HDB homeowners who recently completed It is also higher than the 54 units transacted in amid a lower-for-longer rates the tightened rules are likely those targeted at their five-year minimum occupation period Q3 2019. Of the 168 units transacted last quarter, environment and a still-low Housing Development Board (HDB) upgraders. (MOP) in Built-to-Order Flats are now eligible to 35 units were at Parc Clematis, 24 units at Trea- unemployment rate − a phe- These buyers must now sell their HDB flat first, sell their units and use the gains to upgrade to sure at Tampines, 12 units at Seaside Residences, nomenon also playing out in pocket the proceeds, and then rent a home while condominium homes, said Leonard Tay, Knight and 10 units at The Florence Residences. Hsome other countries. waiting for their new homes to be ready. Frank Singapore’s head of research. In the resale market, the biggest quantum paid Cash-rich buyers have pushed new homes HDB upgraders are a goldmine to developers, There were 25,138 HDB flats sold in 2014, and for a mass-market condominium transacted in Q3 sales for the first 10 months of 2020 to 8,021, as and they buy homes in the more affordable rest 23,445 in 2015. Those flats sold in 2014 would 2020 was a 428 square metre (sq m) resale unit at the unemployment rate rose to 3.6 per cent in of central region (RCR) but especially in the have completed their five-year MOP by now; The Trilinq that was sold for S$4.8 million or September from 3.4 per cent in August. Econo- mass-market outside central region (OCR). those who got their HDB flat keys in 2015 will S$1,042 per square foot (psf) in September. In mists think the unemployment rate will stay To paraphrase Mao Zedong, HDB upgraders complete their MOP some time this year. August, a resale unit at The Tembusu, which was sub-4 per cent for the full year. The 8,021 volume hold up half the private condo market. Total sales One trend that has got the market sitting up is a 361 sq m freehold condominium sold for S$4.6 is 4.5 per cent lower than the 8,401 units sold in for the OCR (new and resales excluding executive the number of wealthy buyers gunning for OCR million or S$1,184 psf. the first 10 months of last year. condominiums) made up 47 per cent or 6,565 of homes. Last quarter, 168 non-landed homes in The pandemic has brought home the safe Projections for full-year sales range from 9,000 total homes sales of 13,980 in the first nine OCR were transacted at S$2 million and above, haven that is Singapore. And for some, it is the to 9,500, which some find comforting given the only asset worth owning. current health and economic crisis. Last year, For Asians, property is a very important asset, developers sold 9,912 units. said Alfred Chia, chief executive of financial advi- With the strong volume, some expect that pri- sory firm SingCapital. vate residential property prices for 2020 as a “In addition to being a good hedge to inflation, whole may end in positive territory after prices it is our culture to channel our hard earned rose 0.8 per cent quarter-on-quarter in Q3, nudg- income into a physical asset we can feel and ing the overall price index up 0.1 per cent touch. It is also very important for retirement year-to-date. In comparison, prices increased by planning as property ensures we have a roof 2.1 per cent in the first three quarters of last year. over our head, and can also be part of our legacy The price increase is encouraging given the to pass on to the next generation,” said Mr Chia. extent of uncertainties in the macroeconomy and In Singapore, it is even more apparent as the job market, said Christine Sun, head of research value of property − HDB or private − has appreci- & consultancy at OrangeTee & Tie. ated greatly over the years, he said. “The property market beat expectations as it With home ownership beyond 90 per cent, it is managed to avert a major price correction during certainly a very important asset class for many of the current pandemic that is considered to be us, and it is not unusual that some only invest in one of the most severe health and economic property, though from an investment portfolio Of the 168 units in the OCR transacted at S$2m and above last quarter, 10 units crisis in recent decades,” she said. perspective, they have too much exposure in were at The Florence Residences (above) and 35 units were at Parc Clematis (below). In comparison, prices posted four consecu- PHOTOS: LOGAN PROPERTY SINGAPORE, SINGHAIYI GROUP LTD physical properties, added Mr Chia. tive quarterly declines during the 2008 Global One couple approached him for advice with Financial Crisis and 10 consecutive quarterly their property purchases and loans after they sold decreases during the 1997 Asian financial crisis, their HDB flat in 2015. Equities did not appeal for she said. them. Both, aged 40, were earning S$15,000 a Various measures, such as allowing borrowers month with stable employment prospects and to defer their loan repayments, and temporary had accumulated much savings. relief measures, such as granting a waiver of The husband bought a property valued at S$2 extension charges of up to a total of six months million and took a 25-year loan for S$1.6 million for developers applying to extend their existing at 1.5 per cent interest. The monthly instalment completion and/or disposal deadline, have prob- was S$6,398. ably prevented homeowners and developers The wife bought a S$1 million home and also from slashing prices to move sales. took a 25-year loan for S$800,000 with the same The year started off well but the “circuit break- interest rate of 1.5 per cent, and her monthly er” almost brought sales to a standstill with 277 instalment was S$3,199. transactions inked in April, a monthly low not She bought a second property in 2017 worth seen in many years. The previous low was in De- S$900,000 and borrowed S$450,000 for 20 years cember 2014, which saw 230 transactions. at 1.5 per cent interest rate which worked out to Confidence returned subsequently and take- monthly instalments of S$2,171. She had to pay up rebounded strongly to sales of 1,083 in July, S$63,000 additional buyer’s stamp duty which is followed by 1,258 and 1,329 in August and Sep- levied on a second home purchase. tember respectively. They have a big housing loan due to leverage, October’s poor showing of 642 was due to Inside noted Mr Chia, and they need to be confident buyers holding back on purchases following the about their employment. clampdown on the reissuing of options to pur- Luxury apartments in hot demand 2 Pent-up demand to boost property 12 Another risk will be premature death and criti- chase (OTPs) by developers, analysts reckoned. despite economic woes investment sales for 2021 cal illness that will disrupt loan repayment, The OTP tightening to prevent market distor- Mass-market private homes maintain 4 Office Reits still viable investments 14 though the latter can be mitigated by insurance, tion was announced on Sept 28 and gives the appeal amid pandemic despite challenges in office market he added. impression that any incipient froth is nipped in “On the other hand, if they have a long-term the bud. Demand for city-fringe homes on 6 In asset allocation, how much 16-17 holding period and can rent out their investment The new conditions included restricting devel- the rise property is too much? properties, the tenants will be servicing their opers from providing upfront agreements to home loan,” he said. “At age 65, their loan will be buyers to reissue the OTPs, restricting develop- Regional centres take centre stage 8 Looking back on 25 years of 18 fully paid and they can continue to receive rental collective sales in Singapore ers in the reissuing of OTPs to the same buyers as passive income. As long as Singapore contin- for the same unit within 12 months of the expiry ues to enjoy economic growth, property value Supplement coordinator: Siow Li Sen Sub editor: Melissa Lee Suppiah Cover design: Gareth Chung of the earlier OTP, and requiring that developers Graphics: Simon Ang, Gareth Chung, Teoh Yi Chie, Noordin Ayob should be able to ride on the growth in our inform buyers of this condition upfront. Advertising sale: Alexandria Faith Tang 9823 3939, Glenda Khoo 9477 8101, Jamie Peh 9782 8828, Oh Say Tuck 9792 1700, Stella Yeo 9799 9001 land-scarce country.” 2 | PROPERTY 2020 The Business Times | Thursday, November 19, 2020 Luxury apartments in hot demand despite economic woes Focus on capital preservation throughout the Covid-19 pandemic has driven many investors to divert their monies to real estate properties in property hot spots such as Singapore.