8th November to 14th November 2022
The compensation to be received by Ang Mo Kio residents whose Housing and Development Board (HDB) flats were picked for the Selective En Bloc Redevelopment Scheme (SERS) was around 7.5% higher than previous estimates. Meanwhile, National Development Minister Desmond Lee said about 3% of HDB flat owners also own at least one private residential property as of October this year.
1) Compensation for Ang Mo Kio SERS residents was around 7.5% higher than previous estimates
HDB cited two main factors for the higher-than-expected compensation.
First, flats that were well renovated and maintained commanded a higher value. Second, the actual compensations reflected resale market movements from the time the SERS announcement was made in April to the time when the estimates were prepared in February.
Aside from the market value compensation, the owners would also receive payment for “reasonable expense”. Eligible owners would also get up to $30,000 in SERS grants for the acquisition of a replacement unit.
Despite the higher compensation, some of the residents called for greater transparency on how the compensation as well as the flat valuation figures were derived. This comes as flats of the same size and the same level received different compensation figures, they said.
“I don’t know how HDB calculates the numbers, it’s not fair,” 61-year-old resident, Goh Chye Hock told TODAY.
2) About 3% of HDB flat owners have at least one private property
National Development Minister Desmond Lee said about 3% of HDB flat owners also own at least one private residential property as of October this year, reported CNA.
He noted that this proportion has declined by 0.3 percentage points over the past three years.
Of these HDB flat owners, around 45% have rented out their entire flat and are no longer living in it.
Meanwhile, another 4% of HDB flat owners have rented out one or more bedrooms of their flat, said Lee, noting that such proportions have remained stable over the past three years.
“Among the remaining 97% of the flat owners who do not own private residential property, about 13% are renting out their whole flat or bedrooms within their flat. This proportion has also stayed stable in the last three years,” the minister said in Parliament.
On whether the Government will consider requiring HDB flat owners to dispose of their flats if they acquire private property, Lee revealed that the Government has been gathering the views of Singaporeans and will look into the findings.
3) 9,200 HDB flat owners have applied for the lease buyback scheme
The minister made the statement in response to MP Liang Eng Hwa’s question on why some flat owners did not benefit from the scheme and whether the Government plans to improve and expand the scheme.
Lee noted that there are many reasons why some elderly flat owners are not keen on signing up for the scheme, such as having other sources of income or they prefer to take up other options like renting out spare bedrooms or downsizing to a smaller flat.
“HDB will continue to review the housing needs of our elderly flat owners to ensure that our housing policies remain relevant and responsive to the changing needs and preferences,” he added.
4) Singaporeans make no ‘triple payment’ for state land used to develop HDB flats
Second Finance Minister Indranee Rajah said no “triple payment” is made by Singaporeans for state land used to develop HDB flats, reported CNA.
She pointed out that whenever the Government needs to acquire land for public housing, the owner of the land is compensated for its value, which is based on fair market value.
The land is then acquired by HDB from the Government at fair market value.
“Why don’t we simply transfer the land to HDB at zero cost since it is a transaction between the Government and a government agency?” asked Indranee.
This is because the transfer of land to HDB results in the land parcel being taken out of the past reserves, she explained.
The revenue shortfall incurred by HDB from selling flats at prices lower than market value is then covered by a government grant that is funded by returns on government investments and taxes – which she underscored is not only paid by Singaporeans but also by foreigners working here, companies, permanent residents and others.
As such, the Government “does not profit from the sale of state land developed into public housing,” said Indranee.
5) Expats dig deeper into pockets as housing rents hit a record high
The red-hot housing rental market in Singapore saw expatriates digging deeper into their pockets as landlords demand up to 70% more in rent.
URA data showed that rents for private homes rose 8.6% in Q3 2022 – its highest since 2007.
And given the robust demand, expats are finding it hard to secure a place.
“The search is really painful because there are fewer and fewer good offers reasonably priced. The good ones are out of the market within one week,” said an expat who wanted to be identified only as Alex.
She revealed that some tenants are even forced to overbid for places they want and could not negotiate any terms with agents or landlords.
“Everyone is just panicking … People transfer deposits without visiting the place,” she told CNA.
6) Record high housing rents due to COVID-19 construction delays, demand amid pandemic recovery
National Development Minister Desmond Lee has attributed the record high rents for homes in Singapore to COVID-19-related construction delays as well as the broad-based demand amid the pandemic recovery, reported CNA.
Data from the Urban Redevelopment Authority (URA) showed that private home rents hit a new high as they increased by 8.6% in Q3 2022.
OrangeTee and Tie noted that rents for HDB flats have also increased substantially in recent months as landlords raised rents in anticipation of more interest rate hikes.
With this, Lee assured that the Government is closely monitoring the property market, including the housing rental market.
“The Government is monitoring the market closely as rising rental prices may affect Singaporeans who need to rent, as well as global talent,” he said.
“That said, global talents consider many factors besides rental prices when making relocation decisions. These include Singapore’s standing as a global business hub, our strong external connectivity, our good trade links, our education and healthcare standards, and the quality of life,” added Lee.
7) Property players more pessimistic in Q3 2022
A new survey showed that property players in Singapore have become less optimistic during the third quarter of 2022, with the respondents expecting a negative future net balance in most sectors.
Conducted by the National University of Singapore’s Institute of Real Estate and Urban Studies (IREUS), the survey revealed that the suburban residential sector had the lowest future net balance of -19%, from its current net balance of 35%.
Meanwhile, only the hotel and serviced apartment sector registered a significantly positive future net balance of 68%, while its current net balance stood at 86%.
Two other market sectors – the prime residential and office segments – also posted positive future net balances of 3% and 11%, respectively. Their current net balance stood at 30% and 54%.
“Current and future net balance percentages are used to indicate current and future sentiment, based on the difference between the proportion of respondents who have selected the positive and negative options in the poll,” reported The Business Times.
8) Golden Mile Tower makes its first en bloc attempt, the indicative price at $650mil
Golden Mile Tower at 6001 Beach Road will be launched for collective sale on 18 November 2022 at an indicative price of $650 million, reported The Business Times.
With a leasehold tenure of 99 years, the 22-storey commercial development is located right next to the iconic Golden Mile Complex, which has successfully sold en bloc for $700 million in May.
Golden Mile Tower features 405 strata lots and is situated between Beach Road and Nicoll Highway.
Occupying an 8,727 sq m site, the District 7 development has a gross floor area of 38,953.7 sq m and a plot ratio of 4.46. This means the $650 million asking price works out to $1,550 per sq ft per plot ratio (psf ppr).
And since it is zoned for commercial use under the 2019 Master Plan, buyers need not worry about Additional Buyer’s Stamp Duty (ABSD). There is also no restriction on foreign ownership.
ERA’s Senior Division Director Anna Tan – who is handling the sale – shared that this is the property’s first successful en bloc attempt, noting that the required 80% consent of owners was obtained in mid-October.
9) People’s Park Centre goes en bloc again, price unchanged at $1.8bil
After a failed attempt in August, People’s Park Centre has taken another stab at a collective sale, with the reserve price unchanged at $1.8 billion, reported The Straits Times.
The reserve price translates to a land rate of $2,620 psf ppr. It also takes into account the differential premium as well as the premium to top up the lease to a fresh 99 years.
Collective sale committee chairman Koh Yam Khoon said they remain optimistic of selling en bloc since the development is located near an MRT interchange and is near the Central Business District.
“It’s time for the Chinatown area to be rejuvenated, so we are confident to have the first-mover advantage,” he said.
Analysts, however, remain sceptical since the large quantum poses a high risk for developers.
“While buyers have shown a preference for integrated mixed-use developments, risks for People’s Park Centre are higher and the quantum exceeds $1 billion,” said Lee Sze Teck, Senior Director of Research at Huttons Asia.
The tender for the People’s Park Centre closes on 12 December 2022.
10) Commercial investment volume up 30% in Q3 2022
Commercial real estate investment activity in Singapore rose 30% year-on-year to US$1.5 billion in the third quarter of 2022, thanks to the city-state’s buoyant office sector, reported Singapore Business Review citing MSCI data.
“A rise in rents and a limited supply pipeline has boosted trading of offices and for the first nine months of the year, deal activity surpassed that for the whole of 2021,” said MSCI.
It noted that prices also continued on an upward trend amid improving rental and occupancy levels, “although this has been driven disproportionately by prime assets”.
With the hike in investment volume, Singapore was ranked as the 6th country in the Asia Pacific region with the highest investment volume in Q3 2022.
It also emerged as the third most popular destination in APAC for cross-border investments.
“The city-state’s safe-haven status continues to attract a variety of private cross-border investors, which has continued to push prices up, particularly for the strata office and shophouse sectors,” said David Green-Morgan, Global Head of Real Assets Research at MSCI.
Farhan Shafie, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: email@example.com.