IN WHAT appears to be a subtle warning to the real estate industry to keep the property market in check, the government has withdrawn the concession to defer stamp duty - a move that coincided with last night’s annual dinner of the Real Estate Developers Association of Singapore (Redas).
A statement released by the Inland Revenue Authority of Singapore (IRAS) yesterday said: ‘The government has decided to withdraw the concession with immediate effect (starting today) as the economic conditions and the property market have improved.’
The statement was timed to be made public only at 12.05 am today, but news of the taxman’s action surfaced early at last night’s Redas dinner - taking most by surprise.
However, developers BT spoke to said they are not too worried that the change will dampen demand for high-end property. Redas president Kwee Liong Keng said the withdrawal of the concession might not have an effect even on buyers looking to ‘flip’ properties quickly, as previously, they had to pay the stamp duty when selling their properties anyway.
Developers also maintained that speculation is not rampant. ‘If you look at top-end products, I don’t think Singapore has seen the kind of interest from overseas before. So you can’t use the yardstick from the past to measure,’ said Redas honorary treasurer Eddie Yong.
Minister of State for National Development Grace Fu, who was the guest of honour at the Redas dinner, was more prepared with a comment - and she similarly maintained the government’s official stance that the property market is not seeing a ‘bubble’.
‘As we have done in the past, we will monitor the trends of property prices and rentals quite closely,’ Ms Fu said. ‘So far, the growth is supported by economic growth - it is quite a healthy growth.’ She was unable to comment on the withdrawal of the concession or the reasons behind it.
The concession to defer stamp duty payment was introduced in 1998 to cushion the impact of an economic slowdown. With its withdrawal, buyers of new properties will have to pay stamp duty within 14 days of making a purchase. Previously, they could defer payment until a project received its Temporary Occupation Permit or TOP.
Interestingly, the withdrawal of the concession comes at the time when the most sought-after residential property of the moment, Marina Bay Residences, is being sold, and with at least three more city centre properties about to be launched.
Knight Frank’s director of research and consultancy Nicholas Mak said the withdrawal of stamp duty concession does not necessarily bode ill for the property market. ‘One view is that IRAS does simply feel that with the property market looking up, there is no longer a need for the concession.’
Mr Mak did, however, say that if one ‘read between the lines’, it could be seen as the government, ‘taking a small step towards discouraging property speculation’. However, it is just ‘baby steps’.
Savills Singapore director of marketing and business development Ku Swee Yong agreed, and said that if the government really wanted to curb property prices, it could increase Government Land Sales (GLS) or capital gains tax.
Developers are unlikely to be in favour of increased GLS. At the Redas dinner, Mr Kwee urged the authorities to continue using the Reserve List in its land sales programme to make sure the demand-supply balance is maintained.
He said the Reserve List is one of the key mechanisms that has helped stabilise the Singapore real estate market. Under the Reserve List system, a site is put on the market only after a developer commits what the authorities deem is an acceptable bid for it.
‘With developments at Sentosa Cove and Marina Bay, redevelopments at Orchard Road and Bras Basah Road and the launch of the two large integrated resorts . . . the real estate market is undergoing a significant transformation that will see major adjustments in the supply and demand equation,’ said Mr Kwee.
‘We need to ensure that the supply of real estate over the next few years will not run ahead of demand.’
Separately, the Building and Construction Authority (BCA) yesterday said it will launch three initiatives worth a total of $70 million to bring about more energy-saving buildings.
For private developers, BCA will dangle a carrot by offering a $20 million incentive scheme for projects that meet certain criteria. And a $50 million fund has been set up to intensify R&D efforts in green building technologies and energy efficiency.
Moving with the market
1996: Govt announced measures to curb property speculation, including:
Extending stamp duty to buyers of all sales and sub-sales of uncompleted properties.
New stamp duty on those who sell properties within 3 years.
Tax on gains from properties sold within 3 years of purchase.
1997: Following Asian financial crisis, stamp duty for sellers was suspended.
1998: Stamp duty deferred for buyer of uncompleted properties until TOP or subsequent sale to help improve cash flow of property purchasers.
Dec 15 2006: IRAS withdraws this concession. All property buyers to pay stamp duty (at up to 3% for properties worth over $360,000) within 14 days of the date of acceptance of an Option. Sales before today’s date are not affected by new rule. As transitional measure, buyers who accept an Option or sign S&P agreement between today and the end of the year will have until March 14 to pay the stamp duty
Friday, December 1, 2006
Saturday, September 30, 2006
New high-end housing project for Jomtien Beach
New high-end housing project for Jomtien Beach
The Nation:20 September 2006
By: Somluck Srimalee
Property developer AEH Co Ltd launched a Bt1.4-billion detached-housing project yesterday called Baan Talay Pattaya, hoping to take advantage of the eastern property boom driven by the opening of Suvarnabhumi Airport.
AEH vice president Aroon Eamsureya said his company would use an 8.4-hectare block of land at Jomtien Beach it bought two years ago for Bt200 million. It will invest a further Bt700 million to develop the project this year and next.
Half of the cost will be borrowed from a bank, and the rest will come from the company's cash flow.
"We planned to develop a residential project two years ago but delayed our decision to wait for the new international airport and maybe to change the project's concept to meet demand," he said.
In the two or three years before completion of the airport, demand for detached housing in Pattaya grew strongly. Land prices there have doubled, and Aroon said they were expected to increase again this year.
The company decided to develop detached housing rather than a condominium and will offer units priced from Bt14 million to Bt120 million. Market demand in the area suggests a greater need for detached housing than for condominiums.
Aroon said CB Richard Ellis had been assigned as the sales agent and manager of Baan Talay Pattaya.
Ten of the project's 68 units have already been sold, and the company expects 70 per cent of its customers will be locals and 30 per cent foreigners.
He said AEH's first project, Baan Nuen Num, also in Chon Buri province, generated sales of Bt500 million to the end of 2004.
This experience has led the company to believe its new project will sell successfully by the end of next year.
It expects sales of Bt400 million from Baan Talay Pattaya this year and of Bt1 billion next year.
AEH was established with registered capital of Bt150 million six years ago.
Its owners, the Eamsureya family, also operate the Shanghai Xiao Long Pao Chinese Restaurant.
The Nation:20 September 2006
By: Somluck Srimalee
Property developer AEH Co Ltd launched a Bt1.4-billion detached-housing project yesterday called Baan Talay Pattaya, hoping to take advantage of the eastern property boom driven by the opening of Suvarnabhumi Airport.
AEH vice president Aroon Eamsureya said his company would use an 8.4-hectare block of land at Jomtien Beach it bought two years ago for Bt200 million. It will invest a further Bt700 million to develop the project this year and next.
Half of the cost will be borrowed from a bank, and the rest will come from the company's cash flow.
"We planned to develop a residential project two years ago but delayed our decision to wait for the new international airport and maybe to change the project's concept to meet demand," he said.
In the two or three years before completion of the airport, demand for detached housing in Pattaya grew strongly. Land prices there have doubled, and Aroon said they were expected to increase again this year.
The company decided to develop detached housing rather than a condominium and will offer units priced from Bt14 million to Bt120 million. Market demand in the area suggests a greater need for detached housing than for condominiums.
Aroon said CB Richard Ellis had been assigned as the sales agent and manager of Baan Talay Pattaya.
Ten of the project's 68 units have already been sold, and the company expects 70 per cent of its customers will be locals and 30 per cent foreigners.
He said AEH's first project, Baan Nuen Num, also in Chon Buri province, generated sales of Bt500 million to the end of 2004.
This experience has led the company to believe its new project will sell successfully by the end of next year.
It expects sales of Bt400 million from Baan Talay Pattaya this year and of Bt1 billion next year.
AEH was established with registered capital of Bt150 million six years ago.
Its owners, the Eamsureya family, also operate the Shanghai Xiao Long Pao Chinese Restaurant.
Tuesday, August 29, 2006
High-End Homes Shine in Sub-Sale Market
The sub-sale market in the high-end residential segment was abuzz in the second quarter, both in terms of price gains and activity, as those who bought units earlier took the opportunity to sell them for a tidy profit.
DTZ Debenham Tie Leung’s latest analysis of caveats shows the median price of private apartments and condos that changed hands in the sub-sale market in Q2 jumped 37% from Q1. The median price rose from $598 per square foot in Q1 to $822 psf in Q2.
This was the highest level since $830 psf a decade ago in Q2 1996 at the peak of the property market, according to the firm’s analysis of caveats captured by the URA Realis database.
Subsales essentially refer to cases in which buyers who bought from developers sell in the secondary market prior to the project receiving Certificate of Statutory Completion. The certificate is typically issued about a year after a project receives Temporary Occupation Permit.
Sub-sales - often seen as a proxy of the level of speculative activity in the property market - were transacted largely for apartments/condos in the higher price brands in the April-June quarter this year, DTZ says.
The two highest price bands DTZ used in its five-tier analysis - units costing $1 million to less than $1.4 million, and units priced at $1.4 million and above - accounted for 44 per cent of total sub-sale transactions in Q2.
These two price bands posted respective quarter-on-quarter increases of 73% and 23% in the number of sub-sale deals. There was also a 60% quarter-on-quarter rise in number of sub-sales of units costing $800,000 to less than $1 million.
DTZ attributes this partly to strong interest in exclusive projects that were either completed recently or are nearing completion - such as The Pier at Robertson along the Singapore River, and The Berth By The Cove at Sentosa Cove.
‘People who want to buy homes for owner occupation or for investment with immediate rental income flow tend to prefer a unit that is nearing or has received Temporary Occupation Permit,’ says DTZ executive director Ong Choon Fah.
She also points to sub-sale interest in popular projects such as Icon in Tanjong Pagar, The Berth by The Cove and The Sail @ Marina Bay (first tower) that were launched by developers a few years ago at prices lower than those of similar projects released recently.
For instance, Ho Bee launched The Berth by The Cove in late 2004 at an average of $785 psf. Condo units there today would be worth more than $1,000 psf, property agents say.
DTZ says: ‘With the price recovery in high-end residential projects, those who bought units earlier in such developments have been able to benchmark the value of their properties against the newer projects.
‘This has created an opportunity for them to sell their units in the sub-sale market to the increasing number of buyers who are keen on such high-profile exclusive projects.’
DTZ’s analysis shows that while there was a pick-up in sub-sale deals in the higher price bands in Q2, activity in the two lowest price tiers declined from the preceding three months. As a result, the total number of apartments and condos sold in the sub-sale market for Q2 - at 115 - was hardly changed from the Q1 figure of 113.
Buyers with HDB addresses continued to account for a lower share of the number of sub-sale deals for private apartments and condos, down to to 23% in Q2 from 38% in Q1.
The firm also notes that the number of sub-sales continued to remain relatively low in Q2 - at 2.8% of the total 4,096 apartment and condo transactions in the quarter.
‘Going forward, while sub-sales will still be significantly lower than the levels between 1996 and 1999, the momentum for the sub-sales market is expected to strengthen on the back of the recovery of the high-end residential market and several high-profile projects that are expected to be launched,’ DTZ says.
‘These will boost median prices of apartments/condos transacted in the sub-sale market. In addition, a strong take-up for these forthcoming high-profile launches may also lead buyers who are unable to secure a choice unit to remain interested in the sub-sale market for several top-quality projects which have been previously released at lower prices.’
Source: The Business Times, 29 August 2006
DTZ Debenham Tie Leung’s latest analysis of caveats shows the median price of private apartments and condos that changed hands in the sub-sale market in Q2 jumped 37% from Q1. The median price rose from $598 per square foot in Q1 to $822 psf in Q2.
This was the highest level since $830 psf a decade ago in Q2 1996 at the peak of the property market, according to the firm’s analysis of caveats captured by the URA Realis database.
Subsales essentially refer to cases in which buyers who bought from developers sell in the secondary market prior to the project receiving Certificate of Statutory Completion. The certificate is typically issued about a year after a project receives Temporary Occupation Permit.
Sub-sales - often seen as a proxy of the level of speculative activity in the property market - were transacted largely for apartments/condos in the higher price brands in the April-June quarter this year, DTZ says.
The two highest price bands DTZ used in its five-tier analysis - units costing $1 million to less than $1.4 million, and units priced at $1.4 million and above - accounted for 44 per cent of total sub-sale transactions in Q2.
These two price bands posted respective quarter-on-quarter increases of 73% and 23% in the number of sub-sale deals. There was also a 60% quarter-on-quarter rise in number of sub-sales of units costing $800,000 to less than $1 million.
DTZ attributes this partly to strong interest in exclusive projects that were either completed recently or are nearing completion - such as The Pier at Robertson along the Singapore River, and The Berth By The Cove at Sentosa Cove.
‘People who want to buy homes for owner occupation or for investment with immediate rental income flow tend to prefer a unit that is nearing or has received Temporary Occupation Permit,’ says DTZ executive director Ong Choon Fah.
She also points to sub-sale interest in popular projects such as Icon in Tanjong Pagar, The Berth by The Cove and The Sail @ Marina Bay (first tower) that were launched by developers a few years ago at prices lower than those of similar projects released recently.
For instance, Ho Bee launched The Berth by The Cove in late 2004 at an average of $785 psf. Condo units there today would be worth more than $1,000 psf, property agents say.
DTZ says: ‘With the price recovery in high-end residential projects, those who bought units earlier in such developments have been able to benchmark the value of their properties against the newer projects.
‘This has created an opportunity for them to sell their units in the sub-sale market to the increasing number of buyers who are keen on such high-profile exclusive projects.’
DTZ’s analysis shows that while there was a pick-up in sub-sale deals in the higher price bands in Q2, activity in the two lowest price tiers declined from the preceding three months. As a result, the total number of apartments and condos sold in the sub-sale market for Q2 - at 115 - was hardly changed from the Q1 figure of 113.
Buyers with HDB addresses continued to account for a lower share of the number of sub-sale deals for private apartments and condos, down to to 23% in Q2 from 38% in Q1.
The firm also notes that the number of sub-sales continued to remain relatively low in Q2 - at 2.8% of the total 4,096 apartment and condo transactions in the quarter.
‘Going forward, while sub-sales will still be significantly lower than the levels between 1996 and 1999, the momentum for the sub-sales market is expected to strengthen on the back of the recovery of the high-end residential market and several high-profile projects that are expected to be launched,’ DTZ says.
‘These will boost median prices of apartments/condos transacted in the sub-sale market. In addition, a strong take-up for these forthcoming high-profile launches may also lead buyers who are unable to secure a choice unit to remain interested in the sub-sale market for several top-quality projects which have been previously released at lower prices.’
Source: The Business Times, 29 August 2006
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