- Published on
After the Singapore government announced the steepest increase of Additional Buyer Stamp Duty (ABSD) among the past few property cooling measures on 26 April 2023, more Singaporeans have expressed their interest in overseas properties and Singaporeans are now considered the top buyers of property in Johor Bahru, which has seen prices of condominiums in Johor climb by up to 30% in the first half of this year.
Recently, Channelnewsasia reported about the Singaporeans who bought properties in Johor, Malaysia who discovered to their horror that they are not the legal owners of the properties they had bought. More than 100 of them are now locked in a legal dispute with a Malaysian developer, alleging that it was not upfront about the sale terms and conditions. Property lawyers representing the buyers and the developer are now urging buyers to read the fine print and to be more aware of local conditions before purchasing properties in Johor as the buyers claimed they did not realise they are actually buying the properties under Private Lease Scheme (PLS) when they signed the Sales and Purchase agreements at the law firms.
What is Private Lease Scheme (PLS)?
The Private Lease Scheme (PLS) allows land owners / developers to lease out their freehold land for development for a term of 30 – 99 years under a Certificate of Private Lease, often seen in overseas property arrangements.
Under the Private Lease Scheme (PLS) - buyers are actually “renting” for the duration of the lease period. Buyers of Private Lease Scheme (PLS) properties must be made aware that they are not buying the said property but are instead merely renting or leasing the property from the sellers for a specific number of years. At the end of the lease period, the future descendants of the buyer (lessee) must surrender the property back to the seller / developer (lessor).
Difficult to Resell
While it might be easy to buy Private Lease Scheme (PLS) properties directly from developers, re-selling them in the future might not be so easy. Typically, banks with many business dealings with developers would normally be willing to provide 90% end-financing to the first batch of buyers who buy directly from the developers. However, over time, if the homeowner decides to sell the property in the open market, the re-selling of such Private Lease Scheme (PLS) properties will become harder, as most banks will hesitate to provide full end-financing to the owner who technically doesn't own the property.
The developer may also require the homeowner to resell back to the developer at a specific price instead of allowing them to sell in the open market. Sometimes, Private Lease Scheme (PLS) property homeowners may not have legal ownership of their property, thus they won’t be able to sell, transfer or use it as collateral.
Other countries like England also faced such controversial Private Lease Scheme (PLS) issues surrounding the leasehold system which has gathered a huge momentum in recent years that prompted the authorities in England to clamp down on such PLS schemes.
Most, if not all buyers who purchase directly from developers (whether in England or in Malaysia) generally will use developer-appointed lawyers as some are packaged as free legal fees. What is important to note is, the lawyer is acting for the developer and not the buyer and thus the developer is not obliged to inform house buyers of the pitfalls of buying Private Lease Scheme (PLS) properties.
Usually Private Lease Scheme (PLS) leasehold homeowners were unaware of the escalating ground rent that can be charged by the land owner, especially when the landlord changed hands and a new landlord owns the land. In the example in England, the house buyers were only vaguely informed about the need to pay annual maintenance charges and were subsequently surprised to discover that these charges can increase exponentially over the lease period. However, by then, it would be very difficult to challenge the validity of such maintenance charges and most buyers have no choice but to pay.
The first new condo launch in Toa Payoh in 8 years. Register your interest today to receive ebrochure & floorplans!
Interestingly, Singapore's Housing Development Board (HDB) flats also used a form of Private Lease Scheme (PLS) as a policy that allows HDB flat owners in Singapore to rent out or sell their flat in the open market subject to HDB's approval under specific conditions, while retaining the right to live in the flat for a pre-agreed lease period if the buyer does not sell the HDB flat.
Kiwi Lim, Associate Group Director of Propnex Realty said "the Private Lease Scheme (PLS) by HDB is generally different from overseas properties in two areas: firstly HDB allows flat owners (lessee) to enjoy the flexibility of taking a bank loan to finance / refinance their HDB flats unlike some overseas properties that were bought under the Private Lease Scheme (PLS)."
"Secondly, Singaporeans generally trust the Housing Development Board (HDB) which is protected by the Singapore government and that it will not go bust unlike some private property developers overseas. Thus HDB homeowners do not expect HDB to go bankrupt and having to lose their HDB flats in the process."
Kiwi Lim warned that when buyers buy their overseas properties under the Private Lease Scheme (PLS) scheme, it should be noted that homebuyers may not have any proprietary rights on leases but that these rights essentially may still belong to the developer / seller. These homebuyers may find their properties being confiscated from them but still legally obligated to pay off the housing loans when the developer goes bust or face financial burdens and the properties taken away from the homebuyers without compensation as part of the developer's debt liability obligations to their creditors.
The information above is provided for general information and reference only. The writer makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.
- Published on
In Chinese culture, the Snake symbolizes wisdom, intuition and adaptability. Some believe that the year of the Snake could bring subtle, calculated changes which could influence markets to move more cautiously rather than drastically.
Predicting property prices based on zodiac years, like the Year of the Snake is more a matter of cultural symbolism and speculation rather than an economic analysis. While Singapore's property market has shown remarkable resilience, several factors could lead to a potential drop in property prices.
Some factors that may shape 2025's real estate property market in Singapore:
1. Economic Downturn
- A global or domestic recession could result in job losses, reduced household incomes, and lower purchasing power. Reduced demand for property as buyers adopt a wait-and-see approach, leading to downward price adjustments.
- Singapore's economic outlook for 2025 appears moderately positive, with several indicators suggesting continued growth, albeit at a slightly tempered pace compared to 2024.
- The Ministry of Trade and Industry (MTI) forecasts a GDP growth range of 1% to 3% for 2025 and the Monetary Authority of Singapore (MAS) expects GDP growth to be at the upper end of the 2% to 3% range for both 2024 and 2025.
- While the projected GDP growth for 2025 indicates a slight deceleration compared to 2024, the overall economic outlook remains positive, with expectations of continued expansion across various sectors. Prudent fiscal and monetary policies, coupled with Singapore's resilient economic fundamentals are poised to support this sustained growth trajectory into 2025.
2. Interest Rates and Inflation Rates
- The Federal Reserve is expected to lower interest rates further in 2025 which will then reduce the cost of borrowing, making home loans more affordable for buyers. Buyers may likely decide to take this opportunity to purchase or upgrade their property homes, increasing demand and prompting sellers to raise prices in the resale market.
- Inflation rates are anticipated to moderate gradually, with core inflation expected to remain elevated. The MAS is likely to maintain its current monetary policy stance through 2025, focusing on supporting GDP growth while managing inflationary pressures.
3. Supply and Demand in the Real Estate Market
- A large number of new property launches or an increase in completed developments can lead to supply exceeding demand. Developers may offer discounts to clear unsold inventory, leading to a general price decline.
- As of late 2024, Singapore's property market is experiencing a notable increase in housing supply, which has implications for both property prices and rental rates. However, despite the surge in supply, private home prices have continued to rise, with a 2.8% increase observed in Q4 2023. This suggests that demand remains robust, potentially offsetting the effects of increased supply.
- While there is a significant increase in housing supply in Singapore's property market, it has not yet led to an oversupply situation across the board. The continued rise in property prices indicates sustained demand. However, the decline in rental rates and the concentration of new developments in specific areas warrant close monitoring to prevent potential oversupply issues in the future.
4. Weakening Sentiment in the Market
- Negative perceptions about the property market, often fueled by media or analyst reports, can deter buyers. Widespread caution may result in lower transaction volumes and price dips.
- The potential impact of Donald Trump on Asia's economies after 2025 depends on his policy priorities and strategies. Historically, Trump’s administration focused on trade imbalances, renegotiating trade agreements, and prioritizing U.S. interests, which significantly influenced Asia’s economies. Trump might revisit tariffs or trade restrictions on key Asian exporters, particularly China. Southeast Asian economies could see increased trade opportunities if companies continue diversifying supply chains to reduce reliance on China.
- Globally, we may see more countries engaging in protectionist policies that could hinder exports from emerging Asian economies, reducing growth prospects. Currency fluctuations driven by U.S. monetary policy or geopolitical tensions could increase volatility in Asian markets.
5. Foreign Investment in Singapore
- Geopolitical instability, stricter regulations, or unfavorable currency exchange rates could deter foreign buyers. Properties targeting expatriates or foreign investors may see price drops due to decreased demand.
- With Trump regaining power next year, an emphasis on "America First" could lead to reduced U.S. involvement in multilateral trade initiatives, encouraging Asia to deepen intra-regional cooperation.
- Increased rivalry among countries could exacerbate economic tensions, potentially impacting the global supply chain and regional economic stability.
- Policies aimed at decoupling from China may drive further investments in alternative markets like Vietnam, Indonesia, and India.
6. Rental Yields
- Rental yield is the annual rental income expressed as a percentage of the property’s purchase price. There are two types:
- Gross Yield: (Annual Rent ÷ Property Price) × 100
- Net Yield: (Annual Rent - Expenses) ÷ Property Price × 100
- High rental yields signal better returns on investment, making properties more attractive to investors. Increased demand from investors often drives property prices up, particularly in areas with consistently high yields.
- If rental demand weakens, especially during economic slowdowns or if expatriate numbers fall, property investors may struggle to cover their mortgage payments. Investors may sell off properties at lower prices, increasing supply and pressuring overall market prices. Reduced investor interest can slow price appreciation or even lead to price stagnation or decline.
7. Demographic Shifts
- Demographic changes significantly impact property markets by influencing demand, supply, pricing, and the type of properties people seek. Here's how different demographic trends shape the property landscape:
- An aging population with fewer new household formations can reduce demand for housing. This may slow market activity, particularly in certain areas, leading to price corrections.
- A growing population from immigration can boost demand for housing, driving up prices and stimulating new developments.
- Rising numbers of single-person households may drive demand for smaller, compact living spaces, such as one-bedroom apartments or studios.
- As household / individual income rises, home buyers may prefer larger space creating demand for larger properties that allows them to create flexible layouts.
8. External Shocks
- Events like pandemics, natural disasters, or financial crises can lead to market uncertainty and causing buyers to delay purchases, leading to price stagnation or decline in the short term.
- Based on current global trends and potential risks, the following areas could pose challenges or shocks to global markets in 2025:
- Rising Conflicts: Escalations in regions like Ukraine, Taiwan, or the Middle East could disrupt supply chains and global trade.
- Sanctions or Trade Wars: New trade restrictions, particularly between major powers like the US and China, may lead to market volatility. Rising nationalism and protectionist policies could stifle global trade growth.
- Debt Crises: Emerging markets with high external debts could face crises if global liquidity tightens or the US dollar strengthens.
- Oil Price Shocks: Geopolitical instability in oil-producing regions or unexpected cuts in production could drive up energy costs.
- Rare Earth and Semiconductor Dependencies: Supply disruptions in critical materials could create bottlenecks, especially in tech-driven industries.
- Global Warming & Natural Disasters: Increased frequency and intensity of extreme weather events could impact agriculture, insurance, and supply chains.
- New Outbreaks: Another significant health crisis or pandemic could strain global health systems and disrupt economic activity.
9. Government Cooling Measures
- Policies like stricter loan-to-value (LTV) limits, higher Additional Buyer’s Stamp Duty (ABSD), or tightened eligibility criteria for loans can reduce speculative and investment-driven purchases. Reduced demand from investors and foreign buyers may depress prices, particularly in the luxury segment.
- Over the years, the Singapore government has implemented a series of property cooling measures aimed at ensuring a sustainable real estate market and preventing speculative activities.
"Recently there are speculations that the government may possibly announce a property cooling measure soon after last month's record number of new launch condo units sold in November where developers sold 2,557 private homes, which is more than three times the sales volume from previous year's November sales of 784 units" said Kiwi Lim - Associate Group Director of Propnex Realty.
Kiwi Lim believe the government may be closely watching the upcoming condo launch in Toa Payoh -The Orie - a harmonised mega condo project in the highly sought after Toa Payoh district expected to attract huge interest among home buyers with analysts expecting the estimated average price to be hovering around $2,700 psf. If we see more than 80% sold for The Orie in January next year and subsequent new launches in Clementi and Tampines in the 1st quarter of 2025, the government likely may announce another property cooling measure - which could affect first time buyers who are looking to purchase a property."
The first new condo launch in Toa Payoh in 8 years. Register your interest today to receive ebrochure & floorplans!
- Published on
Recently the Business Times published an article suggesting a possibility that a property cooling measure may be announced soon where local Singaporeans may need to pay a 5 per cent Additional Buyers Stamp Duty (ABSD) for buying their first local residential property above S$1 million.
This possibly unthinkable scenario came after a record number of new launch property sales was seen last month in November where developers sold 2,557 private homes more than three times the volume of sales from the previous year's November sales of 784 units.
With Singapore's private home market expected to roar into the upcoming year of 2025 on the back of consecutive project launches buoyed by strong pent-up demand amidst rising consumer sentiment and optimism of the future.
Based on yesterday 16th Dec 2024 data released by the Urban Redevelopment Authority (URA), the latest sales figure, which excludes executive condominiums (ECs), is 246.5 % more than the 738 units sold in October this year.
Foreigners buying any residential property in Singapore 27 Apr 2023 will have to pay an additional buyer’s stamp duty (ABSD) of 60% after it was doubled from 30% - image from IRAS website
Since 2009, the Singapore government has implemented over 10 rounds of property cooling measures to maintain a sustainable property market and prevent speculative activities. These measures have been introduced periodically in response to market conditions, with notable rounds in 2013, 2018, 2021, 2022 with the latest round being the most drastic in terms of Additional Buyer Stamp Duty (ABSD) doubling for foreigners buying Singapore residential property from 30% to 60% over and above the price they pay for their residential property purchase. See above for the cooling measure implemented on 27 April 2023.
After last month's eye popping sales figures where more than 90% of the residential units sold are purchased by Singaporeans and Singapore Permanent Residents owning their first property, some property analysts speculate that the government may raise the Additional Buyer Stamp Duty (ABSD) for Singaporeans buying their first property priced above one million by 5% and Permanent Residents buying their first property above one million dollars may have to pay 10% Additional Buyer Stamp Duty (ABSD) as demand from locals and Singapore PRs purchasing homes for owner-occupation has been growing stronger and is expected to rise next year.
However, real estate analyst - Kiwi Lim from Propnex Realty believe that it is unlikely that Singapore government will penalize Singaporeans for owning their first home, as home ownership is a key pillar of Singapore’s housing policy and a fundamental part of the nation’s social and economic framework.
One of Singapore's proudest global achievement is in the fact that we have one of the highest home ownership rates in the world (about 89%) due to far-sighted government policies that encourage and support first-time homebuyers.
Our government policies often favor first-time homebuyers over investors or those purchasing second properties which is why the Singapore government offer helpful schemes like CPF Housing Grants and subsidies for HDB flats ensure that Singaporeans have affordable options to buy their first home.
"If you look at the past property cooling measures implemented by the Singapore government, you can see that ABSD and tighter loan restrictions are mainly targeted at multiple property owners and investors to curb speculation. First-time buyers are not the target of such policies, as the government aims to ensure Singaporeans can afford their first homes without undue pressure" said Kiwi Lim, associate group director of Propnex Realty.
The first new condo launch in Toa Payoh in 8 years. Register your interest today to receive ebrochure & floorplans!
- Published on
Identifying online crafty "sellers" who are out to scam requires vigilance and a keen eye for red flags. Here’s how you can spot scammer red flags and avoid them:
1. Unrealistic Deals
- "If a price seems too good to be true, it likely is. Scammers often lure victims with deals that are far below market value to entice quick decisions."
This classic warning reminds us to trust our instincts and exercise caution, especially in online marketplaces. Always research and verify the legitimacy of the offer before proceeding.
2. No Reviews or Fake Reviews
Genuine sellers often have reviews or a history of transactions. A lack of feedback or overly positive,
generic reviews can indicate a scam. When shopping online, look for sellers with:
- Positive, detailed reviews from past buyers.
- A consistent transaction history that reflects reliability.
- Active engagement, such as answering questions or addressing concerns professionally.
- If a seller lacks these signs, proceed with caution. A trustworthy track record is a key indicator of authenticity.
3. Lack of Transparency
- Sellers who avoid providing details, photos, or specifications about the product may be hiding something.
- They may refuse to meet in person or provide unclear communication.
The first new condo launch in Toa Payoh in 8 years. Register your interest today to receive ebrochure & floorplans!
4. Push for Immediate Payment
- Scammers often pressure buyers to make payments quickly, claiming urgency or exclusivity (e.g., “This deal won’t last!”).
- Beware of sellers who insist on upfront payments without guarantees.
5. Use of Untraceable Payment Methods
- Requests for payments through gift cards, cryptocurrency, or wire transfers are major red flags. These methods are hard to trace and often irrecoverable.
6. Sketchy Online Presence
- Examine their profile, website or store. Poorly designed sites, missing contact information, or inconsistencies in their business details are warning signs.
- Be wary of sellers with:
- Poorly Designed Websites: A lack of professional design or an incomplete website can be a sign of a scam.
- Missing Contact Information: Legitimate businesses typically provide clear contact details, such as a phone number, email, and physical address.
- Inconsistent Business Details: Look for inconsistencies in product listings, pricing, or business history. Scammers often lack a solid online footprint or provide conflicting information.
- No Verified Reviews or Testimonials: Genuine sellers usually have customer reviews or testimonials. If a site has no reviews or only generic, overly positive feedback, it's a red flag.
Always double-check the legitimacy of a seller by researching their online presence and cross-referencing reviews or business details. Stay cautious, and trust your instincts when something feels off. If you are intending to make a big online purchase probably in the hundreds of dollars, it is best to make sure the online seller has a physical shop presence. Some buyers will secretly drop by the seller's physical shop to see if the seller's brand or contact is listed on the shop to verify if its genuine before the buyers transfer their money over.
7. Refusal to Provide Proof
- If the seller refuses to provide photos, videos, or evidence of the item, they may not have it.
- For high-value items, request additional verification, such as receipts or certifications.
8. No Secure Checkout
- Legitimate sellers use secure payment gateways. Check for a secure connection (HTTPS) and trusted payment options. When shopping online, lack of a secure checkout process can put your financial and personal information at risk. Here’s what to look for and avoid:
- A secure website will have "https://" at the start of the URL, with a padlock icon next to it. If this is missing, your data is not encrypted.
- Avoid websites that redirect you to unfamiliar or untrusted third-party payment platforms.
- Be cautious if the seller insists on payment methods like wire transfers, cryptocurrency, or gift cards, which are harder to trace and recover.
- Legitimate websites typically offer trusted payment options like credit cards, PayPal, or other reputable payment services.
- Frequent errors, broken links, or a confusing checkout interface can indicate a poorly managed or fraudulent site.
- A legitimate e-commerce site should have clear privacy and security policies explaining how your data will be protected.
9. Suspicious Shipping Practices
- Be wary of sellers who claim they will ship the product after receiving payment but provide vague shipping timelines or conditions. By being vigilant and asking the right questions, you can avoid falling victim to shipping-related scams.
10. Trust Your Instincts
- If something feels off—whether it’s their tone, evasive responses, or reluctance to answer questions—it’s better to walk away than risk falling for a scam.
Thank you for reading my blog. Online shopping can be convenient and enjoyable when done securely. By staying vigilant and following these safety guidelines, you can protect yourself from scams and make informed choices.
Meanwhile, "Your dream home should not only feel right—it should also be a smart investment for your future"
Finding a home is about more than just four walls; it’s about creating a space that matches your lifestyle, nurtures your dreams, and provides a foundation for long-term growth.
We are here to guide you through this exciting journey, ensuring that your dream home:
- Reflects your unique personality and preferences
- Offers comfort and convenience for your everyday life
- Stands as a wise financial choice, aligning with your goals
Together, we’ll ensure that your next home isn’t just a place—it’s a step toward the life you’ve always envisioned.
Are you ready to get started?
