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Around 42 private residential launches, estimated 5,421 units are expected to launch in 2022. Find out more here
The government announced new property curbs on 16 December 2021 to cool its housing market amid rising concern of “prices running ahead of economic fundamentals and increasing risk of a future destabilising correction” after an excellent year for 2021 property market where an estimated 13,000 units were sold by developers, 30.2% higher than 2020. This is the highest annual sales since 2013. Around 10,000 units from 24 private residential projects were launched for sale in 2021 with 12 projects in the CCR, 7 projects in the RCR and 5 projects in the OCR.
This latest round of cooling measures are seen by industry watchers as one of the most aggressive yet. Notably, Additional Buyer Stamp Duties (ABSD) for non-entities have been increased by about 5% to 15% for certain buyer types. This is higher as compared to previous rounds, where the increases ranged from only 5% to 10%. Additionally, the Total Debt Servicing Ratio (TDSR) has been tightened further from 60% to 55% as well as Loan-to- value ratios (LTV) for HDB loans have been reduced from 90% to 85%.
ABSD for foreigners was significantly increased by 10% points to reach 30%. Some consider the increase in ABSD for foreigners to have limited effect, given their small impact as foreign purchases for non-landed private residential properties made up only around 4% of demand for 2020 and 2021.
The increase in ABSD is not expected taper foreign buying demand, especially when borders’ measures are gradually relaxed, leading to the return of overseas buyers. Foreigners’ interest may be diverted to alternative asset classes such as strata retail shops, shophouses or strata offices that do not face or have limited cooling measure risk.
This latest round of cooling measures are seen by industry watchers as one of the most aggressive yet. Notably, Additional Buyer Stamp Duties (ABSD) for non-entities have been increased by about 5% to 15% for certain buyer types. This is higher as compared to previous rounds, where the increases ranged from only 5% to 10%. Additionally, the Total Debt Servicing Ratio (TDSR) has been tightened further from 60% to 55% as well as Loan-to- value ratios (LTV) for HDB loans have been reduced from 90% to 85%.
ABSD for foreigners was significantly increased by 10% points to reach 30%. Some consider the increase in ABSD for foreigners to have limited effect, given their small impact as foreign purchases for non-landed private residential properties made up only around 4% of demand for 2020 and 2021.
The increase in ABSD is not expected taper foreign buying demand, especially when borders’ measures are gradually relaxed, leading to the return of overseas buyers. Foreigners’ interest may be diverted to alternative asset classes such as strata retail shops, shophouses or strata offices that do not face or have limited cooling measure risk.
Piccadilly Grand is an upcoming mixed condo project in Northumberland Road beside Farrer Park MRT & shopping malls jointly developed by 2 heavy weight developers - City Developments (CDL) and MCL Land, exhibiting full confidence in the long-term fundamentals of the Singapore residential market.
The new cooling measures impacts all segments of buyers with tighter loan curbs with higher upfront costs due to a tightening of TDSR and increase in ABSD. First-time Singaporean and Permanent Resident (PR) private residential buyers were the least affected with ABSD rates remaining unchanged.
The impact would be more keenly felt for property investors. Singaporean property buyers now face higher ABSD of 17% and 25% for their 2nd and 3rd property purchase, respectively as compared to 12% and 15% previously. For PRs, they now have to pay 25% and 30% ABSD for their 2nd and 3rd private residential purchase from 15% previously. Coupled with TDSR tightening, investor demand is expected to cool significantly, due to potential higher upfront costs and tighter financing conditions.
The impact would be more keenly felt for property investors. Singaporean property buyers now face higher ABSD of 17% and 25% for their 2nd and 3rd property purchase, respectively as compared to 12% and 15% previously. For PRs, they now have to pay 25% and 30% ABSD for their 2nd and 3rd private residential purchase from 15% previously. Coupled with TDSR tightening, investor demand is expected to cool significantly, due to potential higher upfront costs and tighter financing conditions.
Perched atop the verdant Pearl’s Hill City Park, One Pearl Bank is set to be the tallest residential development in the Outram-Chinatown district in Central Singapore comprising two gently curving 39-storey towers linked at the roof by dramatic sky bridges featuring panoramic views extending from the Central Business District to Sentosa.
The en-bloc market which had just picked up pace in the last couple of months are expected to cool as developers become more selective and wait to see the impact on demand especially when developers are now facing significantly higher development risks given the increase in ABSD for entities. The risks to developers have been increased by 10% to 35% should they fail to sell everything within 5 years. This is onerous on developers and en-bloc hopefuls have to temper their expectations to increase their chances of a successful en-bloc. The higher ABSD rates coupled with ongoing construction uncertainties, and uncertain demand due to the new cooling measures, have increased development risks, especially for large-scale projects.
We could still see en-bloc demand for well-located smaller sites at prime districts, where buyers’ profiles tend to be very high net worth and hence may not be too impacted by higher ABSD. As developers need to ensure feasible profit margins, land bid prices are expected to moderate after factoring in higher costs and risks associated. As developers turn towards Government Land Sales (GLS) Programme to fill their empty lan banks, the government is under pressure to release more land to fill the void from en-bloc market to satisfy developer's demand for land. It remains to be seen if the government is more inclined to fill its national reserves or lower their collections from the sale of each plot of GLS if they decide to supply more GLS land. Increased supply will usually lower the bid price submitted by developers.
We could still see en-bloc demand for well-located smaller sites at prime districts, where buyers’ profiles tend to be very high net worth and hence may not be too impacted by higher ABSD. As developers need to ensure feasible profit margins, land bid prices are expected to moderate after factoring in higher costs and risks associated. As developers turn towards Government Land Sales (GLS) Programme to fill their empty lan banks, the government is under pressure to release more land to fill the void from en-bloc market to satisfy developer's demand for land. It remains to be seen if the government is more inclined to fill its national reserves or lower their collections from the sale of each plot of GLS if they decide to supply more GLS land. Increased supply will usually lower the bid price submitted by developers.
In 2022, sales of new homes will be constrained by the lack of new supply. Around 42 private residential launches are expected consisting of 5,421 units in 2022 with 21.7% in the CCR, 36.4% in the RCR and 41.9 % in the OCR. Two EC projects may be launch in 2022 - North Gaia in Yishun in Mar / Apr 2022 and another along Tengah Garden Walk probably in 4th Qtr 2022. Another EC project along Tam pines Street 62 will reach its 15th month in Nov 2022 and may be launch in 1st Qtr 2023.
Upcoming projects include Belgravia Ace, Kovan Jewel, Royal Hallmark, The Arden, Piccadilly Grand, Gems Ville, Sophia Regency, Evelyn Newton, former 10A/B & 11 Institution Hill, former 2, 4 and 6 Mount Emily Road , former Ji Liang Gardens , projects along Ang Mo Kio Ave 1 and Tanah Merah Kechil Link .
Overall , the new home market may see sales between 8,000 and 9,000 units while prices may move up to 3% in 2022 on the back of higher construction costs.
Kiwi Lim from Huttons Asia believed that due to the current very low levels of unsold inventory, developers will continue sourcing for GLS land and en-bloc smaller residential projects cautiously. Developers are also not expected to cut prices for existing launches as unsold inventory remains very limited and developers have to brace themselves with higher construction costs which may be made even higher with the prospect of an increase in GST this year.
Upcoming projects include Belgravia Ace, Kovan Jewel, Royal Hallmark, The Arden, Piccadilly Grand, Gems Ville, Sophia Regency, Evelyn Newton, former 10A/B & 11 Institution Hill, former 2, 4 and 6 Mount Emily Road , former Ji Liang Gardens , projects along Ang Mo Kio Ave 1 and Tanah Merah Kechil Link .
Overall , the new home market may see sales between 8,000 and 9,000 units while prices may move up to 3% in 2022 on the back of higher construction costs.
Kiwi Lim from Huttons Asia believed that due to the current very low levels of unsold inventory, developers will continue sourcing for GLS land and en-bloc smaller residential projects cautiously. Developers are also not expected to cut prices for existing launches as unsold inventory remains very limited and developers have to brace themselves with higher construction costs which may be made even higher with the prospect of an increase in GST this year.
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Wisteria Mall is the commercial component of mixed-use development The Wisteria, located in Yishun.
Wisteria Mall is being sold by joint venture company led by BBR Holdings and Hexacon Construction along with Santarli Venture, MUSE Capital and AHPL (Investments) to UK private equity firm Schroders, according to reporting by Mingtiandi on 25 Jan 2022. Schroders is acquiring the Wisteria Mall, which has a strata lot area of 17,328 square metres (186,517 square feet) on a 99-year leasehold site, for the equivalent of nearly S$12,004 ($8,924) per square metre.
The UK private equity firm Schroders has agreed to buy Wisteria Mall - the commercial component of mixed-use development The Wisteria, located in Yishun for S$208 million, as neighbourhood retail continues to attract property investors during the COVID-19 era. The British finance firm, which took over Hong Kong’s Pamfleet in 2020, is buying the Wisteria Mall, which forms the retail podium below the Wisteria condo complex in the Yishun area, from a unit of Singapore-listed builder BBR Holdings, which announced the sale in a filing with the Singapore Exchange.
While retail investments have lost favour in recent years with investors pursuing the e-commerce-powered appeal of warehouses, Schroders — which has a track record in the region of acquiring and repositioning less-loved assets — sees the Wisteria Mall as providing opportunities that complement online channels especially with the high density in Yishun, which is home to several large public housing estates, and the mass-transit stations encircling the Wisteria Mall, as providing a built-in catchment for the project.
The UK private equity firm Schroders has agreed to buy Wisteria Mall - the commercial component of mixed-use development The Wisteria, located in Yishun for S$208 million, as neighbourhood retail continues to attract property investors during the COVID-19 era. The British finance firm, which took over Hong Kong’s Pamfleet in 2020, is buying the Wisteria Mall, which forms the retail podium below the Wisteria condo complex in the Yishun area, from a unit of Singapore-listed builder BBR Holdings, which announced the sale in a filing with the Singapore Exchange.
While retail investments have lost favour in recent years with investors pursuing the e-commerce-powered appeal of warehouses, Schroders — which has a track record in the region of acquiring and repositioning less-loved assets — sees the Wisteria Mall as providing opportunities that complement online channels especially with the high density in Yishun, which is home to several large public housing estates, and the mass-transit stations encircling the Wisteria Mall, as providing a built-in catchment for the project.
YewTee Point is 20 metres from Yew Tee MRT station and frequented by local shoppers in Choa Chu Kang
In March 2021, Frasers Centrepoint Trust announced that it had agreed to sell the YewTee Point mall in western Singapore for S$220 million ($164 million) in a string of divestments for the SGX-listed REIT to the buyer understood to be Arch Capital, which is managing a fund on behalf of a German investor.
YewTee Point is 20 metres (66 feet) from Yew Tee MRT station and is frequented by local shoppers who rely on the Choa Chu Kang area mall for purchasing non-discretionary items such as groceries at the Fairprice supermarket that anchors the property. Other family-friendly tenants include Watsons, KFC, BreadTalk and Sushi Express.
YewTee Point is a two-storey mall with 72,382 square feet (6,725 square metres) of net lettable area. Market observers say it makes sense for the REIT to sell the low-volume but profitable YewTee Point to focus on larger investments, such as the PGIM retail portfolio recently bought by FCT.
YewTee Point is 20 metres (66 feet) from Yew Tee MRT station and is frequented by local shoppers who rely on the Choa Chu Kang area mall for purchasing non-discretionary items such as groceries at the Fairprice supermarket that anchors the property. Other family-friendly tenants include Watsons, KFC, BreadTalk and Sushi Express.
YewTee Point is a two-storey mall with 72,382 square feet (6,725 square metres) of net lettable area. Market observers say it makes sense for the REIT to sell the low-volume but profitable YewTee Point to focus on larger investments, such as the PGIM retail portfolio recently bought by FCT.
Le Quest shopping mall is a convenience centre that is well-located & accessible, serving Bukit Batok population
A single-storey shopping mall in Bukit Batok has become Firmus Capital’s second acquisition in the city-state valuing the asset, which was Qingjian’s first commercial project in Singapore, at over $103 million in Aug 2021.
Le Quest shopping mall situated in Bukit Batok heartlands residential precinct, is the retail element of the mixed-residential Le Quest project developed by the seller, Qingjian Realty, a local unit of Chinese builder Qingjian Group.
Le Quest shopping mall is a convenience centre that is well-located, with good accessibility serving a dense and growing catchment population with a gross floor area of 64,584 square feet (6,000 square metres). Le Quest shopping mall holds potential as a last-mile fulfilment hub for retailers and restaurants offering delivery and click-and-collect services as consumers stay closer to home during the COVID-19 era.
Le Quest shopping mall situated in Bukit Batok heartlands residential precinct, is the retail element of the mixed-residential Le Quest project developed by the seller, Qingjian Realty, a local unit of Chinese builder Qingjian Group.
Le Quest shopping mall is a convenience centre that is well-located, with good accessibility serving a dense and growing catchment population with a gross floor area of 64,584 square feet (6,000 square metres). Le Quest shopping mall holds potential as a last-mile fulfilment hub for retailers and restaurants offering delivery and click-and-collect services as consumers stay closer to home during the COVID-19 era.
FRASERS Centrepoint Trust (FCT) will divest Anchorpoint shopping centre for S$110 million to third parties
Anchorpoint is a mall with a net lettable area of approximately 6,616 square metres. It comprises two retail levels (including one basement level) and an adjacent two-storey building.
In Dec 2020, FRASERS Centrepoint Trust (FCT) announced that it will divest Anchorpoint shopping centre for S$110 million to unrelated third parties by entering into two sale and purchase agreements with each of the undisclosed purchasers for the proposed sale of two strata lots (together with the accessory lots) to each buyer. These lots collectively comprise the shopping centre.
The shopping centre has 51 tenants as at Sept 30, 2020. Key tenants include household retailer Mr D.I.Y., fashion retailer Cotton On, Koufu food court, Xin Wang HK Café, as well as restaurants Sakuraya, Uncle Leong Signatures and Jack's Place. The sale consideration took into account Anchorpoint's independent appraised value of S$110 million as at Sept 15, 2020.
In Dec 2020, FRASERS Centrepoint Trust (FCT) announced that it will divest Anchorpoint shopping centre for S$110 million to unrelated third parties by entering into two sale and purchase agreements with each of the undisclosed purchasers for the proposed sale of two strata lots (together with the accessory lots) to each buyer. These lots collectively comprise the shopping centre.
The shopping centre has 51 tenants as at Sept 30, 2020. Key tenants include household retailer Mr D.I.Y., fashion retailer Cotton On, Koufu food court, Xin Wang HK Café, as well as restaurants Sakuraya, Uncle Leong Signatures and Jack's Place. The sale consideration took into account Anchorpoint's independent appraised value of S$110 million as at Sept 15, 2020.
The sale price of $108 million on the basis of Bedok Point as a redevelopment site was supported by two independent valuations, which put the mall's net property income yield at 2.5 per cent. PHOTO: FRASERS MALLS
Bedok Point is a four-storey mall located in the town center of Bedok along New Upper Changi Road, and near Bedok MRT station. Bedok Point officially opened on 26 April 2011. The mall held its soft opening on 16 December 2010. It has a range of retail units, entertainment outlets, a bookstore and food outlets.
Frasers Centrepoint Trust (FCT) announced in Oct 2020 that they now wholly own AsiaRetail Fund (ARF), having completed the purchase of the latter's remaining 63.11 per cent interest from Frasers Property therefore confirming the sale of Bedok Point mall at $108 million on the basis of Bedok Point as a redevelopment site was supported by two independent valuations, which put the mall's net property income yield at 2.5 per cent.
Kiwi Lim from the third largest real estate agency Huttons Asia believe that as Singapore gradually emerges from the pandemic, neighbourhood malls with strong fundamentals are attracting foreign investment firms and private equity firms. These firms may find our local strata shopping malls desirable as they offer a good variety of essential services to the heartland neighbourhood with some generating a reasonable property yield especially if they are surrounded by public housing estates, transportation, catchment of good schools, etc to increase shopper traffic.
Frasers Centrepoint Trust (FCT) announced in Oct 2020 that they now wholly own AsiaRetail Fund (ARF), having completed the purchase of the latter's remaining 63.11 per cent interest from Frasers Property therefore confirming the sale of Bedok Point mall at $108 million on the basis of Bedok Point as a redevelopment site was supported by two independent valuations, which put the mall's net property income yield at 2.5 per cent.
Kiwi Lim from the third largest real estate agency Huttons Asia believe that as Singapore gradually emerges from the pandemic, neighbourhood malls with strong fundamentals are attracting foreign investment firms and private equity firms. These firms may find our local strata shopping malls desirable as they offer a good variety of essential services to the heartland neighbourhood with some generating a reasonable property yield especially if they are surrounded by public housing estates, transportation, catchment of good schools, etc to increase shopper traffic.
From Mingtiandi and Straits Times
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The first residential government land sales (GLS) tender for 2022 - a plum site at Jalan Tembusu - closed on Tuesday (18 January) afternoon after attracting 8 bids and a robust bid price that showed developers' hunger for land is not dampened by the recent property cooling measure announced by the government in December last month.
The 99-year leasehold government and sale (GLS) land parcel in Jalan Tembusu, near Tanjong Katong Girls' School - offered for sale by the Urban Redevelopment Authority under the GLS programme for the second half of 2021 - is the first GLS tender to close since the government announced sweeping property cooling measures last month.
City Developments (CDL) emerged the top bidder at $768 million. This is close to market analysts predictions before the cooling measures were announced and more than 50 million higher than the second highest bid by a consortium also involving CDL.
The 99-year leasehold government and sale (GLS) land parcel in Jalan Tembusu, near Tanjong Katong Girls' School - offered for sale by the Urban Redevelopment Authority under the GLS programme for the second half of 2021 - is the first GLS tender to close since the government announced sweeping property cooling measures last month.
City Developments (CDL) emerged the top bidder at $768 million. This is close to market analysts predictions before the cooling measures were announced and more than 50 million higher than the second highest bid by a consortium also involving CDL.
The top bid of $1,302 per sqft per plot ratio (psf ppr) is within analysts' estimates before the property cooling measure was announced last month. It is also nearly $200 psf ppr higher than that of another plum GLS site in the Farrer Park area last year.
This land acquisition will ensure that CDL maintain a healthy land parcel inventory stock in Singapore. This also show that developers have full confidence in the long-term fundamentals of Singapore's residential market even after the recent property cooling measure.
The 99-year GLS leasehold land parcel at Jalan Tembusu is located in District 15 with a generous land size of approximately 210,545 sqft located strategically within 1km from Dakota MRT station on the Circle Line and 600m from the upcoming Tanjong Katong MRT station on the Thomson-East Coast Line.
This new upcoming condo will be surrounded by good schools nearby include Chung Cheng High School (Main), Tanjong Katong Girls’ School, and Tanjong Katong Secondary School. There are also lots of amenities and F&B eateries located along Tanjong Katong Road and Parkway Parade shopping mall.
This land acquisition will ensure that CDL maintain a healthy land parcel inventory stock in Singapore. This also show that developers have full confidence in the long-term fundamentals of Singapore's residential market even after the recent property cooling measure.
The 99-year GLS leasehold land parcel at Jalan Tembusu is located in District 15 with a generous land size of approximately 210,545 sqft located strategically within 1km from Dakota MRT station on the Circle Line and 600m from the upcoming Tanjong Katong MRT station on the Thomson-East Coast Line.
This new upcoming condo will be surrounded by good schools nearby include Chung Cheng High School (Main), Tanjong Katong Girls’ School, and Tanjong Katong Secondary School. There are also lots of amenities and F&B eateries located along Tanjong Katong Road and Parkway Parade shopping mall.
Diminishing private housing supply in the market and strong take-up rates in new condo launches with a lack of available land parcels for developers to replenish their land stocks ensured that land bids remain strong even after the cooling measures.
Kiwi Lim from Huttons Asia expect the developer to price this new upcoming mass market condo on Jalan Tembusu from around $2,300 psf taking into account the land cost and higher construction costs.
Kiwi Lim from Huttons Asia expect the developer to price this new upcoming mass market condo on Jalan Tembusu from around $2,300 psf taking into account the land cost and higher construction costs.
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Data from WhereNext & URA
Record Low Supply Of New Condo Units
According to past records, an average of 9,000 new condo units are sold yearly in Singapore.
During the Covid pandemic, in 2020, more than 10,000 new condo units were sold and last year more than 14,500 new condo units were sold last year in 2021.
The current remaining unsold new condo units left available in the market are estimated at around 10,000 units. This year in 2022, we expect around 5,400 new condo units to be launched into the market with 7 mass market condos (see below table) and many other smaller sized apartment projects.
These are the 7 upcoming mass market condo projects in 2022 all expecting to launch around $2,000 psf or above. Data from WhereNext & URA
Upcoming Mass Market Condo Projects Expected Around $2,000 psf
There are only seven upcoming mass market condo projects in the pipeline for this year 2022. These projects are as shown above.
These seven mass market condo projects are expected to be launched at $2,000 psf or more on average. Once these mass market projects are launched throughout this year, it will set a new benchmark for mass market new condo pricing.
Previously five years ago, mass market condos were launched around $1,500 psf. This year's mass market condos will test the psychological barrier of mass market condo upgraders to accept $2,000 psf as the new normal.
There are only seven upcoming mass market condo projects in the pipeline for this year 2022. These projects are as shown above.
These seven mass market condo projects are expected to be launched at $2,000 psf or more on average. Once these mass market projects are launched throughout this year, it will set a new benchmark for mass market new condo pricing.
Previously five years ago, mass market condos were launched around $1,500 psf. This year's mass market condos will test the psychological barrier of mass market condo upgraders to accept $2,000 psf as the new normal.
Less Than 5% of Foreign Buyers During Covid Pandemic:
Before Covid, the percentage of foreigner buyers in Singapore's property market is around 15% on average. However during the Covid pandemic, foreigner buyers of our local property is less than 5% in 2020 and 2021 not because they are no longer interested in Singapore property but because Singapore's borders were closed to them.
Therefore, the property market demand seen in 2020 and 2021 is largely driven by domestic demand consisting of mainly Singaporeans and PRs and not influenced by foreign demand for our property in Singapore. We felt the increase in ABSD for foreigners will only serve little to reduce the demand for local property, moreover because Singapore currently has no estate tax, the 30% ABSD charged upon foreigner buyers is still lesser than the estate tax in other countries which can be as high as 45% for some making Singapore look attractive for estate planning. Once the borders open, we expect foreign buyers who are looking to home their families in a stable and safe environment in a country that is fluent in both Mandarin and English to find Singapore a very attractive place to live, work and play.
Before Covid, the percentage of foreigner buyers in Singapore's property market is around 15% on average. However during the Covid pandemic, foreigner buyers of our local property is less than 5% in 2020 and 2021 not because they are no longer interested in Singapore property but because Singapore's borders were closed to them.
Therefore, the property market demand seen in 2020 and 2021 is largely driven by domestic demand consisting of mainly Singaporeans and PRs and not influenced by foreign demand for our property in Singapore. We felt the increase in ABSD for foreigners will only serve little to reduce the demand for local property, moreover because Singapore currently has no estate tax, the 30% ABSD charged upon foreigner buyers is still lesser than the estate tax in other countries which can be as high as 45% for some making Singapore look attractive for estate planning. Once the borders open, we expect foreign buyers who are looking to home their families in a stable and safe environment in a country that is fluent in both Mandarin and English to find Singapore a very attractive place to live, work and play.
Developers May Not Be Keen On Collective Sale (enbloc)
The government's latest round of cooling measures announced last month are expected to take the wind out of the sails of the residential collective sale market.
Under the new rules, entities buying residential properties must pay 35 per cent ABSD – up from 25 per cent – if they cannot sell all their units in five years. There is also an additional non-remittable 5 per cent ABSD for developers.
Developers will have to consider the additional tax impact and buyers’ concerns about the future selling prices, as well as how these will affect demand and the take-up rate as developers will have to pay the heftier 35 per cent Additional Buyers’ Stamp Duty (ABSD) should they fail to complete and sell all units within five years – which analysts said will make developers more cautious with their land bids.
This may cause developers to probably look towards developing properties in less regulated overseas markets or join in the competition to bid for local government land sale (GLS) land parcels. Kiwi Lim from Huttons Asia feel that if developers are not acquiring land from collective sales, the government may need to significantly release much more land for sale from the government's limited reserved land parcels that they are currently holding on or we may see a much smaller supply of future upcoming condos launched yearly in Singapore's property market in the next five years of around 5,000 new condo units per year, excluding Executive Condo projects. If demand for new condo units continue to hover around 9,000 units during pre-Covid period, the supply will not be sufficient to meet demand.
The government's latest round of cooling measures announced last month are expected to take the wind out of the sails of the residential collective sale market.
Under the new rules, entities buying residential properties must pay 35 per cent ABSD – up from 25 per cent – if they cannot sell all their units in five years. There is also an additional non-remittable 5 per cent ABSD for developers.
Developers will have to consider the additional tax impact and buyers’ concerns about the future selling prices, as well as how these will affect demand and the take-up rate as developers will have to pay the heftier 35 per cent Additional Buyers’ Stamp Duty (ABSD) should they fail to complete and sell all units within five years – which analysts said will make developers more cautious with their land bids.
This may cause developers to probably look towards developing properties in less regulated overseas markets or join in the competition to bid for local government land sale (GLS) land parcels. Kiwi Lim from Huttons Asia feel that if developers are not acquiring land from collective sales, the government may need to significantly release much more land for sale from the government's limited reserved land parcels that they are currently holding on or we may see a much smaller supply of future upcoming condos launched yearly in Singapore's property market in the next five years of around 5,000 new condo units per year, excluding Executive Condo projects. If demand for new condo units continue to hover around 9,000 units during pre-Covid period, the supply will not be sufficient to meet demand.
Cost of Construction Labour and Building Materials
The cost of construction labour and building materials has escalated by 30 per cent to 50 per cent over the past few months. The tightening of foreign construction workers entering Singapore as well as the increase in their levy fees will also adversely affect the inflow of construction workers and will negatively impact the timeline of construction projects and may cause delays as the construction association - Singapore Contractors Association Limited (Scal) warned recently.
Singapore Contractors Association Limited (Scal) predicted that some sub-contractor and main-contractor companies may be forced to close and it will adversely impact some 100,000 residents working in the construction sector. The government has asked that all stakeholders - including developers to share the (increased) expenses instead of contractors taking the biggest hit by allowing the contractors to submit a higher quote for the construction costs to replace the previously signed agreements which were at a lower quote as they were prepared using the costs before Covid pandemic raised the costs. Developers therefore are unwilling to lower prices and may even have to raise prices for their unsold supply of new condo projects currently available and launched in the market.
The cost of construction labour and building materials has escalated by 30 per cent to 50 per cent over the past few months. The tightening of foreign construction workers entering Singapore as well as the increase in their levy fees will also adversely affect the inflow of construction workers and will negatively impact the timeline of construction projects and may cause delays as the construction association - Singapore Contractors Association Limited (Scal) warned recently.
Singapore Contractors Association Limited (Scal) predicted that some sub-contractor and main-contractor companies may be forced to close and it will adversely impact some 100,000 residents working in the construction sector. The government has asked that all stakeholders - including developers to share the (increased) expenses instead of contractors taking the biggest hit by allowing the contractors to submit a higher quote for the construction costs to replace the previously signed agreements which were at a lower quote as they were prepared using the costs before Covid pandemic raised the costs. Developers therefore are unwilling to lower prices and may even have to raise prices for their unsold supply of new condo projects currently available and launched in the market.
