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In view of the current market, the Singapore government announced the latest cooling measures at 11:59pm on 29 September 2022 (Thursday) to help home buyers exercise prudent borrowing to avoid future challenges in servicing their home loans. Over the past few months, home loan interest rates have risen significantly and likely to increase further in the near future affecting borrowing costs for buying residential homes.
Residential Property TDSR & MSR raised from 3.5% to 4%
For property loans granted by private financial institutions, MAS will raise by 0.5%-point the medium-term interest rate floor used to compute the Total Debt Servicing Ratio (TDSR) for private residential property and Mortgage Servicing Ratio (MSR) for HDB flats.
Non Residential Property TDSR raised from 4.50% to 5.00%
For non-residential property loans granted by private financial institutions, MAS will raise by 0.5%-point the medium-term interest rate floor used to compute the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) for non-residential properties from 4.5% to 5%.
Residential Property TDSR & MSR raised from 3.5% to 4%
For property loans granted by private financial institutions, MAS will raise by 0.5%-point the medium-term interest rate floor used to compute the Total Debt Servicing Ratio (TDSR) for private residential property and Mortgage Servicing Ratio (MSR) for HDB flats.
- This will apply to loans for the purchase of properties where the Option to Purchase (OTP) is granted on or after 30 September 2022, or where there is no OTP, the date of the Sale and Purchase Agreement is on or after 30 September 2022.
- The actual interest rates charged for mortgages will continue to be determined by the private financial institutions.
Non Residential Property TDSR raised from 4.50% to 5.00%
For non-residential property loans granted by private financial institutions, MAS will raise by 0.5%-point the medium-term interest rate floor used to compute the Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR) for non-residential properties from 4.5% to 5%.
From MND press release (click to read whole press release)
For Buyers of HDB Flats (BTO or resale):
Housing Loans Granted By HDB - HLE MSR raised from 2.60% to 3.00%
For housing loans granted by HDB, HDB will introduce an interest rate floor of 3% for computing the eligible loan amount.
LTV For HDB Housing Loans cut from 85% to 80%
HDB will lower the Loan-to-Value (LTV) limit for HDB housing loans from 85% to 80%. The lower LTV limit will apply to new flat applications for sales exercises launched and complete resale applications which are received by HDB on or after 30 September 2022.
The revised LTV limit does not apply to loans granted by private financial institutions, for which the LTV limit remains at 75%.
HDB does not expect this to affect first-timer and lower-income flat buyers significantly, as they may receive significant housing grants of up to $80,000 when buying a subsidised flat directly from HDB, or up to $160,000 when buying a resale flat. They can also tap on their CPF savings to pay for the flat purchase, thereby reducing the loan amount they may need to take.
HDB Loan will continue to be priced at 0.10% + OA rate
There is no change to the actual interest rate charged for housing loans provided by HDB. The HDB concessionary interest rate is reviewed quarterly, and will continue to be pegged at 0.1%-point above the prevailing CPF OA interest rate. It will remain at 2.6% p.a. from 1 October to 31 December 2022.
Housing Loans Granted By HDB - HLE MSR raised from 2.60% to 3.00%
For housing loans granted by HDB, HDB will introduce an interest rate floor of 3% for computing the eligible loan amount.
- The interest rate floor will apply to fresh applications for an HDB Loan Eligibility (HLE) letter received on or after 30 September 2022, 00:00 hours.
- There will be no impact to existing HLE applications received by HDB before this time.
- This will not affect the actual HDB concessionary interest rate, which will remain unchanged at 2.6% p.a..
- flat buyers who are taking an HDB housing loan at the concessionary interest rate; and
- whereby commercial interest rate is charged, e.g. flat buyers who are taking a second HDB housing loan and buying an HDB flat before disposing of their existing one. The interest rate will be converted to the concessionary rate after the flat buyer has disposed of the existing flat and used the CPF refund and 50% of the cash proceeds received to reduce the second HDB housing loan amount.
LTV For HDB Housing Loans cut from 85% to 80%
HDB will lower the Loan-to-Value (LTV) limit for HDB housing loans from 85% to 80%. The lower LTV limit will apply to new flat applications for sales exercises launched and complete resale applications which are received by HDB on or after 30 September 2022.
The revised LTV limit does not apply to loans granted by private financial institutions, for which the LTV limit remains at 75%.
HDB does not expect this to affect first-timer and lower-income flat buyers significantly, as they may receive significant housing grants of up to $80,000 when buying a subsidised flat directly from HDB, or up to $160,000 when buying a resale flat. They can also tap on their CPF savings to pay for the flat purchase, thereby reducing the loan amount they may need to take.
HDB Loan will continue to be priced at 0.10% + OA rate
There is no change to the actual interest rate charged for housing loans provided by HDB. The HDB concessionary interest rate is reviewed quarterly, and will continue to be pegged at 0.1%-point above the prevailing CPF OA interest rate. It will remain at 2.6% p.a. from 1 October to 31 December 2022.
One Pearl Bank - city fringe hilltop condo by Capitaland is highly sought after by home buyers and investors due to its iconic design, rare strategic location and attractive prices. Click to view website for more information.
15 Months Wait Out Period For Condo Downgraders
To moderate demand in the HDB resale market, HDB will impose a wait-out period of 15 months for private residential property owners (PPOs) and ex-PPOs to buy a non-subsidised HDB resale flat. The wait-out period will not apply to seniors aged 55 and above who are moving from their private property to a 4-room or smaller resale flat. This new measure will take effect from 30 September 2022. It is a temporary measure which will be reviewed in future depending on overall market conditions and housing demand.
Ex-PPOs refer to those who had disposed of a private property prior to submitting an application to buy a resale flat.
Seniors aged 55 years and above (and their spouses) not affected by Wait Out Period
The 15-month wait-out period will not apply to seniors aged 55 and above (and their spouses) who are moving from their private property to a 4-room or smaller resale flat. Senior private residential property owners PPOs / ex-PPOs can continue to buy a 2-room Flexi flat on short lease (if they are aged 55 and above) and Community Care Apartment (if they are aged 65 and above) from HDB. In addition, private residential property owners PPOs / ex-PPOs, regardless of age, with extenuating circumstances, e.g. financial difficulties, may approach HDB for assistance, and we will assess their situation on a case-by-case basis.
Ex-PPOs refer to those who had disposed of a private property prior to submitting an application to buy a resale flat.
The Singapore government assures Singaporeans that they are committed to keep public housing inclusive, affordable and accessible to Singaporeans. The government will continue to monitor the property market and adjust policies to ensure that they remain relevant.
Real estate professional Kiwi Lim felt this recent measure seem to be more targeted towards resale HDB buyers in order to manage the rising prices of HDB resale flats which has seen more and more million dollar resale flats being transacted in the market. There are more HDB resale flats changing hands for at least $1 million in the first nine months of 2022 than in the whole of 2021, as overall property prices continue to edge up. To date, there have been 274 million-dollar HDB resale flat transactions, exceeding the 259 units recorded in 2021, according to HDB data.
"There are a growing number of elderly above 55 who cashed out from the sales of their private properties to live their retirement years in a large 5 room HDB flat, EA or EM and these buyers are very willing to pay larger amounts of COV for their retirement homes. I believe the government is trying very hard to prevent the number of million dollar flats from hitting 300 units this year" said Kiwi Lim.
To moderate demand in the HDB resale market, HDB will impose a wait-out period of 15 months for private residential property owners (PPOs) and ex-PPOs to buy a non-subsidised HDB resale flat. The wait-out period will not apply to seniors aged 55 and above who are moving from their private property to a 4-room or smaller resale flat. This new measure will take effect from 30 September 2022. It is a temporary measure which will be reviewed in future depending on overall market conditions and housing demand.
Ex-PPOs refer to those who had disposed of a private property prior to submitting an application to buy a resale flat.
Seniors aged 55 years and above (and their spouses) not affected by Wait Out Period
The 15-month wait-out period will not apply to seniors aged 55 and above (and their spouses) who are moving from their private property to a 4-room or smaller resale flat. Senior private residential property owners PPOs / ex-PPOs can continue to buy a 2-room Flexi flat on short lease (if they are aged 55 and above) and Community Care Apartment (if they are aged 65 and above) from HDB. In addition, private residential property owners PPOs / ex-PPOs, regardless of age, with extenuating circumstances, e.g. financial difficulties, may approach HDB for assistance, and we will assess their situation on a case-by-case basis.
Ex-PPOs refer to those who had disposed of a private property prior to submitting an application to buy a resale flat.
The Singapore government assures Singaporeans that they are committed to keep public housing inclusive, affordable and accessible to Singaporeans. The government will continue to monitor the property market and adjust policies to ensure that they remain relevant.
Real estate professional Kiwi Lim felt this recent measure seem to be more targeted towards resale HDB buyers in order to manage the rising prices of HDB resale flats which has seen more and more million dollar resale flats being transacted in the market. There are more HDB resale flats changing hands for at least $1 million in the first nine months of 2022 than in the whole of 2021, as overall property prices continue to edge up. To date, there have been 274 million-dollar HDB resale flat transactions, exceeding the 259 units recorded in 2021, according to HDB data.
"There are a growing number of elderly above 55 who cashed out from the sales of their private properties to live their retirement years in a large 5 room HDB flat, EA or EM and these buyers are very willing to pay larger amounts of COV for their retirement homes. I believe the government is trying very hard to prevent the number of million dollar flats from hitting 300 units this year" said Kiwi Lim.
FAQs extracted from HDB website:
1. Do both spouses have to be 55 to be exempted from 15 months wait out?
Yes. Both spouses need to be 55. The 15-month wait-out period will not apply to seniors and their spouses, both of whom must be aged 55 and above, who move from their private property to a four-room or smaller resale flat.
2. Can I buy resale HDB now as I have sold off my private property before the cooling measures?
No. The resale application must be before 30 Sep. You will have to wait out for 15 months from the official completion date.
3. When does the 15 months date start?
It starts from the official completion of the sale of your private property.
If unsure, you may check directly with HDB as there may be conditions subject to changes without notice.
1. Do both spouses have to be 55 to be exempted from 15 months wait out?
Yes. Both spouses need to be 55. The 15-month wait-out period will not apply to seniors and their spouses, both of whom must be aged 55 and above, who move from their private property to a four-room or smaller resale flat.
2. Can I buy resale HDB now as I have sold off my private property before the cooling measures?
No. The resale application must be before 30 Sep. You will have to wait out for 15 months from the official completion date.
3. When does the 15 months date start?
It starts from the official completion of the sale of your private property.
If unsure, you may check directly with HDB as there may be conditions subject to changes without notice.
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The new rule may see future condo units with smaller aircon ledges
The Urban Redevelopment Authority (URA) recently issued a circular on harmonisation of floor area definitions which is expected to impact all developers who successfully bid for government land sales (GLS) from 1 June 2023 onwards. It is unclear if it will also affect developers who procured land parcels thru enbloc sales also known as a collective sale.
These new changes described in the circular is to be adopted by 4 government agencies: URA, Singapore Land Authority (SLA), Building and Construction Authority (BCA) and Singapore Civil Defence Force (SCDF).
Under the new standardised definition, all strata areas will have to be included as gross floor area(GFA), which is limited by the Master Plan plot ratio for the site.
Currently, such aircon ledge spaces make up around 4% to 5% of the total saleable area of the private residential unit which buyers pay for as residential property developers sell the aircon ledge spaces as part of the payable strata area of condo units. But due to current computation, this aircon ledge area is not charged by the government and therefore is actually considered free of charge to developers.
These new changes described in the circular is to be adopted by 4 government agencies: URA, Singapore Land Authority (SLA), Building and Construction Authority (BCA) and Singapore Civil Defence Force (SCDF).
Under the new standardised definition, all strata areas will have to be included as gross floor area(GFA), which is limited by the Master Plan plot ratio for the site.
Currently, such aircon ledge spaces make up around 4% to 5% of the total saleable area of the private residential unit which buyers pay for as residential property developers sell the aircon ledge spaces as part of the payable strata area of condo units. But due to current computation, this aircon ledge area is not charged by the government and therefore is actually considered free of charge to developers.
Many complaints about oversized aircon ledges
Throughout the past few years, we have seen many cases of homeowners complaining about oversized aircon ledges - some almost the length of a bus - in newly built condominiums all across Singapore casting the spotlight on this loophole that allows developers to build them without having them counted as part of the gross floor area (GFA). Yet, developers are allowed to charge home buyers for that same space.
Some property analysts estimate that each year, Singapore's private property owners pay approximately $800 million to developers for air-con ledges. Many feel that it is time for that the authorities take away the GFA exemption for these aircon ledges - just as what the authorities did for planter boxes and bay windows around 13 years ago when the Urban Redevelopment Authority made the move on 1 Jan 2009 after noticing that some developers had been exploiting the loophole for profit.
Throughout the past few years, we have seen many cases of homeowners complaining about oversized aircon ledges - some almost the length of a bus - in newly built condominiums all across Singapore casting the spotlight on this loophole that allows developers to build them without having them counted as part of the gross floor area (GFA). Yet, developers are allowed to charge home buyers for that same space.
Some property analysts estimate that each year, Singapore's private property owners pay approximately $800 million to developers for air-con ledges. Many feel that it is time for that the authorities take away the GFA exemption for these aircon ledges - just as what the authorities did for planter boxes and bay windows around 13 years ago when the Urban Redevelopment Authority made the move on 1 Jan 2009 after noticing that some developers had been exploiting the loophole for profit.
How will this new rule affect property prices in future?
Real estate professional Kiwi Lim says developers usually use their free aircon ledge space to average out the overall cost price per square foot of the whole apartment to offer a lower overall per square foot selling price to buyers after taking into account the free aircon ledge space that the government does not charge developers for.
If this new rule kicks in for future Government Land Sale (GLS) land parcels, we may see developers in a dilemma. They need land parcels to continue building properties in order to keep their tens of thousands of staff employed and therefore they have to keep bidding and securing more land parcels. Should they continue to compete and bid higher for the GLS land parcels to secure more land for new projects to bring in revenue? If they hesitate to pay higher prices for the GLS land parcels, they may secure no new projects and may need to retrench. If they bid for the new GLS land parcels, they will have to charge higher per square foot prices for future condo projects because they no longer have the free aircon-ledge buffer space to bring down their average per square foot price.
Real estate professional Kiwi Lim says developers usually use their free aircon ledge space to average out the overall cost price per square foot of the whole apartment to offer a lower overall per square foot selling price to buyers after taking into account the free aircon ledge space that the government does not charge developers for.
If this new rule kicks in for future Government Land Sale (GLS) land parcels, we may see developers in a dilemma. They need land parcels to continue building properties in order to keep their tens of thousands of staff employed and therefore they have to keep bidding and securing more land parcels. Should they continue to compete and bid higher for the GLS land parcels to secure more land for new projects to bring in revenue? If they hesitate to pay higher prices for the GLS land parcels, they may secure no new projects and may need to retrench. If they bid for the new GLS land parcels, they will have to charge higher per square foot prices for future condo projects because they no longer have the free aircon-ledge buffer space to bring down their average per square foot price.
Straits Times online on 22 Sept 2022
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Lentor Modern sold more than 84% of its total units on its preview day with prices breaching $2,400 psf
Lentor Modern sold more than 84% during its preview sale yesterday on 17 Sept 2022 (Saturday) as property giant GuocoLand launched the 605-unit integrated mixed-use development in Ang Mo Kio area with prices starting from $1,880 per square foot (psf) onwards. By late afternoon, prices of Lentor Modern were seen selling above $2,400 per square foot (psf) for 2 bedroom units as more than 1,400 cheques from interested buyers were received by Guocoland. Some units saw prices selling above S$2,500 per square foot (psf) towards the end of the sales preview.
Lentor Modern is integrated with Lentor MRT station on the Thomson-East Coast Line, comprising of one bedroom to four bedroom condo units ranging from 527 sq ft to 1,528 sq ft. Prices for Lentor Modern's one bedroom units started at prices ranging from $$1.07 million for a 527 sqft unit, to S$3.33 million for a 1,528 sqft four bedroom unit.
The 99-year leasehold plot of land at Lentor Central was successfully bidded by Guocoland at a price that translates to a land rate of $1,204 per square foot per plot ratio (psf ppr). It is situated close to schools such as Anderson Primary, CHIJ St Nicholas Girls, Catholic High, Presbyterian High, Raffles Institution and Anderson Serangoon Junior College, as well as Nanyang Polytechnic and the French International School. Lentor Modern is also located near plenty of green space, including Thomson Nature and Bishan parks, the upper and lower Seletar Reservoir areas and Lower Peirce Reservoir Park.
Real estate professional Kiwi Lim said it is no surprise that Lentor Modern sold more than 84% on its sales launch as high demand was expected following the success of AMO Residence, where 98% were sold during its launch in July and Sky Eden@Bedok which sold more than 75% last week.
Lentor Modern is integrated with Lentor MRT station on the Thomson-East Coast Line, comprising of one bedroom to four bedroom condo units ranging from 527 sq ft to 1,528 sq ft. Prices for Lentor Modern's one bedroom units started at prices ranging from $$1.07 million for a 527 sqft unit, to S$3.33 million for a 1,528 sqft four bedroom unit.
The 99-year leasehold plot of land at Lentor Central was successfully bidded by Guocoland at a price that translates to a land rate of $1,204 per square foot per plot ratio (psf ppr). It is situated close to schools such as Anderson Primary, CHIJ St Nicholas Girls, Catholic High, Presbyterian High, Raffles Institution and Anderson Serangoon Junior College, as well as Nanyang Polytechnic and the French International School. Lentor Modern is also located near plenty of green space, including Thomson Nature and Bishan parks, the upper and lower Seletar Reservoir areas and Lower Peirce Reservoir Park.
Real estate professional Kiwi Lim said it is no surprise that Lentor Modern sold more than 84% on its sales launch as high demand was expected following the success of AMO Residence, where 98% were sold during its launch in July and Sky Eden@Bedok which sold more than 75% last week.
AMO Residence was the first OCR new condo project to test the psychological barrier of mass market home buyers in its launch in July this year
What does OCR, RCR and CCR mean?
RCR refers to the Rest of Central Region which are usually city fringe areas and are typically very sought-after, e.g. Tiong Bahru, Telok Blangah, Queenstown and Boon Keng, etc. For those who work in the CBD or who frequently travel to the city centre for leisure, RCR properties can offer greater convenience. Some RCR new condo projects in this area are seeing condo units selling at prices above $3,700 per square foot (psf) recently.
CCR refers to the Core Central Region which covers the city area and some other prime locations most desired by savvy home buyers and property investors. We usually see the priciest properties located in these areas. We have seen latest transactions of new condo projects above $6,000 psf in the CCR region.
OCR refers to the planning areas which are Outside the Central Region which essentially means all of Singapore except the RCR and CCR regions. OCR properties are located farther away from the city centre and include suburban areas like Jurong, Woodlands, Yishun and Changi. OCR properties located within walking distance of an MRT station tend to be more sought-after due to their better connectivity. New condo prices in the OCR are usually the most affordably priced in order to attract HDB upgraders.
RCR refers to the Rest of Central Region which are usually city fringe areas and are typically very sought-after, e.g. Tiong Bahru, Telok Blangah, Queenstown and Boon Keng, etc. For those who work in the CBD or who frequently travel to the city centre for leisure, RCR properties can offer greater convenience. Some RCR new condo projects in this area are seeing condo units selling at prices above $3,700 per square foot (psf) recently.
CCR refers to the Core Central Region which covers the city area and some other prime locations most desired by savvy home buyers and property investors. We usually see the priciest properties located in these areas. We have seen latest transactions of new condo projects above $6,000 psf in the CCR region.
OCR refers to the planning areas which are Outside the Central Region which essentially means all of Singapore except the RCR and CCR regions. OCR properties are located farther away from the city centre and include suburban areas like Jurong, Woodlands, Yishun and Changi. OCR properties located within walking distance of an MRT station tend to be more sought-after due to their better connectivity. New condo prices in the OCR are usually the most affordably priced in order to attract HDB upgraders.
Is the price disparity between OCR and RCR narrowing?
Recent new condo launches in the mass market OCR locations have seen prices reaching above $2,400 per square foot (psf), this may make some city fringe RCR new condo projects look attractive, e.g. The Landmark - a beautiful exclusive city fringe new condo located on a hillside near the alluring Singapore River, expected to TOP in 2024 selling from $2,2xx per square foot (psf). One Pearl Bank also takes the cake with its amazingly iconic design and envious location of being situated on the hilltop of the stategically located Pearl's Hill green park offering rare unblocked views of the city priced from $2,4xx per square foot (psf). Riviere is beautifully embraced by the Singapore River priced from $2,700 per square foot (psf) and Piccadilly Grand - a fully integrated condo development with MRT and shopping mall directly below and well connected to other malls, hospital and hotel with current prices from below $2,000 per square foot (psf).
Kiwi Lim from Huttons Asia said we are seeing new benchmarks being set in Singapore’s property market on the back of rising land costs, manpower and construction costs. Buyers are now prepared for mass market condos to sell above $2,300 per square foot (psf) in the heartland Outside Central Region (OCR) locations. The consistent strong take-up rates at multiple recent launches could whet developers’ appetite for suburban GLS land parcel sites in the near future.
"Meanwhile, I am also seeing more and more buyers securing new condo projects in the city fringe RCR (Rest of Central Region) as some RCR new condos are now seen as being priced close to or even below recent OCR new launches with OCR prices catching up." said Kiwi.
Recent new condo launches in the mass market OCR locations have seen prices reaching above $2,400 per square foot (psf), this may make some city fringe RCR new condo projects look attractive, e.g. The Landmark - a beautiful exclusive city fringe new condo located on a hillside near the alluring Singapore River, expected to TOP in 2024 selling from $2,2xx per square foot (psf). One Pearl Bank also takes the cake with its amazingly iconic design and envious location of being situated on the hilltop of the stategically located Pearl's Hill green park offering rare unblocked views of the city priced from $2,4xx per square foot (psf). Riviere is beautifully embraced by the Singapore River priced from $2,700 per square foot (psf) and Piccadilly Grand - a fully integrated condo development with MRT and shopping mall directly below and well connected to other malls, hospital and hotel with current prices from below $2,000 per square foot (psf).
Kiwi Lim from Huttons Asia said we are seeing new benchmarks being set in Singapore’s property market on the back of rising land costs, manpower and construction costs. Buyers are now prepared for mass market condos to sell above $2,300 per square foot (psf) in the heartland Outside Central Region (OCR) locations. The consistent strong take-up rates at multiple recent launches could whet developers’ appetite for suburban GLS land parcel sites in the near future.
"Meanwhile, I am also seeing more and more buyers securing new condo projects in the city fringe RCR (Rest of Central Region) as some RCR new condos are now seen as being priced close to or even below recent OCR new launches with OCR prices catching up." said Kiwi.
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ARC@Tampines EC
In a rare move by the MCST, a couple who bought a three-bedroom EC unit at Arc@Tampines EC were evicted after the executive condominium's Management Corporation Strata Title (MCST) forced sold the unit at an auction.
Forced sales are very rare and its usually the last resort by the MCST as this process may be traumatic for all parties and time consuming with a host of potential legal and other complications, but the MCST had run out of options after repeated reminders were ignored by the couple to pay their over due outstanding management fees and sinking fund bills amounting approximately $36,000. Under the Building Maintenance and Strata Management Act, the MCST has the power to force the sale of a unit to recover money owed.
Homeowners started selling around $950 psf on average after Arc@Tampines EC achieved its Minimum Occupation (MOP) Status in the year 2020. Arc@Tampines EC was launched in 2012 with overall units selling around $750 psf on average.
The forced sale - a 7th floor three bedroom unit measuring around 1,055 sqft were initially auctioned by Knight Frank months ago but were withdrawn as there were no bids with an opening price of $880,000 ($835 psf). The forced sale condo unit enjoys a premium facing - overlooking beautiful landscaped greenery and swimming pool.
But in the last auction, at a higher opening price of $900,000 - this forced sale unit saw two buyers aggressively bidding for the unit which eventually was sold for $945,000 (around $896 psf) at an auction by Knight Frank. This is estimated to be around $100 psf lower than the current market rate according to current caveated transacted prices.
According to real estate professional Kiwi Lim "MC forced sales are pretty rare and for such forced sale units, the MC does not need to possess the unit and usually there will not be any viewing, especially when the unit is still occupied by the owner or tenant. The new buyer would have to obtain a court order to evict the current occupiers of the unit after the sale is completed. And that could take about three months".
Forced sales are very rare and its usually the last resort by the MCST as this process may be traumatic for all parties and time consuming with a host of potential legal and other complications, but the MCST had run out of options after repeated reminders were ignored by the couple to pay their over due outstanding management fees and sinking fund bills amounting approximately $36,000. Under the Building Maintenance and Strata Management Act, the MCST has the power to force the sale of a unit to recover money owed.
Homeowners started selling around $950 psf on average after Arc@Tampines EC achieved its Minimum Occupation (MOP) Status in the year 2020. Arc@Tampines EC was launched in 2012 with overall units selling around $750 psf on average.
The forced sale - a 7th floor three bedroom unit measuring around 1,055 sqft were initially auctioned by Knight Frank months ago but were withdrawn as there were no bids with an opening price of $880,000 ($835 psf). The forced sale condo unit enjoys a premium facing - overlooking beautiful landscaped greenery and swimming pool.
But in the last auction, at a higher opening price of $900,000 - this forced sale unit saw two buyers aggressively bidding for the unit which eventually was sold for $945,000 (around $896 psf) at an auction by Knight Frank. This is estimated to be around $100 psf lower than the current market rate according to current caveated transacted prices.
According to real estate professional Kiwi Lim "MC forced sales are pretty rare and for such forced sale units, the MC does not need to possess the unit and usually there will not be any viewing, especially when the unit is still occupied by the owner or tenant. The new buyer would have to obtain a court order to evict the current occupiers of the unit after the sale is completed. And that could take about three months".
MCST has the right to order a force sale
Section 43 of the Building Maintenance and Strata Management Act (BMSMA) does not impose a duty upon MCs to lodge with or seek approval from the authority before proceeding to sell a unit for the purpose of recovering outstanding amounts from the property owner.
There are certain legal requirements MCs should fulfil, e.g. registering a charge with the Registrar of Titles, passing a special resolution to sell the unit and placing a notice of the intended sale in one or more approved daily newspapers.
The MC would have to seek mandate at its General Meeting prior to seek the majority owner's approval to proceed further to force sale the unit. Prior to such harsh action, the condo's Managing Agent would have attempted to reach out to the owner and the MC is also likely to have engaged legal advice to pursue recovery by legal means such as lodgement of charges (to secure MCST interest), debtor judgement, writ of summon, writ of seizure etc.
If the MC still does not receive any payment from the property owner after six weeks from the publication of the notice, and there is no legal action pending in court to restrain the sale, the MC can sell the unit.
Essentially, the MCST hopes the owner will make the outstanding payment promptly to avoid such a traumatic experience for all. If any condo owner is experiencing any difficulty with their MCST or sinking fund payments, please communicate with your MCST / MA to work out some payment installment arrangements to avoid such unhappiness.
The main objective of embarking on a forced sale is to compel the property owner to make payment of the outstanding contributions. As long as the owner pays up, the forced sale will be called off.
Condo owners are required to make prompt MCST payments in order to allow the MC and MA to have the necessary funds to upkeep the common property in order to maintain a nice environment for all owners to enjoy.
Section 43 of the Building Maintenance and Strata Management Act (BMSMA) does not impose a duty upon MCs to lodge with or seek approval from the authority before proceeding to sell a unit for the purpose of recovering outstanding amounts from the property owner.
There are certain legal requirements MCs should fulfil, e.g. registering a charge with the Registrar of Titles, passing a special resolution to sell the unit and placing a notice of the intended sale in one or more approved daily newspapers.
The MC would have to seek mandate at its General Meeting prior to seek the majority owner's approval to proceed further to force sale the unit. Prior to such harsh action, the condo's Managing Agent would have attempted to reach out to the owner and the MC is also likely to have engaged legal advice to pursue recovery by legal means such as lodgement of charges (to secure MCST interest), debtor judgement, writ of summon, writ of seizure etc.
If the MC still does not receive any payment from the property owner after six weeks from the publication of the notice, and there is no legal action pending in court to restrain the sale, the MC can sell the unit.
Essentially, the MCST hopes the owner will make the outstanding payment promptly to avoid such a traumatic experience for all. If any condo owner is experiencing any difficulty with their MCST or sinking fund payments, please communicate with your MCST / MA to work out some payment installment arrangements to avoid such unhappiness.
The main objective of embarking on a forced sale is to compel the property owner to make payment of the outstanding contributions. As long as the owner pays up, the forced sale will be called off.
Condo owners are required to make prompt MCST payments in order to allow the MC and MA to have the necessary funds to upkeep the common property in order to maintain a nice environment for all owners to enjoy.
Straits Times online on 15 Sept 2022
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Federal Reserve's FOMC meets again this month to promote maximum employment, stable prices, and moderate long-term interest rates thru monetary policy
The financial markets are increasingly expecting the Federal Reserve to hike interest rates massively when the Federal Reserve board of directors convene later this month as central bankers underscore their commitment to controlling inflation — even at the risk of slowing the economy too aggressively and causing a recession. Skipping an August meeting, having met in late July, the Federal Reserve's next scheduled monetary policy Federal Open Market Committee (FOMC) meeting takes place on 20 - 21 September 2022.
The chairman of Federal Reserve - Jerome H. Powell said at the Cato Institute’s 40th Annual Monetary Conference on 8 Sept 2022 (Thursday) “It is very much our view, and my view, that we need to act now, forthrightly, strongly, as we have been doing,” Just a day before, the Vice Chairman of Federal Reserve Lael Brainard said “we are in this for as long as it takes to get inflation down.”
Real estate professional Kiwi Lim felt this shows the great resolve by the Federal Reserve to bring inflation totally under control on a manageable level for Americans. It is a direct message that the central bank will not stop hiking rates until inflation is under control, no matter what the other consequences are. "The labour market has remained strong with low unemployment rate in America, retail and services industries are still seeing positive sales. In my opinion, this September could see the final massive hike of around 75 basis points followed by smaller 25 basis point hikes in the near future." said Kiwi Lim.
The chairman of Federal Reserve - Jerome H. Powell said at the Cato Institute’s 40th Annual Monetary Conference on 8 Sept 2022 (Thursday) “It is very much our view, and my view, that we need to act now, forthrightly, strongly, as we have been doing,” Just a day before, the Vice Chairman of Federal Reserve Lael Brainard said “we are in this for as long as it takes to get inflation down.”
Real estate professional Kiwi Lim felt this shows the great resolve by the Federal Reserve to bring inflation totally under control on a manageable level for Americans. It is a direct message that the central bank will not stop hiking rates until inflation is under control, no matter what the other consequences are. "The labour market has remained strong with low unemployment rate in America, retail and services industries are still seeing positive sales. In my opinion, this September could see the final massive hike of around 75 basis points followed by smaller 25 basis point hikes in the near future." said Kiwi Lim.
What can we expect if Federal Reserve hikes interest rates by 75 basis points this Sept?
1. Fixed Deposit Rates
Fixed deposit rates in Singapore are currently being offered to the public by various banks ranging between 1.8% to 2.88%. News reported long queues outside many bank branches where people waited more than four hours to open and deposit their money into the fixed deposit accounts.
"We may see fixed deposit rates adjusted closer to 3% from Oct onwards if there is a 75 basis point increase by the Federal Reserve this Sept" said Kiwi Lim
2. Home Loan Rates
Home loan fixed rates which is now hovering around 2.55% may also rise to around 3% or higher. This is still below the stress test threshold of 3.5% rate used in Total Debt Servicing Ratio (TDSR) calculations and homeowners are expected to be able to comfortably continue servicing their home loans. Rental may be adjusted as some landlords face slightly higher mortgage loans.
3. TDSR
The government may be tempted to tweak Total Debt Servicing Ratio (TDSR) if interest rates continue rising in order to maintain relevancy for the stress test relating to housing mortgage loans. This may also be interpreted as a cooling measure because potential property buyers may find their approved loans for buying properties shrinking slightly. Thus potential property buyers will have to fork out more cash or CPF if applicable to acquire their desired properties.
1. Fixed Deposit Rates
Fixed deposit rates in Singapore are currently being offered to the public by various banks ranging between 1.8% to 2.88%. News reported long queues outside many bank branches where people waited more than four hours to open and deposit their money into the fixed deposit accounts.
"We may see fixed deposit rates adjusted closer to 3% from Oct onwards if there is a 75 basis point increase by the Federal Reserve this Sept" said Kiwi Lim
2. Home Loan Rates
Home loan fixed rates which is now hovering around 2.55% may also rise to around 3% or higher. This is still below the stress test threshold of 3.5% rate used in Total Debt Servicing Ratio (TDSR) calculations and homeowners are expected to be able to comfortably continue servicing their home loans. Rental may be adjusted as some landlords face slightly higher mortgage loans.
3. TDSR
The government may be tempted to tweak Total Debt Servicing Ratio (TDSR) if interest rates continue rising in order to maintain relevancy for the stress test relating to housing mortgage loans. This may also be interpreted as a cooling measure because potential property buyers may find their approved loans for buying properties shrinking slightly. Thus potential property buyers will have to fork out more cash or CPF if applicable to acquire their desired properties.
The Federal Reserve’s tools to ease inflation’s burden on households and businesses are blunt, revolving around interest rate increases that make lending and investment more expensive to cool demand in the economy.
Kiwi Lim felt the inflationary figures may still rise sporadically during certain months in the near future even after the Fed's expected massive hike in September as there are certain things the Federal Reserve can’t do anything about - for example: supply chain problems or Russia’s invasion of Ukraine or other global factors keeping fossil fuel energy prices high which will affect almost every industry's services and product's costs.
Kiwi Lim felt the inflationary figures may still rise sporadically during certain months in the near future even after the Fed's expected massive hike in September as there are certain things the Federal Reserve can’t do anything about - for example: supply chain problems or Russia’s invasion of Ukraine or other global factors keeping fossil fuel energy prices high which will affect almost every industry's services and product's costs.
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The Marina South site will comprise a mix of retail, office, hotel and residential uses. PHOTO: URA
As the year is coming to an end, the Marina Gardens Lane GLS is expected to be released for sale soon.
The Marina Gardens Lane GLS land parcel was announced by the government on 7 June 2022 (Tuesday) as the first GLS site in Marina South - located next to Gardens by the Bay. The Marina Gardens Lane GLS land site is set to kick-start private residential development in the precinct.
This is the first time the government is launching a site in the Marina South neighbourhood. The Marina Gardens Lane GLS site in Marina South is a 12,300 square metre mixed-use plot on Marina Gardens Lane expected to yield about 795 residential units and 750 sq m of commercial space. To be launched for sale in December, the land parcel sits next to the Gardens by the Bay tourist attraction in Singapore’s downtown core.
The 45ha Marina South precinct, which overlooks the Marina Reservoir and the Singapore Strait, will comprise a mix of retail, office, hotel and residential uses. It can yield more than 10,000 homes when the whole area is fully developed in the future.
The Marina Gardens Lane GLS land parcel was announced by the government on 7 June 2022 (Tuesday) as the first GLS site in Marina South - located next to Gardens by the Bay. The Marina Gardens Lane GLS land site is set to kick-start private residential development in the precinct.
This is the first time the government is launching a site in the Marina South neighbourhood. The Marina Gardens Lane GLS site in Marina South is a 12,300 square metre mixed-use plot on Marina Gardens Lane expected to yield about 795 residential units and 750 sq m of commercial space. To be launched for sale in December, the land parcel sits next to the Gardens by the Bay tourist attraction in Singapore’s downtown core.
The 45ha Marina South precinct, which overlooks the Marina Reservoir and the Singapore Strait, will comprise a mix of retail, office, hotel and residential uses. It can yield more than 10,000 homes when the whole area is fully developed in the future.
Based on the latest Masterplan, it is one of five sites in the area with residential and commercial at the first storey, among other white sites, and is expected to kickstart development in the area where it will be a sustainable, car-lite estate comprising a mix of residential, commercial and hotel uses. Located near the CBD, it is also in line with the authority’s vision of turning the CBD into a more vibrant area for work live play.
Real estate professional Kiwi Lim believe the Marina Gardens Lane site in Marina South is likely to be the priciest parcel on the list of avail GLS sites to be released this year. "This plum mixed development site is expected to cost at least a billion and would be the most popular. It is expected to receive seriously competitive bids from developers with deep pockets due to its first-mover advantage in the precinct's development and being the first residential site out of five sites along the same stretch" said Kiwi.
The Government will continue to monitor economic and property market conditions closely and adjust the supply of future GLS Programmes, as necessary.
Real estate professional Kiwi Lim believe the Marina Gardens Lane site in Marina South is likely to be the priciest parcel on the list of avail GLS sites to be released this year. "This plum mixed development site is expected to cost at least a billion and would be the most popular. It is expected to receive seriously competitive bids from developers with deep pockets due to its first-mover advantage in the precinct's development and being the first residential site out of five sites along the same stretch" said Kiwi.
The Government will continue to monitor economic and property market conditions closely and adjust the supply of future GLS Programmes, as necessary.
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The Housing and Development Board (HDB) launched 4,993 flats for sale under its August Build-to-Order (BTO) exercise on 30 August 2022 (Tuesday) spread across seven projects in both mature and non-mature estates - namely Ang Mo Kio, Bukit Merah, Choa Chu Kang, Jurong East, Tampines and Woodlands.
The latest HDB BTO exercise in August closed at 11.59pm on 5 September (Monday) with the final numbers updated on 6 September (Tuesday) afternoon There were about 39,000 applicants in this exercise, which is about 46 per cent more than the applications in May's BTO exercise. HDB launched 4,993 BTO flats in August, compared to the 4,583 BTO flats in May and with more flats in good mature estates near MRT stations this August.
The latest HDB BTO exercise in August closed at 11.59pm on 5 September (Monday) with the final numbers updated on 6 September (Tuesday) afternoon There were about 39,000 applicants in this exercise, which is about 46 per cent more than the applications in May's BTO exercise. HDB launched 4,993 BTO flats in August, compared to the 4,583 BTO flats in May and with more flats in good mature estates near MRT stations this August.
Number of applications received for three-room and bigger flats in the August 2022 BTO Exercise
HDB's data shows 4,513 applicants vying for 398 four-room and nearly 6,000 applicants competing for 372 five-room and three-generation flats at the Central Weave @ AMK project with prices ranging from $535,000 to $676,000 for a four-room flat and $720,000 to $877,000 for a five-room flat.
Central Weave @ AMK project is seen as an attractive choice due to it being a matured estate conveniently located along Ang Mo Kio Central 2 within walking distance to the Ang Mo Kio public library surrounded by ample amenities and near MRT station.
HDB announced that for the BTO projects launched in August 2022, the waiting time generally ranges from three to 5.7 years. HDB also advised home buyers looking to move into their flats sooner to consider BTO projects in Choa Chu Kang, Tampines and Woodlands, such as flats at Keat Hong Grange, Sun Plaza Spring and Woodlands South Plains, as these have the shortest waiting times at 3.8 years or less.
The next BTO sales exercise is scheduled for November. HDB will offer about 9,500 BTO flats in towns and estates such as Bukit Batok, Kallang Whampoa, Queenstown, Tengah and Yishun.
HDB aims to launch up to 23,000 new flats this year.
Central Weave @ AMK project is seen as an attractive choice due to it being a matured estate conveniently located along Ang Mo Kio Central 2 within walking distance to the Ang Mo Kio public library surrounded by ample amenities and near MRT station.
HDB announced that for the BTO projects launched in August 2022, the waiting time generally ranges from three to 5.7 years. HDB also advised home buyers looking to move into their flats sooner to consider BTO projects in Choa Chu Kang, Tampines and Woodlands, such as flats at Keat Hong Grange, Sun Plaza Spring and Woodlands South Plains, as these have the shortest waiting times at 3.8 years or less.
The next BTO sales exercise is scheduled for November. HDB will offer about 9,500 BTO flats in towns and estates such as Bukit Batok, Kallang Whampoa, Queenstown, Tengah and Yishun.
HDB aims to launch up to 23,000 new flats this year.
The Pinnacle@Duxton was only 3 times oversubscribed in 2004
In stark contrast, real estate professional Kiwi Lim said during the buyer's market in 2004, there were only 5,171 applications in total for the 1,232 four-room and 616 five-room flats at The Pinnacle@Duxton when HDB launched this city central area 50 storey BTO project comprising of 7 towering blocks connected by two sky gardens at level 26 and level 50 offering HDB residents an unparalleled view of Singapore.
Demand for The Pinnacle@Duxton is considered very low at prices ranging from $289,200 to $380,900 for 4-room flats and $345,100 to $439,400 for 5-room flats in 2004.
In stark contrast, real estate professional Kiwi Lim said during the buyer's market in 2004, there were only 5,171 applications in total for the 1,232 four-room and 616 five-room flats at The Pinnacle@Duxton when HDB launched this city central area 50 storey BTO project comprising of 7 towering blocks connected by two sky gardens at level 26 and level 50 offering HDB residents an unparalleled view of Singapore.
Demand for The Pinnacle@Duxton is considered very low at prices ranging from $289,200 to $380,900 for 4-room flats and $345,100 to $439,400 for 5-room flats in 2004.
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An artist's impression of the Build-to-Order (BTO) flats at Central Weave @ AMK. (Image: HDB)
HDB's August 2022 BTO launch is now currently on with the deadline for application closing by tonight on 05 September 2022, Monday, 11:59 PM.
With 4,993 units spread out across six estates, this launch is going to be a very exciting one as compared to the past BTO lunches. This latest BTO launch includes a variety of units in quite a few mature estates up for grabs, namely Ang Mo Kio, Tampines and two BTO projects under the Prime Location Public Housing (PLH) model in Bukit Merah - Alexandra Vale and Havelock Hillside.
HDB buyers of PLH BTOs will face certain restrictions such as a longer, 10-year Minimum Occupation Period (MOP), a subsidy clawback, and not being able to rent out the entire flat even when the MOP is over.
For budget-conscious buyers, they can choose non-mature estates among Choa Chu Kang, Jurong East and Woodlands. According to HDB, interest was most muted for the Choa Chu Kang BTO project, where there are fewer first-time applicants than the number of available three-room, four-room and five-room flats.
HDB said almost all larger flats in the ongoing Build-To-Order (BTO) sales exercises have been oversubscribed just a day after the launch, with the five-room and three-generation units in Ang Mo Kio proving to be the most popular.
With 4,993 units spread out across six estates, this launch is going to be a very exciting one as compared to the past BTO lunches. This latest BTO launch includes a variety of units in quite a few mature estates up for grabs, namely Ang Mo Kio, Tampines and two BTO projects under the Prime Location Public Housing (PLH) model in Bukit Merah - Alexandra Vale and Havelock Hillside.
HDB buyers of PLH BTOs will face certain restrictions such as a longer, 10-year Minimum Occupation Period (MOP), a subsidy clawback, and not being able to rent out the entire flat even when the MOP is over.
For budget-conscious buyers, they can choose non-mature estates among Choa Chu Kang, Jurong East and Woodlands. According to HDB, interest was most muted for the Choa Chu Kang BTO project, where there are fewer first-time applicants than the number of available three-room, four-room and five-room flats.
HDB said almost all larger flats in the ongoing Build-To-Order (BTO) sales exercises have been oversubscribed just a day after the launch, with the five-room and three-generation units in Ang Mo Kio proving to be the most popular.
HDB saw strong demand for the 372 five-room BTO flats at Central Weave @ Ang Mo Kio despite prices of up to $877k for the five-room flats and three-generation flats of up to $842,000.
This means that the five-room Ang Mo Kio flats are attracting more applicants than the four-room flats in the two Bukit Merah PLH BTO projects that fall under the prime location public housing model. This translates to around three first-time applicants to each available unit in Ang Mo Kio. Second-timers face an even bleaker prospect with more than 82 applicants to each available unit.
At the Alexandra Vale and Havelock Hillside PLH BTO projects, which sits in the vicinity of Redhill and Tiong Bahru MRT stations, there were 2,465 applicants for the 1,298 four-room flats on offer. This translates to more than one first-time applicant to each available unit, but the number of applicants is expected to increase in coming days.
Real estate professional Kiwi Lim from Huttons Asia said after the circuit breaker during the Covid pandemic, HDB buyers prefer a larger space to build their dream homes. Thus Kiwi Lim believe that in the near future - 5 room flats in matured estates will be highly sought after among HDB BTO or resale buyers, especially when they are located near amenities, eateries and MRT. In fact, these 5 room flats may even be more popular than the PHL Model HDB flats located in the prime city fringe areas.
This means that the five-room Ang Mo Kio flats are attracting more applicants than the four-room flats in the two Bukit Merah PLH BTO projects that fall under the prime location public housing model. This translates to around three first-time applicants to each available unit in Ang Mo Kio. Second-timers face an even bleaker prospect with more than 82 applicants to each available unit.
At the Alexandra Vale and Havelock Hillside PLH BTO projects, which sits in the vicinity of Redhill and Tiong Bahru MRT stations, there were 2,465 applicants for the 1,298 four-room flats on offer. This translates to more than one first-time applicant to each available unit, but the number of applicants is expected to increase in coming days.
Real estate professional Kiwi Lim from Huttons Asia said after the circuit breaker during the Covid pandemic, HDB buyers prefer a larger space to build their dream homes. Thus Kiwi Lim believe that in the near future - 5 room flats in matured estates will be highly sought after among HDB BTO or resale buyers, especially when they are located near amenities, eateries and MRT. In fact, these 5 room flats may even be more popular than the PHL Model HDB flats located in the prime city fringe areas.
Central Weave @ AMK
Bounded by Ang Mo Kio Avenue 8, Ang Mo Kio Central 2, and Ang Mo Kio Central 3, Central Weave @ AMK comprises 5 residential blocks ranging from 21 to 32 storeys. One of these blocks will house some rental flats. You can choose from 896 units of 2-room Flexi, 4-, 5-room, and 3Gen flats.
The residential blocks of Central Weave @ AMK are arranged in rows, interweaving with the surrounding landscaping to form a grid-like pattern from an aerial view. Central Weave @ AMK takes its name from this design approach, reinforced by a weaving pattern of vertical stripes on its facade.
Facilities within Central Weave @ AMK include a childcare centre, residents’ network centre, playgrounds as well as adult and elderly fitness stations. The roof garden above the Multi-Storey Car Park (MSCP) offers another space where you can exercise and relax.
To learn more about the August 2022 HDB BTO units, you can also check out the HDB InfoWeb.
Bounded by Ang Mo Kio Avenue 8, Ang Mo Kio Central 2, and Ang Mo Kio Central 3, Central Weave @ AMK comprises 5 residential blocks ranging from 21 to 32 storeys. One of these blocks will house some rental flats. You can choose from 896 units of 2-room Flexi, 4-, 5-room, and 3Gen flats.
The residential blocks of Central Weave @ AMK are arranged in rows, interweaving with the surrounding landscaping to form a grid-like pattern from an aerial view. Central Weave @ AMK takes its name from this design approach, reinforced by a weaving pattern of vertical stripes on its facade.
Facilities within Central Weave @ AMK include a childcare centre, residents’ network centre, playgrounds as well as adult and elderly fitness stations. The roof garden above the Multi-Storey Car Park (MSCP) offers another space where you can exercise and relax.
To learn more about the August 2022 HDB BTO units, you can also check out the HDB InfoWeb.
MND clarified that HDB does not profit from the sale of HDB BTO flats. In fact, HDB will incur a loss from HDB BTO projects, as the estimated amount to be collected from the sale is lower than the estimated total development cost of the projects. If taken into account the CPF housing grants that HDB will extend to eligible buyers, the deficit is higher still. In the last three years, the average deficit incurred by HDB was about S$2.68 billion per year.
The MND reminds all that HDB incurs a deficit every year. The deficit is mainly due to "significant subsidies" for new flats and the disbursement of CPF housing grants for eligible buyers. Because of this, most first-timer buyers use less than a quarter of their monthly income to service their housing loans. Currently according to the MND, close to 90 per cent of first-timer families service their HDB loans using CPF with little or no cash payments.
To learn more about the August 2022 HDB BTO units, you can also check out the HDB InfoWeb.
The MND reminds all that HDB incurs a deficit every year. The deficit is mainly due to "significant subsidies" for new flats and the disbursement of CPF housing grants for eligible buyers. Because of this, most first-timer buyers use less than a quarter of their monthly income to service their housing loans. Currently according to the MND, close to 90 per cent of first-timer families service their HDB loans using CPF with little or no cash payments.
To learn more about the August 2022 HDB BTO units, you can also check out the HDB InfoWeb.
