Part l: Singapore’s Property Market Outlook 2018 - ‘Most Searched Keywords’
Recently, a large number of search engines have published this year’s popular keywords search based on the public’s topic of interest. In this article, we have specially extracted some of the keywords to summarize the property market outlook in 2018.
En Bloc Sales
The collective sale in Singapore is similar to Hong Kong’s strong redevelopment plan, once more than 80% of the home owners are agreeable, a public tender will be conducted. Following several tenders conducted in 2017, the collective sale in 2018 have eventually broke the record last year. There were approximately 35 private residential projects which were successfully sold through collective sale, which was transacted at about $10 billion, a 20% increase compared to last year.
The main focus in this year’s collective sale market is mainly concentrated in District 9 and 10, as well as District 15, which is expected to provide more than 20,000 private homes in the coming two years. The Government said earlier this December that it also plans to slow its release of land sales for residential use in the first half of next year, citing a spike and in supply and a cooling in demand.
Record-breaking price set by Hong Kong developer
The public tender for Park House was awarded on June 1 to Shun Tak Cuscaden Residential, a wholly-owned subsidiary of Hong Kong-listed Shun Tak Holdings. The freehold District 10 development at 21 Orchard Boulevard sold for S$375.5 million, translating to S$2,910 psf ppr on the maximum allowable gross floor area.
This new benchmark price beats the previous peak of S$2,526 psf ppr, which Hong Kong's Swire Properties paid for the Hampton Court collective sale site at Draycott Park in 2013. After 5 years, the record was broken once again by Hong Kong developers.
Additional Buyer’s Stamp Duty
The Government announced on July 5th that it is raising Additional Buyer’s Stamp Duty (ABSD) rates and tightening loan-to-value (LTV) limits on residential property purchases, in an effort to “cool the property market and keep price increases in line with economic fundamentals”. The ABSD will be raised by 5 percentage points for citizens and permanent residents (PRs) buying second and subsequent homes.
Meanwhile, LTV limits will be tightened by 5 percentage points for all housing loans granted by financial institutions. LTV limits for mortgage equity withdrawal loans will also be tightened - 75 per cent for a borrower with no outstanding housing loan for the purchase of another residential property and 45 per cent for a borrower with an outstanding housing loan for the purchase of another residential property.
With the measures in place, the resale market in the OCR (Outside Central Region) has begun to slow down. On the contrary, the CCR (Core Central Region) has the least impact. Even though the cooling measures bring about short-term fluctuations, but we believe that Singapore’s property market outlook is still optimistic and will continue to remain stable next year.
