Singapore Property Weekly Issue 143

8/13/2019 Singapore Property Weekly Issue 143

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Issue 143Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Exemption of the TDSR Rules Tweaking orLoosening?

p7 Singapore Property News This Week

p13 Resale Property Transactions

(January 29 February 4)

Welcome to the 143th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 143

Page | 2Back to Contents

By Property Soul (guest contributor)

On February 10 2014, the Monetary Authority

of Singapore (MAS) issued a press release to

broaden the existing exemption from the Total

Debt Servicing Ratio (TDSR) rules introduced

in June last year. Market watchers havedebated whether this just a tweak or a sign

that the government is loosening its cooling

measures due to the recent weak market

sentiment.

Fine-tuning financing restrictions a norm?

Financing restrictions introduced by MAS

under the context of prudent borrowing are

usually made effective the following day.

However, it is not uncommon to see

Exemption of the TDSR Rules Tweaking or Loosening?


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subsequent fine-tuning after the

announcement.

Motor vehicle loans are a good example:

- On 25 February 2013, MAS imposedfinancing restrictions on car loans that cap

maximum loan-to-value to 50 or 60 percent

and loan tenure to five years.

- On March 8, after carefullyconsidering the

feedback received from different groups,the

physically disabled and their caregivers are

exempted from such restrictions.

- On April 5, after taking into account the

distinct conditions in the used car market,a

grace period of 60 days was granted for the

purchase of used cars that were inventorybefore February 25.

The TDSR framework was announced in

June 2013. But it was not until eight months

later that some details were fine-tuned after

receivingfeedback from borrowers who face

challenges refinancing loans for owner-

occupied properties.

Anyway, all lenders and borrowers are now

used to MAS being the modifying authorityof

financing restrictions introduced in Singapore.

Although MAS stands firm on their policies,

they know do tweak some terms and

conditions based on public feedback.So the question is: Are more fine-tuning

announcements on the way?

What is the exemption this time?

With immediate effect, any borrower who

bought his owner-occupied residentialproperty before 29 June 2013 is exempted

from the TDSR rules during refinancing of this

property, even if he owns more than one


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property and has other outstanding property

loan. He can also enjoy the same remaining

tenure in his refinanced loan.

Refinancing of all investment property loansabove the 60 percent TDSR threshold is

allowed during the transition period until 30

June 2017, provided that:

1. The option to purchase was granted before

29 June 2013;

2. The borrower commits to a debt reduction

plan with the financial institution (FI) during

refinancing; and

3. The borrower fulfils the FIs credit

assessment.

How can property owners benefit from the

exemption?

The exemption is meant to enable home

owners to refinance their properties when

interest rates go up. On the other hand,

property investors are given sufficient time to

right-sizetheir loans when the 4-year lock-in

period of their loans expires in 2017, so they

will be able to service or refinance their loans

andwontsuffer a huge loss in a forced sale.

With interest rates still around two percent

now, not many property owners will bother to

refinance their properties. For those who

bought their properties recently, their housingloans are most likely still under the lock-in

period of 2 to 4 years. As the saying goes,

you only cross the bridge when you come to

it.

It is only when interest rates shoot up to over

3 or 4 percent that owners will start feeling

the pain. In 2006 and 2007, banks would

inform borrowers of a revised interest rate

and a higher monthly repayment every few

months, to be effective the following month.


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Foreign banks were even more aggressive in

updating their interest rates.

Mortgagors should be aware of the fact that

applications for refinancing or re-pricing takes

time. When the new loan package is finally

approved, it can only be made effective three

months later.

Who doesnt benefit much from the

exemption?

1. Developers, agents and sellers

It is an exemption, not an abortion. And the

exemption doesntapply across the board to

include all new property purchases. Buying

new projects launched by developers or

resale units in the market after 29 June 2013are still subject to the limit of the TDSR rules.

2. Other buyers

Buyers who unfortunately bought after the

magic date of 29 June 2013 or have

purchased commercial properties still have to

go through the tedious TDSR evaluation

process during refinancing.

Buyers waiting on the sidelines are unlikely to

see many units selling at depressed prices

due to failure in securing refinancing. There

may not be a drastic drop in property prices

this year.

3. Financial institutions

FIs are relieved that they can probably meet

their sales quota on refinancing of home

loans now. But not the quota on new housing

loans.

Even if the target group of the TDSRexemption fails to pass the stress test, FIs

are now unable to hold them hostage to

monthly repayments with higher and higher

interest rates.


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Well, there is no clear definition and guideline

on debt-reduction plan and credit

assessment. At least the FIs do not have to

give up too much business from their

overleveraged mortgagors with no holding

power, especially after toiling for weeks with

all that paperwork!

By guest contributor Property Soul, a

successful property investor and enthusiast

who shares her experiences and knowledgeonher blog.

SINGAPORE PROPERTY WEEKLY I 143
http://propertysoul.com/http://www.moneymatters.sg/http://propertysoul.com/http://propertysoul.com/http://propertysoul.com/


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Singapore Property This Week


ResidentialA b r eat her f o r h o m eo w n er s w h o b o u gh t

b e f o r e la st Ju n e 2 9

With immediate effect from Feb 10 this year,

the Monetary Authority of Singapore (MAS)

has announced that refinancing of loans for

homes bought before June 29, 2013 will be

exempted from the total debt servicing ratio

(TDSR) cap of 60 percent. The cap means

that a borrower's monthly installments for all

debt servicing including mortgage payments

cannot exceed 60 percent of gross monthlyincome. This is a breather from the strict debt

rules governing mortgages for homeowners

who are considering refinancing of their

mortgages. Before this, owner-occupiers with

an intention to refinance their loans could only

be exempted from this rule if they owned no

other property and had no other home loan.

Banks are also likely to welcome this policy

tweak because it may revive the refinancing

market, after the sharp decrease in new

home loan sales since the introduction of the

TDSR framework.

(Source: Business Times)

Ri ver ban k @ Fer nv ale p ro jec t d raw s

s t r o n g i n t e re s t

UOL Development's newest condominiumdevelopment Riverbank @ Fernvale is

reported to be gaining strong interest from

buyers. It has received more than

SINGAPORE PROPERTY WEEKLY I 143


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500 cheques since its showflats opened for

preview a week ago. The 555 residential

units prices will be above $1,000 psf on

average. Anthony Wong, UOL's deputy

general manager (marketing) said that hesaw strong interest across all unit types.


H o m e o w n e r s h i p a k e y s o c i a l p i l l ar

Minister for National Development Khaw

Boon Wan said that home ownership remains

a key social pillar for Singapore, and that the

government will continue to help

Singaporeans realize their dreams of owning

a home in a post on his blog. Mr Khaw wrote

that HDB estates are lasting intangibles

where Singaporeans build homes, start

families and form strong bonds with their

neighbors and communities. Feb 12 marked

the 50th anniversary of the Housing &

Development Board's Home Ownership for

the People Scheme the programmed that

offers subsidized mortgages to buyers of

HDB flats and has culminated in the

Republic's high home ownership rate.


TDSR t w eak a l if el in e f o r s tr u gg li ng

o w n e r s

Following the MASs decision to exempt

owner-occupiers from the TDSR cap of 60

percent, analysts are reported to say that the

tweak is targeted at a small group of stressed

households struggling to get mortgage

refinancing. This revision to the rule may

mean that the group of households with a

debt-servicing ratio (DSR) of 40-60 percent

may be larger than expected earlier.

However, analysts also said that the tweak is

not likely to indicate a rollback of property



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cooling measures. In fact, the measures are

expected to stay, and a reversal may only

happen next year.


A n ch or val e Cr es cen t EC s ite at tr ac ts

st r o n g in t e r e st

The 99-year leasehold site at Anchorvale

Crescent attracted 12 bids at the close of its

tender period on Feb 13. The top bid was

$192.89 million, or $366.91 psf ppr, by

SingHaiyi Group's Phoenix Real Estate. The

second highest bid was $191 million, or

$363.32 psf ppr, by MCL Land (Brighton).

Ong Teck Hui, national director, research and

consultancy, at Jones Lang LaSalle said that

the site has attracted a particularly strong

interest with 12 parties contesting and the top

six bidders within a 4.8 percent margin. This

reflects developer's confidence in demand for

EC homes, and demand for ECs in the

Sengkang area has been encouraging

recently.


D BS: h o m e p r ice s t o f a l l 1 0- 15 % t h is ye a r

Speaking at DBS's Q4 results briefing, DBS

Bank chief executive Piyush Gupta expects

home prices to decrease 10 to 15 percent in

2014, more than the 10 percent forecast by

property consultants. Yet he said that such

decline would not make a material impact on

the bank's loan book. As for the higher

interest rates expected with the shrinking of

monetary stimulus policy by the US, he was

not expecting it to have any effect on DBS.

DBSs own stress tests in the past have

shown that DBS can easily withstand a 20

percent reduction in Singapore property



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prices without material impact on their

portfolio.


Jans r es al e o f n o n -l an d ed h o m e s d o w n

70 %

Resale transactions of non-landed private

residential homes decreased 70.2 percent to

310 in Jan 2014 from 1,039 deals of last year.

Flash estimates from the Singapore Real

Estate Exchange (SRX) also indicated that

the number of resale deals last month was

9.1 percent lower than 341 transactions in

December. However, resale prices measured

by the SRX index increased 2.3 percent from

the December level. Analysts said the lower

number of transactions in Jan might have

caused the overall price index more sensitive

to deals that changed hands at a higher price.


R iv er tr ees p r ic i ng s et t o t op n ex t-d o o r

R ive r b a n k' s

Rivertrees Residences is expected to be

launched at a premium of $50-100 psf,

topping its next-door competing project, UOL

Development's Riverbank @ Fernvale.

Rivertrees is a project jointly developed by

Frasers Centrepoint, Far East Orchard and

Sekisui House. Prices for the units will start

from $950 psf when the project is open for

booking on Feb 22, with the average price for

the initial phase likely to be within $950-

$1,150 psf. Chief executive Cheang Kok

Kheong noted that Rivertreess advantage

over Riverbank is that it offers the waterfront

view, and its slight premium to the other isconsidered fair. Riverbank @ Fernvale has

an average price indication of slightly more

than $1,000 psf.




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Commercial

Ke p p e l C lu b a n d o n e SI C C co u r se a f f e ct e d

b y r e vie w

Under the government's plans for land use,Keppel Club may not be able to keep its golf

course when its lease expires in seven years,

and at least one of the Singapore Island

Country Club's (SICC) locations may be

affected. The fate of these and other golf

courses has long been discussed before 16Feb, when representatives from government

agencies meet the members of four clubs -

Keppel, SICC, Tanah Merah Country Club

(TMCC) and the National Service Resort &

Country Club (NSRCC) - at separate briefing

sessions. The Ministry of Law said that therewould be no new land allocations for golf

courses, and that some of the golf courses

would have to be phased out and the greens

put to other uses.


K H K ea P ro p er ti es s eek i ng p ar tn er t o

d e v e lo p b u i l d i n g

KH Kea Properties Pte Ltd is seeking a joint-

venture partner to tap on the best use of its

small building next to Bras Basah Complex

with McDonald's as tenant on the lower floors

- the nine-storey building at 333 North Bridge

Road. The building's existing gross floor area

(GFA) is 29,049 sq ft, or an equivalent plot

ratio of 7.145 which exceeds the 5.2 plot ratio

allocated for the site under Master Plan 2008.

The company is controlled by an Indonesian

family with business interests across Asia. It

also owns an adjacent 635 sq ft piece of land

along Cashin Street. Both properties have

balance lease tenure of 812 years,



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are zoned for commercial use, and yield a

total of 32,351 sq ft GFA.


F a r E a s t t o b e g i n s a l e s f o r T u a s f a c t o r y

c o m p l e x n e x t w e ek

Far East Organization is expected to begin

sales at a 30-year leasehold strata factory

project, The Index in Tuas South Avenue 3

next week. The expected average price ofthe factory units is around $330-350 psf. 98

strata factories as well as a staff canteen will

be on sale. There will be three unit types:

Type A (32,754 sq ft to 33,615 sq ft), Type B

(10,613-14,574 sq ft) and Type C (2,195-

8,697 sq ft). The Indexsaverage price is a

bit lower than the $360 psf average for the

groupsnearby project The Westcom in Tuas

South Avenue 6. The group has sold about

92 percent of the 144 warehouse and factory

units in The Westcom. The Westcom is on a

site with a remaining 41 years on its 60-year

lease term.




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Non-Landed Residential Resale Property Transactions for the Week of Jan 29 Feb 4

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

5 VARSITY PARK CONDOMINIUM 1,345 1,590,000 1,182 99

9 PATERSON RESIDENCE 1,313 2,830,000 2,155 FH10 THE MONTANA 614 1,286,710 2,097 FH

10 BALMORAL 8 2,928 4,900,000 1,674 FH

10 ONE JERVOIS 2,777 4,600,000 1,656 FH

11 PARK INFINIA AT WEE NAM 1,464 2,400,000 1,639 FH

11 HILLCREST ARCADIA 926 1,050,000 1,134 99

11 CHANCERY COURT 2,271 2,520,000 1,110 99

14 THE WATERINA 635 834,388 1,314 FH

14 THE WATERINA 1,066 1,230,000 1,154 FH

14 LE CRESCENDO 3,391 3,480,000 1,026 FH15 POSHGROVE EAST 1,238 1,767,000 1,427 FH

15 RIVEREDGE 1,518 1,750,000 1,153 99

15 MABELLE 1,119 1,250,000 1,117 FH

15 THE VESTA 1,561 1,580,000 1,012 FH

18 RIS GRANDEUR 1,539 1,400,000 910 FH

21 SPRINGDALE CONDOMINIUM 1,130 1,280,000 1,133 999

21 PINE GROVE 1,755 1,539,000 877 99

26 THE CALROSE 1,249 1,570,000 1,257 FH

26 CASTLE GREEN 1,281 1,100,000 859 9926 CASTLE GREEN 1,152 950,000 825 99

27 YISHUN SAPPHIRE 1,399 1,020,000 729 99
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Singapore Property Weekly Issue 143

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