Condo Buyer Suffered $30,000 Loss for Backing Out of Blossoms By The Park Deal, HDB Wants to Rezone 6 Sites, and More
13 to 19 June 2023
Developers sold 1,038 private homes, excluding Executive Condominiums (ECs), in May 2023, up 17% over the 887 units shifted in April 2023, marking its fifth consecutive month-on-month (MoM) increase. Meanwhile, HDB eyes doubling the supply of HDB flats under the Parenthood Provisional Housing Scheme (PPHS) to 4,000 in the next two years.
1. New private home sales rose 17% MoM in May 2023
Developers sold 1,038 private homes, excluding ECs, in May 2023, up 17% over the 887 units shifted in April 2023, reported CNA citing Urban Redevelopment Authority (URA) data.
This marked the fifth consecutive MoM increase and the highest level achieved in 12 months.
On a year-on-year (YoY) basis, sales dropped 23.4% from the 1,355 units transacted in May 2022.
Analysts said the hike in sales was mainly driven by two project launches within the Rest of Central Region (RCR) – The Reserve Residences and The Continuum, which sold 523 and 225 units, respectively.
With this, the RCR accounted for the bulk of sales last month at 81.6%, followed by the Core Central Region (CCR) at 14.6%. The remaining 3.8% came from the Outside Central Region (OCR).
Huttons noted that almost 99% of the buyers at The Reserve Residences and The Continuum were Singaporeans and Permanent Residents (SPRs).
The proportion of homes bought by foreigners significantly declined in May due to the property cooling measures rolled out in April 2023.
Looking ahead, analysts expect new home sales to decline in June 2023 due to the ongoing school holidays and the lack of project launches.
Related article: What Do Singaporeans Think About the April 2023 Property Cooling Measures?
2. HDB to double the supply of PPHS flats to 4,000 over the next two years
HDB eyes doubling the supply of HDB flats under the PPHS to 4,000 in the next two years, reported CNA.
Senior Minister of State for National Development Sim Ann revealed that HDB has met its target of raising the supply of PPHS flats to 1,800 units this year from 800 units in 2021.
The PPHS, which temporarily houses families awaiting the completion of their new HDB flats, witnessed a decline in application rates from over 20 times in 2021 to three times currently.
Sim shared that HDB is also looking to maximise the available pool of PPHS units, which could potentially require the flat-sharing of bigger PPHS flats.
“This will allow more homebuyers awaiting their HDB flats to benefit from subsidised market rental,” she added.
3. One-third of ethnic integration policy appeals granted in 2022
About one-third of appeals relating to the Ethnic Integration Policy (EIP) had been successful in 2022, an increase from 21% in 2020, reported CNA.
Law and Home Affairs Minister K Shanmugam said the Housing Board received 411 appeals relating to EIP in 2022, of which 128 had been granted.
Of the successful appeals, 92 were from flat owners of Indian or other races, 29 from Malay owners and seven from Chinese owners.
Shanmugam explained that such appeals account for just 1.5% of all HDB flat resale applications.
He also revealed that one in 10 HDB blocks had reached their EIP limits in 2022.
“This means the racial concentrations had reached a point where they were going to be higher than our threshold limits. And these threshold limits already have some buffer built in,” said the minister.
“That is with the EIP in place. If we didn’t have the EIP, the enclaves would have become more pronounced,” he added.
4. HDB wants to rezone six sites
HDB has proposed to rezone six sites – namely, Alexandra Road / Prince Charles Crescent, Upper Thomson Road, Orchard Road / Cuscaden Road, Bukit Batok Street 23, Exeter Road and 21 Cuscaden Road, reported Singapore Business Review.
Of the proposed changes, Huttons expect the rezoning of Alexandra Road / Prince Charles Crescent, 21 Cuscaden Road and Orchard Road / Cuscaden Road to have the most impact.
It noted that rezoning a land parcel at Orchard Road/Cuscaden Road to Commercial from Hotel will allow the owner to “inject new retail space into Orchard and unlock value for the assets”.
Over at 21 Cuscaden Road, a proposal to rezone Ming Arcade to Hotel from Commercial will allow the owner “to capture the strong recovery in the tourism industry”.
Meanwhile, the proposal to rezone land parcels at Alexandra Rd/ Prince Charles Crescent to “Residential at gross plot ratio (GPR) 5.3” from “Residential at GPR 3.5” will raise the number of HDB flats that could be built on the site from 1,500 units to 2,000 units.
Related article: Singapore District Map: Defining the CCR, RCR and OCR by the 28 Districts
5. New home sales to drop in June 2023 due to lack of new launches
Property analysts expect new home sales to hover between 7,000 and 8,000 units this year, even as it is anticipated to decline in June due to a lack of new project launches, reported Singapore Business Review.
They noted that several high-profile projects are set for launch over the coming months, boosting overall sales for 2023.
In fact, some developers may bring forward their launches prior to the lunar seventh month.
“With the government reporting that 90% of private home buyers comprise citizens and permanent residents buying their first property, demand for new products will continue to be firm throughout 2023 as new projects are launched, so long as the price points are within the affordability levels of this type of buyer,” said Knight Frank Singapore’s Research Head Leonard Tay.
Notably, private home prices are forecasted to increase by 4% to 6% this year.
Tay expects foreigners to adopt a wait-and-see stance towards the impact of the new property cooling measures, though they may still invest in Singapore homes “as a hedge against global volatility”.
6. Condo buyer suffered nearly $30,000 loss for backing out of a deal
A Singaporean regretfully lost almost $30,000 after backing out of a deal to purchase a 3-bedroom condo at the Blossoms By The Park project in Buona Vista, reported The Straits Times.
Attracted to the property’s location in one-north and hoping to make a good profit in the future, the man paid the 5% deposit for the $2.3 million unit.
However, he decided to pull out of the deal two weeks following the signing of the sales and purchase agreement due to worries over the high interest rate for his mortgage.
Cancelling the purchase came with a penalty, which is 1.25% of the sale price or $28,750.
The man eventually bought a unit at The Reserve Residences, which is an integrated development located near a bus interchange and MRT station.
“There will be more amenities, and I feel it makes a better purchase,” he said.
Related article: Quick Guide to Everything You Need to Know About Sub-Sale
7. Prices of some new condos are up by 70% over resale unit prices
New condominium units have become increasingly more expensive compared to similarly sized units in the resale market within the same area, reported The Straits Times.
Units at The Continuum, for instance, were sold at a median price of $2,720 per sq ft (PSF), 70.2% higher than the median price of resale units in the same district.
This trend has been observed since 2021, with new unit prices up by as much as 90% over resale prices.
Previously, new units are typically priced at 20% to 30% more than resale units within the vicinity.
Analysts attributed the widening price gap to various factors, such as high land expenses and construction costs.
Many people are also willing to pay higher prices for new units due to fear of missing out on potential gains and prospects of higher rental yields.
Experts, however, warned against relying solely on rental income to finance mortgage payments.
They explained that property owners may face problems servicing mortgage repayments once their rental income drops or if the unit is vacant for a certain period.
8. Orchard Road businesses want to reduce waste, and energy and water usage
In a bid to be a “sustainable lifestyle precinct”, Orchard Road aims to reduce waste as well as its energy and water usage, revealed Orchard Road Business Association (ORBA) Chairman Mark Shaw.
He shared that the association – which represents the interests of businesses at Orchard Road – conducted its first environmental, social and governance (ESG) forum to gather feedback on a proposed sustainability roadmap for the area, with the aim of finalising the plan by the end of 2023.
The roadmap includes several infrastructure-related targets that are set to be achieved by 2028 – such as having all buildings within the precinct Green Mark-certified and 80% of all new buildings certified as Super Low Energy buildings, reported The Business Times.
ORBA also plans to install water points to encourage the usage of refillable bottles among consumers.
Shaw noted that “the bottom line is always a challenge” for businesses looking to go green.
“At the end of the day, if your cost increase to your tenants’ rent for being green is small, then nobody will mind. But if it’s a huge cost, and you pass it on, you might lose tenants,” he said.
9. Singaporeans’ expectation of home ownership is reportedly unsustainable
Singaporeans have considered home ownership as a favourable method of accumulating wealth, due to its relatively low cost and risk involved.
However, this has led to unsustainable expectations, reported CNA.
“Singaporeans want affordable and accessible housing, but they want housing to be … their aspiration to wealth accumulation,” said Associate Professor Walter Theseira from the Singapore University of Social Sciences (SUSS) School of Business.
To de-link housing and investment, Assoc Prof Theseira suggested adjusting the tax system, subsidising the use of housing as well as broadening access to desirable public housing.
To balance home ownership aspirations with those of social mobility, Senior Minister of State for National Development and Foreign Affairs Sim Ann noted that the latter is a matter of expectation that Singaporeans have developed over time.
“If we were to define (social mobility) very rigidly in terms of, say, the floor area of the flat, I think this is something that does need to be revisited as Singapore matures,” said the minister.
“As we plan our towns better, as the amenities and the conveniences of living in different parts of Singapore, I think the differences are going to narrow over time,” she added.
10. Investors turn to commercial shophouses amid new property cooling measures
With the introduction of new property cooling measures, investors – including foreigners – are expected to shift their focus from residential properties to commercial shophouses, reported CNA.
Under the new measures, the Additional Buyer’s Stamp Duty (ABSD) for foreigners buying residential property was doubled to 60%.
Buyers of shophouses zoned for commercial use, on the other hand, need not pay ABSD or Seller’s Stamp Duty (SSD).
With this, prices for commercial shophouses are anticipated to increase by about 10%, on the back of limited supply and higher demand.
Singapore only has around 6,500 conserved shophouses, of which about 60% are in central areas such as Outram, Downtown Core and Rochor.
Moreover, those who buy shophouses tend to hold them longer and are in no hurry to sell as they consider them as limited “trophy assets”, making investment opportunities limited.
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Marcus Lee, Content Executive at PropertyGuru, edited this story. To contact him about this story, email: marcuslee@propertyguru.com.sg.
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