1. It is possible to use your CPF to pay the downpayment in full
While bank loans require you to pay a certain percentage of the downpayment in cash, the downpayment for your HDB flat can be paid fully using your CPF Ordinary Account (OA) savings if you take the HDB Housing Loan. If the amount in your CPF OA is insufficient, you will need to pay the balance in cash. This allows you to decide whether to use your CPF OA savings and if so, how much to use.
2. You can loan up to 90% of the purchase price or market valuation of the flat
For new flats, the loan ceiling is 90% of the purchase price. For resale flats, it is 90% of the resale price or market valuation, whichever is lower.
3. You can apply to change the repayment period of the loan
You can apply to change the repayment period of your HDB housing loan. Upon the extension or shortening of your repayment period, the mortgage instalment amount will be revised downwards or upwards accordingly. This gives you greater control of your finances over the entire duration of repayment.
4. You can make partial or full capital repayments without any early redemption penalty
To reduce your financial commitments, you can make partial or full capital repayments in addition to your monthly loan instalment without incurring any penalty for early redemption. However, the CPF Housing Withdrawal Limits may apply if you are using your CPF OA savings for these repayments.
5. The interest rate for the loan is pegged at 0.1% above the CPF OA interest rate
When you take a housing loan from HDB, you will enjoy a concessionary interest rate. This interest rate is pegged at 0.1% above the prevailing CPF OA interest rate, and may be adjusted in January, April, July and October, in line with CPF interest rate revisions.
For information on eligibility conditions to take the HDB housing, you may refer to HDB's website.
Sales have been brisk at Wandervale, the first executive condominium (EC) project launched this year, its developer said yesterday.
About 320 apartments have been sold since the launch of the 534-unit project in Choa Chu Kang Avenue 3 last month, Sim Lian Group noted. It said larger units were most popular with HDB upgraders and young families, with all 82 four-bedroom units sold.
Wandervale comprises 130 three- bedroom units, 322 three-bedroom premium units, and four-bedders ranging from 958 to 1,249 sq ft.
The sales are encouraging, likely making Wandervale one of the more successful ECs in terms of take-up since Lake Life in Jurong, which sold 534 of its 546 units at its launch in November 2014. There's no doubt there is underlying demand, be it ECs or private condos; it is a matter of pricing them right. As to whether this is a green shoot, it is too early to tell, as there're a few more projects coming in, said an analyst.
The average price of units at Wandervale, which is near Choa Chu Kang MRT station, is $755 psf. Prices start from $655,000 for a three- bedder and from $753,000 for a three-bedroom premium unit, while four-bedroom homes go for $896,000 upwards, Sim Lian said.
A consultant said that buyers are price-sensitive, so developers that want to enjoy good sales at the project launch will have to come up with an attractive price point. At under $800 psf, he thinks buyers are coming back to the market.
Wandervale is vying for buyers with nearby Sol Acres EC, a 1,327-unit development by MCL Land launched last year. It had sold 416 of the 707 units launched as at March at a median price of $791 psf.
All in, developers sold 485 new EC units in March. Analysts say sales are likely to hold up this month with two launches in Sembawang - The Visionaire and Parc Life. Other EC projects in the pipeline include Treasure Crest in Anchorvale Crescent, Northwave in Woodlands Avenue 12 and a development in Choa Chu Kang Avenue 5.
Adapted from: The Straits Times, 20 April 2016
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Prices of executive condominiums (ECs) do catch up with private condos after the initial five-year minimum occupation period (MOP), and even more so when they are fully privatised 10 years after purchase.
A study has found that the average price gap between new condos and ECs starts at around 20 per cent, due to the sales restrictions that apply to ECs, as well as their lower land and construction costs.
But upon fulfilling the MOP and at privatisation, the discount narrows to 9 per cent and 5 per cent respectively.
At the end of the MOP, ECs can be sold in the open market to Singaporeans and permanent residents; upon privatisation, ECs can be sold to foreigners.
This is not to say that buying an EC is a sure-profit investment, as history shows that much still depends on the initial purchase price.
By matching caveats at 21 EC projects already privatised and analysing their profits made at the end of five and 10 years, the study found that 13 projects made a loss after five years, mostly because they were bought at the boom period before the Asian financial crisis. The remaining eight projects managed gains of over 20 per cent.
But at privatisation, all the EC projects became profitable. How much money owners made depended on the ECs' locational attributes and surrounding supply at the time of sale.
Based on historical data, first-hand owners of currently privatised ECs are sitting on considerable gains, the report said.
The report also alluded to a trend that The Business Times had highlighted in an article in January - that increased vacancy rates may be a sign that buyers are starting to treat ECs as an investment product, as young-couple EC buyers continue to live with their parents after marriage while waiting for EC prices to re-calibrate over time before they sell.
However, the study found something even more surprising. Comparing between buying an EC and a private condo and holding each for 10 years, the report said that the EC could in fact be the better long-term investment due to their higher internal rates of return over 10 years.
This is because of their subsidies and lower prices compared to private condos. Also from year six onwards, entire EC units are allowed to be rented out, and their rentals tend to be on a par with private condos'. This helps to significantly defray their holding costs.
The hypothetical study assumed a 1,100-square-foot EC home bought for S$875,000, and a comparable condo for S$1.09 million.
The hypothetical couple has a household income of S$14,000, with a not very financially prudent loan-to-value of 80 per cent for 25 years at a fixed rate of 2.5 per cent per annum.
Rents for both units are fixed at S$3,000 per month. To simplify matters, other costs such as stamp duties, maintenance fees, and taxes were not considered.
At the end of just five years, the private condo proved to be the better buy, because the EC was not able to offset its monthly mortgage payments with rental income, as regulations forbid renting out the whole unit. This dampened its otherwise stellar capital appreciation.
But once rental restrictions are lifted, the EC quickly outperformed the condo.
Asked if the findings, which support an investment case for ECs, mean that the partly state-subsidised housing designed for the "sandwiched class" home buyer has become irrelevant, one of the authors of the report said no.
(This is) given the significant price gap between ECs and private condos. ECs provide an affordable option to HDB upgraders or first timers who aspire to achieve a higher standard of living. Though some may plausibly be buying ECs for investment, majority are buying them for their own occupation, she elaborated.
Adapted from: The Business Times, 25 February 2016
The Wisteria, at the corner of Yishun Avenue 4 and Yishun Ring Road, will be launched soon.
Half or 108 of the project's 216 residential units will be offered in the initial launch at an average price of S$1,030-1,050 per square foot (after a 5 per cent early bird discount). The preview starts this Saturday (Feb 27) with sales slated to begin a fortnight later, on March 12.
Eighty apartments, or 74 per cent of the 108 units in the initial launch, will be priced below S$1 million each. In terms of per square foot pricing, 25 apartments or 23 per cent of the 108 units will cost under S$1,000 psf.
Absolute prices of the 108 units range from S$469,600 for a one-bedder of 441 sq ft to slightly over S$1.19 million for the priciest four-bedroom apartment with a study of 1,173 sq ft.
The Wisteria will be part of a 12-storey mixed development that will also include 83,361 sq ft net lettable area of retail space, Wisteria Mall, to be held for rental income by the developers - a consortium that includes BBR, Santarli group and private equity investors.
The project is coming up on a 99-year leasehold site sold at state tender that closed in January 2015. The S$185.09 million winning bid translates to S$629.24 per square foot of potential gross floor area.
Slated for completion in 2018, the project will have 12 storeys and a basement level. The retail space will be housed in the basement and on level one. Car parking lots will be located on levels two and three, with apartments filling levels four to 12.
"This will be one of the most affordable homes above a lifestyle mall," said Michael Leong, CEO of Keppel Land Retail Management (KLRM), which has been appointed as the project and marketing manager for the mixed development. KLRM is 75 per cent owned by Keppel Land, with the rest held by ex-staff of the property management and services contract division of Guthrie.
The development is being undertaken by Northern Resi and Northern Retail, which are fully-owned subsidiaries of NorthernOne Development.
A consortium led by BBR holds a 50.1 per cent stake in NorthernOne Development. Santarli Venture, which is a consortium led by Santarli group, holds 29.9 per cent interest. MUSE Capital, comprising private equity investors from Singapore, holds 18 per cent interest and AHPL (Investments), the remaining 2 per cent.
Leasing has started at Wisteria Mall, with two anchor tenants secured so far. NTUC FairPrice will operate a FairPrice Finest supermarket of nearly 15,000 sq ft, while Kopitiam will operate a 16,000 sq ft food court.
Rentals at Wisteria Mall will generally range from S$10-25 per square foot a month. On top of that, tenants will pay a cut of their turnover to the mall owner. While the plan currently is for the developer to hold the mall, it could potentially sell it on an en-bloc basis in future. All the retail space in the development has to be held under a single strata lot - that is, subdivision into smaller strata units is not allowed - under the conditions of tender for the site.
The development will have a single car park entrance but separate access points for shoppers and residents. This will be one of the first projects that is required to adopt the prefabricated prefinished volumetric construction (PPVC) method under the site's sales conditions.
All apartments at The Wisteria will be equipped with smart home features which will enable residents to remotely control air-conditioning and lighting in the living/dining area and master bedroom as well as the digital main door lock.
ERA will market the apartments for sale.
Adapted from: The Business Times, 25 February 2016
With resale property prices stabilising and rents forecast to slide further this year, it is a tough market for sellers and landlords.
But a decorating technique that has been the rage in America might do the trick to turn a slow-moving property into a hot listing here. Called "home staging" - and like the theatrical connotations in the term - it refers to transforming a lived-in home so that it is fit for an audience.
Said to have originated in the United States in 1972 by real-estate agent Barb Schwarz, home staging involves everything from cleaning up and re-arranging furniture to repainting walls and baking bread during viewings so that the house smells irresistibly welcoming.
For landlords looking to rent out a property, home staging can involve renting furniture instead of leaving the apartment empty for viewings.
The aim, of course, is to have the property stand out in a buyer's market, to sell it fast and possibly at a higher price.
There are many reality television shows based on this decor concept. The popular series Property Brothers, shown here on HGTV (StarHub TV Channel 437), features twin brothers Jonathan and Drew Scott who help home owners turn a profit on a fixed-up house.
In the soft property market, home staging might just be the X factor that gets a property sold quicker.
In Singapore, there are only a handful of professionals that offer home staging services. These include Asian Professional Organisers, which specialises in space management, and interior design and styling studio paper+white, which often upcycles existing furniture.
There are also furniture rental companies. These include WTP The Furniture Company, which leases out furniture that it makes in-house for a minimum of three months, and Singapore Furniture Rental, which rents out furniture and home accessories such as carpets and cutlery.
Packages start from $1,400 a month to furnish a studio apartment. Singapore Furniture Rental will send stylists to arrange the furniture and the fee includes transportation and photography.
Some property agents also provide home staging services.
For one of them, before taking photos of the home or hosting a viewing, he lugs suitcases of cutlery, throw pillows and potted plants to stage a house. If necessary, he changes the home owner's bedsheets to fit the theme. He also uses home scents and may serve wine to prospective buyers during viewings.
Last year, he took an online course to learn more about home staging. He is a member of the Real Estate Staging Association, an international trade association for professional home stagers.
His past work is showcased on LuvingHomes.com and he has staged at least 50 homes, from a three-room HDB flat to a semi- detached house.
So does home staging work? Many baulk at the idea of forking out money on a house that is to be sold, but home stagers say it is worth the money.
Mr Eugene Lim, key executive officer at real estate firm ERA Realty, says that resale flat prices are "likely to be stable this year, with minimal price movements", while rental rates are expected to continue falling.
He says that buyers are more likely to pick a spruced-up home over a messy one, even if its price is slightly higher. "A cluttered house is visually not appealing and stays on the market longer. The longer the house stays on the market, the more likely it will sell at a lower price."
In general, the cost of home staging depends on factors such as the size of the house; the areas to stage; and the furniture and accessories needed.
Some property agents may tag on the staging bill to their commission or throw it in as part of the service.
London-based designer Davina Stanley, 45, founder and creative director at paper+white, charges a minimum of $2,500 for work that includes sprucing up furniture pieces or shopping for items. The company has a Singapore office.
Commuting between London and Singapore, she works mainly on black-and-white colonial houses here. She often helps expatriates find new renters to take on their lease if they are leaving Singapore, for example.
But she says that Singaporean clients might not be looking at the reward of spending some cash first.
"Elsewhere, home owners understand that they can spend a five- figure sum to home stage, but they can get back that amount and an even bigger profit because their house has attracted buyers willing to bid high for a good-looking house. The difference can be enormous."
Moreover, home owners can also take the new furniture to their next house, she adds.
There is another benefit of home staging: a swifter sale.
For those in a hurry, home staging can help them sell their house quickly.
Over and over, property agents say that homes that have been sitting on the market for a long time get sold in weeks after being spruced up.
Asian Professional Organisers' chief executive officer Georgina Wong, who is in her early 50s, recalls a three-bedroom flat in West Coast Drive that had been sitting on the market for eight months.
Her five-year-old company, which specialises in organisation and space management, started offering home staging services about 31/2 years ago.
When the owner brought her in to help sell the flat, she made him clear a spare room that was filled with photography equipment so that she could snap uncluttered pictures of the space. Five weeks later, the property was sold.
She says: "In a market that is competitive, it's not only about getting a higher price. Home staging helps your house move faster."
One of her clients, noodle manufacturer Annie Tan, 47, swears by home staging.
She had been renting out a furnished three-room HDB flat in Tampines for two years before deciding to sell it in 2014. It received an offer 10 days after Ms Wong started decorating it with flowers and throw pillows for photos.
Ms Tan says: "She created a cosy environment that would appeal to a lot of young families."
Adapted from: The Straits Times, 30 January 2016
Extracted from Romesh Navaratnarajah • January 18, 2016
Maybank Kim Eng said there are three factors that could help Singapore bump up the demand supply outlook for its residential market, reported Singapore Business Review.
Firstly, the country could review its long-term population target established in 2013, where growth was capped in response to the infrastructure shortfall seen in recent years.
“Recall that population growth was capped in response to Singapore’s infrastructure shortfall in recent years. As Singapore continues its build infrastructure aggressively, including housing, there could be room for a review of the target,” noted Maybank Kim Eng.
To boost demand for housing, Singapore may also revisit its foreign-worker policy.
“The number of EP and S Passes it issued in 2015 was less than a quarter of the 47,300 approved during the peak in 2011. If the economy and job creation pick up, we believe the Ministry could adjust its cap.”
Maybank believes that a revival of the en-bloc market may help overturn the supply-demand disparity.
“Land remains in limited supply in Singapore. With the government reining in land supply in its GLS programme, we believe that a revival of the en-bloc market cannot be ruled out as developers seek to replenish landbank from the private land market. This could raise demolition rates and absorb part of the market surplus,” it added.
Poiz Residences in Potong Pasir may be launched at S$1,380 psf
MCC Land will be releasing close to half of the 731 units in its new private condominium project The Poiz Residences during its sales launch on Nov 28. Sources told BT that the group has fixed the pricing for the initial units at an average S$1,380 per square foot (psf).
The project on Meyappa Chettiar Road forms part of a mixed-use development that includes retail component The Poiz Centre, which will be connected to the adjacent Potong Pasir MRT station. Its showflat opens for public preview on Friday.
MCC Land (Singapore) managing director Tan Zhiyong said The Poiz Residences is priced attractively in reference to recent project launches and its breakeven price of around S$1,200 psf. The group has engaged ERA Realty as one of the joint marketing agents of the residential project.
"We are hopeful of selling more than 40 per cent of the units we release during the launch weekend," he told The Business Times. Despite market concerns of a potential oversupply in the housing market and rising vacancies, Mr Tan said some buyers are just adopting a wait-and-see approach. "But the government has moderated the pace of land sales since 2013, while private housing demand has remained high."
He added that with MCC Land's affiliates China Jingye Construction Engineering (S) Pte Ltd and China Jingye Engineering Corporation (Singapore Branch) undertaking the construction of its projects, there is better control of costs and quality. MCC Land and China Jingye are subsidiaries of China's state-owned Metallurgy Corporation of China headquartered in Beijing.
MCC Land, which acquired the land parcel in August last year, owns 51 per cent of the mixed-use project after roping in new partners. Greatview Development owns 39 per cent and Sustained Land owns 10 per cent of the project.
To cater to the needs of both owner-occupiers and investors, The Poiz Residences has three distinct zones - hotel-like "Suites" suitable for renting out, "Urban" units for price-sensitive young professionals and "Habitat" units for families looking for bigger spaces. Some 65 per cent of the residential units are one and two-bedroom units ranging in area from 420 sq ft to 1,259 sq ft.
The Poiz Centre will span a gross floor area (GFA) of 50,000 sq ft and house 84 shops. About 10 per cent of the space is allocated to food and beverages. While MCC Land plans to lease out the retail units, it does not rule out selling some of these strata units if there is strong demand.
More affluent HDB upgraders will consider Potong Pasir given its proximity to the city area while new retail amenities could re-energise the area.
In the longer term, HDB flat owners who own a flat in Bidadari will also wish to upgrade within the vicinity, further supporting the future resale demand for private homes in Potong Pasir, said an analyst. Investors will find the rentability of homes here higher than those in north-eastern areas.
Another consultant noted that when the land parcel was launched in the first half of 2014, the government estimated some 685 residential units to be built on this site, which means each unit would be 809.6 sq ft of GFA on average. The developer has managed to generate 731 units from the allowable GFA, translating to an average 758.7 sq ft of GFA per unit.
He reckoned that leasing prospects for the project are positive given its retail amenities and proximity to Potong Pasir MRT and the new Bidadari housing estate. But he also said that there could be competition in the vicinity - 59 per cent of units in developments within 300 metres of the Potong Pasir MRT station are less than 90 sq m in area.
In the near future, there would be at least two mixed residential-commercial developments near the Woodleigh MRT Station.
MCC Land's development pipeline includes a private condominium site on Tampines Avenue 10, which is expected to be launched in the third quarter of next year.
Owing to its close ties with Chinese developer Hao Yuan Investment in China, MCC Land is providing project management for some of its overseas projects. This includes Hao Yuan's current mixed-use project in Danga Bay and an upcoming executive condominium project here on Woodlands Avenue 12, which is slated to be launched in April or May.
MCC Land is also undertaking project management for the private condominium project of HY Realty at Dundee Road, which is likely to be launched in Q3 next year. HY Realty shares the same shareholders as Hao Yuan Investment. China Jingye will undertake construction of these Woodlands and Dundee projects.
Adapted from: The Business Times, 20 November 2015
With the income ceiling raised in 24 August 2015 to $14,000, buyers who were previously not eligible to buy Executive Condominiums (EC) due to income exceeding $12,000 have came back into the EC market.
Weekly sales have been taking place over a good selection of exisiting and newly launched ECs. Buyers now have more choices over the available EC units by different reputable developers over the island.
The recent launch in Yishun, Signature at Yishun by JBE Holdings, has seen a good response of about 20% units were sold during its preview with a 2 Bedroom unit starting from $5xxK. Sales has been moving at a steady pace after the launch as well as other ECs that are already opened for immediate booking.
The EC beside this development, The Criterion by City Developments Ltd, has also received a high interest in application towards its targeted preview on 10 Oct 2015.
These 2 ECs are priced attractively with afforability factor taken into consideration without comprimising the quality in furnishing and fixtures. Such competitive pricing among developers thus creates a beneficial opportunity for eligible buyers to come back into the EC market.
With the potential to fully privatize after the 10th year, the resale potential makes it a highly sought after alternative compared to a private condominium. Of course ECs are only for elibigle buyers so not everyone who can afford are able to own an unit. Apart from pricing, the locations and facilities are also comparable or may surpass those of private condominiums. So if you are eligible, EC is another good option for consideration; only the privilege can buy.
Check out the List of ECs available and open for immediate booking.