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Singapore Property News This Week Should Short Term Room Rentals Be Allowed? Resale Property Transactions (April 18 April 24)
FROM THE
EDITOR
Welcome to the 50th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise
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Monetary Authority of Singapore (MAS) also stated that any rebates or discounts received from the seller or any other party in the transaction must be declared when apply for home loans. NUS SRPI sub-index for small apartments grew the most in March
The NUS Singapore Residential Price Index (SRPI) sub-index for small apartments/condo units (up to 506 square feet) increased by 2.8%from February to March, compared to 0.8% and 0.7% respectively for the SRPI sub-indices for the Central Region and NonCentral Region which does not include small units.
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SINGAPORE PROPERTY WEEKLY Issue 50 The overall SRPI for March 2012 was a 0.8% increase from February. Such shoebox units are said to be the reason behind high prices, the profile of buyers (mainly with HDB addresses) also suggests an investment demand. This, coupled with the anticipated increase in supply from 2,400 at end-2011 to 8,200 units by end-2015, has led to worry that there is no genuine demand for the units. While some feel that there may be cooling measures targeting these units, others feel that it may not happen as there is genuine demand for young singles and couples who want to own a private property. Since most of these units are not ready for occupation, whether the rents will continue to fetch high yields is a question. In Q1 2012, the average monthly rental of these units is $6.51 psf, compared with $3.80 psf for 501-1,500 sq ft units. As the supply of completed units
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increase, rents for these units are likely to fall. Government may intervene in growth of shoebox units
National Development Minister Khaw Boon Wan clarified the perception that HDB flats are getting smaller and stated that there might be a potential governmental intervention if the proportion of "shoebox" units in Singapore rises too much at the annual Reach Contributors Forum. He allayed concerns over the perceived shrinking of HDB unit sizes by stating that flat sizes in Singapore have not changed in the past 15 years but also stated that both smaller and larger units will be built to meet demand and needs. He also stated that the government may intervene if shoebox units grow to a worrying proportion, especially if there may not be much demand for these units.
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SINGAPORE PROPERTY WEEKLY Issue 50 Latest figures showed that such units accounted for over 25% of private home sales in Q1 2012, compared to the 15% in Q4 2011. He also stated that the sharp increase in home prices was a temporary imbalance of supply and demand where the supply could not catch up to the increase in population and added that 100,000 new flats could be built in the following five years if deemed necessary. FLO Residence at Punggol to be launched FLO Residence located at Punggol Field Walk near Coral Edge LRT is to be launched at an average of $850 psf, with prices of twobedroom units starting at $620,000, threebedroom units at $750,000 and four-bedroom units at $990,000. Out of the 530 units, 106 are two-bedroom units between 764 sq ft to 861 sq ft, 317 three-bedroom units ranging from 926 sq ft to 1,044 sq ft, 92 four-bedroom
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units between 1,227 sq ft to 1,346 sq ft and 15 penthouse units between 1,500 sq ft to 2,500 sq ft. The project is likely to be attractive given that the adjacent site is reserved for an international school. Woodlands EC site attracts $247m top bid The 99-year leasehold EC site at Woodlands Avenue 5/Woodlands Drive 16 drew five bids, with the top bid at $247 million or $317.65 psf ppr within expectations of consultants. This bid reflects that confidence of the developer since there are no new EC projects in the area but the number of bids is rather low, possibly due to the recent tender for the more attractive Tampines Central 7 EC site. The developer plans to develop the site into a 700-unitresidential project comprising three and four-bedroom apartments with an expected launch date by this year.
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SINGAPORE PROPERTY WEEKLY Issue 50 The expected breakeven cost is around $630650 psf. Commercial Other properties potentially up for sale include the Park Regis Singapore hotel at New Market Street-Merchant Road. The mixed hotel-and-office project consists of the 203room hotel and a seven-storey office block with about 42,000 sq ft NLA which sits on a site with a remaining lease of about 95 years. Meanwhile, the99-year office development at 7&9 Tampines Grande is asking for $400 million and above or $1,400 psf on its 287,000 sq ft NLA, of which 95% has been let. The project includes two eight-storey towers with 147 basement carpark lots. The eight-storey office block at 99-year 700 Beach Road may also be sold at $115 million or $1,650 psf based on the fully let 70,000 sq ft NLA. 66 strata office units at Burlington Square (with 83 years lease remaining) located at Bencoolen Street is also on the market for $100 million.
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SINGAPORE PROPERTY WEEKLY Issue 50 Higher proportion of financial firms in Marina Bay than in Raffles Place The proportion of financial and insurance companies in Marina Bay (75%) is higher than that in Raffles Place (55%). The absolute amount of office space occupied by such firms in Raffles Place, however, is much higher at four million sq ft than the 2.6 million sq ft in Marina Bay. This may change as more firms move into spaces in newly completed buildings in the region. The space occupied by such firms in Marina Bay will increase to more than 3.3 million sq ft in the next couple of quarters based on pre-commitments in Asia Square Tower 1 and Marina Bay Financial Centre (MBFC) Tower 3. Average occupancy rate of office space in Marina Bay decreased by over 30 percentage points from 2011 to 68.1% in Q1 but
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increased to 86% when the one million sq ft pre-committed space is included, while the occupancy rate in Raffles Place fell 3.6 percentage points to 91.3% in the same period. The net increase in supply in 2012 is around 1.1 million sq ft, but rents may see a decline as a good 700,000 sq ft of space is expected to be returned to the market as shadow space or when lease expires and tenants shift to new spaces.
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SINGAPORE PROPERTY WEEKLY Issue 50 Some hosts even offer premium services such as breakfast and complimentary toiletries and EZ-link cards. Neither the HDB nor JTC allow short-term subletting either, so those caught doing so can face penalties. HDB homeowners may even get their flats confiscated. The URAs rationale for banning this practice is that transient occupiers may disturb and inconvenience other residents. A Singapore Hotel Association (SHA) spokesperson voiced concerns about how unregulated guesthouses could compromise the safety and health of the guests, and that any complaints from tourists might create adverse publicity for Singapore. Is the renting out of rooms really that bad? Personally, I believe that short-term room renting should be allowed. As one of the hosts in The Straits Times article put it,
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From the hosts perspective, its a great way to earn some extra dollars from a spare room, while from the guests perspective they can save a lot of money and get a different experience versus staying in a hotel.
The catch? Its illegal Sounds like a win-win idea but its illegal. According to the Urban Redevelopment Authority (URA), private residential properties can only be rented out or sublet for periods of six months or more. A spokesman said they would investigate cases of breaches, and those caught will be issued enforcement notices. If they do not stop they can be fined up to $200,000 and/or jailed for up to a year.
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SINGAPORE PROPERTY WEEKLY Issue 50 doing so democratizes the marketplace and is a win-win for both the hosts and guests. For the hosts, they can earn extra income from their asset while meeting new people from around the world. For the guests, they have a greater choice of accommodation at affordable prices, and can choose the experience they would like to have. In my travels, my favorite places to stay were often not the fancy hotels but small bed and breakfast places where you get to enjoy the local hospitality. probably overstated, given that this practice has been going on for over five years and we do not seem to have any major incidents arising from it. Of course, if renting out rooms were allowed, the URA would still play a vital role in investigating any complaints lodged by neighbors and residents if a nuisance was being created, and could take action against offenders instead of banning it outright. While negative incidents could indeed affect a tourists impression of Singapore, I believe on the whole that allowing the short-term renting of rooms would actually have the opposite effect it would allow tourists to experience true Singaporean hospitality, and get an understanding of the local culture that they would never get by staying in a fancy hotel.
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If this practice became widespread, the losers would be the hotels and hostels as they would face greater price competition and an increased supply of rooms, which is probably why they are against it. In my opinion, the risks stated by the URA and the SHA are
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SINGAPORE PROPERTY WEEKLY Issue 50 It would also allow asset rich and cash poor homeowners to monetize their asset and increase their incomes, while exposing Singaporeans to people from all over the world, leading to increased cultural tolerance and understanding. Hopefully the regulations can be reconsidered, and amended to benefit the homeowners and not just the hoteliers.
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Non-Landed Residential Resale Property Transactions for the Week of Apr 18 Apr 24
Postal District 1 1 1 2 2 3 3 3 3 4 4 4 4 5 5 5 5 5 5 5 5 5 8 8 8 Project Name THE SAIL @ MARINA BAY PEOPLE'S PARK COMPLEX PEOPLE'S PARK COMPLEX ICON ICON RIVER PLACE RIVER PLACE THE ANCHORAGE RIVER PLACE MARINA COLLECTION MARINA COLLECTION MARINA COLLECTION TERESA VILLE THE STELLAR BLUE HORIZON THE CASSANDRA MONTEREY PARK CONDOMINIUM WEST BAY CONDOMINIUM VISTA PARK VISTA PARK VARSITY PARK CONDOMINIUM PARK WEST CITYLIGHTS CITY SQUARE RESIDENCES SOHO @ FARRER Area (sqft) 1,701 1,119 1,604 560 926 786 786 1,765 2,067 1,873 2,185 2,185 1,927 1,389 936 1,453 1,249 893 883 646 2,207 1,894 678 1,496 506 Transacted Price ($) 3,520,000 950,000 1,350,000 1,038,000 1,600,000 988,800 960,000 2,150,000 2,460,000 5,338,050 6,227,250 6,227,250 2,080,000 1,450,000 945,000 1,390,000 1,150,000 815,000 800,000 575,000 1,858,000 1,439,900 1,090,000 2,060,000 665,000 Price Tenure ($ psf) 2,070 99 849 99 842 99 1,854 99 1,728 99 1,258 99 1,222 99 1,218 FH 1,190 99 2,850 99 2,850 99 2,850 99 1,080 FH 1,044 FH 1,009 99 957 FH 921 999 912 99 906 99 890 99 842 99 760 99 1,607 99 1,377 FH 1,314 FH Postal District 8 9 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 12 12 14 Project Name KERRISDALE THE CLAYMORE ORCHARD VIEW THE PATERSON RIVERGATE ESTILO WATERMARK ROBERTSON QUAY NASSIM JADE BELMOND GREEN MELROSE PARK ONE ROBIN WATERFALL GARDENS VIZ AT HOLLAND DUKES RESIDENCE DALVEY COURT DUCHESS CREST THE SERENADE @ HOLLAND AMARYLLIS VILLE AMARYLLIS VILLE PAVILION 11 TREVOSE PARK THE LINCOLN MODERN DE PARADISO BALESTIER 288 THE HELICONIA Area (sqft) 1,270 3,348 2,530 1,206 1,755 517 1,572 2,250 980 1,345 1,948 2,196 818 1,711 2,164 1,378 1,507 657 657 1,485 2,185 1,109 1,238 624 1,335 Transacted Price ($) 1,180,000 8,950,000 6,619,000 2,532,600 3,250,000 908,000 2,730,000 5,250,000 1,750,000 2,265,000 3,220,000 3,623,400 1,300,000 2,600,000 2,880,000 1,650,000 1,600,000 1,038,000 1,030,000 2,170,000 3,183,000 1,530,000 1,485,600 608,000 1,230,000 Price Tenure ($ psf) 929 99 2,674 FH 2,617 FH 2,101 FH 1,852 FH 1,757 FH 1,737 FH 2,334 FH 1,787 FH 1,683 999 1,653 FH 1,650 FH 1,589 FH 1,519 FH 1,331 FH 1,198 99 1,062 99 1,581 99 1,569 99 1,461 FH 1,457 FH 1,380 FH 1,200 FH 974 FH 922 FH
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NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data.
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