Government Takes Measure To Cool Property Market – IAS Abolished

With immediate effect, Minister for National Development (MND) Mr. Mah Bow Tan has announced 3 main measures to cool the current speculative property market:-

Removal of the Interest Absorption Scheme (IAS) and Interest Only Housing Loans (IOL) with effect immediately (14th September 2009)
Reinstatement of Confirmed List for 1st Half 2010 Government Land Sales (GLS) Programme
Non-extension of the January 2009 Budget assistance measures when it expires.

What is IAS?

Interest Absorption Scheme. Details can be found here.

What it means for the property market?

Speculative property buyers will not be able to opt for IAS with immediate effect, bringing them to service their mortgage as soon as the construction of the new project begins according to the stage it is built (Normal Payment Scheme – NPS).

This will stop a huge number in terms of speculation; though it shouldn’t stop genuine buyers who is looking to buy a place of their own stay.

The reintroduction of GLS also means that the Government is preparing to insert fresh supply of land to curb the excessive speculation in this current market.

Simple equation – More supply, less demand.

What happens to new project launches after today?

Official quote:

The Monetary Authority of Singapore will disallow the IAS and IOL with immediate effect from today, i.e. 14 Sep 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where the units had already been offered for sale under the IAS before 14 Sep 2009. The IOL will be disallowed with immediate effect.

So projects that has offered IAS before 14th September is still eligible.

Where can I get the official source?

Download a copy of the official press release jointly from Ministry of National Development (MND), Ministry of Finance (MOF), Ministry of Law (MOL) and Monetary Authority of Singapore (MAS) and Question and Answer on how these changes will work in detail.

IRAS – No Changes to Tax for Property Gains

Nothing new is springing up from Inland Revenue Authority of Singapore (IRAS), after a period of uncertainty especially to property investors with the recent speculations of government measures to firm up the possible taxation of property owners selling their assets for capital yield.

Previously it was proposed that an individual who sells a property would not be taxed on the profit if he had not sold any other property in the preceding four years.

The public consultation process for the proposal attracted 64 responses with 60 opposing the change. This rule would be confusing to sellers amidst the economy which seems to start finally picking up pieces.

The gray area of how IRAS actually goes after property owners who transacts property on a regularly basis will still persist, but its still better than punishing long term investors who deem investing in property as a financial tool to hedge inflation over a long period.

Punggol Promenade Starts Work

Punggol has started its ground breaking ceremony today to start work on its 4.9km long promenade that will start from Punggol Point.

Today, the town has a population of 53,600 and this is projected to grow to 70,000 by 2011.

I have recently sold a 5-room Design and Built in Punggol Central, this has been one of the most discussed selling point on the transformation of Punggol. “This is coming, the second generation of Punggol residents will enjoy what has been a bare land transformed” as quoted by my owner.

Price has also steadily raised for Punggol HDB apartments with its promised plans from the Government to transform the whole estate into a beautiful waterfront town. As we can see, the estate is slowly maturing.

Read more about the plans from URA here on the Punggol Promenade.

No Stakeholder Monies to Be Held by Law Firms Soon

Finally! And I thought it’s going to take them long enough to realize that sometimes even the level which is suppose to be the most just and neutral party might just give you the most problematic issues.

Ministry of Law has came up with a proposal that might allow an entity to be the stakeholder instead of the law firms that are in charged of conveyance of the intended property. The two suggestive was either the local banks or the Singapore Academy of Law to be the possible candidate in the process.

This move is to prevent lawyers who has ill-intention to abscond their clients deposits. The most common property conveyancing involves in lawyer holding deposits is via the option to purchase method to purchase a property.

The usual conveyancing process involves the buyer to pay the seller a option money (usually 1%) and have a exercise money (4% or more, depending on the cash or what the option conditions were) which is to be held by the lawyer as stated in the option; The law firm will safe-keep the deposit (as stakeholder cheques are usually issued to the firm’s name). Upon the completion date of the property, the lawyer will then release the stakeholder’s sum together with the rest of the balance amount due to the seller.

You’ll feel much safer now when the deposits are addressed to an authority assigned department. This change is likely to happen by the end of the year.

Singapore Snaps Out of Technical Recession, New Homes Up 9.4% in June.

With Singapore climbs out of technical recession with 20.4 growth percent in Q2 this 2009, the government has also raised its growth forecast for the months to come. With much credits to the government and her people, Singapore is the first Asean country to move out of a technical recession.

Will we continue to fair much better? It seems there’s still much life in our daily lives, trades and walks of live in our own country hasn’t been much affected by claims of the worst recession in years, no doubt we’re in good hands.

Primary New Home Sales Up 9.4% in June

1,825 homes were sold in June, tiding over the figures of May by 9.4%

The fuel mostly came from 8@Woodleigh in Potong Pasir which attributes to 330 units of the sale. The median price sold was at $804 psf. Other residential projects which added the numbers were Martin Place Residence, Nathan Residences, One Devonshire and Vista Residences.

Foreign Investors Back?

Foreign buyers are slowly creeping back into the country as the high-end luxury segment seems to be moving as well. Two units were sold recently at Nassim Park Residences by its developer at above $3,000 per square foot (psf), one of them at $3,813 psf.

In the sub-sale market, a caveat has surfaced for a 37th floor unit at The Orchard Residences at about $3,550 psf last month.

Caveats have also been lodged for transactions of three units at The Ardmore Park at $2,375-$2,513 psf, and for a sub-sale deal at Marina Bay Residences at $2,200 psf in June.

A Possible Start of Another Bubble?

With Singapore snapping out of technical recession in the second quarter, observers said this may inject more confidence in the property sector.

The figures are definitely going to be affected from end of August to mid September onwards because of Chinese Hungry Ghost Festival (20th August – 18th September), but should the momentum continue to swing forward after the period, it could possibly be a strong rally.

CPF Minimum Sums Adjusted With Effect on 1st of July 2009

The minimum sum(MS) for your CPF account will be raised from 1st of July 2009 from the existing $106,000 to $117,000. The new MS will apply to CPF members who turn 55 from 1 July 2009 to 30 June 2010.This is in line with the Ministry of Manpower’s annoucement in August 2003 that the CPF Minimum Sum will be gradually raised to $120,000 by year 2013.

Minimum Sum was introduced to curb inflation and to ensure that Singaporeans have set aside sufficient savings for their retirement.

How Will the Minimum Sum Affect Property Buyers who is using CPF

Having an increased MS in CPF means you would have to set aside more funds in CPF (can be in the form of both Special Account and Ordinary Account) if you are using CPF to buy a second property. You can wipe out your Ordinary Account for your first purchase of a property with your CPF account, but if you’re using CPF to purchase your second home, you’ll have to set aside $58,500 (SA or OA) in your account. This is applicable to your spouse or friends whom you might purchase the 2nd property under tenancy-in-common.

Under the approved Residential Properties Scheme (RPS), you can utilise your CPF OA savings for the following:

To pay 100% of the Valuation Limit (VL). The VL is the lower of the purchase price or the value of the property at the time of purchase.
To refinance your housing loan taken for the purchase of a residential property
To pay your monthly instalments on your existing house loans.
To pay all stamp duty, valuation and legal fees on transfer or conveyance for the purchase or mortgage of a property.

The CPF Board has a very comprehensive breakdown on how the Valuation and Withdrawal Limit works on their website.

Singapore New Blueprint for Green Buildings By 2030

The Government has released a blueprint on the direction to go within the next 20-30 years for green buildings in Singapore. This is tied inconjunction with Building and Construction Authority (BCA) on its Green Mark Project started since January 2005.

There’re a few tier standards in the Green Mark namely Gold, Gold PLUS and Platinum. You can refer to the chart from BCA here.

To encourage existing buildings to be stamped Green, BCA has roled out its second Master plan to offer cash incentives.

Free Gross Floor Area for Developers

Urban Redevelopment Authority (URA) is working closely with BCA to offer bonus gross floor area (GFA) for new private developments, a huge bonus to developers, again being subjective to Development Charges on the bonus GFA.

The landscape for new business districts such as Marina Bay and Jurong Lake District is monitored closely as buildings will have to attain a certain level of rating.

Excerpt from The Straits Times

SINGAPORE’S policymakers have unveiled a sweeping blueprint, 15 months in the making, to help build a greener, more energy efficient and sustainable nation. The $1 billion plan, to be implemented over the next five years, will change everything from the cityscape and landscape here, to the way Singaporeans live and the way businesses are run. If successful, it will make energy usage here more efficient, reduce pollution and expand the nation’s green spaces – even as the demand for resources rises along with economic growth…

More from Straits Times

All these initiatives will result in energy reduction cost savings by $1.6 billion a year and result in creation of more job professions for the new standards.

As a developed nation, the move would create sustainability and encourage a healthier landscape make-over in Singapore. The future of the country has not sway in the wrong direction and is still looking bright for global investors and our local people.

A Swavroski Cable Car Cabin for Singapore?

Photo credit: Flying Cloud

Amazing things people can come up with for ideas. Sentosa is finally upgrading its fleet of their old school cable cars during this recession.

SINGAPORE: The view off Singapore’s Harbour Front is going to change as the cable cars stop moving for a S$36m overhaul later this year.

Mount Faber Leisure Group is investing in a whole new cable car system which will see 67 new cable car cabins, as well as a Swarovski-encrusted VIP cabin.

As part of the changes, the cable car rides will be rebranded as jewel rides. The project will start in the third quarter of 2009 and is scheduled for completion by the second quarter of 2010.

…Channel News Asia

A Swavroski encrusted cabin? I wonder how much that’s going to cost to just be sitting on it in the future, but before the rides of our old cabins stop before the 15th of August, maybe you’d like to bring your kids (free for those under 12) and yourself for another nostalgic ride before the rates get hike when its new fleet is ready.

I bet the glittering cabin is going to be a hit with girls and couples who wants an alfresco sky dining experience. Hum

IRAS Reduces Annual Value for Over 150,000 Homes

Great news for property owners who will be having their AV(annual value) reduced for Q1 of 2009.

SINGAPORE : The Inland Revenue Authority of Singapore (IRAS) has reduced the Annual Values of over 115,000 private properties in the first quarter of this year.

That is almost 100 per cent of the total number of properties reviewed.

With the reduction and the 40 per cent property tax rebate announced in this year’s Budget, owners of these properties will pay between 45 per cent and 60 per cent less in terms of property taxes…

Channel News Asia

Oh and yes, have you file your income tax for 2008 yet? Deadline is 15th April 2009 for your normal filing and 18th for E-filing, don’t miss it!

Go Green on 28th March. Support Earth Hour

If you happen to see part or most of Singapore’s lights turned off when you’re roaming around on the 28th of March (Saturday) between 8.30pm to 9.30pm, don’t be alarmed as it’s all part of WWF’s Earth Hour campaign.

Time to go green and support for a cause for the Earth.

THIS IS THE WORLD’S FIRST GLOBAL ELECTION, BETWEEN EARTH AND GLOBAL WARMING.

On March 28 you can VOTE EARTH by switching off your lights for one hour.
Or you can vote global warming by leaving your lights on.

The results of the election are being presented at the Global Climate Change Conference in Copenhagen 2009. We want one billion votes for Earth, to tell world leaders that we have to take action against global warming.
the earth!

And if this is not enough, you’d be happy to know that Capitaland Malls will be joining us in the darkness too with high profile malls including Raffles City, Bugis Junction, Junction 8 and many more as Capitaland pledges their participation in saving the Earth.

CAPITALAND, one of Asia’s leading real estate companies, will participate in Earth Hour on Saturday, March 28. CapitaLand properties will mark the occasion by turning off their facade lights for an hour. These properties include 13 CapitaLand retail malls including Raffles City, Plaza Singapura, Bugis Junction and Junction 8. Aside from their malls, other properties will also go dark during Earth Hour.

The company’s office buildings like Capital Tower, One George Street and Robinson Point, as well as the Ascott’s serviced residence properties including Ascott Singapore Raffles Place and Citadines Mount Sophia will also join the event…

The Business Times on 18th March 2009

This is a global event that calls for global participation. I’ve asked G4 Station‘s staff to turn off all the lights in the inn, told my family to turn off the house lights as well.

Are you playing a part for the Earth too?

*Updates on 21st March 2009 : Hong Leong Group, CDL’s buildings will be joining in the Earth Hour spree as well according to the Straits Times as Hong Leong’s chief executive, Kwek Leng Beng pledges in. A total of 25 buildings will be turning off their lights.