Jurong East and Nusajaya

Property values around Jurong Lake Distict and Gerbang Nusajaya are expected to rise thanks to the iconic High Speed Rail (HSR) project.

Jurong Lake District is fast taking shape as a decentralised CBD with almost 500,000 sq m of office space plus 200,000 sq m of retail, food & beverage and entertainment space called Jurong Gateway with plans for 2,800 hotel rooms. Photo: Courtesy of the Urban Redevelopment Authority (URA)

By Khalil Adis

Jurong East in Singapore and Gerbang Nusajaya are set to enjoy further growth as they become new regional centres thanks to the iconic High Speed Rail (HSR) between Singapore and Malaysia although there will be a delay by two years to 2022 for that to fully materialise.

First announced in 2010, the project is the first of its kind in the region which will cut travel time from Singapore to Kuala Lumpur to a mere 90 minutes.

This is expected to spur cross-border investments on both sides of the causeway and enhance property values at the eight HSR stops spanning from Sungei Besi in Kuala Lumpur all the way to Jurong East in Singapore.

At the recent Leaders’ Retreat in Singapore, Singaporean Prime Minister Lee Hsien Loong revealed that Jurong East has been chosen as the site for the Singapore terminus which will tie in with the government’s overall plans to transform the area into the country’s second Central Business District (CBD).

Noting that the project has received great attention both domestically and internationally, Lee and Malaysian Prime Minister Datuk Seri Najib Tun Abdul Razak said the HSR project will be a game-changer.

“Both Leaders were encouraged by the support and attention from the global community and looked forward to further progress on this game-changing iconic project which will boost connectivity, facilitate travel between Kuala Lumpur and Singapore, enhance business linkages and improve people-to-people ties,” read a statement from the Prime Minister’s Office (PMO).

Singapore’s new gem in the making

Back in 2008, the Urban Redevelopment Authority (URA) had announced the Draft Master Plan for Jurong Lake District which comprised a new CBD and commercial hub along with retail malls and hotels.

The area is fast taking shape as a decentralised CBD with almost 500,000 sq m of office space plus 200,000 sq m of retail, F&B and entertainment space called Jurong Gateway with plans for 2,800 hotel rooms.

Once a sleepy neighbourhood blessed with a lake, Jurong East is now buzzing with life and currently home to a Grade ‘A’ office tower. Called Westgate, this is where CapitaLand, one of Asia’s largest real estate companies, now calls home. Meanwhile, Genting Hotel became the first hotel to make its mark in the district in April 2015.
This growth is set to receive a further boost from tourists and business travellers from Malaysia once the HSR project is completed as it will enhance the area’s desirability.

A property values booster
With the announcement of the HSR station within the area, property values are set to rise even more especially in the current bearish market.

If we follow historical trends in Singapore, properties which are located within close proximity of transportation hubs such as MRT stations tend to appreciate between 5 to 10 per cent over a long period of time.

Further boosting the property market in the vicinity is the demand to live in and around Jurong Lake District, thus leading to higher asking prices.

Homes near the terminus such as those in the neighbourhoods of Jurong East, Lakeside and Taman Jurong are already reporting a 1 per cent increase in asking prices despite the weakening market which is the result of the various cooling measures in place.

These neighbourhoods are 5 minutes away from Jurong Country Club which has been identified as the site for the terminus location

A matching CBD in Nusajaya

Gerbang Nusajaya’s press conference. This township will serve as the gateway to Malaysia with a HSR station and mixed-use development. Photo: Courtesy of UEM Sunrise.

While the station in Nusajaya has not yet been announced, government officials have indicated that it will be located close to Motorsports City near East Ledang.

In April 2015, Nusajaya’s master developer UEM Sunrise Berhad further revealed its comprehensive development plans for Gerbang Nusajaya which will have its own CBD similar to Jurong Lake District.

“Gerbang Nusajaya is the gateway to Iskandar Malaysia and will serve as the commercial and business engine for Nusajaya,” said the company in a statement.

Spread across 4,551 acres of land, this second phase of Nusajaya’s development will be designed with catalytic industries similar to the various economic drivers in Nusajaya and Medini.

Both these areas are home to tourism, logistics, finance, information communication technology and creative industry establishments just to name a few.

In anticipation for the HSR terminus in Gerbang Nusajaya, a number of catalytic developments have been planned.

They include Nusajaya Tech Park, a 519-acre integrated eco-friendly tech park and FASTrack Iskandar which is a 300-acre ‘motorsports city’.

This is the closest hint we can get on the possibility of the Nusajaya HSR station being located here.

With a gross development value of RM42 billion, property values for existing homes in Nusajaya and Medini will enjoy a boost from the economic spillover.

As it stands, condominium prices here range from RM800 to RM1,000 per sq ft.

In the near future, it could possibly increase by 5 to 10 per cent as the area will be developed over a period of 25 years.

An estimated 76,000 direct job offerings and 137,000 indirect job offerings are expected to be created as a result.

UEM anticipates Gerbang Nusajaya to have an estimated 220,000 population upon its completion, tying it nicely with its site for Nusajaya’s HSR terminus.

This article was first published by iProperty.com in its June 2015 issue.

Under pressure

The luxury market saw little transactions this year while developers are faced with a deadline to move unsold units.

The property cooling measures have worked and developers are feeling the bite as they are under pressure to move unsold units. Photo: Courtesy of Shutterstock.

Developers are feeling the heat from the property cooling measures in Singapore and are calling for the government to ease the Additional Buyers’ Stamp Duty (ABSD).

Just last February, the local real estate body, Real Estate Developers’ Association of Singapore (REDAS) repeated their calls for the abolishment of the ABSD that has impacted the luxury sector severely.

“Not many Singaporeans are buying into this segment, and prices have indeed come down substantially. The imposition of ABSD on this segment runs counter to the Government’s efforts to encourage foreign investment flows into the country, to activate the economy, grow investments and create jobs for Singaporeans,” REDAS President Augustine Tan was reported as saying in the media.

Indeed, Singapore appears to be losing its shine among foreigners as they now have to pay a 15 per cent ABSD while transaction volume has dropped significantly.

According to CIMB, foreign demand has fallen considerably.

Foreigners now make up less than 10 percent of new sales compared to 15 percent two years ago.

What defines the luxury market in Singapore?

Kasara – The Lakeside by YTL located within the prime area of Sentosa Cove. Photo: Courtesy of YTL.

Often defined as the prime areas of the Lion City, the luxury market includes Sentosa Cove, Orchard Road, Marina Bay, Newton, Tanglin and the CBD where condominiums are priced from S$2,500 upwards.

It also includes Good Class Bungalows (GCBs) and bungalows on Sentosa Cove where average prices are now around S$1,400 and S$1,600 per sq ft respectively.

There are altogether 39 GCB areas in Singapore that spans from Belmont Park to White House Park.

Typically, they are defined as houses with a minimum land plot size of 1,400 sq m and a building height of two-storeys only.

Planning guidelines also prevent high density developments in these areas giving it an air of exclusivity.

Primarily the address of choice for high net worth local and foreign investors, the high-end segment, however, has taken a beating as the property cooling measures take its bite.

Buyers’ market as transaction volumes dropped

According to the latest data from CBRE Singapore, a total of 136 caveats were lodged last year by the Urban Redevelopment Authority (URA).

This was a 44 per cent drop from the 243 caveats lodged in 2013.

The caveats tracked transactions involving luxurious condominiums priced from S$5 million onwards in the core central area of Singapore.

As transaction volume dropped, so did prices, indicating that it is a buyers’ market as sellers become more realistic and are willing to sell below their asking price.

For example, according to CBRE Singapore, the average price of luxury apartments in the resale market fell 6.7 per cent year-on-year from S$2,825 per sq ft as at the end of 2013 to S$2,650 per sq ft during the same time last year.

The GCB market also saw a further slowdown in the second half of 2014 with 13 caveats lodged compared to 15 recorded in the first half of last year.

Data from CBRE showed that there was an 8.2 per cent decline in investment quantum in 2014 at S$626.14 million compared to the S$681.98 million figures recorded in 2013.

The average price also saw a marginal decline in 2014 at S$22.36 million compared to the average price of S$23.52 million recorded in 2013.

While average prices are showing a decline, the average per sq ft however is still holding up, recording a 6.7 per cent increase from S$1,338 per sq ft in 2013 to $1,428 per sq ft in 2014.

Over on Sentosa Cove, only three transactions were recorded as foreign investors stayed away from the market.

Data from CBRE showed that there was a 20 per cent drop on the average transacted price recorded at S$1,676 per sq ft in 2014.

Developers under pressure

With some developers stuck with unsold units in the primary market, CBRE notes that they are “likely to adopt innovative sales schemes to cut prices to market these homes in 2015”.

Indeed, developers face a deadline to move unsold units, failing which they have to pay a levy, calculated at 8 per cent, 16 per cent and 24 per cent of the property purchase price for the first, second and third extra years respectively.

One case in mind is Goodwood Residences which CBRE said was sold at an average price of S$2,450 per sq ft.

It notes that “the developer sought to beat the deadline of June 2015 when it has to pay a premium to extend the sales period

During the peak of the market back in 2010, such properties in the exclusive Bukit Timah enclave could command prices of around S$3,000 per sq ft.

As more luxury units come on-stream this year, others may also follow suit to cut prices to move unsold units.

Seven luxury projects totaling 467 units that were completed in 2014 included Ardmore 3, Hana, Le Nouvel Ardmore, Nouvel 18, Sculptura Ardmore, Tomlinson Heights and TwentyOne Anguilla Park.

Moving forward, the luxury market will favour those with deep pockets as it will mean more choices for them as developers scramble to find such niche buyers.

Forging stronger links

By Khalil Adis

Despite previous setbacks, the planned Woodlands-Johor Bahru RTS-MRT link is expected to reignite the local residential market 

Woodland MRT Station. Photo: Courtesy of WIkiCommons Media.

Developers and analysts are optimistic that the proposed Rapid Transit System (RTS)-Mass Rapid Transit (MRT) linking Malaysia’s Johor Bahru (JB) to Woodlands, Singapore will have a positive impact  on property values, enhance liveability around the transport hubs and reduce the notorious congestion along the Woodlands-Johor causeway.

“The opening of any MRT station will have a 5 to 10 percent value increase over the longer term,” said Donald Han, managing director of property firm Chesterton Singapore.

“The lure of being just a doorstep or an MRT station  away from Johor Bahru is also a tremendous plus, without having to negotiate perpetual causeway traffic jams especially on weekends.”

He added that the Woodlands North MRT station will be located next  to a proposed Customs, Immigration and Quarantine (CIQ) complex and is within System (RTS)–Mass Rapid and the Woodlands Regional Centre, adjoining several offices and business parks to Woodlands, Singapore

Plans for a cross-border link have been on the table since the 80s, but have to date fallen to the wayside as a result of several bilateral disagreements.

The project was, however, revived in May 2010 and both Singaporean Prime Minister Lee Hsien Loong and Malaysian Prime Minister Dato’ Sri Mohd Najib Tun Abdul Razak agreed to  jointly develop an RTS  Link.

“I think we will see more Singaporeans and Malaysians who are Singapore Permanent Residents buying second homes in JB city centre to take advantage of the RTS and accessibility to Singapore,” said Han.”The RTS will benefit JB city centre immensely. Singaporeans can now take advantage of ‘lower cost of living’ and to an extent having better lifestyle such as larger apartments with condo facilities at a price of an HDB flat.”

TriTower Residence by MB Buikders Sdn Bhd is the closest located near the RTS Station in Bukit Chagar. Photo: Courtesy of MB Builders Sdn Bhd,

Meanwhile, developers believe the RTS station in Johor Bahru will have a positive impact on the overall development of the Malaysian state.

“The Malaysia government’s decision will likely add value to our development, as it will further improve the commuting convenience for our residents, especially for those lacking their own transport and need to travel between Johor Bahru and Singapore frequently,” said Cindi Sim, Group Managing Director of MB Builders Sdn Bhd.

Under the Urban Redevelopment Authority’s (URA) Master Plan 2013, the Singapore government has put in place a decentralisation strategy to develop the Woodlands Regional Centre into a key business hub.

It will serve as a northern gateway to Iskandar Malaysia over the next decade and a half, with direct links to the Thomson Line and to Iskandar Malaysia.

Woodlands Regional Centre Draft URA Masterplan 2013. Photo: Courtesy of Urban Redevelopment Authority (URA) Singapore.

The Land Transportation Authority (LTA) said the RTS would have co-located CIQ facilities on both sides, allowing commuters to clear immigration at a single location for each way of travel.

Four potential stations have been identified: Tanjung Puteri, JB Sentral 1, JB Sentral 2, and Bukit Chagar as the terminating station.

“Consequently, we expect that the RTS project will increase the capital appreciation and potential rental yield of TriTower Residence,” said Sim, whose firm’s TriTower Residence development is located just next to the planned RTS station in Bukit Chagar. “We expect the properties in Bukit Chagar will increase in value due to the RTS project as well as the new Komtar JBCC shopping centre.”

According to Sim, it would be more valuable to stay near to the transit stations following the rise in petrol prices and the recent toll hikes on both sides of the causeway.

Indeed, Johor Bahru is undergoing major transformations, boosted by MYR1.8 billion (USD549 million)worth of committed funds from Malaysia’s federal government. Ambitious projects in the pipeline include the rehabilitation of Sungei Segget, the revival of the city centre, a new entry gateway near the causeway, and a mixed-use development called Vantage Bay.

Likewise, buyers are anticipating new developments to be launched in the area that will benefit from the reduced travel time created by the RTS.

“The RTS will impact my investment decisions, but only within Johor Bahru or Zone A of Iskandar Malaysia,” said William Liong, a homeowner in Iskandar Malaysia. “Nevertheless, I would still be interested in Zone B, Nusajaya, as this area is not too dependent on the RTS. In Nusajaya, the High Speed Rail project and other catalysts wdriving the demand pattern.

Although the announcement of the RTS in Bukit Chagar has been much anticipated by market observers, officials from Malaysia and Singapore are still awaiting confirmation from either side in order to move on to the next phase of the project and approve the specific train station locations.

Despite the delays, however, they remain optimistic about the overall plan, and believe the crosslink will be mutually beneficial for both Singapore and Malaysia, especially in the manufacturing sector, which normally depends on cheaper workforce from Malaysia.

“Malaysian workers may rent apartments within JB City Centre and commute daily via RTS/MRT to Woodlands,” according to Chesterton Singapore’s Han. “It could be a win-win for both JB and Woodlands each holding their own attractive grounds co- existing in unison.”

This story was first published by Property Report in its January 2015 issue.

SMART expo targets investors from Singapore

Singapore chosen as Asian city to kick off SMART Investment & International Property Expo 2014

The crowd at last year’s SMART expo. Photo: Courtesy of SMART Expo Ltd.

Dubbed recently as the “world’s most expensive city” by the Economist Intelligence Unit’s latest Worldwide Cost of Living survey, Singapore has been aptly chosen as the Asian city to kick off this year’s SMART Investment & International Property Expo 2014 on 29 to 30 March at Marina Bay Sands.

Cost of living and the various property curbs have made it increasingly challenging for investors from Singapore to purchase their next property.

Buoyed by the strength of the Singapore dollar against this backdrop, overseas properties have become popular among Singaporeans and investors based in Singapore.

SMART is Asia’s longest running international property & investment expo and its impeccable timing to hold it in Singapore will certainly interest Singaporeans’ and the region’s growing consumer appetite for purchasing overseas properties.

The expo will be led by international giants of the property industries such as SDB Properties (Malaysian property), Tarian Real Estate (Australian property) and Walton International (North American land investments), the best in luxury overseas properties will also be on display and for the investors picking.

Whether you’re looking to own a beachside villa in Phuket, a condo unit in Tokyo or investment property in London, the exhibition offers a unique showcase of world’s best residential developments.

Some of the highlights of the two-day expo will include key seminar topics from noted speakers in the real estate industry.

Among notable real estate personalities headlining the expo include Song Seng Wun, Executive Director & Regional Economist of CIMB Research Pte Ltd & Benjamin Goh, Vice President of CIMB Securities, Mohamed Ismail Gafoor, CEO of Propnex Realty Pte Ltd and Khalil Adis, Founder of Khalil Adis Consultancy Pte Ltd.

There will also be a panel discussion on “Top 5 Cities to Invest” featuring international experts giving their tips on which regions they would buy property.

The panel will be moderated by property journalist and consultant Khalil Adis.

Khalil Adis will be hosting the expo over the two days, moderating the panel discussion and closing the expo with his talk on Iskandar Malaysia.

“I am thrilled to be part of this year’s SMART Investment & International Property Expo. I look forward to meet the various speakers, moderate the panel discussion and close the expo,” said Adis.

There will also be great onsite deals available for the smart property investor which will include Downtown Melbourne condominiums from US$550,000, luxury apartments in Boracay, Philippines for under US$150,000, award-winning 5-star beach view residences in Bali for under US$800,000 and luxury condominium in Iskandar Malaysia for less than US$200,000.

Khalil Adis will be closing the expo on Sunday at 4pm where consumers can sign up for his investors’ club.

To register your attendance, click here

Tackling the great income divide

More help on the way for the low and middle-income families

Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam delivering Budget 2014 earlier today. Photo: Screen grab from Singapore Budget 2014 live webcast.

Expect no changes to the property cooling measures, more help for the low-to middle-income families and more steps to take care of senior citizens – that is the takeaway from today’s Budget 2014 announcement by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam.

The property curbs, particularly the Total Debt Servicing Ratio (TDSR) introduced in July last year, have worked to reduce sales volumes and transactions.

It takes into account existing loans, making it even more difficult for property investors to obtain housing loans.

As a result, prices of private residential properties fell for the first time since the first quarter 2012.

According to the Urban Redevelopment Authority (URA), the Private Property Index (PPI) decreased by 0.9 percent in the fourth quarter of 2013 to reach 214.3 points.

For the whole of 2013, developers sold 14,948 units, significantly lower than the 22,197 units sold in 2012.

In the HDB market, the Resale Price Index (RPI) fell by 1.5 percent from 204.8 points in the third quarter to 201.7 points in the fourth quarter of 2013.

For the entire 2013, the RPI registered a decline of 0.6 per cent – the first annual decline since 2005.

Meanwhile, zero or low cash-over-valuations are now the norm.

Collectively, the cooling measures seem to have worked effectively to ensure property prices remain affordable for all.

A more polarised society?

Singapore has over the years, become an increasingly polarised society defined by the haves and have-nots.

In early 2000, the government introduced various immigration policies and tax incentives to attract the wealthy to make Singapore their home.

The city is currently home to Jim Rodgers and Eduardo Saverin.

The tiny city-state also has a special zone called Sentosa Cove with the tagline: “The world’s most desirable address”.

Wealthy foreigners applying to buy homes on Sentosa Cove can get fast track approval from the Singapore Land Dealings (Approval) Unit.

According to the Boston Consulting Group, the city-state boasts the highest concentration of high net worth individuals in 2012 at 16 percent.

In less than a decade, the city has become a playground for the rich.

Interestingly, during the same year, Singapore’s income inequality, also defined as the Gini coefficient, was the second highest after Hong Kong among developed economies at 0.478 points.

That, however, had eased in 2013 according to recent government data to 0.463 points.

Budget 2014 – a more caring government?

Singapore’s glitzy city skyline. The city is a playground for the rich. However, it also has the second widest income gap among developed economies after Hong Kong. Photo: Shutter stock.

The measures announced by Mr Tharman earlier today seem to indicate that the government is listening to the growing voices of discontent and is prepared to do more to narrow the income gap.

In fact, it appears more help is on the way to help the less well-off.

One of the measures is a one-off GST Voucher-U-Save Special Payment this year to help low and middle-income families deal with the high cost of living in Singapore.

Those living in smaller HDB flats will also be given a helping hand in the form of housing rebates.

This means the lower income will have more cash in hand to cope with day-to-day living expenses.

Mr Tharman said around 800,000 flat dwellers are expected to benefit from the rebates.

Another reprieve the government has given is the rebates for the Service & Conservancy Charges, ranging from one to three months.

Families living in one- and two-room HDB flats will get the most help with three months worth of rebates for this year.

Meanwhile, three- and four-room households will receive two months of rebates.

There is no way to tell how poor the really poor are in Singapore as there is no clear definition on the official poverty line.

However, a recent BBC report about the poor in Singapore shows just how far some in society have been left behind despite the country’s economic success.

“In this house no one can afford to fall sick at all,” said Nurhaidah Jantan who was quoted in the report.

Mahatma Ghandi once said: “A nation’s greatness is measured by how it treats its weakest members.”

Now, that is something worth pondering on the current state Singapore is in.

This article was first published by PropertyGuru Singapore.

Infographic on Singapore property outlook 2014

Khalil Adis Consultancy Infographics Singapore Property Outlook 2014

Here’s a bite-sized infographic on Singapore’s Property Outlook 2014 from the article I wrote for your easy digest.

Share the infographic so everyone knows the market outlook, prediction and hotspots or read more here > bit.ly/KAC2014

#askKhalil for anything related to the property market

TV interview on Singapore’s Suria TV channel tomorrow

 

Aset on Singapore’s Malay Suria channel will feature an interview with yours truly on 8 January 2014 at 8.30pm.

Tune in to Singapore’s Malay TV Programme Ehwal Semasa on Suria at 8.30pm where I will dispense advice on property buying hot spots and investment tips.

 

Singapore property outlook for 2014

Softer market ahead will make it a challenge for developers, sellers and agents. Genuine buyers will rejoice.

The Singapore property market is heading towards a soft landing

Quick recap of 2013 – private property market

2013 had seen various cooling measures implemented in Singapore’s property market including revised Additional Buyer’s Stamp Duty (ABSD) rate and tighter loan-to-value (LTV) ratio in the private property market.

The new ABSD regime and LTV ratio took effect on 12 January 2013 to curb rising property prices in the LionCity.

The influx of hot money flowing in to the city had resulted in record highs in both the private property (PPI) and HDB resale price index (RPI).

So much so that million dollar HDB flats, had become the ‘new normal’ in the public housing market.

In the private market, foreigners were seen snapping up luxury homes on Sentosa Cove despite the earlier ABSD regulations.

To further stem excessive speculation and prevent a property bubble from forming, the government further tightened the property market.

For instance, Singaporeans buying their second, third and subsequent properties will have to pay a 7 and 10 per cent ABSD respectively.

Meanwhile, PRs buying their first, second, third and subsequent properties will have to pay a 5, 10 and 10 per cent ABSD respectively.

Foreigners saw a 5 per cent increase to 15 per cent across the board for their first, second, third and subsequent properties.

The LTV ratio for individuals who are obtaining a second housing loan was lowered to 50 per cent or 30 per cent if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65.

Meanwhile, for individuals obtaining third or subsequent housing loans, the LTV limits were lowered to 40 per cent or 20 per cent if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65.

For companies, the current LTV limit of 40 per cent has been lowered to 20 per cent.

The minimum cash down payment required for individual borrowers who have one or more outstanding housing loans and are obtaining second or subsequent housing loans was raised from 10 to 25 per cent.

New TDSR framework and incoming supply led to further softening

Tan Sri Azman Yahya, chairman of the board of directors of M+S with Ole Scheeren. DUO was one of the best selling project in the third quarter 2013.

More government land sales (GLS) programmes were also announced in 2013 which can yield up to 28,200 private residential units, including 6,400 executive condominium (EC) units.

This is in itself a cooling measure as more supply coming on stream will lead to a price correction.

Collectively, the new ABSD rates and Total Debt Servicing Ratio (TDSR) implemented in July this year have had a significant impact on the private property market.

The URA Private Property Index (PPI) as of third quarter of 2013 was 216.3 points, a 0.4 per cent increase from the previous quarter,

According to figures from the Urban Redevelopment Authority (URA), prices of private residential properties increased by 0.4 per cent in the third quarter of 2013.

This is lower than the 1.0 per cent increase recorded in the second quarter.

Condominium prices in prime areas continued their downward trend, declining by 0.3 per cent in the third quarter after the 0.2 per cent decrease in the previous quarter.

More significantly, those in the Rest of Central Region (RCR) saw prices decreasing by 0.9 per cent – the first decrease recorded in the region since the first quarter 2012.

The mass market segment, defined as those located in the Outside Central Region (OCR), however, saw prices increasing by 2.2 per cent.

This was expected as they are affordable and driven by genuine home owners.

The increase, however, is still lower than the 3.8 per cent increase in the previous quarter.

In the primary market, buying activity was somewhat subdued as the new TDSR framework caused buyers to exercise financial prudence.

In view of this, developers were forced to price their projects more realistically.

Projects that did well are those located in the RCR such as DUO, Alex Residences and The Creek @ Bukit Timah.

According to CBRE, sales for November registered 1,228 units, bringing the total number of new home sales at 14,678 units for the 11 months of 2013.

The whole year’s new home sales are estimated to be around 15,000 units.

HDB market

In the HDB market, the Monetary Authority of Singapore (MAS) capped the Mortgage Servicing Ratio (MSR) for housing loans granted by banks at 30 per cent of a borrower’s gross monthly income.

For loans granted by HDB, the cap on the MSR was lowered from 40 per cent to 35 per cent.

Additional restrictions were also imposed on PRs as the HDB sought to tighten loopholes that Singaporeans had raised.

For example, PRs who own a HDB flat were disallowed from subletting their whole flat.

In addition, they must sell their flat within six months after purchasing a private residential property in Singapore.

Notable events in the market include the government finally recognising single’s contribution to the economy and their housing woes.

In July 2013, singles were finally allowed to buy flats direct from the HDB, marking a significant shift in the government’s policy.

Previously, singles above 35-years-old, can only buy HDB flats from the resale market which would normally cost higher due to higher resale flats’ valuation and COV.

With this relaxation of rules, singles earning less that $5,000 can now buy Built-to-Order (BTO) flats but only two-room units.

Low-income singles and those who cannot afford resale flats will benefit from the move.

The government had also ramped up supply of around 26,000 new BTO flats on average since 2013.

The HDB Resale Price Index (RPI) fell by 0.9 per cent from 206.6 points in the second quarter to 204.8 points in the third quarter of 2013 – the first decline since the first quarter of 2009.

This, together with other cooling measures, had resulted in the HDB RPI to fall by 0.9 per cent from 206.6 points in the second quarter of 2013 to 204.8 points in the third quarter.

This is quite significant as it is the first time the index had fallen since the first quarter of 2009.

With the softening in the HDB market, resale flats with little or zero cash-over-valuation are now the norm.

Prediction for 2014 – private property market

The private property market will soften further making it a challenging time for developers, agents and sellers.

The market will be primarily driven by genuine home buyers or ultra high net worth investors who are cash rich and do not mind paying for the ABSD.

Most of the buying activity for new launches will be located in the RCR.

Developers are also likely to offer incentives and vouchers to entice buyers in view of the softening market.

Luxury projects will be a tough sell in view of the TDSR framework.

The PPI will likely drop between 5 to 10 per cent as the full impact of the cooling measures and TDSR framework continue to be felt.

In the resale market, buying activity will primarily be driven by condominiums in the suburbs due to their relatively affordable quantum price.

Buyers, now is the time to start your property hunt as it will be your market.

Meanwhile, sellers will have to be more realistic in their asking price.

Low ball offers will be the norm, which will make it challenging for property agents.

The luxury market will see low transactions with those who cannot hold on to their properties likely to sell below valuation.

The HDB market

As the demand for families have been met, the HDB said it will now focus on the needs of other segments of the population

Expect more two-room BTO and studio apartments to be rolled out in 2014 to cater to singles and senior citizens respectively.

According to the HDB, it will increase the number of two-room flats in non-mature estates from 2,600 units in 2013 to 5,000 units.

It will also offer 700 studio apartments to meet the needs of seniors wanting to right-size.

Three-room flats and larger flats will be reduced by 18 per cent from 22,600 units in 2013 to about 18,600 in 2014.

Singles and senior citizens will be spoilt for choice.

A lot more first-timers applicants will be able to ballot for a BTO flat.

In the resale market, low and zero COVs will be the norm.

Hence, it will continue to be a buyers’ market as they will be spoilt for choice from both new and resale flats.

Hot areas like Bishan, Queenstown, Redhill and Tanjong Pagar can still command high COVs but they will likely be not more than S$50,000.

The days of million dollar HDB flats are now over.

Hotspots to buy

Punggol Waterway. Photo: Courtesy of HDB

With the new URA Draft Masterplan, where should you look to buying property?

Punggol is set to be an exciting satellite township blending its natural rustic environment and modern convenience served by malls and LRT stations.

The Waterway Punggol will enhance property values around the area.

This government-led initiative became the first for an Asian country to win the Global Superior Achievement Award from the International Water Association in August 2012.

Already, we are seeing a lot of mass market condominium projects and BTO flats being launched in the area with good take-up rates.

Woodlands is also another hot area to watch out for with the new Woodlands Regional Centre that will unlock property values there.

The decentralised business district is expected to draw small to medium enterprises to relocate there due to the cheaper costs of doing business.

Woodlands is also set be a vibrant township acting as a crossroads between Singapore and Iskandar Malaysia.

Singapore is currently the top investors in this special economic zone.

Already plans are on the way to connect Johor Bahru to Woodlands via the Thomson MRT Line by 2018.

Feasibility studies between both governments have already been completed.

In the west, Jurong Lake District is fast taking shape with a slew of new malls, condominiums and tourism clusters around Jurong East MRT station.

The entire masterplan for Jurong Lake District will be completed by 2018 with a new business district, Jurong Gateway, that will be home to CapitaLand, among others.

Those staying in Tanjong Pagar will see a new waterfront city rise by around 2030 once the Tanjong Pagar container terminal moves to Tuas after 2027.

Expect a vibrant waterfront city with a mix use of retail, residential and commercial components, in line with the URA’s motto of ‘live, work and play’ within the city.

However, price appreciation, if any, will only take place from 2030 onwards.

Investors should take a long-term investment horizon in view of this.

Lee sounds warning on Iskandar Malaysia, but the same occurred in Singapore

CapitaLand’s investment in Puteri Harbour, Ascott Somerset Puteri Harbour which is still under construction. Photo: Khalil Adis.

When the man speaks, the entire nation listens.

Although retired from politics, former Prime Minister Lee Kuan Yew still wields considerable influence and is regarded as one of Asia’s most critical voices, especially when it comes to Malaysia.

Therefore, when Lee Kuan Yew recently spoke about the risks involved when investing in Iskandar Malaysia in his latest book, ‘One Man’s View of the World’ it caught the attention of both Singaporeans as well as across the causeway.

“This is an economic field of co-operation in which, you must remember, we are putting investments on Malaysian soil. And at the stroke of a pen they can take it over,” Lee was reported as saying.

Iskandar Malaysia was first mooted in 2006 by former Malaysian Prime Minister Abdullah Badawi.

It has now succeeded beyond its wildest dreams with record investments now valued at RM116 billion, according to the latest figure by Iskandar Regional Development Authority (IRDA).

First met with sceptisms and tepid response from Singapore, the city-state has over the years warmed up to Iskandar Malaysia owing to the excellent bilateral ties between the Lee Hsien Loong and Najib administrations.

Space constrains in Singapore versus the abundance of land, natural resources and access to cheap labour has made Iskandar Malaysia a sort of hinterland for land scarce Singapore.

The Republic is now the largest investor in the special economic zone led by Temasek Holdings and CapitaLand.

Figures from IRDA cites Singapore investments at RM6.05 billion followed by Spain, Japan, Netherlands and United Arab Emirates at RM4.18 billion, RM3.42 billion, RM2.80 billion and RM1.89 billion respectively.

Singapore cooling measures were implemented overnight

The aim of this article is to lay down the facts and present both sides of the story so that investors can make a more informed decision.

While Lee is right in raising his concerns about Iskandar Malaysia, the same can be said about policy changes in Singapore’s property sector.

In fact, the seventh property cooling measures that was announced on 11 January 2013 had affected investors overnight, leading investors to rush to sign documents to beat the clock.

Some of these measure that took effect on 12 January included new Additional Buyers’ Stamp Duty rates for Singapore citizens, permanent residents and foreigners buying their second properties at 7 per cent, 10 per cent and 15 per cent respectively.

Another one was the minimum cash down payment for individuals applying for a second or subsequent housing loan.

It was raised from 10 per cent to 25 per cent overnight.

The Loan-to-Value (LTV) ratio was also decreased for those with one or more outstanding loan – investors had to come up with 50 per cent cash upfront.

While the state of Johor had announced it was reviewing property tax on foreign owned properties, it will only be announced and implemented towards the end of the year giving investors sufficient time to react.

Singapore’s new hinterland?

With a population of 6.9 million come 2030, enhanced connectivity to Iskandar Malaysia by 2018 and the ability to use your CPF Medisave for medical treatment in Gleneagles Medini Hospital, could Iskandar be the new hinterland?

View of Causeway Bay in Hong Kong. Singapore will have the highest density population per sq metre come 2030, outpacing Hong Kong. Photo: Shutterstock.

With the Singapore Parliament approving the motion recently on the White Paper that projects a population of 6.9 million people by 2030, I was left wondering how Singapore can accommodate such a figure.

Since independence, Singapore has been trying to compete with Hong Kong as a hub for finance and commerce.

Today, the Lion City has succeeded beyond its wildest dreams – it has become a favoured wealth management destination among the wealthy, especially since the UBS banking scandal hit Switzerland in 2008.

The Boston Consulting Group in 2011 puts Singapore as a nation with the highest concentration of millionaires in the world at 17 per cent.

That’s 88,000 millionaire households – or one in six homes.

However, Singapore is also a victim of its success – rapid population growth via immigration and the most unhappy nation according to international pollster Gallup.

Singaporeans shopping in Chinatown. Singaporeans are the most unhappy people according to a poll conducted by Gallup in December 2012. Photo: Khalil Adis.

In addition, unlike Hong Kong which has China as a hinterland, Singapore has none to speak of.

It is only a tiny city-state with Malaysia and Indonesia as its closest neighbours.

Singapore’s current population stands at 5.3 million people.

For 6.9 million people to fit into the island, as the White Paper suggests, this begs the question on how sustainable this figure is.

Immigration policy, its effects and the political implications

Living in shoebox apartments – defined as those under 500 sq ft have
become the norm in Singapore. Photo: Shutterstock.

The effects of the current immigration policy have hit Singaporeans hard with creaking public infrastructure and a city already bursting at its seams.

Talk to any Singaporeans and they will tell you of the frequent train breakdowns, high property prices, wage stagnations and a heartland that suddenly seems so foreign to them.

Our current immediate neighbours include those from China and Myanmar, some of whom are not able to speak English – the lingua franca of the nation since independence.

This has resulted in HDB re-looking into its Ethnic Integration Policy (EIP) to include foreigners who have recently become Permanent Residents or Singapore citizens.

In 2011, the public showed its displeasure with the Lee administration at the ballot box which translated to the lowest vote margin ever for the ruling PAP government during the general election.

It also led to the fall of the Aljunied GRC to the Worker’s Party – the first time ever in Singapore’s history since independence.

Subsequently, the PAP lost two by-elections – Hougang in 2012 and Punggol in 2013.

In January this year, Prime Minister Lee Hsien Loong admitted his government lacked the 20/20 foresight and could have planned better.

“I decided that we should try and make up for lost time because you want the economy to grow. You want Singapore to make progress and you don’t know how long the sun is going to shine. As it turned out, the sun remained shining for longer than we expected. So the population grew faster than we expected, our infrastructure didn’t keep up,” he told Channel News Asia.

Therefore, it came as no surprise that the ‘selling’ of the recent White Paper to the Singapore public was met with much derision and opposition online.

The sentiment is – “If the government cannot get current infrastructure right for a population of 5.3 million people, what more for 6.9 million?”

New Singapore investments pouring into Iskandar Malaysia

Due to its small size and geographical constrains, there is only so much land Singapore can reclaim and height limit that our public housing can take.

With more and more Singapore-based companies now investing in Iskandar Malaysia, the closest Malaysian state, Johor, seems the only logical way to expand without encroaching on its territory.

Singapore companies with presence in Iskandar Malaysia include CapitaLand, Ascott Somerset, UOB, MDIS and Raffles Education.

According to Iskandar Regional Development Authority (IRDA), Singapore investments from 2006 to June 30 2012 is around RM5 billion.

Just last week, Global Capital & Development (GCD), the concession holder of Medini, announced that it has inked an investment deal worth S$1 billion in gross development value with Link (THM) Holdings Pte Ltd, a Singapore property developer to develop the Media Village @ Medini Iskandar.

For the uninitiated, Medini is a special economic zone that will be the hub for Islamic finance and creative industry.

It is also the site where Temasek Holdings and Khazanah Nasional will be jointly developing its iconic wellness centre.

The Link (THM) Holdings Pte Ltd investment will specifically result in 5.9 hectares of land to be turned into a development of mixed properties, expected to be completed in three phases, over a period of five years.

On offering will be more than 2,000 SOHO units (Small Office Home Office) and business suites of 1.2 million square feet of net saleable area.

Meanwhile, the commercial properties consisting of mainly food and beverage outlets will take up 1.1 million square feet of net lettable area.

The Media Village @ Medini Iskandar will also support the creative industries catalysed by the adjacent Pinewood Iskandar Malaysia Studios

Keith Martin, chief executive officer of GCD said the Link’s development of Media Village @Medini Iskandar will provide a catalyst for further business activity in Medini and complements the upcoming Pinewood Iskandar Malaysia Studios.

Keith Martin, CEO of Global & Capital Development, sees The Link (THM) Holdings Pte Ltd’s development of its Media Village as a boost for Pinewood Iskandar Malaysia Studios. Photo: Courtesy of Global Capital & Development.

“Together with Singapore’s Mediapolis, we see a ‘blended solution’ where the full value chain of media services from script to final production is offered all within an hour’s drive of each other. GCD looks forward to fruition Link (THM)’s plan to create business clusters and to kick-start this new destination for the production for film entertainment in Asia,” said Martin.

A new playground for Singaporeans?

Cost of living in Singapore is a huge concern that has resulted in many to delay marriages that has subsequently led to the country’s low fertility rate.

So much so that the White Paper sees the need to bring in more foreigners to support Singapore’s ageing population and artificially boosts the replacement rate.

In 2010, the Malaysia – Singapore Joint Ministerial Committee (JMC) for Iskandar Malaysia announced the Rapid Transit System (RTS) connection that will connect from the Tuas West extension and back to Woodlands North MRT Interchange.

In May last year, it was announced that Malaysia’s Land Public Transport Commission and Singapore’s Land Transport Authority were awarded the tender for the Malaysia-Singapore RTS Link Joint Engineering study.

I wonder if this is part of the White Paper’s plan to mitigate concerns of space constrains in tiny Singapore.

For the lucky few, I have seen instances of young couples being supported by their parents and parents-in-law to purchase their first homes as both public and private properties have hit their record highs.

Some, however, are not taking their chances and have started looking beyond their motherland for greener pastures abroad, fearing for their children’s future.

Bayou Creek, located in Leisure Farm Resort, offers a slower pace of life and freehold landed properties at a fraction of what you pay for a Good Class Bungalow (GCB) in Singapore. Photo: Courtesy of Mulpha International Berhad.

“Looking at how Singapore is rapidly developing now, I wonder how my children can afford to own their first homes. The salary of a fresh graduate can barely allow you to save for your future, what more your first property?” asked one concerned parent.

In 2010, GCD secured a landmark RM 500 million landmark deal in 2010 with Malaysia’s leading healthcare provider, Pantai Group for the development of the Gleneagles Medini Hospital in the Medini Lifestyle zone.

The hospital, operational in 2015 will benefit Singapore patients who can use their Medisave for healthcare services under the Medisave programme, enabling them to enjoy cost effective treatment in Malaysia.

With the strong Singapore dollar versus the Malaysian ringgit, enhanced connectivity by 2018 and the relatively slower pace of life, the thoughts of retiring in Iskandar Malaysia seem like an attractive proposition for some Singaporeans, if the local authorities get things right.

In the meantime, are you ready to brace an overpopulated Singapore come 2030?