Singapore’s property game changes

KUALA LUMPUR: Malaysian developers that enthusiastically expanded across the Causeway could hit a bump in their plans, following the latest move by Singapore to further cool its property market by making buyers, particularly foreigners, pay more in taxes. Singapore’s government had on Wednesday announced that foreigners buying private homes will have to fork out an additional stamp duty amounting to 10% of the property’s value. Singapore permanent residents meanwhile will be subject to an additional stamp duty of 3% for second and subsequent properties while citizens purchasing their third and subsequent homes will similarly have to pay an extra 3% on the property’s value. Foreign buyers accounted for 19% of all private residential purchases in 2HFY11, up from 7% in 1HFY09. Explaining its rationale, the government said in a press release that demand for private residential properties in Singapore remained firm and prices have continued to rise, albeit more slowly in the last two quarters. It can’t help that the new measures, which came into effect yesterday, raised concerns that property developers will be hit in the immediate term. Malaysian property players that have expanded to Singapore include S P Setia Bhd, Selangor Dredging Bhd, IOI Corp Bhd, YTL Land and Development Bhd and sovereign wealth fund Khazanah Nasional Bhd. “The effect is expected to be most felt by developers with projects in the pipeline as well as those that sell substantially to non-Singaporean customers,” said a local property analyst. Singapore has had one of the most exciting real estate markets in the region as investors from China, Indonesia and Malaysia snapped up private residential properties in the island state. According to Singapore government data, foreign buyers accounted for 19% of all private residential property purchases in 2HFY11, a substantial increase from 7% in 1HFY09. However, S P Setia president and CEO Tan Sri Liew Kee Sin seemed unfazed by the new measures to curb real estate speculation in Singapore. Liew said S P Setia’s Singapore projects are mainly targeted at Singaporeans wanting to upgrade their dwellings. He expects to sell about 70% of the group’s real estate units there to Singaporeans. Additionally, Liew does not expect its non-Singaporean customers to be frightened off by the additional stamp duty charges. “The remaining 30% would be foreigners who want to buy anyway, regardless of the stamp duty and additional 10% charge,” a confident Liew said after announcing the group’s latest financial results. Liew also pointed out that S P Setia’s maiden project in Melbourne had seen fast take up from Malaysians despite the strong Australian dollar against the ringgit. S P Setia made its maiden foray to Singapore in April after acquiring a freehold development along Woodsville Close for redevelopment. It plans to redevelop the 0.68-acre land into a multi-storey residential apartment building with an estimated gross development value (GDV) of S$130 million (RM316.3 million). The project is expected to be launched in the coming months. Just last week, S P Setia announced that its subsidiary had won a tender for a 4.62-acre parcel at Singapore’s Chestnut Avenue for S$180 million. The eco-themed development comprises residential apartments with an estimated GDV of S$465 million. The project is scheduled for launched in 4Q12. Selangor Dredging Bhd (SDB), another Malaysian property developer with ongoing projects in the island republic, believes that Singapore remains a viable investment destination despite the new measures. SDB communications and corporate affairs manager Yeoh Guan Jin said although the impact of the new measures will likely be felt quickly, the market will adapt to the new regime. “Speculation will likely be curbed for now. But in the longer term, demand for property will return to normal. We are confident that the market will ride this out. A more stable and less speculative property sector would be a positive development,” Yeoh told The Edge Financial Daily in an email response. Yeoh added that SDB has no plans of delaying the launch of its fifth Singapore project in Pasir Panjang, which is currently scheduled for 2H12. In Singapore, SDB has completed and sold out its low-density apartment called Jia on Wilkie Road. The other three projects that are close to selling out are its mixed development Okio Residences, Gilstead Two apartments and 41-units of luxury apartments called Hijauan on Cavenagh. Among the Malaysian players, IOI Corp and Khazanah (via listed property arm UEM Land) may be more affected as they have a large landbank there with yet-to-be launched projects. The latter recently gained control of two plots of land in the Marina area in exchange for the surrender of the KTM railway land. Analysts say that a positive spin-off effect of Singapore’s move could be a diversion of property investors to Malaysia, particularly Iskandar Malaysia in Johor and even Penang. “The changes in Singapore may affect its attractiveness. It was previously seen as having quite a liberal environment for real estate ownership by foreigners. Foreigners do not like changes that affect their investments. The Malaysian government has been relatively liberal when it comes to property ownership by non-citizens,” said one property analyst. Foreigners in Malaysia are allowed to buy properties priced at above RM500,000 and own landed homes, the analyst pointed out. He also claimed that the Malaysia My Second Home programme was “the cheapest long-term residency programme” in the world. - The Edge

Foreigners and PRs have to pay more stamp duties in Singapore

ON Wednesday, The Singapore government imposed a new 10% stamp duty on foreigners and companies buying private residential property in the city state. The move, its fifth in the past two years, is the first in 15 years targeted at foreign buyers. The stamp duty, effective from Dec 8, is in addition to the existing buyers' stamp duty, which is 1% for the first S$180,000 of the purchase price, 2% for the next S$180,000 and 3% for the rest, The Straits Times reported. Permanent residents who already own a property, and who are buying a second or subsequent property, will now have to pay an extra stamp duty of 3%. Singaporeans who already own two properties and are buying a third or subsequent property will also pay extra stamp duty of 3%. For a S$1 mil property, a foreigner will have to pay an additional buyer's stamp duty of S$100,000 on top of the current S$24,600. The move underscores two important issues. The first, that inspite of the “open and free” market system there, the government is ready to swallow the bitter pill of plying measures that may well add to an already weakening Singapore economy, if those measures were to be the salvation of the country's greater economy in the long-term. The second is its timing. Why, at this juncture when European leaders are meeting this week in an attempt to solve the eurozone crisis? Thus far, foreigners and Permanent Residents, many of whom are Malaysians, have enjoyed a fairly “open and free market” when it comes to property ownership. Until Wednesday, they faced only certain restrictions in buying landed homes. Notwithstanding this open, free and transparent system, Singapore has a two-tiered property market. There is the HDB (or Housing Development Board) and the private residential market. HDB housing makes up the bulk of the market, at about 80%. Private residential market accounts for only 20%. The fact that the government is concerned about prices shooting further in this 20% portion underscores the primacy of the property sector in the country's greater economy. It also underscores its vast exposure in terms of value, that this 20% commands in Singapore's property market. This private residential portion is primarily owned by foreigners where prices are many times that of the HBD portion. In the event the eurozone talks hit a snag due to disagreements among the eurozone members this weekend, and because of Singapore's high foreign exposure, any price fall in that 20% portion will also affect the HBD portion. In any market where there is a large foreign exposure, there will be a greater degree of volatility because foreign buyers will be the first to leave that market. They will not be staying around to weather the storm. It is the PR holders and citizens who will be staying put. Foreign buyers accounted for 19% of all private residential property purchases in the second half of this year, up from 7% in the first half of 2009. These figures exclude purchases by PRs, The Straits Times reported. Sales of new private homes hit a record 16,292 last year. This year looks to be another banner year with 13,688 units sold in the first 10 months, Straits Times reported. That imposition of the stamp duty is sending a message to investors and speculators that the government is seriously concerned about the formation of any bubbles in that 20% private residential portion. Let us return to Malaysia. For years, property consultants and developers have been trying hard to sell high-end properties, both landed and high-rise to foreigners. They are at a loss why despite comparatively low prices in Malaysia, our properties have not enjoyed the same attention as those in Singapore, Hong Kong, China, Vietnam and other southeast Asian countries. The fact is, low prices alone will not attract foreign buyers. While property ownership seems easy enough foreigners can buy residentials exceeding RM500,000 there are many other factors that play an important role. Notwithstanding all these, do we want a large foreign exposure? There are mixed views about this among property consultants, developers and government. It is a fact that the Malaysian property sector will not have the global intricacies tied up with being an international financial hub, so we need not be too worried about that. But we do need to mull over our own property sector as a result of Singapore's move and consider how we can fine-tune our property sector less the threat of eurozone woes come knocking on our doors. We do have a lot of high-end properties waiting to be sold and authorities who approve such projects need to consider today's global climate. Assistant news editor Thean Lee Cheng has two questions: Do we want a large foreign exposure? And if not, what are we to do with the thousands of units of high-end housing which are unsold today? - The Star

Singapore move likely to benefit Iskandar

JOHOR BARU: Property developers in Iskandar Malaysia are expected to benefit from the new ruling introduced by Singapore for foreigners buying private properties in the republic. The move was introduced on Wednesday to cool private residential property prices in the island state which are on the uptrend despite a slowing economy. Johor Real Estate and Housing Developers Association branch chairman Simon Heng said foreigners buying properties in Singapore for investment might look elsewhere in the region. “With Iskandar Malaysia progressing well since its inception five years ago, these buyers (foreigners and Singaporeans) are most probably looking at Johor Baru,’’ he told StarBizWeek. Heng said prices of residential properties in Johor were much lower than those in Singapore and Johor’s close proximity with the republic was an added advantage compared with places like Kuala Lumpur and Penang. He said developers with projects in Nusajaya would benefit the most as there were no restrictions on property ownership by foreigners, including Singaporeans. On the other hand, areas outside Nusajaya in Iskandar did not enjoy the privilege and in places where the 30% quota was imposed on developers selling residential properties worth RM500,000 and above, Heng said. Another strong selling point for Nusajaya was its location, not far from the second link crossing, which made it a favourite place for Singaporeans living in Johor Baru but working in the island, he added. UEM Land Holdings Bhd is the master developer of the 9,308ha Nusajaya which is the key driver of Iskandar and one of the five flagship development zones in the country’s first economic region. Nusajaya comprises seven signature developments – Kota Iskandar (Johor State New Administrative Centre), Southern Industrial and Logistics Clusters, Puteri Harbour Waterfront Development, EduCity, Medical City, International Destination Resort and Residential Developments. Other flagship development zones in Iskandar are the Johor Baru City Centre, Eastern Gate Development Zone, Western Gate Development Zone and Kulai-Senai. “Rehda members are hoping that the special treatment accorded to Nusajaya would be extended to other development zones in Iskander as well,’’ he said. Meanwhile, Daiman Development Bhd general manager Siah Chin Leong said it was still too early to see the impact on the Johor Baru property market following the new ruling. He said majority of foreigners buying private residential properties in Singapore were investors and high net income individuals who already owned properties in other major cities in the world. Siah said overseas investors were particularly the affluent Chinese from the mainland, Indonesian Chinese, Indian nationals and, to some extent, Malaysians, were flocking to buy properties in Singapore. Berinda Group sales manager Lim Sung Heng expected that there would be a spill-over effect from the ruling on the Johor Baru property market probably within the next few months. He said the state government and other relevant agencies must make more effort to make Iskander a preferred destination for property buyers not only Singaporeans but also other nationalities. - The Star

A house built on smart ideas

WITH cool breeze blowing into his house which is also basking in ample natural light, retiree Tan Vait Leong does not need to switch on the lights or air conditioner during the day. Even at noon, the 56-year-old’s bungalow at Puncak Bukit Mutiara in Pearl Hill is still cool, thanks to the environmentally-friendly and open concept design of the house. “The planning of the design of the house started five years ago, while construction of the property took three years to complete. “I would draw up the designs and concepts for the house while I was at airports or in planes, as I travelled frequently for work. “I enjoyed the process, as it was also an outlet for me to destress,” said the former vice-president of a multinational company. Having spent a substantial amount of time travelling, the father-of-four said it was only right that he designed his house ala-resort style so he would not “need to go for holidays anymore”. One of the special features of the house is the photovoltaic (PV) solar panel fixed on the roof, which Tan had obtained through the National Suria 1000 programme to generate power from solar energy. With that, his household is automatically enlisted under the newly launched feed-in-tariff (FiT) programme where Tenaga Nasional Bhd will buy back power generated from the PV solar panel. Currently, the PV electricity subsidised about 20% of the household’s total electricity intake while Tan pays about RM700 monthly for his power bill. “With the FiT, I might not have to fork out a single sen for my electricity bill,” he said yesterday. A tour around the handsome house with a built-up area of 8,000sq ft shows there are five spacious rooms, four bathrooms, an infinity pool with a view overlooking the sea which is also connected to the living room and master bedroom, an indoor fish pond, a kitchen, a family room, a study room, a living room, an outdoor deck as well as a cosy playroom for Tan’s 10-year-old twin daughters. Aptly named after Tan’s wife, Foo Sin Gein, 54, he said his home Gein Villa was constructed to blend into existing green environment where the big trees around are spared from the axe. “I don’t spend money on landscaping. The trees shed leaves seasonally but it is part of the feature of the house. I don’t understand the reasons behind cutting down trees if people want to build houses on the hillside. “Well there are occasions where our ‘special guests’ — monkeys, squirrels and bats will pay a visit but we don’t harm them as they are not aggressive, just playful,” he said. There are no excessive furniture in the house, with only the walnut and cherry flooring along with salvaged chengal wood which Tan used to lay the staircase and kitchen tabletop. “I also use the hollow bricks that were left over from the construction as display shelves,” he said. “We water the plants with water from the fish pond, and we keep plants at the pool and the filter tub to absorb the nitrate.” - The Star

RM7mil drainage system to reduce floods caused by siltation in Batu Ferringhi

A DRAINAGE system costing RM7mil will be constructed in Batu Ferringhi by the Penang Drainage and Irrigation Department (DID). State Local Government and Traffic Management Committee chairman Chow Kon Yeow said the project was expected to solve the flood woes plaguing residents there as the sand buildup at the river mouths was preventing the water from flowing out to sea. “Therefore, each time a heavy rainfall occurs, the overflowing water from the streams will flood to the nearby villages.” He was speaking to reporters after attending a press conference at a hotel yesterday to announce the ‘Penang Beach Make-Over01’ programme to be held at the Batu Ferringhi beach this Saturday. The beach cleanup, which will start from 8am, is aimed at restoring Batu Ferringhi’s status as one of the country’s premier tourist destinations. It is also aimed at instilling awareness among the people to take care of beach cleanliness. Some 500 people from the various non- governmental organisations (NGOs) and government agencies are expected to take part in the programme which will cover the estimated 2km beach stretch. Go green: Chow (third from right) planting one of the trees with MPPP president Patahiyah Ismail (third from left) and other councillors at the intersection of Jalan Sungai Pinang and Jalan Jelutong The event is jointly organised by the state government, Penang Municipal Council (MPPP) and Malaysian Association of Hotels (Penang) with support from the area’s Village Security and Development Committees. Chow said that the programme would be the first of many beach make-over programmes as the state government and the local council were determined to turn Batu Ferringhi into one of the top tourist destinations in the region. He later attended a tree planting session at the intersection of Jalan Sungai Pinang and Jalan Jelutong. The session was held to replace the four trees that were allegedly cut down by certain individuals who were involved in the placement of an illegal billboard at the area. Council Public Health Standing Committee alternate chairman Ong Ah Teong, who was present, said the trees were probably cut down as they were blocking the billboard which had since been taken down. - The Star

减少房屋计划遭搁置 发展商抵押金或调高

吉隆坡8日讯）房屋及地方政府部长拿督斯里曹智雄在国会上议院表示，必须在房屋发展商法令修正案（控制与准证）里增添一项条文，规定发展商需要支付建筑计划成本的3%作为抵押金，以减少遭搁置的房屋计划。 需支付3%建筑成本 曹智雄指出，此新修正案是为了确保发展商是在有信心和拥有足够的资金下，才购地发展。 “如果发展商在计划上遇到什么困难，此抵押金就可以即时地把问题解决了。” “虽然这抵押金的数额看起来相当高，但是如果发展商是以有诚意和认真的态度来进行开发土地计划的话，那这修正案将不会是个阻碍。” 曹智雄是于周四在国会上议院回答巫统上议员拿督费达勿斯的问题时，如是指出。 目前20万抵押金偏低 曹智雄指出，以现在的市场来说，付20万令吉的抵押金已是偏低，而基于许多发展商不符合资格发展，以致加剧房屋计划搁置的问题。 他说，该部会配合此新修正案，研究发展商是有意或无意地搁置房屋计划。 “透过这项新修正法案，房屋部希望能有效解决和减少房屋计划遭搁置的案例，与此同时，也可以维护购屋者的权益。” 对于费达勿斯质问政府是否打算建立一个特定的价格管制方法，以确保房屋的所有权与合理的价格，曹智雄回应说，基于我国是个经济自由的国家，所以目前政府没有这个打算，这也是取决于市场的需求。- 光华

槟政府再出招 峇都丁宜海滩将大整顿

（槟城8日讯）继10月新关仔角大型海滩清洁运动后，槟州政府再出招整顿峇都丁宜海滩，誓要还原其“美貌”！ 槟州政府将于周六上午8时至上午11时联合槟岛市政局、酒店业者、各政府单位、非政府组织、丹绒武雅区州议员服务中心、丹绒武雅文秀组屋乡委会、峇都丁宜双溪尔马斯乡委会、厂商及理科大学展开“槟城沙滩大改造01”运动，并成功号召逾380人参与逾2公里海滩清洁运动！ 槟州行政议员曹观友表示，过去峇都丁宜海滩问题多多，严重影响槟州旅游业。他说，尽管有关当局采取各项必要措施重振该区旅游业，惟依然徒劳无功，最终导致州政府被逼禁止所有海滩活动，这才让大家醒过来。 他指出，有关当局后来也采取业者互相监督方式、实施扣分制度等一系列措施，才逐渐改善问题。他认为，欲改造海滩，首先必须从思想开始改造。他也强调，槟州政府不仅满足于现状，况且在获得业者配合下，未来将陆续展开更多改造行动，包括整顿该区的夜市，鉴定海水污染程度等。 无论如何，他周四召开“槟城沙滩大改造01”运动记者会时呼吁，水利灌溉局极力争取700万令吉拨款，以改善该区的排污系统，避免海水继续受到污染。 此外，针对记者询问非政府组织投诉槟岛市政局官员在古迹区施工过程破坏古迹看法时，他表示，世遗机构身为古迹领导机构，应更主动提升各政府单位对古迹的敏感度，而非等候其他单位来咨询。 出席者有槟岛市政局主席芭堤雅、槟岛市政局旅游、休闲及国际事务部主任莫哈末阿克峇等。- 光华

14日再开汇报会 选更达标海底隧道公司

（槟城8日讯）拟议中槟威海底隧道计划“大肥肉”出现争夺战，然在近半百个有意竞标公司中，其中一半被发现不合格，已遭淘汰出局。 在槟州政府于上个月29日就海底隧道计划举行的“投标资格预审”（pre-qualification）汇报会中，高达48家海内外工程公司出席汇报会，足见海底隧道这块大肥肉的诱惑力之大，然而回到现实中，却有一半公司不符合州政府所拟定的资格条件，如缴足资本，公司背景等，以致未战先败。 槟州公共工程、基本设施及交通委员会主席林峰成行政议员即向本报记者透露，共有48家海内外工程公司出席上个月29日州政府举行的投标资格预审汇报会，在投票预审程序中，将进行首回合筛选，不合资格公司将被淘汰。 林峰成：半数不合条件 他说，有关预审取得承包公司的热烈参与，然其中有一半公司不合条件，关键原因包括有关公司缺乏此方面即打造隧道或公路经验，再来是有关公司所承接的工程规模有限，并非庞大工程项目。 与此同时，林峰成透露，在汇报会后，州政府继续接获来自“错过”出席汇报会的本地及国际工程公司有意参与投标计划，向州政府作出查询要求，由于有关计划将以公开招标方式进行，州政府决定于本月14日，早上10时在光大4楼，再办另一场汇报会，以便让更多有潜能公司参与在聆听汇报后及进行首回合筛选下，同样加入竞标行列。 林峰成说，也有一些工程公司告知没有阅读到有关汇报会的广告，有鉴于此，州政府决定在5家报馆同步刊登广告。 然而他表示，有关截止日期将保持不变，即必须明年1月14日提交“征求献议书”（RPF）文件。 据本报记者也发现，州政府除了在主流各语文报章刊登进行海底隧道及大道工程的投标资格预审广告，同样也在网络媒体如当今大马刊登广告。 曾家麟：影响巨轮进港　局限槟海运业未来发展 在槟州政府如火如荼启动“两岸三通隧道”计划之际，计划也招来反对声浪，其中马来西亚物流师协会即与槟州港口有限公司同声反对该计划。 物流师协会即指计划不只波及未来槟州海运业发展，更将殃及槟州经济发展命脉，更甚的是影响外来直接投资。 马来西亚物流师协会总会会长曾家麟硕士即向本报记者表示，目前世界最大艘货轮的标准集装箱吨量单位为1万8千TEU，而2万TEU集装箱单位的的货轮也在开发研究中，以目前发展趋势，货轮的体积及运载量只会越来越大，没有人可以保证未来集装箱单位将是多少。 他表示，槟州港口在10年前的集装箱货轮只有500至600TEU，如今的集装箱单位却高达1千至2千，最高可达3千，目前的海床深约10点5公尺至11公尺。同样的道理，集装箱单位将会越来越大。 隧道变得不实际 曾家麟认为，将海底隧道计划放在槟威码头北岸将会造成货轮进港受影响，所以真要打造海底隧道，又能兼顾海运业，那么隧道应改建在码头南部。然而问题却是南部已同时有槟城大桥及施工中的第二大桥，使到隧道变得不实际，这也意味槟州无须建造海底隧道。 他认为，海运业直接涉及世界经济贸易，一旦海运业受波及，将影响槟州的国际贸易，将带来连锁性影响，也会造成外来直接投资(FDI)受影响。- 光华

Singapore property shares plunge on cooling move

Singapore will impose an additional 10 per cent stamp duty on foreign buyers of its real estate. — Reuters pic SINGAPORE, Dec 8 — Shares of Singapore property developers fell sharply today after the government announced new measures to cool the city-state’s housing market. CapitaLand Ltd shares fell as much as 6.5 per cent to S$2.44 (RM5.93) while smaller rival City Developments Ltd fell 7.6 per cent to S$9.26 and Wing Tai Holdings was down 6.5 per cent at S$1.00. Shares of Ho Bee Investment Ltd, which develops high-end condominiums in Singapore, tumbled by as much as 12.1 per cent to S$1.09. Singapore said yesterday foreigners who buy private homes will have to pay an additional stamp duty equal to 10 per cent of the property value. Analysts said they expect developers with greater exposure to high-end luxury apartments to face more pressure because as foreign buyers make up a large chunk of their sales. “We believe each of the key residential demand drivers, foreign buying, job creation and credit availability, will likely see signs of softness,” Goldman Sachs said in a report. It added that this could lead to a 15 per cent decline in home prices over the next 18 months with the prime segment facing more immediate pressure as foreign buyers pull back. — Reuters

New measures to cool Singapore housing mart

SINGAPORE: Singapore yesterday announced new measures to cool the city-state’s housing market, saying foreigners who buy private homes will have to pay an additional stamp duty equal to 10 per cent of the property value. Permanent residents who already own a Singapore home will pay an additional stamp duty of three per cent when they buy a second and subsequent properties, while citizens who purchase a third and subsequent homes will pay three per cent. Reuters