Tag Archives: Singapore Properties

More properties under the hammer in 2015

Singapore’s auction market saw 60 properties listed in Q4 2015, bringing the total number of new listings to 215 for this year, revealed a DTZ report.

According to the property consultancy, the number of properties put up for auction has steadily increased since the TDSR framework was introduced in 2013. Notably, there were 136 new listings in 2014, up from 82 in 2013.

“Both the number of listings for owner sales and mortgagee sales went up significantly year-on-year,” said DTZ.

Owner-sales listings increased from 74 properties in 2015 to 125 in 2015, while mortgagee-sales listings climbed from 47 listings in 2014 to 78 in 2015. Of the 215 properties listed this year, 138 were non-landed residential apartments, and 48 properties were landed homes.

The listings with the highest opening bids in 2015 were dominated by landed properties, which included the landed residential property at 25 Branksome Road at S$15 million and 35 Binjai Park, a Good Class Bungalow, at S$35 million.

The average gross floor area for landed properties listed in auction increased from 4,077 sq ft in 2014 to 4,297 sq ft in 2015, while that for the residential apartments increased from 1,430 sq ft in 2014 to 1,880 sq ft this year.

Overall, the success rate of selling during or before the auction stood at around 13 percent in 2015, down from 2014’s sale rate of 14 percent. Of those successfully sold, 23 were non-landed homes.

There were also more successful bids for larger non-landed homes in 2015 compared to those in 2014. The average floor area of those successfully auctioned climbed from 1,382 sq ft to 1,624 sq ft, with average prices at around S$1.6 million.

The prices of the successfully auctioned properties were usually sold at a discount from 3.5 percent to six percent, said DTZ. However, the price cuts for attractive properties at choice locations is lower as these properties are rarely available for sale.

“Choice properties, especially those that are rarely available in the market, attract a lot of buyers’ interest due to its scarcity. Additionally, we see more buyers willing to purchase these units of higher quantum despite the Additional Buyers’ Stamp Duties, as they offer great value for money,” said DTZ’s Head of Auction Joy Tan.

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Cooling measures have been effective

The curbs imposed by the government from 2009 to 2013 have not only controlled the property bubble, they were also an important complement to monetary policy, said the Monetary Authority of Singapore (MAS) Managing Director Ravi Menon in media reports.

However, as they were introduced during a “highly unusual situation”, they will not be a permanent feature of policy and will only be implemented from time to time.

The eight rounds of property cooling measures include limiting the maximum loan tenure at 35 years, pegging the total debt servicing ratio (TDSR) at 60 percent, and capping the property-related exposure of banks at 35 percent of their overall lending.

For mortgages with tenures of less than 30 years, the loan-to-value (LTV) ratios were fixed at 80 percent for the first loan, 50 percent for the second and 40 percent for the third. For mortgages payable over 30 years, the LTV ratios were reduced to 60 percent, 30 percent and 20 percent respectively.

Interestingly, Singapore was one of the pioneers of such initiatives, introducing them as early 1996. Asian countries with similar existing measures are China, Korea, Malaysia and Hong Kong.

The city-state also introduced fiscal measures, such as buyer stamp duties of three to 18 percent and seller stamp duties of four to 16 percent, because the aforementioned macroprudential measures may not be enough to control loan growth and asset price increases.

“These are essentially transaction taxes that aim to curb the speculative flipping of properties,” added Menon.

Source : PropertyGuru