BUYING A HDB SHOPHOUSE WITH RESIDENTIAL QUARTERS TO STAY IN?

With so many new regulations coming up in short spans of time, many people are confused.

You would normally associate HDB with residential flats. However HDB also has shophouse units which are considered commercial properties. These commercial properties are normally located with town councils or town centres near hawker centres.

Some Of These HDB Shophouses Contains Residential Quarters.

Due to these residential quarters within the HDB shophouses, this has caused a lot of confusion as to where they are considered HDB flats or partial HDB flats (apportioned by the size of the unit).

What if you already own a private property, can you buy a HDB shophouse commercial unit that also happens to have a residential dwelling?

Apparent if we go by the HDB rules that applies on HDB flats, then you cannot buy a HDB shophouse if you already own a Private property.

Say for example the HDB shophouse is 1600 sq feet made up of 2 floors.
— 800 Sq feet on 1st floor and
— 800 sq feet of residential unit on the second floor.

If you have NO outstanding housing loan, then the bank will consider to lend you 80% of the valuation for the property. However, if you have any existing home loan, some banks are considering: -

— Lending you 80% on the commercial portion of the HDB shophouse of 800 sq feet
— Lending you 60% on the residential portion of the HDB shophouse of 800 sq feet

Apparently some Singapore banks are still checking with MAS with regards to the treatment and classification of such property. As these properties typically have quite a number of regulations attached to it’s ownership and business use, they can be risky both for the property buyer as well as the banks who lends money out on these type of properties.

So we decided to check with HDB on how they Classify HDB shophouses

—————————- Original Message —————————-
Subject: ENQUIRY ON PURCHASE OF COMMERCIAL PROPERTIES
From: ”Yit Hah LEE” >xxxxx@hdb.gov.sg>
Date: Fri, October 21, 2011 6:40 pm
To: Property Buyer Mortgage Consultant
————————————————————————–

HOUSING DEVELOPMENT BOARD

Your Ref :
Our Ref :
Date : 21 Oct 2011
TEL : 1800-8663073
FAX : 63972477/8
EMAIL : pldmail@hdb.gov.sg

xxxxxx
(Email: admin@propertybuyer.com.sg)

Dear xxxxx,

ENQUIRY ON PURCHASE OF COMMERCIAL PROPERTIES

We refer to your email of 19 Oct 2011.

2 Please be informed that although some HDB commercial
properties have living quarters attached to them, these properties are
sold or tenanted out as a commercial property under a single title and
deemed as non-residential. The prevailing policy that persons who buy
non-subsidized flats are not allowed to concurrently own an HDB flat and
private property within the minimum occupation period is applicable only
to private residential property.

3 We have also no restriction for foreigner/ Singapore
Permanent Resident to purchase HDB commercial shops (i.e. shop with living
quarters at 2nd storey or shop without living quarters) provided the
individual(s) are above 21 years of age and is not an undischarged
bankrupt

4 You may visit our website at http://www.hdb.gov.sg>
Commercial Tenants & Lessees > Managing your sold premises. There is
more general information on the procedure; policies for Resale/
Transfer of Shop. Alternatively, you can call our toll-free enquiry
hotline at 1800-8663073

Yours faithfully

LEE YIT HAH (Miss)
SENIOR ADMIN EXECUTIVE
for HEAD, TENANCY; LEASE MANAGEMENT UNIT
PROPERTIES; LAND DEPARTMENT

CLARIFICATION FROM HDB REGARDING HDB SHOPHOUSE

We are thankful to Ms. Lee of HDB for her fast response to clarify the issue of HDB shophouses.

Even though this property is treated as Commercial, many of these properties have maybe between 40 plus years to 70 plus years of remaining leases as most HDB shophouses were older designs built in the 1970s onwards.

Will There Be Racial Quota?

We can’t help but wonder what would be the racial quota of these shophouses on the residential units?
How many people can stay in it?

Banks are generally only lending to HDB shophouses with a minimum of 60 years of remaining lease. The maximum tenor of the loan is capped by (Remaining lease – 30 years). This is not a rule set in concrete or by regulation, but a rule that banks normally apply.

Property Buyer’s Advice

If for any reason HDB shophouses come in at the cheaper range of the price range, this can best be explained by the possible ambiguity of investing in such category of properties. Investors fear uncertainty and generally apply a discount to uncertainty. Banks similarly may impose either a longer processing time or some conditions on lending on such property, or stay away completely.

The value of this investment will very much depend on the Singapore regulatory environment governing this type of housing as well as credit availability or restrictions at the point of sale. Else this asset will be purely a yield play without too much excitement on capital gains.

As trading volume is rather thin, you could very easily pick a gem as well as a lemon.

Queen Astrid Park houses

Queen Astrid Park is located at the District 10 of Holland, Bukit Timah, Singapore. It is a landed housing estate with close access to the Queen Astrid Park, Klongtan Ping Restaurant, NTUC Fairprice, and School of Chemical and Life Sciences. Transportation access is the Bus Stop located at the Tan Boon Chong. If you want to use the MRT Stations, you may use the Holland Village MRT Station, Buona Vista MRT Station, and the Farrer Road MRT Station. Queen Astrid Park is near to Tanjong Pagar United Fc, Balestier Khalsa Fc, and Gombak United Fc football stadiums. The place is also near to the Padang Cricket Ground and the Kallang Cricket Stadiums.

invest in sentosa cove property in Singapore - Ocean Drive

We drove along the place to see our friend who happens to live there. And we sort of wandered off a little. And took this nice Ocean Drive video. The drive was really scenic. It's comparable to driving along a nice coastline in Australia or elsewhere, but of course the drive was relatively short and you cannot drive fast.

On both sides of Ocean Drive in Sentosa cove, are dotted with landed terraces as well as bungalows. And they are all very unique in shapes and design. Rich people want to be special, and they want to extend their personality towards there houses too.

It's really a sight. We want to work hard now after the inspiring drive.

Feel free to contact a Singapore mortgage consultant to get a home loan for your sentosa cove dream home.

Invest in Sentosa Cove - Oceanfront pool area

The pool area of Oceanfront looks and feel so good. The place is so breezy, so beautiful. You don't feel like you are in Singapore at all. Time seems to slow down, people seemed happy, the life seems beautiful. How can a place feel so different between mainland Singapore and Sentosa cove?

On both sides of the condominium, you see the sea and is surrounded by it. Sometimes you feel so small, and are awed by the natural setting.

Prices start from 3 million onwards. So if you want to finance your sentosa property, feel free to get in touch with us Property Buyer Mortgage consultants.

Invest in sentosa Cove - luxury finishing - Oceanfront condo

High quality finishing - Oceanfront Condo - Sentosa cove

Have you ever wondered how the rich lived? What kind of basin they use? Well, the super rich have very exquisite tastes and enjoyed the finer things in life.

invest in Singapore property - Seascape showroom

By Property Buyer Mortgage Consultants




Exquisite is the word. Heaven on earth. Beautiful... These are expressions reserved for Seascape Condominium. Don't take our word for it, contact your property agent to take a look.

We can help you to do your home loan calculation prior to your purchase, so that you don't get too excited and over-commit your finances.

If you want us to introduce you to a trust worthy property agent, feel free to get in touch with us via SMS 9782 8606. We will put you in touch.

Sentosa cove - Seascape Condominium

by Property Buyer Mortgage Consultants



What is it like to live in Seascape Condominium. All I can say is, it is very exclusive, very snob, very beautiful. Previously when people have arrived, they want to stay in District 9, 10, 11. These days, when people have arrived, they want to stay in Sentosa cove. A lot of Wannabe developments have sprouted up in Singapore's district 9, 10 and 11. And there are also many so called Sea view condominiums in East coast.

They are not the same. You can see the sea, but you cannot touch it. When you take the lift downstairs and walk out of your condominium, you see heavy traffic, you see a mess, disorderly shops and so on. Where is the sea? It's one underpass away to get to the sea at east coast park. And the underpass is 200 to 300 meters away. Once you reach the underpass, it's another 100 to 200 meters to the sea.

How's that for Seaside living? Not a chance!

Seascape is right by the sea. The only thing against it is, there is no beach. For the beach, you have to take a drive to the Siloso beach.

Nonetheless, this is a beautiful place and it's not exorbitant on a per square feet basis. You can get something for around 4 to 5 million singapore dollars.

Not to worry if you do not have $4 to $5 million, as long as you have20 to 40% of downpayment, we can help you with your sentosa cove home loan financing, alternatively you can sms us at +65-9782-8606 for a chat on financing options for your investment in Sentosa Cove properties.

As we are NOT property agents, if you want to view any properties, we can introduce you to property agents who can take care of your needs, just let us know at +65-9782-8606.

Invest in Sentosa Cove - The OceanFront Condo

Invest in Sentosa Cove property - The Oceanfront condo



Live it up at the Oceanfront condominium, the sun, the sea, the yachting lifestyle, the cocktails and the beach parties.

Analysis of reducing HDB lease to 66 years?

We are not amused with the suggestion to reduce HDB lease. From what we gathered, increasing land price is a government policy set in stone.

Singapore has already embarked on Land productivity measures since 2007. (see links below)

(Source: http://www.scribd.com/doc/33276827/Economic-Strategies-Sub-Committee-Maximizing-Land-Value and http://www.asiaone.com/Business/News/My+Money/Story/A1Story20100222-200190.html)

Land productivity is a measure of how best to use land. And the best way to determine how to use a land is of course by who can afford to pay the most for it. Whoever pays the most is naturally assumed to have higher land productivity since they can afford the higher rates, hence they must be making a decent returns from running their business.

For example, a coffee shop at a neighbourhood coffee shop that sells you a 70 cents coffee. They may be low productivity. So if the government release another plot of land and a coffee shop chain bids a very high price for the land and wins the bid, then how will they improve productivity? (Low cost, increase coffee making speed, sell more coffee for same price or sell coffee for more price). And we suspect you guessed correctly, Singapore's government policy will lead to increased cost of living.

In order for land productivity to materialize, Singapore government must constrict land supply only until the best possible price. The Singapore government should produce less supply than there is demand, so that HDB prices and hence land prices can go up.

When land prices go up, then more revenues can be obtained, either via HDB or through various land holding/owning authorities. This is good for the country's coffers.

An average Singaporean has a huge housing loan interest burden and generally pays it off over 30 years.

HDB studio retirement flats with 30 years lease

In the past, the HDB has tried to create a sub-class of HDB flats (Still effective as at today) which are only 30 years lease. HDB tries to create a precedent and hopes that people will gradually accept 30 year land lease via the Lease and Buy back Scheme. On the surface, it seems like a great plan for retirees who are short of money, but in reality, due to the CPF used (with accrued interest), most of these retirees who let go of their normal 3-4-5 rooms HDB to go into such “Studio” and 30 years lease HDBs will have most of their money locked up by CPF, part of the money realized will go into an Annuity with CPF Live.

(http://www.hdb.gov.sg/fi10/fi10325p.nsf/w/MaxFinancesOverviewLeaseBuyback?OpenDocument)

People are buying in flats that are very costly on a Per sq feet per year basis.

For example a 99 years flat with 1200 sq feet cost $450,000. That works out to a $375 psf per 99 years.

• Or $3.79 per sq feet per year.

• Or $4,545 per 1200 sq feet per year.

Say for example, a 30 year flat with 500 sq feet cost $120,000. That works out to: -

• $8 per sq feet per year. (way more expensive than that of a 99 year lease)

In another scenario

In another scenario, the government offers a buy back of 40 years from a 70 years lease at $104,000 (valued 236,000 of 70 years ? 40 years should be 40/70 x 236,000 = $134,857), But the government offered much less, thereby “making” $30,857 from the poor HDB home owner. $30,857 can go a long way towards having a better retirement for these poor folks.

[caption id="attachment_750" align="aligncenter" width="645" caption="HDB lease and buy back scheme"][/caption]

Of course, this offer by HDB is optional. We see this as a very BAD deal and urge home owners to reject it.

Unfortunately, those people who are in those situation may not even have a computer, much less internet access, thereby possibly succumbing to a bad deal as they do not have enough knowledge.


(Source: http://www.hdb.gov.sg/fi10/fi10297p.nsf/ImageView/CORPORATE_PR_05032010_LBS_ANNEXA/$file/Annex+A.pdf)

Private developers buy FreeHold land and sell it as 103 years lease hold land

These buying of FH land and selling it as 103 years lease hold land is allowed under the common law.

These reduces the supply of FH/999 land and makes lease hold land more the norm for eventual gradual acceptance.

SMALLER UNITS BELOW 500 SQ FEET (Mickey mouse units)

With the reserve list bidding deposit dropping from 5% of bid price to 3%, this means that developers will likely bid higher for the land. There is also a cap of $5m on the bid deposit allowing more developers to participate.

(Source: http://www.ura.gov.sg/sales/reservelist/faqrlq11n12.html)

This means that developers wanting to stay in business will have to bid higher prices to win the land bids. As the population has limited income and affordability, in order to make money from their very high land bids, they will have to build houses smaller and sell at a higher per square feet price.

Recent trends indicate that Singapore Government has started land productivity

The land productivity measures by the government points the way towards making land more expensive on a per square feet per year basis. We have seen various measures to vary the land lease, vary the size or impose regulations, all trying to check what sticks.

Implications of Singapore’s land policies

There should be a class of land that the Singapore government provide for ordinary citizens without so much as worrying about land productivity.

Leave the productivity to Commercial properties, industrial properties, spare the hard working and over-taxed citizens. These Singaporeans merely want a roof over their heads and stay alive. Give them a chance.

Imposing Shorter leases on HDBs will only make them more expensive on a per unit basis with Singaporeans having lesser and lesser “equity” (because they own less of a house, instead of a house with 99 years lease, they own one with 66 years lease) while paying higher and higher prices.

Eventually, shortages in supply whether deliberate or via constraints will drive up the prices of HDB with 66 years leases up to the point where people can still afford it, sapping up most of the household portion of disposable income. Eventually 66 years leases will rise to the price point set by previous 99 year HDB leases.

So the key to maintaining reasonable pricing is NOT giving you less of a HDB flat, but by creating a balance supply and demand condition to smooth out the prices.

Based on these reasoning, we totally reject Conrad Rai’s argument of proposing HDBs with shorter leases!

See below for Article by Todayonline.com where the writer proposed a 66 year HDB lease.

Why not 66-year HDB leases?
(source: Todayonline.com
www.todayonline.com/Print/Business/EDC110930-0000244/Why-not-66-year-HDB-leases)

Introducing some flats with shorter lease periods would make them more affordable
04:46 AM Sep 30, 2011
by Conrad Raj
The Ministry of National Development's decision earlier in the year to raise the supply of HDB flats is a step in the right direction.
The move to raise the income ceiling for buyers from S$8,000 to S$10,000 for Build-To-Order flats and from S$10,000 to S$12,000 for executive condominiums is another welcome response from the Government.
The Housing Board is expected to put on offer 25,000 new flats this year and another 25,000 next year to meet pent-up demand for public housing. While the promise of higher supply is said to have slowed down the pace of price rises in the residential property market, prices are still on the high side and public housing needs to be made still more affordable.
At present new flats are sold on a 99-year lease, good for more than three generations. What the Government does after that is anybody's guess, although in the case of HUDC property, the Government has topped up the leases of flats in estates that have gone private for a fee. Perhaps they will do the same with HDB flats.
But do all leases have to be that long? Perhaps the Government should look at providing flats with shorter leases to make them more affordable.
After all in China, leases on residential property are for 70 years.
In Hong Kong, nobody really knows what is going to happen when the Chinese government's commitment to let the former British colony remain autonomous ends. While new leases are normally for 50 years and may be renewed, what the Chinese government will do after 2047 is anybody's guess - yet the buying goes on despite the deadline being just 36 years away.
Although most financial institutions here rarely provide loans on properties with less than 70 years left on their leases, there is nothing in the books to prevent them from giving loans for properties with shorter shelf lives.
In fact according to a financier some financial institutions here do give loans for properties with as short as a 40-year lease.
"We look more at the ability of the borrower to repay the loan rather than the life of the flat," the financier said.
Just look at the resale market where HDB flats are being sold with more than 30 years of their lease gone.
I, in fact, bought a property at Dover Close East with less than 70 years of its lease left, and flats are still being bought and sold in my estate.
In theory if HDB apartments are sold on a 66-year lease basis, one third less than the present 99 years, they should go for a third less.
But of course the HDB might want to recover its building and other costs much faster and so the actual selling price of these flats might be higher, but it should not be very much more.
Whatever the actual cost recovery basis is, shorter leases should provide substantial savings for buyers, especially the younger crowd who have been in the job market for a shorter period and thus probably would have less savings in both their CPF and bank accounts.
This is not to say that all HDB flats should be sold on a shorter lease plan. Perhaps there should be a mix to allow people preferring the longer 99-year lease period a choice.
In any case, why not have leases for just 33 years (or whatever period the HDB is comfortable with) for those who do not want to pass on their property to the next generation, but want a more affordable flat?
After all the current 99-year period just follows convention elsewhere and is not cast in stone.
According to Wikipedia, the 99-year lease was, under historic common law, the longest possible term of a lease of real property.
Although no longer the law in most common law jurisdictions today, 99-year leases continue to be common as a matter of business practice and conventional wisdom.
Mortgage News Daily and other online sources further note that under traditional American common law, the 99-year term was not literal, but merely an arbitrary time span beyond the life expectancy of any possible lessee or lessor.
So, can we look forward to more affordable public housing in the near future?
Conrad Raj is Today's editor-at-large.

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES? Part 5

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part Five

PROPERTY BUYER’s PROPOSAL

We do NOT agree with PM Lee’s statement that people are marrying later and hence allowing a high income ceiling helps them to own a house. Happy pictures or interviews (as shown in Straits Times) showing people being happy for this new policy change may be taken from a skewed sample.

Instead, we strongly recommend that PM Lee looks into why people are marrying later.

Many people we have spoken to mentioned the high cost of living (Not high standard of living) and high cost of HDB flats as major contributing factors for delays in getting married. Not only that, having to wait for 2 to 3 years for an over-priced BTO flat (in their opinion) further adds to hesitation of getting married.

How to Make HDB more affordable?

Rather than raise income ceiling for new HDB flats, the government could instead impose an income eligibility ceiling of say $12,000 (for Singaporeans) and $15,000 (for Foreigners with Singapore PR) on resale HDB.

This would immediate cut off demand from the high income earners from competing in HDB resale flat.

(Currently Resale HDB has no income ceiling - this means that the very high income earners can compete in the HDB resale market, driving up prices of resale HDB)

This would nudge PR into private properties and retain HDB resale flats for Singaporeans.

New HDB flat income ceiling should NOT be raised!!!



Although there is a price differential of 20 to 30% (According to PMO) between Resale and new HDB prices, raising Income ceiling on the new HDB flats will allow new HDB flats to rise in price, rather than for resale prices to come down.



At the same time, HDB must double up it’s speed on building cost effective HDB flats, not BTO and not DBSS. It is the Shortage of Supply that is driving up prices.

Do away with DBSS, as there is too much froth built into the price by these private developers and they will pay too much for government land (in expectation of future profits), involuntarily ending up as "tax collectors" for the Singapore Government. Since they may corner the market forming some form of a cartel, a monopoly or duopoly or tri-poly, they can effectively pass on the higher land cost to the new HDB property buyers.

Do away with BTO as supply is in the catch up phase. Price new HDB flats lower and impose more restrictions if required (to create fairness), to make it more affordable for newly weds.

When the gap of the HDB resale and New HDB prices closes, this will lead to a more orderly market. And we don't mean for HDB new prices to go up to HDB resale level to close the gap. We prefer for resale prices to come down so as to close the price gap between HDB resale and New HDB prices.

Once a balance is reached, HDB should NOT indulge in BOOM and BUST supply cycles of HDB ever again.

Because from 2006 to 2010, the supply has been badly managed. There is absolutely no excuse.

DO AWAY WITH CASH OVER VALUATION

Last but not least, REMOVE the Cash-Over-Valuation system. A Valuation that is not really a valuation makes a mockery of the valuation professionals. If you use the benchmark method, then surely the price increase should be reflected in the price and hence the valuation, and not in the "Cash over Valuation".

We see the Cash Over Valuation as a means to help HDB home owners upgrade to Private properties if they sell their HDB flats (this is a form of social engineering).

We have no objections to helping people upgrade from HDB to a more comfortable Condominium living (now that they can pay the downpayment) , the only question is,

Can their incomes afford it?

If they can, how many years of loan tenor do they need? Have they really checked through in a home loan calculator?

What will happen to these hapless buyers when they lose their jobs in a recession?

Part 4 WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part four

WHAT IS THE IMPLICATION OF HDB CEILING INCREASE

By increasing the income ceiling from $8,000 monthly household income to $10,000, this will mean that more people will be competing to buy New HDB flats when the supply is still fairly constricted.

IMPORTANT NOTE:


At $8,000 income ceiling, the maximum loan quantum is estimated at $890,000. At $10,000 income ceiling, the maximum loan quantum that a Singapore bank will lend is estimated at $1,113,000. Home loan calculators can be found here.


This means that DBSS can price their flats $223,000 more potentially. ($1,113,000 - $890,000) = $223,000. Initially, those developers will make more money. And these developers would bid for land more aggressively, hence bidding up land prices. Expensive land prices end up as a form of “UPFRONT PERSONAL TAX” by the government on the new HDB property buyer.



The government’s stance has been that people are marrying later and hence will likely have more income when they get married. By consequence, increasing the income ceiling from $8000 to $10,000 will allow them to be eligible. This will cause them to compete with existing property buyers to add to the pool of new HDB flat buyers.


To revisit the Centrale 8 (in Tampines) furor, having more people eligible via higher income ceiling will allow DBSS developers to make more profit due to the higher number of demand that will find their pricing “Affordable”. Higher levels of income will allow the developer to price it based on home loan affordability and push it to the limit. (People will pay through their noses for their HDB flats and any changes in home loan interest rates will hurt them really hard)

When DBSS developers feel confident of making more money, then they will bid higher prices for the land, eventually it means that more money flows to either the HDB or through the statutory boards holding the land and eventually as revenues to the government.

NOTE: At the time of publishing, we still have not found out who are the agencies that are responsible for the land sale, is it Singapore land authority (SLA) or is it HDB.

When DBSS price rises, this will create headroom for BTO prices to rise. Eventually, this will mean more expensive HDB flats. This in turn means that there is a minimum price on the land, forming the base support level for all other types of housing further up on the food chain.

The root cause is, a mis-managed supply and demand situation by MND which we strongly belief the government of Singapore had all the data at hand to solve, but did not do a good job.

Eventual victims are: Singaporeans who are newly wedded or singles who just become eligible to buy HDBs.

Continue on Part 5 - Summary and Proposals for Singapore Government

Property Buyer is believed to be Singapore's ONLY mortgage consultant that does Property Research. We avail research to the every day men and women to help you de-myth the Singapore property market and make sense of it.

Continue on Part 5
http://propertybuyer.com.sg/articles/regulation/will-raising-of-hdb-income-ceilings-to-affect-home-prices-part-5/

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WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES? part 3

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part three - 3

HDB MEDIAN RESALE PRICES

HDB New flat prices are not lodged through Caveats. Data is too granular. And our enquiry with HDB ended with directing us to a HDB Annual report, which gives us some rather granular data. These data are too coarse to be used for any meaningful study or property research.

[caption id="attachment_320" align="alignnone" width="610" caption="Hdb flat supply statistics"][/caption]

(HDB Key statistics 2010)

And since we cannot get data on that, we can only infer.

“Before the change, a couple's combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.”

(PMO,
http://www.pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html
)

According to Prime Minister’s office, new HDB BTO flats are typically 20 to 30% cheaper than a resale flat.

And HDB median resale flat prices can be found here
(HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatMedianResalePrices?OpenDocument#Latest)

RESALE FLAT INCOME CEILING

There is no income ceiling for buying a resale flat

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatPublicScheme?OpenDocument) unless you are applying for a housing grant or a HDB loan.

Without an income ceiling in eligibility in buying Resale HDB, together with more demand from an increasing number of Permanent Residents (PR) each year, this causes the first time Singaporean buyers to be priced out of HDBs due to resale prices rise.

Population (Singstat) in '000s.

Year Total Population Singaporeans + PR
2004 ----------- 4,166.7 ----------- 3,413.3
2005 ----------- 4,265.8 ----------- 3,467.8
2006 ----------- 4,401.4 ----------- 3,525.9
2007 ----------- 4,588.6 ----------- 3,583.1
2008 ----------- 4,839.4 ----------- 3,642.7
2009 ----------- 4,987.6 ----------- 3,733.9
2010 ----------- 5,076.7 ----------- 3,771.7
(Census)

However this means that their only recourse is new HDB flats. But New HDB flats have been constricted in supply and HDB prices go crazy.

Singapore citizen grows (native) grow at a rate of 0.8 to 1% a year, excluding new citizens. It is obvious that by lumping Permanent Resident together with Citizen, the "Singapore residents" grows much faster.

Contact Property Buyer Mortgage Consultants for Customized Property Buying Research (fee based) or Contact us for mortgage advice (Free).

Continue on part 4.
http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-4/

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS TO AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.

[caption id="attachment_373" align="alignnone" width="701" caption="HDB Executive Condominium launched - adding to supply"][/caption]






[caption id="attachment_375" align="alignnone" width="548" caption="Singapore HDB confirms sites for EC"][/caption]

http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?




http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatFlatsonOfferEC?OpenDocument

http://www.facebook.com/pages/PropertyBuyercomsg/101354546624904

Continue to Part 3 - Raising of Income Ceiling to affect HDB home prices

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

WILL RAISING OF HDB INCOME CEILINGS AFFECT HOME PRICES?

Part 2
http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/will-raising-of-hdb-income-ceilings-affect-home-prices/

Executive Condominium Supply launched and in the pipeline

Executive Condominium is a class of condominiums that are restricted by HDB’s rules on minimum occupation for 5 years and will only fully become a private estate after 10 years. These condominiums tend to be pricey on a relative scale compared to other condominiums which does not have any restrictions. Most newly wedded couples will most likely not be able to afford these type of housing looking at median incomes.


HDB Executive Condominium launched - adding to supply

Singapore HDB confirms sites for EC



http://propertybuyer.com.sg/articles/hdb-flats-and-loans/will-raising-of-hdb-income-ceilings-affect-home-prices-part-3/

Try out the carefully selected Home loan calculator

With HDB new raised income ceiling affect home prices?

With HDB new raised income ceiling affect home prices?
with permission from www.PropertyBuyer.com.sg

Part – One A

“The ceiling will go up from the current $8,000 to $10,000 for HDB’s build-to-order (BTO) flats, and from $10,000 to $12,000 for executive condominiums, Prime Minister Lee Hsien Loong announced in his National Day Rally speech last night.”

“Before the change, a couple’s combined income had to be below $8,000 a month for them to qualify to buy a BTO flat from the HDB, which is typically 20 to 30 per cent cheaper than a resale flat.” (PMO)

(PMO, pmo.gov.sg/content/pmosite/mediacentre/inthenews/primeminister/2011/August/HDB_raises_income_ceiling_to_10000.html)

The income ceiling for New HDB flats will be raised to: -
Income Ceiling Type of Flat

$10,000
Studio Apartment 3-room (mature towns/estates),
3-room (Premium) 4-room or 5-room flat
$5,000
3-room Standard (non-mature towns/estates)
$2,000
2-room
(HDB, http://services2.hdb.gov.sg/webapp/BP13EligCheck/BP13SHome?strSystem=CHECK)

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand, from the between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply.

HDB Property Supply In The PIPELINE

As we discussed in our last article, despite all the HDB launches in 2010 and the “NOISE”, if we look at the statistics these announced supply are hardly enough to meet even Singapore’s local domestic needs, not to mention providing for the massive influx of foreigners and new Permanent Residents (PR). Ministry of National development got their numbers quite wrong. In that, they have under-supplied HDB flats to the tune of even up to 100,000 units (based on our estimates)

The fact that there is not a long queue at BTO registration (As claimed by some minister as indication of people not needing a home) itself does not mean that there is no latent demand as there are between 22,000 to 25,000 marriages each year. (http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/) This probably reflects the various complicated paper work and bureaucratic costs imposed as well as the people not being able to afford the supply of such HDB BTO flats.

Supply From Balance HDB Flats

Supply of HDB flats are from current balanced stocks are also in short supply.

There are not much supply from Balance flats as well. “The flats offered in the Sale of Balance Flats exercise are mostly under construction or near completion. Because of strong interest for such flats, the chances of getting a flat in the Sale of Balance Flats exercise are slim. Property Buyers who are not invited to select a flat can consider applying for a new flat under the BTO system, which is where HDB’s main supply for flats comes from.”

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatSBF?OpenDocument)

There are hardly any supply of balance units, so the only way to go will be to buy from the HDB Build-to-order (BTO) market.

(http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyingNewFlatModeBTO?OpenDocument)

That means that the current shortage of HDB supply will stay at least until some of the proposed Build-to-order flats are completed. And more of such BTO sites will need to be launched, sold and completed. And the time frame for that will be 2 to 4 years considering that it takes on average 2 years to complete a HDB building project.

HDB Property Supply From BTO Launches

Let’s take a look at the supply of HDB flats from Build-to-order to be launched. There are only 5,500 units of HDB flats (Remember, we estimate that there is a demand of 22,000 to 25,000 of housing needs due to household formation, i.e. marriages)

Sentosa Cove - Bungalows

Sentosa Cove has many bungalows. The bungalows are fancy, each with a unique character. The Sentosa home owners are proud home owners. At easily 10,000 to 15,000 feet in land, these bungalows cost easily 20 million singapore dollars at the minimum. Take a look at the surrounding environment of how rich people live.

Sentosa Cove - The OceanFront Condo

Sentosa Cove - The OceanFront Condo



Investing in Singapore takes many forms. If you want to invest in a Singapore property, there are many to choose from. Make sure you choose the right ones. Are you looking for luxury or style or simply a place to stay while you conduct your daily business?

Contact a Mortgage Broker before you start your search or

SMS: 9782 8606 for your mortgage needs to find out how to finance a property first.

Check before you Invest in Sentosa Cove Properties in Singapore?

By www.PropertyListings.asia

Sentosa Cove in Singapore was mooted as an idea and developed on an island resort and tourist destination in Singapore. Somewhere around 2003 to 2004, there was a realization in Singapore that we need to keep pace with the world's premium properties by offering super high net worth the luxury lifestyle that they have become so used to, such as in Monaco, Dubai and elsewhere. Many rich people from the western hemisphere prefer Sun and sea and a yachting lifestyle. So in 2004 onwards, the Singapore government re-zoned Sentosa to carve out a piece of land in the Eastern tip of Sentosa Island and created Sentosa Cove.



take a walk here to see luxury properties without setting foot into sentosa, which by the way is quite restricted, you cannot simply just walk in.

Leave us a message if you are keen at: info@propertylistings.asia

or leave the mortgage consultants a message, they can help you sort out the financing of the said properties.

loans@propertybuyer.com.sg

Mortgage Broker

Property Buyer spins off home loan consultancy to www.SingaporeHomeLoan.net

Property Buyer, a Singapore based property portal is soft launching its revamped site with additional search engine application dedicated to finding real estate properties within Singapore. The company also is transferring its home loan functions to its sister website SingaporeHomeLoan dot net while maintaining a mortgage section at http://www.propertyBuyer.com.sg/mortgage for continuity.

The same team of home loan consultants will continue to service loan inquiries from both websites (the change over will be transparent for users) and will continue to be branded, “Property Buyer Mortgage Consultants,” with expertise on property buying loan consulting activities for high net worth individuals as well as the generic property loan refinancing activities.

This split will allow the two websites to be more focused in developing their own growth path while maintaining a symbiotic inter-dependence on each other as people who need home loans may need to look at properties and vice-versa.

Focus Of Singapore Home Loan Website

The new focus of SingaporeHomeLoan dot net (Property Buyer Mortgage Consultants) will be around providing better tools and data around loan comparisons to facilitate buyers to make an informed financing decision.
After the re-organization, the brand “Property Buyer Mortgage Consultants” will be used by http://www.SingaporeHomeLoan.net to ensure continuity. Property Buyer is a research focused mortgage consultant that does research into property economics as well as issues and regulations affecting property prices.

Focus Of Property Buyer Website

Property Buyer website continues to be the flagship website for the company and will continue to have a loans consultancy section within it’s website at Property Buyer Mortgage. The split will enable Property Buyer to break free from having to work around a home loans focus and to concentrate on providing tools, developing products as well as functionality that helps buyers to make the property buying process simpler and less risky. With the re-organization, the website will develop more revenue sources for the website around the property and wealth related segment.

The Managing Director of Property Buyer says, “We are pleased with our increased market presence so far. Currently “Propertybuyer.com.sg has a three-month global Alexa traffic rank of 1,091,767. The site is relatively popular among users in the city of Singapore (where it is ranked #4,876).” (Alexa, 21st July 2011) The split is more psychological in nature, as it frees up creative space to develop tools, products and services that is relevant to each website’s needs. And therefore we can better meet customers and readers expectations. We can develop more business successes only if and when we provide what the market is looking for.”

About Property Buyer

Property Buyer Mortgage Consultants is a research-focused mortgage advisory that helps property buyers look through hundreds of loan packages to find the best package that fits their financial circumstances, not simply some cheap loan packages. Property Buyer (CoreConcept Systems Pte Ltd) is a registered mortgage broker in Singapore. (Business registration 200618162C) with it’s office at No. 8 Liang Seah Street, #02-01 Liang Seah Court, Singapore 189029. Property buyer is also probably the only mortgage consultant in Singapore that produces research, not simply FAQs.

About The Company

All the websites and brands belong to CoreConcept Systems Pte Ltd. The company is focused on using technology to innovate traditional business segments and to use web technologies to bring to market, products and services. The company’s other divisions provides Search Engine Optimization (both English language as well as Chinese languages), Social media marketing and consulting, management consulting as well as professional career coaching and entrepreneurial start-up programs.

PropertyBuyer Mortgage Consultant
Home Loan Calculator
+65-9782-8606

loans@propertybuyer.com.sg

How to choose a Property in Singapore

How to buy a property in singapore

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Invest in Greenleaf estate landed housing in Singapore

Enjoy the quiet drive by to Greenleaf landed housing estate in Singapore. One of Singapore's well hidden luxury estates.

Invest in Singapore properties - Sixth Avenue and Lantana avenue landed property

Found anything you fancy?

Drive by to Holland village

Holland Road Community Club and Swimming pool drive by

Take a drive along Holland Road

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Why use a mortgage broker?

Singapore Property Buyer mortgage and Home loan Broker

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If you are buying a property in Singapore, you need to have a very balanced emotion state. And Property Buyer Advisors can help you to maintain that state and guide you through the buying process. Apart from that, Property Buyer Mortgage Consultants can also do home loans selection either for refinancing or new home loans.

WHAT KIND OF ASSET IS HDB?

WHAT KIND OF ASSET IS HDB?
by Property Buyer

There are many arguments for or against a HDB flat as an asset class. We shall list down the various benefits and shortfalls of HDB as an asset class in this research.

Technically anything that retains a monetary value, either appreciating or diminishing, is called an asset.

Let us first take a look at the charter of HDB so as to understand the characteristic of this asset class.

“Mission
We provide affordable homes of quality and value.
We create vibrant and sustainable towns.
We promote the building of active and cohesive communities.
We inspire and enable all staff to give of their best.”

(HDB, http://www.hdb.gov.sg/fi10/fi10320p.nsf/w/AboutUsVisionMission?OpenDocument)

HDB started off as a government housing program to alleviate severe shortage in housing. Therefore it is more of a social program when it started off. So it should be more concerned about providing shelter.

The HDB flats of yester years are based on the cost of construction maybe with some land cost added into the equation. Therefore these flats cost only several thousands of dollars in the late 1960s (around $5000 to $9000). At that time, factory workers earned around $200 a month (citations required), or $2400 a year. A flat is equal to about 2 times to less than 4 times of a factory worker’s annual salary. Home loan tenors are usually 15 years.

Today, HDB houses 82% (Singstat, http://www.singstat.gov.sg/pubn/papers/people/ssnsep10-pg25-29.pdf) of Singapore’s Citizens plus Permanent residents which numbers 3.11m. Singapore’s Total Citizen + residents stands at 3.77m (as at June 2010).

Singapore’s citizens stand at 3.23m as at 2010. (Singstat, http://www.singstat.gov.sg/stats/keyind.html#keyind)

HDB Subsidy And Regulations

HDB is a public housing program with a social charter. It is to provide affordable housing initially. As Singapore witness rapid progress from a third world country to a 1st world country (economically), HDB has gradually changed it’s stance. Prices of HDB flats soon soared. The prices today is no longer using the Cost plus model, i.e. using the cost as a base adding some margin as selling price. Today’s HDB pricing model is based on the Resale flat prices in the open market less off a market subsidy of typically $30,000 to $40,000 for new HDB flats. The grant is $20,000 for Singapore citizen and PR mixed household (HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatCPFGrantFamily?OpenDocument)

There are many policies and regulations governing HDB housing. This makes it much more cumbersome than any other classes of property asset classes either for selling, for buying as well as for leasing it out. There are also restrictions on minimum use (i.e. Minimum Occupation Period “MOP”) of between 1 to 3 years for resale flats and 5 years for new flats. Therefore, if you are able to bear with HDB rules and still manage to lease it out without breaking any rules, the yield can be higher than private properties. However, these rules changes without notice, and failure to comply can mean that HDB can forfeit your HDB flat.

EVOLUTION OF HDB AWAY FROM ITS SOCIAL CHARTER

HDB has also evolved away from its social charter of providing good quality affordable housing. It’s new pricing formula where a new flat is often pegged to a small discount compared to resale flat prices means that, any shortage in new HDB flat supply will lead to people being forced to buy in the open re-sale market. With more people buying in the resale market, the demand rises. From 2006 to 2010, HDB supply planning has been a massive failure where the Ministry of National Development under-supplies the market to the tune of an estimated >100,000 flats (Property Buyer, http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/)

based on our rough estimate. Naturally this led to a massive price hike of HDB flats. And subsequently new HDB flats also reflect the rises and raised prices.

The move away from a “COST PLUS” model to a market value model is in fact capitalist in nature and there is nothing social about it.

BETTER QUALITY HDB FLATS COST MORE?

As HDB flats began to have more and more frills, HDB adopted a one size fits all approach. Whether you liked it or not, HDB flats comes with valued added features. These features don’t cost very much to build, but they do nevertheless ends up increasing the selling prices quite a bit. In other words, HDB resembles more and more like a private developer. What these does is, it raises the base cost of land and subsequently prices of all HDB flats, regardless of whether you can afford to have those amenities.

Singapore’s median income per household (per month) is $5704 (Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf), while the average income in the 41th to 50th percentile income per household’s working adult is $1,506 (per month).

This means that at current prices in the range of 300,000 onwards, if people were to borrow $240,000 and pay a down payment of $60,000. This would result in a 30 year loan tenor with each monthly installment of $960.82 per month for 30 years. On a new household of 2 person, earning an average income (41st to 50th percentile median), the total household income would be $3,012. As each of them would need to contribute 20% to CPF, their total take home pay would be around $2,400. This $960.82 a month is about 1/3 of all their expenditure although CPF can pay for part of this amount.

What does this mean? It means that even at the 50% percentile point (the cut off point of half the people) many will find it very tough to afford a HDB flat, much less the others who are earning less. And all these frills are good for people who can afford it, but increases the hardship of people who do not need these frills as they still have to grapple with daily cost of living.

DOES UPGRADING INCREASES HDB VALUATION?

HDB flat’s valuation has always been subjected to some debate. All these upgrading projects are not free, home owners of HDB flats have to co-opt to pay for it.

Many older estates which are more than 40 years old such as Tanglin Halt HDB estates have been upgraded. However all these physical upgrades like adding a balcony and an extra room only make these flats more livable. As for the argument that upgrading really increase the value, we believe there will be some net increase in value, but whether there is any value added increase (above and beyond the cost of construction), that we doubt it will be much. The best comparison will only be verified using 2 similar type properties (in the same estate) before Upgrading and after upgrading. Compare the 2 properties again to mark the average selling prices. We believe that the price increase will likely be in-line with construction costs, and not much more. If at all it is much more, it is likely due to the construction time.

Say if it takes 18 months to complete construction, during this time, the base price of all HDB flats in the area also increases, these should be due to overall increase of HDB prices and not due to value added construction. For example, 2 similar properties of similar location, one undergoes upgrading. Before upgrading, both are priced at $300,000. After $50,000 of upgrading, the one after upgrading is priced at $400,000. Does this mean that it has increased much? Let’s see. If the HDB flat without upgrading is priced now at $360,000. What does it say about the upgrading program?

Hence the value added increase (above and beyond mere construction cost) are not necessarily due to upgrading works, but by overall market conditions in the resale market.

What is the purpose of upgrading the building without upgrading the lease?

Let’s call it sprucing up. At the end, it leads to increased consumption, as these increase in values are not realized in most cases.

HDB FLAT IS A HIGHLY REGULATED MARKET

All HDB flats have HDB appointed valuers. These valuers tend to value HDBs in a non-market driven way. In the 1998 and 1999 where there is a financial crisis, HDB prices were trading below valuation.

Illustration: -

A valuation could be $280,000 and the traded price could be $240,000. And these anomalies persists over extended periods of time.

During the HDB price booms in 2007, 2008 and 2010, Cash over valuation have reached levels such as $50,000.

The biggest question we would like to ask is, why are valuers pricing it as such? It could be that they are using a different methodology than the commonly practiced Benchmark method used in valuing private properties.

But persistently the valuations seemed to lag the actual transacted prices again.

So in other words, we can infer that the prices are set by the Singapore government and it is not entirely a free market as we would like to think, otherwise there is no reason that the HDB flats are valued using a different methodology than those of the Private properties.

PRICE INCREASE FOR HDB FLATS IS GOOD?

Price increase for HDB flats if it is in a moderate way and generally keeping pace with inflation and median wages, then it is acceptable.

Based on an average income of $1504 (41st to 50th Percentile) (Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf), a $300,000 HDB flat equals to 16.62 years of annual income.

Compared to previous level in the 1970s of about 2 to 4 times, the home loan affordability has gone down. Even though people can still afford the installment, they are nonetheless enslaving themselves for a typical 30 years tenor home loan.

As HDB flats are mainly to provide affordable housing, any price increase should be carefully calibrated. And as most people who own HDB flats would be assumed to own only 1 property, therefore the HDB flat is their one and only residential dwelling. If HDB flats were to rise in value, the whole asset class would generally rise in tandem apart from some pricing anomalies.

So where will these people stay if they sold their only home?

In fact, higher HDB prices attract higher Property Tax (IRAS, http://www.iras.gov.sg/irasHome/page04.aspx?id=9690)

This is because Inland Revenue Authority of Singapore (IRAS) revises the Annual values for HDB flats. Annual values are the potential rental income if it is rented out. And IRAS charges residential (own stay) 4% of the assessed value.

So Higher HDB prices (if you are not going to sell) ends up costing you more with no extra benefit.

So if there is a risk of HDB affordability, there is likely a risk of default some time down the road, causing a potential loss of asset value.

HDB FLATS ARE LEASE HOLD FOR 99 YEARS


Upgrading or no upgrading, HDB flats are leasehold properties. This means that both the land and the building depreciate in value. The most important component of that value is in fact the number of leases left on the property as well as it’s location. The condition of the property may not account for much of that value (as long as the building is not too run down). But expensive housing leads to higher home loan costs.

Even if HDB does increase in value even if the remaining leases are less, it reflects overall buoyant property market. These increases need to be compared with the increases in values of properties which have more number of years of leases remaining as well as Free Hold properties to get the ratio. If these increases are lesser in ratio or magnitude or both ratio and magnitude compared to 99 years properties with more remaining leases or FH properties, upgrading will mean no benefit at all as any gains to be had are wiped out by a even more expensive property.

SUMMARY: ARE HDB FLATS AN ASSET? WHAT SHOULD YOU INVEST IN SINGAPORE?

HDB Flats are a highly volatile asset class which is highly regulated with pricing mechanism which is not entirely transparent. Though there are some semblances of market forces at play, by and large, the Supply is controlled by HDB land sales and build program. The demand is based on demography of the Nation, therefore this demand is well known and understood by any actuaries. Also any additional demand in the form of New citizens or Permanent residents are known by the Immigrations and Check points authority of Singapore (ICA), therefore demand is also known and controllable. With HDB’s size and reach, it is safe to say that they are likely to have control of pricing of sub-contracting work.

So with Supply, Demand, Costing, Pricing and Regulation under control by the government, you cannot simply apply normal practices of investment into buying HDB flats, this is a highly dangerous asset class in our opinion coming from an investment stand-point.

For those people who are residing in HDB flats as their sole residence, HDB flats and its increased valuations becomes a Tax Liability (Property Tax), therefore in terms of Cash flow, it is purely a liability.

For those people who are residing in a HDB flats as their sole residence, the Upgrading works and its subsequent increase in value poses both a tax liability as well as increased consumption as they need to co-opt payment for these upgrades. (Of course the benefit is an enhanced living condition)

For those people who are Permanent residents or people who have private properties as well as HDB properties, the increase valuations may present golden opportunities to capture capital gains.

For those who bought new HDB flats at an elevated price, this increase in price will cost them huge amounts of interest servicing cost over the next 25 to 30 years. This also means higher stamp duties which goes immediately to IRAS.

For those who bought new HDB flats at cheaper prices or HDB resale flat using a housing grant, they could pay up to 25% of the HDB resale price or 90% of the valuation value (whichever is higher) or up to $50,000 in levy. Therefore any remaining capital gain is likely to be small in view of capital gains levy.

HDB flats are a dangerous and volatile form of asset. Many people may make money only to put in even more money for the next HDB flat or upgrade to a higher consumption bracket. Many people who decide to stay in their flats will only see paper valuation gains, there is absolutely no gains that can be had as it will attract increase property tax.

REFERENCES

Reference 1: -

(HDB, Vision/Mission, http://www.hdb.gov.sg/fi10/fi10320p.nsf/w/AboutUsVisionMission?OpenDocument)

Reference 2: -

(Singstat, http://www.singstat.gov.sg/pubn/papers/people/ssnsep10-pg25-29.pdf

“HDB Flat Dwellers)

An estimated 3.11 million Singapore residents were staying in HDB flats in 2010, accounting for 82 per cent of Singapore residents. In 2010, there were ten planning areas where at least 90 per cent of Singapore residents were staying in HDB flats (Chart 4).”

Reference 3: -

(Singstat, http://www.singstat.gov.sg/stats/keyind.html#keyind)

Reference 4: -

(Property Buyer, http://propertybuyer.com.sg/articles/singapore-property-investor-buyer/why-singapore-property-prices-go-crazy/)

Reference 5: -

(HDB, http://www.hdb.gov.sg/fi10/fi10321p.nsf/w/BuyResaleFlatCPFGrantFamily?OpenDocument)

Reference 6

Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf

Reference 7: -

IRAS, http://www.iras.gov.sg/irasHome/page04.aspx?id=9690

Reference 8: – Not quoted in this research, used only as a reading reference

(The Online Citizen, http://theonlinecitizen.com/2010/10/27453/)

Reference 9

Singstat, http://www.singstat.gov.sg/pubn/papers/people/pp-s17.pdf

HDB home owners - Agents partner with Rogue Lawyers to jack up rates

HDB home owners - Agents partner with Rogue Lawyers to jack up rates

April 2011

Amidst many complaints against property agents, the Singapore government has set up the Council of Estate agencies to regulate the property agency business as well as to issue each property agent with a license number, and measures such as NO dual representation do not go far enough.

If you have discovered that you have paid more than a certain rate for your legal conveyancing, you should raise a suspicion and make a NOTE (though not necessarily a complaint) to Council of Estate Agencies (CEA).

There is also a rule in which agents cannot refer home owners to money lenders. Shouldn’t CEA ban agents from striking deals with bankers and lawyers and pocketing illegal kick backs?

Agents are still happily making referrals to lawyers and banks. This is a serious problem and we should highlight here so that in case you are a victim, you could raise this issue with Council of Estate Agencies.

Agents like to strike deals with lawyers to give them kick back. So where is the extra fees coming from? The lawyer (those bad ones) will go about charging the home buyer more in order to pay out the commission. Not only that, agents also work with companies that have pre-arranged ELEVATED legal fees with some law firms. This extra cost is passed on the home buyer. These illegal companies then pass on this extra commission gained as a result of illegal legal fee kick back to the agents. This is illegal under current law as lawyers cannot give out commission from their law fee.

Property agents also push you towards unattractive home loan rates just so as to benefit from the legal fees kick back.

It is always useful to note down the time, date of communication with the property agent. And try to communicate more with Emails and get them to confirm their facts via email. Do not rely too much on verbal conversation.

Attached here is a property agent complaint form which we downloaded from the CEA website. (Please note, you should always check the CEA website to ensure that the form is up to date, we only provide a convenience and are not liable to any losses whatsoever from using the form)A property agent complaint form is available at property buyer. You can contact them at loans (at) propertybuyer.com.sg

CEA Property Agent Complaint Form is available upon request.

Reasonable conveyancing rates guide

For HDB buyers - Buying a HDB in the resale market
$500 mortgage stamp fee is around $1900 to $2300. In fact, $2300 is already at the higher range, you should already start to open your eyes and raise a complaint or lodge a check with CEA if it is at above $2000.

Conveyancing rates for HDB home loan refinance
The estimated legal fees inclusive of Mortgage stamp fee is from $1900 to $2300.

For Private Property Loan- Buying a New Condo under construction
Total (Inclusive of Mortgage Stamp fee) is $2500 (for near to TOP) to $3500 (for those many years later)

Some law firms claim that it will cost them more resources to keep things on file and track condos which are still under construction. And indeed if the completion is far away, the law firm’s responsibility is dragged out longer. If they did not execute according to the letter of instructions from banks, they may become black listed by the banks and be kicked out of the bank’s panel. The cost is also more.

Legal conveyancing for buying Private residential – completed condominium
Total (Include of mortgage stamp fee) is $2500 to $3210.

The price varies a bit, depending on the law firm and the banks. Some banks are deemed more troublesome at the back end, therefore some law firms charge more. But there is a limit to it, so the above prices can be used as a guide.

Conveyance fees for Private Residential Refinance
The legal conveyance fees (including mortgage stamp fee) ranges from $2500 to $2800.

Why do legal conveyance rates differ?

Basically it is up to the law firms when to charge you higher. Perhaps sometimes, we feel it depends on their mood, other times, it depends on whether they are in cahoots with the Dishonest property agents.

Law firms can charge you extra under these situations: -

Last minute appointments such as 1 day before the exercising of option date, law firms may charge more.
Exercise dates falling into public holidays (maybe)
Faster that the normal legal completion date.
Liaising with CPF on expediting payment.
Multiple parties involved in the property.
Involving bridging loans or construction loan.
In illegal partnership with property agents.
Not corrupt, but legal conveyancing is not their core business and hence they charge a higher price.
Some property, usually those above 3m may face higher legal conveyancing fees, due to more potential complexity. (But not always the case)
Involving probate cases and estate issues.
What can you do if you get charged higher fees than normal?

If you have discovered that you get charged a higher fee than what we have described, it is possible that you have been cheated by the property agents, if you have not been cheated by the agents (in that they did not receive a commission), it is possible that you have over-paid.

Although the law society fee recommendation stipulates a higher fee, the free market has stabilized on the above fees which we have highlighted and hardly anyone uses the recommended fee.

In case you have paid higher than the highest range there, you can take down your property agent's license number and raise a complaint in case the bank and/or the law firm was referred to you by the property agent.

CEA Property Agent Complaint Form

These guideline fees are what we understand to be correct market rates as at April 2011

In case you do not know if you are cheated, you can tell us your story, we will be able to guesstimate whether you have been cheated.


write to loans at propertybuyer.com.sg perhaps we can go through your case to let us know if you have been cheated.

SMS Property Buyer mortgage consultants at: +65 9782 8606

New social Media for Singapore property listings

New social media for Singapore Property listings 

by www.PropertyListings.asia


What is New media? What does it generally include? Is there a business case to learn so many new stuff?

What is defined as new? Generally the internet and social networking sites are considered new forms of communication platform or media.



Brief review of forms of internet media



What are blogs and what are websites?

Blogs are originally sites hosted by others where you can post your own content. Websites are internet media where you own the domain name and you also host the site. Therefore you are not under the mercy of the blog operator's rules.

Image sites

There are many sites that allows you to upload pictures for sharing with friends. These sites such as Flikr, google’s Picasa, photobucket and many others allow you to upload your photos to share with your friends and family. If you are a property agent in Singapore, you could share the pictures of the Singapore property listings you had just taken with your potential customers. Some sites allow you to embed the code into your websites to show the photos. This saves you website space.

Video Sites



Video sites are many. Youtube is the most popular video site, but others are aplenty such as Vimeo, Youku, Tudou and many others. You could embed the video into your websites or you could simply post video footage of the property you are trying to sell.



Social networking media



Social media refers to sites where people congregate, either to do something or to participate in an activity or discussion. There are many forms of social media, facebook is a major one where people participate to play games, to talk to comment on groups and many other things. Facebook has become the biggest social media site worldwide. You can start your own group and invite your friends into your property listings group. All such groups will take time to grow. Alternatively you can market the group or fanpage using advertisements to grow it’s numbers. Do be careful though, places where people congregate, there are social etiquettes to follow. When you are trying to sell something in a social setting, please be tactful and discreet or else your efforts will backfire and your brand may suffer as a result.



Special interest group social sites



Some sites are more focused on music and entertainment such as Myspace. Then the are also others such as matchmake and adult friend finder and many adult social sites. These are probably not appropriate for property listings and will most likely be not effective for your needs. The other sites are Friendsters, Bebo, Orkut, Renren, h15, perfspot, zorpia, netlog, habbo, xiaonei, 5q, yeejee, kai xin wang, 51, Fanfou, Twitter, etc.



Social share and bookmarking sites



As there are too many websites out there. Some sites have spruced up to use people's votes or "choices" or "Likes" to rank websites. These websites are them served to users as the preferred websites. There are many interest groups within these sites. There are many sites that allows people to rank favourite websites and serve it to their users. You need to know that these are also powerful forces to reckon with. These sites are Delicious, Digg, reddit, stumbleupon, Hubpages, squidoo, yahoo buzz, google bookmarks and MSN network.



Therefore, new media is not necessarily a holy grail. But it is definitely a bed of roses with thorns. Once you remove the thorns, you can enjoy the roses.



How to succeed in new media depends on how you are able to get persistent visitor traffic that are not only relevant and cheap to acquire. If you do not have too much worry about acquiring clients, then you can focus more on serving them.



If you want to sell your property, you will need to master these skills in order to market effectively on the internet. Consider talking to the Searh Engine Optimisation and Social media consultants to help you in creating and successful and sustainable business on the new media.

Write to info@propertylistings.asia

Traditional media for Property Listings in Singapore and Asia

Traditional media for Property Listings in Singapore and Asia
By www.PropertyListings.Asia

We’re sure these are questions that you often ask. Listing a property for sale is not difficult. There are many ways to list a property for sale. You can place an advertisement on the traditional media such as newspapers or you can place advertisements on Facebook, spread the news amongst your friends, or post on numerous websites to list your property for sale. Let us first explore the merits and disadvantages of traditional media.

Traditional media for Property Listings
Print media such as newspapers or Free Magazines
Newspaper media can be quite fast and time targeted as you can choose when to advertise. For example, if you you have a property listings advertised on Friday and Saturday, you can expect replies on the same Friday and Saturday and maybe Sunday. But it is not persistent, because property buyers are unlikely to see your advertisements in the next week. So you have only 1 chance to make it work or else you throw away your money.

Flyers
Are flyers effective you may ask?

With flyers, the respondents may take a few days before responding to your advertisements and sometimes even longer. But most people throw away flyers the moment they receive it.

Direct mailing campaigns
There is another method, using direct mailing via Singpost or other private mail operators. If you address the letter or advertisement to the named addressee, you may be guaranteed at least a quick browse through of the advertisement.

However if you need to have a very accurate database. And good database is not cheap to come along. Some mail service provider may be able to provide the name of the addressee for you for a fee. However, you will need to print your own letter or flyer and engage someone to put it into the envelopes. All these are labour intensive and costly.

TV advertising and TV sales network
If you are a property developer, you may even need to do a television advertisement. Despite what the media says, TV is increasingly marginalized as people can watch movies on the computer. Again, TV advertisements do not engage the consumer, they blast everything at the property buyer and then hope that the viewer will quickly pick up the phone or copy the address and go visit them. So how many advertising slots do you want to buy? The same for the more persistent TV advertorials. But TV advertorials get repeated again and again. But these usually require long term contracts. Therefore, unless you have huge amount of funds, these form of property listings is out.

Professional magazines or niche magazines
Another form of traditional media is through the magazines. This form of advertising still works for some highly visible property agencies. The property listings are also more persistent. In such advertisements, most prefer to advertise their company or their brands or themselves. As long as the magazine is relevant to what their readers are reading, there is always a chance that the viewers will call the property agency, property agent or call up regarding the property listings.

Innovative traditional bricks and mortar advertising such as Car park barrier advertisements
You can also put up advertisements at Taxi stands, Taxi boards, MRT stations notice boards and so on. All these will more likely create Impressions than actual action. But as always, innovation doesn’t hurt as long as it does not cost too much. These methods are all very effective in a Saturation marketing campaign.

Master Lynn Yap predictions for Year of rabbit 2011

With permission from Property Buyer mortgage consultants

Feng Shui for property buying in Singapore - Rabbit year 2011

View more presentations from Property Buyer Singapore.

Once again, we at www.PropertyBuyer.com.sg are honoured to receive Master Lynn Yap’s Feng Shui Prediction. In life, there’s economics, there’s finance, there’s statistics and there’s fate.

All these don’t always explain every phenomenon. Therefore Feng Shui (the harmonious way of natural living) plays an important part in helping to make sense of the complex world.

In the year of the Tiger, Master Lynn has given many predictions and most have come true. These included the drop of the US dollar, the rise of the price of gold, numerous calamities as well as political calamities. For those who wanted to check, you can review last year’s prediction.

Here is the prediction for 2011 year of the rabbit for property buyers, investors as well as general public.

PRoperty regulation in Jan 2011

PROPERTY BUYING REGULATION IN JANUARY 2011
By www.propertybuyer.com.sg

As the election is approaching, it is imperative to paper over the failure to keep property prices in check. The Singapore government is again resorting to brute force tactics to artificially cool the property market. The measures are an over-kill and ill conceived when the market is already showing signs of slowing down.

Just weeks ago, we mentioned that Quantitative Easing will likely lead to regulation risk to slow the market and sadly this has come so quickly and without warning.

The New Property Buying Rules Will Come Into Effect On The 14th January 2011.

1) Increasing the holding period for imposition of Seller’s Stamp Duty (SSD) from the current three years to four years;

2) Raising the Seller stamp duty SSD rates to 16 per cent, 12 per cent, 8 per cent and 4 per cent of consideration for residential properties which are bought on or after Friday, and are sold in the first, second, third and fourth year of purchase respectively;

3) Lower the Loan-To-Value (LTV) limit to 50 per cent on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals

4) Lower the LTV limit on housing loans granted by financial institutions regulated by the Monetary Authority of Singapore from 70 per cent to 60 per cent for property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase. The measures will take effect on Friday.

(Source: Straits Times, http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_623779.html)

ANALYSIS AND COMMENTARY ON PROPERTY BUYING REGULATION – SINGAPORE

The intention is to cool down the market and demonstrate to the Singaporean electorate that the government is really trying to do something to cool down the market and to show that regulation is starting to show results. Like we say previously, we hope they don’t over-react, but It seems that our hope is in vain. It could be that Q4, 2010 transacted prices are still moving up too quickly.

(We are still waiting for Q4, 2010 URA private property transacted prices to come out and we will be doing a research on it. We will first disseminate to all our ex-customers 3 to 4 weeks ahead of all others so that they get a head-start in decision making)

Trying to make property prices cheaper for Singaporeans and PRs

The supposed intention of the Singapore government is to try to make property prices not rise as fast. (We shall not go into who created the imbalance in the supply in the first place)

After much hard work digging (seems like median salary is not a favoured form of reporting statistics), we found the median salary statistics. Singapore’s median salary is only $2710 in June 2010.

This means that most Singaporeans will not be able to afford private properties. And since HDB flats is facing a severe supply shortage, the round of cooling is unlikely to have much effect given the extreme shortage of supply of HDBs. The segment of Singapore population most at risk is also the one most exposed to risks from over-priced HDB properties.

‘Boosted by the strong economic recovery, the median monthly income for Singaporeans in full-time employment rose by 4.2 per cent over the year to $2,710 in June. This is higher than the marginal growth of just half a per cent last year. According to the Ministry of manpower (MOM), the median income still rose by 1.8 per cent after factoring in inflation. The median income of part-timers also saw a significant increase of 13 per cent to $700 this year. Overall, the nominal median income for all employed residents rose by 3.3 per cent to $2,500.”

(Source: Reach.gov.sg, http://www.reach.gov.sg/YourSay/DiscussionForum/tabid/101/mode/1/Default.aspx?ssFormAction=[[ssBlogThread_VIEW]]&tid=[[947]])

Housing Benefit To Singapore Expatriates And Would Be Immigrants

The intention is to benefit the local population with some form of supposed lower property prices for HDBs, but instead it may cool the private property market. The new measures effectively will allow Expatriates in Singapore to own properties easily at 70% or 80% of loan to valuation (depending on the full regulatory statement from Ministry of National Development (MND) tomorrow on the 14th January 2011).

As most Singaporeans own their residential homes already, buying a second property will be a 40% downpayment and many cannot afford 40% downpayment. And most singaporeans earn only a median income of $2710, therefore most Singaporeans cannot afford private properties. Therefore, this paves the way for Singapore expats to buy their first property in Singapore without so much competition.

So Singapore expats, if you are looking to buy a property, whether the government intended or unintended to help you, this is the golden opportunity to consider to buy a property in Singapore now instead of renting (However please read Comparisons of buying versus renting property). Before their change the rules again and impose buying restrictions on Foreigners, this may be your last chance for 2011.

We anticipate that the next regulation may involve foreigners buying property in Singapore.

What If Property Buyers Want To Switch Properties Or Upgrade?

Property borrowers who can show evidence of Sale of property will not be subject to the new rules. If the Property buyer wants to buy another property, he must first sell his property, show a signed Sale and Purchase (S&P) agreement proving the sale of this property and then show the IRAS certificate showing that someone has bought his property and paid stamp duty on it.

Where the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80 per cent LTV from financial institutions.

But the timings are extremely tight, 2 weeks for options to be exercised and another 2 weeks stamp duty to be paid. In this time, they must also apply for a home loan and show these to the banks to ensure that the bank can lend at 80%, (not all banks will lend in these cases, please check and confirm via approval in principle with banks at
loans@propertybuyer.com.sg or sms 9782 8606).

NOTE: we cannot be held responsible for the accuracy of this article and buyers please take all necessary precautions such as contacting us to ensure a loan can be obtained. Please read our terms and conditions.

Then they will need to complete the sale in 2 months instead of the usual 3 months in order to have a place to stay. Alternatively, buyers will need to drag out the sales completion date of the property they are selling.

Borrowers Without Any Outstanding Housing Loans Will Have A 80% Loan To Valuation Limit

These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90 per cent.