Most residential property owners to face higher taxes next year, 72% of Tenet EC sold at first day of launch and Reserve Residences
29th November to 5th December 2022
Most owners of Housing and Development Board (HDB) flats and private residential properties will face higher property taxes from 1 January next year following a yearly review of the properties’ annual values. Meanwhile, Tenet executive condominium (EC) in Tampines sold 447 units or 72% of its units during its first day of launch.
1) Most residential property owners to face higher taxes in 2023
Most owners of HDB flats and private residential properties will face higher property taxes from 1 January next year following a yearly review of the properties’ annual values which is used to compute the tax.
The revision in the annual values of properties reflects the hike in market rents, said the Ministry of Finance (MOF) and Inland Revenue Authority of Singapore (IRAS) in a joint release.
To mitigate the increase, the Government “will provide a one-off 60% property tax rebate for all owner-occupied properties, up to a maximum of $60”.
The authorities explained that the rebate “will be automatically offset against any property tax payable in 2023”.
They noted that one- and two-room HDB owner-occupiers will continue to pay no property tax next year since their annual values remain below $8,000.
“For the majority of owner-occupiers in other HDB flat types, they will pay between $30 and $70 more in property tax compared to 2022, after taking into account the rebate,” they added.
The hike in property tax following the rebate will be higher for those owning more expensive properties.
2) 72% of Tenet EC sold on launch day
Tenet (EC) – a joint project between Qingjian Realty, Santarli Realty and Heeton Holdings – sold 447 units or 72% of its units during its first day of launch at an average price of around $1,360 per sq ft (PSF), reported The Straits Times.
Related article: Executive Condo Guide: Everything You Need to Know About Buying an EC in Singapore (2022)
The strong take-up rate at the 618-unit project was achieved even as the launch was held in December when many people prefer to travel overseas following the easing of COVID-19 restrictions, said Qingjian Realty Deputy General Manager Yen Chong.
PropNex Realty’s Head of Research and Content Wong Siew Ying expects Tenet to be fully taken up once sales are opened to more second-time homebuyers in a month.
“We understand that the second-timer buyer quota was maxed out during the project’s launch,” said Wong.
Under EC rules, only 30% of a project’s total units may be allocated to second-time buyers during launch.
Located at Tampines Street 62, Tenet will be integrated with the upcoming Tampines North Station as well as Tampines North Bus Interchange.
3) Government will not increase the income ceiling for HDB grants
The Government’s priority is to rein in the resale prices of HDB flats, said Second Minister for National Development Indranee Rajah.
With this, the Government does not plan to raise the income ceiling for grants to HDB buyers of Build-To-Order (BTO) and resale flats despite the rising inflation.
This comes as doing so would negate its efforts to cool the HDB resale market, explained Indranee, who also serves as Second Minister for Finance and Minister in the Prime Minister’s Office.
The minister was referring to the Enhanced CPF Housing Grant, which is offered to eligible buyers of BTO and HDB resale flats.
Notably, an increase in grants may see more expensive flats becoming more affordable for buyers, pushing up demand and prices, reported TODAY.
Also on the Government’s priority list is boosting the supply of new flats to meet the heightened demand, said Indranee.
“Thus, any review to raise the income ceiling would also have to be balanced against the greater competition for the finite resources of the Government,” she added.
4) Access to public housing to be prioritised amid land constraints, high demand
Deputy Prime Minister Lawrence Wong said access to public housing needs to be prioritised due to land constraints and large demand, reported CNA.
He made the statement in response to a question about making public housing in Singapore more accessible for young people in their 20s and 30s.
“I can completely understand the desire for young people to want to move out (and) live on their own but the challenge is this: if you have more and more households fragmenting – that means people moving out to live on their own – we just will not have enough land to accommodate everyone’s needs,” said Wong, who also serves as Finance Minister.
“Even today, without talking about the demand from singles in their 20s and early 30s … We are already unable to meet the demand.”
He pointed out that young couples still have to wait for their flats, while seniors in need of elderly flats are unable to get their flats. Singles above 35 years also face a long queue when they apply for a flat.
“Not to mention that we still have to look around and see whether there is sufficient land to build new flats. So this is our conundrum,” he added.
5) 20-24% of first-time applicants in mature estate secure a BTO flat on the first try
About 20% to 24% of first-time applicants for BTO flats within the mature estates have succeeded to secure a flat from 2019 to 2021, while less than 2% of first-time homebuyers took over five tries to secure one, reported TODAY citing National Development Minister Desmond Lee.
Of all the first-time applicants who succeeded, Lee said the median number of attempts before they succeeded in their application for a BTO unit within a mature estate during such period was one.
The minister was responding to questions regarding BTO applications in mature estates during the last three years.
Lee explained that it would not be representative to look at the maximum number of unsuccessful attempts within a mature estate made by a first-time BTO homebuyer before they succeeded.
“This is because there are some applicants who may not have an urgent need for a BTO flat, and may be applying exclusively to (mature estate) BTO projects or more attractive BTO projects only,” said the minister.
6) Applications for BTO flats drop in November but demand is still strong
First-time applicants for BTO flats will now have a bigger chance of securing a flat as the latest sales exercise saw a lower application rate for such flats.
CNA reported that 24,562 applied for BTO flats during the November 2022 sales exercise, down from 39,136 in August.
Nonetheless, there were 25,350 applications for Sales of Balance (SBF) flats, indicating that demand for new flats remains strong. The Government did not offer any SBF flats in the August launch.
The November launch offered 9,655 BTO flats and 1,071 SBF flats. With this, the overall application rate for SBF units is 23.7, while BTO flats are 2.5.
“This may indicate that the completion period of flats remains a key consideration for buyers since demand is higher for SBF units,” said OrangeTee & Tie’s Senior Vice-President of Research and Analytics Christine Sun.
7) CDL sales were down in Q3 2022 due to low inventory
City Developments Limited (CDL) posted a total sales value of $281 million during the third quarter of 2022, which was slower for the quarter due to a low inventory of unsold units.
In an SGX filing, CDL revealed that its launched projects were substantially sold, with Sengkang Grand Residences fully sold out. It noted that the group had no new launches during the period under review.
For the first nine months ending 30 September 2022, CDL and its joint venture associates shifted 802 units with a total sales value of $1.9 billion. This is lower compared to the $2.5 billion sales value registered over the same period last year.
In November 2022, sales surged to 1,417 units bringing the total sales value to $2.8 billion, mainly led by the launch of Copen Grand EC.
Looking ahead, CDL expects the property market “to remain resilient given the low stock levels”.
“Moreover, with a recovering economy, Singapore’s political stability, and its strength as a financial hub, there is sustained interest from local buyers, foreign investors and high-net-worth individuals,” it said.
8) Link REIT leads the race to acquire Singapore shopping malls from NTUC Enterprise
Link Real Estate Investment Trust emerged as the frontrunner in acquiring a portfolio of assets from NTUC Enterprise Co-operative Ltd, a shopping mall owner in Singapore, reported Reuters citing multiple sources.
CapitaLand Integrated Commercial Trust (CICT) and Frasers Property have also been vying for the assets.
The assets to be sold include retail malls Swing By @ Thomson Plaza and Jurong Point.
Two of the sources said the deal value has been trimmed from roughly $3 billion to $2.5 billion after one more asset has been pulled out from the proposed sale.
Sources believe the winning bidder may be announced over the next few weeks.
“While this portfolio will represent Link REIT’s first foray into Singapore, the pivot to more retail exposure is expected to be positive overall, as Link REIT has significant scale and expertise managing such assets in Hong Kong,” said DBS analysts.
Notably, the acquisition of the assets would mark this year’s biggest real estate transaction in Southeast Asia.
9) JTC launches 25 Gul Drive site for tender
Industrial landlord JTC has launched an industrial site at 25 Gul Drive for tender.
With a leasehold tenure of 20 years, the site has an area of 0.49 ha and a gross plot ratio of 1.4. It is also zoned for business 2 use.
JTC noted that the site is the last of four Confirmed List sites for the 2H 2022 Industrial Government Land Sales (IGLS) programme.
The tender for the site will close on 25 January 2023.
10) Flex space occupancy rebound in Q3 2022
Singapore saw occupancy level at flexible space centres increase from 50% to 60% on average in 2020 to 80% to 90% in the third quarter of 2022, reported Singapore Business Review citing CBRE Research.
CBRE attributed the hike to the reopening of borders as well as the revival of back-to-office arrangements.
“New models are emerging, with the management contract and partnership models becoming more popular as they benefit both landlords and flexible workspace operators,” it noted.
However, the rate of flex space organic expansion may slow down amid conservative corporate real estate demand and uncertainties in the global economic outlook.
Tricia Song, Hear of Research in Southeast Asia at CBRE, shared that more respondents, 73%, use flexible space, compared to 53% within the Asia Pacific.