Two of five BTO projects delayed by Greatearth pull-out completed, Pine Grove site may attract up to 8 bids and more

22nd February to 28th February 2022

Works at two of the five Build-to-Order (BTO) projects affected by Greatearth Corp and Greatearth Construction’s liquidation have been completed. Meanwhile, analysts expect the Pine Grove site (Parcel A), which was recently launched for sale by public tender, to attract up to eight bids.

1) Two of five BTO projects delayed by Greatearth pull-out completed

Senja Ridges launched in 2016. Source: HDB

Construction works on two of the five BTO projects affected by the liquidation of Greatearth Corp and Greatearth Construction have been completed, reported Channel News Asia citing the Housing and Development Board (HDB).

Senja Ridges was completed in January 2022, while the two blocks at Senja Heights were completed in December 2021 and February 2022, respectively.

Construction for the five BTO projects was delayed after Greatearth Corp and Greatearth Construction went bust, despite government assistance.

Thereafter, HDB appointed new construction firms for the projects and took several measures to ensure works resumed quickly, which include providing the new contractors with the list of Greatearth’s subcontractors and suppliers.

HDB noted that works on the three other BTO projects are progressing well and are on track to be completed by their probable completion dates.

Rising material and labour costs, as well as having to deal with COVID-19 safety measures and a manpower crunch hit the construction sector hard in 2021. In total, about 2,200 construction companies ceased their operations in the past year. 

2) Pine Grove site may attract up to eight bids

Source: URA

A 22,534.7 sq m residential site at Pine Grove (Parcel A) has been launched for sale by public tender, as announced by the Urban Redevelopment Authority.

Expected to yield 520 units, the 99-year leasehold site is one of the Confirmed list sites under the first half 2022 Government Land Sales (GLS) programme.

PropNex expects it to attract seven to eight bidders, with the top bid at about $586 million to $637 million, or a land rate of between $1,150 and $1,250 per sq ft per plot ratio (psf ppr).

“We expect the Pine Grove (Parcel A) site to attract developers who are eager to shore up their land inventory. In addition, future homes on the site should appeal to many home buyers given its location within an established residential enclave and proximity to numerous schools, such as Pei Tong Primary School, Henry Park Primary School and School of Science and Technology, Singapore,” it said.

Meanwhile, Huttons believe the site will attract five to eight bidders, with the land bids ranging from $1,200 to $1,300 psf ppr.

According to the PropertyGuru Singapore Property Market Report Q1 2022, property supply is at a 3-year low. Putting the site move to increase private

Parcel B is slightly bigger ( 25,039.2 sq m) and can yield 565 units. Both land parcels are a short walk away from Henry Park Primary School is a short walk away. The closest MRT stations are Dover and Clementi MRT stations on the East West Line.

Related article: 5 Best Neighbourhoods in Singapore for Families with Young Children (2021)

3) UOL tops out twin towers at Avenue South Residence

Avenue South Residence was one of the projects launched in Q3 2019.

UOL Group, along with its joint venture partners Singapore Land Group and Kheng Leong Company, has topped out the twin towers at Avenue South Residence.

Located at Silat Avenue, the 1,074-unit development comprises two 56-storey towers and five low-rise conservation blocks.

It boasts the world’s tallest residential towers to have used the prefabricated prefinished volumetric construction (PPVC) method. For this project, over 3,000 apartment modules were built at offsite factories before they are stacked and assembled into the 56-storey twin towers.

In a release, UOL shared that the PPVC method helped improve productivity by around 40% in terms of time and manpower savings, while also helping reduce pollution and noise.

Avenue South Residence is set to be completed in Q2 2023.

4) February BTO sales exercise registers overwhelming demand

Demand for the Feb 2022 BTO exercise was “overwhelming”, with Dakota Crest in Geylang leading in terms of applications, reported Singapore Business Review.

Related article: BTO Application Rates in 2021 Are High: Here’s How to Improve Your HDB BTO Application Ballot Chances

As at midnight on 23 February, 26,870 applicants vied for the 3,953 new flats on offer. This works out to an overall application rate of 6.8 times, way higher compared to the 4.4 times registered in the November 2021 BTO exercise when 4,501 new flats were launched.

Dakota Crest in Geylang emerged as the “star” of the February BTO sales exercise, with 7,794 applications received for the 442 available flats, or an application rate of 17.6.

In terms of four-room HDB flat applications, the prime location public housing (PLH) project, King George’s Heights, recorded an application rate of 16 as 4,704 applicants vied for 294 units.

Here is the BTO application rate for Feb 2022 (for non-elderly first-timers) for 3-room flats and bigger.

5) Rental profits to take a tumble amid higher property taxes

The once bullet-proof strategy of owning multiple properties in Singapore for long-term wealth accumulation may now face headwinds as the government raised the tax rates for properties.

Related article: How Can I Own an HDB and Condo at the Same Time in Singapore: 6 Factors to Consider

In a commentary posted in Channel News Asia, Dr Lee Nai Jia, Deputy Director at the Institute of Real Estate and Urban Studies (IREUS) and Professor Sing Tien Foo, Director at the IREUS and Head of the Department of Real Estate at the National University of Singapore, said rental profits “will inevitably take a tumble” with the higher property taxes, which comes hot on the heels of the latest cooling measures, which include higher Additional Buyer’s Stamp Duty (ABSD).

They noted that impending revisions to property tax rates, on top of paying maintenance, insurance and repairs, will push up operating expenses, squeezing property owners’ rental income.

And even if earnings are not completely wiped out, Lee and Sing believe that would-be landlords will think twice before entering the rental market.

Alongside the property cooling measures announced in December 2021, these raised taxes are aimed towards those who own multiple properties in Singapore. These policies have the goal of ensuring housing affordability for the average first-time homeowner.

6) Property tax hikes not to affect house prices

Property analysts do not expect the recent property tax hikes to significantly affect home prices, which they say are usually influenced by the overall economic sentiment as well as demand-and-supply dynamics, reported TODAY.

Nicholas Mak, ERA Realty’s Head of Research and Consultancy, believes the increased tax will do little to deter property investors given that the tax is a small price to pay compared to larger financial hurdles like the ABSD rates for those purchasing their second or third property or the Total Debt Servicing Ratio (TDSR) for property loans.

“On the whole, if property investors are willing to fork out the other expenses and taxes that are necessary to invest in real estate, the incremental property taxes will also be something that they could accept,” he said.

Nonetheless, landlords within the central districts may try to pass on the costs to tenants since the “increase in property tax is quite significant for this segment”, said Christine Sun, OrangeTee and Tie’s Senior Vice-President of Research and Analytics.

According to the PropertyGuru Singapore Property Market Report Q1 2022, rental supply is at a 3-year low while rental demand is at a 3-year high. Prices have increased steadily over the past 3 years, with the HDB rental market seeing the most significant spikes in price and demand.

7) Higher-end segment hardest hit by the property tax hike

Luxury apartments in Singapore.

OCBC Investment Research believes the recently announced property tax hike will affect the higher-end segments of both owner and non-owner occupied residential properties the most, reported Singapore Business Review.

Notably, the government has raised the property tax of owner-occupied properties to 6% to 32% in 2024 beyond the first $30,000 valuation, while the tax for non-owner-occupied residential properties, including investment properties, was raised to 12% to 36% in 2024.

Related article: Guide to Your First Investment Property: Singapore or Overseas?

OCBC said the tax hike – which will come into effect in 2023 – will affect the top 7% of owner-occupied residential properties.

Despite the impact, OCBC still considered the tax hike as a “welcome relief”, particularly for Singapore developers given the talks for other potential tax increases like capital gains tax.

Despite the pandemic and the economic uncertainties it brought in 2021, the ultra-rich still snapped up luxury properties in Singapore. Comparatively low taxes, political stability and the want for capital preservation are the some of the main motivating factors.

8) Analysts see more residential mortgagee sales in 2H 2022

Analysts expect residential mortgagee sales to increase in the second half of 2022 as deferred payment plans come to an end, reported The Business Times.

Knight Frank said that buyers may also feel that residential property prices will level off to match their expectations this year, given the cooling measures.

Notably, several prime residential properties have already been put up for auction. Knight Frank’s line-up of properties for auction included a four-bed duplex penthouse at Marina Bay Residences priced at $12.6 million and a Sentosa Cove bungalow with a guide price of $10.75 million.

Edmund Tie’s list, on the other hand, ranges from a one-bedroom unit priced at $670,000 to a three-bedder priced at $2.1 million.

Knight Frank started its auction on 24 February and Edmund Tie on 23 February.

9) Tanglin Shopping Centre sold for $868mil in fourth en bloc attempt

Tanglin Shopping Centre, one of Singapore’s earliest retail landmarks, has been sold for $868 million or $2,769 per sq ft per plot ratio, assuming full commercial usage, revealed marketing agent Savills Singapore.

The 364-unit commercial complex was sold to Pacific Eagle Real Estate, a Singapore-based developer that is privately held by the Tanoto family of the Royal Golden Eagle group.

“This is the fourth collective sale attempt by Tanglin Shopping Centre … The marketing campaign ran by Savills resulted in a competitive bidding exercise which resulted in a price that is 10% above the reserve price,” said Galven Tan, Savills’ Deputy Managing Director of Investment Sales and Capital Markets.

Located within the Orchard Road enclave, the freehold shopping centre has 12 storeys and two basement levels as well as an annex eight-storey car park.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.