30 May to 5 June 2023
The 120-hectare (ha) site (almost the size of 51 football fields!) on which Singapore Turf Club sits, is going to be returned to the government in 2027 for redevelopment purposes. Meanwhile, HDB’s May 2023 BTO and Sale of Balance Flats (SBF) launch deadlines have been extended by three working days – from 5 June to 8 June 2023 – after some applicants experienced difficulties accessing the HDB Flat Portal due to system glitches.
1. Singapore Turf Club will be returned to the government in 2027 and redeveloped for public housing and other uses
The Singapore Turf Club, which currently operates Kranji Racecourse, will return the 120ha site to the government in 2027 for redevelopment into public housing and other uses, according to a joint press release by the Ministry of National Development (MND) and Ministry of Finance (MOF), as reported by The Straits Times.
This redevelopment plan will take place in line with other major plans for the North of Singapore, including the redevelopment of Woodlands Checkpoint, the Woodlands estate, and a master plan for a high-tech agri-food cluster within Lim Chu Kang.
Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru said: “Rarely is there a collective 120ha of land in one location. The last time land of such scale was provided for development was the Jurong Lake District (JLD), then touted as the largest business district outside the Central Area. Taking reference from JLD, this could potentially mean an estimated 20,000 homes in the land currently occupied by the Singapore Turf Club.
So it is a prudent decision by the government to re-purpose the land given falling spectatorship of horse racing, putting the land into its best and optimal use.”
Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group added: “This potential redevelopment is unlikely to have an immediate upside until the government comes up with a concrete planning blueprint for the site. There is definitely some redevelopment potential for retail and hotels when the zoo is fully redeveloped under the Mandai Rejuvenation Project. Separately, there may be new needs for land for food labs and high-tech farming.
Another potential development that could catalyse the area is the JB-Singapore RTS Link. That said, the area is considered far from most current major employment clusters and it will take some time for people to change their perception.
Should one or more choice primary schools relocate their campuses to Kranji, it will provide an impetus for families with school-going children to benefit from this redevelopment.”
2. HDB extends the deadline for May 2023 BTO and SBF launches to 8 June 2023
The deadline for HDB’s May 2023 BTO and SBF launches has been extended by three working days – from 5 June to 8 June 2023 – after some applicants experienced difficulties accessing the agency’s portal due to system glitches, reported CNA.
“This is to give our buyers even greater assurance of being able to submit an application,” said HDB in a Facebook post.
On 30 May 2023, some applicants complained on HDB’s Facebook page that they spent long waiting times at the portal’s virtual waiting room (VWR), while some encountered error messages when processing their HDB Flat Eligibility (HFE) letter.
HDB attributed the long wait times to various factors including higher application volume due to the combined launch of BTO and SBF units as well as the inclusion of popular mature estate projects.
It also pointed to applicants applying for the HFE letter for the first time.
After adjusting system parameters, HDB said the waiting time to access its portal was reduced to just three to 20 minutes as of 30 May 2023, while the VWR was not triggered on 1 June 2023.
“We are sorry for the negative service experience, and would like to assure them that we are reaching out to assist those facing issues,” said HDB.
Related article: HDB BTO May 2023 Launch Review: Bedok, Kallang/Whampoa, Serangoon, and Tengah
3. Singapore is still plagued by affordable housing issues despite high homeownership
Despite having a robust economy and a high homeownership rate, Singapore is still plagued by affordable housing issues.
Urban Land Institute’s (ULI) recent report showed that the median prices of private homes in the city-state have exceeded that of Hong Kong’s, making them the most expensive in the Asia Pacific region.
However, Singapore leads the region in terms of affordability when it comes to public housing.
“Is Singapore’s high housing cost a sign of affordability issues, or an endorsement of our thriving city-state?,” asked Dr Lee Nai Jia, Head of Real Estate Intelligence, Data and Software Solutions, PropertyGuru Group, in an article posted in The Business Times.
“It could be argued that the housing price tag is a reflection of our city’s undeniable charm and remarkable resilience,” Dr Lee pointed out.
He said the government should make careful deliberation before it implements any radical interventions.
“The potential costs must be calculated and implications accurately modelled, as any miscalculations could lead to unintended consequences,” Dr Lee said.
4. More than 7,000 HDB flats were launched in the May 2023 BTO and SBF launches
The HDB launched 5,495 BTO flats and 1,500 SBF units on 30 May 2023, with the BTO flats spread across five projects in Bedok (Bedok South Blossoms), Serangoon (Serangoon North Vista), Kallang/Whampoa (Farrer Park Arena), and Tengah (Plantation Weave and Parc Meadow @ Tengah).
Four out of the five projects, or almost 90% of the BTO flats offered, have a waiting time of less than four years. Notably, the median waiting time for the flats offered during the May 2023 sales exercise is about three years and five months.
This makes the May 2023 BTO sales exercise “one of the BTO launches with the highest proportion of flats in recent years to be completed in less than four years”, said HDB.
The Housing Board expects Bedok South Blossoms and Serangoon North Vista to attract strong demand since it has been several years since Bedok and Serangoon have seen a BTO launch.
It noted that the BTO project in Kallang Whampoa – the 569-unit Farrer Park Arena – is offered under the Prime Location Public Housing (PLH) model.
5. Service and conservancy charge hike at PAP town councils from July
Residents of People’s Action Party (PAP) run town councils will face higher service and conservancy charges (S&CC) from July 2023, reported CNA.
In a release, Marine Parade Town Council (MPTC) said the increase in S&CC will be phased over a two-year period, with the hike on 1 July 2023 being smaller than in July 2024, thanks to special funding support from the government.
Monthly fees for HDB residents will increase by $0.70 to $7.90 during the first revision, and by $1.00 to $9.10 on 1 July 2024.
Monthly fees for shops and offices as well as market and food stalls will also increase.
MPTC explained that town councils have been facing rising cost pressures due to higher maintenance costs, manpower costs and energy prices.
Meanwhile, the Workers’ Party shared that, much like PAP town councils, they are also facing similar cost pressures.
The party said they are deliberating the matter carefully and “will communicate any changes to service and conservancy charges to their respective residents directly”.
6. Fixed rate home loans decline as US Fed takes a less hawkish stance
After rising past 4% last year, fixed-rate home loans in Singapore have been dropping since the start of 2023 as the US Federal Reserve appears to pause or even reverse policy tightening, reported CNA.
DBS, Singapore’s biggest lender, offers fixed-rate packages with lock-in periods of between two to five years at 3.75% a year, down from 4.25% in January 2023.
Two- and three-year fixed rate packages at OCBC are offered at 3.8%, down from 4.25% and 3.9%, respectively, in January 2023.
Industry watchers expect the downward trend to continue.
“With inflation and employment data in the US softening, the US Federal Reserve has indicated a less hawkish stance,” said Paul Wee, Vice President – PropertyGuru Finance. “Hence, it is likely that fixed rates will soften further.”
Meanwhile, no change was registered for floating-rate home loans.
Related article: Will Interest Rates Increase Further In 2023? How This Affects Your Mortgage in Singapore
7. Developer sentiment softens, as reported by a new survey
A new survey showed that developer sentiment in Singapore had “softened visibly” during the first quarter of 2023, amid high interest rates, the latest April 2023 property cooling measures and the banking crisis in the West, reported The Business Times.
Based on the latest Real Estate Sentiment Index published by the National University of Singapore’s Institute of Real Estate and Urban Studies (IREUS), the composite index – which comprises a combination of current and future sentiment – dropped to 4.6 in Q1 2023 from 5.1 in Q4 2022. The neutral line is 5.0.
Notably, concerns over government intervention and supply increased, with those expecting supply to be moderately or substantially higher in the next six months rising 12 percentage points to 35%.
Developers expect to see government intervention double to 54.5% in Q1 2023, from 25% in the previous quarter.
8. Landed home rents surge amid robust demand from High-net-worth-individuals (HNWIs)
After registering several quarters of growth, rents for landed properties in Singapore continued to increase, rising 14.5% in Q1 2023, reported CNA.
Tricia Song, Head of Research for Southeast Asia at CBRE, noted that while rents spiked across all three landed property types, it was the detached homes which posted the sharpest increase.
In fact, the median per sq ft (PSF) rents for such properties rose 120% from $1.70 PSF per month in Q3 2020 to $3.75 PSF per month in Q1 2023.
Analysts attributed the surge in rent to the low supply of luxury homes as well as the strong demand from HNWIs.
Song also attributed the hike to HNWIs and families setting up businesses or offices in Singapore, adding that they are willing to pay top rents for prime bungalows or GCBs.
And with the Additional Buyer’s Stamp Duty (ABSD) for foreigners increased to 60%, more foreigners may turn to the rental market, with the demand likely to spill over the landed property segment, she said.
Looking ahead, Song expects landed rents to stabilise later in the year on growing resistance to high rents and a weaker economic outlook.
9. Condo owners not keen on selling private homes
Experts observed that condominium owners in Singapore are reluctant to sell their homes, following the introduction of the 15-month wait-out period announced during the September 2022 property cooling measures, reported Singapore Business Review.
Notably, the wait-out period limits private homeowners’ ability to acquire an HDB resale flat after selling their private homes.
Some owners of multiple properties are not also keen on selling their investment property amid concerns about paying higher ABSD.
“In addition, with the still-healthy home rental market, many of these owners have opted to lease out the unit,” said an expert.
Huttons Asia noted that the new project launches in April may have shifted demand away from the resale market.
“The hike in interest rates by US FED in April and slower Q1 2023 economic growth in Singapore could have also contributed to the slower resale demand as well,” added Huttons.
10. Resale price hike for Sentosa Cove condo surpasses price increases on the mainland
Prices of resale condominiums in Sentosa Cove have significantly increased over the past year compared to that of resale condominiums in mainland Singapore, reported The Straits Times.
In fact, the median PSF price of Sentosa Cove condominiums jumped 29.77% to $2,018 in 2022 from $1,555 in 2021.
The median PSF price of resale condominiums in the CCR, on the other hand, rose by 6.8% year-on-year (YoY), while prices in the city fringe climbed 9.97% and 12.2% in the suburbs.
Sentosa Cove condos saw median PSF prices further increase to $2,147 from January to April 2023.
Mogul.sg Chief Research Officer Nicholas Mak attributed the hike in prices for Sentosa Cove condos to the high prices achieved at Cape Royale.
The 302-unit development accounted for a significant proportion of total transactions in Sentosa Cove. Of the 154 Sentosa Cove condos transacted from January 2022 to April 2023, 45% or 69 units were in Cape Royale.
“It means that the prices of the other condos, excluding Cape Royale, are still fairly subdued,” said Mak.
11. Higher interest rates make new homes sold off-plan relatively attractive
Higher interest rates are making home acquisitions more expensive for those who borrow to finance their purchases.
And while new homes that are sold-off plan may come with higher PSF prices compared to resale units, these new homes may still be a better option for borrowers.
This comes as they can take advantage of progressive payment schemes offered for uncompleted new homes, to stagger payments.
“In short, a buyer of an uncompleted new home need not draw down a home loan as quickly or fully as a buyer of a resale unit,” said The Business Times.
Aside from this, buyers of new homes may potentially enjoy lower interest rates in the future.
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Marcus Lee, Content Executive at PropertyGuru, edited this story. To contact him about this story, email: marcuslee@propertyguru.com.sg.
