Look back 2018: Property – Year of ups & downs

An artist’s impression of the flats to be built in Plantation Grove, the first of five housing districts in the new Tengah town. PHOTO: HDB

It was a roller-coaster year for the Singapore property market, with the first half riding up to the top. Collective sales were so buoyant and private home prices rebounded so strongly that analysts predicted a new price peak by the end of the year.

But the party ended on July 6, with unexpected cooling measures preventing any bubble from forming and stabilised prices to come in line with income growth and economic fundamentals. The move had an immediate effect and proved timely as interest rates rose, trade tensions weighed on global growth and a supply of more new homes is anticipated next year. The public housing market had welcome news when Prime Minister Lee Hsien Loong announced in August new schemes to boost the value of older Housing Board flats.

The Straits Times takes a look at eight things that made the news.


Last month, the Housing Board launched more than 1,600 flats in the upcoming “forest town” of Tengah.

These Build-To-Order units will spring up in Singapore’s first new town in more than 20 years, since Punggol, and also make up the first batch of BTO flats with shorter waiting times.

Tengah will be about 700ha, roughly the size of Bishan, and have a car-free town centre and lush greenery. The first of five housing districts in Tengah is Plantation Grove. It will have 10,000 flats when completed and a 700m-long farmway for residents to get together and plant their own crops.

Buyers of the BTO project in Tengah can also opt to subscribe to a centralised cooling system, the first to be piloted in an HDB estate, instead of installing their own air-conditioning units.

This would translate into greater energy efficiency and cost savings for residents, the HDB said.

The cooling measures shifted investor interest towards pure commercial sites and mixed-use sites, such as Golden Mile complex. ST FILE PHOTO


Residential collective sales looked set to hit fever pitch until the announcement of new cooling measures, which raised additional buyer’s stamp duty (ABSD) and tightened loan limits.

Collective-sale fever for residential sites was doused almost overnight, with only a handful of deals done since July 6. At least two collective sales were aborted, while some hopeful sellers lowered reserve prices.

Some analysts noted that even before the cooling measures were announced, collective sales had started to slow down as many major developers had secured at least one residential site since last year.

One dampener was the raising of development charge (DC) rates for non-landed residential sites.

The rates, which are assessed every six months, are paid by developers seeking to enhance the use of a site or build a bigger project on it. They were raised after bullish bids by developers for residential sites in state tenders and collective sales.

The measures also shifted investor interest towards pure commercial sites, which do not draw the ABSD, and mixed-use sites, such as the Golden Mile complex.

Interest in the purchase of sites for hotel developments also rose with the sale of Waterloo Apartments in Bugis to a wholly owned subsidiary of the Fragrance Group, for $131.1 million. Permission was secured to change the zoning use.


Like many a football match, property this year was a game of two halves – madcap activity in the first act, defensive tactics in the second.

Those first six months saw developers shoring up land banks due to insufficient supply from government site sales. They were also encouraged by a robust recovery in private home prices following a downturn that lasted nearly four years.

In the first half alone, 46 residential deals worth $13.3 billion from private and public sources were done – up from $9.2 billion last year, according to CBRE. But the second half of the year began with surprise cooling measures on July 6. Developers didn’t wait for a red card – they couldn’t get off the field quick enough.

Only 12 deals worth $2.26 billion were done in the last six months of this year, CBRE said. The main spanner in the works was an additional 5 per cent non-remissable additional buyer’s stamp duty (ABSD) when buying residential properties for development. Buyers also retreated to the sidelines when the ABSD was raised by 5 percentage points for Singapore citizens and permanent residents buying a second, third or subsequent residential property.

But the game was back on last month with a rebound in new home sales. Seven projects were launched to capture pent-up demand. This augurs well for the new year, despite growing economic headwinds.

The biggest collective sale in more than a decade was of Pacific Mansion, a freehold site in the upscale River Valley precinct. ST PHOTO: KEVIN LIM


There were record-breaking transactions in the private residential market.

The biggest collective sale in more than a decade and the second-highest on record was Pacific Mansion, a freehold site in Singapore’s upscale River Valley precinct, which was acquired for $980 million by GuocoLand, Intrepid Investments and Hong Realty.

It was the biggest collective sale of the year, exceeding Tampines Court’s $970 million and Amber Park’s $907 million, and was surpassed only by the sale of Farrer Court for $1.34 billion in 2007.

In what may have been the richest deal in absolute price terms in a Good Class Bungalow (GCB) area, a two-storey home in Nassim Road near the Botanic Gardens was sold for $105.3 million. This worked out to $2,477 per sq ft on the freehold land area of 42,515 sq ft. It was more than the $93.9 million which changed hands for the late Mr Lim Kim San’s bungalow in Dalvey Road. That deal reflected $1,804 psf on a 52,059 sq ft land area.

In government land sales (GLS), a consortium led by Far East Organization was awarded a plum commercial and residential site in Holland Road, with a winning bid of $1.213 billion or nearly $1,888 per sq ft per plot ratio (psf ppr). Far East’s consortium members are Sekisui House and Sino Group.


From early next year, the maximum number of units allowed in new private flats and condominium developments outside the central area will be reduced, as the Urban Redevelopment Authority (URA) has revised its guidelines to manage potential strains and stresses on infrastructure.

The new rules, announced in October, will help to curb the proliferation of shoebox units. They will apply to new development applications for projects submitted on or after Jan 17 next year.

With the changes, the maximum number of housing units allowed in a development outside the central area will be arrived at by dividing the proposed building gross floor area (GFA) by 85 sq m. The current formula divides GFA by 70 sq m.

In addition, nine areas will face even more stringent requirements, where the GFA will be divided by 100 sq m to work out the maximum number of units that can be built. This is to avert severe strain on infrastructure.

However, the move sparked warnings from the Real Estate Developers’ Association of Singapore (Redas) that the new guidelines could price some buyers out of the market. With the new rules promoting fewer and bigger units, there could be a rise in the absolute sale prices of new private apartments, analysts said.


Home owners hoping for clarity on whether they can rent out their homes for short periods have to wait a little longer, after a public consultation earlier this year yielded mixed results.

In July, the Urban Redevelopment Authority commissioned a more detailed survey to complement feedback it received from the public consultation exercise and meetings with stakeholders.

National Development Minister Lawrence Wong had also said that laws allowing for Airbnb-style stays are unlikely to come any time soon.

Currently, stays in private homes have to be for at least three months. Among the proposals made is one to allow properties to be used as short-term accommodation for up to 90 days, as long as owners who hold 80 per cent of the share value agree to a change in land use.

Some felt that the proposed regulations were overly stringent, while others said tighter regulations were needed, especially to address the security and privacy concerns of other residents.


In August, owners of ageing Housing Board flats found out that the value of their flats would not automatically go to zero at the end of their 99-year leases.

The Voluntary Early Redevelopment Scheme (Vers) gives owners of flats aged 70 years and older a chance to vote for the Government to buy back their homes before their leases run out.

Announced by Prime Minister Lee Hsien Loong during his National Day Rally speech, it is a successor – albeit a much more limited one – to the Selective En bloc Redevelopment Scheme (Sers), a compulsory buyback scheme with generous payouts.

The issue of ageing leases came to the fore last year, after National Development Minister Lawrence Wong cautioned buyers to “do their due diligence and be realistic when buying flats with short leases”, and not assume that every old HDB flat would come under Sers.

But the authorities have added that details on Vers – such as how much one would get or which precincts would be selected – will only come later. It will be about another two decades before the first batch of flats is shortlisted.


Aside from Vers, another thing owners of ageing HDB flats can rejoice over: A second round of improvement works for flats when they are between 60 and 70 years old.

The Home Improvement Programme II, unveiled in August, will start in about 10 years’ time, although details of what the works will comprise will only come later.

Meanwhile, the existing Home Improvement Programme (HIP), which addresses common maintenance problems such as spalling concrete and the replacement of pole sockets with new laundry drying racks, has been expanded to include 230,000 homes built between 1987 and 1997.

The significance of the multi-billion programme is that it boosts the value of an old flat, the authorities have said.

Reports by Rachel Au-Yong and Grace Leong

“Source:[Look back 2018: Property – Year of ups & downs] © Singapore Press Holdings Limited. Permission required for reproduction”

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