Published December 8, 2010

Good response to Prive

PRIVe, the first executive condominium (EC) project to come up in Punggol, has attracted strong interest from home buyers.

The developers, NTUC Choice Homes Co-operative and Chip Eng Seng, received 1,011 applications for the 680 apartments available as at 8pm yesterday. Applications have closed and bookings will start on Friday.

The 99-year-leasehold development offers two to four-bedders across four 17-storey towers, and the average selling price will be between $660 and $690 per square foot (psf).

The developers are offering a deferred payment scheme, although buyers who opt for that will have to pay 2 per cent more.

DMG & Partners analyst Brandon Lee, who visited Prive's sales gallery over the weekend, said in a report that the turnout was buoyant. 'We thought overall pricing of $680 psf is reasonable, which equates to a slight 8 per cent premium over the $630 psf fetched by nearby completed ECs.'

Response to ECs launched this year has been moderate. When Frasers Centrepoint launched Esparina Residences, it received 1,155 applications for the 573 units available. Actual take-up was lower as some potential buyers could have backed out after their preferred units were sold. At MCC Land's The Canopy, around 450 applications had come in for the 406 units available.


Source: www.businesstimes.com.sg

Published December 7, 2010

URA explains why DPS is still available for exec condos

By EMILYN YAP

PROPERTY developers can continue to offer the deferred payment scheme (DPS) for executive condominiums (ECs) because eligibility and ownership rules keep speculation in such projects at bay.



But homebuyers hoping that the interest absorption scheme (IAS) and interest- only housing loans (IOL) will also be available for ECs are in for a disappointment. The withdrawal of these two schemes in September last year applies to all types of private residential projects.

The Urban Redevelopment Authority (URA) issued clarifications on the various payment schemes in response to queries from BT.

Many in the property industry thought the government had scrapped the DPS for all types of uncompleted private homes in 2007 to curb speculation. It was not until last week that they realised DPS would still be available for ECs.

The news spread when developers of Prive - an EC in Punggol - said they would offer the scheme.

As at 5pm yesterday, 823 applications had poured in for the 680 apartments available in Prive.

Asked why developers can still offer the DPS for executive condominiums, URA said that ECs 'are different from other private residential developments' as they are meant for owners to live in and are subject to eligibility criteria and ownership conditions. For instance, EC buyers must form a family unit and they have to occupy their units for five years before selling them in the open market.

In addition, the subsale of booked ECs is not allowed.

'With these conditions, there is no need to remove DPS for ECs,' URA said. The 2007 move was meant to 'discourage excessive property investments in a buoyant market'.

According to URA, when the DPS was cancelled in October 2007, it had informed the Real Estate Developers' Association of Singapore, the Law Society of Singapore and all licensed developers in writing that the withdrawal would not apply to ECs and flats under the design, build and sell scheme.

Developers which intend to offer DPS for ECs have to seek the Housing and Development Board's approval to vary the terms in the standard sales and purchase agreement.

Then what about the IAS and IOL, which the government disallowed last year for all private residential projects to also discourage speculation? The news release made no mention of ECs then.

URA said that the ban on IAS and IOL 'is effected via the Monetary Authority of Singapore's housing loan rules for financial institutions', which apply to all residential properties, including ECs

Source: www.businesstimes.com.sg

Published December 2, 2010

Relevance of deferred payments in spotlight

By EMILYN YAP

(SINGAPORE) Is the deferred payment scheme (DPS) relevant in today's property market? That's the question on the mind of some observers as they learned the scheme can be offered for executive condominium (EC) projects.

The low interest rate environment and higher price tags for homes sold on DPS could encourage buyers to stick to the normal payment scheme (NPS), some say.

On Tuesday, NTUC Choice Homes Co-operative (NCH) and Chip Eng Seng said they will offer NPS and DPS for their EC at Punggol, Prive.

Buyers who opt for DPS will pay just a 5 per cent booking fee and 15 per cent of the purchase price - they need not make further payment until the development obtains its Temporary Occupation Permit.

That caught many market players by surprise, as they had assumed the government withdrew DPS in 2007 to curb speculation. BT found out later that the change did not apply to ECs.

NCH chief executive Margaret Goh told BT yesterday the developers wanted to give EC buyers an 'attractive and affordable' option with the DPS.

Those taking up the scheme have to pay 2 per cent more than those under NPS. Average selling prices at Prive will be $660-690 per sq ft.

Colliers International research and advisory director Tay Huey Ying does not expect take-up of DPS to be high because of the premium charged.

Typically, 'genuine buyers' prefer to pay less for their homes while those who aim to re-sell units before project completion take up DPS, she said. With ECs, flipping is not possible in the early years, as owners need to fulfil a minimum occupation period of five years.

Some observers also feel there is little incentive for buyers to defer payments, since banks are offering attractive home loans now. Interest rates may not stay low, and buyers on DPS may end up signing on to more expensive loans later.

'Because the interest rates are so low, they might as well start (paying)' and reduce their borrowings along the way, said Dennis Ng, founder of mortgage consultancy portal HousingLoanSG.com.

Some consultants are a bit more optimistic about DPS's appeal. It is still a 'persuasive tool', said Cushman & Wakefield Singapore vice-chairman Donald Han.

EC buyers tend to be less cash-rich than other private property buyers and many may want to put off the burden of paying for the homes, he said.

DTZ executive director (consulting) Ong Choon Fah feels Prive's developers made a strategic move to offer DPS.

'We know there has been a slowdown in some parts of the market, so it's good to be cautious and make sure that whatever you can do to incentivise and empower the buyer is there,' she said.

Source: www.businesstimes.com.sg

Published December 1, 2010


Exec condo surprises with DPS option

By EMILYN YAP

(SINGAPORE) NTUC Choice Homes Co-operative (NCH) and Chip Eng Seng (CES) are launching an executive condominium (EC) project in Punggol with a surprising feature - a deferred payment scheme (DPS).

Many in the property industry had assumed that the DPS was entirely scrapped in the boom year of 2007 to curb speculation. The two developers' move could trigger owners of other EC projects to also offer DPS.

NCH and CES are behind the 99-year-leasehold Prive, the first EC to come up in Punggol. The site is at the junction of Punggol Field and Punggol Road, and average selling prices will be between $660 and $690 per square foot (psf).

There will be 680 apartments ranging from two to four-bedders, located across four 17-storey towers. The developers bought the plot from the government in June this year.

The developers will open the sales gallery on Dec 3 and allow viewings and applications up until Dec 7. Bookings will start on Dec 10 and home seekers have to gain entry to the gallery that day through a ballot.

Buyers can finance their homes through a normal payment scheme (NPS) or the DPS. Under the DPS, they need to pay only a 5 per cent booking fee and 15 per cent of the purchase price. They will not need to make further payments until the development obtains its Temporary Occupation Permit.

Developers of two earlier EC projects - Esparina Residences and The Canopy - did not offer DPS.

Several developers and consultants whom BT spoke to were surprised to learn that DPS was allowed for EC projects.

In October 2007, the government withdrew DPS for the sale of uncompleted private residential, commercial and industrial properties. The news release made no mention of ECs then.

Some industry players seem to have assumed that DPS was also disallowed for ECs. After all, ECs are seen as a hybrid of public and private housing. They have facilities comparable to private condominiums but carry public housing restrictions which are lifted only after 10 years.

Few might have thought of clarifying the rule change with the authorities, since the last EC launch happened some time back in May 2005.

Following some checks yesterday, BT understands that the withdrawal of DPS in 2007 did not apply to ECs. Some in the industry could have been 'a little presumptuous', said one developer who declined to be named.

Also, EC buyers have to fulfil a minimum occupation period of five years. This means that speculation would be minimal to begin with.

Knight Frank chairman Tan Tiong Cheng said it is possible that other EC developers will follow suit to offer DPS, now that they are aware of the option.

MCC Land is currently exploring the viability of offering both DPS and NPS for The Canopy. It has sold 190 out of 406 units at an average price of around $590 psf.

United Engineers is also working towards offering DPS for its upcoming EC project, Austville Residences. It could launch the site this month or next.

Response to ECs has been warm this year. Frasers Centrepoint has sold 508 out of 573 units at Esparina Residences, at an average price of $740 psf.

DMG & Partners analyst Brandon Lee expects to see good take-up for Prive as it is just a few minutes' walk from Punggol MRT station.


Source: www.businesstimes.com.sg