Airbnb-style short-term home sharing still illegal: URA

The Business Times – May 09

The decision by the Urban Redevelopment Authority (URA) to keep the status quo for short-term stays in private homes has likely triggered a collective sigh of relief from among hospitality players, who have seen their business eaten into.

This development means that rentals of private properties for periods of less than three consecutive months - popularised by the likes of home-sharing platforms Airbnb around the world - will remain illegal in Singapore.

Under the Planning Act, those who convert the use of a property for short-term accommodation without the URA's approval may be fined up to S$200,000 and/or jailed up to 12 months.

Govinda Singh, Executive Director, Valuation & Advisory Services:
The recent announcement by the URA goes some way to clearing up what was largely a grey area. In so doing it does however, also mark a major departure from other countries which have allowed Airbnb in some form or another. Is money being left on the table?

The announcement will no doubt be a boost to hoteliers who have long complained about the apparent duality in regulations, similar to what cab drivers had with ride-sharing firms for example. 

We expect mid-tier and lower hotels to benefit the most and especially those offering more lifestyle facilities. For longer stays and groups, serviced apartments should also benefit. 

The biggest loser will possibly be private residential and especially those owners who perhaps will now have to rely on the traditional long-stay rental market. However, despite a slowing demand from foreigners, the recent spate of en bloc sales may well bolster this segment, thus mitigating the impact.

Having said that, the success of this will only be measured by the willingness to enforce it.

Tricia Song, Head of Research:
Last April, URA proposed new rules governing the leasing out of private homes for short-term stays, including a cap of 90 days per year in which the property can be rented out for Airbnb-style use; and the host must take down and submit the particulars of the guest, as well as agree to comply with rules such as fire regulations; and strata-titled properties (i.e. condos with management committees) must get 80% consensus from owners by share value. We believe the 80% mandate is unlikely to be achieved. In Singapore, private homes are still largely owner-occupied, and not purchased with the intention to offer short-term rentals. Most owners will value privacy and exclusivity of their homes and condo facilities. It is thus highly likely that the majority will be concerned about security and the asymmetric benefits and disamenities that may arise from transient tenants.

70 units at The Woodleigh Residences sold to date

The Business Times - May 13
The Woodleigh Residences has sold a total of 70 units following its launch weekend, said co-developers Japan-based Kajima Development and Singapore Press Holdings (SPH) on Sunday.

Many of the condominium units sold were two- and three-bedroom units, with prices starting at S$1,733 per square foot (psf). Three of the units were four-bedroom residences, which achieved a high of S$2,331 psf. 

Tricia Song, Head of Research:
The Woodleigh Residences may be the first project to drop its price since the measures. Based on caveats lodged on Realis, it sold 27 units between November 2018 and January 2019 at an average price of SGD2,025 psf. 

We expect sales for The Woodleigh Residences to pick up gradually. More than 1,100 units at nearby competing launches Park Colonial and Tre Ver have been sold within nine months since July 2018. As of 13 May, Tre Ver has sold 529 units, or 73% of its total 729 units. We estimate Tre Ver’s prices have increased 3% since its launch in August 2018, but still remains the lowest priced among the new launches in the Woodleigh/ Potong Pasir area at about SGD1,600 psf. Park Colonial has sold 604 units, or 75% of its total 804 units at an average price of SGD1,730 psf since its launch in July 2018.     

CPF, HDB housing loan rules for buying older properties updated

The Business Times - May 09
Home buyers will now have greater flexibility to use their CPF when buying older homes as long as the remaining lease of the property can cover the buyer until they turn at least 95 years of age.

In an announcement on Thursday, the Ministry of National Development (MND) and the Ministry of Manpower (MOM) said that rules on CPF usage and HDB housing loans have been updated to provide increased flexibility for Singaporeans to buy a home for life.

If the remaining lease of the property is at least 20 years and covers the buyer until they turn 95 years of age, buyers can use their CPF to pay for the property up to the valuation limit of the property. This applies to both HDB flats and private property. There will still be a minimum lease requirement for the use of CPF for property purchases - this is being lowered to 20 years from the current 30 years. 

Tricia Song, Head of Research:
Previously, the restrictions on the use of CPF funds were tiered according to the flat’s remaining lease. For example, the use of CPF for flat purchase for units with less than 60 years’ remaining lease is pro-rated, while it cannot be used at all for those with less than 30 years’ lease.  The new rules thus should widen the pool of buyers and inject more liquidity into the resale market for older HDB flats and private leasehold homes. Sellers of older HDB flats could offload their properties faster and downgrade or upgrade to other properties, thus improving the overall transaction volumes. That said, we believe private housing prices are unlikely to be directly impacted by this measure.