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OPERATIONS AND MARKET REVIEWSINGAPORE – RESIDENTIALCooling MeasuresTo promote a sustainable residentialmarket aligned with economicfundamentals, the governmentintroduced two rounds of coolingmeasures in 2011. The fifth round ofmeasure, effective on 8 December2011, was the latest introduced sinceSeptember 2009.13 JANUARY 2011:(a) Increased holding period forimposition of Seller’s Stamp Duty(SSD) from three years to four years(b) Raised SSD rates to 16%, 12%,8% and 4% of consideration forresidential properties bought on orafter 14 January 2011, and sold inthe first, second, third and fourthyear of purchase respectively(d) The LTV limit was lowered to50% on housing loans forproperty purchasers who arenot individuals8 DECEMBER 2011:(a) Implemented ABSD for residentialproperty purchases:(i)ABSD of 10% for foreignersand non-individuals(ii) ABSD of 3% for permanentresidents buying thesecond and subsequentresidential property(iii) ABSD of 3% for Singaporeansbuying the third and subsequentresidential propertyMARKET REVIEWHOME SALES EXPECTED TO MODERATEDevelopers sold 15,904 homes in 2011,slightly below 2010’s record homesales of 16,292 units.Demand eased significantly to 632 unitsin December 2011, compared withabout 1,700 units sold in November.However, there was a sharp pick-upin January 2012 with 1,872 units sold,reflecting the underlying strength indemand for housing from Singaporeans.CB Richard Ellis (CBRE) expectsdemand for new homes to declineto 13,000–14,000 units in 2012.According to DTZ Research, foreignersaccounted for 17% of total home salesin 2011, up from 12% in 2010. However,the proportion of foreign buyers hasfallen from 23% in December 2011 to5% in January 2012, suggesting that theimpact of the ABSD on foreign demandhas taken effect.Developers expect prices of privatehomes to ease in the year ahead.Price growth moderated for the ninthconsecutive quarter in the last quarterof 2011, up 0.2% quarter-on-quarter.In 2011, prices increased by 5.9%,significantly lower than the 17.6%growth in 2010. Prices of high-endand suburban homes could fall 10–15%and 5–10% respectively in 2012,according to CBRE.While the higher ABSD rates maydampen demand for high-endproperties and foreign interest in theshort term, it will however ensurethat home prices are aligned witheconomic fundamentals to promotea sustainable property market.Although some potential homebuyersmay hold back purchases until marketconditions improve, market liquiditySingaporeSingapore’s growing population will supportdemand for new homes.2010 2011E 2012F 2013FReal GDP growth (%) 14.8 4.9 1–3 4.4Prime rate (average, %) 5.4 5.4 5.5 5.6Inward FDI (US$ bn) 38.6 35.8 25.5 32.7Exchange rate (S$/US$, average) 1.36 1.26 1.23 1.22Personal disposable income (US$ bn) 95.8 117.7 131.2 142.5CPI change (average, %) 2.8 5.2 3.4 2.1Sources: Economist Intelligence Unit and Singapore Department of Statisticsremains high and the current interestrate environment is still favourable.These factors, coupled with Singapore’sgrowing population, will supportdemand for new homes.Demand and prices of developmentswith unique marketing attributesas well as good connectivity to keytransport nodes such as MRT stations,will continue to draw buyer interest.Underlying demand for suburbanhomes, which target primarily HDBupgraders and first-time homebuyers,is expected to be more resilient.(c) The Loan to Value (LTV) limit onhousing loans was lowered from70% to 60% for property purchaserswith one or more housing loansPrivate Residential Demand, Supply and Price IndexUnits18,00014,40010,8007,2003,600 500Source: Urban Redevelopment Authority (URA)2007 2008 2009 2010 2011No. of new units launched 14,016 6,107 14,103 16,575 17,710No. of new units sold 14,811 4,264 14,688 16,292 15,904URA private residential price index 170.8 162.8 165.7 198.4 206.2Index250200150100048Keppel Land LimitedReport to Shareholders 2011Operations and Market ReviewSingapore – Residential49