02 Mar Singapore Property News: 16th to 28th February 2015
Property Market Activities
GuocoLand sells over 100 units at Sims Urban Oasis (BT, 28 February 2015)
GuocoLand has sold more than 100 units at its 1,024-unit Sims Urban Oasis condo project at Aljunied since sales began on Feb 14. Some 200 units ranging from one to five-bedroom units were released in the first phase, with selling prices of between S$1,295 and S$1,595 per square foot (psf), the developer told BT. The nearly 2.4-hectare site fronting Sims Drive, Aljunied Road and the Pan Island Expressway (PIE) was acquired by GuocoLand last year at S$530.9 million or S$687.9 psf of potential gross floor area. Market watchers noted that the sales performance for the 99-year leasehold Sims Urban Oasis was largely within expectations given today’s subdued environment. The project is located in a quiet enclave off Aljunied Road within walking distance to the Aljunied MRT station, and one station away from the up-and-coming Paya Lebar Commercial Hub.
Deluge of new condos erodes rental market (ST, 23 February 2015)
Whether you look at the official data or check out some popular condominiums, the unmistakeable conclusion is that the rental
market is in for a tough year. Analysts say weakening demand stems from the deluge of newly completed condominium units and expectations of an interest rate hike. The official numbers tell part of the story: private residential rents fell 3 per cent last year after four successive years of increases. But the sombre state of the leasing market was most evident when The Straits Times analysed projects that recorded the highest rental volumes last year. Although the number of leases inked largely picked up in 2014, it did not prevent landlords from suffering a dip in collected rents, data from OrangeTee showed. Reflections at Keppel Bay was the most popular condo with 607 leases recorded last year, well up from the 293 contracts secured in 2013. Monthly rents at the 1,129-unit estate averaged $4.85 per sq ft (psf) in the fourth quarter – down 6.6 per cent on the same period a year earlier.
Khaw Boon Wan sees Singapore housing supply rising 11% in three years (BT, 21 February 2015)
The supply of housing in Singapore will increase by about 11 per cent in about three years with the addition of more than 100,000 HDB and 67,000 private units. Minister for National Development Khaw Boon Wan revealed that by early 2018, the stock of housing in Singapore would have grown to 1.43 million units and that the residential market in Singapore has achieved a better balance between sellers and buyers. This would be an 11 per cent increase from the current stock of about 1.28 million housing units, of which 960,000 are in HDB estates and the remaining 320,000 in the private sector. The projected increase in housing in Singapore in 2015-2018, is 182,506 units. Out of these, 101,000 will be public housing units, 14,220 will be EC (executive condominium) units and the remainder 67,286 will be private units.
Developer sales surge 62% in Jan, thanks to more launches (BT, 17 February 2015)
Singapore developers sold 372 private homes in January, a 62 per cent improvement from the 230 units sold in the traditionally lull December period. But the increase was largely a function of greater supply, with Marine Blue at Marine Parade and Symphony Suites at Yishun making up the bulk of the launches. January’s sales figure remained a 35 per cent drop from the 572 units moved in the same period last year. It also fell far short of the 12-month sales average of 630 units, as cooling measures and loan curbs continue to cap demand. Of the total of 124 units in Marine Blue, 50 were launched for sale and 32 units were taken up at a median price of S$1,829 psf. At Symphony Suites, 180 of its 660 units were launched, and deals were closed for 54 at a median price of S$1,010 psf. This was despite the project being priced at the lower end of market expectations and being touted as the cheapest new condominium on the market currently.
City fringe homes ‘more rent-resilient’ (ST, 16 February 2015)
The vacancy rate for private homes is at its highest level in nearly 10 years – the result of rising completions and curbs on foreigners coming here to work, experts say. About 7.8 per cent, or 24,062 completed private residential units, were vacant at Dec 31 last year, according to figures released by the URA. According to a property analyst, the high vacancy rate is symptomatic of supply coming on stream faster than demand. Furthermore, the structure of demand has been changing: In the past 30 or 40 years, one expatriate could be mapped onto one apartment, however, one expatriate may now only be taking up a smaller apartment or a room in recent times. Rents are set to fall by up to 8 per cent this year, with the drop most pronounced in the central region as firms keep cutting back on housing allowances.
Price, rental rises recorded for office, retail sectors (BT, 24 January 2015)
Home owners of properties on the city fringes need not feel so despondent over heavier than average price falls over the last year.
Prices there may have dropped more than properties in the city centre and suburbs, but experts note the resilience of rents there. They also point out that home prices in this area are now more competitive in relation to homes further out in the suburbs. Last year, prices for non-landed properties in the region – known as the rest of central region (RCR) – fell 5.3 per cent. This was steeper than price falls of 4.1 per cent in the central region and 2.2 per cent in the suburbs. Currently, price premiums of Core Central Region (CCR) homes versus RCR homes remained unchanged over the past year. It was 39% in 4Q13 and 41% in 4Q14. However, the price premium of RCR homes over those in the suburbs, or Outside Central Region (OCR) homes have narrowed significantly, from 61% in 4Q13 to 29% in 4Q14. This presents a rising value proposition for city fringe homes on a per sq ft basis. Some projects in the RCR are TRE Residences, Eight Riversuites, Highline Residences, Sky Vue and Sky Habitat.
Average size of EC units decreases over the years (CNA, 22 February 2015)
The average size of executive condominium units has become smaller over the years, say property analysts. And the trend is likely to continue as developers struggle between maintaining their bottom lines and keeping units affordable for buyers. Executive condominiums (ECs) were introduced about 20 years ago, and since then, unit sizes have been shrinking. According to a property consultant, the average size of a three-bedroom unit ranged between 1,200 and 1,300 square feet when the first batch of ECs was launched in the 1990s. But it has since gone down to less than 1,100 square feet in the last five years. The main reason is likely profit motivation. In order to increase the price per square foot and still keeping the price quantum at a fairly affordable level for EC buyers, developers are actually reducing the size of the EC units. Some property analysts say the units are likely to get smaller. Not just that, there are now two-bedroom units. The two-bedroom units entered the market as early as 2005, according to property analysts. And currently, some measure about 700 square feet each.
Government Land Sales
DC rates for non-landed residential use trimmed 3 per cent (BT, 28 February 2015)
The government is reducing development charge (DC) rates – payable for enhancing the use of some sites or to build bigger projects on them – by 3.2 per cent on average for non-landed residential use for the period March 1 to Aug 31 this year. The latest cut comes amid continued weakness in condo and apartment prices, note market watchers. For non-landed residential use, nearly 62 per cent, or 73 of the 118 geographical sectors across Singapore saw declines in DC rates ranging from 2 per cent to 13 per cent. These sectors are mostly found in the Core Central Region (CCR) where high-end homes are located, and in the Punggol/Sengkang and Yishun/Woodlands areas. At the other end, DC rates for commercial use have been raised by 1.9 per cent on average, matching the increase in the previous revision. The latest increase is the third consecutive rise and was probably supported by buoyant prices for office space in addition to CBD shophouses. DC rates for all other use groups were left completely unchanged.
Tuas South site up for public tender (CNA, 24 February 2015)
A new site at Tuas South Street 6 is up for sale, announced JTC Corporation on Tuesday (Feb 24). The 0.7-hectare site was launched for sale by public tender under the first half 2015 Industrial Government Land Sales (IGLS) Programme. The Confirmed List site is zoned for Business-2 development and has a 20-year 3-month tenure, with a maximum permissible gross plot ratio of 1.0, JTC said in its press release. The tender closing date is on the 21st April 2015.