Singapore Property News: 16th to 30th September 2015

Real Estate News

Property Market Activities

Prices of private apartments dip 0.6% in August (ST, 29 September 2015)

Prices of completed private apartments appear to be stabilising after months of decline, despite some ambiguous data out yesterday. The new numbers point to a 0.6 per cent dip in values from July to last month following stagnant pricing in June and July, according to flash estimates for the NUS Singapore Residential Price Index. Analysts believe that many home owners are not pressured into selling as interest rates are still relatively low. Resale transactions of central units, excluding small units, were down 23 per cent to 114 last month, while non-central unit sales fell 23.6 per cent to 272. The slight price decline last month was led by completed units in the central region -Districts 1 to 4 and 9 to 11, which posted a 0.7 per cent month-on-month drop.

CDL, JBE in battle for EC buyers in Yishun (BT, 24 September 2015)

Listed property heavyweight City Developments starts accepting e-applications for The Criterion from Thursday, the same day JBE Holdings unveils prices for Signature at Yishun. The developers bought their respective sites at state tenders that closed on the same day – May 22, 2014. CDL paid S$330 per square foot per plot ratio (psf ppr) for its site, slightly below the S$335 psf ppr paid by JBE for its land parcel. CDL is not expecting a direct price competition and analysts commented that CDL may price its project at a slight premium to JBE’s development to reflect a higher quality of finishes and amenities.

Homegrown Kim Soon Lee buys Tuas warehouse from ISK (ST, 22 September 2015)

Homegrown transportation and logistics group Kim Soon Lee is buying the former storage facility of Japanese chemicals group Ishihara Sangyo Kaisha (ISK) in Tuas for S$30 million, to speed up the expansion of its warehouse business. Located at 37 Tuas West Avenue, the property has a land area of 325,211 square feet, a total gross floor area of 286,000 sq ft and a 32 years’ balance lease. Under the Urban Redevelopment Authority’s Master Plan 2014, the site is zoned for Business 2 use and has a 1.4 plot ratio. Kim Soon Lee plans to pump about S$1 million to do minor renovations to the existing two-storey property.

Higher repayments ahead for home loans (BT, 19 September 2015)

The recent surge in interest rates is going to bite home buyers who are facing an increase in monthly instalments which could run into hundreds of dollars. And that will rub salt further into the wound for those with investment properties, as rentals are dropping like ten pins. The Urban Redevelopment Authority’s overall private residential rental index in the second quarter of 2015 was down 2.7 per cent from Q4 2014. Especially miserable are likely to be borrowers whose loan packages are pegged to the swap offer rate (SOR), given the 50 per cent jump in the 3-month SOR last month. Experts’ advice to borrowers who worry about future increases in interest rates but want to enjoy the current low interest rate, they can consider the managed mortgage.

Manage cooling measures exit ‘for soft landing’ (ST, 17 September 2015)

The head of Singapore’s property developers’ body has warned that various negative factors could cause home prices to plummet – especially if a sell-off gets under way. And property cooling measures, if left fully in place, “could actually increase the risk to the real estate market and economy”, Mr Augustine Tan said yesterday. In the wake of the cooling measures, prices had fallen for a seventh straight quarter in the April to June period, “the longest sustained period of decline in 13 years”. Rentals are also expected to fall sharply over the next 12 to 18 months, while regional and global conditions remain uncertain. On top of this, there is increased volatility in financial markets, an imminent interest rate hike and slower economic growth.

REDAS to work with Government to address oversupply of private homes (CNA, 16 September 2015)

REDAS estimates there will be 67,000 new units by 2019, excluding executive condominiums. This represents about 20 per cent of the total number of private residential units currently. Only 6,500 homes were sold during the 12 months leading to June this year. REDAS said the high supply and low demand of private homes could lead to a downward spiral of property prices. REDAS President Augustine Tan said: “We intend to engage the Government agencies to give our constructive inputs and to explain where we think the market could be trending, and that we want to avoid the hard landing.”

Aug slump in new home sales unlikely to affect cooling measures: analysts (BT, 16 September 2015)

The slump in developers’ private homes sales last month came in largely expected, after July’s sales were skewed by the launch of a massive project. However, the slump is hardly an impetus for the government to tweak the property cooling measures now. And with such status quo expected to last at least until the end of the year, a buying inertia may ensue, consultants say. Excluding executive condominiums, some 495 private residential units were sold by developers in August, the latest data from the Urban Redevelopment Authority revealed. This marked a 69 per cent plunge from the 1,611 units sold in July, out of which 73 per cent of the volume came from the launch of High Park Residences, where the majority of units were priced at less than S$1 million. Analysts point out that project with more affordable pricing will find buyers more easily in the current market.

Public Housing

September BTO launch to be merged with November’s: MND (BT, 24 September 2015)

The Ministry of National Development (MND) has decided to delay the September build-to-order (BTO) launch by a few weeks, so that three housing policies that were recently tweaked can benefit as many Singaporeans as possible, starting from the very next BTO launch. This will mean a bumper crop of about 7,000 BTO flats in six HDB towns across the country: Bidadari, Bukit Batok, Chua Chu Kang, Hougang, Punggol Northshore and Sengkang, as well as 5,000 balance flats in a concurrent Sale of Balance Flats exercise.

BTO flats in Bidadari estate to come at a premium: Analysts (CNA, 21 September 2015)

A total of 2,150 new flats in Bidadari estate will soon be launched for sale under the HDB’s next Build-to-Order (BTO) exercise, expected by the end of September. The BTO flats will comprise two- to five-room units. This will be the first batch of HDB flats on offer in the new estate and priority will be given to those whose parents live in Toa Payoh, Potong Pasir or within the 2km radius. The estate will be served by two MRT stations – Woodleigh and Potong Pasir – on the North East Line. According to property watchers, the Bidadari units will come at a premium, largely due to the city-fringe location.

Government Land Sales

Lor Lew Lian housing site triggered for tender (BT, 23 September 2015)

A private housing site on the reserve list of the Government Land Sales (GLS) Programme, located in Lorong Lew Lian, near the Serangoon MRT and NEX mall, has been triggered for release, the first time in about 21 months. The plum 1.4-hectare 99-year leasehold site with 3.0 plot ratio can be developed into a private condo project with about 465 units, based on estimates stated in the current H2 2015 GLS Programme. The S$250 million minimum bid price undertaking given by an unnamed developer that made the successful application for the site’s release, translates to S$552.93 per square foot of potential gross floor area. Analysts expects bids to range from S$630 to 800 per square foot per plot ratio (psfppr) and an average selling price of S$1,250 to S$1,400 psf.

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