01 Sep Singapore Property News: 16th to 31st August 2014
Property Market Activities
Private home resale prices drop 0.3% (ST, 29 August 2014)
Resale prices of private homes continued their slide last month as buyers held back in a market still feeling the chill of property cooling measures. Flash estimates out a day ago showed the Singapore Residential Price Index (SRPI) declined 0.3 percent in July compared with June. Demand for shoebox units was particularly soft with the index for small apartments – defined as those with a floor area up to 506 square feet – dropping 0.8 percent. Prices in the central region fell 0.7 per cent, although the non-central region bucked the trend, rising 0.1 percent. Both indices exclude small units. July’s results continue the slump seen throughout this year except for a surprise expansion in May which analysts see as a blip that is unlikely to be repeated this year.
Tanjong Rhu’s transport woes lifted (ST, 25 August 2014)
Tanjong Rhu has been something of a transport dead zone but plans to build a MRT station will put the inner city within easy reach and boost local real estate, said analysts. The station will be one of the stops on the Thomson-East Coast Line announced last Friday. It is expected to open by 2023, a move that consultants said will lift property values and solve a transport headache for residents. Ms Christine Li, research head at OrangeTee, predicted that home values in Tanjong Rhu could appreciate between 7 and 12 percent by the time the new rail line is completed.
Cluster home projects to have fewer units (BT, 23 August 2014)
The URA has fine-tuned its guidelines for cluster housing to address growing concerns of overcrowding in some landed estates. A new set of formulae to determine the maximum number of units for the various types of cluster housing, known as strata-landed homes, will significantly lower the number of units in new projects. Another change is that developers will be required to set aside more land for communal facilities and greenery in such developments – at least 45 percent of the land area, up from the current 30 percent; at least a quarter of the land area has to be set aside for on-the-ground greenery. The revised guidelines take effect today, said the URA a day ago.
Strong demand from singles for 2-room flats expected to continue (CNA, 22 August 2014)
It has been about a year since a new housing policy allowed singles to buy two-room flats directly from the HDB. Since then, more than 5,200 two-room flats in non-mature estates have been put up for sale, and 2,765 units have been sold under the scheme, with about 560 successful applicants collecting their keys so far. This exceeds the 1,550 units set aside for singles. These include applications under the Single Singapore Citizen Scheme, Joint Singles Scheme and Non-Citizen Spouse Scheme. Prior to this, singles were only allowed to buy flats from the resale market.
Home prices near new MRT stations set to rise (ST, 18 August 2014)
Prices of homes near the future MRT stations in the east are set to rise markedly, although the full gains will be realised only as the new line nears completion, consultants say. In the short term, however, rents may take a hit from noise, disruption and privacy issues caused by construction, said a market observer. Prices of private homes in Amber, Marine Parade and Bayshore could rise as much as 15 percent by 2023 when the first stage of the Thomson-East Coast Line (TEL) is due to be completed, said a property researcher. Likewise, Housing Board areas in Marine Parade and Bedok South are expected to see price rises after the MRT line is completed, said OrangeTee head of research Christine Li. She expects HDB flats in Marine Parade to benefit the most.
Developers hard-pressed to price projects modestly (BT, 18 August 2014)
Latest official statistics showed that developers’ housing sales continued to languish last month, but the focus now is on the likely launches for the rest of the year and how much room developers have to price them attractively to get potential buyers into making a commitment. Many developers paid high prices for 99-year private housing sites at state tenders in the past couple of years as they sought to replenish land following strong home sales at the time. URA’s July data also revealed that the remaining 37 units at The Vermont on Cairnhill, which was completed last year, were sold at S$2,113 psf median price in July. This is 8.6 percent below the S$2,313 psf median price, based on caveats data, for all previous sales in the project by its developer, said OrangeTee research head Christine Li.
Options available to elderly to monetise their flats (CNA, 21 August 2014)
About 293,000 HDB flats in Singapore are owned by residents aged 55 and older and 72 percent of these flats are three-and four-room units. This means these seniors have the option to sublet or ‘right size’ to monetise their flat. Selling part of their leaseback to the HDB is another option – for those who have met their CPF drawdown age, which is currently at 63. Not all seniors see subletting as an attractive option. Only one in 10 of eligible senior citizens chooses to rent out a room or the whole flat. Other options to help seniors monetise their flat are available, including the Lease Buyback Scheme.
Government Land Sales
China/HK developers lead bids in Potong Pasir tender (BT, 20 August 2014)
A state tender for a commercial and residential site next to Potong Pasir MRT Station has surprised the market with a whopping 15 bids, with strong participation from the China contingent. The top four bids were cast by China/Hong Kong players (including one who teamed up with a Singapore developer). The China players generally have a more optimistic view of the Singapore property market compared with Singapore developers. Local players, on the other hand, generally cast more measured bids. City Developments was the the fifth highest bidder a day ago at S$716 per square foot per plot ratio (psf ppr) – much lower than the S$793 psf ppr it paid back in September 2012 for the nearby Tai Thong Crescent site.