Singapore Property News: 16th to 31st December 2014

Real Estate News

Property Market Activities

Completed shoebox units lead price falls this year (BT, 30 December 2014)

So far this year, prices of small units have fared the worst of the four segments of completed non-landed private homes covered by the National University of Singapore’s Singapore Residential Price Index (SRPI) series. Flash estimates for November released recently show that the SRPI for completed small units of up to 506 sq ft islandwide has contracted 4.4 per cent since December 2013. The biggest month-on-month drop for this small unit subindex so far this year of 1.9 per cent was in November itself. However, as this is a flash value, it is subject to final revision in January. The sub indices for Central and Non-Central regions (both excluding small units) have decreased 4 per cent and 3.9 per cent year to date.

Mortgagee sales surge amid weak leasing
market (ST, 24 December 2014)

The number of mortgagee sale listings shot up this year in the wake of the lacklustre leasing market. There have been 150 listings of mortgagee sales in 2014, up from just 32 in 2013. The increase is being blamed on the weak leasing market, which has made it harder for borrowers to finance their mortgages, said a person with a property consultancy. In another sign of the distressed market, mortgagee sales listings comprised an average of 39 per cent of all residential auction listings in 2014 – up from only 6 per cent a year ago – and is the highest in at least five years, she said. “In 2015, the auction market is likely to see more sales listings put up by mortgagees, with a moderate increase (from 2014),” she said.

Foreign firms not solely to blame for pricey land (ST, 20 December 2014)

The growing participation by foreign developers in land tenders here in recent years has sparked worries that they have been crowding out local developers. But while they are seen to be aggressive in bidding for land, they cannot be solely blamed for pushing up land prices, experts say. Foreign developers and their joint venture partners won 32.3 per cent of residential Government Land Sales (GLS) tenders from 2011 to November 2014, excluding executive condominium (EC) sites, said a consultant. But while some foreign developers submitted bullish bids – defined as top GLS bids over 10 per cent higher than the second highest bid – they made up only 27.8 per cent of the total number of bullish bids in the same period.

Some luxury homes changing hands for tidy
profits (ST, 20 December 2014)

Resale activity might be slowing for luxury homes, but some owners have managed to make a tidy pile from their Orchard Road homes
in the fourth quarter. Two units at the coveted Ardmore Park project by Wheelock Properties each changed hands for over $2 million in profit in November, despite the shrinking pool of foreign buyers who have supported demand in this segment. One unit bought in October 1999 for $1,543 per sq ft (psf) or $4.45 million was sold on Nov 18 for $2,524 psf – a profit of $2.83 million. A second unit that was bought in August 2006 for $2,115 psf or $6.1 million went for $2,843 psf or $8.2 million – a gain of $2.1 million.

Sentosa deal: Blackstone ready for 5-year wait (BT, 20 December 2014)

Blackstone Group, which is taking part in the refinancing of luxury Singapore properties, is prepared to wait as long as five years for a turnaround in residential prices to see higher returns on the transaction. Blackstone and Malaysia’s CIMB Bank agreed to take part in a financing for a luxury hotel, retail and residential development, owned by City Developments, Singapore’s second-largest developer, on Sentosa. In exchange for S$469 million in funding, the New York-based private-equity company and CIMB will receive a fixed 5 per cent coupon for five years and other cash flows from the Sentosa project. They also have rights to any proceeds from the sale of the luxury residential units on Sentosa.

Developer sales in 2014 likely to be about half of last year’s (BT, 16 December 2014)

With developers’ sales of private condominiums falling 48 per cent in November from a month ago to 412 units and December being typically a slow month, it is almost a foregone conclusion among property consultants that new private condo sales for the full year will be about half the level of 2013. The latest monthly data from the URA on developers’ sales reflected mixed fortunes in the private residential market – weak sales of private condominiums on one hand and brisk sales of executive condominiums (ECs) on the other. With three EC projects launched in November following nearly a year of hiatus, buying interest swiftly shifted to the more affordable ECs. This turned Lake Life, Bellewaters and Bellewoods into top-selling projects in the month.

Public Housing

Single-digit fall in HDB prices next year a good thing: Khaw (BT, 30 December 2014)

Another single-digit fall in public housing resale prices in 2015 would still be manageable and “a very good development”, Minister for National Development Khaw Boon Wan said on 29th December. It is a level people can accept and a balance between keeping homes affordable for home buyers and preserving the asset values of home owners. HDB resale prices as at Q3 2014 have fallen 6.1 per cent year on year. Mr Khaw said he would be worried if prices fell double digits in 2015 – what he termed “drastic corrections” which historically only happened in response to major external shocks. According to him, his focus in 2015 will be on singles and low-income families who cannot yet afford flats and are renting.

$1,088,888 for Bishan flat despite soft resale market (ST, 24 December 2014)

The property market may be on the downtrend, but that did not stop a Housing Board maisonette in Bishan from fetching an auspicious $1,088,888 in October and setting a new record. The 150 sq m flat, with 72 years left on its lease, is not the first of its kind to fetch a sky-high price in the public housing market. Of the seven resale units which sold for at least $1 million, four were maisonettes from Blocks 190 and 194 in Bishan Street 13. These point blocks have four units on each floor, with maisonettes on the two highest storeys. Their airy, two-storey design is one selling point, said a 50-year-old teacher who gave her name only as Madam Chan. Of the eight maisonettes in the block, at least four – including the record-setter and Madam Chan’s flat – changed hands in the last four years.

Government Land Sales

Sengkang EC tender closing postponed (BT, 31 December 2014)

The HDB has postponed the tender closing for an executive condo (EC) development site in Anchorvale Crescent in the Sengkang East location to allow potential bidders time to study an additional requirement set by the Land Transport Authority for the provision of sheltered bicycle parking spaces. The tender for the 99-year leasehold site was originally due to close on 30th but on Christmas Eve, HDB informed potential tenderers that had collected the tender documents of the postponement in the tender closing to Jan 20, 2015, a HDB spokesman said in response to BT’s queries. The new condition for the site states that to encourage cycling as a mode of transportation, the successful tenderer is required to provide a minimum of 88 bicycle parking spaces within the development.

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