01 Jan Singapore Property News: 16th to 31st December 2016
Property Market Activities
Singapore labour market expected stay tepid in Q1 (BT, 31 December 2016)
The official quarterly data coming out of the Ministry of Manpower (MOM) since April has painted a grim picture of the labour market in the first nine months of 2016, drawing comparisons with the big cuts in jobs and workers in the last recession in 2009. The Monetary Authority of Singapore, Singapore’s central bank, also saw “similarities” between the labour markets of 2016 and 2009. Looking ahead, based on a poll of 620 employers conducted by a recruitment firm, there is a net employment outlook of plus 8 per cent for the first quarter of the year. An industry expert opined that organisations still have intent to hire, but recruitment may be focused on only a few job functions where critical skills reside, with the overall job market anticipated to remain tepid in the first half of 2017, with a turnaround in the labour market only in a longer run of a few years.
Property investment sales surge to 3-year high (BT, 30 December 2016)
It has been a banner year for big-ticket property transactions of at least S$10 million each. As at Dec 23, the tally stood at $22.5 billion – up 31 per cent from 2015’s S$17.2 billion, according to market analysts. S$10.1 billion of office investment sales deals this year (up to Dec 20) gave the sector the lion’s share or 44 per cent of overall investment sales. This was followed by the residential segment, accounting for 33 per cent or S$7.5 billion worth of transactions. Analysts expect total investment sales in 2017 to be in the S$18-S$20 billion region – down from this year’s high base, marked by mega deals.
Prices of completed condos dip 0.7% in November: NUS (BT, 29 December 2016)
Based on the flash estimate by NUS for its overall Singapore Residential Price Index released on 28 December, completed units (excluding small units of 506 square feet or below) in the Central Region fell 0.8 per cent during the month, followed by a 0.7 per cent price drop for completed units outside this region. According to the sub-index for small units of 506 square feet or below, such units resumed their price fall, slipping 0.1 per cent in November after a 0.5 per cent rise in October.
Rising global economic tide may not lift Singapore’s boat (BT, 29 December 2016)
The global outlook is forecast to improve in the coming year but Singapore may not be riding that wave. Economists cited several structural hurdles for the disconnect between global growth prospects and Singapore’s trade and export-oriented economy. Although the World Bank forecasts 2017’s global growth at 2.8 per cent, a tad ahead of 2016’s growth, which is expected to be at 2.4 per cent, economists polled by the central bank put Singapore’s growth at a median forecast of just 1.5 per cent in 2017. At 1 to 3 per cent, MTI’s initial forecast for 2017 is the same as that it had first projected for 2016.
Banks drop some fixed-rate home loans amid interest rate uncertainty (ST, 29 December 2016)
A number of fixed-rate mortgage plans have been pulled from the shelves lately, as banks grapple with uncertainty over the pace of interest rate hikes. Market watchers noted that several banks are trying to ensure their margins are not squeezed by cheaply priced fixed-rate packages. How fast interest rates will rise next year has become a concern since earlier this month, when the United States Federal Reserve hinted that there may be up to three increases next year. The three-month Sibor – one of the key benchmarks that banks use to price home loans – could hit 1.35 per cent in the second quarter of next year and 1.6 per cent in the fourth quarter, according to a market analysts’ forecast.
Singapore’s property market: Dark clouds, but silver lining too (ST, 22 December 2016)
Singapore’s broader property market appears decidedly gloomy, with vacancy rates in offices and malls climbing and residential prices falling relentlessly, but according to analysts, various sectors of the market are showing signs of life, with increased office investments, robust luxury residential sales and a rejuvenated collective sales market. Private home prices have sunk 10.8 per cent in 12 straight quarters since the peak of the third quarter in 2013. Rents have dropped to almost the same extent, by 10.7 per cent, according to URA data. However, sales volume has been rising, with a total of 11,993 private residential units (excluding ECs) sold in the first nine months of this year, an increase of 9.8 per cent year on year.
Limited scope for reversal of property measures for now (BT, 21 December 2016)
Whether property cooling measures should be tweaked has been a perennial question bogging the industry. The US Federal Reserve’s signals of a faster pace of interest rate hikes next year is rekindling hopes among those who have been lobbying for policy relaxation. But while there may be greater justification for property curb reversals towards the latter half of 2017 if economic conditions deteriorate rapidly from here, it probably is premature to unwind any policy now as liquidity remains ample for now. Also, the private residential market is not in need of any propping up at this point, having marked a recovery in sales momentum and more moderate price declines compared to a year ago. As such, the government’s hands are clipped until interest rate normalisation runs its full course to rein in on property investment demand.
2016 marks highest number of developer sales in 3 years (BT, 16 December 2016)
Developers have already sold more new, private residential units and ECs so far this year than the whole of last year, thanks to the momentum sustained in November when two new projects were launched. This means 2016 will mark the highest number of new sales by developers in three years. A total of 7,769 private residential units were sold by developers in the first 11 months, surpassing last year’s 7,440 units. Another 3,804 ECs were sold in the same 2016 period, exceeding the 2,550 ECs sold in 2015. A total of 860 new, private residential units were sold in November, a 31.4 per cent decline from October but 13.3 per cent higher than a year ago.
Singapore dollar to slide to levels seen after 2008 crisis, says policy sage (TODAY, 16 December 2016)
The Singapore dollar is likely to slide to weaken past S$1.45 against the greenback within the next six months, a level last seen in the aftermath of the global financial crisis in August 2009 as the Monetary Authority of Singapore resumes easing policy in April, according to an analyst. The authority is set to lower the center of the band within which it steers the local dollar as Singapore’s export-driven economy feels more pain from China’s slowdown in 2017 at a time when growth is already under pressure amid a slowdown in global trade, with lower energy prices hurting the oil and gas services industry. This prediction is in line with the median estimate for the currency by end-June in a Bloomberg survey of analysts.
Business as usual, with 17,000 new BTO flats (ST, 28 December 2016)
In October, National Development Minister Lawrence Wong highlighted some changes to come. One of the most significant is the launch of new flats for young couples with shorter waiting times, as part of a national strategy to help Singaporeans settle down and have children, likely to be introduced in 2018. Mr Wong said he wanted to cut the wait to two to three years, down from the current three to four years. While these changes are percolating, there is likely to be little action on the market. The resale market has been largely flat for the past two years while HDB resale prices fell a marginal 0.1 per cent in the first quarter of this year and stayed completely flat for the following two quarters.
Park-like living in Dawson by 2020 (ST, 19 December 2016)
Dawson will offer park-like surroundings, with thousands of trees and a pedestrian street. Many residents will come from Tanglin Halt, part of HDB’s largest Selective En-bloc Redevelopment Scheme. Landscaping will be done by 2020, revealed the Housing Board last week, in its first masterplan devoted to crafting a town’s landscape. Upcoming estates such as Bidadari can expect the same touch. The Dawson “Housing in a Park” plan will link up its seven housing projects in a series of green spaces and pathways, to form a nature-centric neighbourhood.
Government Land Sales
Govt defers launch of Bidadari mixed-use site to Q1 2017 (ST, 30 December 2016)
The launch of a plum commercial and residential site in Bidadari Estate along Upper Serangoon Road that property consultants had been very bullish on has been deferred until the first quarter of 2017. The HDB announced the deferment was to “allow the site requirements for comprehensive development to be finalised”. A market analyst opined that demand for the site will not be affected due to its good location in a new housing sub-market in the making where BTO sales have consistently received keen response.
Government trims marginally industrial land supply for first half of 2017 (ST, 24 December 2016)
In what is seen as a mild trimming of industrial land supply in a weak market, the government is releasing six sites on the Confirmed List and five sites on the Reserve List under the IGLS programme for the first half of 2017 spanning 11.25 hectares. The six sites on the Confirmed List can potentially yield 656,167 square feet in gross floor area based on their plot ratios, after the government offered seven Confirmed List sites that can yield 705,466 square feet in H2 2016 IGLS.
Supply of private homes from confirmed government land sales up 7.4% for first-half of 2017 (ST, 16 December 2016)
On the Confirmed List are five private residential sites which can yield 2,330 units, higher than the supply of 2,170 units from confirmed sale sites in 2H 2016, the MND announced on 16 Dec. The supply of 5,135 units from the Reserve List is similar to the 5,375 units from the 2H 2016 Reserve List. Overall, the total supply of 7,465 units from the 1H 2017 GLS Programme is comparable to the supply of 7,545 units from the 2H 2016 GLS Programme.
Swee Hong sells Choa Chu Kang property for S$3.1m (ST, 27 December 2016)
Swee Hong has agreed to sell a freehold property at 190A and 190C Choa Chu Kang Avenue 1 for S$3.1 million to Hong Ee Corporation, a privately held firm run by one of its employees. The property is made up of two strata-titled units situated one on top of the other, with a valuation of S$3.1 million on Dec 12, 2016. 80 per cent of the net proceeds will be used to repay creditors.
Wilkie Edge’s commercial space for sale (ST, 20 December 2016)
CapitaLand Commercial Trust is putting retail and office space at mixed-used development Wilkie Edge in the Selegie area up for sale. The space will be sold through an expression of interest exercise closing on Jan 19. The space up for sale includes a two-level retail block and six floors of prime-grade quality office space, with a gross floor area of about 215,000 sq ft and net lettable area of about 154,000 sq ft. The indicative price is $1,900 per sq ft on the net lettable area, which translates to about $293 million.
Old bottling factory may be conserved, says URA (BT, 16 December 2016)
The former National Aerated Water Company’s 62-year-old bottling factory near the Kallang River, which was sold to Malaysia-listed developer Selangor Dredging for $47 million last week could be conserved, the Urban Redevelopment Authority said in an unexpected announcement. The freehold site near the Potong Pasir MRT station can yield 117 apartments. Buildings earmarked for conservation need to follow URA’s principles of maximum retention, sensitive restoration and careful repair, among other things. When asked if the news would affect their development plans, a spokesman for Selangor Dredging said the company was “unable to comment on this at this stage”.