16 Jan Singapore Property News: 1st to 15th January 2017
Property Market Activities
Deferred payment plans at more condos (ST, 13 January 2017)
Good response to creative marketing schemes, including deferred payment, at OUE Twin Peaks last year sparked similar moves by other developers to move unsold units at completed projects. Deferred payment schemes have been rolled out at The Peak @ Cairnhill II, Sky Habitat, and Ardmore Three. An alternative version of the deferred payment scheme called the stay-then-pay programme has been introduced at d’Leedon. The Interlace, and Sky Habitat.
Core Central Region leads in resale condo market (BT, 11 January 2017)
For the second consecutive year, the CCR has outperformed the rest of the island in terms of resale prices for non-landed private homes, according to latest data from SRX Property. Moreover, the volume of resale transactions of private apartments and condos in CCR rose 52.5 per cent to 2,048 units last year – a faster clip than the increases of 24.2 per cent in the RCR and 18.2 per cent in the OCR. This could be due to buyers finding value in projects where prices have corrected significantly, as well as attractive packages including deferred payment schemes that developers dangled for delicensed projects.
Rents for private homes fall 1.3% in December, 6.2% in 2016: SRX Property (ST, 11 January 2017)
Rents for condominiums and private apartments weakened for the sixth straight month, falling a sharper 1.3 per cent in December from the previous month, and 6.2 per cent for the whole of 2016, according to flash estimates released by SRX Property on Jan 11. HDB market saw rents edge up by 0.2 per cent from November, though they still lodged a 3.7 per cent fall for 2016. In the private leasing market, rents fell almost equally across all locations in 2016 – 6.2 per cent in the prime districts, 6.3 per cent in the city fringe and 6.1 per cent in outlying areas.
Rise in last quarter’s landed home prices not seen to be sustainable (ST, 5 January 2017)
The surprise rebound in prices for landed homes by 0.9 per cent from the third to fourth quarter 2016 does not spell recovery, analysts warned. Landed home prices in the October to December period were boosted by the detached house segment, which saw several large deals. Despite the slight increase in the fourth quarter, landed home prices still posted a 4.4 per cent drop for the whole of last year, following falls of 4.1 per cent in 2015 and 5.3 per cent in 2014. Market watchers expect landed home prices to either remain flat or fall at a more gradual pace this year.
Pressure on Sibor and SOR continues with spectre of Fed hikes (BT, 5 January 2017)
Local interest rates, the Sibor and SOR, remain under pressure and will continue to rise in the New Year, in line with expected hikes in US interest rates. A banking expert points out that following last month’s Federal Open Market Committee meeting, expectations were raised for three interest rate hikes in 2017, pressuring the three-month Sibor and SOR to climb towards the 1.5 per cent – 1.55 per cent region respectively as the year progresses, up from the near 1 per cent handle currently.
Singapore private housing prices down 3% in 2016 (BT, 4 January 2017)
The residential market is showing signs of stabilising even as private home prices slipped for the 13th consecutive quarter, going by the government’s flash estimates for the fourth quarter. For the full year, the estimated 3 per cent fall in private home prices and the 0.15 per cent decline in HDB resale prices were smaller than their respective 3.7 per cent and 1.6 per cent declines in 2015. The 0.4 per cent decline in private home prices during the fourth quarter was also milder than the 1.5 per cent fall in the preceding quarter.
Singapore GDP surprises with 1.8% full-year growth in 2016 (BT, 3 January 2017)
The health of the Singapore economy surprised many – even the government itself – with a full-year growth for 2016 of 1.8 per cent, advance estimates released by the MTI on 3 Jan show. These numbers came in stronger than the government’s expectations. It earlier had put full-year growth in 2016 to be between 1 to 1.5 per cent.
Time of plenty in office rental market (BT, 3 January 2017)
The Singapore office rental market has been languishing amid a ramp-up in new completions and weak demand. In addition to the possibility of a new wave of office space completions from 2020, there are also issues about demand, which has slowed significantly since 2014 amid a slowing economy, European and US financial institutions scaling down their operations, the crash in oil prices and sliding commodity prices. Net demand has been declining in the past five years since the recent peak of 2.3 million sq ft. in 2011 to just 280,000 sq ft in the first nine months of 2016. Flexible/agile office formats which reduce demand for office space per employee are fast gaining traction. Despite these trends, it is not necessarily all gloom and doom for office landlords as companies are willing to move to better-spec spaces with higher per-square-foot rents offset by a smaller footprint in order to attract millennial talent.
Singapore economy expected to grow 1% to 3% this year (ST, 1 January 2017)
Singapore’s economy is expected to have grown by more than 1 per cent last year, lower than initial forecasts, Prime Minister Lee Hsien Loong said yesterday.
Yet the country is “not doing badly” considering the global uncertainty, he added, noting that despite the easing off in demand for workers, unemployment remains low and jobs are still being created.
HDB resale prices down 0.3% in Dec, 0.2% in 2016: SRX (BT, 6 January 2017)
HDB resale prices slipped 0.3 per cent in December from a month ago, pulled down mainly by the declines for bigger flats, flash estimates from SRX Property show. This translated to a 0.2 per cent drop for the whole year and 10.9 per cent from the peak of the SRX resale index in April 2013. Resale prices in mature estates rose by one per cent for the whole year, compared to the 1.2 per cent drop in non-mature estates. Most consultants are expecting HDB resale prices to stabilise before potentially making a positive turn in the second half of this year.
HDB resale prices stabilising, with 0.1% dip in Q4 (BT, 4 January 2017)
Prices dipped 0.1 per cent from the third quarter, putting the full-year decline at 0.1 per cent, based on flash estimates from the Housing & Development Board released on 3 Jan. An industry expert opined that with prices stabilising, resale flats appeared to be gaining favour among buyers, with about 19,089 units transacted from January to November 2016, with the full-year figures expected to exceed 2015’s tally of 19,306 units.
Government Land Sales
Surprisingly bullish bids swamp year’s first housing land tender (BT, 11 January 2017)
Construction company Low Keng Huat beat 10 other competitors for a residential site along Perumal Road with its unexpectedly bullish bid of S$174.08 million, which translates to S$1,000.72 psf ppr. Experts opined that the strong participation by 11 bidders was a sign of contractor-developers’ need to secure fresh development opportunities. The bullish bidding, which is not congruent with market performance might imply that more developers are expecting prices to bottom out in 2017 and will see prices increase from 2018 onwards when the project is ready for launch.
One Tree Hill Garden to be up for en bloc sale (BT, 13 January 2017)
The boutique prime freehold residential development site in District 10 with three-storey walk-up apartments has a reserve price of about S$70 million, which translates to S$1,792 per square foot based on the land area of 39,063 square feet. The plot may potentially be redeveloped into a new project comprising 10 semi-detached houses and three bungalows.
13 units in Gemini@Sims industrial project up for en bloc sale (BT, 10 January 2017)
Wenul Assets (Industrial) Pte Ltd, the developer of the freehold B1 industrial project in Kallang, is looking to sell the entire ground floor of 13 strata units. It is expecting offers above S$900 per square foot over the strata floor area of about 40,375 sq ft. The pricing for the 31 caveated new sales in the project since 2013 averaged around S$690 psf.
Three parties shortlisted for Jurong Point (BT, 7 January 2017)
Macquarie, Blackstone and Frasers Centrepoint have been shortlisted for the purchase of Guthrie and Lee Kim Tah’s space in Jurong Point mall. Macquarie and Blackstone have each offered about S$2.2 billion – crossing S$3,350 psf on the 658,000 square foot commercial net lettable area owned by the equal joint-venture between Lee Kim Tah Holdings and Guthrie GTS in Jurong Point. The net yield is about 4 per cent. Frasers Centrepoint’s offer is said to be below S$2 billion. The trio are now doing due diligence on the asset before they finalise their bids.
Freehold industrial building near Tai Seng MRT sold for S$33.5m (BT, 6 January 2017)
An eight-storey freehold industrial building situated on a 21,111 sq ft site at 3 Little Road, near Tai Seng MRT Station, is being sold for S$33.5 million. The price works out to S$771 per square foot based on the net lettable area of 43,451 sq ft. The buyer, Chan Rong Fen Building Construction, is expected to occupy some space in the building.