Singapore Property News: 1st to 15th December 2015

Real Estate News

Property Market Activities

H2 2016 may see green shoots of recovery for private homes (BT, 15 December 2015)

Amid all the gloom and doom surrounding the private residential market, a more contrarian view that has emerged now points to green shoots of recovery in the second half of 2016. A continual downward drift in residential prices is almost a foregone conclusion in light of rising vacancies, impending interest-rate hikes and a slowing economy, consultants say. Some analysts believe transactions could see a rebound in the second half of 2016 as value emerges in some areas, such as the high-end market and secondary sales. With hopes of some economic stimulus from the government and mature foreign markets such as Australia and London turning toppish, there could be a return of interest from both local and foreign buyers.

Rents for private, HDB flats ease further in November (BT, 10 December 2015)

Weakness prevailed in the residential leasing market in November, going by an estimated 1.1 per cent month-on-month drop in private non-landed home rents and a 0.5 per cent decline in HDB rents. Analysts have noted that most tenants are taking shorter leases to capitalise on declining rents. This is why despite the month-on-month dip in the number of private residential rental transactions in November, there were still more transactions inked compared to the same month last year.

Prices of private homes in Singapore likely to stay depressed (ST, 10 December 2015)

There will not be a major correction next year but factors from oversupply to lending curbs will keep prices of private homes and executive condominiums (EC) depressed, say analysts. They also warn that any let up on cooling measures seems unlikely in the near term as the price falls have not affected most owners. Analysts expect prices of new homes to fall 3 to 5 per cent in 2016 and projects with many unsold units may cut even more.

Resale prices of non-landed homes in CCR and fringe fare better (BT, 9 December 2015)

Resale prices of non-landed private homes in Core Central Region (CCR) and the city-fringe have been more resilient so far this year compared to those in the suburbs. Based on the November flash estimates released by SRX Property, its price index for resale non-landed private homes in CCR rose 1.6 per cent from December 2014 to November 2015. Over the same period, the index for Rest of Central Region (RCR) appreciated 2.3 per cent. However, the index for Outside Central Region (OCR) slipped 2.6 per cent over the same period. Analyst revealed that as prices in CCR and RCR fell more previously, centrally located properties have become more attractive and thus demand may start to gravitate towards them.

Interest in Singapore property seen waning in 2016 (BT, 2 December 2015)

Singapore has been slipping in its real estate investment prospect rankings over the past few years, falling from first place in 2011 and 2012, to third in 2013, seventh in 2014 and ninth in 2015. It is expected to fall further to 11th place in 2016, halfway down the list of 22 regions studied by PwC and Urban Land Institute. Borrowing rates in Singapore have increased since the start of the year, with the three-month Singapore interbank offered rate more than doubling to 1.07 per cent, and swap offer rate almost doubling to 1.39 per cent.

Raffles Place’s office rents catching up with Marina Bay’s (BT, 1 December 2015)

Grade-A office rents in Singapore’s Raffles Place CBD nearly caught up with the newer business district in Marina Bay in the third quarter of this year. The rental gap between the two areas was 4 per cent in the third quarter, the smallest differential since 2011. This significant narrowing of rental gap between Raffles Place and Marina Bay came as Grade-A office rents in Marina Bay dropped 19 per cent in the first three quarters of this year to S$10.70 per square foot per month (psf pm). During the same period, office rents in Raffles Place fell by only 0.7 per cent to S$10.31 psf pm.

Small units lead price falls for completed condos (BT, 1 December 2015)

Small units have led price falls for completed apartments and condos year to date as well as on a year-on-year basis, according to National University of Singapore’s October flash estimates for its Singapore Residential Price Index (SRPI). The SRPI shows that the subindex for small units (up to 506 sq ft) islandwide eased 3.1 per cent between December last year and October 2015. This is a bigger decline than the 2.3 per cent and 2.1 per cent falls respectively over the same period for the respective subindices for Central and Non-Central regions (both excluding small units). The overall SRPI has lipped 2.2 per cent year to date.

Prices of private resale homes inch up (BT, 1 December 2015)

Prices of completed non-landed private homes are showing signs of stabilising after falling for five straight months, but downward pressures remain. Their values rose 0.1 per cent in October over September, after rising 0.3 per cent in September, according to flash estimates out yesterday for the NUS Singapore Residential Price Index. The modest rally stems from increasing buyer interest in resale properties over the past half year as developers cut back on launches. Experts expect more slight month-to-month fluctuations in the SRPI but the general trend is still downwards, on the back of rising completions.

Public Housing

5-room Punggol flat sold for $760,000 (ST, 5 December 2015)

A premium five-room flat in Punggol fetched $760,000 on the resale market in Nov 2015, setting a new record for the non-mature estate. The price was possible as the flat is not only larger than usual, but also has a rare loft design, said the agents behind the deal. According to SRX Property’s records, it is the biggest sum paid for a Housing Board (HDB) five-room flat in Punggol. Such prices are more usual for popular mature estates such as Queenstown.

More take Special CPF Housing Grant (ST, 3 December 2015)

Households receiving the Special Central Provident Fund Housing Grant more than tripled in the last financial year, according to the Housing Board’s latest annual report. In the 12 months up to March 31, 10,213 households received the Special CPF Housing Grant, up from 3,380 in the previous financial year. This increase came after changes in July 2013 raised the income ceiling for the grant and extended it to four-room flats.

Government Land Sales

SingLand-UOL venture is top bidder for Clementi housing site (BT, 10 December 2015)

A 99-year leasehold private housing site along Clementi Avenue 1 has fetched six bids at a state tender that closed on Dec 9. The highest bid was from a joint venture between Singapore Land unit Singland Homes and UOL Venture Investments; its bid of S$302.1 million works out to S$615.04 per square foot per plot ratio (psf ppr). This was 9.4 per cent more than the second highest bid from Oxley-Lian Beng Venture at S$276.20 million, or S$562.31 psf ppr. Wee Hur Development placed the lowest bid of S$362.75 psf ppr. The project is planned to launch before the end of 2016.

Few surprises expected for H1 state land sales (BT, 4 December 2015)

Property consultants are generally not expecting any major surprises for the upcoming Government Land Sales (GLS) Programme for private housing and commercial land for the first half of 2016, and this applies to both the confirmed and reserve lists. In the private housing segment, the authorities will have to weigh the current state of the market – including the ongoing ramp-up in private home completions and rising vacancies, as well as a more measured intake of overseas nationals – against the fact that developers continue to show a healthy appetite for land at state tenders as they need to replenish this vital raw material to keep their businesses going.

Investment Sales

Uptick in shophouse sales attests to niche appeal (BT, 5 December 2015)

The shophouse market seems to be showing some buzz in sales – recent deals include two acquisitions in the Duxton area totalling S$13.7 million; the buyer is believed to be Spanish tycoon Ricardo Portabella Peralta, who a couple of months ago paid S$18.2 million for a pair of adjoining shophouses along Telok Ayer Street. Other transactions include a pair of shophouses along Club Street that went for S$8 million. The two-storey properties are on a 1,272 sq ft site with a balance lease term of 79 years. The built-up area is about 2,540 sq ft.

CCT’s Wilkie Edge being quietly marketed by agents (BT, 2 December 2015)

Capitaland Commercial Trust’s retail and office space at Wilkie Edge in the Selegie area is being quietly marketed for sale by some property agents, The Business Times understands. The asking price being bandied about is S$1,800-2,000 per square foot on net lettable area, which would translate to a quantum of S$275.8 million to S$306.5 million. This is substantially higher than the S$194 million (S$1,266 psf) independent valuation for the property as at June 30, 2015, listed in CCT’s asset valuation announcement in July.

Shanghai buyer completes 137 Cecil Street purchase (BT, 1 December 2015)

The sale of 137 Cecil Street to a businessman from China was completed on 30 Nov 2015. The deal was through the sale of shares in the company that owns the freehold office block and values the property at S$210 million. The sale involves a leaseback deal with the seller, Cheong Sim Lam, for a period of at least two years. The building has typical floor plates of about 4,800-5,700 square feet; the total net lettable area is 67,550 sq ft. Tenants are said to have been found for a substantial chunk of the space.

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