Singapore Property News: 1st to 15th January 2015

Real Estate News

Property Market Activities

Non-landed private home rents down 6.4% in 2014 (BT, 15 January 2015)

Rents of non-landed private residential properties have shown continued decline since February last year, falling 0.8 per cent in December compared to November, according to recent flash estimates from SRX. This translates to a 6.4 per cent fall since the start of the year, and a 10.1 per cent decline from the peak in January 2013. According to a property analyst. It is expected that rents may fall up to 8% in view of tightened foreign labour conditions and cut back in companies housing allowances.

No more new residential projects in 14 ha area of Geylang (BT, 14 January 2015)

URA will not approve any new residential projects in a 14-hectare stretch of Geylang from Lorong 4 to Lorong 22 under a proposed rezoning exercise. The planning authority is proposing to re-zone the section from the existing residential/institution use to the newly minted commercial, institution use group. The maximum plot ratio will remain at 2.8. Market watchers said it will be a long while before the area’s character changes, given the existing fragmented ownership in the belt, with a myriad of apartment developments, hotels and commercial establishments, not forgetting the prostitution dens. However, the rezoning is expected to boost land values in the locale generally (since commercial properties are usually valued more than residential) and spur collective sales.

31 units at Marine Blue sold at an average of S$1,800 to S$2,000psf (BT, 13 January 2015)

Capitaland Limited sold 31 of the 50 units released during the preview of its new freehold condo project Marine Blue over the weekend, at an average price of between S$1,800 and S$2,000 per square foot (psf). The units sold included one-bedroom-plus-study and two-bedroom ones and a penthouse, said a CapitaLand Singapore spokesman. The price list obtained by The Business Times showed a 10 per cent discount off the listed prices. Sited next to Grand Mercure Roxy Hotel along Marine Parade Road and within walking distance of the upcoming Marine Parade MRT station, Marine Blue comprises 120 condo units and four strata terrace houses. Property consultants noted that rental prospects for the project look promising, given its proximity to amenities such as Parkway Parade, Katong 112 and the East Coast Park.

Mortgagee sales rocket as more default on loans (ST, 12 January 2015)

Mortgagee sales shot up fivefold last year as over-committed borrowers defaulted on repayments. There were 159 forced sales listings last year, up from just 32 in 2013, according to a property consultancy firm. About 78 per cent of the listings were residences, the rest being commercial or industrial real estate. Almost all of them came from banks, with a handful from commercial credit companies. The spike in bank sales came on the back of a “stricter regulatory and financing environment”, where borrowers in default are finding it challenging to sell their properties on their own, said a property consultant.

Sales of strata-titled retail units hit by curbs (ST, 9 January 2015)

Sales of strata-titled retail units plunged last year as tough lending curbs took effect, a new report showed recently. Only 453 sales caveats were lodged in 2014 – 61 per cent down from the 1,163 registered in 2013. Investor demand for such strata-titled outlets is likely to stay weak this year, added the report, due to the continued impact of the total debt servicing ratio and the spectre of higher interest rates. According to the report, it is expected that the average capital values of prime strata-titled space in Orchard road and regional centres to remain flat for most of 2015. Landlords are expected to hold on to their price expectations as these units remain rentable.

Morgan Stanley fund mulls bulk sale of luxe units (BT, 8 January 2015)

The momentum for bulk transactions of high-end residential units looks set to continue this year. A German core fund managed by Morgan Stanley is said to be exploring a bulk sale for its 23 units in the Draycott Eight condo. It has appointed two agents to help it find a buyer in a transaction which will be effected through the sale of shares in a company that owns the 22 four-bedders and a penthouse with a total strata area of 68,419 square feet. Based on market talk, the asking price is S$2,300 per square foot, which would amount to S$157.4 million. Some agents estimate the units could be worth around S$150 million assuming an average price of S$2,194 psf – derived from a 20 per cent discount to an average price of S$2,742 psf achieved last year for the nearby Ardmore Park, which has freehold tenure. Draycott Eight is on a site with a
balance lease term of about 82 years.

Public Housing

Non-mature estates see bigger fall in resale prices (ST, 9 January 2015)

Resale prices in non-mature Housing Board estates were hit harder in last year’s cooling market, falling more than twice as hard as those of flats in mature estates. Flat prices in non-mature estates such as Punggol and Sengkang fell 8.3 per cent over the year compared to a 3.1 per cent fall in mature estates like Queenstown and Bishan. This made for an overall fall of 6.1 per cent in HDB resale prices last year, according to SRX Property flash estimates recently. But more flats changed hands, with 15,914 deals last year, up from a low of 14,220 in 2013. Experts are expecting transaction volume to stabilise or even pick up this year, amid another year of gradual price falls. “In a market with falling prices, the focus is back on market fundamentals… Buyers are willing to pay for flats with good location attributes,” said a property consultant.

Resale flat prices likely to fall further (ST, 3 January 2015)

After a sluggish year in the public housing resale market, prices are expected to continue their slow slide into 2015. But the number of deals closed might pick up, as buyers are lured back by low prices. Experts’ predictions range from stagnation to a fall of 5 per cent to 8 per cent for the full year, though this depends on whether cooling measures are lifted. So far, the Government has stuck to its position that it is not yet time to do so. Larger forces such as the country’s and global economic growth as well as interest rates could also weigh down on prices. Lower prices could be good for buyers but would erode home owners’ wealth. Buyers’ return to the resale market might also be encouraged by a smaller supply of new flats. About 16,000 Build-to-Order units will be launched in four batches, including the first housing projects at Bidadari.

Government Land Sales

Lower than expected bids at tender for Yishun mixed site (BT, 14 January 2015)

A HDB tender for a mixed-use commercial/residential site at Yishun Ave 4 which closed on the 13th of January 2015 garnered a “muted” turnout from just five bidders. Northern Resi and Northern Retail, both units of listed construction engineering group BBR Holdings, beat four others to offer the highest price of S$185.09 million, which translates to S$629.24 per square foot per plot ratio (psf ppr). The Yishun plot, with a gross floor area of about 27,327 square metres, is the first of two selected government land sale sites to adopt a new building method called prefabricated prefinished volumetric construction (PPVC). It has to meet a certain level of prefabrication under new government rules for the built sector. This could partly explain the low number of tender bids and lower than expected winning tender bid. All of the tender participants were developers with a construction arm, and would be better equipped to control construction costs, given the new guidelines.

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