18 Jan Singapore Property News: 1st to 15th January 2016
Property Market Activities
Completion of DTL2 boosts home prices (ST, 15 January 2016)
The completion of the Downtown Line 2 (DTL2) late December has bolstered prices of homes near the new stations, bumped up rents and increased sale volumes. Anlaysts noted that average prices of private apartments along major roads near the DTL2 – Upper Bukit Timah, Bukit Timah, Rochor Canal and Sungei roads rose 3.58 per cent in the two years to Dec 31 last year, while the Urban Redevelopment Authority’s property price index weakened by about 7.6 per cent.
Sibor and SOR head north on China worries (BT, 14 January 2016)
Singapore’s key interest rates continue to rise to levels last seen in 2008, amid persistent worries about China. Economists think that the movements in Sibor and SOR can be partly attributed to volatility in the forex markets, which came on the back of gyrations in the offshore yuan (CNH). OCBC’s current forecast is for the USD-SGD to head towards 1.4670 before the year is out, and for the three-month Sibor and SOR to similarly test the 2 per cent handle.
Over-supply of industrial space looms (ST, 13 January 2016)
Demand or factory space has weakened in line with the contracting manufacturing sector, amid fewer calls for business park units, given the uncertain economic climate. Rents of multiple-user factory space suffered their second consecutive decline in the fourth quarter. Monthly rents of first-storey factory units were down 4.5 per cent for the whole of 2015 while those for upper-storey space were down 5.7 per cent.
Another 7-10% fall in private home prices seen: BNP Paribas (BT, 13 January 2016)
Singapore is “half-way through the residential down-cycle” with another 7-10 per cent of decline in private home prices seen over the next two years, compounded by the prospects of a rising rate cycle, a softer job market and slower immigration growth, BNP Paribas projected. Projection implies a 15-20 per cent price fall from the 2013 peak; he expects vacancies to rise to 10 per cent by 2018.
Home buyers go for price and location (ST, 7 January 2016)
Based on the turnout at the launches held in 2015, three projects defied the cooling measures to perform exceptionally well at their launch, largely due to pricing and location. North Park Residences in Yishun sold 486 units at a median price of $1,374 per sq ft (psf) while High Park Residences in Sengkang sold 1,169 units at a median price of $989 psf in their launch months. In the city fringes, The Poiz Residences in Potong Pasir sold 277 units at a median price of $1,440 psf in its launch month. With that, experts believe that Q1 projects meeting these criteria are likely to do well.
Private home prices in Q4 register smallest drop in more than two years (BT, 5 January 2016)
The 0.5 per cent quarter-on-quarter decline in the Urban Redevelopment Authority’s (URA) flash price index for private residential properties in the fourth quarter brought the full-year fall to 3.7 per cent, following a 4 per cent drop in 2014. Some consultants see as a sign of a future soft-landing and another justification for the government to keep the cooling measures in place for now.
More GCB transactions in 2015 (BT, 2 January 2016)
Good Class Bungalows have turned out to be somewhat of a bright spot in 2015. At least 34 transactions totalling S$730 million in Good Class Bungalow (GCB) Areas were sealed in 2015 – up from 28 deals adding up to S$626 million in 2014. The latest tally is also the best showing since 2012, when 54 properties in GCB Areas changed hands for S$1.17 billion. The increase in sales last year was against the backdrop of softer prices.
Vacancies, oversupply revive debate on ECs (BT, 2 January 2016)
The recently increased income ceiling to S$14,000 from S$12,000 seems to have failed to boost demand for ECs. The narrowing price gap between ECs and 99-year leasehold mass market condominiums has also not helped demand, with some eligible EC buyers finding it more worthwhile to put their money in the latter, which are not subject to the leasing or resale restrictions for ECs. ECs also face some competition from better-quality and well-located build-to-order HDB projects, of which there have been more in recent years.
Rents of condos, HDB flats fall again in 2015 (ST, 13 January 2016)
Rentals of non-landed private homes as well as Housing & Development Board flats continued to decline last year, based on the December 2015 flash estimates from SRX Property. However, the volume of rental contracts in both markets rose in December on a year-on-year basis. SRX Property’s overall rental index for non-landed private homes eased 5.4 per cent in 2015, comparable to the 5.2 per cent fall in 2014. In 2013, the index declined 2.5 per cent.
HDB resale prices rise for first time in 2.5 years (Today, 5 January 2016)
Based on flash estimates released by the HDB on 4 Jan, the Resale Price Index rose 0.2 per cent in the last quarter to 134.9. While HDB resale prices were down on the whole for 2015 by 1.5 per cent, this is smaller compared with the 6.2 per cent decline in prices seen in 2014. Prices of HDB resale flats rose for the first time in 2.5 years in the last quarter of 2015. However, the prices — which had previously fallen for nine consecutive quarters — are not expected to significantly rebound this year, the analysts added.
Singles’ rush for new two-room flats eases (ST, 3 January 2016)
In July 2013, when singles were allow to buy new Housing Board (HDB) flats in non-mature estates, 57.5 singles competed for each available unit. This has fallen to 7.5 singles per unit in the latest Build-To-Order (BTO) launch in November. Since July 2013, about 11,600 singles have been invited to book new flats. By the end of November last year, 7,700 had done so.
Government Land Sales
Optimistic bids for Siglap condo site (ST, 15 January 2016)
A rare Siglap Road condo site attracted eight bids yesterday – testimony to the site’s merits and the need for developers to replenish land banks. A consortium of Frasers Centrepoint unit FCL Topaz, Sekisui House and Keong Hong Holdings unit KH Capital lodged the top offer of $624.18 million, or about $858 psf/pr for the site between Victoria School and East Coast Parkway. It intends to build 800 to 900 units on the 1.93ha plot and will launch within a year.
Tanah Merah site triggered for tender (BT, 8 January 2016)
A private housing site near Tanah Merah MRT Station has been triggered from MND’s reserve list. Market watchers say this reflects developers’ hunger for land, their vital raw material, amid depletion in their landbanks. A successful application has been made for a 2.4 hectare plot at the corner of New Upper Changi Road and Bedok South Avenue 3. The 99-year leasehold site can yield about 570 private homes. The developer has committed to bid at least S$320 million, S$580 per square foot of potential gross floor area, for the site at tender.
Four adjoining Joo Chiat shophouses up for sale (BT, 15 January 2016)
A row of four three-storey shophouses in Joo Chiat has been put up for sale via public tender. The adjoining units are located at 292, 294, 296 and 298 Joo Chiat Road, and have a combined land area of approximately 7,616 square feet. Together, they make up about 17,980 square feet in gross floor area (GFA). The site – which sits within the Joo Chiat Conservation Area – is zoned as “commercial” under the Urban Redevelopment Authority’s (URA) Master Plan 2014. The site comes with a plot ratio of 3.0. It is allowed up to a building height of five storeys, subject to the relevant authorities’ approval.
Industrial site on Lok Yang Road up for sale (BT, 14 January 2016)
A heavy-industry industrial development at 1 Fourth and 4 Fifth Lok Yang Road has been put up for sale by expression of interest (EOI). The indicative price is S$20 million. Sitting on a 133,876 square feet (sq ft) corner site, the property comprises five buildings – two single-storey factory buildings with mezzanine level, a single-storey factory building, a two-storey factory building and a four-storey factory building. The total gross floor area is about 107,130 sq ft. The development is zoned for “Business 2” use, with a maximum approved plot ratio of 2.5. The remaining tenure for 1 Fourth Lok Yang Road and 4 Fifth Lok Yang Road are 18 and 22 years, respectively.
Harper Kitchen being sold for S$51.1 million (ST, 13 January 2016)
Harper Kitchen, a freehold industrial building near Tai Seng MRT Station, is being sold for S$51.1 million to a four-member consortium led by Nanshan Group Singapore. The consortium is expected to redevelop the property, given its substantial untapped plot ratio. Occupying 23,893 sq ft, the site is zoned for Business 1 – White use. The price paid works out to S$834 per square foot of potential gross floor area, inclusive of an estimated development charge (DC) of S$18.65 million.
CapitaLand Trust said to seek sale of One George Street office tower in Raffles Place (ST, 13 January 2016)
CapitaLand Commercial Trust, Singapore’s largest office real estate investment trust by value, is seeking to sell the 23-storey One George Street building in the Raffles Place office district. The building, whose tenants include Royal Bank of Scotland Group and Diageo Singapore Pte, has 41,564 sq m (447,000 sq ft) of lease area, according to the trust’s website. The tower, bought in 2008 for $1.17 billion, was valued at $975 million as of Dec 31, 2014, the website showed.
Value of shophouse deals rises 8% in 2015 (BT, 7 January 2016)
The value of shophouse transactions last year reached S$655.6 million, up 8 per cent from S$606.2 million in the previous year. However the number of transactions eased in 2015, suggesting bigger-ticket shophouses changed hands last year. Some market watchers told The Business Times that there has been heightened interest for this property asset class from ultra high net worth investors and family funds, some prepared to accept low entry yields of just 2-3 per cent (on a gross basis) with an eye to capital appreciation in the medium to long term.