17 Jul Singapore Property News: 1st to 15th July 2014
Property Market Activities
Prices of resale condos slip 1.4% in June: SRX (BT, 15 July 2014)
Resale prices of private condos dipped further last month to a low since December 2012, despite an increase in resale volumes. This could be due to more buyers moving into the resale market as owners relent to lower prices to match the expectations of buyers. Transaction data from Singapore Real Estate Exchange (SRX) shows that prices fell 1.4 per cent from May, dragged by declines across all regions. The Rest of Central Region (RCR) marked the biggest price decline of 3.2 per cent, followed by 1.7 per cent in Core Central Region (CCR) and 0.3 per cent in Outside Central Region (OCR). Resale prices in the CCR are also affected by loan curbs, ample unsold developer stock, additional buyers stamp duty and weak leasing demand.
Unlocking the Gate to the city’s charms (ST, 12 July 2014)
The impending launch of the City Gate mixed development in Jalan Sultan is drawing attention back to the Kampong Glam district. Its charm as a historical and cultural zone may give it a head start over many areas but it is its location – on the edge of the city centre and close to retail and entertainment amenities – that is its strongest suit. The 30-storey City Gate is on the site of the former Keypoint, which was acquired by World Class Land for $360 million from Frasers Commercial Trust in 2012.The 99-year leasehold project in Beach Road will feature 311 flats – one- and two-bedroom units of 431 to 570 sq ft, two-bedroom and three-bedroom dual-key units of 678 to 1,066 sq ft and one- to four-bedroom penthouses that range from 484 to 1,819 sq ft. It will also have 188 commercial units, ranging from 280 to 3,735sq ft. Residential units are expected to go for $1,900 to $2,000 per sq ft (psf) and commercial units could sell for $4,000 to $5,000 psf.
Hiap Hoe seeks sole buyer for Balmoral condo units (BT, 10 July 2014)
Another developer is putting up unsold condo units for bulk sale, apparently to avoid having to pay hefty fees to extend the sales period. Singapore-listed Hiap Hoe Group wants to sell all 48 units in its District 10 project, Treasure on Balmoral, at a guided price of $1,850 per square foot (psf) or $191.4 million. “That’s one way for developers to dispose of unsold units without incurring the QC fines,” said OrangeTee head of research and consultancy Christine Li, in a reference to the government’s Qualifying Certificate rules, under which developers have to pay extension charges to extend the sales period two years after the project’s completion. Hiap Hoe’s project received its temporary occupation permit (TOP) in November 2012, meaning that the developer will have to pay extension fees for unsold units from this November. Hiap Hoe’s subsidiary paid $138 million for the Balmoral site by way of a collective sale tender in 2007.
More buying smaller private units (ST, 10 July 2014)
Soaring prices and home loan curbs are forcing increasing numbers of buyers to turn to ever smaller homes as they struggle to get on the property ladder. The median size of private homes sold dropped to 947 sq ft in the period from July last year to June this year, according to STProperty. This is slightly smaller than a Housing Board (HDB) four-room flat, which is typically around 969 sq ft. The effect of TDSR on home sizes was even more pronounced within the new sales market. The median floor area of new homes bought from developers in the past 12 months was just 753 sq ft, according to caveats lodged with the Urban Redevelopment Authority. That was 12.5 per cent smaller than the median size of 861 sq ft in the first six months of last year before TDSR was imposed. A run-up in property prices per sq ft (psf) since 2009 after the global financial crisis has also played a part in shrinking private home sizes, STProperty said.
Low Keng Huat buys remaining 36 units at Balestier Towers (BT, 9 July 2014)
Low Keng Huat (Singapore), which last August acquired 15 commercial units and an apartment at Balestier Towers for nearly $77.4 million, exercised options to purchase the balance 36 units in the mixed-use development for slightly above $63.9 million on 8 July. Its 99 per cent owned subsidiary Newfort Alliance (Moulmein), which made the two sets of acquisitions, plans to redevelop the 29,986-sq-ft site into a mixed residential and commercial development. The site’s tenure is statutory land grant, which is akin to freehold tenure. Tan JingWen holds the other one per cent of Newfort. Low Keng Huat’s release did not give further details but under Master Plan 2014, the site is zoned for commercial and residential use with a 3.0 plot ratio (ratio of maximum gross floor area to land area).
Mid-tier, luxury home sales stuck for now (ST, 8 July 2014)
Property investors hoping for a lift in the ailing real estate market were likely to have been disappointed last week. The Ministry of National Development (MND) said last Monday it was not time to wind back the property cooling measures as private home prices have remained largely unchanged despite falling for two consecutive quarters. Lifting the curbs prematurely could cause a sharp increase in demand and housing prices, MND said. The moves that reined in property prices included extra stamp duties to curb speculative buying and the total debt servicing ratio (TDSR) framework, which was introduced on June 29 last year. Fresh estimates from the Urban Redevelopment Authority (URA) showed that prices of non-landed units sank 1.1 per cent in the second quarter, which meant that the residential price index had eased by just 3.3 per cent over the past three quarters. This hardly seemed significant compared with the 60 percent spike since the recent market upswing in 2009.
Resale prices of private homes rebound in May (ST, 1 July 2014)
Resale prices of private homes staged a surprise rebound in May over April, reversing a nine-month decline, but experts say to keep the bubbly on hold. They warn that investors remain wary, and the unexpected price bounce does not signal a sustained recovery. Overall resale prices climbed 0.8 per cent from April to May, according to Singapore Residential Price Index flash estimates out one day earlier. They had fallen 1 percent from March to April as new launches drew buyers away from completed homes. Consultants recently said May’s price rise could have just been a blip, pointing out that the resale market largely remained stagnant. Resale prices are likely to have fallen or stayed flat from May to June, they added.
HDB resale prices dip 0.6% in June to hit a two-year low (BT, 11 July 2014)
HDB resale prices continued to slip for the fifth consecutive month, registering a 0.6 percent dip in June from May and marking a fresh two-year low since April 2012. This translates to a 6.1 per cent drop from a year ago and a 3 percent fall year-to-date, going by data from the Singapore Real Estate Exchange (SRX), which looks at pre-caveat resale transactions and unit rental information. Softness in resale prices last month was seen in three, four and five-room resale flats. Resale prices for HDB executive flats, however, rebounded with a 1.3 per cent month-on-month increase in June. Property consultants are expecting HDB resale prices to soften by up to 8 percent over the whole of this year.
Government Land Sales
Sembawang EC tender result reflects softer market (BT, 11 July 2014)
A state tender for an executive condominium (EC) site in Sembawang Avenue has drawn just four bids, reflecting the soft sentiment for ECs following December’s introduction of a mortgage service ratio cap for EC purchases from developers. The top bid of $320.11 per square foot per plot ratio (psf ppr) is lower than the $350 psf ppr that another EC site in Sembawang fetched at a tender in January. In fact, the earlier site, a long Canberra Drive, is further from Sembawang MRT Station and it drew six bids. The top bid at 10th July’s tender closing is from a tie-up between units of Frasers Centrepoint and Keong Hong Holdings.