Singapore Property News: 1st to 15th March 2014 | Jack Sheo

Singapore Property News: 1st to 15th March 2014

Real Estate News

Property Market Activities

Potential in suburban office space (ST, 15 March 2014)

Head of Research at OrangeTee Ms Christine Li said that as Singapore steps up the drive to decentralise, many office tenants have been moving away from the pricier city. As a result, the rental gap between central and fringe areas narrowed slightly, from a 14.4 price index gap in 2011 to 14.2 last year. As mass-market residential home prices have moved ahead of office prices, there is room for fringe office prices to grow.

Better methods unlikely to hit developers’ margins (BT, 12 March 2014)

Costs may creep up for developers in the short run as they adopt productive technologies for selected Government Land Sale sites but margins should still be protected. As more developers adopt prefab components, costs could decline with economies of scale. In addition, developers are expected to rein in land bids in anticipation of higher construction costs.

Non-landed resale homes market remains soft in Feb (BT, 11 March 2014)

Flash figures released by SRX showed resale transactions down 18.5 per cent m-o-m to an estimated 242 transactions in February. This is a 22.2 percent drop on a y-o-y basis, from 311 resale deals closed in February 2013. Meanwhile, resale prices reversed consecutive price gains in December and January to dip 2 percent. Prices in the CCR fell 3.9 percent m-o-m in February, after climbing 1.8 percent in January, while those in the OCR fell 1.8 percent, after climbing 2.6 percent the month prior. Only the suburban RCR bucked the downward trend, with resale prices climbing 0.4 percent in February, after falling 3 percent in January.

Three adjoining Bukit Timah freehold properties up for sale (BT, 11 March 2014)

Three adjoining freehold properties along Queen’s Road and Duke’s Road are up for tender, with the seller expecting offers above $45 million. The residential site in Bukit Timah has a combined land area of 25,425sqft, with a maximum permissible gross floor area of 35,595sqft. Assuming a $5.8 million development charge for redeveloping apartments, the land cost could translate to $1,430 psf ppr.

Govt studying reverse mortgage as means to help elderly (CNA, 10 March 2014)

The government is seriously studying the reverse mortgage scheme as an additional option to help the elderly in Singapore monetise their flat. Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral. The owner then repays the loan with accumulated interest upon termination, or death, usually with sales proceeds from the flat. With a better understanding of the needs of seniors and experience in other monetisation schemes for the elderly, Mr Khaw said it is timely to revisit the option of reverse mortgages.

More luxury units going at discount (ST, 8 March 2014)

Prices are dropping at more luxury projects as developers struggle to move unsold stock. Consultants said the high-end segment has been weighed down by limited demand and ample unsold stock, adding that some developers may face extra pressure as they approach compulsory deadlines to sell off all their units. OrangeTee research head Christine Li expects high-end private home prices to soften by up to 5 percent this year.

Development charge rates up from today (BT, 1 March 2014)

Development charge (DC) rates payable for enhancing the use of some sites or to build bigger projects on them have been raised from 1 Mar by an average of 15 percent for commercial use and 13 per cent for hotel/hospital use. For landed and non-landed residential uses, the average increase is about 1 percent each, while rates for industrial use have been left completely untouched.

Public Housing

Changes unlikely to affect valuation, say experts (ST, 12 March 2014)

Experts said that changes to the way HDB resale transactions were conducted were unlikely to affect the valuation of a flat. Valuations will continue to be based on direct comparisons of recent transactions. The changes are more likely to spell a mind-set change for buyers and sellers, who must learn to focus on a unit’s innate characteristics, instead of the amount of cash they stand to fork out or gain.

HDB overhauls system for resale transactions (BT, 11 March 2014)

HDB overhauls the procedure for resale HDB transactions in a bid to shift the focus from COV to market prices when negotiating resale prices. It requires buyers to first obtain the option to purchase (OTP) before asking for a valuation through HDB, and it will not accept valuation requests from sellers. Buyers who are granted the OTP will have 21 calendar days to exercise the OTP. HDB will also start posting daily prices of resale transactions on HDB InfoWEB as soon as they are registered.

Resale flat COVs fall to zero for first time since 2006 (BT, 7 March 2014)

For the first time in nearly a decade, the overall median COV for resale HDB flats hit ground zero last month, compared with $3,000 in January, as demand for resale public homes softened. Almost two in five HDB deals closed below valuation, making up 37.3 percent of HDB resale deals, up from 29.4 percent in January, based on transaction records from SRX. Flash estimates by SRX also showed HDB resale prices marking a sharpest month-on-month fall of 1.8 percent since prices began declining in April 2013, while resale volume dropped 20 percent from a month ago to 734 deals.

Government Land Sales

EL Dev tops bids for Yishun condo site (BT, 12 March 2014)

EL Development trumped four other bids for a Yishun Avenue 9 site with its offer of $278.8 million, or $450 psf ppr, exceeding consultants’ expectations of $380-$431 psf ppr. This marks a historical high for a residential non-landed government land sales site in Yishun, excluding mixed development. The 99-year leasehold site has an area about 221,239sqft, with a maximum gross floor area of about 619,473 sqft. It can yield about 685 units. OrangeTee research head Christine Li expects the developer to sell the project from $1,000 psf onwards.

Prince Charles Crescent site up for tender (BT, 1 March 2014)

A 99-year leasehold residential site at Prince Charles Crescent (Parcel B) has been put up for sale in a public tender by the government. The land parcel is located in an established residential estate and minute drive to Orchard Road and city centre. It has a site area of 24,964sqm with a permissible gross floor area of 52,426sqm. It can yield some 655 residential units. Analysts expect the land to attract as many as 10 bids from major developers given its prime location.

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