17 Mar Singapore Property News: 1st to 15th March 2015
Property Market Activities
Rents for condos, HDB flats slip further in Feb (ST, 12 March 2015)
Overall rents to further decline by 6-8 per cent for the whole year as more new non-landed are slated for completion over the course of the year, according to a property consultant. Several negative factors are still in play; record numbers of private home completions, tighter inflow of expatriates into Singapore, a stringent property tax regime and a rising interest rate environment. Owners of newly completed condominiums are expected to cut rents significantly to secure tenants for the initial investment term of the first one to two years. This could result in a narrowing of the rental premium for new properties versus the older properties. But as more flat owners move into newly completed condos and put up their HDB flats for leasing, HDB flat rents would be affected and are expected to dip in this year by up to 7 per cent.
Frasers to start selling condos in Yishun project at end-March (BT, 11 March 2015)
North Park Residences, Frasers Centrepoint Ltd’s (FCL) newest condominium project in Yishun, is slated to begin sales at the end of this month, with a preview starting this weekend for buyers to express interest through placement of cheques. Property consultants said they are expecting residential projects within integrated developments to outperform pure residential projects. FCL is likely to initially release half of the total units for the project. North Park Residences is part of Northpoint City, the largest integrated development in the north of Singapore slated to complete in 2018. Northpoint City will also have over 500 retail shops and F&B outlets and covered walkways to an integrated transport hub comprising a new air-conditioned bus interchange and the existing Yishun MRT station.
Feb condo resale prices continue to stagnate (BT, 11 March 2015)
Resale prices of condominiums and private apartments continued to stagnate, remaining flat in February over the preceding month, according to flash estimates released by SRX Property recently. According to market experts, the market has been flat month after month because the equation has not changed and people have already come to terms with the fact that the cooling measures are unlikely to be tweaked in the near future. As such, buyers do not face any urgency. And sellers are not prepared to go much lower than the current price levels which have already come down. As long as sentiments remain unchanged, the market would remain at a stalemate.
Number of ultra-wealthy in Singapore set to grow (ST, 7 March 2015)
The ranks of Singapore’s ultra-wealthy are set to grow by more than 1,700 by 2024 – the strongest growth among 108 cities in a new global survey. In the survey, an ultra-wealthy person is defined as having a net worth of US$30 million (S$41 million), not counting their main home. The report predicts a 54.3 per cent jump in the number of ultra-wealthy from 3,227 last year to 4,979 in 2024. Singapore is ranked third among cities where the ultra-wealthy live, behind Tokyo with 3,575 and London with 4,364. The next biggest projected jump by 2024 after Singapore was in Hong Kong, with 1,251 more such individuals. Singapore’s strengthening position as a regional financial and transportation hub, coupled with stable and pro-business government, has attracted multinational corporations to relocate their operations here. These strong attributes have also attracted many (ultra-wealthy) to relocate and invest in Singapore, especially in the real estate sector. The growing numbers of ultra-wealthy in Singapore should bode well for the high-end property market in the long term.
Prices of small private housing units holding out well – for now (ST, 3 March 2015)
Price declines for completed private apartments and condos have been less pronounced for small units. But things could be headed for a change, as more shoebox units are completed and the competition for tenants intensifies. Flash estimates from the National University of Singapore for its Singapore Residential Price Index (SRPI) series indicates that small units of up to 506 sq ft posted a 0.6 per cent month on month fall in January this year. The Overall SRPI eased 1.6 per cent in January. According to a property consultant, when the shoebox unit reaches completion, HDB flat owners who invested in a shoebox unit may face challenges as the units are not sufficiently large for their family’s living requirements; at the same time, competition to find tenants will also be intense. Rather than leaving such units idle, such owners may decide to eventually dispose of their shoebox units at lowered prices.
Buyers paying premium for Tanglin Halt Sers flats (ST, 10 March 2015)
Tanglin Halt flats marked for redevelopment are fetching premiums in the resale market, as buyers look forward to new replacement flats in nearby Dawson estate, also in Queenstown. At least 41 units have been sold since the estate was announced for the Selective En bloc Redevelopment Scheme (Sers) last June. The estate comprises 3,480 units in 31 blocks in Tanglin Halt Road and Commonwealth Drive. When Housing Board flats are due to be demolished under Sers, owners are compensated and offered replacement units at subsidised prices. However, some owners have decided not to wait for the replacement units and have instead opted to cash out in the resale market. Currently, depending on flat attributes, many owners are selling at premiums of $10,000 to more than $30,000 over HDB expected compensation amount. Experts noted that premiums were lower than in previous Sers exercises as the market is cooler now, with resale prices having fallen for six consecutive quarters.
HDB resale prices dip on lower volume in February (ST, 6 March 2015)
HDB prices continue to decline in February, as their transaction volume also shrunk month on month, according to flash data from SRX Property released recently. Overall, HDB resale prices fell 0.6 per cent in February, confirming the 0.2 per cent increase in January to be a blip. Year on year, prices have fallen 5.7 per cent from February 2014. The biggest factors driving prices down were: the tightened credit situation (a 30 per cent mortgage servicing ratio), the three-year wait-out period before newly minted permanent residents can buy resale flats, and more recently, the creeping up of the Singapore interbank offered rate (Sibor), to which mortgage rates are pegged. Resale volume fell 8.5 per cent to 1,148 flats sold in February, down from 1,255 transacted units in January. But year on year, resale volume rose by 20.7 per cent in February, compared with just 951 units resold in February 2014. This was seen as a sign of buyers returning to the resale market, drawn by lower prices and the awareness that fewer new build-to-order flats will be launched this year.
Government Land Sales
Jurong site tender draws $338m top bid (ST, 11 March 2015)
A state tender for a private residential site in Jurong West closed recently after attracting healthy demand from developers despite a softening market. The Urban Redevelopment Authority (URA) said nine bidders made offers for the 99-year leasehold site in Jurong West Street 41. MCL Land (Vantage) emerged the top bidder, with an offer price of $338.1 million – 21 per cent higher than the average bid from all nine bidders. This works out to be $630.13 per sq ft (psf) of gross floor area. Chinese firm HY Realty came in second with a $317.9 million bid, the 191,635 sq ft site, launched for public tender on Dec 5 last year, is expected to yield a maximum permissible ground floor area of 536,580 sq ft when the project is completed. The URA will announce its decision on the award of the tender after the bids have been evaluated.