18 May Singapore Property News: 1st to 15th May 2015
Property Market Activities
Condo rents flat in April; HDB rents dip (ST, 14 May 2015)
Private residential rents remained flat in April compared to March, while HDB rents slipped 0.7 per cent, data from SRX Property shows. Transaction-wise, private rental volumes fell 11.9 per cent from March and public rental volumes, 13.2 per cent. These numbers had climbed in March, when leasing interest underwent a short recovery on the back of pent-up demand during the festive period the month before, consultants say. A total of 3,621 condo and apartment units were rented in April, 11.9 per cent lower than the 4,111 units rented in March. Year on year, rental volume in April was 11.2 per cent higher than the 3,257 units rented in April 2014.On the public housing front, four-room, five-room and executive flats posted a 0.9 per cent, 1.3 per cent and 0.4 per cent decrease in rents respectively. HDB rental volume fell 13.2 per cent to about 1,705 HDB flats rented in April, compared to 1,964 units rented in March.
Singapore developers face competition from home sellers in slow market (BT, 12 May 2015)
Resale of homes in Singapore have soared to almost half of all the private residential property transactions in the city-state, forcing developers to consider cutting prices as a flood of new apartments enters the market. Falling rentals, currently at their lowest level in four years, and an expected increase in mortgage payments due to rising interest rates are spurring some home owners and investors to put their properties on the market. On top of this, the stock of completed private homes will grow 7 per cent this year alone, pushing vacancy rates higher, according to official data and property consultants.
Fewer residential properties sold for more than S$1.5m last year: MND (CNA, 11 May 2015)
The number of residential properties sold for more than S$1.5 million in 2014 dropped by 42.4 per cent from the previous year, but they fetched higher prices on average, according to the Ministry of National Development. A total of 4,153 residential units were sold for more than S$1.5 million last year, compared to 7,218 sold in 2013. The number of residential units sold for more than S$1.5 million in 2014 was an 80.9 per cent increase from that of 10 years ago. In 2005, 2,295 units were sold. The average price of the residential units in 2014 was S$2.83 million, while the median price was S$2.13 million. Both saw an increase compared to 2013, which recorded S$2.76 million and S$2.10 million for the average and median price respectively.
Mixed-use development around the station (ST, 12 May 2015)
The development of the High Speed Rail (HSR) terminus will go hand in hand with the transformation of the surrounding Jurong Gateway business precinct. The terminus is expected to take up about 12ha of the 67ha plot and supporting infrastructure and amenities are needed. He said URA would develop around the station an “attractive mixed-use development precinct for businesses”, with office, hotel, retail and entertainment space. According to the Master Plan 2014, Jurong Gateway has land for about 500,000 sq m of office space, 250,000 sq m for retail, food and beverage and entertainment uses and a further 2,500 hotel rooms. Another 1,000 or more homes are to be added as well. Prices of private residences and Housing Board resale flats in Jurong East and Lakeside are likely to be boosted by up to 10 per cent closer to the completion of the HSR, with increased leasing demand as well. Demand could come from more Malaysians working in Singapore and looking to rent rooms here.
Jurong Country Club to make way for high-speed rail terminus (CNA, 7 May 2015)
News that the Republic’s terminus for the High-Speed Rail (HSR) link to Kuala Lumpur has caused Jurong East residents to purr with excitement. Having enjoyed greater convenience from the developments that have sprouted rapidly in their neighbourhood in recent years, they believe the latest addition can bring only more benefits, such as better transport links and retail options. However, a minority of those fear that the problems that have started creeping in with the recent developments, such as traffic congestion, could worsen. Meanwhile, businesses in Jurong East were mostly nonchalant about the announcement, as despite the increase in shopping malls, business still remains the same because of competition.
11 properties sold at loss of over $1m this year (ST, 6 May 2015)
Japanese tycoon Katsumi Tada’s eye-popping $15.8 million loss on a St Regis Residences penthouse may be the largest, but several other sellers also had hefty losses in the project this year. Three other sellers each lost over $1 million, ranging from $1.06 million to $4.78 million. Including two landed properties, 11 transactions this year sustained losses of over $1 million apiece. Overall, 78 loss-making transactions have taken place so far this year, up from 46 last year and 45 in 2013, over the same period. The number of unprofitable transactions also rose from 188 from the 132 in 2013. The pace of unprofitable transactions has picked up and is likely to grow even faster amid continuing cooling measures, as both the sale and leasing markets soften further, the trigger for such sales tends to be sellers saddled with heavy debt who are unable to service their loans.
Fall in rental vacancies ‘may not be full picture’ (ST, 2 May 2015)
Landlords and property agents remain convinced it is a tenants’ market even though the latest numbers from the Urban Redevelopment Authority (URA) show vacancy rates have fallen. The surprise fall in rental vacancies in the first quarter might suggest that the property sector is poised for an upturn but experts are not buying it. They reckon that the fall to 7.2 per cent from 7.8 per cent in the previous quarter is more of a statistical anomaly than a turnaround. As rent levels give a more accurate signal, the 1.7 per cent fall can be explained by the drop in number of expatriates and increase in rental supply. About 67,300 new private residential units are expected to hit the market between now and 2018, which may well keep rents sliding.
BTO flat prices ‘far lower than what people estimate’ (ST, 4 May 2015)
New Housing Board flat prices are overestimated by the public, and the majority of prospective flat buyers are willing to pay more than the current average prices. A new survey of more than 1,400 residents by the MND showed that one in five of them intended to buy a flat in the next five years. The issue of pricey new flats had been a rising concern in recent years, with Minister Khaw Boon Wan promising to fix the issue when he first took charge of the ministry. But perceptions that new Build-to-Order flats are expensive continue to linger. Last year, the average price of a four-room unit in a non-mature estate was $295,000. The most common estimate, chosen by 28 per cent, was between $300,001 and $400,000.
Some 5,000 exec condos slated for launch this year (BT, 2 May 2015)
Some 5,000 executive condominium (EC) units in up to eight new projects could be launched this year, which will probably exacerbate the build-up of unsold inventory. With loan restrictions still in place, consultants are expecting tepid take-up of these EC units, especially when developers have little room to adjust prices downwards at sites bought at fairly high prices. ECs are subject to HDB eligibility conditions and minimum occupation period as well as a housing loan cap of 30 per cent for units bought directly from developers, but they become full-fledged private condos after 10 years. Consultants estimate that there are still some 2,100 unsold units from 12 EC projects launched. Latest data from the Urban Redevelopment Authority released last week showed that the vacancy rate of available and completed ECs shot up to 15.1 per cent in the first quarter this year from 11.5 per cent in the fourth quarter.