16 Jun Singapore Property News: 1st to 16th June 2014
Property Market Activities
New home sales in Singapore nearly double in May from April (ST, 16 June 2014)
Home seekers continued to sweep up new private homes last month, nearly doubling their purchases from April. Developers sold 1,470 units in May, up a whopping 97.3 per cent from 745 units in April, which was itself a five-month high, according to Urban Redevelopment Authority (URA) figures. May’s sales marked the highest demand for new homes since June last year, when 1,806 units were sold. Mass-market units in the suburbs led demand in May, with 944 new homes sold. This accounted for more than half of all new homes sold in the month. Another 494 units were sold at city-fringe projects, while sales in the city centre remained weak with just 32 new homes shifted. May’s top seller was City Developments’ (CDL) Coco Palms in Pasir Ris Drive 1, with 590 units sold at a median price of $1,018 per sq ft (psf), URA data showed.
Price cuts at prime central private homes too (BT, 16 June 2014)
The sale is on for private residential projects in the prime central region, following price cuts for city fringe and suburban projects which helped developers move more unsold units. Some projects are dangling incentives such as direct discounts, ABSD absorption, rental guarantees or cashback options. For example, Hallmark Residences along Ewe Boon Road in Bukit Timah is offering a discount of more than 10 percent for several of its units. A 969-sqft two-bedder, for instance, will cost $1.9 million, down from $2.1 million. Three-bedders will cost $2.8 million instead of $3.1 million, and four-bedders, $3.5 million instead of $4 million.
Bidadari home projects attract growing interest (ST, 14 June 2014)
Interest in Housing Board flats in Bidadari is growing but investors have also been quick to buy private homes in the growing residential enclave. The stigma of living near a former cemetery does not seem to be a deterrent to eager home buyers. The proliferation of upcoming mixed developments in the vicinity means that future residents will be well served by amenities. The area is well-connected with the Woodleigh and Potong Pasir MRT stations, which are both on the North-East and Circle lines. Schools in the vicinity, like the St Andrews Junior College, Maris Stella High School and Stamford American International School, should boost Bidadari’s appeal to both expats and locals. As many as 10,000 public homes are expected to sprout up, with another 1,000 private homes to be built by the second half of 2015.
Dark condos shine light on rising vacancy (BT, 10 June 2014)
As dusk descends upon the Singapore skyline, the excess capacity building up in the private housing market is evident. Dark patches in some condominium developments completed six to 12 months ago, or even longer, point to significant vacancy. Analysts cite a host of factors, including strong investment demand for real estate after the global crisis, escalation in private home completions of late, and slower expatriate inflow. Vacancies are set to climb and rents fall in general. Suburban locations, where most of the supply is, will be the worst hit. Competition for tenants is likely to be more intense in suburban projects, as the bulk of completions last year as well as the potential supply pipeline are in Outside Central Region (OCR). URA’s Q1 rental index for non-landed private homes in OCR was down 2.3 per cent from a year ago. This compares with a decline of 0.3 per cent for Core Central Region (CCR) and a rise of one per cent in Rest of Central Region (RCR).
Resale condo volume, prices slide in May (BT, 10 June 2014)
Loan restriction measures and buyers’ stamp duties aside, two other factors-aggressive discounts offered by developers on new units and weak leasing conditions drove resale transactions and prices of non-landed private homes down last month. The developers of a few major condominium projects recently cut prices to drive up sales and clear their stock by their deadlines, failing which they would have to pay extension charges. This move has siphoned some demand away from the resale market, analysts said. Flash figures released by the SRX showed that the number of condo units resold in May fell 7.5 per cent month-on-month to 421 units. This is 42.6 percent lower than the 734 units resold in May last year. Resale prices continued to inch down, falling 0.3 per cent in May, driven mostly by a 2.9 per cent price plunge in the luxury market in the core central region; prices wilted by 0.3 per cent in the city fringes. Only prices in the suburban areas bucked the trend, climbing 0.6 per cent.
Unsold homes big drag on developers’ coffers (BT, 7 June 2014)
Developers have collectively paid up to $55.1 million in extension fees for unsold units in their private condo projects since 2012. They could potentially fork out another $80.7 million to extend the sales period for another year if they do not sell their inventory by year-end, according to a study by OrangeTee Research. “As the penalty amounts to millions of dollars per project, we believe that it will incentivise some developers to reprice some of these projects to move sales in the near term,” said OrangeTee research head Christine Li. Given that the QCs allow developers up to five years to finish building a project and two more years to sell all the units, the heat is on developers to clear their stock by the deadline.
Luxury homes left empty in quiet market (ST, 2 June 2014)
Completed luxury homes without owners are gathering dust in exclusive pockets of the city centre as developers hold off selling them in a moribund luxury market. In the Ardmore Park area off Orchard Road, for instance, an entire condominium project has been completed but not launched for sale. Other projects nearby could soon face the same fate. While the residential property market in general has slowed down markedly, the top end has been the hardest hit. Experts point to recent rounds of property market cooling measures that have driven away many buyers in the high-end segment.
Market largely unaffected by subletting caps (ST, 16 June 2014)
Six months after the start of quotas on subletting public flats to foreigners, the fear that they would hurt the rental market does not seem to have come true. As of June, only about 1 percent of Housing Board neighbourhoods and blocks have reached the quota limits, according to HDB. This is about the same proportion initially affected when the quota kicked in this January. Since then, only 8 per cent of the flats in a neighbourhood or 11 percent of the flats in a block can be wholly sublet to permanent residents or foreigners. However, it seems that HDB blocks near the MRT stations in the west have been affected by the quota. This is due to the high demand by foreign students or fresh graduates from the nearby universities.
Government Land Sales
More commercial land up for sale (ST, 11 June 2014)
A sharp spike in commercial land was a striking feature of the Government’s land sales programme released recently. The Ministry of National Development said it will release land that could supply up to 159,000 sqm of commercial gross floor area (GFA) in the next half of the year – a huge hike over the 5,000 sq m from land on the confirmed list in the first half of the year. The move was a sign that the Government was stepping up its plans to decentralise commercial hubs, analysts said. The bulk of new commercial space will come from a 3.98ha site in Paya Lebar Road, which can yield up to 132,000sqm of GFA. The site comprises a 2.07ha plot in Sims Avenue and another plot across the road. Both plots will be connected underground, and will give developers more flexibility for the new building’s design, according to the URA. Another site of interest is a 2.31 ha site in Holland Road, which is expected to yield 580 homes and a mid-size mall with 13,500 sq m of GFA.