15 Feb Singapore Property News: 30th January to 15th February 2016
Property Market Activities
Raintree Cove site at East Coast Park to close next Feb (ST, 11 February 2016)
Popular establishments at East Coast Park, such as Long Beach Main Seafood Restaurant and Lorna Whiston Pre-school, will have to move out when the lease for the Raintree Cove site expires on Feb 28 next year. Tenants are expected to make way for the area’s development. The National Parks Board will take over the space, but said it is too early to reveal the plans for development.
JLL warns of further correction in property prices (BT, 4 February 2016)
Residential property prices in Singapore could fall by 4 to 6 per cent a quarter, going by past correlation studies with the stock market, said investment management firm JLL. In fact, recent declines in the domestic stock market could signal a further correction in property prices in the months ahead – especially since stock market movements typically lead property market movements by one to two quarters.
Cooling measures review: Market stability an important factor (BT, 4 February 2016)
Market stability is key when assessing property cooling measures and the government will review these policies when the risks are “less or manageable”, Minister K Shanmugam said. He also stressed that the property market does not exist in a vacuum but is linked to Singapore’s economy, whose susceptibility to the global economy is magnified by the fact that its external trade volume is four times that of its GDP.
2015 property investment sales lowest since 2009 (ST, 3 February 2016)
Property investment sales last year hit their lowest level since the global financial crisis in 2009, according to a report. It noted that the value of transactions dropped 9 per cent to $16 billion, mainly due to the mismatch of price expectations between buyers and sellers and the slowdown in launches of new sites in the Government Land Sales (GLS) programme. Property sales by government agencies fell 13 per cent to $5.8 billion last year while private investment sales declined 8 per cent to $10.3 billion.
Singapore still cost competitive for luxury home buys despite ABSD: study (BT, 2 February 2016)
Even after factoring in the hefty additional buyer’s stamp duty (ABSD) of 15 per cent on foreign property buyers, Singapore is still cost competitive compared to London and Sydney for luxury home purchases. The report from an inaugural Global Tax report by Knight Frank and Ernst & Young found that Singapore’s tax costs and property costs are lower compared to London and Sydney for a foreigner buying a property worth US$10 million and holding it for five years before selling it.
Developers’ sentiment dips further in fourth quarter (BT, 2 February 2016)
Developers’ sentiment weakened further in the fourth quarter of last year, a survey by the National University of Singapore (NUS) and the Real Estate Developers’ Association of Singapore (Redas) has found. The Current Sentiment Index, which tracks changes in sentiment in the preceding six months, fell from 3.7 in Q3 to 3.6 in Q4. The Future Sentiment Index, which tracks sentiment in the next six months, also took a dip – from 3.7 in Q3 to 3.4 in Q4. A score under five indicates deteriorating market conditions, while a score above that, improving conditions.
Tenants call the shots in private rental market (BT, 1 February 2016)
The objectives of the Total Debt Servicing Ratio (TDSR) framework seem to have been met. According to the Monetary Authority of Singapore (MAS), less than 10 per cent of existing borrowers have a TDSR of above 60 per cent, and this is expected to decline over time as households pay down their loans. Borrowers are also taking fewer mortgages. As at Q3 2015, borrowers with more than one loan made up 20 per cent of all new housing loans, down from 30 per cent in 2011.
Developers eye bulk sales in weak market (ST, 1 February 2016)
Some developers caught out in the weak market are looking to bulk-sell their luxury projects to avoid hefty penalties. City Developments (CDL) is believed to have been marketing one of two towers at the as-yet-unlaunched Gramercy Park, while OUE is looking to offload one of two Towers at Twin Peaks. A bulk sale makes sense for the companies as it can allow them to avoid penalties on unsold stock, while property funds see relative value between Singapore and Hong Kong, said analysts.
More facing problems refinancing homes due to TDSR (BT, 1 February 2016)
Home owners looking to refinance their properties are finding it increasingly difficult to do so against the backdrop of falling property prices, stringent definitions of what constitutes income and the tedious paperwork involved. According to independent mortgage adviser FindaHomeLoan, of the 300 cases it advised in the last six months, about 25, or 8 per cent, of home owners could not refinance because they did not meet either the total debt servicing ratio or the bank’s credit assessment criteria, or both.
Empty offices and falling rents spell further gloom for landlords (CNA, 1 February 2016)
Office buildings in the city fringes may be increasingly left vacant as tenants seek the opportunity to move into Grade A premises in the Central Business District (CBD) with rents weakening amid an onslaught of incoming supply. With another seven million square feet of new office space under construction at a time when businesses are holding back expansion plans, rents in Singapore will continue to tumble, analysts warned.
In weak market, HDB rents holding up better than those of private homes, SRX data show (ST, 12 February 2016)
Flash estimates from SRX Property showed rents in the private market edged up 0.2 per cent in January from December while those for HDB flats rose 0.7 per cent in the same period. For the private market, this is the second month that rents have stabilised. They inched up 0.4 per cent month-on-month in December after declining for 10 straight months.
HDB resale prices down 0.5% in January: SRX (BT, 5 February 2016)
HDB resale prices fell 0.5 per cent in January 2016, compared to the month before that. This marks the first decline in the monthly index in seven months, data released by SRX Property indicated. Consultants say that there should be stable prices in the HDB resale market this year given that HDB’s official transaction data is often used as the basis for negotiation of the sale price nowadays and since prices rarely differ much from those of recently transacted comparable units, there is increased price stability in the HDB market.