Singapore Property News This Week #153

Residential

100 of 131 units in The Sorrento sold

100 of the 131 units have been sold in The Sorrento – a five-storey freehold condominium on West Coast Road which offers one-to three-bedroom units from 441 to 1,808 sq ft and is expected to be granted the temporary occupation permit (TOP) in 1Q2015. The rapid sales were the result of attractive prices ($1,380 to $1,600 psf) and the sense of exclusivity offered through the condo’s small scale and freehold status. Other developments such as Icon@Pasir Panjang, Seasuites, Village@Pasir Panjang and Whitehaven have also achieved transacted prices of $1,600-1,700 psf.

(Source: Business Times)

11,000 Singaporean families purchased exec condos from 4Q2010 to 4Q2013

According to Minister for National Development Khaw Boon Wan, 11,000 Singaporean households purchased executive condominiums (EC) from Q4 2010 to Q4 2013. Approximately 86 percent of the buyers are HDB residents and 55 percent are second-timer families. Due to the increase of the income ceiling for ECs in 2011 – from $10,000 to $12,000, there have been changes in terms of EC buyers’ profile over that one-year period, where the share of second-timers increased from 43 percent to 57 percent and those aged from 35 to 44 increased from 35 percent to 43 percent.

(Source: Business Times)

HDB resale prices dropped 1.6% in Q1 2014

Resale prices of HDB flats have decreased by 1.6 percent in Q1, with the number of transactions falling 5 percent to 3,781, making it the third consecutive quarter where prices slid. According to ERA Realty, government measures of reducing the mortgage servicing ratio from 35 percent to 30 percent limited buyers from owning more expensive flats. Furthermore, the minimum three-year waiting period for newly minted permanent residents before they can purchase resale flats, the availability of two-room build-to-order (BTO) flats for singles and the cessation of reporting cash-over-valuation (COV) held back market activities. Due to the slowdown in resale activities, the sub-letting market has seen improvement where subletting transactions rose 17 percent quarter-on-quarter in Q1 to 8,485.

(Source: Business Times)

Increase in foreigners’ proportion of home purchases

Transactions of private home purchases in Q1 dropped to 2,076 units, seeing Singaporeans’ share falling to 70 percent from 73 percent in Q1 2013, PRs’ share rising to 19 percent from 16 percent in Q4 2013 and foreigners’ share – mainly coming from mainland Chinese, Malaysians, Indonesians and Indians – climbing up to 10 percent from 9 percent in Q4 2013. Due to the additional buyer’s stamp duty and the high home ownership rate, purchasing activities among Singaporeans have slowed down, while with the regulation that new PRs must wait for three years before being allowed to purchase public flats, those who are in urgent need of accommodation started setting their eyes on the private housing market.

(Source: Business Times)

51 percent of units purchased by HDB owners were below 800 sq ft

A total of 892 non-landed private homes were purchased by HDB owners in Q1 2014, 453 units or 51 percent of which were of areas of up to 800 sq ft, showing an increase from 44 percent in 2013. On the contrary, in terms of the equivalent area, merely 29 percent of the 1,014 non-landed private homes were acquired by private home owners. Smaller units are preferable among those with HDB addresses as the required investment sum is more affordable and they can benefit from the progressive payment scheme if they buy in the primary market, where 581 units or 65 percent of the total 892 private homes were purchased from developers in Q1.

(Source: Business Times)

0.7 percent drop in private residential rentals quarter-on-quarter in 1Q2014

On a quarter-on-quarter basis, private housing rentals fell 0.7 percent for the second consecutive quarter, as a consequence of the growth in completed private homes, more restriction on foreign tenants in Singapore and a stricter property tax system. Private residential completions are estimated to reach 17,138 units in 2014, higher than the 13,150 units in 2013, whereas demand will not match this supply due to tighter regulations on hiring foreign executives. Additionally, a stricter property tax policy took effect from Jan 1, 2014, stating that landlords can no longer claim vacancy refunds on property tax. Overall, consultants estimate a 5-10 percent dip in private housing rentals for the full year.

(Source: Business Times)

Commercial

Lian Beng purchases 70,000 sq ft at 24 Leng Kee Road for $46.2m

A site of approximately 70,000 sq ft at 24 Leng Kee Road has been purchased by Lian Beng Group for $46.2m. It is expected that the area will be developed to prepare for the entry to the automotive business of Wealth Assets Pte Ltd – a joint venture company between Lian Beng Group and parallel importer Vincar. The tender attracted around a dozen bidders as the Leng Kee Road/Alexandra Road area is regarded as Singapore’s key auto belt.

(Source: Business Times)

15% increase in Singapore’s office rents this year

Office rents in Singapore are anticipated to increase to 15 percent this year owing to the rise in demand, where international companies such as Cargill Inc and Bordier & Cie are having their offices in the central business district. Additionally, landlords are getting more bargaining power due to the lack of completed developments in 2015 and the increase in office occupancy rates – which, according to DTZ, rose to 95.1 percent from the last quarter. Compared to the previous quarter, rents in Marina Bay area rose by 4.5 percent, while compared to the same period in 2012, rents in the central business district increased by 8.4 percent in 4Q2013.

(Source: Business Times)

Two units in Orchard Towers and one unit in Marine Parade for sale

Two commercial units in Orchard Towers and one in Marine Parade Central are open for sale, with no advanced indicative prices but guiding prices from sales of shops nearby. The freehold units in Orchard Towers occupy a strata area of approximately 8,105 sq ft, covering the ground floor and the basement. A third-floor unit in Orchard Towers was sold for $6,636 psf last year. With 62 years remaining on the lease, the unit in Marine Parade Central occupies a strata area of about 25,833 sq ft over the ground and second floors of Block 87. Sales of ground floor and basement shops in nearby The Flow ranged from $4,008 to $5,789 psf during the past nine months.

(Source: Business Times)

Retail rentals in Central Region showed 0.3 percent drop: URA

According to the Urban Redevelopment Authority (URA)’s data, there was a decline of 0.3 percent in rentals at retail malls in the Central Region, covering retailers and non-shop space such as food and beverage, entertainment, and health and fitness in the downtown area and city fringe. However, skepticism about the index’s reliability was raised as according to several retailers, rentals have significantly increased in the past three years. URA’s data set may not have captured the full scene as it does not look at suburban malls in Jurong East, Tampines and Bedok.

(Source: Business Times)

Annual supply of 2.1m sq m of industrial space over the next three years

According to JTC Corp’s data, there is an average annual supply of industrial space of 2.1 million square metres (sq m) coming on-stream over the next three years, of which 28 percent is multiple-user factory space, 37 percent is single-user factory space, 25 percent is warehouse space, and the rest business park space. This is double of the annual average demand. Concerns have been raised as there is no dearth in industrial space and the appropriate use of industrial space needs to be restructured, in order to capture more manufacturing companies.

(Source: Business Times)

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