Singapore Property News This Week #160

Residential

Private home vacancies climbing

Figures from URA show that the number of vacant private homes has climbed from 18,003 at the end of Q4 2013 to 19,285 by the end of Q1 2014. Vacancy rate increased from 5.2 per cent at end-Q1 2013 to 6.2 per cent in Q4 2013 and 6.6 per cent by end-Q1 2014. According to DTZ regional head (SEA) research, Lee Lay Keng, more private home units are left empty. After the global crisis, real estate demand grew among investors. This led to some investor hoarding the apartments, without occupying it. On the other hand, some other units were left unoccupied as investors were unable to find tenants as the labour policies have slowed the inflow of expatriates. Also, the competitive rental market has pushed rental prices down, thus making it unattractive for property owners to rent out their apartments. Furthermore, the recent increase in supply of private homes could contribute to increased vacancies. According to analysts, suburban locations are most likely to suffer from the climbing vacancy rates, since the supply of private homes is greatest in those regions.

(Source: Business Times)

Experts: vacant property will deteriorate quicker

Private homes are increasingly vacant. Ku Swee Yong, Century 21 chief executive said that a vacant property will deteriorate quicker than one that is occupied, hence home owners should find ways to find a tenant quickly. Mr Ku said that home owners can provide rental discounts or lower their capital appreciation expectation and sell the property. Ong Kah Seng from R’ST Research also urged investors who are holding on to completed suburban condos to consider selling their property. This is because Mr Ong believes that suburban condo projects are less unique and have limited resale value in the longer run.

(Source: Business Times)

May’s resale condo volume and price are falling

According to flash figures by Singapore Real Estate Exchange, the number of condo units resold in May fell 7.5 per cent month-on-month to 421 units. This is 42.6 per cent lower than the 734 units resold in May 2013. Resale prices were also down by 0.3 per cent in May. This fall in resale transactions and prices of non-landed private homes in May could be due to loan-restriction measures and buyers’ stamp duties. Analysts also believe that demand for resale property fell because developers have offered huge discounts for new units. Not only so, weak leasing conditions could also affect the resale market. According to SLP International, rental volumes rose slightly by 3.7 per cent to 3,120 whole units from April’s 3,010 transactions. However, rental prices are slipping since last year. From January 2013 till this month, rental prices have fallen by 6 per cent.

(Source: Business Times)

Lorong Puntong and Tampines Road land parcel popular among developers

In the H2 Government Land Sales (GLS) Programme, private housing sites at Lorong Puntong in Upper Thomson area and Tampines Road are among developers’ favourites, said property consultants. These two housing sites are the latest to be added onto the confirmed list for the GLS Programme. Located near the upcoming Bright Hill MRT Station, the site at Lorong Puntong will launch for tender in August, while the other site at Tampines Road will launch a month later. The land parcel at Lorong Puntong is expected to generate 280 homes, and is expected to draw bids that are at least $650 to $700 per square foot per plot ratio (psf ppr), according to CBRE head of Singapore research, Desmond Sim. Christine Li from Orange Tee predicts that the site will fetch a price of $720 to $745 psf ppr. On the other hand, Ms Li predicts that the land parcel at Tampines Road, near Kovan MRT Station, will cost around $690 to $720 psf ppr, while Mr Sim estimates the winning bid to be around $650 to $700 psf ppr. The site is predicted to yield 340 homes.

(Source: Business Times)

Commercial

New commercial and residential sites released

New commercial and residential sites were released in the confirmed and reserve lists for the Government Land Sales programme in H2 2014. The Urban Redevelopment Authority (URA) will launch the tender of a commercial and residential development site in Holland Village in December. This site will accelerate development of the existing urban village in that area according to the Ministry of National Development. Commercial sites near Paya Lebar MRT Station will also be up for tender, according to URA, to drive the development of commercial hubs within that area. However, market watchers believe that only big players will participate in this tender as the gross floor area is expected to be almost 1.8 million square feet.

(Source: Business Times)

Landscape renewal policy extended to include more sites

The Urban Redevelopment Authority (URA)’s Landscaping for Urban Spaces and High Rises (LUSH) Programme, which aims to develop more green spaces, has undergone new enhancements. Under the LUSH 2.0 plan, the landscape replacement policy will now cover more areas. At least 40 per cent of developments in strategic areas must be planting areas and the remaining 60 per cent must be landscaped communal areas. The policy was also extended to cover all residential, commercial, hotel and mixed-use developments that are outside the identified strategic areas. Depending on the gross plot ratio, developments have to replace 30 to 40 per cent of the full site area with planting areas, with effect from September 12 this year.

(Source: Business Times)