Singapore Property News This Week #177

Residential

HDB resale price falls again

For the eighth consecutive month, resale prices of HDB flats have fallen in September, according to flash estimates by the Singapore Real Estate Exchange (SRX). Data from SRX showed that HDB resale prices have fallen by 0.5 per cent from August to September. Resale prices of three room flats fell by 0.2 per cent; while resale prices of four-bedders fell by 0.2 per cent and five-bedders fell by 1.6 per cent. However, market experts believe that the fall in prices is within expectations. This is because of the recent implementation of loan curbs and because of the increase in supply of build-to-order flats. Eugene Lim from ERA Realty said that price moderation is gradual because buyers and sellers are more cautious and realistic now. On the other hand, executive flat prices have increased by 0.1 per cent from August to September. Overall resale volumes for HDB flats have increased by 10.7 per cent from the 1,327 units in August to 1,469 units in September. Wong Xian Yang from OrangeTee added that sales in August were low due to the Hungry Ghost Festival. The rental market, on the other hand, has remained weak, according to SRX estimates. Rental prices have fallen by 0.3 per cent in September from August. Ong Kah Seng from R’ST Research added that HDB owners are less inclined to sell their flats due to low demand. As such, more owners are offering their flats at competitive rental prices to attract tenants.

(Source: Business Times)

More than 300 units sold at Marina One

Out of the 372 units released at its launch, more than 300 units have been sold at Marina One Residences. Marina One Residences comprises of 1,042 units, and two 34-storey towers. One bedroom units start from $1.4 million and range between 657 square feet to 775 square feet. On the other hand, two bedroom units, which are between 969 square feet and 1,130 square feet, cost about $2 million each. The condominium is expected to cost between $1,960 per square feet to $3,100 per square feet after a 10 per cent early bird discount. Since October 3, buyers who are looking to purchase multiple units have already balloted for their choice units. On the other hand, the public launch of Marina One has begun on October 11.

(Source: Business Times)

High demand for Jurong EC

Since the launch of Lake Life, an executive condominium located at Jurong Lake District, more than 1,380 applicants have expressed interest in the property. The e-application will end on October 12. Market experts predict that Lake Life will break the record for the highest number of applications received for an executive condominium launch. Given that only 546 units were released for this project, the project has been oversubscribed by 2.5 times. Lake Life, which is located at Yuan Ching Road, is the second executive condominium to be released this year. Not only so, it is the first to be launched in Jurong in the last 17 years. It has a 99-year leasehold tenure and has 129,135 square feet. Despite the high demand for Lake Life, executive condominium transactions have been slow in 2014, said the developer of Lake Life. Nonetheless, a total of 1,758 units are expected to be released this year. Two other executive condominiums, Bellewoods in Woodlands and Bellewaters at Anchorvale Crescent will be released in the upcoming two months.

(Source: Business Times)

Resale volume of condos fall

Resale volume of private condominiums has not picked up in areas such as Yishun and Sembawang. According to Business Times, 18 transactions were made in those districts in Q2 this year. Yet, in Tampines and Pasir Ris, resale volumes have risen by 5.6 per cent in Q2 this year, compared to the same period last year. Market experts believe that sellers with strong holding power might have been unwilling to let go of their properties at a lower price, despite of the total debt servicing ratio framework. A total of 1,314 private condos were resold in Q2 2014. This represents 31.9 per cent of all private non-landed residential transactions. While the total private condo resale volume in Q2 2014 is higher than in Q2 2013, it is about 9 per cent lower than in Q4, 2012, before the implementation of the total debt servicing ratio framework. The fall in resale volume in Q2 was led by condo units at Middle Road, Golden Mile, Serangoon Garden, Hougang and Punggol. Nicholas Mak from SLP International said that the lack of new launches in some districts might have an impact on the resale market. Ong Kah Seng from R’ST Research added that interest for homes in Pasir Ris is due to high leasing demand. On the other hand, Christine Li from OrangeTee predicts that there will be a drop in foreign purchases in the core central region due to the additional buyer’s stamp duty.

(Source: Business Times)

Property agencies affected by slow sales

Profit margins for property agencies have fallen by 20 to 50 per cent this year, due to the slump in the property market. Of the 1,425 registered agencies, more than half are expected to have made a loss in the last one year. While some agencies have looked to overseas markets to regain sales, others have merged or been acquired to share resources. Mohammed Ismail from PropNex said that sales have dipped by 3 per cent in 2014. Not only so, as property prices fell, the total value of transactions also fell. This fall in profits has also affected large agencies, said Jack Chua from Era Realty. Market experts expect the market to worsen. In July, SLP International, OrangeTee, HSR and Dennis Wee Realty have banded together to form the Project Alliance Group to consolidate resources. RE/MAX, C&H Group and More Property have followed suit in August too to form Real Alliance.

(Source: Business Times)

Private home index eases gradually

According to Moody’s, the gradual decline in private home index in Q3 this year can help Singapore banks ease pressure on bank asset quality. According to URA’s Private Residential Property Price Index, the price index fell by 0.6 per cent quarter on quarter in Q3 this year; and the price index for Q3 this year fell by 3.8 per cent year on year from 2013. Despite the fall in price index, market experts expect the asset quality of housing loans to remain robust in these two years due to favourable economic conditions, such as low unemployment. Moody’s believe that the fall in housing price index was due to the cooling measures implemented by the government. According to Business Times, the increase in house loans slowed after the implementation of the total debt servicing ratio framework. In fact, the year-on-year growth in housing loans for this year was the lowest in five years.

(Source: Business Times)

Commercial

Samsung Hub fetches $3,175 psf

Level 19 of Samsung Hub, at Church Street, has been sold for $41.7 million or $3,175 per square foot. The floor has a strata area of 13,121 square feet and is said to have been purchased by a foreign investor. In August, the building’s 18th storey was sold for $3,225 per square feet. The lease of the 19th storey of Samsung Hub has been renewed until 2017. Thus, the net yield for the buyer is expected to be about sub-3 per cent. The 19th storey comprises of six strata units. Market watchers believe that the total debt servicing ratio framework will make it harder for strata office investors to get loan approvals, compared with those buying the space for their own use.

(Source: Business Times)

Da Vinci Building sold for $58 million

Da Vinci Building, which is located at 191 Upper Bukit Timah Road, has been sold for $58 million to Sim Lian Holdings Pte Ltd. According to Business Times, Sim Lian Holdings will be leasing out the building after Da Vinci Holdings Pte Ltd moves out of the building. The Da Vinci Building is located beside the Sim Lian Holdings’ headquarters and is a freehold site that has a plot ratio of 1.4. It has been zoned for commercial use under the Urban Redevelopment Authority’s Master Plan 2014. It has a gross floor area of about 30,000 square feet and has a land area of 21,415 square feet. It also has a basement car park and comprises four storeys.

(Source: Business Times)

Strata-titled industrial sales expected to be slow

A report by Colliers International said that replacement anchor sub-tenants will be harder to find when secondary industrial space becomes available from expiring sale and leaseback transactions. Chia Siew Chuin from Colliers expects rents and yield to be impacted when leasing space from third-party facility providers. Nonetheless, Chia believes that rents for business parks and independent high-specs buildings will remain constant from Q3 to Q4 this year due to a slowdown in land supply. Chia also predicts that the sale of strata-titled industrial land will remain slow. Despite strong leasing activities, Chia believes that the outlook for the industrial market will remain mixed. According to URA Realis caveats, sale transactions of strata-titled industrial properties have fallen by 36 per cent quarter-on-quarter in Q3 from Q2 this year. According to DTZ, the decline in sales volume is due to the implementation of the total debt servicing ratio framework. Not only so, CBRE said that there is a widening gap in rents between business parks located in the city fringe and in the rest of the island.

(Source: Business Times)