Singapore Property News This Week #178

Residential

SRX: resale condo sales increase

According to SRX, there was a 15.3 percent increase in the number of non-landed private homes sold in September versus August, with 468 units transacted in September. Market experts believe that resale prices might be stabilising. The overall median transaction over X-value (TOX), which indicates how much buyers pay over past comparable units, was negative $2,000 in September. This is less than the negative $10,000 that was recorded by SRX in August this year. Nonetheless, the non-landed private residential resale price index fell 0.3 percent month-on-month from August to September, according to SRX flash estimates. This was 4.6 percent lower than in 2013. Eugene Lim from ERA Realty said that property sellers are not pressured to cut prices due to favourable economic conditions. Mohd Ismail from PropNex added that he believes transaction volumes will continue to increase as the market stabilises. While that may be so, the rental index for non-landed private homes has fallen by 0.2 percent month-on-month in September. According to SRX, only the rents of private property in the core central region have increased by 0.3 per cent from August to September. Nicholas Mak, from SLP International, believes that rentals in the outside central region may be the weakest due to an increase in supply of rental spaces in that region. Mak added that he believes that property demand will remain flat in the coming year if cooling measures are not lifted.

(Source: Business Times)

More condos sold below $1.25 million in 2014

71.7 percent of private apartments and condos sold in H1 this year are priced below $1.2 million. Last year, 63.6 percent of private properties were sold below that price. Desmond Sim from CBRE said that most properties were priced between $750,000 and $1 million during the first half of this year. Sim believes that the total debt servicing ratio framework could have pushed prices low. HDB upgraders, singles and new couples may be less able to finance new non-landed private residential units due to the cooling measures. Ong Choon Fah from DTZ said that a large portion of HDB dwellers are buying private homes for owner occupation. Ong added that more condo projects are including smaller units to attract cash-tight home buyers.

(Source: Business Times)

Lake Life EC receives record high number of e-applications

Lake Life, an executive condominium (EC) that is located at the Jurong Lake District, has received more than 1,848 applications. About 65 per cent of these applications are second time applicants and the average age of the applicants is about 42 years old, according to the Business Times. The condominium project, which only has 546 units available, is at least three times subscribed. On Nov 5, the unit pricing will be released. Bookings for Lake Life will be launched on Nov 8. Lake Life is the second EC to be launched in Jurong in the last 17 years. It has a 99-year leasehold tenure and has 129,135 square feet in total.

(Source: Business Times)

Q3 developer sales hits new low

Developer sales in Q3 have fallen by 40 per cent from the previous quarter. This resulted in a new low since the global financial crisis in Q4, 2008. A total of 1,596 units were sold in Q3. About 648 private homes were sold by developers in September. This was 48 per cent higher than August, which coincided with the Hungry Ghost festival. However, Septembers’ developer sales was almost half that of the number of units transacted in September 2013. According to Ong Teck Hui from JLL, the low developer sales volume reflects weak demand in the primary market. A total of 6,005 private homes were sold by developers from January to September this year. Market experts expect the full year tally to be between 7,000 and 9,000 units, down from the 10,000 to 14,500 range that was estimated in January this year. Eugene Lim from ERA Realty believes that the effect of the total debt servicing ratio framework has fully kicked in. He believes there will be reduced demand in the next year, if the government does not lift loan curbs and other cooling measures. Ong added that demand is also affected by a slowing economy. URA’s data also showed that in September, developers have sold 59 EC units, which is marginally higher than the 58 units sold in August. A total of 471 EC units were transacted by developers in the first nine months of this year.

(Source: Business Times)

Condo at Prince Charles Crescent re-launched

The Crest, which is located at Prince Charles Crescent, was re-launched at a discount of 5 to 10 per cent. Market experts believe that this was likely to be due to slow sales in June. According to the Urban Redevelopment Authority (URA), out of the 469 units available, 50 were sold at a median price that was about $1,800 per square feet. A one bedroom unit at The Crest ranges from 614 square foot to 775 square foot. The one-bedder is priced from $980,000, a two bedroom unit costs $1.28 million, a three bedroom unit costs about $2 million while a four bedroom unit is priced at $2.5 million and a five bedroom would cost about $3 million. The 99-year leasehold condo project is 450 meters away from Redhill MRT station and is located in the Jervois precinct. It was acquired by Wing Tai Asia, Metro Australia Holdings and UE E&C in 2012, for $960.28 per square foot per plot ratio. Nicholas Mak from SLP International said that the additional buyers’ stamp duty might have weakened demand in the property market. Ong Kah Seng from R’ST Research added that buyers may still be cautious of making purchases, despite the discounts given.

(Source: Business Times)

Median prices of private residences fall

According to R’ST Research, 12 out of 20 private residential projects that were sampled have median prices that were 0.4 per cent to 14 percent lower than the prices between June and September. On the other hand, six projects saw an increase in median prices. Ong Kah Seng from R’ST Research said that price changes from June to September may be due to differences in types of units sold in each month. Rivertrees Residences in Seng Kang experienced a 13.6 percent drop in median prices and Bartley Ridge in Mount Vernon Road also experienced an 11.1 per cent fall. Yet, Goodwood Residences in Bukit Timah and Eight Riversuites in Whampoa saw a 4 percent increase in median prices. According to R’ST, the fall in median prices in the four-month period is expected due to the implementation of the total debt servicing ratio framework. Ong believes that developers will continue to cut prices so as to attract more buyers in the rest of the year.

(Source: Business Times)

Unit size of condos shrinking

In H1 this year, the size of new private apartments and condos sold have shrank by 41.5 percent from 2007. According to the Business Times, developers have built smaller units in recent years to increase the affordability of their units. The median size of new apartments sold has decreased by 10 percent to 743 square feet in H1 this year as compared to 829 square feet in 2013. On the other hand, median sizes of resale transactions have been consistent at 1,200 square feet in the last 7.5 years, said CBRE. CBRE said that the H1 2014 median transaction price quantum for resale deals show that resale buyers are willing to pay more in absolute price quantum to enjoy more space. Ku Swee Yong from Century 21 estimates that there are about 8,000 completed units that are less than 500 square feet each, out of the 230,000 non-landed private homes available. He believes that owners of smaller units will find it more difficult to find new buyers. On the other hand, Ong Choon Fah from DTZ said that buyers may find the smaller units more affordable.

(Source: Business Times)

Commercial

Reits acquisitions increases real estate investments

According to a report by DTZ, acquisitions by Reits have increased real estate investments in Q3 this year by 15.4 per cent, quarter-on-quarter to $5.5 billion. Reits acquired a total of $2.9 billion in properties in the commercial, industrial and hospitality sector. This makes it the largest buyer of properties in Q3. Listed and non-listed property companies have acquired $2 billion in investments in Q3. This was lower than the average $3.1 billion that was achieved in Q1 and Q2 this year. Lee Lay Keng from DTZ said that property companies have made fewer acquisitions in Q3 as firms have increased overseas acquisitions. She estimates that close to US$4.1 billion of acquistions were made overseas, by Singapore-based property companies by the end of Q3 this year. Not only so, listed and non-listed property companies have divested $2.9 billion in Q3, which makes them net sellers in that quarter.

(Source: Business Times)