Residential

Fewer BTO flats will be launched in 2015

According to National Development Minister Khaw Boon Wan, 25 per cent fewer build-to-order (BTO) flats will be released in 2015. This year, 22,400 BTO units were released. This is 10 per cent fewer than in 2013. Due to high demand, a total of 77,000 BTO flats were launched from 2011 to 2013. However, Minister Khaw said that the government will be reducing supply of BTO flats as demand for them has waned. According to Minister Khaw, BTO exercises will be held every quarter, instead of six times per year. Nonetheless, the BTO launch sizes will remain unchanged at 4,000 units. Minister Khaw said that this should be sufficient to meet demand in the upcoming year.

(Source: Business Times)

URA: Q3 private residential price index down 0.7%

According to URA, prices of private residential properties have fallen by 0.7 per cent in Q3 this year from the previous quarter. Prices have fallen across all segments of the private residential property market, said URA. From Q2 to Q3, prices of non-landed homes in the Core Central Region have dipped by 0.8 per cent; while prices in the Rest of Central Region (RCR) fell by 0.4 per cent quarter-on-quarter from Q2 to Q3 this year. On the other hand, landed home prices have also dipped by 1.8 per cent from Q2 to Q3. The rental market for private residential properties has also taken a hit in Q3, as the market saw a 0.8 per cent dip in rental prices. Nonetheless, the resale market has contributed to a larger proportion of the sales in the secondary market. According to URA, resale transactions for private homes accounted for 43.6 percent of all private home sales in Q3.

(Source: Business Times)

HDB resale prices shrink further

For five consecutive quarters, HDB resale prices have fallen due to the increase in supply of build-to-order flats and the implementation of the cooling measures. According to HDB, resale prices of HDB units have fallen 1.7 per cent quarter-on-quarter from Q2 to Q3 this year. This fall in prices is marginally more than the 1.6 per cent that HDB had predicted earlier. Nonetheless, this fall in HDB resale prices have attracted greater demand in the market as transaction volumes rose 2.8 per cent during Q3 to 4,513 transactions, according to the Business Times. Not only so, more residents have flocked to the HDB leasing market. Market experts believe that more HDB upgraders will be looking to rent HDB flats while they move into their newly completed condo units. Nonetheless, Eugene Lim from ERA Realty believes that resale volumes will fall below 17,500 units by the end of 2014. However, he believes that the market will pick up in 2015, when the government cuts back BTO flat supply.

(Source: Business Times)

Commercial

Q3 industrial rents fell

The industrial rental market has fallen due to an increase in industrial space and due to anti-speculation measures. The factory space segment suffered the biggest hit, according to the Business Times. Market experts believe that this downwards trend will persist in 2015. According to JTC, industrial property prices have fallen by 0.9 per cent from Q2. On the other hand, prices for multiple-user factory spaces have dropped by 1.8 per cent. Nonetheless, warehouse space prices have risen 3.2 per cent. Chia Siew Chuin from Colliers International said that buyers and sellers for strata-titled industrial property contributed to falling prices in the factory segment. Rents for multiple-user factory space fell by 2.2 per cent from Q2 to Q3. The average occupancy rate stands at 86.8 per cent in Q3 this year. This is the lowest since Q3, 2007. Nonetheless, Nicholas Mak from SLP International expects that the overall industrial property prices to increase by 2 to 3.5 per cent this year due to a 4.5 per cent increase in H1 this year. On the other hand, Chia expects rents for higher specification properties to remain constant in Q4 2014 due to a tight supply.

(Source: Business Times)

Developer sentiment improved by 0.2 in Q3

A survey done by the National University Singapore (NUS) and the Real Estate Developers’ Association of Singapore (Redas) showed that developers’ confidence in the market has increased slightly in Q3. While the overall sentiment remains weak, the overall sentiment gauge has increased slightly to 3.7 in Q3 from 3.5 in the previous quarter. According to the survey, the future sentiment indicator also increased from 3.4 in Q2 to 3.6 in Q3. Sing Tien Foo from NUS believes that the outlook for the next six months will remain dull as the price correction mechanism is expected to persist. Prime and suburban residential sectors are expected to suffer the biggest hits as market sentiments showed that there is a current net sentiment balance of negative 76 per cent in the prime residential sector. Also, the current net sentiment balance in the suburban residential market stands at a negative 61 percent. According to the Business Times, fear of a slowdown in the economy has shrouded market sentiments. 71 per cent of the survey’s respondents believe that launch prices of residential properties will continue falling. Nonetheless, 19 per cent of the survey respondents felt that market demand would not be affected.

(Source: Business Times)

Office prices increased by 1.6%

According to URA, prices of office spaces have increased by 1.6 percent in Q3 this year from the previous quarter. Following a 2.8 percent climb in Q2, office space rentals increased by another 2.6 percent in Q3. A total of 1.087 million square meters in gross floor area was released by the end of Q3 to be used as office spaces. Not only so, the amount of occupied office space increased by 50,000 square meters in Q3, as compared to Q2. As such, vacancy rates fell from 9.6 percent at the end of Q2 to 8.4 percent in Q3. Nonetheless, Desmond Sim from CBRE Research said that the increase in office rents is likely to be fuelled by firm expansions and not due to the slowdown in office spaces. However, Karamjit Singh from JLL said that the weak economy may threaten the rental market. He predicts that as interest rates increase, the net rental yield will be low. This is because office prices have increased in excess of rentals. Nonetheless, Alan Cheong from Savills believes that Singapore’s office market will remain resilient.

(Source: Business Times)

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