Residential

HSR: HDB resale flat prices may drop to 2008 affordability levels by 3Q2015

According to HSR Research, if HDB resale prices continue to fall, it may soon reach the affordability levels in 2008 by Q3 next year. This suggests that cooling measures may be lifted by Q3 2015, said market experts. HDB resale prices need to fall by another 6 percent in order for it to reach the affordability levels in 2008, before significant increases took place in 2009, said HSR. Affordability has been defined by HSR as the ratio of the average annual household income to the prices of HDB or private non-landed residential units. The calculations were made based on the perspective of a first-time buyer. HSR said that currently, a typical 1,000 sqft resale HDB flat would cost about five times the average annual household income of HDB dwellers. On the other hand, private resale condos of 1,000 sqft cost about 4.9 times the average annual household income of apartment dwellers. HSR added that HDB resale prices have decreased at a compound monthly rate of 0.6 percent while resale condo prices have fallen by 0.4 percent.

(Source: Business Times)

Redas: intervention needed to prevent market from slowing down

Chia Boon Kuah from the Real Estate Developers’ Association of Singapore (Redas) said that the government needs to intervene with supportive measures when the property market spirals downhill. He added that since the implementation of the total debt servicing ratio framework, developers have been concerned about the shrinking market. Chia argued that the residential market will suffer from additional pressure when 68,000 new residential units are completed in the subsequent few years. The implementation of the cooling measures has also lead to the adoption of a wait-and-see attitude in potential buyers, said Chia. Chong Chou Yen from Tuan Sing group suggested that the government could look into lifting the cooling measures for mass-market mid-end homes to maintain their affordability.

(Source: Business Times)

Commercial

Grade A CBD office rent increased by 19.8% this year

Moray Armstrong from CBRE said that the increase in office rentals may have been driven by tight supply rather than increased demand. Chris Archibold from JLL said that financial institutions are choosing not to expand thus demand for office space has fallen. According to the Business Times, CBD office rents have increased by 19.8 percent this year and it is expected to increase by another 7 percent in 2015. JLL estimated that there will be a 4.2 percent quarter-on-quarter increase in average gross monthly rental value for Prime Grade A CBD office space in the fourth quarter of this year. Nonetheless, as the economy slows, occupancy rates are also expected to fall, said Armstrong.

(Source: Business Times)

Singapore Grade A office rental growth highest in Asia-Pacific region

According to Cushman & Wakefield, rental growth for Grade A office space is the highest among 13 countries in Asia- Pacific. Cushman had estimated Singapore’s office rental growth to be 10.88 percent by the end of the year. This is significantly higher than the 7.69 percent for Tokyo and 3.02 percent for Hong Kong. Cushman believes that at the end of 2014, Grade A monthly rental value will be as high as $10.45 psf, and it will increase to $11.04 psf by end-2015. Sigrid Zialcita from Cushman said that the strong economic sentiments in Singapore have increased its competitiveness compared to the other markets in Asia. Zialcita also predicts that the vacancy rates will fall greater in Singapore than in other core markets in Asia.

(Source: Business Times)

Derby Court released for en bloc sale

Derby Court, which is a condominium that is located at Novena has been put up for en bloc sale. The 12-storey condominium comprises of 20 apartments and has an allowable gross floor area of 53,094 sq ft. Its tender will close on Jan 20, 2015. The site has been zoned for residential use and it has a plot ratio of 2.8 under the 2014 Master Plan. According to Savills Singapore, the site can be developed into 70 apartments of about 753 sqft each. The site has been given an indicative price of $68.28 million or $1,286 psfppr. Suzie Mok from Savills Singapore expects that investors would be attracted to Derby Court’s prime location.

(Source: Business Times)

URA: at least 70% of site at Beach Road must be for offices

A commercial site at Beach Road, which has a 99-year leasehold, will not be allowed to be developed into small strata units or retail units. 70 percent of the site has to be for offices according to the Urban Redevelopment Authority (URA). The site will be launched in H2 2014 under the Government Land Sales Programme. The land parcel is 2.1 ha and can be developed into a gross floor area of 950,592 sq ft. 665,424 sqft has to be set out for office use while 86,111 sqft could be used for retail purposes. Not more than three strata units can be developed from this site said URA. Chua Yang Liang from JLL predicts that the site will attract bids between $1,300 and $1,500 psfppr.

(Source: Business Times)

Tender for Serangoon site won at $276.8 million

Since the implementation of new productivity regulations, a 99-year leasehold mixed-use site at Upper Serangoon Road has had the highest tender bid price. According to the Urban Redevelopment Authority, ASSET Legend had offered $276.8 million or $848.84 psfppr for the site. This was higher than experts’ predicted bid price of between $670 to 750 psfppr. Not only so, the winning bid was 15 percent higher than the next highest bid of $240 million. Chua Yang Liang from JLL is surprised by the winning margin given the current market sentiments. Other market experts have expected developers to be more cautious with their bids due to the prefabrication requirements implemented by the government, which would push construction costs up. Nonetheless, Ong Kah Seng from R’ST Research said that foreign developers tend to place higher bids.

(Source: Business Times)

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