Singapore Property News This Week #192

Residential

Resale volumes of private homes increased 8.4% in H2 2014

In H2 2014, 2,528 more private homes changed hands than in H1 that year. According to DTZ, there was an 8.6 percent increase in the resale volumes of private houses. Lee Nai Jia from DTZ said that as sellers adjusted their prices to fit demand, resale volumes increased. Lee added that the weak rental market has pushed home owners to sell their properties. Ong Choon Fah from DTZ believes that resale volumes will continue to increase. On the other hand, new sales by developers fell by 36 percent to 2,520 units in H2 from H1 last year. Despite that, Ong believes that developers would not be cutting prices any time soon as they have reserves to tide through the lull sales period.

(Source: Business Times)

Land bids for EC site hits a new low

Land bids for an executive condominium located at Sengkang have been the lowest since 2011, according to the Business Times. Sim Lian won the bid for the site near Anchorvale Crescent for $280.04 psf ppr. This was lower than the $367 psf ppr bid that was made for a neighbouring site in February 2014. The Anchorvale Crescent site had only managed to attract 3 bids. Christine Li from OrangeTee said that the 30 percent mortgage service ratio cap on executive condo units have dampened demand for executive condo units by developers. As such, developers have been less willing to bid for executive condo land sites. The recent increase in executive condo launches in Punggol and Sengkang have also added on to developers’ negative sentiments, said Li.

(Source: Business Times)

HDB resale prices down by 1.5% in Q4

In Q4 last year, resale prices of HDB flats dropped by 1.5 percent from Q3. Nonetheless, resale transactions of HDB flats increased by 2.7 percent to 4,635 units from October to December last year. According to HDB, resale prices have fallen by a total of 6 percent by the end of 2014. Eugene Lim from ERA believes that the fall in HDB resale prices and transaction volumes was due to the implementation of cooling measures such as the Mortgage Servicing Ratio. Lim said that the increase in supply of new Built-To-Order flats and Sale of Balance Flats have also impacted resale volumes of HDB flats. Nonetheless, resale volumes are expected to increase in 2015, according to market experts. Not only so, Ong Kah Seng from R’ST Research added that resale flat prices are expected to fall as the demand for private houses and executive condominiums increases. HDB rentals are expected to increase by 7 percent in 2015, said Ong.

(Source: Business Times)

Short-term rental policy for private homes under review

The Urban Redevelopment Authority (URA) will be reviewing its policy on short-term rentals of private homes. Under URA’s guidelines, private homes have to be rented out for no less than 6 months to safeguard the living environment of residents. While some believe that a relaxation in the short-term rental policy will benefit tourists and home owners, Minister for National Development, Khaw Boon Wan, said that leasing private homes on short-term basis will raise concerns about noise and security. Donald Han from Chesterton Singapore said that vacancy rates for private homes have increased to about 8 percent since Q3 2014, and be predicts that more private homes will be left vacant in the next 12 to 18 months. Han added that he believes there will be a 10 percent increase in vacancy rates of private homes in the next year.

(Source: Business Times)

Commercial

JTC to provide more detailed rental data

Rental price indices have been reviewed by JTC to provide more detailed data for businesses. JTC had increase the number of industrial price and rental indices from 6 to 24, according to the Business Times. This would include price and rental indices for single-use factory space, and sub-indices for multiple-users factories. Furthermore, the indices would be expanded to cover more areas. JTC have also reclassified properties based on their location, remaining tenure and land-use zoning so as to improve industrial prices and rental indices. Following the launch of the Fair Tenancy Framework, these changes have since been in effect.

(Source: Business Times)

Industrial property prices fall by 0.1% in Q4 2014

Industrial prices and rentals have fallen by 0.1 percent and 0.6 percent in Q4 last year, based on the updated price and rental indices by JTC. Since Q4 2014, more geographies and property types have been included in the calculation of industrial price and rental indices. According to JTC, multiple-user factories saw a 4.4 percent year-on-year increase in the previous year. Also, occupancy rates remained at 90.9 percent last year. JTC believes that industrial prices and rents will continue to moderate in 2015 as an ample supply of industrial space is expected to be released from 2015 to 2016. However, Chia Siew Chuin from Colliers predicts that industrial property prices may decrease by up to 3 percent this year.

(Source: Business Times)

Office rents up by 9.8% in 2014

According to the Urban Redevelopment Authority (URA), office rents increased by 9.8 percent while prices for office units increased by 4.5 percent in 2014. Particularly, in Q4 last year, office rents increased by 1.7 percent after a 2.6 percent increase in the Q3. On the other hand, rents and prices increased by 0.9 percent in 2014 for the retail market. Nonetheless, market experts believe that retail rents will fall this year due to decreased demand. However, the office market should continue growing, said experts. Alice Tan from Knight Frank said that prime office rents are likely to experience slower growth as demand for rental units in the central business district falls. She predicts that the annual growth in the office market will be around 5 to 7 percent.

(Source: Business Times)