Singapore Property News This Week #193

Residential

Higher home vacancies expected to push prices down further

Property values are falling following the government’s implementation of cooling measures. These measures include a stricter restriction on property loans. After a spike in property prices in 2013, the government tried to regulate the market by capping borrowers’ total debt repayments at 60 percent of their income. With such measures, Singaporeans found it harder to refinance loans. Besides that, the government had also implemented additional property taxes on purchases made by foreigners. These cooling measures had been effective in reducing home prices by 4 percent in 2014. However, the cooling measures had weakened the rental market. Vacancy rates for private residential homes increased by 1.6 percent from Q3 to Q4 last year, according to data from the Urban Redevelopment Authority. The data also showed that rental prices had fallen by 3 percent last year. Other signs that the property market is weak include increased sentiment that property prices will slip further, according to the Business Times. Not only so, the number of repossessed homes that are on auction had increased about 10 times to 118 in 2014 from 2013, according to Mok Sze Sze from Jones Lang Laselle Inc.

(Source: Business Times)

Non-landed private home prices slip by 1.2%

From November to December last year, prices of non-landed private homes fell by 1.2 percent according to flash estimates from the National University of Singapore. This is well within expectations, said Ong Kah Seng from R’ST Research. In December, resale prices in the non-central region and the central region had also fallen. The sub-index for the central region had fallen by 1.7 percent month-on-month in December last year, while the sub-index for the non-central region had fallen by 0.8 percent within the same period of time. Ong believes that the continued loan curbs and decreased interest in resale properties are reasons for the fall in resale prices. Nonetheless, prices of small apartments and condo units that are up to 506 sq ft had increased marginally by 0.5 percent in December last year.

(Source: Business Times)

NUS-Redas Real Estate Sentiment Index falls by 0.3 from Q3 to Q4 2014

According to the NUS-Redas Real Estate Sentiment Index, the overall market sentiment in Singapore had fallen by 0.3 from 3.7 in Q3 to 3.4 in Q4 last year. Sing Tien Foo from the National University of Singapore said that the weak residential market had dampened market sentiments. Particularly, sentiments about the residential sector had been mostly negative. The proportion of respondents who picked positive options and those who picked negative answers were a net minus 59 percent for the prime residential sector. Nonetheless, the current net balance for office properties was a positive 38 percent. Not only so, 43.5 percent of respondents had indicated that they would want the government to review its property cooling measures in 2015.

(Source: Business Times)

Commercial

Tuas site launched for tender

Under the Industrial Government Land Sales programme, JTC Corporation has launched a 0.8 ha site at Tuas South Street 11 for tender. The land parcel is zoned for business development and its tender will close on March 24. The Tuas site has a maximum permissible gross plot ratio of 1.0. Eight other sites will also be launched under the confirmed list for the Industrial Government Land Sales programme in the first half of 2015, according to the Ministry of Trade and Industry (MTI). Another five sites will also be added onto the reserve list during the same period of time. This would mean that a total of 14 hectares of land will be made available by H1 2015. Of the 14 hectares, the nine sites on the confirmed list will make up 6.46 hectares while 7.62 hectares will be yielded from the reserve list.

(Source: Business Times)

AXA Tower acquired for $1.17b

AXA Tower will be acquired by a consortium of investors for $1.17 billion or $1,735 psf of net lettable area. The AXA Tower, which is 50-storeys high, has a total net lettable area of about 674,000 sq feet. Its total gross area is about 1.03 million sq ft. The building is currently made up of Grade A office spaces and other retail spaces. Located at Shenton Way, the building has a 99-year lease from 1982. Investors in the building say that they will look into optimising the value of the property by utilising the additional 212,000 sq ft that is currently not in use.

(Source: Business Times)