Singapore Property News This Week #241

Residential

Prices of completed small condos fall by 1.2% month-on-month in Nov

According to the Singapore Residential Price Index, prices of completed small condo units and apartments that are no larger than 506 sq ft have fallen by 1.2% in November from October. In October, a 0.4% month-on-month fall in prices was seen in the same category. Year-to-date, prices of small units islandwide have fallen by 4.1%. Ong Kah Seng from R’ST Research said that owners of smaller flats may be more willing to let go of their flats at lower prices as the units may be too small for their families and the demand for such units may also be weak in the leasing market.

(Source: Business Times)

GCB transactions completed in 2015 totals $730 million

In 2015, at least 34 transactions totalling $730 million were completed in the Good Class Bungalow (GCB) area. This is up from the 28 transactions totaling $626 million in 2014. According to the Business Times, this is the best showing since 2012 when 54 properties in the GCB areas were sold for $1.17 billion. William Wong from Premier Group estimated that GCB prices have fallen by 10 to 15% in 2015 due to weaker economic sentiments. Not only so, he believes that overall GCB prices have fallen as there were several transactions that were below $20 million in 2015. Samuel Eyo from Singapore Christie’s International Real Estate also predicts that prices have fallen about 10% in 2015. He added that senior homeowners whose children have moved out may wish to downsize to a smaller home, thus contributing to sales in 2015. He predicts that GCB prices would ease by around 5% in 2016 if interest rates continue to increase and if the government does not lift the property cooling measures.

(Source: Business Times)

Market experts: more see ECs as investments rather than homes

Executive Condominiums (ECs) may be losing their relevance as more homeowners are seeing them as investments rather than residential units. According to market experts, demand for ECs have not increased despite the increase in income ceilings to $14,000 from $12,000. Not only so, some eligible EC buyers find it more worthwhile to purchase mass market condos as the price gap between ECs and those condos narrows. Furthermore, ECs face competition from better-quality and well-located BTO HDB projects. In Q3 of 2015, EC vacancy rates stood at 10.5% according to URA, which is higher than from 2012 to Q2 2013 where vacancy rates were less than 1%. Based on data from URA, 3,435 EC units were left unsold at the end of Q3 last year. Combined with the 3,780 units to be launched this year, there will be a supply of about 7,000 EC units in the market.

(Source: Business Times)

Two EC sites launched under GLS

Under the Government Land Sales programme, two EC sites were launched – one at Yio Chu Kang under the confirmed list and another at Sumang Walk under the reserve list. The Yio Chu Kang site is 18,422.9 sq m large and has a permissible gross floor area of up to 51,584.12 sq m. According to HDB, the site may generate about 520 units and its tender will close in Feb 2016. Market experts predict that there may be between 5 to 14 bidders with the winning bid ranging from $260 to $340 psf ppr. As EC land prices have fallen in 2015, Ong Teck Hui from JLL believes that bidding would be cautious. On the other hand, the Sumang Walk site is about 27,056.4 sq m and has a maximum permissible gross floor area of 81,169.2 sq m and is able to yield about 820 units.

(Source: Business Times)

Minister Wong: too early for government  to lift cooling measures

Minister for National Development, Lawrence Wong said that the housing market is healthy and stabilised thus it is still too early to lift cooling measures. He added that the government will continue to monitor the market and adjust its policies accordingly. According to the Business Times, both public and private housing prices are stabilising as the rate of declines is levelling off. Mohd Ismail from PropNex predicts that HDB prices may remain flat or drop 1% in 2016 while private home prices may fall by 3 to 4%. Minister Wong said that 18,000 HDB flats will be launched in 2016. This is 20% more than in 2015.

(Source: Business Times)

Commercial

H1 2016 Industrial land supply the lowest in 8 years

6 industrial land site have been released in H1 this year, the lowest in 8 years. Under the H1 sale this year, 4.04 ha of industrial land was released, this was reduced from the 6.12 ha released in H2 last year. B1 spaces for light industrial use was also not released in the government land sale programme for H1 this year under the confirmed list. Market experts believe that this reflects that there is an oversupply in land for B1 uses. Nicholas Mak from SLP International noticed that all 6 plots have 20-year lease terms, which may not appeal to industrial property market and mortgage lenders. Mak added that as industrial land supply was reduced and by there are no B1 sites on the confirmed list, there is more time for the market to absorb the oversupply of industrial land space.

(Source: Business Times)

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