Singapore Property News This Week #247

Residential

Jan’s resale price index for non-landed homes up by 0.6%

According to flash estimates by SRX Property, the resale price index for non-landed private homes had increased by 0.6% month-on-month in January. Alan Cheong from Savills said that this increase could signal an upwards trend for the resale market in 2016. Cheong added that barring unforeseen circumstances, he believes that private home prices in both resale and new-sale markets have stabilised. However, Eugene Lim from ERA Realty argued that this year, the overall price trend is still downwards. Citing the economic downturn and the weak rental market, Lim believes that home owners of multiple properties bought before the imposition of the total debt servicing ratio framework, may find it hard to finance their properties, thus choosing to dispose them. Year-on-year, resale prices have fallen by 1.7% in January this year and 7.2% from January 2014. In December 2015, resale prices had fallen by 0.5% month-on-month. This January, prices had gone up by 1% in the Core Central Region, 0.1% in the Rest of Central Region and 0.8% in the Outside Central Region. In January this year, 364 non-landed private homes changed hands, this was a 20% drop from the 455 units resold in December last year. Nonetheless, the resale volume in January this year had gone up by 3.7% from the 351 units transacted in January last year.

(Source: Business Times)

Rental index for non-landed homes up by 0.2% in Jan

A 0.2% increase in the rental index for private non-landed homes was observed in January this year. This was the second consecutive month of increase after a 0.4% rise in December. Nonetheless, rents in January were still 14.6% lower than in January 2013 and 5.5% lower than in January 2015. Market experts believe this this increase in rental does not indicate that the market is stabilizing. Alan Cheong from Savills said that the inking of shorter term leases could have lent support to the rental index as these leases tend to lock in higher rents than longer term ones. Eugene Lim from ERA Realty added that 21,906 private residential units will be completed this year. This is more than the 18,971 units completed in 2015. The surge in completed units may dampen the rental market, particularly in the suburban areas where most new completions are located this year. According to the Business Times, the rent uplift in January came mainly from the city fringe and the suburban area where rental increased by 1.2% and 1.3% respectively. However in the Core Central Region, the rental index for private homes fell by 2.4%. On the other hand, rents of HDB flats rose by 0.7% in January from December, but remain 3.1% lower than from a year ago and 8% lower than in August 2013. HDB rental volume also contracted by 5.4% month-on-month in January 2016 and 17.7% year-on-year. The HDB rental market is also expected to be dragged by weakness in the private home market, said market experts.

(Source: Business Times)

Commercial

Asia-Pacific expected to see US$8.5 billion in hotel investments this year

According to the Business Times, US$8.5 billion is expected to be invested in hotels in the Asia-Pacific this year. This is down from last year’s transactions which totalled US$9.2 billion. Particularly, markets such as Singapore and Hong Kong will be less active due to a shortage of available assets this year. Last year, markets such as Japan, Australia and Hong Kong were the most active markets in the hotel industry. Scott Hetherington from JLL Hotels & Hospitality said that this year, the transaction activity across Asia will slow down with a likely shift to secondary markets in Southeast Asia and the Indian Ocean. Due to tightly-held hotel stocks, deals in Singapore are expected to be slow, added market experts.

(Source: Business Times)

Asians to invest more in properties beyond the region than in it

Plagued by slow economic growth and waning rents, real estate markets in Asia are expected to remain less appealing than those in US and Europe this year. Nick Axford from CBRE predicts that there will be greater outbound capital flow from Asia this year. Last year, US$39.7 billion worth of properties outside the region was snapped up by Asian investors. This was a 26.8% increase from 2014. In 2015, Asian investors had invested US$14.3 billion in real estate within the region, which was a 12.3% increase from 2014. These investments include office, retail, industrial, hotel and mixed-use projects but excluded residential projects and development sites. CBRE estimates that about US$8.1 billion will be invested outside the region by Singapore-based investors while an estimated US$6.6 billion will be invested within the region. Based on preliminary data from Real Capital Analytics, Singapore-based investors purchased US$26.3 billion in overseas real estate in 2015, which was a 49% increase from the US$17.6 billion invested in 2014.

(Source: Business Times)

Picture22

Leave a Reply

Your email address will not be published. Required fields are marked *