Residential

Global House Price Index up by 3% in 2015

According to Knight Frank’s Global House Price Index, prices have increased by 3% in 2015. Market experts believe that the low interest rate had influenced buyer’s sentiments. Of the 55 countries accounted for in the price index, 43 markets saw prices rise. This is up from the 10 countries recorded in the aftermath of the Lehman’s collapse in 2008. Based on the price index, Ukraine and Greece were the weakest housing markets last year with price falls of 12% and 5% respectively. While the rate of quarterly price declines of non-landed private homes have moderated in Q4 2015 after 9 consecutive quarters of decline, Singapore is still one of the weakest performers, said Knight Frank’s Alice Tan. According to Knight Frank, prices of Singapore’s non-landed private homes are likely to decrease by 0.2% to 0.5% for Q1 this year.

(Source: Business Times)

Authorities believe it is premature to lift cooling measures

In his Budget Speech, Heng Swee Keat, Minister for Finance, said that it is too early to lift cooling measures given current market conditions and price levels. Since the peak in 2013, private home prices have fallen by 8.4%. Tay Huey Ying from JLL echoed the government’s stance and said that any interference at this juncture would be premature. Cushman & Wakefield’s Christine Li added that if cooling measures are lifted prematurely, buyers may rush into the market and property prices which are led by demand will surge. Li also added that tweaking the additional buyer’s stamp duty (ABSD) would not serve the interest of the masses as the ABSD helps to keep property prices low. Instead, changes to the ABSD will benefit property developers, Singaporeans who can afford a second property, permanent residents and foreigners.

(Source: Business Times)

Developers optimistic about selling out before ABSD deadlines

Despite the looming deadlines, developers are optimistic that they will be able to sell out before the respective additional buyer’s stamp duty (ABSD) deadlines. Not only so, developers have said that they would not need to resort to massive price cuts in order to meet the deadline. SingLand’s boutique project, Mon Jervois and Pollen & Bleu, as well as Alex Residences will be liable for the ABSD of 10% with interest if there are any unsold units by February, June and December 2017 respectively. As of February this year, there are 61 unsold units at Mon Jervois, 94 units at Pollen & Bleu and 13 units at Alex Residences. Another developer, City Development is also confident of clearing all its units at Jewel@Buangkok, Bartley Ridge and The Venue Residences before their deadlines due to their prime location. According to the Business Times, developers may set up a subsidiary or fund to buy the unsold units if the loss in a stack sale to an institutional fund is more than developer’s cost of paying an ABSD of 15% on the purchase of unsold units. Thus, developers need not resort to massive price cuts. Not only so, the location and design of the development may also affect developer’s ability to sell of the project.

(Source: Business Times)

Commercial

Q1 property investment sales set to fall to near 7-year low

Investment sales of property or big ticket transactions of at least $10 million are expected to fall to about $2 billion in Q1, said Savills Singapore. This would be less than half the $5 billion for Q4 last year and the lowest quarterly level since Q2 2009. According to Savills, it is expected that there will also be a fall in Q1’s investments this year from the $3.6 billion invested in Q1 2015. Steven Ming from Savills said that the sharp quarter-on-quarter fall will likely to be due to a lack of big deals in the commercial property segment. Galven Tan from CBRE said that investors are cautious in completing office transactions as they anticipate that there will be an increase in demand for office rental. Nonetheless Ming said that due to the decline in global interest rates, interest in commercial property deals may still pick up. On the residential front, investment of sales have increased 12.9% to $1.5 billion in 1 Jan to 22 March this year over Q4 2015. Not only so, the top bids by developers for three residential sites at state tenders in Q1 were above market expectations. This reflects developers’ optimism for 2017 when the projects are expected to be marketed, added Savills.

(Source: Business Times)

CaptiaLand enters co-working space arena

In partnership with Collective Works, CapitaLand will turn the entire 12th floor at Capital Tower into co-working space that spans about 22,000 sq ft. The space is expected to house up to 250 companies. Collective Works, which is a co-working space operator, will manage the space. Grade-A office rents in Tanjong Pagar are estimated to range from $8 to $8.50 psf per month. The average rent of remaining leases expiring at Capital Tower disclosed by the CapitaLand Commercial Trust was $9.15 psf per month in Q4 last year. Wen Khai Meng from CapitaLand said that the co-working space is likely to appeal to fast-growing businesses, entrepreneurs and freelancers who are seeking to rent fully functional, fitted-out office spaces under flexible lease terms.

(Source: Business Times)

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