Residential
HDB resale prices in Q1 remain flat
Quarter-on-quarter, HDB resale prices have fallen by 0.1% in Q1 this year. Resale transactions fell 10.9% from 4,992 units in Q4 last year to 4,449 units in Q1 2016. Market experts believe that this was due to the festive season in February, which is also a shorter month. Year-on-year, the transaction volume increased by 7.6%. PropNex’s Ismail Gafoor believes that resale transactions are likely to increase gradually due to falling prices. Eugene Lim from ERA Realty added that the market is likely to be stabilising as minute price movements have been recorded in the resale market in the last 4 quarters. Lim believes that resale flats in mature estates will continue to draw buyers as BTO flats in these areas are rare. He predicts that there will be a drop of less than 1% for HDB resale prices in 2016 while resale volumes will likely be around 20,000 to 22,000 units this year. This is up from the 19,300 units resold in 2015.
(Source: The Business Times)
Private home price index fell 0.7% in Q1
Quarter-on-quarter, URA’s private home price index has fallen by 0.7% in Q1 this year, following a 0.5% drop in Q4 2015. Since Q3 2013, the index has also fallen 9.1%. Market experts believe that the index reflects market sentiments as evidenced by the successful launches of Cairnhill Nine and The Wisteria. Prices of non-landed private homes in the outside central region have fallen by 1.3% quarter-on-quarter in Q1. In the same period, prices have gone up by 0.3% in the core central region while prices remained flat in the rest of central region. Nonetheless, market experts believe that it is still too early to lift cooling measures. On the rental front, URA’s rental index for private residential units has gone down by 1.3% in Q1. With an increase in expected completions by end-2016 and a slowdown in the inflow of expats, market experts believe that there will be an oversupply in the next 3 years. This is expected to further affect the rental index.
(Source: The Business Times)
Gramercy Park to be launched soon in regional markets
Located at Grange Road, a freehold condo, Gramercy Park is expected to be promoted in regional markets including China and Hong Kong. The 174-unit project will be subjected to extension charges for unsold units from Q2 2018. Market experts said that Indonesians and Malaysians may be keen to invest in Singapore’s real estate due to business dealings here and also because investors are looking to hedge against their currencies’ depreciation. While there is a 15% additional buyer’s stamp duty applicable to foreign buyers, steep discounts offered for high-end homes have piqued buyers’ interest.
(Source: The Business Times)
Commercial
Office rental index down by 2.1% in Q1
According to the Business Times, URA’s office rental index has fallen 2.1% quarter-on-quarter in Q1 this year, following a 1.8% drop in Q4 last year. Year-on-year, the index has fallen by 9%. The URA price index for office spaces also fell by 0.3% in Q1 this year after falling 0.1% in Q4 2015. Vacancy rate for office spaces fell to 9.2% in Q1 2016 from 9.5% in Q4 2015. Also, the stock of office space shrank by 23,000 sq m (nett) in Q1 2016, which was a bigger drop than the decrease of 21,000 sq m (nett) in Q4 2015. However, market experts believe that vacancy rates will continue to increase due to the number of expected office completions in the coming quarters. The fall in the office rentals is likely to have been due to weak business sentiments and a large impending supply of office spaces, added JLL. Thus, JLL predicts that URA’s office rental index will drop another 10 to 15% this year.
(Source: The Business Times)
Retail space prices fall by 1.9% in Q1
After falling 0.1% in Q4 2015, prices of retail spaces have fallen by 1.9% in Q1 this year. Rentals of retail spaces also fell by 1.9% in Q1 after falling 1.3% in the previous quarter. Island-wide, vacancy rate for retail spaces have gone up to 7.3% in Q1 2016 from 7.2% in Q4 last year. In Q1, the amount of occupied retail space increased by 11,000 sq m (nett), while the stock of retail space increased by 19,000 sq m (nett), this is said to have caused the rise in vacancy. According to the Business Times, at the end of March this year, a total supply of 783,000 sq m gross floor area of retail space was also recorded to be in the pipeline.
(Source: The Business Times)
Shops and shophouses overtake residential units in auctions
A report by Knight Frank showed that shops and shophouses have overtook residential properties in total sales value in auctions in Q1 this year. In that quarter, $5.5 million worth of shops and shophouses were sold in auctions, which more than doubled the total sales value in the residential sector where $2.5 million worth of sales was made. According to Knight Frank, the shift in buyers’ preferences could be due to the additional buyer’s’ stamp duty, which is applicable only to residential properties. Grace Ng from Colliers said that prices for HDB shophouses have been stable in the last 2 years. Asking prices have not gone down as buyers would still able to get good and stable yield for those shophouses. On the other hand, mortgagee sales have made up 42.6% of the auction market in Q1. According to the Business Times, there was also a higher proportion of lower priced properties in auctions.
(Source: The Business Times)