Singapore Property News This Week #30

Residential

Increased demand of commercial and industrial units expected

While sales for residential projects have been slower since the introduction of the Additional Buyer Stamp Duty (ABSD), there are still some buyers. Developers and agents selling small strata-titled commercial and industrial units are expecting increased demand from investors who are unwilling to pay the ABSD, and therefore are increasing their marketing efforts. One such developer is Oxley Holdings, which will launch five industrial, commercial and commercial-cum-residential developments over the next six months.

Far East Organization sold about 15 units at its projects, while City Developments sold a few units at 892-unit The Palette. Buyers seemed to be waiting for the prices to drop – despite the stream of viewers at showflats many did not buy anything. This is despite the packages offered by developers such as Far East Organization, Wing Tai Holdings and City Developments to offset the ABSD. Nonetheless, buyers who have purchased units at The Palette or the 583-unit Bedok Residences have not withdrawn their options as a result of the ABSD.

80% of freehold Charlton Residences sold even before official launch

Freehold three-storey Charlton Residences developed by SingXpress Land Ltd has sold 80% of its units even before its official launch in January 2012 despite the new governmental measures. This may be due to its affordable pricing and location, being near Kovan MRT Station and schools. Units ranging from 5,350 to 7,696 sq ft with 6 bedrooms and two car park lots were sold at an average of $2.8 million per unit or about $500 psf.

Average condo size has decreased again

The average size based on gross floor area (GFA) per home for private condo sites in both the Rest of Central Region (RCR) and Outside Central Region (OCR) has decreased by 5 sq m to 85 sq m and 95 sq m respectively from the H2 2011 programme to the H1 2012 GLS Programme. The average home size for executive condo (EC) sites however remains unchanged at 100 sq m in OCR.

The space standards (the average GFA per housing unit) used to estimate the number of homes that can be generated from Government Land Sales sites are regularly reviewed, taking into account the sizes of residential units in housing projects (including ECs) which have obtained planning approvals in recent years. This helps to reduce the possibility of underestimating the supply of homes from the land it sells. There is also a trend towards smaller average home sizes with more singles living on their own. It may also be due to the reduction of sizes of electronic devices.

Sing Holdings buys its 4th Robin Road site

The freehold 16-unit apartment development located at 2 to 8 Robin Road was sold at $52 million or $1,46 psf ppr based on an allowable plot ratio of 1.54, including balconies. The site has a maximum allowable height of five storeys and could yield a gross floor area of around 135,462.4 square feet. This is the 4th Robin Road site purchased by the developer, bringing the cumulative purchase price and total land area to $176.3 million and 87,962.6 sq ft respectively. The site is located near upcoming Stevens MRT station, and popular schools such as Singapore Chinese Girls’ Primary School.

Home sales to slow after November’s rush

Private home sale was high in November but this trend is unlikely to continue given the new cooling measures which could slow sales by 20 to 30%.

The sales for private homes excluding ECs in November were a 22.3% increase from October’s figures. However, with the cooling measures in place sales could fall to 1,000 units or fewer per month and rise a little to between 1,100 to 1,200 units after Chinese New Year. The slower sales in December could bring the total sale to last year’s level, instead of the higher level expected before the new measures.

Given the uncertain global economy and the new measures, homes sales in are expected to be between 9,000 and 11,000 units. The full effect of the ABSD might only be seen in February as most developers are adopting a wait and see approach. Prices of luxury/prime residential properties and mass-market homes could fall by 10 to 15% and 5 to 10% respectively in 2012, whereas landed home prices may fall by less than 5% given the limited supply and restrictions on foreigners purchasing such properties.

Bid prices for 99-year leasehold residential site shows effect of cooling measures

The provisional tender results the site near Punggol MRT Station show that the cooling measures implemented are working now. Despite the 13 bids it received, the top bid by Wee Hur Development of $354.37 psf of potential GFA was 12.8% lower than the $406 per square psf ppr that Sim Lian paid for a nearby site in December last year. The breakeven cost is about $740-760 psf since Wee Hur is in the construction trade. Mass-market condo prices might decrease by 10% next year as a result of decreased demand due to the ABSD. Nevertheless, the 13 bids attracted by the site showed that developers felt that the mass-market sector is less likely to be affected by the ABSD, since buyers are likely to be either HDB upgraders or first-time private home buyers.

Commercial

Three 999-year conservation shophouses at Liang Seah Street up for sale

The indicative price for the 2,694 sq ft site put up for sale through an expression-of-interest exercise is $30 million or $2,602 psf, based on the total floor area of 11,529 sq ft. The part three, part five-storey development served by a passenger lift could be converted into a hostel or a budget hotel.  It is expected to attract investors who wish to capitalise on its location – near Bugis Junction area which will attract retailers or investors who collect conservation shophouses.

Freehold GRTH Building up for sale

22,147 sq ft seven-storey freehold GRTH Building located at 66 East Coast Road is asking for $82 million. Zoned for ‘commercial’ use, it has a gross plot ratio of up to 3.0 with a potential gross floor area of 66,440 sq ft, it could redeveloped into a commercial or residential cum commercial development. The selling price could increase from $1,094 psf ppr to $1,234 psf ppr if approval is granted to purchase an adjoining 1,420 sq ft plot of state land. The tender will close at 3pm on Feb 15, 2012.

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