Singapore Property News This Week #4

Here’s our summary of the important residential, commercial and industrial news this week. We hope this helps you to save time catching up on the news!

RESIDENTIAL

Slower home sales reported last week but sellers remain firm on their pricing

Minister Khaw’s comments on the property market might have caused interested buyers to hold back their purchases for the time being as agents and developers saw slower home sales last week. For example, Terrasse in Hougang hit a single-digit sale figure last week, after having sold about 20 units in each of the earlier two weeks. However, sellers have no intention of altering their prices as they believe that sales will improve in July and August. Till now, Far East Organization has already sold more than 80 units at its Woodhaven at an average price of more than $900 psf. In Newton, 17 out of 25 units at Classique have been sold at an average price of about $1,950 psf.

Hong Kong stars buy 3 one-bedder units in 99-year leasehold Twin Peaks condo project

Jackie Chan and Wakin Chau have recently purchased three apartments of 571 sq ft each in the 99-year leasehold Twin Peaks condo at Leonie Hill Road. Chan purchased two one-bedder units while Chau purchased one . The average trading price for units in the Twin Peaks project is around $2,850 psf; however Chan and Chau might have been given a discount due to their celebrity status. Twin Peaks, which is estimated to complete in 2014, consists of two identical 35-storey towers that can house 462 units. Till now, OUE has sold more than 50 units and the highest price attained is $3,170 psf.

Private home sales in May down 4% from 1,918 units in April

The Government’s cooling measures may have affected buyers’ confidence as sales of new private houses (including ECs) decreased around 4%, from 1,918 units in April to 1,825 units in May. Excluding ECs, the amount of sales in May decreased 13% from 1,805 units in April to 1,575 units in May. PropNex noticed that the top selling projects in May, which consisted of 624 units and made up 34% of total units sold, were all located in the OCR: 184 units at Terrasse at a median price of $994 psf, 162 units at Belysa at median price of $691 psf, 141 units at Foresque Residences at a median price of $1,108 psf, and 137 units at Eight Courtyards at a median price of $806 psf. Interestingly, units in OCR made up 60% (945 units) of new private home sales in May. The remaining 40% were from RCR and CCR, which made up 29% (458 units) and 11% (172 units) respectively. PropNex believed that sales in June are expected to remain above 1,500 units while CBRE believed that home sales in Q2, excluding ECs, will exceed 4,000 units.

Fraser Centrepoint’s top bid for condo plot exceeded second highest bid by only 0.4%

Developers’ decisions in bidding for 99-year leasehold mass-market condo sites may have been affected by the government’s decision to increase housing supply and possibly the income ceiling. Fraser Centrepoint’s top bid of $325 psf ppr for a private condo plot at Flora Drive, which exceeded the second highest bid by only $1.43 psf ppr (0.4%), was the lowest price for 99-year private condo site sold in 2011 to date. Also, Fraser Centrepoint’s top bid exceeded the top bid for a nearby site sold last year by a mere 1.3%. Analysts mentioned that Fraser Centrepoint’s top bid reflected signs of price softening in the market and Knight Frank believed that the bidding result reflects an upcoming change for the mass-market condo land price.

Income ceiling for new HDB flats may be increased due to rising age of first-time applicants: Minister Khaw

Minister Khaw mentioned that there is a need to adjust the income ceiling for new HDB flats because of the rising age of first-time applicants. He mentioned that the median age of first-timers who applied for HDB’s Fiancé-Fiancée Scheme for BTO project introduced in May was 27, while other first-timers, such as those already married had a median age of 34. Also, he noticed that 65% out of the 14,000 Singaporeans who applied for the 4,000 BTO units introduced last month were first-time applicants. He hopes that by increasing supply of BTO flats, applicant’s chances to select a flat will increased.

Singapore achieved 10.5% growth in house prices year-on-year

Singapore, which was ranked 5th in the Knight Frank Global House Price Index, reflected a 10.5% increase in house prices year-on-year. Asia, which has a growth rate of 8.4% annually, was the best performing continent this time round. Globally, appreciation of housing prices by a mere 1.8% marked the lowest annual rate of growth ever since Q4 2009. Knight Frank predicted that the slow growth in housing markets will continue and global housing prices are likely to recover slowly in 2012.

COMMERCIAL

Orchard road ranked 26th most expensive place for retailers in the world: Colliers International

Orchard Road, which was the 27th most expensive place for retailers to rent a shop in 2010, was in the 26th position in Q1 2011, according to a survey by Colliers International. Although the rent remained unchanged at $462 psf per annual in SGD terms, the rent of USD$366 psf per annual revealed a 10.8% year-on-year increase. Colliers International mentioned that rents in Orchard Road might continue to increase due to the decrease in supply of retail spaces in the area. However, Singapore’s ranking within the Asia-Pacific dropped from 6th last year to the 7th this year.

800,000 sq ft The Shoppes at MBS can only be sold in 2017

Although the casino operator at MBS intends to sell The Shoppes, an 800,000 sq ft mall in MBS, for US$4 billion in the next 2-3 years, the development agreement between MBS and STB stated that MBS Pte Ltd is not allowed to sell the mall within a 10-year exclusivity period and without the Singapore’s government approval. The 10-year exclusivity period, which started in 1st March 2007, means that The Shoppes can only possibly be sold after March 2017. Las Vegas Sands (LVS) president and COO Mr. Leven mentioned that the mall will be a US$200 million EBITDA business when it is fully developed.

GuocoLand sold 20% stake in Tanjong Pagar development project to Malaysia’s EPF for $640 million

GuocoLand, who won the 99-year leasehold plot above Tanjong Pagar MRT station at $1.708 billion ($1,006 psf ppr) at a government land tender last year, has sold 20% of its stake in its $3.2 billion development project to the Employees Provident Fund of Malaysia (EPF). GuocoLand has to assign a minimum of 60% of the maximum 1.7 million sq ft GFA to office and 10% for hotel purpose. The development, which is estimated to complete by 2015 or 2016, will likely house Grade A office space of more than a million sq ft, a 5-star hotel plus retail space and Singapore’s tallest residences of 280 metres. According to GuocoLand, the residential units might be launched in 2012.

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