More couples applying for flats before marriage
Between 2009 and 2011, under-25s are taking up 32% 39% and 35% of applications under HDB’s Fiance-Fiancee Scheme, with a median age of 27. In 2011, over 50%of the first-timers applied under this scheme. This is a significant number since 65% of the applicants are first-timers and 95% of flats in Build-to-Order (BTO) launches are reserved for them. More young couples are also buying relatively more expensive ECs, one example being the two couples with the female under 18 applying for MCC Land’s 1 Canberra in Yishun. When interviewed, the reasons young couples gave for buying a house first include the higher future returns they can get on subsidised housing, the improved architectural designs, and the lack of guarantee in getting a flat since there is balloting.
There are also worries that the young couples are adding on to the already high demand for BTO flats and deprive those who need the flats more urgently, such as married couples planning to have children in the immediate future. This may mean that HDB may have to prioritise these buyers if the situation worsens. Meanwhile, young couples who are not married yet have to be sure of their relationship before applying for flats or they may face penalties and legal fees.
CapitaLand offers shoebox units at Bedok Residences despite CEO labelling them “almost inhuman”
37 of the 583 units at Bedok Residences are below 50 sq m (538 sq ft), with the smallest at 48 sq m (517 sq ft) while another 11 units of size 50 sq m are also offered in the development. 226 of the 1,715 units at d’Leedon at Farrer Road are between 50 and 60 sq m, just slightly above the 50 sq m benchmark used by URA for defining shoebox units. While there are different definitions for what constitutes a shoebox unit, the general consensus is that shoebox units are around 500 sq ft. CapitaLand’s CEO claimed that CapitaLand does not build units under 500 sq ft, defending his earlier comments about shoebox units being “almost inhuman” though he acknowledged that using “too restrictive” instead might have cause less of a uproar. He added that most of the units around 500 sq ft that is offered by CapitaLand are one-bedders catering to singles or couples rather than families with children, which may find such units too restrictive.
Narrowing price gap between new suburban and prime resale homes
The price gap between new suburban homes and prime resales have been narrowing so much so that the psf price for a one-bedroom unit in a 99-yer leasehold private residential project is similar to the psf resale price of a similar unit in a freehold development located in the prime districts. As more savvy buyers caught on to the trend, the prime property market could be rejuvenated and this is reflected in the increase in the number of resale non-landed core-central region (CCR) home deals in the past few month as well as the increase in average prices of units in the CCR from $1,636 psf in Q1 to $1,733 in Q2 (comprising data from April and May 2012). Also, the greatest number of resale units (16) in a single development in May comes from Paterson Suites located in the CCR. In general, activity in the resale market has been on the rise with the total number of resale deals (621 units) exceeding that of developer sales (504 units).
99-year-leasehold Buangkok private condo plot draws $508.22 psf ppr top bid
The site located just 100m from Buangkok MRT Station attracted just five bids, with the top bid of $301 million or $508.22 psf ppr from City Developments Ltd (CDL) unit White Haven Properties exceeding the earlier predictions of $320-$500 psf ppr. The relatively lacklustre number of bids may be due to the competition from the large number of new and upcoming projects in the Sengkang/Punggol area as well as competition from more attractive sites at Farrer Drive and Pheng Geck Avenue. Nevertheless, the plot which can yield around 600 units can expect strong demand since it is the first condo plot near Buangkok MRT Station. CDL plans develop the plot into a 16-storey project. The expected breakeven cost and average selling price of the project are $900-950 psf and $1,040 psf respectively.
H2 GLS sites mainly in OCR and RCR to meet demand
In the H2 2012 GLS release, the private residential sites (including EC sites) are mainly located in the suburban Outside Central Region (OCR) and Rest of Central Region (RCR) to meet the demand for more affordable private housing. Six out of the 13 residential sites on the confirmed list including one mixed use site are EC sites. These six sites can yield a potential of 3,100 EC units up from the the five sites or 2,900 EC units in H1 2012. The increase in EC supply on the confirmed list reflects the government’s aim to meet the demand for affordable private housing as well as the need to stabilise prices. Sites that are expected to be popular include a private housing site along Commonwealth Avenue opposite the Queenstown MRT station and a mixed-use residential site at Yishun Ring Road. Within the commercial sector, there is a site at Venture Avenue (Jurong Gateway) on the confirmed list and sites at the Sims Avenue/Tanjong Katong Road and Cecil Street/Telok Ayer Street, as well as a hotel site at Victoria Street/Ophir Road on the reserve list.
There are a total of 12 private residential sites, a commercial and residential site, and 2 commercial sites on the confirmed list, which can be developed into 7,100 private residential homes and 861,112 sq ft GFA of commercial space. Meanwhile, the reserve list offers 24 sites with 14 private residential sites, two white sites, two commercial sites and six hotel sites with a potential of 7,100 private homes, 3.3 million sq ft GFA of commercial space and 3,700 hotel rooms.
Government unlikely to implement more cooling measures
Bank of America Merrill Lynch (Singapore) economist Chua Hak Bin suggests in a recent report that more cooling measures are not needed currently as the latest cooling measures late last year has been effective in suppressing overall sentiment and transaction. Prices have fallen 0.1% in Q1 while transaction values and volumes fell by 26% and 14% respectively from the Q4 2011 to Q1 2012. Transactions in the luxury property market also fell by 61%. With the ABSD in place, the proportion of foreign purchases fell from 34.7% (from January to May) to 22.7% in the same period this year. The number of foreign purchases also fell by 48% compared to 2011. However, buyers who are not affected by the ABSD because of bilateral free trade agreements continued their buying, suggesting that the fall in foreign purchases were due more to the ABSD rather than the general negative economic outlook.
Hotel plot at Victoria St/Ophir Road on reserve list likely to be triggered
A 0.77 ha hotel plot released under the H2 reserve list located at Victoria Street/Ophir Road is likely to be triggered given its attractive location near Bugis Street and Raffles Hospital which may draw medical tourists. Its 4.2 proposed gross plot ratio meant that it can potentially yield 785 rooms. However, given its size the bidders could be only larger developers. Other hotel sites available for tender also include the 0.82 ha site at East Coast Road yielding 600 rooms and the 0.61 ha site at Sturdee Road yielding 445 rooms, both of which are from the H1 list. However, not all are optimistic that the site will be triggered, especially with 12,000 hotel rooms in the pipeline, increasing average room rates and the global uncertainty.
Kaki Bukit Road 5 industrial site attracts 8 bids with top bid of $27.3m
The top bid of $27.3 million, or $138.6 psf ppr for the 30-year 1.31 ha plot came from Hock Lian Seng Holding. It exceeded the earlier predictions of a top bid around $100 psf ppr. This could be due to the lower capital outlay required for the relatively small plot, the prices of surrounding developments and its proximity to the MRT station. There are no restrictions on strata subdivision on the site zoned Business 2 with a 1.4 maximum gross plot ratio though the gross floor area of a single unit must be above 150 sq m.