Singapore Property News This Week #76

Residential

Chinese nationals making less private homes purchases

The number of homes purchased by Chinese nationals from January to September this year has fallen by 48% from 2,046 units in the same period last year to 1,066 units, falling from their spot as the top foreign buyers. They have also shifted their interest in homes located in prime and mid-range Districts 9, 10, 11 and 14, 15, 16 to mass-market Districts 18, 19 and 23 in 2012, especially to new launches near MRT stations and amenities. This could be a result of the aggressive marketing of suburban project launches in China as well as the imposition of the ABSD on Chinese buyers which will increase the costs. Furthermore, the abolition of the Financial Investor Scheme, stricter immigration rules and a slowdown in China’s economy also resulted in a fall in demand.

Meanwhile, Malaysians, currently the top foreign buyers, bought a total of 1,394 units (mainly in Districts 19 and 18), a 7.5% fall from 2011. The interest in Singapore properties is likely due to its proximity and cultural similarity to Singapore as well as the perception that Singapore is safe for long-term investment.  Purchases by Indonesians, who remained the third largest foreign buyers, saw a 25% decrease year-to-date to 942 units. The preference for District 9 remains, making them the largest foreign buyers to purchase homes in District 9, though there had been an increase in interest for District 19 as a result of new launches in Punggol. Likewise, the Indians retained their spot as the fourth largest foreign buyers with the 685 units purchased, despite the 22% fall from the units purchased in the whole of 2011. The US citizens, have replaced the UK citizens as the fifth largest foreign buyers with the 122 units purchases, a 15% increase from the 106 bought in the same period last year. This is likely because they are not subject to the ABSD as a result of the FTAs signed with their country, along with citizens of Switzerland, Liechtenstein, Norway and Iceland.

Malaysians, Chinese citizens, Indonesians, Indians and US citizens are the top five largest foreign buyers with each taking up 25.3%, 21.7%, 17.8%, 15.2% and 2.7% of the 1,610 units sold in Q3 respectively.

(Source: Business Times)

Sentosa bungalow sets new record psf price of $3,214

A 99-year leasehold bungalow on Ocean Drive, Sentosa Cove is said to have been sold for $32.5 million or $3,214 psf based on its 10,111 sq ft land area, breaking the previous record of $2,989 psf. There had been a sudden increase in activity in Singapore’s upscale waterfront housing district, accompanied by an increase in prices. However, this is not reflected in the caveats lodged, suggesting buyers have yet to exercise their options.

(Source: Business Times)

HDB resale prices climbed 2% in Q3

The HDB Resale Price Index (RPI) increased by 2% from Q2 to 197.9 in Q3, bringing the year-to-date increase to 3.9%. This increase is attributed to the relative lack of supply to meet demand. This also meant a 15-20% increase in median COV from Q2 to $30,000 in Q3. However, there was a 6% fallin resale transaction volume to 6,560 units. This could be due to record high prices of private properties leading to less incentive for HDB owners to sell and upgrade, or an increased demand from buyers unwilling or unable to wait for BTOs, second-time buyers as well as buyers ineligible for BTOs. While prices are expected to continue rising, to about 5-7% by end-2012, it should be at a fairly moderate pace especially with the record 27,000 BTO units launched this year. However, with the cap on home loan tenures, prices may fall instead as homeowners decide not to move, resulting in lower supply.

(Source: Business Times)

Heron Bay penthouse breaks EC record price at $1.774m

The $1.774 million set for a 2,845 sq ft five-bedroom penthouse unit in Heron Bay broke the previous record of $1.61 million set last week by a 2,716-sq-ft double-storey penthouse at 1 Canberra in Yishun. The record prices are likely due to rising income, liquidity and the low interest rates, as well as an increased demand for larger and more luxurious penthouses from young and affluent buyers and HDB upgraders who had benefitted from the increased HDB resale prices. However, these prices are not indicative of the overall EC pricing since such transactions are rare given the size of the units.

(Source: Business Times)

Olive Road and Faber Drive bungalows sold for $26.1m and $10.38m respectively

The first bungalow is a GCB at 27 Olive Road at Caldecott Hill Estate which was sold for $26.1 million or $1,114 psf based on its 23,423 sq ft land area. The buyers intend to redevelop it into a luxurious new bungalow. The second is located at an elevated site of 11,719 sq ft at Faber Drive which was sold for $10.38 million or $886 psf. It may be developed into two smaller detached houses. Despite the potential economic slowdown, it appeared that well-located GCBs are still in demand.

(Source: Business Times)

GCB market not affected by latest cooling measure

Five caveats totalling $122 million for the GCB market has been lodged in October, with possibly more to be lodged for recently signed deals, despite the recent cooling measures in the property market. These included a 15,450-sq-ft vacant freehold hilltop site at Swettenham Road which was sold for $21.98 million or $1,423 psf and a 15,094-sq-ft vacant plot at Jervois Hill for $25.8 million or $1,709 psf. Others include a six-bedroom Leedon Park bungalow with a pool sold for $33 million or $2,110 psf on its 15,640-sq-ft land area, a two-storey Olive Road bungalow sold for $26.1 million or $1,114 psf and a property at Kingsmead Road for $15.1 million or $1,776 psf on its 8,504-sq-ft land area. While some believe that these deals began before the introduction of the cooling measures and that there had been a slowdown in activity, others did not see any signs of a slowdown. Nevertheless, demand is expected to continue and drive an increase in transaction volumes. A total of 16 GCBs totalling $332 million have been sold in Q3, compared to 18 transactions at $359 million in Q2, bringing the year-to-date total to 48 transactions at $1.04 billion.

Meanwhile, a 24,207-sq-ft freehold plot located in the Holland Rise GCB Area is up for sale via an expression-of-interest exercise. The property located 500 metres from Holland Village MRT Station and amenities in Holland V is asking for $1,300-$1,500 psf. The exercise will close on Nov 22.

(Source: Business Times)

Commercial

Industrial property price rose 8.8% in Q3

According to the URA, the industrial property price index climbed by 8.8% from Q2 to 183.3 in Q3, resulting in a 26.7% year-to-date increase, just slightly below the 27.2% increase registered for the whole of 2011. This is likely due to the spillover demand from the residential market, as well as demand from industrialists seeking to own their own premises which exerted an upward pressure on prices. The price index for multiple-user factory space grew 10.1% in Q3, compared to an 8.3% in Q3, driven by the demand for strata factory units. There had also been increase in transaction volume of these units, with 2,591 units transacted year-to-date, 95% of the 2,723 units transacted in the whole of 2011. The price index for multiple-user warehouses and the rental rates have slowed to a 2.3% and 1.2% increase respectively in Q3, compared to the 8.6% and 2.8% growth respectively in the previous quarter. This resulted in a rental rate growth of 6% year-to-date, compared to 15.5% for 2011. Prices are likely to continue increasing, albeit at a more moderate 5-6% in Q4 though it will exceed the price increase registered in 2011. Capital values of industrial property are likely to increase by 33-37%, with the rental index to increase by 7-10% for the whole of 2012.

Meanwhile, prices of private residential properties rose by 0.6% in Q3, a slight increase from the 0.4% in Q2, driven by the 1.1% increase in landed private housing in Q3. This moderate increase reflects a much more stable market, especially since there is only 0.9% increase year-to-date. Prices of non-landed private property in the Outside Central Region saw a 1.0% increase in Q3, while the prices for Rest of Central Region and Core Central Region rose by 0.8% and 0.1% in Q3 respectively.

(Source: Business Times)

Bukit Timah Saddle Club site up for sale

The Singapore Land Authority (SLA) is launching a 104,567.2 sq m site with a 2,202.3 sq m GFA at 51 Fairways Drive for sale by public tender. It is currently occupied by the Bukit Timah Saddle Club (BTSC) which leases only five hectares at $18,000 a month. The public tender is launched so that other interested parties wishing to run a saddle club can have a chance at bid for the site. The site will remain primarily for equestrian purposes with public riding made available. In addition, ancillary uses, such as restaurants and shops, cannot exceed GFA of 251 sq m. SLA is providing BTSC a six-month lease extension until June 30, 2013 so that disruption to BSTC’s operation can be kept minimal if BSTC participates in the tender and is successful. The tender will close on Nov 20 at 11am.

(Source: Business Times)

49,053 sq ft of freehold Delta House strata industrial space up for sale

Two vacant strata units totalling 49,053 sq ft of freehold strata industrial space at Delta House in the Alexandra /Delta Road vicinity is up for sale with an asking price of almost $54 million or $1,100 psf via an expression of interest exercise. One unit occupies the entire 36,308 sq ft on the fourth level of the eight-storey building while the other occupies 12,745 sq ft on the third level. The building sits on an 88,537 sq ft plot zoned for residential use with a 2.1 plot ratio. It could be potentially redeveloped into a new condominium project with 170 1,000 sq ft units. The current property offers 82 surface carpark lots.

(Source: Business Times)

Three industrial plots released for sale by JTC – one at Woodlands and two at Tuas

The first is a 30-year leasehold site located off Woodlands Ave 10 next to Mapletree’s Woodlands Spectrum I and II. While some expected the top bid to be in the range of $75-100 psf ppr as a result of the more affordable overall cost from its smaller size, others expect the top bid to be around $55-$75 psf ppr because of its small size that does not allow it to be built into a flatted factory. It is expected to draw three to six bids, and could probably fetch $280-$290 psf if a new development is strata-titled and sold.

The two sites at Tuas South Street 8 are the 32,674.9 sq ft Plot 8 and the 48,727.1 sq ft Plot 18. Both have a 1.0 GPR and a lease term of 22 years and seven months. Plot 8 is expected to draw four to eight bids while Plot 18 is expected to draw 11to 18 bids since it is larger and located at the corner. Both are expected to achieve a top bid of $50-$78 psf ppr.

(Source: Business Times)

Freehold industrial building near Sims Drive up for sale

The freehold seven-story building near Sims drive is up for sale by public tender. It is asking for $33.8-36 million, or $564-601 psf ppr. The 23,936 sq ft rectangular plot zoned for Business 1 use has a 2.5 GPR. It is likely to be popular given the demand for light industrial space, and it is reasonably priced considering its excellent condition and its proximity to Aljunied MRT station. The tender will close on Nov 28 at 3 pm.

(Source: Business Times)

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