Singapore Property News This Week #84

Residential

Foreign demand to help recovery of luxury property market

Despite the 17.5% fall in foreigner’s share of purchases from 2011 to 6.2% in November 2012 as a result of the ABSD, the luxury property market is expected to recover in 2013 as foreign investors return to the local market. This is also helped by the low interest rates, the market liquidity and possibly fall in prices as a result of excess supply. Furthermore, recent cooling measures such as caps on loan tenures are unlikely to affect foreign investors can afford higher upfront payment.

While foreign purchases in the CCR fell to 495 units in Q1-3 2012 from the 1,387 units in 2011, sales volume had increased since developers are offering ABSD rebates to both locals and foreigners. In Q1-Q3, 2,109 units were sold to locals, 86% of the 2,459 units sold in 2011 while the 489 units bought by PRs were 74% of the 665 units sold in 2011. Demand for prime properties in city-fringe locations or the RCR may also increase since the narrower price gap (25.4% in Q2 2012 compared to 32.3% in Q1 2011) between the upper-end suburban and lower-end prime markets has led to an increase in demand for the latter.

19,792 new homes were sold in the first 10 months of 2012, breaking 2010’s record of 16,292 units. This is attributed to the large number of shoebox units. With the restrictions on the maximum number of units in non-landed private housing projects outside the Central Area, and buyer fatigue, this is likely to fall to 15,000-18,000 units in 2013. While some expect prices to remain stable with a marginal 5% fall at most in 2013, others expect an overall increase of up to 10% (mass-market and luxury properties to increase by 10-15% and 3-5% respectively), citing increased land costs and low interest rates.

(Source: Business Times)

99-year leasehold Echelon launched for sale

The private condominium project next to Redhill MRT Station at Alexandra Road is set to bel launched at an average price of around $1,700 psf. It is said that around 30-50% of the 508 units in the 43-storey, twin-tower development may be released. Units range from studios to four-bedroom apartments and penthouses.

Meanwhile, 800 e-applications had been submitted for the 653-unit Forestville EC at Woodlands Ave 5/Woodlands Drive 16. It is being sold at an average of $700 psf, with those under the deferred payment scheme paying 3% higher. There are two to five-bedroom units and 29 penthouses (1,550-2,756 sq ft) in the 14-block project, with 30% of the units being dual-key units.

(Source: Business Times)

Estimates of housing supply in GLS reflects smaller average unit sizes

The average GFA per unit for most private condo sites in OCR and RCR in the 2013 H1 GLS programme has been reduced by 5 sq m to 90 sq m and 80 sq m respectively compared with the sizes in GLS sites in 2012. The average GFA per unit remained at 100 sq m for EC sites in the OCR. This reflects the increase in smaller units in new projects which had led to the change in space standards. Sites at Kim Tian Road, Faber Walk and Jalan Bunga Rampai, however, have a larger average unit size since roads surrounding the sites could not support high traffic flows.

(Source: Business Times)

HDB resale market expected to do well in 2013

HDB resale prices are expected to increase by 3-8% in 2013, and COVs are similarly expected to rise by 5-10% next year. However, if there are new cooling measures in the market, there may be a fall of around 3% instead. In the first three quarters of 2012, resale prices of HDB flats climbed by 3.9% and the year could end with a 5-7% growth. COVs continued to climbed after stabilising initially in the first two quarters to $34,000. Volume of resale HDB transactions fell from 25,000 in 2011 to 19,000 in the first three quarters of 2012, a result of the extension of the Minimum Occupancy Period (MOP) and the requirement owners of private property to sell them if they buy HDB flats, both of which discourage upgraders from selling their flats.

Low interest rates, and the increase in demand for resale flats from singles – both factors for well-performing resale market is likely to remain in 2013. Furthermore, the large supply of BTO flats also meant that it will be another eight years (three for construction, five for MOP) before the flats are available for resale. Owners with both private housing and HDB flats may also sell the flats if rental yields are low. However, the rising cost of mass market private housing may discourage upgraders, constraining the supply of resale flats.

(Source: Business Times)

Commercial

3 industrial sites released for public tender

The first is a 30-year leasehold 0.35 ha site located in Ubi Avenue 4. Zoned for Business 1 development, the site with a 2.5 plot ratio is expected to be popular since it is located near the Tai Seng and MacPherson MRT stations. It is expected to attract five to 10 bids with a top bid of $110-160 psf ppr.

The second is a 30 year-leasehold 3.96-ha site located at Tuas South Avenue 10. The site is zoned for Business 2 development with a 1.4 plot ratio. It is likely to attract three to eights bids with a top bid of $50 to $95 psf ppr.

Also zoned for Business 2 development is the third site –  a 22-year-and-five-month leasehold 0.3-ha parcel located at Tuas South Street 8 with a plot ratio of 1.0. Five to 18 bids are expected for the plot, with a top bid of $55 and $70 psf ppr.

The tender closes on Feb 7 at 11am.

(Source: Business Times)

30-year leasehold Woodlands industrial plot available on reserve list

The 3.9-ha site at Woodlands Ave 12 is zoned Business 1 with a 1,055,645.3 sq ft maximum GFA and a height restrictions of 61 m above mean sea level. The site is unlikely to be triggered, given its size and its proximity to an ample upcoming supply of sites. However, if triggered, the site is likely to be triggered at $50-$55 psf ppr and attract four to eight bidders with a top bid of $110-$126 psf ppr when launched.

(Source: Business Times)

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