Singapore Property News This Week #87

Residential

Few units sold at showflats following new cooling measures

The new cooling measures which include the cap on EC unit sizes at 160 sq m, and the inclusion of private enclosed spaces and private roof terraces in the 10% bonus GFA had resulted in slower sales at showflats – CityLife@Tampines, which had only 20 three-bedroom units left for sale, sold only two units on Sunday. Other developments which had a quiet weekend at their showflats include the 52-unit SeaSuites and 148-unit Village along Pasir Panjang. The new cooling measures was targeted at keeping the size and the price of ECs down but some believe that it might be better to  introduce a ratio for balcony space to interior space rather than simply capping the GFA. While sales volume is expected to fall, it is expected to recover a little the next month as potential buyers might start buying in their child’s name.

(Source: Business Times)

Private home sales and prices to fall

Following the latest round of cooling measures, analysts have predicted a fall in transaction volumes ranging from 20 to 50% to 10,000 units in 2013 while prices fall by 5-10%. Investment demand and the mass-market is likely to be affected the most, and resale transactions is likely to fall by 30-50% from 10,000 units per year as owners hold on to their property if they have more than one to avoid incurring the ABSD when they purchase another. Further, the luxury property market is likely to suffer as a further 5% ABSD is imposed on foreigners (bringing it to 15%) who make up 30% of the buyers. Some thought this unnecessary since the foreign non-PR purchases had accounted for 7% of the transactions in each quarter in 2012 and below 10% of the transactions involving properties priced below $1,670 psf. Given the low interest rates, it is likely that more cooling measures will be introduced.

(Source: Business Times)

Private property rentals likely to stay stable

The latest cooling measures such as increased minimum cash downpayment for second and subsequent homes, increased ABSD and lowered LTV limits for individuals with outstanding housing loans may result in less demand for private homes and possibly an increase in demand in the rental market since potential buyers affected by the new measures may choose to rent instead. However, most analysts do not expect an increase in rentals but instead, a stabilisation. The HDB rental market, on the other hand, may see an increase by 3% since PR owners are now disallowed from subletting the entire flat leading to a smaller supply.

(Source: Business Times)

Developers go ahead without change in plans

It would seem that most developers planning to launch their projects would continue to do so without changes in dates and pricing while developers who have recently launched their projects also have no intention of changing their prices yet. For example, prices in the 46-unit Liberte in Sarkies Road still start at $1.8 million for a 743 sq ft two-bedroom apartment. In the last round of cooling measures, developers had offered incentives such as furniture vouchers and reimbursements. However, these incentives have yet to been seen as possibly many are still uncertain of what to expect. Some, such as the 630-unit Q Bay Residences in Tampines Avenue 10, may see a 5-7 % fall in prices to below $1,000 psf.

(Source: Business Times)

2012’s record breaking numbers unlikely to repeat

22,290 private homes excluding ECs were sold in 2012, breaking 2010’s record of 16,292 units. However, this is unlikely to be seen now following the recent cooling measures. This can already be seen in the proportion of sales OCR accounted for in December, 640 of the 1,410 units or 44%, compared to the earlier monthly average of 1,441 units or 75% of the total in January to November 2012. Likewise, only 25% or 248 of the 1,011 private homes excluding ECs launched in December were in the OCR, compared to the earlier monthly average of 1,355 units and 66% from January to November. A total of 21,487 private homes (excluding ECs) were launched in 2012, a 21.3% increase from 2011. 4,521 ECs were also sold last year, a 56.8% increase from 2011.

Looking ahead, a price fall of up to 5% and 5-7% is expected in the mid and mass-market segments, and the high-end market respectively while a 10-46% fall in sales volume to 12,000 to 20,000 units is predicted.

(Source: Business Times)

Land bids expected to fall

The latest round of cooling measures includes an increase in ABSD, lower LTV limits and higher cash downpayment; these will result in a reduced demand for residential property. In addition, by including private enclosed spaces (PES) and private roof terraces (PRT) in the 10% bonus GFA of which development charges are payable, the saleable strata area will fall by 4-5%, leading to a corresponding 5% fall in land prices. This change in guideline will affect low-rise sites the most. Developers’ demand for large sites is also likely to fall as a result of the increase in the ABSD rate residential land purchases from 10% to 15%.  In particular, there is likely to be a fall in overall sales of residential en bloc sites since developers less willing to pay more and owners may be reluctant to lower their asking price.

(Source: Business Times)

Q Bay Residences launched at $985 psf ppr

630-unit Q Bay Residences at the junction of Tampines Avenue 1 and Tampines Avenue 10, the first private condominium launched in 2013, was launched at an average of $985 psf ppr, a 7% fall from the planned $1,050 psf ppr following the introduction of the new property cooling measures. This meant that a 527 sq ft one-bedroom unit and a 1,981 sq ft five-bedroom unit will cost $525,000 and $1.7 million respectively after a 15% early bird discount and a 7% stamp duty discount, which can either be taken upfront or as a rebate.  Despite the cooling measures, demand for Q Bay Residences is expected to remain strong given the fact that it is the first condominium to be launched in Tampines in the last two years, and its wide range of unit configurations (11 different types; from one bedroom, two bedroom, Trio to four bedroom verandah units).

Looking ahead, transaction volumes are expected to fall by 20-25% this year especially with the increase in ABSD rates, accompanied by a 5-7% fall in prices for mass and mid-tier condos and a 10-15% fall in prices of higher-end condos. PRs are also expected to demand more private property rather than HDB flats.

(Source: Business Times)

Slow showflat sales at Q Bay Residences

Only 214 of the 400 people at Q Bay Residences’ preview launched bought a unit at the private condominium project, much smaller than the expected 300 had the latest round of cooling measures not be introduced. Nevertheless, there are potential buyers who may return after sorting out financing issues brought on by the new loan restrictions. While demand for one to two-bedroom units expected to fall, given that such units are usually bought for investment, they made up 46% of the 214 units sold. The strong demand may be a result of the lack of new condominium in the Tampines area for a few years, and the pool of buyers who are likely upgraders less affected by the latest round of cooling measures.

(Source: Business Times)

200,000 new homes by 2016

National Development Minister Khaw Boon Wan had announced in his blog an upcoming supply 200,000 new housing units by 2016, including 80,000 private properties, 10,000 ECs and 110,000 HDB flats. He noted that there is imbalance in the market as a result of pent-up demand from undersupply and increased investment demand in recent years. He also added that the latest round of cooling measures is necessary and designed to protect first-time buyers.

(Source: Business Times)

Commercial

Cooling measures may boost commercial property market

Since most of the cooling measures recently introduced are targeted at the residential sector of the property market, with another, a SSD in the industrial property market, the commercial property market may see more investments as they are diverted from the former two sectors. In particular, demand for strata-titled office and retail units will likely increase. Given the limited supply of such property, prices are expected to increase. The government, however, is not likely to introduce new measures in this sector unless the rate of price increase is too high or the strata units being subdivided are getting too small for end users.

(Source: Business Times)

4 freehold North Bridge Road shophouses up for sale

The four shophouses at 762, 764, 766 and 768 North Bridge Road have been launched for sale by public auction with existing tenancies at an indicative asking price of $15.5 million. They sit on a 5,765 sq ft site and have a total GFA of around 9,600 sq ft. The site is located near Bugis Junction, Bugis Plus, Golden Landmark, Sultan Plaza and Key Point. The auction will be held on Jan 23.

(Source: Business Times)

21% strata interest in prime freehold Orchard Towers up for sale at $190 million

Sinarmas Land Ltd’s subsidiary Golden Bay Realty is selling its 21% stake at around $190 million in Orchard Towers by tender. The space being sold comprises of three components the 7,449 sq ft strata retail space from 21 units, the 70,536 sq ft strata area in 37 office units in the front tower and 50,084 sq ft of office space in the rear tower along Claymore Road. Potential buyers can purchase each of the three components separately or as a whole. If sold separately, the retail space and the office space have asking prices of $3,000 psf and under $2,000 psf respectively. Orchard Towers which also has residential spaces has 595,066 sq ft of strata area in 25 floors and 361 carpark lots. The tender closes on Feb 27 at 3pm.

(Source: Business Times)

Leave a Reply

Your email address will not be published. Required fields are marked *