Tag Archives: residential

Real Estate 2015 Outlook Survey

Dear friends, 2015 is coming to an end.

We are conducting a short survey on the real estate outlook in Singapore. Please participate in this survey to help us consolidate response from the public with regard to Singapore’s property outlook for the near future.

Part 1 (Overall and Residential)

Part 2 (Commercial Real Estate)

Thank You and Merry Christmas!

Condo developers dangle discounts in down market

Lower prices have helped to entice buyers in a down market, going by sales at two recent property launches.

Developers have adjusted their expectations in a bid to gain some traction amid falling sales, in the wake of cooling measures and stringent financing rules.

Take Kingsford Waterbay, a 1,165-unit development in Upper Serangoon that sold 140 homes over the weekend.

The average sales price of $1,050 to $1,180 per sq ft (psf) was below an initial expected selling price of $1,200 psf, the project’s developer Kingsford Development told The Straits Times recently.

The weekend sales included that of a 1,949 sq ft semi-detached unit, which was sold for $2.14 million – or $1,097 psf – and a 1,625 sq ft strata terrace unit, which fetched $1.76 million, or $1,080 psf.

The firm said that most of the units sold were two-bedders, spanning 614 to 721 sq ft. Singaporean buyers were in the majority, comprising mostly young couples and upgraders, the firm added.

Kingsford Waterbay includes apartments, six strata terrace houses, two strata semi-detached houses, a childcare centre and six shops.

Meanwhile, GuocoLand’s 1,024-unit Sims Urban Oasis in Sims Drive sold 29 apartments over the weekend, bringing the sales tally to “more than 170 units” since sales began on Feb 14.

Property agents said that discounts of up to 19 per cent were offered over the Chinese New Year holiday. But that has now shrunk to 18 per cent.

GuocoLand said units were snapped up for between $1,295 and $1,595 psf.

Other upcoming launches this quarter include NorthPark Residences by Frasers Centrepoint and Botanique at Bartley by UOL Group.


Lower than expected bids at tender for Yishun site

A HOUSING Board tender for a mixed-use commercial/residential site at Yishun Ave 4 which closed on Tuesday garnered a “muted” turnout from just five bidders.

This fell short of consultants’ earlier predicted six, to as many as 18 bidders by the most bullish of the lot.

Northern Resi and Northern Retail, both units of listed construction engineering group BBR Holdings, beat four others to offer the highest price of S$185.09 million, which translates to S$629.24 per square foot per plot ratio (psf ppr).

Again, this was below even the floor of consultants’ predictions of at least S$650 psf ppr for the highest bid.

The Yishun plot, with a gross floor area of about 27,327 square metres, is the first of two selected government land sale sites to adopt a new building method called prefabricated prefinished volumetric construction (PPVC). It has to meet a certain level of prefabrication under new government rules for the built sector.

Two Koh Brothers units, KBD Ventures and Changi Properties, put in a very close second highest bid of S$181.6 million (S$617.37 psf ppr), only 1.9 per cent less than the highest tenderer.

R’ST Research director Ong Kah Seng thus called the top bid a “chance occurrence”. When interest is high in a site, bidders would bid aggressively, resulting in a wide margin between the first and second bids, but there was notably no outlying top bid in this tender, he said.

Sim Lian (Focus) Pte Ltd put in the third highest bid of S$168 million (S$571.14 psf ppr). The fourth and fifth bidders were Wee Hur Development and KSH Land Development, respectively.

Desmond Sim, CBRE research head for South-east Asia, said it was not surprising that the tender participants were developers with a construction arm, given the site’s mandatory use of PPVC technology. “Such developers have the advantage of being able to control construction costs better, transferring potential savings into their profit margins,” he said.

But the higher construction cost using the PPVC method – which involves assembling whole rooms or apartment units complete with internal fixtures off-site, and installing them on-site Lego-style – may also have been priced into the subdued bids, SLP International executive director Nicholas Mak said.

“In a buoyant property market, the developer may be able to pass on the higher construction costs to the buyers. But this could be difficult in the current market,” he said. The alternative would thus be for the developer to lower its own land costs.

Ong Teck Hui, national research director at JLL, said the bidders also likely also took into account retail and residential competition in the vicinity.

Northpoint City, an integrated development which includes the largest mall in the north, will be completed in 2018, while Junction Nine at Yishun Ave 9 will be ready in mid-2017. There are also some 920 units for sale at Northpark Residences, and 660 units for sale at Symphony suites.

Chia Siew Chuin, director of research & advisory at Colliers, cited the requirement for the commercial component of the development to be held under a single strata lot as another reason for the low bids.

“This disallows any strata subdivision of the commercial component during the lease term, which could have prompted a more cautious bidding strategy from developers due to the more restrictive investment exit options available,” she said.

The expected breakeven price for the residential component is estimated to be S$950 to S$1,000 psf. Its selling price could range from S$1,050 to S$1,150 psf, depending on the state of the market when it launches, she said.

The retail component could also achieve monthly gross rents of S$6 to S$12 psf, she added.


Rezoning of Geylang by URA

The Urban Redevelopment Authority on Tuesday (Jan 13) announced it is proposing to rezone parts of Geylang, so as to better manage the area in question and “prevent spillover of disamenities to surrounding areas”.

URA said the proposed area is bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang, excluding the parcels of land zoned Road, the lots fronting Geylang Road and the sports field bounded by Talma Road and Lorong 12 Geylang. It plans to rezone this area from Residential/Institution to Commercial/Institution, according to its press release.

Explaining the decision, URA Group Director for Physical Planning Hwang Yu-Ning said in the proposal that Geylang is a “rich and colourful neighbourhood” interspersed with associations, clans, places of worship, shops, offices and residential uses. It is also a traditional red-light area, she noted.

“The various entertainment and eating outlets in the area give rise to activities of a certain colour and vibrancy,” Ms Hwang said. “With more new residential developments in the area, there has been an increasing spillover of disamenities and friction on the ground.

“In our assessment, the growth of new residential community in the area of Lorongs 4-22 Geylang needs to be re-balanced and moderated.”

If the rezoning gets the go-ahead, residential units will no longer be approved in this area. She added the new residential developments in the area, which have been approved will not be affected and can proceed to be built.

A Geylang resident Channel NewsAsia spoke to welcomed the rezoning proposal.

“All these are red light areas. And if they could take this away and put it into more commercial use, like running a legal business that would be fine. It’s good to have commercial properties around your estate so that it’s convenient for everybody to go shopping or to do things or have an office near your home,” he said.

The area’s Member of Parliament (MP) said it is useful not to have more residential developments in the area.

Said Mr Edwin Tong, MP, Moulmein-Kallang GRC: “There are not many residential units there anyway. And much of the area that is being rezoned is already largely commercial, with a good mix of clans and associations. I think it is also useful to not have further residential developments there in an area where traditionally there are not just commercial properties there but also more nightclubs and bars which probably don’t co-exist suitably with residential units. ”

The URA said members of public can submit their feedback, objection or representation to the proposal in writing to the Permanent Secretary, Ministry of National Development, 5 Maxwell Road, Singapore 069110, by Feb 11, 2015.

More information on this proposal can be found on the URA website.


Possible Reason why cooling measures not removed: Rise caveats in Q2

Here’s a possible reason why the authorities are not inclined to remove any property cooling measures just yet: There was an across-the-board increase in caveats lodged for private home purchases in the second quarter compared to the previous quarter.

DTZ’s analysis of URA Realis caveats database shows a 37.1 per cent quarter-on-quarter increase in the total number of private homes transacted to 3,369 units in Q2.

A segmental breakdown showed that the number of units picked up in the resale market climbed nearly 41 per cent or 386 units to 1,328 units in Q2 from 942 units in Q1 – ending three consecutive quarters of decline.

New sales by developers too rose by 511 units or 36.8 per cent to 1,898 units. In the subsale market, 143 units changed hands in Q2, up 11.7 per cent from Q1.


Purchases by Singaporeans rose nearly 45 per cent quarter-on-quarter to 2,491 units in Q2. The number of private homes picked up by Singapore permanent residents climbed 24 per cent to 574 units, while purchases by non-PR foreigners rose 2 per cent to 260 units.

Those with HDB addresses bought 1,629 units in Q2, up 41.3 per cent from Q1. The number of private homes acquired by those with private addresses climbed 33.4 per cent to 1,740 units.

Despite the recovery in Q2, the 5,826 total private homes sold in the first-half of this year is not even half the 13,651 units transacted in the first-half last year – reflecting the dent on transactions created by the Total Debt Servicing Ratio (TDSR) framework since its introduction in late-June 2013, notes Lee Lay Keng, regional head (SEA), research at DTZ.

Still the pick-up in the Q2 caveats would give the policy makers a reason to pause and reflect, amid calls by developers and other parties urging the authorities to start rolling back cooling measures such as the additional buyer’s stamp duty and the seller’s stamp duty, she added.

Most industry watchers accept that TDSR is here to stay for the long term. Under the framework, banks granting new property loans to individuals have to ensure a borrower’s total monthly debt obligations (including car loan and credit card repayments) do not exceed 60 per cent of gross monthly income.

“The reason caveats have recovered in Q2,” said Savills Singapore research head Alan Cheong, “is that demand is extremely price elastic or price sensitive. Even a slight price decline would lure many potential buyers back to the market”.

“In 2012 and 2013, the market was fixated with new property launches. In 2014, the genuine upgraders and even investors who are not overwrought by new-fangled small-format homes have started to look at the resale market where more habitable, larger apartments are to be found, and they have started to plunge into the market.

“And the sellers of such properties being individuals, unlike developers, have little bargaining power and acceded to the buyer’s price offers. Hence, prices in the resale market have gone down.”

DTZ’s Ms Lee said the strong new home sales in Q2 was amid an increase in launches by developers.

“Based on preliminary monthly numbers, developers launched 2,843 private homes in Q2, compared with 1,964 units launched in Q1. Big projects were released in Q2 in good locations and at attractive prices – such as Commonwealth Towers, Lakeville, Coco Palms and The Sorrento – resulting in relatively good sales,” said Ms Lee.

“Moreover, some previously launched projects saw renewed interest after new units were released at lower prices in Q2. For instance, the developers of The Panorama and Sky Habitat sold another 149 units and 153 units, respectively in Q2 after median prices were reduced by 10-15 per cent since these developments were first launched in Q1 2014 and Q2 2012, respectively.”

DTZ’s caveats analysis also showed that because Singaporeans’ share of private home purchases rose at a faster clip in Q2 compared with the more modest increases in buying by PRs and foreigners, the proportion of units bought by Singaporeans rose four percentage points quarter-on-quarter to 74 per cent.

Conversely, PRs saw a two percentage point retreat in their share to 17 per cent in Q2. Foreigners too posted a three percentage point fall in their share to 8 per cent.

Another finding is that 58 per cent of private homes picked up by Singaporeans in Q2 were new sales by developers. Among foreigners, the figure was 62 per cent. For PRs, however, it was a roughly equal split of the source of units between new sales and resales. Of the 574 units PRs acquired in the second quarter, 47 per cent comprised new sales, and 46 per cent resales, with the balance 7 per cent involving subsale transactions.

“It appears that a higher proportion of PRs are buying for owner occupation and hence want a completed property they can move into immediately,” suggests Ms Lee.

Private Resale Market is not spared of price falls despite volume increase

The number of private home resale transactions was a 7.9 per cent increase over May, but prices fell by 1.4 per cent in June, according to the Singapore Real Estate Exchange.

Resale prices for non-landed private residential homes continued to fall in June, reaching a 1.5-year low, according to the latest report by the Singapore Real Estate Exchange (SRX) on Monday (July 14).

Overall resale prices fell 1.4 per cent month-on-month to hit an 18-month low, with prices at their lowest since December 2012, according to the SRX Flash Report. Compared to the price peak in January this year, June prices are 4.7 per cent lower.

Prices fell for all three regions – Rest of Central Region (RCR), Core Central Region (CCR) and Outside Central Region (OCR) – with the city fringe area leading the fall by 3.2 per cent. This was followed by the core central area and the suburbs, which dropped 1.7 per cent and 0.3 per cent, respectively, SRX said.

The majority of districts – or 15 of 24 districts – saw zero or negative median Transaction Over X-value (TOX) in June. For districts with more than 10 resale transactions, districts 15 (Katong, Joo Chiat and Amber Road) and 10 (Bukit Timah, Holland Road and Tanglin) had the lowest median TOX at negative S$50,000 and negative S$37,000, respectively.

The number of resale transactions went up though, registering a 7.9 per cent month-on-month growth to reach an estimated 452 deals in June. Resale volume has gone up by 53.7 per cent since the beginning of year, the report said.

In terms of rental deals, prices slipped 0.8 per cent compared to May while volume went up 2.2 per cent over the same period. An estimated 3,151 whole units were rented out last month, according to SRX.


Softer market sentiment seen from recent EC tender


SINGAPORE – Only four bids were tabled for an Executive Condominium (EC) site in Sembawang Avenue, in another sign that the repeated rounds of cooling measures and loan curbs are taking their toll on the property market here.

FCL Tampines Court and KH Capital placed the top bid of S$214.08 million, or about S$320 per sq ft per plot ratio (psf ppr), the Housing and Development Board (HDB) said.

The 238,848 sq ft site has a plot ratio of 2.8 and can yield about 620 dwelling units.

Mr Nicholas Mak, executive director of SLP International Property Consultants, said: “The low number of bids tender illustrates the more cautious outlook among some developers on the EC market, especially after the Government implemented the Mortgage Servicing Ratio for EC purchases. Buyers of this EC project who are HDB upgraders will also be subject to the HDB resale levy.”

Under rules announced last December, the Mortgage Servicing Ratio for new EC units is now capped at 30 per cent of a buyer’s gross monthly income, while second-time applicants who buy such units from developers will have to pay a resale levy.

Mr Mak added that the lacklustre sales at an adjacent EC project, Skypark Residences, could have contributed to the low participation rate. Seven months after its launch, Skypark Residences still has 200 unsold units.


Government says it is still too early to roll back property cooling measures

According to the Ministry of National Development (MND) yesterday, it is still too early to roll back property cooling measures. It said that despite home sales have decreased, prices have remained relatively stable.

The moves to rein in property prices included extra stamp duties to curb speculative buying and the total debt servicing ratio framework which was introduced a year ago.

MND noted that private home prices had surged 60 per cent during the most recent market upswing that began in mid-2009.

The MND’s comments came as prominent developer Kwek Leng Beng warned of a potential impact on Singapore’s reputation as a global city, and called for a review of the policy measures.

The National University of Singapore’s Residential Price Index out yesterday showed that prices of resale homes climbed 0.8 per cent in May from April, after falling for nine months. The Urban Redevelopment Authority’s flash estimates for private home prices will be out today.