Singapore Property Weekly Issue 152
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Transcript of Singapore Property Weekly Issue 152
Issue 152Copyright © 2011-2014 www.Propwise.sg. All Rights Reserved.
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CONTENTS
p2 Will New Home Sales Recover From Here?
p8 Singapore Property News This Week
p12 Resale Property Transactions
(April 2 – April 4)
Welcome to the 152th edition of the Singapore Property Weekly.
Hope you like it!
Mr. Propwise
FROM THE
EDITOR
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 2Back to Contents
By Mr. Propwise
Okay, we know that March home sales were
bad. Very bad. According to the URA data,
private new home sales fell from 2,793 units
in March last year to 480 units in the same
month this year – a whopping 83 percent
decline. The total number of units sold in
1Q2014 fell to 1,791 from 2,568 in the
previous quarter and 5,412 in 1Q2013, a 30
percent and 67 percent decline respectively.
What’s driving the slump?
Analysts have attributed this to the impact of
the government cooling measures and Total
Debt Servicing Ratio (TDSR) framework, as
well as the lack of launches by developers.
Will New Home Sales Recover From Here?
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 3Back to Contents
Launch volumes in the first quarter of this
year were the lowest since the Global
Financial Crisis (GFC) in 2008. The Santorini
and Ascent@456 were the only two projects
launched in March.
But many analysts believe that new home
sales could pick up starting from the second
quarter due to an expected surge of new
launches over the next few months. Up to 11
new projects could start going on sale from
now till the end of June (versus just seven
major launches in the first quarter), which
should boost new home sales. So look out for
headlines shouting of a recovery in new home
sales from April onwards, which is not difficult
given the low base effect of March.
But does that signal a market recovery?
No, I do not think so.
While developers can continue to “push” units
onto lazier and more gullible buyers with
some marketing glitz and gimmicks, the
crickets are chirping for homeowners who
want to sell their unit.
In fact, the situation is even worse in the
resale market than in the primary market.
Figure 1 – Monthly Residential Sales Volume
(source: PropertyMarketInsights.com)
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 4Back to Contents
From Figure 1 we can see both that total
residential sales (the blue plus red bars) have
collapsed since early 2012, and that
secondary market sales (the blue bar) have
collapsed even more. Total residential sales
at under 1,000 units for the past four months
are way below the average of 2,500 to 3,000
units per month.
Figure 2 – Developer Sales as a Percentage of
Total Sales (source:
PropertyMarketInsights.com)
Furthermore, developer sales as a
percentage of total sales have been steadily
increasing since late 2009.
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 5Back to Contents
Thus the recovery since the GFC has been
mainly driven by the flood of ever-shrinking
units of new launches, while resale market
volumes have been steadily declining over
this period.
Who will be buying and renting the flood
of upcoming homes?
Figure 3 – Private Residential Supply
Pipeline as of 4Q13 (source:
PropertyMarketInsights.com)
This trend begs the question – as these new
units start to get completed in large numbers
over the next few years, who will the buyers
and renters of these units be? The resale
market has dried up as the spread between
sellers’ asking prices and what buyers are
willing to pay grows larger, and the pool of
buyers shrink due to the TDSR rules. And the
rental market’s growth is now constrained as
the immigration taps are gradually tightened
(and I’d imagine they’d stay tight till at least
after the General Election in 2016).
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 6Back to Contents
Developers are under increasing stress
too
Figure 4 – Developer Monthly Sell-Through Rate
(source: PropertyMarketInsights.com)
And while many analysts blame the poor
March sales on the lack of new launches, the
Sell-Through Rate (how many units
developers sell versus how many they
launch) is also falling, suggesting a growing
inability of developers to sell out at launches,
and the likelihood of the increasing use of
marketing tricks and hidden discounts to
move inventory.
Figure 5 – Developer Inventory Levels (source:
PropertyMarketInsights.com)
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 7Back to Contents
We’ve seen developer inventory levels creep
up since January 2013 to a tad under 7,000
units at the end of March, getting close to
their all-time highs. Combined with weakening
sell-through rates and a poor outlook due to
the prospect of rising interest rates in the
medium term, developers are likely to be
cautious when buying new land.
And thus we see land prices moderating, as
in the recent example of the tender of a 99-
year leasehold residential site at Prince
Charles Crescent (Parcel B). The winning bid
price for the Parcel B site was $820.65 psf
ppr, 15 percent lower versus the $960.28 psf
ppr paid for the adjacent Parcel A site just two
years ago.
To conclude, while we may see developer
sales volumes “recover” strongly from April
due to the impact of new launches, it may be
an empty recovery. You have to dig deeper
into the numbers to see what’s really going
on.
SINGAPORE PROPERTY WEEKLY Issue 152
Singapore Property This Week
Page | 8Back to Contents
Residential
Residential investments dragged by
cooling measures
Total real estate investments in Q1 amounted
to $4.7 billion, a 24 per cent increase from
the previous quarter. While 41 to 45 per cent
of real estate investments in Q1 are from
residential transactions, this is expected to
fall. Also, total real estate investment volumes
are likely to drop 13 to 20 per cent from last
year’s $28.6 billion, as the introduction of
cooling measures and the Total Debt
Servicing Ration (TDSR) framework drags
private residential sales. Restrictions in
supply of residential sites in the first half of
this year, and increased interest rates will
further weaken residential investments.
(Source: Business Times)
Fewer private homes sold in March
According to the Urban Redevelopment
Authority, private home sales fell from 2,793
units in March last year to 480 units in the
same month this year. Total units sold in Q1
2014 fell to 1,791 from 2,568 in the previous
quarter and 5,412 in Q1 last year. Launch
volumes in Q1 this year is the lowest since
the global financial crisis in 2008 and 2009.
The Santorini and the Ascent@456 were the
only two projects launched in March, as
cooling measures weakened sales.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 9Back to Contents
Lower bids at Prince Charles Crescent
Government’s cooling measures and the Total
Debt Servicing Ratio (TDSR) framework
severely impacted the tender of a 99-year
leasehold residential site at Prince Charles
Crescent (Parcel B). Bid price for the Parcel B
site was at $820.65 psf ppr. However, its
adjacent site at Parcel A was sold for $960.28
psf ppr two years ago. UOL Venture
Investments and Kheng Leong were the
highest bidders for the Parcel B site, and plan
to develop it into 750 new units. The Crest, at
the Parcel A site will be launched next
quarter.
(Source: Business Times)
Fewer couples applying for larger PPHS
flats
To encourage couples to take up larger flats,
the government may allow couples to co-rent
flats under the Parenthood Provisional
Housing Scheme (PPHS). While 80 per cent
of the 1,150 PPHS flats are occupied,
applications have fallen from 409 in
September last year to 81. Married and
engaged couples who booked uncompleted
Build-To-Order flats last year can apply under
the PPHS.
(Source: Channel NewsAsia)
Developers increase marketing efforts to
attract buyers
850 private residential homes will be
launched in Queenstown next month, and
close to 1,000 units will be launched near
Tanglin Road and Tiong Bahru. While
condominium supply has surged, developers
are unlikely to lower prices. Instead to attract
buyers, developers have stepped up
marketing efforts. Prices are not expected to
fall as interest rates remain low.
(Source: Channel NewsAsia)
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 10Back to Contents
Commercial
Sale of shophouses slows as demand
shrinks
Commercial shophouse transaction volumes
plunged from $921.7 million in H1 last year to
$346.5 million in H2. According to CBRE, 26
shophouses sold for a total of $197.2 million
in Q3 2013, but sales fell in the next quarter
to $149.3 million, and further shrank to $118.4
million in Q1 this year. Tightened property
loans, following the implementation of the
Total Debt Servicing Ratio framework, and
steep property prices have muted sales.
(Source: Business Times)
Non-residential investments likely to
increase this year
Office investments are expected to soar this
year, as rents improve and interests surge
from H2 of 2013. Major office investments in
Q1 2014 include the acquisition of the OUE
Bayfront by OUE Commercial Reit; Low Keng
Huat (Singapore) Ltd and Sun Venture
Homes Pte Ltd’s $579.4 million purchase of
CapitaLand’s Westgate Tower; and a $123.8
million acquisition of a 50 per cent stake in
Finexis Building.
(Source: Business Times)
More shop and factory space available in
next three years
Doubling the average annual demand for
shop and factory spaces, an average of
500,000 sq m of multi-user factory space will
be made available yearly for the subsequent
three years. This move is expected to
stabilise rental price, which account for about
3 to 7 per cent of business costs for small
and medium-sized enterprises.
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 11Back to Contents
While rental rates dropped during the global
financial crisis in 2007, prices have since
crawled into recovery in 2009.
(Source: Business Times)
Hotel on Sentosa managed by Accor
undergoes renovation
The Sentosa, A Beaufort Hotel, currently
known as the Singapore Resort & Spa
Sentosa is undergoing a $20 million
makeover. To be completed in Q3 2015 as
Sofitel Singapore Sentosa Resort & Spa, the
hotel was purchased for $210.85 million by
Royal Group from HKR International. The
hotel is currently managed by Accor, and
continues to operate despite renovations.
(Source: Business Times)
SINGAPORE PROPERTY WEEKLY Issue 152
Page | 12Back to Contents
Non-Landed Residential Resale Property Transactions for the Week of Apr 2 – Apr 4
NOTE: This data only covers non-landed residential resale property
transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
1 THE SAIL @ MARINA BAY 893 1,750,000 1,959 99
5 KENTVIEW PARK 1,313 1,475,000 1,123 FH
9 THE ORCHARD RESIDENCES 2,174 8,800,000 4,047 99
9 CAIRNHILL CREST 2,013 4,388,000 2,180 FH
9 LUMA 743 1,330,000 1,791 FH
10 THE MONTANA 549 1,220,170 2,223 FH
10 THE TESSARINA 1,367 2,070,000 1,514 FH
10 BLISSFUL VIEW 1,518 1,868,888 1,231 FH
11 TRILIGHT 1,163 2,413,900 2,076 FH
13 EURO-ASIA PARK 2,260 2,300,680 1,018 FH
13 PARC MONDRIAN 2,368 2,200,000 929 FH
14 KEMBANGAN COURT 786 880,000 1,120 FH
15 THE SOVEREIGN 3,305 6,000,000 1,816 FH
15 AMBER RESIDENCES 1,163 1,700,000 1,462 FH
15 THE MAKENA 1,582 2,150,000 1,359 FH
15 COSTA RHU 990 1,250,000 1,262 99
18 DOUBLE BAY RESIDENCES 1,313 1,510,000 1,150 99
18 SAVANNAH CONDOPARK 1,453 1,340,000 922 99
18 THE TROPICA 990 886,000 895 99
19 SUNGLADE 1,044 1,208,000 1,157 99
20 THE GARDENS AT BISHAN 1,658 1,525,000 920 99
21 CLEMENTI PARK 1,873 2,008,457 1,072 FH
Postal
DistrictProject Name
Area
(sqft)
Transacted
Price ($)
Price
($ psf)Tenure
21 THE RAINTREE 1,335 1,340,000 1,004 99
21 THE RAINTREE 1,335 1,320,000 989 99
22 PARC VISTA 1,249 1,240,000 993 99
23 MERAWOODS 1,345 1,330,000 988 999
23 MAYSPRINGS 1,399 1,090,000 779 99
28 MIMOSA PARK 2,164 1,628,000 752 FH