Singapore Property News This Week #162

Residential

2 in 5 Sentosa condos resold at a loss

According to market watchers, cooling down measures such as loan restrictions may have driven buyers away from the luxury homes market. Data from URA Realis that was gathered by STProperty.sg showed that 31 condominium units at Sentosa have been resold since May 2013, however, about two in five units were resold at a loss. According to HSR Research, between January and May this year, the average resale price fell 25 per cent to $1,800 per square foot as compared to $2,400 per square foot over the same period last year. Nonetheless, since only five transactions were made this year, price movements are expected to be more volatile. Among others, four units at The Berth, three units at The Oceanfront, two at the Coast and one at Azure were resold at a loss. Nicholas Mak from SLP International believes that given the weak leasing market, owners may choose to sell their property at a loss as they are unable to rent their units out. Other analysts believe that owners who have bought their Sentosa units at marked up prices earlier may be at the losing end now.

(Source: Business Times)

TDSR may push mortgagee sales to a new high in Q2

The number of properties that are auctioned by mortgagees in Q2 this year is the highest since Q3 2009. According to Colliers International, the number of properties that have been put up for auction this quarter almost doubled from 22 units in Q1 to 42 units in Q2 this year. This is likely to be due to the implementation of the total debt servicing ratio (TDSR) framework. Auctioneers explain that the TDSR framework has made it difficult for financially tight borrowers to secure buyers for their properties. As such, more of such homes have been put up for auction by financial institutions. As the supply of non-landed private homes increases, mortgagors face an even greater challenge in selling off their property. This means that mortgagee sales may increase even further. Besides that, market analysts believe that the weak leasing market may also contribute to the raise in mortgagee sales, as owners may not be able to find tenants.

(Source: Business Times)

30 out of 80 units released at Trilive condo in Kondo have been sold

Roxy-Pacific Holdings’ Trilive condo project at Kovan area was launched last Friday. However, sales have been slow at its launch said Teo Hong Lim, Roxy-Pacific’s executive chairman. The 222-unit freehold project which is located 650 meters away from Kovan MRT, has released 80 of its units at a discounted price of $1,550 per square foot for early birds. Yet only 30 units have been sold so far. According to Teo, private home sales have been slow thus product differentiation may be the key to closing a deal. Unit sizes at the Trilive condo project begin from 463 square feet for a one-bedroom unit to 1,195 square feet for a four-bedroom unit. Of the 222 units, around 80 per cent of the units are dual key units. Prices start from $730,000 for a single bedroom unit to $870,000 for a two-bedroom unit. A two-bedroom dual key unit will start from $960,000, a three-bedroom dual key unit is priced around $1.3 million, and a four-bedroom unit will cost around $1.65 million.

(Source: Business Times)

Three new residential sites on GLS confirmed list

Three 99-year leasehold residential sites are up for tender under the confirmed list of H1 2014 Government Land Sales programme. Of the three sites, two reside in Sengkang while the other is an executive condominium (EC) plot that is located at Choa Chu Kang. The Sengkang land parcels are both at Fernvale Road—the smaller land plot is around 16,604 square meters while the larger plot is around 17,414 square meters. The tenders for both plots will close on August 7 and the two sites are expected to yield a total of 1,100 units when fully developed. Market analysts believe that each of the Sengkang site will draw bids from $420 to $480 per square foot per plot ratio. On the other hand, the EC plot at Choa Chu Kang which is expected to yield around 535 homes is expected to draw bids between $310 and $350 per square foot per plot ratio before its tender closes on September 4.

(Source: Business Times)

Commercial

More land plots at Gambas and Tuas for sale

The fourth land parcel at Gambas Crescent has been launched for sale, along with two new sites at Tuas South. The Gambas Crescent site which is 15,665 square meters large and has a maximum gross plot ratio of 2.5, is zoned for light industrial use for Business-1 development. The site has a 30-year lease and is expected to draw bids between $90 and $120 per square foot per plot ratio (psf ppr). Nicholas Mak from SLP International believes that Far East Organisation, which owns three other sites in the area, may aggressively bid for the fourth Gambas Crescent site in order to secure a stronger presence within the area. However, Ong Kah Seng, R’ST Research director believes that there is no major need for the property giant to own the fourth parcel as they already have a strong territorial presence. On the other hand, the land parcel at Tuas South Avenue 7, which also has a 30-year lease, is 25,700 square meters. It has a maximum gross plot ratio of 2.0 and is zoned for heavier industrial use for Business-2 development. Analysts believe that site will draw bids from $75 to $85 psf ppr. Lastly, the site at Tuas South Avenue 14 has been launched under the reserve list. It has a maximum gross plot ratio of 2.0 too, and is 33,300 square meters large.

(Source: Business Times)

Property investment sales slow to a crawl

Investment sales in Singapore property has slowed to $3.5-$3.6 billion this quarter. Such sales cover big-ticket transactions that are beyond $10 million. In H1 of 2013, the total amount of investment sales was around $12 billion. However, the year-to-date tally this year is only around $8 billion. Both CBRE and Savills predict that there will be a fall in investment sales from last year’s $30 billion. CBRE expects that there will be $12-$15 billion worth of transactions this year while Savills predicts that there will be $16-$18 billion worth of transactions. This pullback in investments is expected to be due to the government’s cooling measures. According to Desmond Sim from CBRE, the implementation of the total debt servicing ratio framework has affected buyers’ and sellers’ interest. Not only so reduced land supply in the Government Land Sales programme may also result in a decrease in investment sales. Furthermore, according to CBRE, there is increased interest in overseas property. Nonetheless, according to Savills Singapore, investment sales in the office sector have been optimistic as there are about $680 million of office transactions recorded this quarter.

(Source: Business Times)