Singapore Property News This Week #189

Residential

SRPI for completed small units fell by 4.4% in Nov 14

The National University of Singapore’s Singapore Residential Price Index (SPRI) for units smaller than 506 sqft has fallen by 4.4 percent in November 2014 from December 2013. In November 2014, the price index for small units showed a 1.9 percent drop from the previous month, this was the biggest month-on-month fall this year. About 3.9 percent of the 78,877 completed non-landed private homes that are accounted for in the SRPI’s basket are made up of units smaller than 506 sq ft. 429 private residential projects from October 2003 and September 2013 are also accounted for in the SRPI basket. Market experts believe that the weak price index for small units will continue. This is because by end-2015, the number of shoebox units would stand at 11,000 units, up from the 2,400 units in 2011. Nicholas Mak from SLP International added that in 2015 and 2016, 6,200 shoebox apartments will receive their Temporary Occupation Permit. Mak predicts that rentals for such apartments will fall by 5 to 9 percent in 2015. Ong ChoonFah from DTZ said that owners of shoebox units may find it difficult to lease out their apartments and thus may be inclined to dispose of their units sooner.

(Source: Business Times)

Q3 2014 HDB resale prices fell by 6.1% year-on-year

HDB resale prices have fallen by 6.1 percent year-on-year according to the Business Times. Minister for National Development Khaw Boon Wan said that a single digital fall in resale prices in 2015 may be beneficial to the market. Lee NaiJia from DTZ also added that as the supply of new flats is expected to fall from 22,400 in 2014 to 16,900 in 2015, thus it is unlikely that there will be a double-digital fall in HDB prices. Lee added that subsidies to increase income ceiling and changes in policies directed at singles buying public housing may improve demand and hence moderate the fall in prices. Khawsaid that there may be a possibility that some cooling measures may be lifted in 2015. Nonetheless, Khaw said that the total debt servicing ratio framework will likely stay. Khaw said that other central banks, such as in Australia are also implementing similar frameworks to monitor the housing market. According to Khaw, the focus in 2015 is to assist singles and low-income families who cannot afford flats and are renting houses.

(Source: Business Times)

URA’s private residential property price index falls by 4% in 2014

Data from the Urban Redevelopment Authority (URA) showed that the private residential property price index had fallen by 4 percent in 2014. Market experts believe that this decline will continue into 2015. Ong Teck Hui from JLL said that developers are holding back launches as they expect the government to relax the current cooling measures. URA’s private home price index in Q4 2014 also showed a one percent fall from the previous quarter. This was the fifth quarter that prices have fallen. Particularly, flash estimates by URA for Q4 non-landed private residential properties in the city fringe or rest of central region have suffered the biggest hit with a 5.2 percent decline in prices in 2014. Also, prices in the core central region fell by 4.1 percent in 2014. However, areas outside the central region were the least affected with just a 2.2 percent fall in the price index for private residential properties.

(Source: Business Times)

Bellewaters and Bellewoods introduces CoSpace flexi concept

To attract buyers, developers of Bellewoods and Bellewaters have introduced a “CoSpace flexi” concept and have offered units at a discounted price without interior fit-outs or floor finishing. In November 2014, Bellewoods sold 79 of its 561 units at $800 psf while Bellewaters sold 170 of its 651 units at $813 psf. The executive condominiums (EC) were both launched in that month. A 5 bedroom unit may cost around $955,000 after discount, according to the Business Times. Yet, Ong Kah Seng believes this unique marketing strategy may improve sales only slightly, as some buyers may be unwilling or unable to fork out additional amount for renovation. Ong believes that a direct reduction in price to $780 psf may be a better alternative. The “CoSpace flexi” concept allows buyers to merge the utility room and a study to create a larger room. About 40 percent of those who bought CoSpace units have opted to merge their utility room and study.

(Source: Business Times)

Tender for Sengkang EC to close on Jan 20

The closing of a tender for an executive condo (EC) at Sengkang East has been postponed to Jan 20, 2015. The EC is a 99-year leasehold site. It is expected to be developed into 525 EC units and will consist of 88 bicycle parking spaces. The space allocated for bicycle parking may be exempted from the calculation of the gross floor area. The bicycle parking facilities will be kept for use by residents only. The inclusion of a bicycle parking area is in line with LTA’s Land Transport Masterplan 2013 that was previously launched, said Business Times.

(Source: Business Times)

Commercial

Less industrial land sites up for tender on H1 2015 confirmed list

In H1 2015, the Ministry of Trade and Industry (MTI) has put up only 9 industrial land sites for sale under the confirmed list. The 9 sites will provide a total of 6.46 ha. This is about half the amount of land that was put up for tender in each half of 2014. MTI said that it will be reducing land supply to support prices and rentals. From 2010 to 2014, it has released an average of 42 ha of industrial land per year, including reserve list sites. This is significantly higher than from 2005 to 2009 when an average of 32 ha of industrial land per year was released. Ong Kah Seng from R’ST Research said that this move will reduce the probability of an oversupply. Nicholas Mak from SLP International added that there will be a large supply of strata-titled industrial developments in the next two years as 10 large projects are expected to be launched. As such, the move to reduce the number of units of strata development in H1 2015’s list may benefit developers.

(Source: Business Times)

Industrial property market expected to be weak in 2015

According to the Business Times, the industrial property market is expected to be slow in 2015 as JTC will further increase supply of industrial land despite a weaker manufacturing outlook. Particularly, demand for multi-user factories and ready-built factories are likely to be affected in 2015. This is because such properties are typically owned by players in sunset industries. Rental of factories may also be affected by an increase in supply of factory spaces in 2015. According to the Business Times, about 2.6 million sqm of factory space is expected to be built in 2015. Nonetheless, high specification factories, business parks, warehouses and niche developments may continue to command stable rental prices due to optimistic growth in biomedical and petrochemicals industries. While Nicholas Mak from SLP International said that developers may be unwilling to adjust prices of launched projects downwards, Chia SiewChuin from Colliers believes that industrial property prices may fall by another 3 percent.

(Source: Business Times)