Singapore Property News This Week #202

Residential

GCB median price increase by 35% from 2010 to 2014

According to ERA Realty, the median psf price of good class bungalows (GCB) increased by 35 percent from $1,107 psf to $1,490 psf from 2010 to 2014. However, the annual number of GCB transactions fell from 80 to 15 units. ERA said that GCB sellers are generally not affected by market changes as they are not under pressure to sell their houses. Henry Lim from ERA added that this has caused sellers to hold their properties until prices reach their expectations. As such, the supply of GCBs fell by 10 percent in the last year. Yet, William Wong from RealStar Premier Group said that he predicts home prices will fall by another 2 to 3 percent by the end of this year.

(Source: Business Times)

Feb’s condo prices fell by 0.3% month-on-month

According to the National University of Singapore Institute of Real Estate Studies, the prices of completed private non-landed homes have fallen by 0.3 percent in February from January. This is a 5 percent drop in the NUS Singapore Residential Price Index from the same period in 2014. In February, the sub-index for the central region fell by 0.7 month-on-month; while the sub-index for small units of up to 506 sq ft fell by 0.2 percent month-on-month during the same period. Eugene Lim from ERA Realty believes that there will be a 5 to 8 percent drop in prices for the whole of this year. Ku Swee Yong from Century21 added that developers may have to cut prices in order to attract buyers.

(Source: Business Times)

Private residential property price index revised by URA

URA has revised its private residential property price index (PPI) to include sales data from stamp duty submissions to the tax authority. The new PPI will cover all private home transactions. According to the Business Times, this new methodology will improve the sensitivity of the index to market changes. This methodology is also similar to that used by HDB for the HDB resale price index. Under the new method, transacted units are grouped based on property types before price change over time is computed. Fixed index weights are assigned to these groups. Market experts believe that the new method will allow them to price properties better.

(Source: Business Times)

URA: Private home prices fall by 1.1% quarter-on-quarter

The revised PPI showed that there was a 1.1 percent quarter-on-quarter fall in prices in Q1 this year from Q4 2014. This is the 6th consecutive quarter that prices have fallen. Landed properties experienced a 1.1 percent fall in prices in Q1 this year while non-landed properties also experienced a 1.1 percent fall in the same time period. The fall in prices was more substantial in the Rest of Central Region for non-landed residential properties according to flash estimates by URA as prices fell 1.8 percent quarter-on-quarter for in Q1 this year. Non-landed homes in the Outside of Central Region experienced a 0.9 percent fall while those in the Core Central Region saw a 0.6 percent fall in the same time period. Ong Teck Hui from JLL believes that prices may fall by 1 to 2 percent each quarter in 2015. Sellers who are pressured into selling may cut prices even further, Ong added. Eugene Lim from ERA Realty agrees with Ong and predicted that there will be a 5 to 8 percent fall in prices for the whole year.

(Source: Business Times)

Q1 HDB resale prices fell by 1% quarter-on-quarter

HDB resale prices have fallen by 1% in Q1 2015 from the preceding quarter, according to HDB. According to Nicholas Mak from SLP International, the resale price index in the last 7 quarters has fallen by a total of 9.2 percent. Nonetheless, the fall in the price index in Q1 this year is the smallest in the last 1.5 years, said Mak. However, Mak believes that the fall in prices will continue unless cooling measures are lifted. Not only so, the increase in BTO and Sale of Balance Flat supplies has negatively impacted the resale market. Mak predicts that HDB resale prices will fall by 4 to 6 percent this year, and Ismail Gafoor from PropNex estimates that the HDB resale volumes will range from 19,000 to 20,000 units this year.

(Source: Business Times)

URA: Uneven price falls for condos

10 out of 46 condo projects saw double-digit declines in median prices this year, compared to prices in 2013, according to a study by URA on private non-landed home prices. However, only 2 projects in the city centre saw price declines of over 20 percent this year. According to the URA study, the large price falls appears to be confined to a few projects. Particularly, ultra-luxury condos saw a 12.4 percent fall in average prices in the last year according to a study by Knight Frank. Higher price properties saw a greater fall in prices because of the weak market sentiments and the increase in supply of completed units for certain types of condos, said Alice Tan from Knight Frank.

(Source: Business Times)

Commercial

Subletting of industrial land is banned

To ensure that Singapore’s industrial land spaces are used more productively, HDB has revised its subletting policy in line with JTC Corporation’s policy. Currently, tenants of HDB industrial properties can lease out up to 50 percent of their factory floor space. However, new and existing tenants of HDB industrial properties will not be allowed to sublet their units from June 1 onward. The maximum allowable sublet quantum for other end-user lessees and third-party facility providers have also been cut from 50 to 30 percent of the gross floor area. Tenants with existing approved subletting arrangements will be allowed to renew their subletting agreements up to Dec 31, 2017. Nicholas Mak from SLP International said that due to the policy changes, subtenants may have to relocate. This may marginally increase occupancy levels in the private industrial market. However, the changes may mean that industrial tenants may have less flexibility to rescale their space, said Chia Siew Chuin from Colliers.

(Source: Business Times)