Singapore Property News This Week #209

Residential

Property developers may be charged up to $90m in extension fees by end of year

From April to December this year, developers may be charged up to $90 million in extension fees for unsold condo units. According to the Business Times, this amount will be raised to $238 million in 2016 if current market conditions prevail. The large increase in the extension charge is because more projects received their temporary occupation permit in 2014 as compared to the previous year. Developers are given two years to sell their projects. As such, more developers may be incurring the extension charges in 2016 than in 2015. Christine Li from Cushman & Wakefield said that bulk sales or project re-launches may be useful strategies to help developers sell their unsold units.

(Source: Business Times)

EC site at Choa Chu Kang launched for tender

Located at Choa Chu Kang, an executive condominium site (EC) has been launched for tender. The tender is expected to close on June 30. The site is 4.9 hectares large and has a 99-year lease. It may be developed into 490 units according to HDB. Market experts predict that the site will attract moderate bids. They believe that the winning bid would be between $250 and $330 psf ppr. Nicholas Mak from SLP International believes that the lack of retail facilities nearby and its distance away from the MRT station may affect developers’ willingness to bid highly for the site. Not only so, Ong Teck Hui from JLL believes that the slow sales for EC projects may also affect bidders’ confidence. However Ong Kah Seng from R’ST Research said that the slow EC sales are not due to an oversupply of ECs. Instead, Ong believes that the slow sales is due to loan restriction curbs such as the mortgage servicing ratio framework that reduces buyers’ ability to make big ticket purchases. Ong added that a reduction in price for ECs may improve sales.

(Source: Business Times)

Slow sales at boutique condo at Farrer Road

According to the Business Times, sales have been slow at Pollen & Bleu, a boutique condo project that is located at Farrer Road. The condo which comprises of 106 units was launched on May 9. Prices of between $1,900 to $2,000 psf were offered by the developer during its soft launch. Michael Ng from United Industrial Corp believes that the project’s close proximity to the Botanic Gardens is a key appeal. The 99-year leasehold project consists of one-bedders that are priced from $1.05 million, two-bedders that cost about $1.58 million, and three-bedders that are priced from $2.18 million. Four-bedders and penthouses are also available. It is located near Orchard Road, Holland Village and Dempsey Hill.

(Source: Business Times)

Foreigners’ demand for luxury homes increases

More foreigners are purchasing luxury homes in Singapore that are priced more than $5 million, according to a caveats analysis. According to DTZ, homes that cost more than $5 million accounted for 19 percent of private homes bought by foreigners in April this year. This is a significant increase from a 6 percent share in Q1 this year. According to the Business Times, demand for luxury homes may have increased due to a fall in property prices. Not only so, market experts believe that property prices in Singapore are more attractive as compared to prices in Hong Kong. This may have resulted in a shift in demand for Singaporean properties. Despite that, the absolute volume of transactions is still low, said the Business Times. On the other hand, George Tan from Savills Residential said that foreign investors are still drawn to the transparent property market in Singapore, despite higher stamp duties.

(Source: Business Times)

GCB at Bishopsgate sold for record $2,190 psf

A good class bungalow (GCB) that is located at Bishopsgate has been sold for a record price of $2,190 psf or $33 million. The GCB has more than 15,000 sq ft of land and is freehold. It consists of two storeys and a basement. Built three years ago, the bungalow is built around a Tembusu tree. The bungalow comprises of a wine cellar, entertainment room and gym. Also, another GCB site at Ridout Road is believed to have been sold for $90 million or $1,228 psf. According to the Business Times, the site is about 73,000 sq ft, and may be subdivided into four smaller plots of about 15,000 sq ft. According to CBRE, from the start of the year till April, 6 GCBs had changed hands. The sales amounted to $125.82 million in total. In 2014, 28 transactions were made in the GCB area, and that amounted to $626.14 million.

(Source: Business Times)

New rules for show units and sales data

Under the revised Housing Developers (Control and Licensing) Act, developers will have to provide detailed sales data on a weekly basis and disclose the value of any benefits to buyers in transaction documents. According to MND, these new rules for developers will provide more information to prospective buyers of private residential properties. Nicholas Mak from SLP International said that not all developers are thrilled by the changes as they may have to redesign their show flats in order to comply with the new regulations. Mak said that developers may use optical tricks to make a space look bigger. These tricks include the use of the same tiles for the balcony and the living room. With the new rules, developers will have to submit a declaration. Not only so, spot checks will be made to ensure that developers have complied with the rules.

(Source: Business Times)

Commercial

CBRE: investors cautious of the hotel market

Teo Junrong from CBRE Hotels said that investors have become more cautious of the hotel market in the first quarter of this year. In Q1 this year, the hotel market has attracted a substantial amount of interest. However, only one deal was recorded. According to the Business Times, investors are more cautious as the tourism industry has been negatively affected by the strong Singapore dollar. Room rates and occupancy rates have also been affected by an increase in hotel room supply, said the Business Times. According to the Business Times, the average occupancy rate fell by 1 percent to 84 percent year-on-year in January and February this year. The average room rate also fell by 5 percent to $249. Despite the fall in occupancy rates, market experts believe that the occupancy rate is still considerably high.

(Source: Business Times)