Real estate investment sales in Singapore’s residential property market hit $10.6 billion year-to-date, up 23 percent over the same period last year, according to a report released by CB Richard Ellis (CBRE).
However, residential investment sales represented $2.0 billion in the third quarter, less than half of the $4.7 billion recorded in the previous quarter.
“The residential investment market was resilient in the first half despite the property cooling measures introduced in January. Given the recent global economic uncertainties increasing, the investment mood has turned cautious and this is reflected in the slowdown in sales momentum,” said Petra Blazkova, Director, Head of Research at CBRE.
She noted that the $477.4 million worth of transactions over six deals in the en bloc residential market was a mere fraction of the $1.0 billion worth of deals transacted in the previous quarter.
“Even so, this is a reasonably strong showing in any quarter, accounting for a significant 24 percent of Q3’s total residential sales. The recent sale of the Hong Leong Garden Shopping Centre apartments for $171.0 million was the biggest en bloc deal in the year so far. Unlike the last two quarters, participation by foreign players, especially Chinese developers, was visibly absent this quarter and all the buyers were local developers,” she said.
Meanwhile, Good Class Bungalows (GCBs) also saw reduced sales in Q3, with only four GCBs changing hands compared to 19 in the previous quarter. However, a GCB at Chatsworth Road set a new price record at $2,083 psf, exceeding the previous high of $2,038 psf in February this year.
In terms of Government Land Sales (GLS), six residential sites worth $1.1 billion were transacted in Q1.
“A residential GLS site near an MRT station would still command strong interest among big developers,” said Blazkova. “This is demonstrated by the surprising 15 bids received for the Pheng Geck Avenue site which is near the Potong Pasir MRT.”
“For developers who prefer not to go through the cumbersome process of en bloc acquisition, the GLS programme offers a less time-consuming route of acquiring land bank. In the coming quarter, developers can choose from at least nine residential GLS sites to bid.”
In addition, the anti-speculation measures introduced in January have driven more investor interest to the commercial property sector, with $656.0 million office investment turnover accounted for in the third quarter.
“There are more office buildings for sale in the market and healthy investor appetite for such assets assuming the price is correct,” she said.
Singapore’s office strata market remained active, with four strata floors in Samsung Hub and several office units in The Adelphi sold this quarter, totalling $120.0 million and $26.5 million respectively.
CBRE said total property investment sales for both commercial and residential properties came to $21.2 billion in the third quarter, up 20 percent over the same period last year. It noted that the overall investment volume at the end of the year will likely hit between $23 billion and $26 billion.
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