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Luxury condo prices buck trend, up in Q1
Prices of private residential properties in Singapore dipped by 0.7 percent in Q1 2016 from the previous quarter, according to flash estimates released on 1 April by the Urban Redevelopment Authority (URA).
This is the 10th straight quarter of price decline, and higher than the 0.5 percent fall seen in Q4 2015.
Specifically, landed homes across the island recorded the largest price drop during the period and in Q4 last year. But the rate of decline slowed to 1.5 percent, from 1.8 percent previously.
Nonetheless, Ong Teck Hui, National Director, Research & Consultancy at JLL, feels that the price drop is still quite significant, as it is higher than last year’s average quarterly decline of one percent.
“Landed homes are big-ticket items frequently requiring significant loan amounts, and with the Total Debt Servicing Ratio (TDSR) constraining buyers, the demand pool has shrunk, resulting in heftier price declines.”
As for non-landed homes, prices in the Outside Central Region (OCR) fell by 0.9 percent in the quarter, after holding firm in the previous three-month period.
In the Rest of Central Region (RCR), prices of non-landed properties slid by 0.4 percent, the same rate of change as in Q4 2015. However, Desmond Sim, Head, CBRE Research, Singapore and South East Asia, pointed out that “the RCR registered a double-digit decline of 10.2 percent from the peak in Q2 2013”.
Bucking the trend, prices of non-landed properties in the Core Central Region (CCR) rose by 0.4 percent, following a 3.0 percent decline in the previous quarter.
“The success of Cairnhill Nine was probably the reason behind the slight increase of 0.4 percent in the CCR this quarter,” said Sim.
Ong revealed that transaction prices at Cairnhill Nine averaged around $2,400 psf, and accounted for about a third of the non-landed caveats lodged in the CCR in Q1.
“The robust sales take-up for Cairnhill Nine attests to the underlying pent-up demand which surfaces when buyers perceive an attractive investment opportunity.”
The flash estimates only cover caveats received by the URA until mid-March, and the agency will release the complete statistics the coming weeks.
Meanwhile, PropertyGuru’s latest Property Outlook Report revealed that transaction volume in the private housing market is expected to pick up in 2016, as buyers are likely to be lured by better affordability. Prices are expected to fall by two to four percent this year, said the report.
In addition, experts told PropertyGuru that sales of resale homes will increase as the number of new launches remains stagnant.
HDB resale prices to remain flat in 2016
Resale prices of HDB flats dipped by 0.1 percent quarter-on-quarter in Q1 2016, according to flash estimates from the Housing Board on 1 April.
Although this is a reversal of the 0.1 percent gain in the previous quarter, this is a slower rate of decline than the respective 1.0 percent, 0.4 percent and 0.3 percent dips in the first three quarters of 2015.
The data is preliminary, and the final statistics will be made available on 22 April, said the HDB.
Mohamed Ismail, CEO of PropNex Realty, expects HDB resale prices to remain flat in 2016.
“The government will maintain measures to stabilise the public housing market, such as the Mortgage Servicing Ratio (MSR) cap of 30 percent and the maximum loan term of 25 years for HDB mortgage loans, (the) three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy 2-room Build-To-Order (BTO) flats in non-mature estates.”
Meanwhile, PropertyGuru’s latest Property Outlook Report revealed that HDB resale flat prices are unlikely to fall by more than one percent for the whole of 2016.
However, prices of resale flats located in mature estates are likely to hold firm this year, and may even see an increase. However, overall transaction levels are expected to remain flat on an annual basis.
In addition, the HDB announced plans to launch around 4,000 BTO flats in May, and about 5,000 balance flats from previous sales exercises.
“HDB will launch 18,000 new flats in 2016 – more than the 15,000 launched last year – which will sap demand from the resale market, thereby stabilising prices,” noted Ismail.
Residential properties dominate Q1 mortgagee listings
Out of the 70 properties that banks placed on the auction block in Q1 2016, 48 were residential units consisting of 15 landed properties and 33 non-landed homes, according to a Colliers International report.
“Many homeowners found it tough to secure their buyers due to the weak buying sentiment, following multiple rounds of government cooling measures, loan curbs, as well as the uncertain economic conditions and interest rate risk,” said the report.
“There was also a wide gap in the price expectations between sellers and buyers.”
In particular, 15 units or 45 percent of the non-landed homes, were larger than 1,500 sq ft. Of this, five are located in prime districts 9, 10 and 11.
Large apartments and condos that lenders placed under the hammer in Q1 included units at The Serenade @ Holland in Holland Road, Prestige Loft in Telok Kurau, Turquoise at Sentosa Cove, Tan Tong Meng Tower in Thomson Road, and The Sail @ Marina Bay.
Meanwhile, the number of landed homes among the mortgagee listings during the first quarter remained high at 15.
Many were detached houses, semi-detached homes and corner terraces with huge built-up areas or land areas in the range of 3,000 sq ft or above, and costing more than $3 million. These included two large detached houses at Woo Mon Chew Road and Branksome Road.
For the whole of 2015, the number of landed homes placed on the auction block more than doubled to 50 units compared to 19 in the previous year, noted Colliers.
Rochor Centre to be demolished soon
Rochor Centre, a public housing estate in the Bugis area dating back to the 1970s, will be demolished by the end of this year to make way for the new North-South Expressway.
Built in 1977, it consists of four brightly coloured HDB blocks that formerly housed 183 shops and 567 households. But due to its imminent redevelopment, 106 shops have closed while 36 households have relocated as of January 2016.
According to a Straits Times report, many long-time residents are saddened about having to move out of Rochor Centre.
Victor Devan, 70, an Indian who speaks English, Teochew, Hokkien and Cantonese, calls it a heartland in Singapore. “It reminds me of the kampong that I grew up in when I was little.”
Moving to another home is painful as they have developed great relationships with their neighbours, added Devan, who is affectionately called ‘orh hia’ (black brother) by neighbours and shopkeepers in the estate.
According to Denise Phua, Member of Parliament for Jalan Besar GRC, which includes Bugis, life will not be the same for the residents, but they can look forward to more greenery and a tranquil environment compared to that in busy Rochor.
The Housing Board revealed that 91 percent of the residents in Rochor Centre will move to HDB flats at nearby Kallang Trivista. Of this, 15 percent opted to relocate to units close to their relatives or former neighbours in Rochor Centre.
Rochor Centre is one of three historic public housing estates that will soon be torn down for redevelopment. The others are Dakota Crescent and four low-rise HDB blocks in Siglap, that were built in 1958 and 1964, respectively.
Zaha Hadid, designer of d’Leedon, dies at 65
Dame Zaha Hadid, one of the world’s most renowned architects, died suddenly on 31 March following a heart attack.
Born in Baghdad in 1950, the London-based architect set up Zaha Hadid Architects in 1979, and was responsible for designing several well-known buildings around the world, including the Aquatics Centre for the 2012 London Olympics.
Many in the architecture and property community were shocked and saddened to hear of her death, at only 65 years old.
In a Facebook post, Tom Pritzker, Chairman of the Hyatt Foundation, which sponsors the prestigious Pritzker Architectural Prize, said: “Zaha represented the highest aspirations of the Pritzker Architecture Prize. She combined her vision and intellect with a force of personality that left no room for complacency. She made a real difference.”
Hadid was the first woman to win the Pritzker Prize in 2004, and also served on the Pritzker Architecture Prize jury in 2012.
Lord Peter Palumbo, who chairs the Pritzker Architecture Prize jury, said: “The world of culture has lost a standard-bearer for the art of architecture. Zaha Hadid fought prejudice all her life with great success. Moreover, this, in addition to her genius as an architect, will secure her legacy for all time.”
In Singapore, Hadid was responsible for designing CapitaLand’s d’Leedon condominium at Leedon Heights, which comprises 1,715 luxury units. It was the firm’s first residential project here.
Wen Khai Meng, CEO of CapitaLand Singapore, said: “CapitaLand has always been impressed by the creativity and boldness of her architectural designs, and worked closely with Zaha Hadid Architects to create the landmark residential development d’Leedon in Singapore, which was completed just two years ago.
“We have lost a great architect of our time, but her legacy will endure for generations. Our deepest condolences to Zaha Hadid’s loved ones and colleagues.”
Two sites up for tender
A commercial and residential site at Bukit Batok West Avenue 6 has been put up for sale by tender, the Urban Redevelopment Authority (URA) said on 30 March.
The 158,194 sq ft site has a permissible gross floor area (GFA) of 474,592 sq ft, of which a maximum GFA of 64,583 sq ft will be allocated for commercial use.
According to the URA, the 99-year leasehold site could also potentially yield 425 homes.
Separately, JTC Corporation has launched one confirmed list site at Woodlands Sector 2, as part of the Industrial Government Land Sales (IGLS) programme for the first half of 2016.
The is a 1.35ha site zoned for Business-2 development. The site has a 20-year lease tenure and a maximum gross plot ratio of 2.
The tenders for the Bukit Batok and Woodlands Sector 2 sites will close on 24 May.
Slower earnings growth for Singapore office REITs
Earnings growth for the six Singapore-listed office-sector real estate investment trusts’ (REITs) is likely to slow in 2016, Fitch Ratings reported.
However, the ratings agency said the credit profiles of most of the office SREITs are strong, which should help to absorb the impact without any major credit implications.
“We expect the sector’s rental reversions to stay marginally positive in 2016, despite the pressure on Singapore office rents,” said Fitch. “This is because the office SREITs’ exposure is limited, with 20 percent of leases due for renewal in 2016, and because renewing leases were contracted about six years ago on average when rents were considerably lower.”
Amid a slower economic environment, and weak services sector, rents in Singapore’s central region fell by three to six percent in Q3 and Q4 last year, respectively. According to Fitch, as demand is likely to remain weak, rents are expected to continue to fall, while supply of new office space could increase by up to seven percent.
The ratings agency also expects vacancy rates to rise this year as new supply increases amid weak demand. “The sector’s credit fundamentals are strong with long-term revenue visibility of six years on average, low leverage and robust funds flow from operations interest cover.”
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