Our top Singapore and regional property stories.
New private home sales highest in 8 months
Property developers sold 843 private housing units, excluding executive condominiums (ECs), in March 2016, according to data released by the Urban Redevelopment Authority (URA).
This represents a 178 percent jump from the 303 units sold in the previous month. Year-on-year, sales increased by 37.5 percent.
OrangeTee said this was the highest tally of monthly developer sales since July last year when 1,655 units were moved.
However, analysts were not surprised by the surge in new home sales. DTZ said the period of March to May tended to see an increased level of activity.
“Notwithstanding, consistent with what we see on the ground, more buyers are returning to the market. Most of these buyers look for developments at choice locations at relatively lower quantum,” noted the consultancy.
OrangeTee explained that there has been an accumulation of pent-up demand from buyers who have adopted a wait-and-see attitude due to the property cooling measures.
While these measures have sidelined many buyers due to the increase in upfront costs and tighter financing conditions, buyers are still willing to commit when there is perceived value in the market, the firm said.
“Good quality projects coupled with competitive pricing is the key to excite dormant demand lurking in the private residential sector.”
Meanwhile, two of the best-performing new launches in March were Cairnhill Nine and The Wisteria.
Located at Cairnhill Road, the 268-unit Cairnhill Nine by CapitaLand sold 177 units last month at a median price of $2,441 psf. Over in Yishun, NorthernOne’s The Wisteria saw 125 out of its 216 units snapped up at a median price of $1,112 psf.
Looking ahead, OrangeTee said three new projects will be launched in April and May, namely Sturdee Residences (305 units), Stars of Kovan (395 units) and Gem Residences (578 units).
Luxury home prices slump amid rental rout
Prices of high-end condominiums in Singapore have slumped to new lows as owners dispose their units due to falling rents, reported The Straits Times.
For instance, a four-bedroom unit measuring 3,000 sq ft at Cairnhill Plaza is understood to have been sold for about $1,300 psf, a price not seen since 2007.
A 678 sq ft studio apartment at The Sail @ Marina Bay also changed hands in February for $1,475 psf, the lowest price in more than five years.
Although the previous owner of the apartment at The Sail is unlikely to have incurred losses, as units there were initially priced at $900 psf during its launch in 2004, other sellers have suffered losses in the past few months.
For example, all three deals at Orange Grove Residences so far this year reported losses of nearly $1 million each.
Data shows that 63 second-hand condos were sold at a loss during Q1 2016 in the Core Central Region (CCR), which includes Sentosa Cove and the downtown core, compared to 60 in the previous quarter.
According to experts, a major reason for the significant drop in luxury home prices is the large supply and sluggish rental demand.
“Many of the apartments are vacant, and it is quite difficult to get leases renewed at a good rate. The returns are not that great, and if owners have made capital gains, it may be time to recycle (the asset),” said Suzie Mok, Senior Director of Investment Sales at Savills Singapore.
Furthermore, expatriates arriving nowadays are usually at the middle-management or executive level, but with smaller housing budgets than in the past, noted Desmond Sim, CBRE’s Research Head for Singapore and Southeast Asia.
As such, demand for large and posh condos that are common in the CCR has weakened substantially, he added.
New condo to launch in Toa Payoh after seven years
The first private condominium to launch in Toa Payoh since 2009, Gem Residences, will hit the market at the end of May 2016.
Jointly developed by Evia Real Estate, Gamuda Berhad, and Maxdin, the project sits on 130,832 sq ft of land and contains 578 apartments across two towers. Unit sizes range from 452 sq ft for a one-bedroom unit to 2,045 sq ft for a six-bedroom penthouse.
This is Evia and Gamuda’s first foray into private condominiums and property projects in Singapore, respectively.
The consortium was the highest bidder among 13 others for the hotly contested site back in June 2015, with an offer of $345.86 million ($755 psf).
Pricing details are yet to be confirmed, but data from the Urban Redevelopment Authority (URA) and PropertyGuru shows that condos in Toa Payoh and Balestier are going at an average of $1,000 psf.
Located at Lorong 4 and Lorong 6 Toa Payoh, the 99-year leasehold development is close to two MRT stations (Braddell and Toa Payoh), Toa Payoh Shopping Mall and HDB Hub. Several established schools are also in the vicinity.
Vincent Ong, Managing Partner of Evia Real Estate, said: “Gem Residences is definitely set to shake things up in Toa Payoh. We believe that there is a pent-up demand for private housing in this area as it is one of the most highly-populated public housing estates in Singapore with only three condominiums.”
He added: “We are also very glad that the Ministry of National Development has announced the rejuvenation of Toa Payoh town with more greenery, covered shopping streets and dedicated cycling paths. This gives us confidence that the development will be well-received by upgraders and first-time buyers.”
Gem Residences is expected to obtain its TOP in 2020.
HK developer to launch Stars of Kovan
One of Hong Kong’s largest property developers is set to launch a prime mixed-use project in Kovan later this month.
The 99-year leasehold Stars of Kovan by Cheung Kong Property Holdings (CKPH) will include four high-rise towers with 390 apartments and five strata terrace units. It is expected to be completed in November 2020.
“Stars of Kovan is our eighth residential project, and the first residential-cum-commercial development, to be launched in Singapore,” said Justin Chiu, Executive Director of CKPH.
Around 23 percent of the units are one-bedrooms, 61 percent are two-bedders, and 15 percent are three-bedders. Sizes range from 506 sq ft to 1,023 sq ft for the apartments. Meanwhile, each of the strata terrace homes are three storeys high, with an area of about 1,830 sq ft.
According to Francis Wong, Director of CKPH, this is “one of the few attractive and sexy projects in the market”. He said that prices will be benchmarked against The Tembusu and Trilive, two nearby condominiums that average around $1,550 to $1,600 psf.
Prices are likely to be in the range of $800,000 for a one-bedder, $1.2 million for a two-bedder and $1.5 million for a three-bedder. The first few buyers will receive early-bird discounts, noted Wong.
Also, 46 British-inspired commercial shops on the ground floor will go on sale for around $5,500 to $7,000 psf.
“Our marketing campaign will roll out primarily in Singapore and simultaneously in Hong Kong and Britain. We are confident that with our reputation and track record, the project will appeal to both local home buyers and foreign investors,” said Wong.
Located at the junction of Upper Serangoon Road and Tampines Road, Stars of Kovan is close to Kovan MRT station, Heartland Mall and several schools.
MAS eases monetary policy, to stop Singapore dollar from rising
The Monetary Authority of Singapore (MAS) said it is setting the rate of appreciation of the Singapore dollar policy band at zero percent in a surprise easing of its monetary policy announced on 14 April.
“This is not a policy to depreciate the domestic currency,” the MAS said, adding that it only removed the modest and gradual appreciation path of the Singapore dollar nominal effective exchange rate (S$NEER) policy band that was in place.
“The width of the policy band and the level at which it is centred will be unchanged,” it added.
The central bank, which uses the Singapore dollar instead of interest rates to guide the economy, manages monetary policy by letting the local currency rise or fall against the currencies of its main trading partners.
After the 6.2 percent expansion recorded in Q4 last year, Singapore’s economy stalled in Q1 and registered a flat growth on a quarter-on-quarter seasonally adjusted annualised basis, the advanced estimates by the Ministry of Trade and Industry revealed.
Meanwhile, MAS Core Inflation has also been subdued.
According to the MAS, the Singapore economy is “projected to expand at a more modest pace in 2016 than envisaged in the October policy review. MAS Core Inflation should also pick up more gradually over the course of 2016 than previously anticipated, and is now likely to fall below two percent on average over the medium term.”
It added that the move to a neutral policy stance of zero percent appreciation follows the measured steps that the central bank took to reduce the rate of appreciation of the policy band in January and October 2015 respectively.
“The actual outcome of S$NEER movements over the six months since October 2015 has in fact been a zero percent appreciation compared to the preceding six-month period,” it said. “The cumulative effects of past S$NEER movements and the new policy path will continue to ensure price stability over the medium term.”
Following the announcement, the Singapore dollar weakened 0.9 percent to $1.36 levels to the US dollar—its weakest since 29 March—trading at $1.3610 a the greenback, from $1.3501 a day before.
Factory, warehouse rents fall further in Q1
Factory and warehouse rents in Singapore declined further during the first quarter as demand waned further, with manufacturing output (NODX) falling for the 13th consecutive month in February, according to a CBRE report.
“Leasing volume for factory and warehouse extended its downward trend in Q1 2016. Occupiers held off expansion plans while relocations dwindled as obtaining budget approvals for capital expenditure remained one of the major stumbling blocks. Given the subdued manufacturing environment, industrialists’ focus has largely been on optimising operations and cost reduction,” said the consultancy.
In particular, monthly rents of ground floor factories declined by 1.7 percent quarter-on-quarter and 6.5 percent year-on-year to $1.73 per sq ft, while upper floors posted a larger drop of 2.1 percent and 7.3 percent respectively to $1.39 per sq ft.
Similarly, monthly rents of ground floor warehouses slid by 2.3 percent to $1.71 per sq ft compared to the previous quarter and down 6.3 percent versus the same period in 2015. The top levels also respectively recorded a quarterly and yearly rental decline of 2.9 percent and 8.5 percent to S$1.34 per sq ft.
On the other hand, rents of business parks were more resilient during the period under review.
Rents in the city fringe remained unchanged at $5.40 per sq ft on a quarterly basis but fell 1.8 percent on yearly terms, while for those in the rest of Singapore was stable at $3.65 per sq ft.
However, the vacancy rate of business parks rose to 9.2 percent during the first quarter from 8.8 percent in Q4 2015, CBRE added.
New Dubai tower taller than Burj Khalifa
The property developer responsible for the world’s tallest building, the 2,716ft tall Burj Khalifa in Dubai, plans to build another skyscraper in the emirate that will surpass the current titleholder.
According to Mohamed Alabbar, Chairman of Emaar Properties, the US$1 billion tower will be “a notch taller” than the Burj Khalifa. It will also be the main highlight of its Dubai Creek redevelopment project.
The unnamed skyscraper, which will have a slender structure and a needlepoint-like tip, was designed by architect Santiago Calatrava Valls, who is famous for his futuristic works like the City of Arts and Sciences complex in Valencia, Spain.
It will also feature a luxury hotel, 18 to 20 floors of shops, glass balconies that rotate on the exterior, and other tourist facilities, said the developer.
Construction work is set to commence in June this year and the tower is expected to be ready for the Dubai World Expo in 2020.
However, the upcoming tower and the Burj Khalifa will still be overshadowed by Saudi Arabia’s 3,280ft Jeddah Tower, a US$1.2 billion skyscraper that is also targeted for completion by 2020.
Meanwhile, two New York-based architectural firms recently proposed to construct the 5,577ft high Sky Mile Tower in Tokyo, Japan.
Surrounded by an archipelago of islands designed to protect the city from flooding, the skyscraper will feature shared public facilities and multi-level open-air sky decks at every 320 metres.
If plans for the eco-friendly complex are approved, it will be taller than the Jeddah Tower and could be ready by 2045.
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