Deluge of new condos erodes rental market - AsiaOne

WHETHER you look at the official data or check out some popular condominiums, the unmistakeable conclusion is that the rental market is in for a tough year.

Analysts say weakening demand stems from the deluge of newly completed condominium units and expectations of an interest rate hike.

The official numbers tell part of the story: private residential rents fell 3 per cent last year after four successive years of increases.

But the sombre state of the leasing market was most evident when The Straits Times analysed projects that recorded the highest rental volumes last year.

Although the number of leases inked largely picked up in 2014, it did not prevent landlords from suffering a dip in collected rents, data from OrangeTee showed.

Reflections at Keppel Bay was the most popular condo with 607 leases recorded last year, well up from the 293 contracts secured in 2013.

Monthly rents at the 1,129-unit estate averaged $4.85 per sq ft (psf) in the fourth quarter - down 6.6 per cent on the same period a year earlier.

It was a similar picture at the nearby Caribbean at Keppel Bay, where 371 rental contracts were inked - slightly up from 343 a year earlier. But rents softened from $5.63 to $5.20 psf in the same period - a dip of 7.6 per cent.

The only way to compete in a "tenant's market" of myriad choices and stronger bargaining power is to lower rents, said Mr Steven Tan, managing director of OrangeTee.

"The rental market is going to get more challenging, especially for older projects that are not located in the central areas."

Interlace, a 1,040-unit estate in Depot Road, had 345 leases last year. The block was completed in 2013, yet monthly rents have hovered between $3.48 and $3.60 psf - on a par with those at Valley Park, a far older development in River Valley.

The 728-unit Valley Park, which was completed in 1997, fetched an average of $3.53 psf a month in the fourth quarter, down from $3.68 psf a year earlier.

Demand at these popular projects is still strong, experts said, underpinned by factors such as proximity to transport nodes and malls as well as limited upcoming supply in the vicinity.

An outlier was City Square Residences in Kitchener Link, where leases dipped 11 per cent to 374 contracts last year, despite being near the City Square Mall and Farrer Park MRT station.

Rentals suffered to a smaller extent, slipping 0.3 per cent to $4.18 psf in the fourth quarter last year. That may be due to the rise of short-term subletting of homes at the 910-unit condominium.

Experts say about 21,300 condo units are to be completed this year, even as Singapore interest rates are expected to head higher.

Landlords of units in better locations still enjoy some pricing power, said Mr Nicholas Mak, executive director at SLP International, but no project "exists in isolation".

He added: "If rentals in every other part of Singapore are falling, landlords of popular projects would also have to be realistic and adjust the rentals accordingly during lease negotiation."

The completion of upcoming MRT lines, such as the Downtown Line, could sap demand from popular projects to the benefit of other condos that would then be more accessible, noted Mr Tan.

ocheryl@sph.com.sg

This article was first published on Feb 21, 2015.

Monday, Feb 23, 2015

Cheryl Ong

The Straits Times

Source: AsiaOne

New URA guidelines for landed homes to take effect from May - Channel NewsAsia

Under the new guidelines, which come into effect on May 11, home owners of landed property can choose to vary the floor-to-ceiling height in their house, while the limits for the attic and basement have also been changed.

SINGAPORE: Home owners and developers will soon get to enjoy greater flexibility in configuring the interior space of their landed homes, after the Urban Redevelopment Authority (URA) on Wednesday (Feb 11) released a new set of guidelines for landed houses.

The new guidelines will come into effect on May 11 to give the industry sufficient notice of the change, said URA. The guidelines adopt an approach where the interior configuration of a house is determined by a combination of the allowable height of the house, distance from the road and common plot boundaries.

This serves as a three-dimensional limit - within which a landed house can be designed.

Under the new guidelines, the allowable overall height for a two-storey landed house will be 12 metres, down from the existing 14.1 metres. Meanwhile, the allowable overall height for a three-storey landed house will be 15.5 metres, down from the existing 17.7 metres. 

However, home owners will now be able to vary the floor-to-ceiling height in their home, giving them a mix of spacious and compact spaces. This is a departure from existing rules, where a height restriction is set for each floor. The various storeys in the house can also be layered creatively, even allowing an extra room to be set up in a mezzanine level. 

Under the new guidelines, the topmost floor, or the attic, will be limited to 3.5 metres in height and has to be set back from the front and rear of the building facade as defined by a 45 degree line. However, the attic can also be designed without a sloping roof, which is currently a requirement. 

The basement will also be allowed to protrude above ground beyond the current one-metre limit. This is expected to allow more ventilation and light to the basement space.

In a circular to professional institutes, URA said the new guidelines are a response to changing lifestyle needs, and are formulated with input from landed house owners and professionals from the building industry.

It added that the new guidelines will simplify existing rules and provide developers and home owners more flexibility in the design of landed housing, while also safeguarding the low-rise character of landed housing estates.

The new guidelines had been piloted by URA on a landed housing area in Sembawang Greenvale. The 55 terrace houses and 10 detached house units were completed last year.

PILOT RESULTS 'POSITIVE'

In a blog post on Wednesday, National Development Minister Khaw Boon Wan said the results in the pilot were "positive".

"The new guidelines should be good news to those who want flexibility in interior design. Owners can ‘layer’ their homes creatively, to bring in natural light and ventilation, and are most likely to benefit those who live in intermediate terraces," he added.

A developer also welcomed the move.

"It will give the architect the flexibility to create an interesting internal space with various volumes and heights for different areas and rooms within the building envelope," said Mr Ng Chee Seng, CEO of Bukit Sembawang Estates.

"Externally, it will also enable architects to come up with more creative and interesting facade treatment. We can come up with new type of housing typology, different types of interesting designs that will be more enticing to the purchaser," he added.

Once the new guidelines kick in, they will apply to all relevant applications involving new erection or reconstruction of landed housing developments. URA said it can also accept development applications from those who wish to adopt the new guidelines during the three-month grace period. 

There are about 130 two-storey and 124 three-storey landed home estates in Singapore today. In total, there are about 72,000 landed units, which make up about 23 per cent of total private housing units in Singapore.

- CNA/av/xq

Source: Channel NewsAsia (11 Feb 2015)

More private properties being sold at a loss - SRX

More people here selling private homes suffered losses last year as prices across the island kept tumbling.

In the most extreme cases, sellers of high-end properties gave up hope of a rebound and absorbed losses of over $2 million.

And the attraction of renting out investment homes faded as the rental market softened too.

Data from SRX Property showed that 4.2 per cent of secondary market transactions, or 161 of them, last year suffered losses, up from just 1.96 per cent, or 103, in 2013.

In 2012, 1.5 per cent of secondary market transactions - including sub-sales and mortgagee sales - were loss-making, while the figure was 1.8 per cent in 2011. Sub-sales are sales made before the property is built.

The percentage of sellers in the secondary market who achieved capital gains has also fallen - from 97.8 per cent in 2013 to 95.4 per cent last year.

"Cooling measures really hit the market last year. Prices were dropping by then and owners could feel the rental market getting weaker. Perhaps for some owners, they couldn't see the light at the end of the tunnel and decided to cut their losses," said SLP International executive director Nicholas Mak.

Most of the losses are likely to have been in the middle to high- end segment as those prices fell more drastically, said Mr Lee Liat Yeang, a real estate lawyer at Rodyk & Davidson.

The biggest losses were suffered mainly in districts 4, 9 and 10. Many of those properties had been acquired in 2007, or at the peak of the previous property boom.

"Those who bought before the Lehman Brothers crisis were hoping prices would go up or at least stay the same... But the high-end segment never really recovered after the crisis. After waiting for six years, they realised the prospect of recovery is still low, so they decided to move on," said Mr Lee.

Such fire sales seem to be gathering pace, with at least two large money-losing deals so far this year. This month, a 1,076 sq ft unit at The Clift in McCallum Street went for $1.9 million, at a loss of $965,600, or 34 per cent. A 1,808 sq ft unit at The Orchard Residences in Orchard Boulevard sold for $5.5 million, at a loss of $2.253 million, or 29 per cent.

A total of 19 properties were put up for auction sale by mortgagees this month, up from six in January last year and three in January 2013, noted Colliers International deputy managing director Grace Ng.

The number of loss-making sales is tipped to rise this year, as supply from newly completed condominiums will raise competition for tenants and rising interest rates may add to holding costs, said Mr Mak. In all, 21,359 private condos are pegged for completion this year, and 20,919 next year.

Ms Ng expects mortgagee sales to hit 200 this year, up from 159 last year, in view of continued cooling measures and challenging conditions. "Sellers will continue to face increasing difficulties in disposing of their properties in the resale market."

posted on 31 Jan 2015

By Rennie Whang

 

Straits Times

Source: SRX

About 4 in 10 private property owners allowed to buy HDB flat: Desmond Lee - Channel NewsAsia

Minister of State for National Development Desmond Lee said about 38 per cent of Singaporeans who own private property were allowed to buy an HDB flat upon appeal.

SINGAPORE: In the past two years, 38 per cent of appeals lodged by Singaporeans looking to buy an HDB flat while holding on to private property were successful.

There were 1,587 appeals lodged between 2013 and 2014 by Singapore citizens and Permanent Residents who wanted to buy an HDB flat while keeping hold of their private property, said Mr Desmond Lee, Minister of State for National Development.

Among them, 486 owned a local private property, while 1,101 owned an overseas private property. Approval was given to 606 appeals - all Singapore citizens, he added.

Mr Lee was responding to questions posed by Jurong GRC MP Ang Wei Neng.

- CNA/rg

Source: Channel NewsAsia (13 Feb 2015)

87,900 households have rented out their flats or rooms - Channel NewsAsia

These figures were given by Minister of State for National Development Maliki Osman in response to questions by MP for Hougang, Png Eng Huat, on HDB flat rentals.

SINGAPORE: As at Jan 31, 87,900 households have rented out their flat, or one or more rooms. Ninety-two per cent of these are Singaporean households, while the remaining 8 per cent are owned by permanent residents. Since January 2013, the Housing Development Board (HDB) has disallowed permanent residents from subletting their entire flats.

These figures were given by Minister of State for National Development Maliki Osman in Parliament on Thursday (Feb 12), in response to questions by MP for Hougang, Png Eng Huat, on HDB flat rentals. Mr Png had also asked how HDB would ensure that flats are properly rented out, and that the number of occupants and tenancy lengths were also within legal limits.

Dr Maliki said: "Every lessee of the flat knows the regulations and as they are subletting the rooms, they are supposed to register the number of tenants that they have in their rooms. HDB monitors that quite closely. We also require the help of local grassroots to let us know should the tenancy breach the agreement set out by the HDB ... so that we can continue to enforce when necessary."  

- CNA/ms

Source: Channel NewsAsia (13 Feb 2015)

More than 200 flats seized by HDB in last three years - Channel NewsAsia

Flats are compulsorily acquired from lessees who have committed major lease infringements such as the unauthorised subletting of flats, says Minister of State for National Development Desmond Lee.

SINGAPORE: A total of 202 flats were seized by the Housing and Development Board (HDB) between January 2012 and December 2014, Minister of State for National Development Desmond Lee said on Tuesday (Jan 20).

Flats are compulsorily acquired from lessees who have committed major lease infringements such as the unauthorised subletting of flats, Mr Lee said, in response to a Parliamentary question by MP Zainal Sapari.

“The action is also taken, as a last resort, against mortgagors who persistently refuse to resolve their arrears, or work towards a sustainable solution, despite the assistance given,” he added.

HDB will assist such households to find alternative accommodation, Mr Lee said. “For those who can afford smaller flats, HDB will help them buy one and may offer them another loan for the purchase, if necessary. Those who are unable to afford another flat, and have no family support or other housing option, are allocated rental flats.”

Mr Lee added there are many measures - both short- and long-term - that can be taken to help HDB homeowners resolve their arrears issues. These include helping the home owner reschedule a mortgage loan up to the maximum repayment period, or allowing owners to pay lower monthly instalments under the reduced repayment scheme. 

Mr Lee said HDB has assisted 9,752 families with one or more of these measures, from January 2012 to December 2014.

"It is not in the interest of lessees to accumulate mortgage arrears. It's not just a heavy financial burden on them, but also a tremendous emotional strain. HDB therefore intervenes early, proactively and sympathetically, to help flat owners resolve their arrears issues," he said.

"For instance, loan instalments are usually paid on the first of each month. But HDB gives lessees up to the end of the month if they face temporary cash flow difficulties for instance. But if they still face problems doing so, HDB will make a call, arrange a meet up or even do a home visit, to better understand the situation and better offer help," Mr Lee added. 

- CNA/cy/dl

Source: Channel NewsAsia (20 Jan 2015)

51 flat buyers unable to take possession of new flats after 2nd credit assessment over past 2 years: MND - Channel NewsAsia

Second credit check is done to check if a buyer's financial position has deteriorated since original credit assessment, says Minister of State for Ministry of National Development Desmond Lee.

SINGAPORE: A total of 51 flat buyers were unable to take possession of their new flats after the second credit assessment, said the Minister of State for Ministry of National Development Desmond Lee on Thursday (Feb 12).

Answering MP Zainal Sapari’s Parliamentary question on the number of potential Housing and Development Board (HDB) flat buyers between 2013 and 2014 who were unable to take possession of their new flat, Mr Lee said HDB conducts a second credit assessment before it disburses a housing loan to flat buyers when the keys are ready for collection.

“This usually occurs a few years after the first credit assessment and an HDB Loan Eligibility (HLE) letter is issued,” he said. “The second assessment is to check that flat buyers’ financial positions have not deteriorated in the intervening years, and that they are still able to service the monthly mortgage instalments.”

Mr Lee said it would not be prudent for flat buyers to complete the purchase if they are no longer able to service a housing loan. “It would merely be creating a potential loan defaulter with many other new problems for the family."

He added that if a flat buyer does not proceed with his flat purchase, 5 per cent of the purchase price will be forfeited to HDB. The housing agency may consider refunding the forfeited amount “in selected cases of genuine financial hardship”.

- CNA/ct

Source: Channel NewsAsia (12 Feb 2015)

Slight rise in private home rentals, HDB rents decline - Channel NewsAsia

Rental prices for Housing and Development Board (HDB) flats fell 0.5 per cent in January from the previous month, while rents for private homes rose 0.2 per cent, according to SRX Property.

SINGAPORE: Rental prices for Housing and Development Board (HDB) flats fell 0.5 per cent in January from the previous month, while rents for private homes rose 0.2 per cent, according to SRX Property.

Four-room, five-room and executive flats saw rental prices fall 1.3 per cent, 0.3 per cent and 1.6 per cent, respectively. Three-room flats, however, bucked the trend with rents rising by 0.3 per cent.

On-year, rents in January 2015 were down 1.6 per cent. Rents in both mature and non-mature estates fell, with rent of non-mature estates in December 2014 dropping 6.9 per cent from its peak in October 2012 while rents in mature estates fell 4.4 per cent in that same month from its peak in February 2013.

Rental volume for HDB flats also increased, with an estimated 1,651 flats rented in January 2015 - a 4.4 per cent increase from the 1,581 units rented in the previous month.

SLIGHT UPTICK IN PRIVATE RENTS

Rentals for non-landed private residences posted a 0.2 per cent increase in January 2015, after 11 consecutive months of decline.

Units in the Core Central Region saw rental prices decline by 0.8 per cent, but rents for units in the Rest of Central Region and Outside of Central Region rose 1.9 per cent and 0.2 per cent respectively.

Rents in January fell 5.9 per cent year-on-year, down 9.6 per cent from its peak in January 2013. 

An estimated 3,417 private units were rented in January 2015, a rise of 13 per cent from the 3,025 units rented last month. Year-on-year, rental volume rose 16.1 per cent from the 2,944 units rented in January 2014.

- CNA/ac

Source: AsiaOne (12 Feb 2015)

HDB resale prices edge up 0.6 per cent after year of declines - AsiaOne

After a year of consecutive monthly declines, Housing Board resale prices edged up 0.6 per cent last month, according to SRX Property flash figures yesterday.

But experts do not take this as a sign that the market is rebounding. Instead, they expect prices to continue sliding.

The last time HDB resale prices rose was in January last year. They have fallen 5.7 per cent since then.

"We cannot read the monthly price increase... as a sure sign of turnaround in HDB resale flat prices, as the increase was very marginal," said R'ST Research director Ong Kah Seng.

Said ERA Realty key executive officer Eugene Lim: "The increase has more to do with the up-and-down fluctuations that are associated with tracking prices on a monthly basis."

Last month's rise was driven by four- and five-room flats, with their prices increasing by 1.1 per cent and 1.5 per cent respectively.

This more than made up for a 0.9 per cent fall in three-room flat prices and a 0.6 per cent fall for executive flats.

Both mature and non-mature estates saw price increases, of 0.5 per cent and 0.7 per cent respectively.

The tepid uptick could be partly due to units sold at the Pinnacle@Duxton premium HDB project last month, said Mr Ong.

Units there have fetched prices ranging from $818,000 to $1.03 million and may have pulled up overall prices, he added.

But analysts see the overall downward trend continuing. Mr Ong expects prices to fall by up to 4 per cent in the first half, while HSR International Realtors expects falls of up to 1 per cent each quarter.

But sellers such as Madam Safiah, 50, hope last month's marginal climb in prices will not be an exception.

"Hopefully the prices will really go up. Last year they already came down a lot," said the housewife, who has been trying to sell since November. She had thought her four- room flat in Hougang could fetch $460,000, but now hopes to get $430,000 instead.

Resale volumes fell for the fourth straight month in January with 1,255 flats sold, down from 1,295 in December.

However, this was still 15.3 per cent more than the 1,088 units sold in January last year.

This year-on-year increase "is an encouraging sign that more buyers are entering the market as prices become more attractive", said HSR.

Noting that January and February are traditionally quiet months in the resale market due to Chinese New Year festivities, ERA's Mr Lim expects the pace of deals to pick up from next month.

"The pace we see in March to May will set the tone for the year... March, April and May are very important months for the HDB resale market," Mr Lim added.

janiceh@sph.com.sg

Friday, Feb 06, 2015

The Straits Times

Source: AsiaOne

HDB resale prices up 0.6 per cent in January after falling for a year - AsiaOne

SINGAPORE - Housing Development Board (HDB) resale prices increased 0.6 per cent in January, according to a SRX Property flash report.

This is the first time since January 2014 that HDB resale prices have risen. When compared year-on-year, prices dipped 5.7 per cent from January last year.

Last month's increment was attributed to the price spike of 1.1 per cent and 1.5 per cent in four- and five-room flats respectively. This compensated for the 0.9 per cent and 0.6 per cent price drops for three-room and executive flats respectively.

According to SRX, resale prices in mature estates rose by 0.5 per cent while those in non-mature estates went up 0.7 per cent.

Although resale volume dropped 3.1 per cent in January from December's figure of 1,295, it was still 15.3 per cent higher than the 1,088 units sold last January.

debwong@sph.com.sg

Thursday, Feb 05, 2015

AsiaOne

Source: AsiaOne