Private Condo Rents May Grow By 2% In 2019 - PropertyGuru

Leasing trends appear to be positive given the falling vacancy rate and growing rents, according to a report.

Rents of private condominium units in Singapore are expected to increase by 2.0 percent by end-2019, reported Singapore Business Review citing a Jefferies report.

This comes as the supply of Government Land Sales (GLS) and Build-to-Order (BTO) units remain low.

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In fact, the confirmed supply of 2,025 units for the first half 2019 GLS is “the lowest since H1 2016”, said Jefferies. “If the trend of low GLS supply persists, it may lead to the next wave of en bloc unless developers diversify or consolidate.”

Leasing trends within the city-state also appear to be positive given the falling vacancy rate and growing rents, added the firm.

It revealed that private leasing volumes rose 8.0 percent annually since 2013, exceeding the rise in resident population (0.8 percent), foreign population (1.6 percent) and private residential stock annual growth (5.0 percent).

“Perhaps it is a combination of shortening of lease tenor, leasing of rooms versus homes and less owner-occupancy,” explained Jefferies.

Meanwhile, the firm expects prices of private condominiums to remain flattish this year, with improving yields due to rising rents.

Romesh Navaratnarajah • February 12, 2019

Source: PropertyGuru

Future Cross Island Line To Cut Travel Time By Up To 70 Mins - PropertyGuru

Phase 1 of the Cross Island Line has been finalised with 12 MRT stations passing through areas such as Changi, Loyang, Pasir Ris, Hougang and Ang Mo Kio.

Construction work on Phase I of the highly-anticipated Cross Island Line (CRL) is poised to commence in 2020, with completion targeted by 2029, reported TodayOnline.

CRL’s first phase, which will span 29 kilometres, is expected to benefit over 100,000 households and reduce travel time by 50 to 70 minutes, said Transport Minister Khaw Boon Wan during a site visit to the upcoming Bright Hill MRT station on Friday (25 Jan).

Phase I will comprise 12 MRT stations commencing from Changi’s Aviation Park to Bright Hill in Bishan. The stations in between are located in Loyang, Pasir Ris East, Pasir Ris, Tampines North, Defu, Hougang, Serangoon North, Tavistock, Ang Mo Kio and Teck Ghee.

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For the CRL’s Phase I, the government intends to partially acquire eight properties based on the prevailing market price. But there is unlikely to be any major impact to owners, occupants and residents as the acquisitions will only affect ancillary facilities like footpaths.

No relocation will be needed and no structures will be torn down, noted the Land Transport Authority (LTA) and Singapore Land Authority (SLA), adding that residents, occupants and property owners can continue to use the ancillary facilities until 31 January 2020.

Aside from industrial spaces, the eight properties to be partially acquired include Loyang Valley Condominium in Loyang Avenue, Kong Meng San Phor Kark See Monastery at Bright Hill Road and Ang Mo Kio Hub in Ang Mo Kio Avenue 3.

Khaw revealed that the CRL will be built in three phases. Based on the 2013 Transport Master Plan, the entire project will have an overall length of around 50km and is targeted to be fully operational by 2030.

Aside from connecting the eastern, western, and northeastern parts of Singapore, the Cross Island Line could also be linked to Changi Airport. However, the government is still looking into that option, as well as conducting research on the alignments for the second and third phases.

Romesh Navaratnarajah • January 28, 2019

Source: PropertyGuru

Higher ABSD deters homebuyers in 2019 - EdgeProp.sg

Findings from the EdgeProp-Knight Frank Homebuyers’ Sentiment Survey conducted in 4Q2018 revealed that higher Additional Buyer’s Stamp Duty (ABSD) rates from last year’s property cooling measures are the main hurdle facing homebuyers in 2019.

Effective July 6, 2018, Singaporeans buying a second residential property must pay an additional 12% ABSD on the property value, up from the previous 7%. Permanent residents (PRs) buying a second home now pay 15% compared to the previous 10%. Meanwhile, foreign buyers without permanent residency status must fork out 20%, instead of 15%.

This latest round of property cooling measures, announced just a day before they took effect, came as a surprise, arriving just as property developers have replenished their land banks throughout 2017 and into the first half of 2018 in anticipation of blockbuster sales. The cooling measures, intended to curb the exuberance in the housing market, introduced higher ABSD rates and tighter loan-to-value (LTV) limits.

Cooling a red-hot residential market

Property prices started to rise in 3Q2017 after falling for four consecutive years, increasing sharply by

9.1% y-o-y the same year. Demand for private residential property also saw a strong recovery, as transaction volumes continued to rise.

It was also around this time that developers heightened a growing collective sale fever. Based on URA data, the year 2017 saw 29 en bloc transactions totalling $7.31 billion, compared to $1.2 billion in 2016 and $380 million in 2015.

The fever continued unabated into 1H2018, which saw 31 en bloc deals totalling nearly $8.85 billion.

The collective sale of Park House hit a record-high price of $2,910 psf per plot ratio in June 2018. (Image source: CBRE)

Notably, the collective sale of Park House in June 2018 hit a record-high price of $2,910 psf per plot ratio (ppr) when it was sold by Hong Kong-listed Shun Tak Holdings at $375.5 million. It smashed the record set by the former Hampton Court for $155 million ($2,526 psf ppr) in January 2013, where the buyer was Hong Kong-listed British conglomerate Swire Group’s Swire Properties.

Increased buying demand, coupled with the flurry of en bloc activities, resulted in a spike in property prices, which quickly prompted the government intervention to cool the red-hot residential market.

Post-ABSD housing affordability

The cooling measures have affected housing affordability because the LTV limit has been slashed to 75% from 80%.

According to Lee Nai Jia, senior director and head of research at Knight Frank, first-time buyers were most heavily affected by the latest cooling measures.

“With the new measures, even if they do not have to pay ABSD, financing could be clipped for these first-time buyers due to a tighter LTV ratio,” said Lee.

The frenzied buying that occurred in the evening before the cooling measures took effect caused a surge in new home sales in 3Q2018. Developers had brought forward three launches to allow buyers to lock in deals before changes to the ABSD and LTV kicked in, resulting in over 1,000 units sold in a single evening.

The following quarter saw a decline of 37.8% in new home sales. However, this decline could be due to the frenzied pre-ABSD buying and seasonal effects. Sales tend to be slower in the fourth quarter each year due to school holidays and festivities.

Fewer looking to buy homes this year

Of the 803 respondents to the EdgeProp-Knight Frank Homebuyers’ Sentiment Survey, only 43.1% said they were looking to purchase a residential property in Singapore in the next 12 months. The survey was jointly conducted by EdgeProp Singapore and Knight Frank Singapore in 4Q2018.

EdgeProp-Knight Frank Homebuyers’ Sentiment Survey

In the previous survey conducted in 2017, 55.6% of 611 respondents said they were on the lookout for a residential property. Meanwhile in 2016, 51.2% of the 500 respondents said they were on the lookout for a residential property here.

Based on responses to the survey, 42.6% said that higher ABSD rates were the main reason for not buying property in 2019. This was followed by the sentiment that property prices were expected to decline further (25.1%), while 24% said they did not have enough savings to make a downpayment.

It is worth noting that 16.7% of the respondents said they do not own any properties, while 60.5% indicated owning one property, 16.9% indicated two properties, and the remainder, three or more properties.

EdgeProp-Knight Frank Homebuyers’ Sentiment Survey

How will new launches fare in 2019?

For 2019, Knight Frank’s Lee said the survey results revealed a strong underlying housing demand in the market. “However, buyers [nowadays] are more discerning and likely to adopt a wait-and-see approach. That said, buyers are likely to enter the market if prices stay at their existing level,” he added.

According to Lee, new launches in 2019 will see sales of between 15% and 20% of total units per project. Already, this was observed for RV Altitude and Fyve Derbyshire, which were both launched in January. The survey suggested that buyers may wait on the sidelines as they expect prices to decline further, he said.

The 140-unit RV Altitude and 71-unit Fyve Derbyshire sold 14% and 18% of their total units during their launch weekends, with prices ranging from $2,729 psf to $3,100 psf and $2,200 psf to $2,700 psf respectively.

Before the cooling measures on July 6, 2018, some developers were able to achieve sales of up to 60% within the first weekend of launch. After the cooling measures, from July to December 2018, the average sales rate achieved was 28% for the same period.

The decline in sales probably reflects the heightened caution among buyers under current market conditions. However, buyers may return if prices continue to stay at current levels as they may have gotten used to paying the stamp duties.

By EdgeProp and Knight Frank / EdgeProp and Knight Frank | February 8, 2019 3:14 PM SGT

Source: EdgeProp.sg

New private home prices up 7.9% in 2018 despite cooling measures - SRX

New private home prices gained 7.9 per cent last year, compared with a 1.1 per cent rise in 2017, even as last July's cooling measures appear to have ended further price recovery after just five quarters, the shortest spurt on record.

Slower private home sales, launches and resale transactions sent prices down by 0.1 per cent in the fourth quarter. This compared with a 0.8 per cent gain a year ago and a rise of 0.5 per cent in the third quarter, the Urban Redevelopment Authority said yesterday.

Leading the fall are landed home prices, which fell by 2 per cent in the fourth quarter, compared with a 2.3 per cent gain in the third. But non-landed property prices edged up 0.5 per cent after remaining unchanged in the previous quarter.

For the whole of last year, landed home prices rose by 6.3 per cent, and private apartment and condominium prices by 8.3 per cent.

Cooling measures introduced on July 6 last year saw the additional buyer's stamp duty (ABSD) raised and loan-to-value limits tightened.

Analysts are divided over the direction of private home prices this year. Some see growth slowing because of the cooling measures and a large supply pipeline, while others see prices supported by new launches in the prime or core central region (CCR). OrangeTee & Tie research and consultancy head Christine Sun sees price growth slowing significantly.

"Many new projects are currently priced at the 'sweet spot'. If the global economy does not deteriorate drastically and the job market remains healthy, overall prices are likely to remain flat or rise marginally this year," she said.

Last year's growth was largely fuelled by pent-up demand, attractive new launches and a positive economic outlook.

"We estimate that overall private home prices could potentially climb by 3 per cent in 2019, in line with economic growth - barring any unforeseen events," said Ms Tricia Song, head of research for Colliers International, Singapore.

Prices of non-landed properties in the prime district fell by 1 per cent in the fourth quarter due largely to soft resale transactions, Ms Song said, compared with a 1.3 per cent gain in the third. But prices of new launches such as 8 Saint Thomas, New Futura and Marina One Residences held up. New Futura units sold at a median price of $3,238 per sq ft (psf) in the fourth quarter, up from $3,226 psf in the third.

"We expect CCR home prices could climb by 5 per cent in 2019, supported by demand for prime district homes," she said.

Meanwhile, prices in the city fringes or rest of central region (RCR) rose by 1.8 per cent, compared with the 1.3 per cent drop in the previous quarter.

"Woodleigh Residences was launched at a benchmark $2,000 psf," Ms Song said. "We estimate that RCR private home values could possibly rise by 3 per cent in 2019 due to new launches such as the former Normanton Park (privatised housing estate) and former Park West (condo)."

Prices in the suburbs or outside central region (OCR) rose by 0.7 per cent, compared with a 0.1 per cent decline in the third quarter.

"Given the substantial pipeline of new supply - such as the 2,225-unit Treasure at Tampines and 1,410-unit The Florence Residences - we expect prices in (the suburbs) to remain flat in 2019," Ms Song said.

For last year, prices of non-landed homes in the CCR, RCR and OCR rose by 6.7 per cent, 7.4 per cent and 9.4 per cent, respectively.

For the fourth quarter, developers sold 1,836 private residential units (excluding executive condominiums, or ECs), down from 3,012 units in the previous quarter.

For the whole of last year, new home sales fell 16.8 per cent to 8,795 units - the worst drop since a 6.3 per cent fall in 2012 after the first round of ABSD.

Mr Desmond Sim, head of research at CBRE Singapore & Southeast Asia, noted that in addition to 35,649 unsold units (including ECs) with planning approval, there is a potential supply of 9,800 units from government land sales sites and awarded collective sale sites that have not been granted planning approval.

"CBRE expects the bulk of these will be launched this year, with some spillover into 2020," he said.

Property News26 Jan 2019

Source: SRX