Tag Archives: 2018

Private home prices to rise by 3-7% in 2018

Prices of residential properties here are expected to increase by three percent to seven percent next year, reported the Singapore Business Review.

According to Analyst Vijay Natarajan from RHB Research, the anticipated price growth is driven by the city-state’s stable job market and robust buying optimism of locals. Another key factor is the en bloc fever that has resulted in sellers, who have received ample cash, needing to buy houses to replaces the ones they sold.

The research house pointed out that the forecasted price hike comes after prices in the city-state hit rock-bottom. The 0.7 percent quarterly rise in the Urban Redevelopment Authority’s (URA) Residential Property Price Index in Q3 2017 is a good indicator that residential values have bottomed out, it said.

Natarajan also noted that recent land bids by developers have factored in a price hike of 10 percent to 40 percent, assuming home builders are targeting typical profit margins of between 10 percent and 15 percent.

But the high bids could limit their profit margins. The recovery of the local housing sector could also be impacted by stiff competition for land, the sluggish rental market with a vacancy rate of 8.4 percent, and potential supply-side curbs by the government.

Looking ahead, RHB Research expects home sales to rise to 7,893 units and 8,696 units by 2018 and 2019 respectively. However, both figures are lower than Singapore’s 10-year average demand of 9,978 units per annum and 10-year average annual supply of 11,472 units.

 

This article was edited by Keshia Faculin.

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Govt unveils land sales programme for H1 2018

Six confirmed list and nine reserve list sites will be launched under the H1 2018 Government Land Sales (GLS) programme, announced the Urban Redevelopment Authority (URA) on Wednesday (13 December).

These land parcels could potentially yield approximately 8,045 private homes and 63,960 sq m in gross floor area (GFA) of commercial space.

According to Colliers International’s director and head of research Tricia Song, the amount of upcoming residential stock was within its expectations.

“The government has not bumped up the supply significantly. In fact, the total number of housing units remains relatively the same with the H2 2017 GLS programme of 8,000-plus units.

“This came about as the government took into consideration the large potential supply of around 20,000 units from awarded en bloc sales and GLS sites that have not yet been granted planning approval, on top of the around 18,000 unsold units that already have planning approval.”

In particular, the six confirmed list sites are mostly intended for private homes, including one for executive condominiums (ECs). These are expected to generate about 4,450 sq m GFA of commercial space and 2,775 private units, including 450 ECs.

Among the confirmed list sites, the plots at Cuscaden and Mattar Road are expected to be the most sought-after due to their location and size, said Edmund Tie & Co’s research head Dr Lee Nai Jia.

“For the Cuscaden site, we expect bids of around $ 1,600 to $ 1,750 psf per plot ratio (ppr), while bids at Mattar Road should range from $ 1,200 to $ 1,400 psf ppr. The number of units to be built on the land parcel at Silat Avenue may be on the high side, despite its favourable location.”

Similarly, Song believes that the land parcel in Cuscaden Road will be the most attractive. The rare luxury housing site has a palatable quantum of 170 units with an average size of 1,000 sq ft, and is projected to benefit from the recent sale of the prime Jiak Kim site.

The Mattar Road site could pique the interest of developers as it’s very close to the Mattar MRT station and there is limited supply in the area. But it is a relatively untested non-landed private residential location surrounded mainly by industrial estates, landed housing and HDB flats. 

Likewise, the Canberra Link EC site could also be popular given its proximity to the upcoming Canberra MRT station, and there is a limited supply of such residences in the vicinity, Song noted.

Meanwhile, the URA released the details of the nine reserve list sites, which consists of one commercial site and eight private housing plots, including two EC sites. These are expected to yield 59,510 sq m GFA of commercial space mostly for offices and 5,270 private houses, including 1,255 ECs.

Of these, Song is optimistic that the land parcels in Sims Drive and Peck Seah Street will be the most desirable. The former is within walking distance to the Aljunied MRT station. The latter is in the Central Business District near the Tanjong Pagar MRT station, and the last time a housing site was offered there was in 2007.

Likewise, Lee revealed that the Peck Seah Street plot is near many eateries and offices, and he thinks the site will get bids ranging from $ 1,600 to $ 1,750 psf ppr.

 

This article was edited by Keshia Faculin.

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Property trends in 2018

View of private apartments in Singapore.

Here are some important trends that have been driving Singapore’s real estate market this year, which are expected to continue to shape the industry.

1) En bloc frenzy

The collective sales fever in Singapore is anticipated to continue in the next few months. According to Cushman & Wakefield Singapore’s research head Christine Li, 18 existing residential projects worth a total of $ 6.34 billion have been purchased by real estate developers via this method as of 15 November.

This is already the highest figure in a decade, but the overall tally for 2017 is expected to rise even further as more en bloc tenders have just been launched. These include Pearlbank Apartments, which is selling for $ 728 million, as well as Parkway Mansion ($ 138 million), Riviera Point ($ 75 million) and Derby Court ($ 62 million).

2) Price rebound

Aside from government statistics revealing that home prices across the city-state are indeed recovering, the PropertyGuru Property Index shows that asking prices of over 200,000 homes listed on the website have been rising since bottoming out in the first quarter.

In Q3 2017, the index rose 3.2 percent quarter-on-quarter and 1.4 percent on an annual basis to hit 97.1. This reflects growing optimism that developers and homeowners could sell their units at higher prices.

3) PropTech revolution

Property developers here are leveraging on new technology not only to expedite construction, but also to connect end-users across different projects. Another aim is to transform their developments into sought-after destinations for visitors.

For instance, developer M+S recently launched MySphere, the first mobile app here that links businesses, residents and visitors across its two integrated projects – Marina One in Marina Bay and DUO in Bugis. 

Based on a recent JLL report, Asia Pacific’s PropTech scene is outperforming Europe and the US. In fact, 179 start-ups in the region have accounted for 60 percent of global financing to this sector after raising a total of US$ 4.8 billion since 2013.

 

 
  The PropertyGuru News & Views   This article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now!

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