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Home prices could increase by 10% this year, says CapitaLand CEO

Rising sales and prices indicate an end to the four-year slump for Singapore’s housing market.

CapitaLand CEO Lim Ming Yan expects home prices in Singapore to increase by as much as 10 percent this year – a view which is in line with other forecasts, reported Bloomberg.

Analysts at Credit Suisse Group AG expect home prices to rise by up to 10 percent this year, while OCBC Investment Research and Morgan Stanley expect an increase of up to eight percent.

SEE ALSO: Pearlbank Apartments sold to CapitaLand for $ 728m

“Transaction volume has gone up and usually that’s a precursor to some price increase,” Lim said in an interview. “A five to 10 percent increase is possible this year barring any unforeseen major volatility in the capital markets.”

Rising home sales and prices reinforces signs of an end to a four-year housing slump. The market rebound saw developers aggressively bid for land.

While CapitaLand has kept a safe distance from the bidding war, it acquired the iconic Pearlbank Apartments for $ 728 million, with plans to redevelop it into an 800-unit residential complex.

“We continue to look for opportunities in Singapore but we feel the kind of bidding, the price, is too aggressive for us,” noted Lim. “We bid in a very disciplined manner.”

The property developer’s net income dropped 38 percent to $ 267.7 million during the last quarter of 2017 after completing fewer homes to sell in China.

Despite this, CapitaLand shares rose two percent to $ 3.54 in Singapore, the biggest increase since 5 October, after the company increased its full-year dividend by 20 percent.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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New private home sales up 37% from a year ago

Symphony Suites sold 65 units in the month of January, making it the most popular project. 

Property developers sold 522 new private homes excluding executive condominiums (ECs) in January 2018, up 21 percent from 431 units in the month before, according to data published by the Urban Redevelopment Authority (URA) on Wednesday (14 February).

Year-on-year, there was a 37 percent increase from the 382 units sold in January 2017.

According to property agency PropNex Realty, last month’s sales tally is the highest for the month of January since 2015. However, it is still lower than the average monthly figure as most developers only plan to launch their projects after Chinese New Year.

“Usually the months of December and January are the slower months with lesser property activities,” said PropNex CEO Ismail Gafoor.

“However, a closer look at the figures comparing with the past few years, it seems to depict that January 2018 is gaining momentum with home buyers and upgraders making their move to purchase existing stocks of private homes available which are rightly priced, before prices are predicted to go up in the later part of this year.”  

The top-selling project in the month was the previously launched Symphony Suites in Yishun, which sold 65 units at a median price of $ 1,085 psf. This was followed by Gem Residences in Toa Payoh, which moved 44 units at a median price of $ 1,508 psf. Parc Botannia in Sengkang was next with 43 units sold at a median price of $ 1,265 psf. 

Ismail expects to see more transactions after Chinese New Year as developers gear up to launch several new projects including The Tapestry at Tampines Avenue 10, The Enclave @ Holland and possibly Rivercove Residences EC in Sengkang.

“Activities in the market will pick up from March onwards with transactions along the lines of 1,000 units,” he noted.

Ismail predicts that some 12,000 units (excluding ECs) will be sold in 2018, similar to last year. 

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Singapore’s GDP to grow slower this year

The weak construction sector is expected to drag Singapore’s real GDP growth at a slower pace of three percent in 2018 from last year’s 3.5 percent, reported Singapore Business Review citing BMI Research.

The construction industry is forecasted to grow 2.4 percent in real terms this year, the same pace seen in 2017, mirroring weak investor sentiment within the residential and non-residential building sectors.

And with the property market showing incipient signs of recovering, BMI Research believes the construction industry will unlikely witness a significant pick up in the coming quarters.

“The government’s ongoing labour restructuring process and the still-weak property market continue to weigh on the construction sector and we expect the outlook to remain anaemic.”

With this, the government plans to use S$ 1.4 billion to support the local construction industry, said the thinktank. However, BMI Research expects the impact to be limited as construction companies continue to struggle with labour shortages and slower demand.

Nonetheless, Singapore’s positive business environment and sound economic fundamentals are expected to provide support for the city-state in the coming quarters.

BMI Research revealed that Singapore has a robust external position, with a net international investment position of around 250 percent of GDP as well as a considerable current account surplus of around 20.0 percent of GDP in 2016.

“In addition, Singapore’s operational risk environment remains sound, coming in at 82.2 (out of 100) compared to the regional average of 53.6 and we expect ongoing efforts to strengthen the already positive business environment to ensure that the republic remains an attractive investment destination over the coming years,” it said.

“This was reflected in Singapore’s retention of its second-place ranking in the World Bank’s 2018 Ease of Doing Business report, boding well for the country’s economic outlook.”

 

This article was edited by Keshia Faculin.

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Slight rise in number of property agents this year

There are now 28,571 registered property agents in Singapore.

The number of registered property agents in Singapore rose slightly to 28,571 as at 1 January 2018, up from 28,397 during the same period last year, according to data released by the Council for Estate Agencies (CEA) on Thursday (4 January).

This is still lower than the 29,262 registered agents seen at the start of 2016.

While CEA issued 66 new property agency licences and 1,344 new property agent registrations throughout 2017, a total of 44 property agency licences and 2,028 property agent registrations lapsed after 31 December.

Chia I-Ling, director, policy & licensing at CEA, said: “The increase in the number of registered agents could be due to a positive outlook on the real estate market.”

Lim Yong Hock, key executive officer of PropNex Realty, said: “In today’s market, increasing number of younger individuals are drawn to the real estate segment as the profession is no longer deemed as a “mid-career switch” option, but instead a long term rewarding career.

“In PropNex, we have fresh graduates and professionals who were doing really well in their previous careers joining us, drawn by their passion for properties and opportunities presented in the industry.”

CEA data also shows that the number of licensed property agencies fell to 1,269 as at 1 January from 1,286 a year ago.

The largest property agency in Singapore is PropNex Realty with 6,684 agents, followed by ERA Realty Network with 5,882 agents and OrangeTee & Tie (3,898).

10 largest property agencies

Source: Council for Estate Agencies

The number of salespersons at PropNex shot up by 21 percent from 5,510 last year, mainly attributed to a merger with Dennis Wee Group (DWG) in June.

“We are indeed witnessing a change in the real estate industry scene where many small to mid-sized firms might choose not to continue operating on their own and will instead consolidate their business with the bigger players,” noted Lim. 

Said Chia. “As the industry continues to evolve, CEA encourages property agents to upskill and leverage technology to keep pace with the changing business environment and meet increasing consumer expectations.”

Lim revealed that PropNex has invested more than $ 10 million in the last five years to provide a range of trainings and development programmes for salespersons to raise their knowledge, skills and service standards, in order to remain relevant in the industry.

PropertyGuru is organising an Agent Summit 2018 on 16 January. Find out more about the future of real estate agents and technology. To register, please click here.

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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Private home sale to increase next year amid collective sale frenzy

With the collective sale fever forecasted to continue into 2018, analysts expect the potential en bloc sellers to lead a hike in private home sales next year, with prices expanding between four to eight percent, reported Channel News Asia.

Cushman & Wakefield expects at least 44 condominiums to go en bloc next year, which could see over 9,000 potential house hunters.

Among the condominiums expected to take the collective sale, path includes the 528-unit Laguna Park, the 264-unit Teresa Ville and the 120-unit Lakeside Apartments.

This year’s 27 collective sale tenders, to date, saw around 3,200 owners looking for a new place to live.

Edmund Tie and Company research head Dr Lee Nai Jia noted that these collective sales have a “snowball effect”.

“Those who have successfully sold their units will probably buy two, even though they will downsize.”

Lee believes the suburban and HDB resale market sector will record the greatest pickup in 2018, given the significant number of former Housing and Urban Development Company (HUDC) estates and government housing projects trying their hand at a collective sale.

Cushman & Wakefield research head Christine Li expects the mass market segment to witness a pickup since many buyers, who have held back purchases over the past three years, have now accumulated enough savings to acquire a new property.

She noted that the local property market’s resilience and the strength of the Singapore dollar have made Singapore more appealing to foreign property buyers again, despite the higher additional buyers’ stamp duty (ABSD) for such buyers.

 

This article was edited by Keshia Faculin.

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