MARKET UPDATES

Dated:

Govt cuts private housing supply from confirmed land sale sites due to Covid-19 fallout

The supply of private residential housing from confirmed sites under the government land sales (GLS) programme for the second half of 2020 has been reduced to take into account the fallout from the global Covid-19 situation, the Ministry of National Development (MND) announced on Wednesday morning (June 24). The private home supply of 1,370 units from three confirmed list sites is 405 units or nearly 23 per cent less than the 1,775 units from such sites under the first half of 2020 GLS programme. It is also the lowest number since the second half of 2009 during the global financial crisis when no confirmed list sites were released, said Christine Li, Cushman & Wakefield head of research for Singapore and Southeast Asia, adding that the move. The confirmed list includes one executive condominium (EC) site that can yield 615 units. Together with eight reserve list sites that can accommodate another 5,300 residential units, the total potential supply of private housing for the second half of this year comes to 6,670 units, slightly more than the 6,490 units under the GLS programme for the first half-year. One hotel site at River Valley Road, which can yield 530 hotel rooms, has been carried over from the first half-year GLS programme and rounds up the reserve list. MND noted that it has not introduced any new sites for predominantly commercial or hotel use given the economic contraction and uncertain business outlook resulting from the pandemic. As to residential supply, MND said it had "to calibrate the reduction carefully to avoid potential supply shortfalls over the medium to longer-term". "Hence we have maintained a good selection of sites with additional supply in the reserve list that developers can initiate for development if they assess that there is demand" it said. The authority also noted that it has provided a "moderate supply" in the confirmed list this time round, as the number of the unsold inventory of private housing units has declined by a cumulative 20 per cent between the first half of 2019 and this year. "Together with the supply of units already in the pipeline, this will cater to the housing needs of the population when completed in about four to five years' time" it added. Ms Li said the "err on the side of caution" move is in line with the current market conditions where there is an expected demand shock to the residential market coupled with ample unsold inventory due to dampened investment sentiment and employment prospects. But to ensure sufficient supply in the event there is a V-shaped recovery in the residential property sector, the government is still putting the bulk of the supply through the reserve list, at 5,300 units. As such, the combined total housing units is even higher than what was announced in December last year for the first half-year of 2020, before the Covid-19 situation emerged. MND said sites on the confirmed list will be launched only in the last quarter of this year. Each will also be given a longer tender period of about six months to allow developers more time to make their assessment in view of the ongoing Covid-19 situation. More time has already been given to confirmed list sites in the first half-year. with the last of three sites to be launched for sale by end-June. The tenders for the three sites will close progressively from October 2020 to March 2021. A total of four residential sites, three white sites and the River Valley Road hotel site were carried over from the reserve list for the first half-year. It includes a multi-use white site in Woodlands Avenue 2, which offers the bulk of new commercial space on the reserve list of 78,000 square metres, and a white site in Marina View, which can yield 905 residential units and 540 hotel rooms. While a lowered housing supply could lead to higher prices in theory, PropNex head of research and content Wong Siew Ying said it is not necessarily the case given the current market headwinds. "The cloudy economic outlook, a heightened level of uncertainty, and a pandemic with no end in sight will exert pressure on prices" she said. "Buyers also remain price sensitive, perhaps more so in the current economic climate. Developers would be well aware of these factors and are unlikely to be overly bullish with their land bids."

Source: Straits Times
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2 Geylang condos up for collective sale

Adjacent condominiums Wing Fong Mansions and Wing Fong Court go on the market today. The combined estates have an indicative land rate of $1,280 per sq ft per plot ratio (psf ppr), marketing agent PropNex Realty said, without disclosing reserve prices. PropNex tried to launch the two freehold sites in Geylang for collective sale in January, with the tenders originally set to close in May, but the process was deferred amid anti-coronavirus measures. "We've received keen expressions of interest verbally from a Middle East conglomerate as well as local developers, "PropNex consultant Richard Hau said yesterday. Tan & Au, the solicitors for the collective sales, has inquired about a potential change of use to allow the sites to be turned into a nursing home, Mr Hau said. Both plots are now zoned for commercial or institutional use with a 2.8 gross plot ratio. Wing Fong Mansions, at 12 Lorong 14, spans 47,880 sq ft and has 130 units over eight storeys with a total strata area of about 142,000 sq ft. Wing Fong Court is across the road, at 10 Lorong 14. It sits on 29,334 sq ft of land and has 88 units over eight storeys with a total strata area of 88,000 sq ft. Taken together, they form a prominent combined site with a wide frontage stretching from Geylang Road to Guillemard Road. Mr Hau said in January that it may be possible to link the sites underground via a basement level to form one integrated development. Both tenders close on Aug 6.

Source: Straits Times
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Ascott secures contracts for 25 new properties

In the first five months of 2020, CapitaLand's lodging business unit The Ascott Limited secured contracts for 25 new properties. The contracts cover 5,400 units across 19 cities, the property giant said on Wednesday. This is the largest number of new properties clinched in the first five months of any year, CapitaLand said. The number of units secured has also doubled compared with the same period a year ago. Through the new properties, Ascott will expand its geographical reach into four new major cities in China, Indonesia and Morocco. In China, it will enter Zhengzhou, the capital of Henan province, and Nanchang, the capital and largest city of Jiangxi province. The company will also enter Jayapura, the capital and largest city of Indonesia's Papua province, as well as Casablanca, the largest city of Morocco. The 25 new properties have been secured under management contracts, franchise contracts, and a lease. They will open in phases between 2020 and 2024. Kevin Goh, CapitaLand's chief executive officer (CEO) for lodging and Ascott's CEO, said Ascott has a strong base of long-stay guests, which has enabled its serviced residences globally to maintain robust average occupancy rates. "We have already taken steps to ready Ascott to be the accommodation of choice in a post-Covid-19 landscape and will continue to cement Ascott's position as a dominant lodging player and deliver more value for our guests and business partners, "he added. This year, Ascott opened six new properties in Singapore, Changsha and Tianjin in China, Gold Coast in Australia, Osaka in Japan, and Tours in France. CapitaLand shares closed at S$3.03 on Tuesday, up S$0.07 or 2.4 per cent.

Source: Straits Times
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New private home sales up 75% in May from April, but down 49% from a year ago

Developers in Singapore sold 486 non-landed private homes in May, up 75 per cent from 277 private homes in April, despite a full month of the circuit breaker and a weaker economic outlook underscored by layoffs and wage cuts.But May's sales does not mean the property market is near recovery or back to normal as evidenced by a nearly 49 per cent plunge in new home sales from 952 a year ago. Developers were expected to launch between 40 and 50 new projects this year but, so far, only 12 have been launched. Fewer new private homes were launched for sale: 615 in May, slightly lower than 640 units in April, and down nearly 56 per cent from 1,394 a year ago. The figures, released by the Urban Redevelopment Authority on Monday (June 15), exclude executive condominium (EC) units, which are a public-private housing hybrid. There were no new EC projects launched in May. New sales were propped up mainly by Treasure at Tampines, Parc Clematis, The Florence Residences, Parc Esta and JadeScape. May's sales appear to be largely driven by locals and investors, noted Ms Christine Sun, OrangeTee & Tie's head of research and consultancy. According to URA Realis data on Monday, the number of non-landed homes bought by Singaporeans jumped 81.1 per cent to 402 units last month from 222 units in April. Purchases by foreigners also strengthened, with the number of non-landed new homes bought by Singapore permanent residents and non-permanent residents rising 71.4 per cent to 72 units in May from 42 units in April . There are also some encouraging signs in June's new home sales numbers. According to URA Realis data,155 new homes, excluding ECs, have already been sold in the first seven days this month, which is more than half the 277 units inked in April. As Singapore moves into the next phase of opening up, property sales may continue to be a hybrid of physical and online viewing of show galleries, Mr Lee Sze Teck, Huttons Asia, director for research, said.

Source: Straits Times
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China home prices rise most in six months as economy reopens

China's home prices rose at the fastest pace in six months in May, as the property market continues its rapid recovery from the coronavirus shutdowns. New-home prices in 70 major cities, excluding state-subsidised housing, increased 0.49 per cent last month, National Bureau of Statistics data released Monday (June 15) showed. That's up from a 0.42 per cent gain in April. Values in the secondary market, which is largely free from government intervention, gained 0.24 per cent, the fastest pace in seven months. Interest in property is rekindling as China returns to business-as-usual, with prices rising across small, medium and large cities. And with the central bank opening the taps on credit to support the economy, housing is again seen as a safe place to store wealth. Discounts, more support from local governments and a surge in supply since the virus was brought under control have also boosted demand. Residential sales last month exceeded pre-virus levels in almost half of the 28 cities monitored by China Real Estate Information Corp, and hit a two-year high in cities such as Shanghai and Hangzhou. Even so, analysts are split on the outlook for the rest of the year. Mr John Lam, head of China real estate research at UBS Group AG, expects prices to hold broadly stable on a more positive funding environment for developers, which reduces the need to cut prices to boost cashflow. For Macquarie Securities Ltd's Larry Hu, "property is the wild card this year." While price momentum is holding up well in larger cities, values in smaller cities are under more pressure, he said.

Source: Straits Times
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Rents may weaken further even as rental volume bottoms out

The volume of private apartments and Housing Board flats rented may have bottomed out in the second month of the circuit breaker, but rents could continue to weaken, market observers said in response to flash data released by real estate portal SRX Property yesterday.The number of non-landed private homes leased rose by 1 per cent to 2,881 units last month from 2,853 in April, SRX data showed. Last month's rental volume for these private flats was still 45.7 per cent lower than a year ago, and 38.8 per cent off the five-year average volume for the month. In the HDB rental market, the number of flats leased fell 4.2 per cent to 1,147 last month, from 1,197 in April. HDB rental volumes last month were down by 45.1 per cent from a year ago. They were also 42 per cent lower than the five-year average volume for the month. Of those leased in May,35.3 per cent were four-room flats,33.5 per cent were three-room units,25.8 per cent were five-room units, and 5.4 per cent were executive flats. The low leasing numbers are the result of the circuit breaker in April and May, which put a lid on the transaction volume in both the HDB and private residential leasing markets, said ERA Realty head of research and consultancy Nicholas Mak. Still, transactions continued to be inked even though prospective tenants could not view the properties offered for lease in person, he noted."This is because, compared with property buyers, tenants are open to leasing properties through viewing photos and video clips of the properties on leasing websites, as most leases are only for one to two years." He added:"The cost of renting an unsuitable property is lighter than buying an unsuitable property. If the tenant does not like the property, he could move to another property at the end of the lease." In the private rental market, rents last month dipped 1.4 per cent from April. "Landlords were probably more eager to secure tenants for their properties in this uncertain period even if it meant lowering the rentals, "said Mr Mak. Year on year, private rents last month were at the level they were in May last year, but are down 17.3 per cent from their peak in January 2013. For the HDB rental market, SRX data shows rents last month fell by 1.3 per cent from April. Year on year, HDB rents fell by 0.8 per cent and were down 15.6 per cent from their peak in August 2013. Looking ahead, Ms Christine Sun, Orange Tee & Tie's head of research and consultancy, said:"The rental situation may improve when travel restrictions are gradually eased and house viewings permitted as our economy continues to reopen. "That said, the rental market may face some challenges ahead as the hiring outlook is increasingly cautious amid the growing economic headwinds." Mr Mak said that with continued restrictions on the viewing of properties, the leasing transaction volume this month is likely to remain at about the same level as in April and May. When the restrictions are lifted, rental volume will jump as some tenants may be waiting to move to another home, he added. Yet, some leasing demand could be lost as some foreigners become jobless and leave Singapore. Mr Mak consequently predicts that leasing demand this year for both private apartments and HDB flats could drop by 2 per cent to 4 per cent.

Source: Straits Times
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New private home sales rebound in May despite virus curbs

75% rise comes even as show-flats were shut, in-person viewing of property was prohibitedNew private home sales rebounded last month from April, even as Singapore was in the second month of its Covid-19 circuit breaker.Developers in Singapore sold 484 new private homes last month, going by sale caveats, Knight Frank Singapore said yesterday. This is 74.7 per cent more than the 277 new private homes they sold in April. A total of 967 caveats for private homes were lodged during the circuit breaker from April 7 to June 1, said Knight Frank. Of these,577 were new sales, while 380 were resale transactions and the remaining 10 were sub-sales. This comes even as show-flats were closed and in-person property viewing was curbed during the circuit breaker as strict safe distancing measures were in place. Mr Leonard Tay, head of research at Knight Frank Singapore, said:"The sales volume of new homes dominated private residential transactions in May. Despite the restrictions on physical interaction, there is life yet for the real estate market." He said new home buyers have shown"a degree of adjustment and adaptation to the prevailing circumstances" amid the pandemic. "It could be that many of these new home buyers who sealed the deal in May had already been to the show-flats prior to the circuit breaker, and weeks thereafter of staying at home helped in some measure towards a decision-making purchase, "he said. "It could be that other buyers were confident enough to make a purchase with only the aid of online visuals and information." While new private home sales last month surged over that of April, they were still down 49 per cent from a year ago when developers sold 952 units, according to Urban Redevelopment Authority (URA) data. Overall monthly demand for both new and resold private homes was down in April and last month, compared with the first quarter of this year, which accounted for a total of 4,162 caveats - or an estimated monthly average of 1,387 caveats. Still, numbers for last month were slightly more promising than April's. There were 643 transactions last month, up 2.6 per cent from the 627 in April. Ms Christine Sun, head of research and consultancy at OrangeTee and Tie, noted that over 90 per cent of new homes sold last month were located in the outside central region (OCR) and the rest of central region (RCR). ADAPTING TO CIRCUMSTANCES It could be that many of these new home buyers who sealed the deal in May had already been to the show-flats prior to the circuit breaker, and weeks thereafter of staying at home helped in some measure towards a decision-making purchase. It could be that other buyers were confident enough to make a purchase with only the aid of online visuals and information. MR LEONARD TAY, head of research at Knight Frank Singapore, on possible reasons for the sales rebound. This is a reversal from April, when new homes in the core central region accounted for more than a third of all sales. On why sales in the mass market segment picked up last month, Ms Sun said:"Possibly some buyers decided to enter the market after reading reports that wealthy investors have been streaming into Singapore's market lately, and the price quantum of homes in OCR and RCR are more affordable for these buyers." The top three best-selling projects last month were Treasures at Tampines (56 units), Parc Clematis (55 units) and The Florence Residences (54 units). The URA is due to release its data on sales and launches of new private homes and executive condominiums next week.

Source: Straits Times
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Singapore new private home sales surged 75% in May over April's low despite circuit breaker: Knight Frank

New private home sales rebounded in May from April, even as Singapore was in the second month of its Covid-19 circuit breaker period.Developers in Singapore sold 484 private homes in May, going by sale caveats, Knight Frank Singapore said on Wednesday (June 10). This is 74.7 per cent more than the 277 private homes sold by developers in April. A total of 967 caveats for new private homes were lodged during the circuit breaker period from April 7 to June 1, said Knight Frank Singapore. Of these,577 were new sales, while 380 were resale transactions and the remaining 10 were sub-sales. This comes even as show flats were closed and in-person property viewing was curbed as strict safe distancing measures were in place. Mr Leonard Tay, head of research at Knight Frank Singapore, said:"The sales volume of new homes dominated private residential transactions in May. Despite the restrictions on physical interaction, there is life yet for the real estate market." Mr Tay added that new home buyers have shown"a degree of adjustment and adaptation to the prevailing circumstances"amid a pandemic. "It could be that many of these new home buyers who sealed the deal in May had already been to the show flats prior to the circuit breaker, and weeks thereafter of staying at home helped in some measure towards a decision-making purchase, "he said. "It could be that other buyers were confident enough to make a purchase with only the aid of online visuals and information." While May's new private home sales surged over April, they were still down 49 per cent from a year ago when developers sold 952 units, according to Urban Redevelopment Authority (URA) data. Overall monthly demand for both new and resold private homes was down in April and May, compared with the first quarter of this year, which accounted for a total of 4,162 caveats - or an estimated monthly average of 1,387 caveats. Still, numbers for May were slightly more promising than April's. Last month saw 643 transactions, up slightly by 2.6 per cent compared with the 627 in April. Ms Christine Sun, head of research and consultancy at OrangeTee and Tie, noted that over 90 per cent of new homes sold were located in the outside central region (OCR) and rest of central region (RCR). It is a reversal from April, when new homes in core central region (CCR) accounted for over a third of all sales. On why sales in the mass market segment picked up in May, Ms Sun said: "Possibly some investors have decided to enter the market after having read reports that wealthy investors are streaming into Singapore's market lately and that the price quantum of homes in OCR and RCR are more affordable for these buyers." The top three best-selling projects in May were Treasures at Tampines (56 units), Parc Clematis (55 units) and The Florence Residences (54 units). URA is due to release its data on sales and launches of new private homes and executive condominiums next week.

Source: Straits Times
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Condo, HDB rental volumes may be bottoming out but rents could soften further

The volume of private apartments and Housing Board flats rented may have bottomed out in the second month of the circuit breaker period but rents could continue to weaken, market observers said in response to flash data released by real estate portal SRX Property on Wednesday (June 10).The number of non-landed private homes leased increased by 1 per cent to 2,881 units in May from 2,853 in April, SRX data showed. May's rental volume for these private flats is still 45.7 per cent lower from a year ago, and 38.8 per cent off the five-year average volume for the month. Over in the HDB rental market, the number of flats leased fell last month by 4.2 per cent to 1,147 flats, compared with 1,197 in April. HDB rental volumes in May were down by 45.1 per cent from a year ago. They were also 42 per cent lower than the five-year average volume for the month. Of these leasing in May,35.3 per cent are for four-room flats,33.5 per cent for three-room units,25.8 per cent for five-room units, and 5.4 per cent for executive flats. The low leasing numbers are the result of the extension of the circuit breaker from April to May, which put a lid on the transaction volume in both the HDB and private residential leasing markets, said ERA Realty head of research and consultancy Nicholas Mak. Yet Mr Mak noted that transactions continue to be inked even though prospective tenants could not visit to view properties offered for lease. "This is because compared to property buyers, tenants are open to leasing properties through viewing photos and video clips of the properties on leasing websites, as most leases are only for one to two years, "he said. "The cost of renting an unsuitable property is lighter than buying an unsuitable property. If the tenant does not like the property, he could move to another property at the end of the lease, "he added. In the private rental market, rents in May dipped 1.4 per cent from April. "Landlords were probably more eager to secure tenants for their properties in this uncertain period even if it means lowering the rentals, "said Mr Mak. Year on year, private rents in May are the level they were in May 2019, but are down 17.3 per cent from their peak in January 2013. For the HDB rental market, SRX data showed that rents in May fell by 1.3 per cent from April. Year on year, HDB rents fell by 0.8 per cent and were 15.6 per cent down from their peak in August 2013. Looking ahead, observers said the rental market may improve once restrictions are reduced, but progress might be dampened by the economic outlook. Ms Christine Sun, Orange Tee & Tie's head of research and consultancy, said:"The rental situation may improve when travel restrictions are gradually eased and house viewings permitted as our economy continues to reopen. "That said, the rental market may face some challenges ahead as the hiring outlook is increasingly cautious amid the growing economic headwinds." Mr Mak said that since restrictions on viewing properties remain in place, the leasing transaction volume in June is likely to remain at about the same level as in April and May. He added that when the restrictions are eventually lifted, there will be a jump in the rental volume as some tenants may be waiting for the chance to move homes. Yet some leasing demand could also be lost as some foreigners leave Singapore, such as those who have lost their jobs here. As a result, Mr Mak predicts leasing demand this year for both private apartments and HDB flats could drop by 2 to 4 per cent.

Source: Straits Times
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Beach Road site up for collective sale with $90m reserve price

A small Beach Road site is up for collective sale at a reserve price of $90 million. The plot of 698.9 sq m (7,523 sq ft) is at the junction of Beach Road and Liang Seah Street and has a 999-year leasehold tenure effective from Jan 25,1827. The six-storey, mixed-use development comprises retail, office and residential units, and is near Bugis MRT interchange station and the upcoming Guoco Midtown, which is under construction. It has a gross floor area (GFA) of 3,515.89 sq m (equivalent to a gross plot ratio of 5.03), Cushman & Wakefield said yesterday. The Urban Redevelopment Authority has provided two allowable developments. The first option is a"commercial"zoning at a gross plot ratio of 4.2 and an equivalent GFA of 2,935.38 sq m. The second is to build with a"residential/commercial"zoning at the current gross plot ratio of 5.03. The reserve price indicates the land rate of $2,848 per square foot per plot ratio (psf ppr) with no development charge due for the full commercial option, and a land rate of $2,394 psf ppr for the second option, subject to a successful rezoning, Cushman & Wakefield said. The allowable building height for both options is up to six storeys. Ms Christina Sim, director of capital markets at Cushman & Wakefield, said:"Investor demand for such bite-sized assets in this vicinity has been on the rise. "As this locality matures into a full-fledged work-live-play hub, asset prices are expected to rise." The tender for 101 Beach Road closes at 3pm on July 22.

Source: Straits Times
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