Prices down, volume up for non-landed private property and HDBs, Pasir Ris’ Coco Palms ready for strong launch, Newly privatised Serangoon North HUDC estate face challenging en bloc, Local real estate investment remains cautious, while foreign assets are in demand
Prices down, volume up for non-landed private property and HDBs
The Singapore Real Estate Exchange (SRX) reported that April resale prices of non-landed private property reached the lowest point of the past 16 months, while achieving the highest resale volume since October 2013. The HDB resale market also saw a higher volume, with 1,484 HDB flats resold in April, a 4.4% increase from March, along with a slight decrease in prices.
Overall resale prices of non-landed private property dropped by 1.7% in April, led by 3.6% and 2.3% drops for the Rest of Central Region (RCR) and Core of Central Region (CCR) respectively. Outside of Central Region (OCR) bucked the trend, with prices up 0.4%. Resale volume grew 24.6% month-on-month to 476 transactions, but dropped 26.7% on a year-on-year basis.
April rental volume for non-landed private property increased, delivering 3,202 transactions, a 9.8% growth compared to the same month last year. Rents crept up by 0.2%, after a 27-month low in March, mainly led by a 0.5% increase in the RCR, while prices in the CCR and OCR continued dropping, by 0.6% and 0.2% respectively.
On the HDB resale market front, prices dropped 0.2% compared to March, and prices of 3, 4, and 5-room flats decreased of 0.2%, 0.8% and 0.4% respectively. Executive flats saw increases, priced 1.2% higher than March. On a year-on-year basis, HDB resale prices shrunk by 5% compared to April last year. In a report by Today, ERA Key Executive Officer Eugene Lim projected a decline in HDB resale prices of 5% to 8% for the year. Nicholas Mak, Executive Director of Research and Consultancy at SLP International Property Consultants, estimated a gradual recovery in resale volume of up to 1,600 transactions per month, with prices remaining flat through the year.
Pasir Ris’ Coco Palms ready for strong launch on 17 May
City Developments Limited (CDL), Hong Leong Holdings Limited and Hong Realty Private Limited are expecting a strong start to the launch of their newest joint project, Coco Palms, on 17th May, after a successful show flat preview recorded more than 3,000 visitors on the first weekend. The 12-block resort-themed condominium, located within five-minutes of Pasir Ris MRT station, offers 944 units of one- to five- bedroom apartments, dual key units and penthouses. Sizes range from 463 to 3,111 square feet, with prices starting at $498,000 for a one-bedroom unit.
CDL successfully launched its Commonwealth Towers project earlier this month and has sold two-thirds of the 400 units released so far. Like Coco Palms, Commonwealth Towers is within minutes of the Queenstown MRT. In spite of the positive uptake, CDL expects the residential market to perform moderately compared to the peak of the property cycle, and has reported a decline in 1Q net profit and revenue of 13% and 5% respectively.
Newly privatised Serangoon North HUDC estate face challenging en bloc
The recently privatised Serangoon North HUDC estate is part of the Government’s effort to meet the rising aspirations of Singaporeans to own private housing, enabling the owners to have better control over the management and maintenance of their estate. The privatisation, achieved through a 75% majority support and initiated by its residents, also paves the way for a potential en bloc sale of the seven blocks of apartments involved – Block 128, 129, 130, 131, 132, 133, and 134 Serangoon North Avenue 1. In a report by Today, Nicholas Mak, Executive Director of Research and Consultancy at SLP International Property Consultants noted that a collective sale in the current housing climate could prove tough, and these flat owners should be patient.
Local real estate investment remains cautious, while foreign assets are in demand
1Q 2014 property investment sales in Singapore reached S$3.94billion, a 1.4% increase from the previous quarter, but was one of the slowest quarters since 4Q 2009. According to Savills, the property investment climate will be challenging, given the market slowdown due to the cooling measures and the historically high capital values.
The executive condominium sector performed unusually well in the cautious climate however, with tenders of some sites attracting up to 12 bids. As a result, investment sales in the residential segment increased by an impressive 167.8% compared to the previous quarter. Savills expects developers to continue replenishing their land banks, but to exercise more discretion in their decisions.
Developers and investors are also increasingly looking towards acquiring foreign assets. Rising demand for foreign property by local property investors, who “can be aggressive in buying when the numbers are right […] will last until early next year or when foreign exchange rate becomes unfavourable or interest rates rise,” said Jeffrey Ning, Assistant Associate Manager of Singapore-based agency, OrangeTee.com, in an interview with OPP Connect. He added that demand will continue for foreign property loans, but advised investors to exercise sound financial planning to reap the benefits of their foreign investments.