Week in Review – 18 September 2014

HDB – upgrading for older towns; stay longer in flats, Highline Residences launch sells well, Causeway toll hike may affect Iskandar, Singapore private home sales fall 15% in August
HDB – upgrading for older towns; stay longer in flats 
Upgrading programmes by the Housing and Development Board (HDB) will see state-of-the-art design and technology involving innovative facilities introduced to both new and old HDB towns. This will accelerate the Home Improvement Programme (HIP), raising the number of flats upgraded from 35,000 to 50,000 a year. Minister for National Development Mr Khaw Boon Wan stated, during the HDB Awards Dinner, that a new Selective Lift Replacement Programme will be launched to replace 750 lifts in Choa Chu Kang and Pasir Ris towns, to “progressively better HDB towns”.
Following the implementation of a temporary “extension of stay” in July, HDB received 176 August requests from flat sellers looking to extend the stay in their flats. The extension permits flat sellers to stay in their existing flats for up to three months, in the event of renovations, or while waiting for funds to be received from their flat sale. According to HDB, an estimated 2,700 households a year will benefit from the newly implemented rule. 
Highline Residences launch sells well
Following the launch of 160 Highline Residences units, situated in Tiong Bahru, Keppel Land reported strong sales, with more than 80 per cent sold. According to brokerage firm OSK-DMG, “the positive response is supported by: i) the low new stock supply within the Tiong Bahru’s vicinity – the last was four years ago; ii) reasonable pricing. The average pricing was $1,900 psf, a more than five per cent premium to Wing Tai’s The Crest; iii) location – one of the most prime locations in Singapore. The project is a mere five minutes’ walk from Tiong Bahru MRT station. OSK-DMG thinks that Keppel Land will continue to draw more buyers to Highline Residence and will soon release its remaining units to the market.” 
Despite Highline Residences’ positive start, DBS noted in the Singapore Business Review “that this does not signal a turn in sentiments for Singapore property” and “demand remains selective”. DBS noted that Highline Residences saw strong demand compared to other property projects, due to its location and being close to amenities and the Tiong Bahru MRT station. Analysts also expect new executive condominium (EC) launches to give the property market a boost. However, Mr Li Jun, General Manager at Qingjian Realty commented that “the strong sell-out demand is not coming back. Now, the market is in a more stable state and it will take a longer time to sell EC units.”
Causeway toll hike may affect Iskandar
Following the toll hike at the Malaysian Customs, Immigration and Quarantine (CIQ) Complex at the Johor Causeway, Singapore will increase its toll charges at the Woodlands Causeway Checkpoint, starting October 1. The increase in toll charges will affect all motorists, except motorcyclists. Toll charges at the Second Link will not change. 
Mr Nur Jazlan Mohamed, Barisan National chief for Pulai, expressed concerns in a Today interview that toll increases may deter Singaporeans from setting up businesses in Iskandar Malaysia.  Nevertheless, economists commented to Today that the impact on Singapore and Malaysia’s economies would be minimal, as they expect commuters and businesses will adjust to the increase in costs.  CIMB Economist Song Seng Wun said, “In the short term, if trips to and fro can’t be avoided, it’s more likely costs will be passed on to consumers…Businesses will have to take this into account in the bigger scheme of things, but I don’t think it’s such an important factor to dissuade them either way.”
Singapore private home sales fall 15% in August
The month of August has seen the lowest point in new sales for private homes this year. The Urban Redevelopment Authority (URA) reported 432 new private homes sold in August – 15.1 per cent less that in July and the lowest number since December 2013. Developer launches also decreased to 351 private homes, from 441 private homes. Analysts told Today that the fall in sales and launches were expected, due to negative consumer sentiment around the cooling measures. 
The most active area was the Outside Central Region (OCR), brought about by the sale of 40 units at Wheelock Properties’ The Panorama, in Ang Mo Kio, and 23 units at Coco Palms in Pasir Ris Grove. 
Despite the weak sales levels in August, analysts and consultants are hopeful that developers will increase market launches over the next two months. Developers could be encouraged to launch new projects with the positive sales at The Highline Residences and Marina One Residences. Mr Nicholas Mak, Executive Director at SLP International Property Consultants, predicts sales of between 8,300 and 9,100 units for 2014. 
Sentosa home prices are likely to see price corrections as well, according to Maybank Kim Eng, especially for higher-priced projects such as Turquoise. While prices of homes sold since 2013 have dropped by at least five to 21 per cent, projects such as Turquoise may see greater losses as a result of its higher launch price, S$2,605 per square foot (psf), when compared to earlier launched projects such as The Oceanfront at S$1,360 psf and The Coast at S$1,592 psf.