Week in Review – 20 November 2014

Property market picks up in October, Marina One Residences sees strong launch, Increase in supply causes vacancy rates to rise, Spike in luxury home mortgages, Two GLS sites in Yishun and Sengkang released for bidding 
Property market picks up in October
According to the Urban Redevelopment Authority (URA), private property developers have sold 765 units in October – an 18 per cent increase from September sales. The number of launches also increased from 514 units in September to 649 units in October. However, sales figures for October have seen a 31 per cent drop based on a year on year comparison with October 2013. The Core Central Region (CCR) recorded the most number of transactions with 381 units sold, while the Rest of Central Region (RCR) and Outside Central Region (OCR) saw 123 units and 261 units sold respectively. 
Despite the lack of new executive condominium (EC) launches, 90 EC units were sold in October, a 52.5 per cent increase from September and the highest volume of sales this year. The best-selling EC project was Forestville at Woodlands Drive 16, whereby 30 units were sold at a median price of S$737 per square foot (psf). The EC market is expected to see more activity in the coming months with the launch of Lake Life, Bellewoods and Bellewaters in November, analysts said to TODAY.
Marina One Residences sees strong launch
Marina One Residences, a 1,042-unit integrated development located in the Marina Bay precinct managed to sell 334 units out of 400 units at its launch. The median price was $2,228 per square foot (psf). Marina One is being developed by M+S, a joint venture by Temasek Holdings and Khazanah Nasional, and is part of a mixed-use project close to the Marina Bay Financial Centre. The project developers offered early buyers a ten per cent discount, bringing prices down to range from $1,960 to $3,100 psf.
The improvement in private non-landed sales in October was primarily driven by the strong sales at the launch of Marina One Residences. Mr Nicholas Mak, Executive Director at SLP International Property Consultants said to TODAY, “If Marina One Residences was taken out of the equation, the sales volume in October would be the lowest for the whole of 2014 … Therefore, there is still a long way to go for the local real estate market to be on the path of a firm and steady recovery.” 
Increase in supply causes vacancy rates to rise
Vacancy rates of executive condominiums (EC) are at its highest in more than five years, as a result of an influx of new EC units in the property market. According to the Urban Redevelopment Authority (URA), the percentage of vacant EC units has increased from 12.2 per cent to 16.2 per cent in Q3 2014. In addition, the HDB resale market is cooling down with HDB resale transactions declining from 25,094 in 2012, to 18,100 in 2013 and 12,683 as of Q3 2014 according to latest HDB statistics. 
Furthermore, private condominiums have also seen a 1.4 per cent increase in vacant units, with 21,569 units vacant in Q3 2014 – up from 21,268 in Q2 2014. However, the private residential vacancy rate remains unchanged for Q3 at 7.1 per cent quarter on quarter after five consecutive quarters of increase since Q2 2013, according to the Savills Residential Leasing Briefing. The number of EC completions is anticipated to be 2,845 in 2015, while 20,244 non-landed private residential units are in the pipeline for 2015.  
Spike in luxury home mortgages
Colliers International Singapore Research revealed to TODAY that 98 residential homes were put up for auction by banks within the first ten months of 2014 – five times the number of homes put up for auction in 2013. In addition, non-landed private homes in prominent residential neighbourhoods contributed to this year’s mortgagee listing, such as Reflections at Keppel Bay, Turquoise at Sentosa Cove, and Stevens Court at Stevens Road. More high-end home owners are finding it difficult to finance their monthly payments and dispose of their properties, thus leading to a sharp increase in mortgagee sales. Ms Grace Ng, Deputy Managing Director of Colliers International said to TODAY, “Amid the stricter regulatory and financing environment, borrowers in default are finding it difficult to sell their properties on their own, as buyers generally remain cautious.”
There has also been an increase in local bank non-performing loans (NPL), as a result of high-end home owners defaulting on mortgages. Analysts commented to TODAY that although the market has become unfavourable for high-end property owners, the increase in NPLs could be due to poor financial planning prior to the implementation of the cooling measures – Total Debt Servicing Ratio (TDSR).  
Two GLS sites in Yishun and Sengkang released for bidding 
The Housing and Development Board (HDB) announced that it would be releasing two new land parcels – an Executive Condominium site at Anchorvale Crescent in Sengkang and a mixed commercial-residential site at Yishun Avenue 4, for sale in November 2014. The EC site located in Sengkang covers 17,450 sq m, with a maximum gross floor area of 52,350 sq m. The Yishun site comprises 9,760 sq m, with a maximum gross floor area of 27,327 sq m. HDB revealed that the two sites are anticipated to yield approximately 700 residential units. Both land parcels are sold on a 99-year leasehold period. The closing dates for the tenders are 30 December 2014 for the Anchorvale Crescent EC site and 13 January 2015 for the Yishun Avenue 4 site.