Buyers and developers cautious in apprehension-filled property market
In the uncertain property situation, players are as good as cautious chess masters, each awaiting the other’s move before deciding their next strategy. Developers are holding back new non-landed private homes, launching only 434 units in July, slightly higher than the 418 units in June. Barclays noted in a recent report that there is a “rising risk of unsold inventory, across both high- and low-end segments”. Sales figures remained stagnant month-on-month and year-on-year, with only 484 units sold in July. In each of June 2014 and July 2013, 482 units were sold. In a Today interview, property agency ERA’s Key Executive Officer Eugene Lim said, “The low number of launches resulted in low sales. Developers are trying to clear their current stocks instead of launching new projects in a market where sentiment is low due to cooling measures and loan curbs that have affected buyer demand.”
Specific to Sentosa, part of the Core Central Region (CCR), sales volume of non-landed homes have fallen, from 71 units in 2012, to 34 in 2013 and 10 so far in 2014. Prices lowered to under valuation have however, seen a positive take up. A penthouse unit at The Berth By The Cove was sold at a cheap price (by Sentosa Cove standards), of approximately $1,150 per sq ft (psf), while resale units at Turquoise and The Oceanfront were successfully sold at $1,500 psf and $1,600 psf respectively. Analysts commented on Channel NewsAsia that weaker property markets in District 1 and 4 are “putting a drag on the CCR”. Contrary to weakening sales, Barclays reported a surge of sales of 91 per cent in District 9 and 10, as prices dropped as much as 20 per cent. Units at The Vermont in Cairnhill were fully sold when the median selling price was lowered by about nine per cent while 63 per cent of units at Hallmark Residences, off Bukit Timah Road, were sold when prices were lowered by 14 to 20 per cent.
Developments in the Rest of Central Region (RCR) continue to remain popular and accounted for 46.1 per cent of new private home transactions and most of the new launches by developers. The 311-unit City Gate was one of the top-selling projects, with 89 units sold, while Commonwealth Towers sold 78 per cent of the units released.
City Developments Limited (CDL) highlighted the potential of panic selling should sales volumes and prices continue to fall. “The general trend in a downturn cycle is that residential sales volume will start to fall and prices will dip slightly, leading to a more acute downward pressure, with spiralling effects, as panic selling or forced sales seep in. This applies across all segments of the residential property market,” said Executive Chairman of CDL Kwek Leng Beng to Today.
URA continues residential site launches and tender awards amidst weakening market
Even as the property market weakens, the Urban Redevelopment Authority (URA) continues to release residential sites for sale to “provide home buyers with more choices for private housing”. This week, URA announced the launch of a residential site at Lorong Puntong and an Executive Condominium site at Sembawang Road / Canberra Link, under the second half Government Land Sales (GLS) Programme. The two sites are estimated to yield about 900 residential units.
Developers continued to show interest in newly launched sites. A 99-year leasehold commercial and residential site at Meyappa Chettiar Road, released from the GLS Confirmed List, attracted 15 bids. Analysts who spoke to Today felt developers showed restraint, noting that the top bid, made by MCC Land (Singapore), was within expectations. MCC Land (Singapore) submitted a bid of $471.6 million. The site can yield an estimated 685 homes and 53,820sqf of commercial space, and is located near the Potong Pasir MRT Station. Mr Ku Swee Yong, Chief Executive of property agency Century 21 told Today that he estimates the break-even price for the project to be $1,200psf and the selling prices of homes to be $1,400psf.
Jurong to be less industrial with more greenery in store
In his National Day Rally Speech last weekend, Prime Minister Lee Hsien Loong announced plans for the integration of the Japanese Garden and the Chinese Garden with Jurong Lake Park, creating the Jurong Lake Gardens. The Jurong Lake District has seen an increase in commercial activity in the Jurong Gateway precinct, with the openings of shopping mall Westgate and institutes such as the Devan Nair Institute for Employment and Employability and the National Continuing Education and Training campus. The new Science Centre Singapore will be located in the Gardens in 2020 and more Housing and Development Board (HDB) flats are planned for the north and south of the precinct. Residents and commuters travelling to the area will also be served by new MRT lines – the Jurong Region Line by 2025 and Cross Island Line by 2030.