Week in Review – 22 July 2016

Local Property News
Lack of new major project launches reduces new home sales by half
Developer sales in June decreased by almost half (49.3 per cent) with 536 homes sold, compared to the 1,058 units sold in May, according to Urban Redevelopment Authority (URA) data. The dip in sales was attributed to a lack of major development launches, as well as June being a seasonal lull month. Development launches fell 82.6 per cent month-on-month from 1,345 homes in May to 234 homes in June. The number of homes launched in June increased 6.8 per cent year-on-year, when compared to 219 homes launched in June last year. A year-on-year comparison of sales figures also showed a 42.9 per cent increase in the total number of units sold in June this year, with only 375 units sold last June.
The bestseller in June was Kingsford Waterbay. The Upper Serangoon View development sold 34 homes with a median price of S$1,185 psf. Prospective buyers can look forward to the launching of Parc Riveria at West Coast and Lake Grande in the Jurong Lake District in the next few months. 
Despite the month-on-month decline in new home sales in June, analysts remain optimistic about the residential property market. Mr Desmond Sim, the Head of CBRE Research in Singapore and Southeast Asia, told TODAY that the market was slowly stabilising and home buyers were purchasing resale homes due to the lack of new launches. He also hinted at a looming bottoming out of the market. 
NCS-led consortium to implement Smart Habitat plan
The Housing and Development Board (HDB) will be rolling out a Smart Urban Habitat Master Plan (SUHMP) to provide guidelines for future development of new towns by partnering with a consortium led by NCS, along with AECOM, Arup Singapore, and Samsung SDS Asia Pacific. 
Eco-friendly and smart features will be implemented by the consortium using the Smart Hub. Based on NCS’s IntelliSURF platform, the Hub will also be used to analyse data received to generate recommendations for HDB on estate management, to reduce resources wasted, and for better energy conservation. According to NCS, the Smart Hub will be scaling up to over 1,000 HDB blocks starting from 2017. 

Persistent fall in private home prices but sales show improvement
CIMB analysts have indicated in a report that private home prices will continue falling and experience a five to eight per cent correction in 2016. The report states that price falls outside of the central region have led to a 0.7 per cent quarter-on-quarter decline in the prices of private homes in Q2 2016. Developers are also likely to lower prices to clear inventory as the Qualifying Certificate and Additional Buyer’s Stamp Duty penalties increase in 2017, thus dragging prices down further. 
While prices have fallen, OrangeTee Research has reported that sales numbers have improved. May 2016 recorded the highest developer sales since July 2015 due to an increase in sales of both existing and new launches. Sales for the first five months of 2016 shows a 1.4 per cent increase compared to the same period in 2015, with healthy sales figures for existing units.
Treasure Crest EC sells over 70 per cent in opening weekend
There was strong demand for Sim Lian Group’s Treasure Crest executive condominium (EC), with over 70 per cent of units (362 of 504 units) sold over the first weekend of the launch. The Group indicated that all 56 four-bedroom units were sold over the weekend. These units averaging 1,345 square feet were sold for S$742 psf on average. Majority of the Treasure Crest EC buyers are first-time buyers, while remaining buyers consist of HDB upgraders. Twelve homes are still reserved for second-time home owners up until 16 August when they will be open to all other potential buyers.

HSR project may lead to property boom in terminus cities
The High-Speed Rail (HSR) connecting Singapore and Kuala Lumpur is slated for completion in 2026, which will reduce travel time between the two cities to 90 minutes compared to the usual four-hour journey by road. Analysts believe the HSR could lead to a property boom for the stop-point cities of Seremban, Ayer Keroh, Muar, Batu Pahat, and Iskandar Puteri in Malaysia, and especially for the terminus cities in Malaysia capital Kuala Lumpur, as well as Jurong East in Singapore. 
Mr Liow Tiong Lai, Malaysia’s Transport Minister, told TODAY that the HSR will boost the economy of both Malaysia and Singapore, and that transit-oriented projects will develop the stop-points along the HSR line. Mr Francis Tan, a UOB economist, told The Star that the HSR will provide opportunities for Singaporeans to invest in Malaysian homes, with more people capitalising on properties in Putrajaya, which lies 25km outside Kuala Lumpur, as well as homes near Bandar Malaysia terminus station due to them being mature towns. Mr Alan Cheong, the Research Head at Savills Singapore, told TODAY that local businesses may move to Kuala Lumpur, taking advantage of the weaker Malaysian currency to save on operating costs. Yet, Mr Ku Swee Yong, Chief Executive of Century 21, cautions that the intermediate stop-points may get passed over and irrelevant if they remain underdeveloped. 
Whether people will end up investing in Malaysian properties depends on the political and economic climate in Malaysia, Mr Song Seng Wun, CIMB Private Bank Economist, told TODAY. Mr Francis Tan added that the pricing of the HSR tickets will also play a big role in deciding if HSR will be the preferred travel mode for Malaysians and Singaporeans.
Global Property News

Canadian home sales dropped in June, prices continue rising
Canadian home transactions fell 0.9 per cent month-on-month in June for the second straight month, according to statistics from the Canadian Real Estate Association. Home prices are not coming down, however, with the average home price rising 11.2 per cent annually to C$503,301. There was a 2.2 per cent month-on-month increase in newly listed homes in June, bringing the national sales-to-new listings ratio down to 63.3 per cent from 65.3 per cent the month before. A ratio in the range of 40 to 60 per cent is an indication of a balanced home property markets. The Aggregate Composite MLS Benchmark price grew by an annual 13.6 per cent to C$564,700 in June 2016, its biggest jump since December 2006 almost a decade ago. Prices in nine of 11 markets tracked by MLS HPI experienced annual increases, but the price growth was not universal, with the largest growers – The Fraser Valley and Great Vancouver — seeing prices rise an annual 35.55 and 32.1 per cent respectively.

Survey: HNWI in Asia shunning property and local stocks
An East & Partners Asia survey of executives from the top 100 firms in China, Taiwan, Hong Kong, Singapore, Indonesia, Malaysia, the Philippines, India, Thailand, and South Korea revealed that high net worth individuals (HNWI) in Asia are shifting away from property and local stocks as investment sources. While typically seen as an important investment asset, property as a share of the investment portfolios of Asian HNWIs fell to 32.3 per cent from 40 per cent three years before. Asian HNWIs have moved towards foreign stocks and alternative assets – alternative assets rose from eight per cent in 2013 to an average of 15.1 per cent of their portfolios today.
HNWIs are turning more to private bankers and financial advisors for investment and wealth management, with less than half of Asian HNWIs managing their own wealth, compared to almost 70 per cent three years ago. More than 10 per cent of them engage a financial advisor, compared to a mere 3.8 per cent in 2013.

London struggling to sell homes
According to Barclays Plc Analyst Mr Jon Bell, a weakening economy may cause the value of residential property in London to drop as much as 10 per cent in 2017 and UK developer sales to dip five per cent, further increasing competition between developers. This comes as a record 5,655 new homes were added to the market in Q2 2016, a record high since data from Molior London was collected in 2009. Another 35,000 new luxury homes worth approximately £77 billion are due for completion in the next 10 years, a 40 per cent increase from 2014. Sales of new London homes dropped by 34 per cent year-on-year, from 6,974 in Q2 2015 to approximately 4,600 homes in Q2 2016, as fears and uncertainty mounted amid the Brexit vote. In response, London home developers are resorting to offering incentives to buyers such as discounts for owner-occupiers, payment for buy-to-let stamp duty taxes, £20,000 worth of furniture, and the chance to get free parking lots.