Demand weakens but prices remain strong, Office sector continues strong growth, Majority opt for open kitchen concept
Demand weakens but prices remain strong
Demand for private residential properties in Singapore may be waning but property prices are staying strong. Private home transactions for the whole of 2014 are expected to reach a total of 7,500, only half of the total number recorded last year (14,948). Home prices on the other hand have wavered slightly, lowering by 0.7 per cent quarter-on-quarter up to Q3 2014. Analysts whom CNBC spoke to, believe that prices will stay resilient in 2015 when Singapore celebrates its 50th year of independence and when an election may be held. Ms Yvonne Voon, analyst at Credit Suisse commented that these events may see the government ensuring that prices are stable by maintaining or revising property cooling measures.
Private home sellers and developers may be well-placed to hold their ground where prices are concerned as property buyers continue to show interest, especially in properties with desirable qualities such as a centralised location. In October, an executive maisonette located at Bishan Street 13 was sold for over $1 million, while last month, two units at Ardmore Park Condominium located in Orchard were sold for over $2 million in profit.
Mr Eli Lee, analyst at OCBC, believes however that the upcoming supply of 159,000 new residential units in the next three years will bring prices down to approximately ten to 15 per cent in 2015 up to 2016. He said to CNBC, “We will likely see significant buyer demand coming into the market at lower price points”. Ms Jin Kaur, property agent at Century 21 added on, “”Buyers feel the market will come down so they are just waiting. Sales transactions have come down tremendously. I’ve been doing more rentals transactions than sales”.
Office sector continues strong growth
The mega-integrated development South Beach has achieved an occupancy rate of more than 80 per cent for its office space as of last week. Its 34-storey tall North Tower, which has a net lettable area of 500,000 square feet has a rent price of S$9 to S$12 per square foot per month. When interviewed by TODAY, Mr Aloysius Lee, Chief Executive of South Beach Consortium commented that these prices are considered stellar when compared to other Grade A offices which average between S$7.67 and S$10.27 based on a Savills report released on October. Jones Lang LaSalle (JLL) estimates that rental prices of office buildings situated at the Central Business District (CBD) will rise by 16 per cent and will moderate by the first half of 2015. The moderation of rental growth is expected due to the upcoming introduction of three million square feet of office space in 2016 and 2017. However industry players like Mr Warren Bishop, Chief Executive Officer of Raffles Quay Asset Management, comment that there is room for more sites in the CBD to be released by the Government. Mr Bishop said to Channel NewsAsia, “When you are talking about a site being released in 2015, it is unlikely to come to market until 2019-2020. We would probably see there is certainly room for the release of more land within the Marina Bay area. Looking at the longer term beyond 2018-2019, there will be consistent demand, what has been released is probably not going to be enough to meet that demand.”
Majority opt for open kitchen concept
Open kitchen concepts are favoured among Build-to-Order (BTO) flat buyers. About 60 per cent BTO buyers have opted for the feature for their homes since it was offered under the expanded Optional Component Scheme last year. This option was first introduced in the Teck Ghee Parkview flats for the BTO exercise in September 2012 and has since been applied to 30 BTO projects according to HDB. The concept was introduced to enable more flexibility for home buyers in planning their layout and design according to their lifestyles. The first batches of flats with this open kitchen concept are targeted for completion in Q1 2017.