Higher income ceilings will increase the number of households eligible to purchase public-housing, by 120,000 households. According to UOB Kay Hian, developers such as City Developments, Sim Lian, Chip Eng Seng, Koh Brothers, Heeton and Keong Hong will benefit from the adjustment. These developers are active in the Executive Condominium (EC) market, and will gain from an increased pool of buyers interested and eligible to purchase ECs.
Despite measures in place that could potentially affect mass private housing negatively, UOB Kay Hian expects public housing prices to stabilize the private residential property market given time. According to a report by UOB Kay Hian, “[near-term] negative impact on private-housing demand would be offset by long-term stabilisation effect. We believe the market has over-discounted the negative prospects for the sector. Besides, the demand from the newly eligible pool will first go to fill the gap created by the restrictions on permanent residents’ purchases before significantly affecting private housing demand”.
Housing Loans Drive Singapore Bank Lending in July
An increase in demand for property loans and for general commerce led to a rise in Singapore’s total bank lending for July. Bank lending in July amounted to S$610.4 billion- a 2.2 per cent growth compared to S$597.4 billion in July 2014. There was an increase of approximately S$1.3 billion in housing and bridging loans compared to June, amounting to S$181.6 billion. Comparing loan figures for July 2014 (S$172.6 billion) and July 2015 (S$181.6 billion), loans have risen by S$9 billion.
Collective Sale of Shunfu Ville
Situated in Bishan-Thomson, just 200m away from Marymount MRT station, Shunfu Ville is slated for a collective sale by tender. Built by former Housing and Urban Development Company (HUDC) in the late 1980s, it was privatised in 2013. The new project, as shared by Regional Director of Capital Markets at JLL Mr Tan Hong Boon, could possibly be the tallest residential building within its one km radius. Its proximity to the Singapore Island Country Club and MacRitchie Reservoir should provide a visual treat. In excess of 80 per cent of owners have signed in favour of the collective sale, and the estate is expected to fetch a minimum price of S$688 million. The tender exercise will close on 27 October.
UMLand Sees Opportunities in Serviced Apartments
United Malayan Land BHD (UMLand) is set to launch the Shama Medini serviced apartments, a component of UMCITY located in Medini Iskandar Malaysia, in October. UMCITY is a RM1.2 billion project due for completion by Q3 2018. Apart from Shama Medini, the development will include lakefront F&B outlets complemented with retail space, a top-tier office block, a 198-room OZO hotel, as well as Citadines, the branded serviced apartments. UMLand group CEO Datuk Charlie Chia Lui Meng told The Edge that owners will enjoy six per cent guaranteed rental return during the initial five years of the leaseback scheme. The subsequent five years provides a revenue-sharing model, where owners share 45 per cent of rental revenue. Units range from 583 sq. ft. to 2,015 sq. ft., and buyers have four layouts to choose from – studio, 1-bedroom, 2-bedroom and 3-bedroom. The selling price is an average RM 1,300psf.
According to UMLand Executive Director Mr Dennis Ng, there is demand in Iskandar Malaysia’s serviced apartment and hospitality segments, especially from long-stay tourists. Mr Ng told The Edge that serviced apartments also cater to an increasing number of tourists who travel in bigger groups. The depreciating ringgit has also led to Singapore tour agencies arranging for tourists to stay in Johor Bahru’s 4 and 5-star hotels, or alternatively in serviced apartments. Compared to accommodation in Singapore, it is cheaper by approximately three times.
CapitaLand Continues to Strengthen Presence in Malaysia
CapitaLand Ltd is looking to strengthen its presence in Malaysia, particularly in Kuala Lumpur, the Klang Valley and Penang. CapitaLand Commercial (M) Managing Director Mr Lim Wie Shan told The Star that the Malaysia real estate market remains viable due to trends such as an increasingly affluent population, a low level of unemployment, and growing household formation. The company’s most recent project genKL, a joint venture with Juta Asia, is located in Jalan Kuchai Lama, Kuala Lumpur. Mr Lim believes that the project’s good location and unique details will be well received.
According to founder and CEO of Moneysmart.sg, Vinod Nair, the Malaysian Ringgit’s weakening against the Singapore dollar provides Singaporeans with a window of opportunity for investment in Malaysian properties. As a result, Singaporeans with limited funds will find themselves able to purchase luxury properties in main Malaysian cities, including Kuala Lumpur, Petaling Jaya and Penang. Vinod believes that luxury condominium developments in the central business district of Kuala Lumpur, as well as upscale landed property areas of Bangsar and Damansara Heights, are amongst the best options for investment. As for properties in Iskandar Malaysia, Vinod believes that the measures such as deregulation and friendly tax laws are being taken in order to attract foreign buyers.
Colliers International’s Australian Investment Review states that the falling Australian dollar, together with low interest rates and a stable economy, have boosted foreign investment in the commercial property market across retail, industrial and office sectors in the 2014/2015 year. According to the report, Sydney is the third most popular destination for global offshore investors, behind London and Manhattan, and ahead of Shanghai and Paris.
Consultancy Plus Property believes that with 88 per cent occupancy and a return on rental amounting to five to seven per cent, the Phra Khanong-On Nut is an attractive option for the Bangkok condominium market. The area is also seeing a development in the trade and hospitality sectors, and rentals have risen to 450-600 baht per sq. m. With high occupancy rates, recent launches and more development projects, the Phra Khanong-On area is set to gain popularity.
Prices of condominiums within this area have increased 50 per cent since 2010. Currently, quality projects fetch up to 100,000 baht per sq. m, and rental rates are between 450-600 baht per sq. m. These figures are more competitive when compared to other zones situated in Bangkok, where the properties cost more, while fetching lower rental rates.
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