Week in Review – 5 February 2015

Oncoming 21,359 private homes in 2015, Real Estate Sentiment Index points to falling market sentiment, Singapore launches its first Islamic villa endowment development, URA Chief Planner explores decentralisation and underground space for Singapore, More shop owners flocking to heartland districts, driving up rentals, Plans for Sengkang’s columbarium cancelled
O ncoming 21,359 private homes in 2015
Savills reported that 75,188 private residential units are in the pipeline as at end 2014, of which 21,359 will be completed by the end of 2015. Of the supply, only 42,218 units (56.1 per cent) have been sold. New projects will continue to be released into the market, with a majority of the 2015 releases located in the Outside Central Region (OCR). Savills highlighted ten major property launches homebuyers should look out for – Botanique at Bartley, Kingsford Waterbay, North Park Residences, Symphony Suites, Marine Blue, Sims Urban Oasis, Parksuites, Pollen & Bleu, South Beach Residences and Victoria Park Villas.
Ms Grace Ng, Deputy Managing Director at Colliers International, recommends homebuyers purchase property now, in the face of rising interest rates. She told Singapore Business Review that home prices are expected to drop by another five to eight per cent in 2015, and homebuyers should buy while interest rates are still low.
Real Estate Sentiment Index points to falling market sentiment
NUS revealed its Real Estate Developers’ Association of Singapore (Redas) Real Estate Sentiment Index, showing a decline in overall market sentiment in Singapore. The index fell from 3.7 in Q3 2014 to 3.4 in Q4 2014, one of the lowest points over the past five years. Eight out of ten developers predicted that 2015 will have more foreclosures and mortgage sales. Most respondents believe that mortgage foreclosure and mortgages sales will increase by 15 percent and 20 percent respectively.
Singapore launches its first Islamic villa endowment development
Mr Yaacob Ibrahim, Minister-in-Charge of Muslim Affairs launched Alias Villas, the first Islamic endowment development with a villa concept, on 31 January. The cluster housing of six semi-detached strata landed units are located along Jalan Haji Alias off Sixth Avenue and are between 3,000 to 3,670 square feet each. Prices start from S$1,500 psf. Alias Villas was developed by Warees Investments, the investment arm of the Islamic Religious Council of Singapore (MUIS). Sales from its proceeds will go to the trust property’s sole beneficiary, Al-Huda Mosque, situated on the same plot of land.
Mr Yaacob praised the charitable efforts and said “Not only are we able to unlock the value but we have been able to unlock the value in a timely manner to benefit from the rising tide of Singapore.” The 99-year lease development is projected to be ready by Q3 2017.
URA Chief Planner explores decentralisation and underground space for Singapore
Mr Lim Eng Hwee, Chief Planner and Deputy Executive Officer of the Urban Redevelopment Authority (URA), spoke with Channel NewsAsia about URA’s plans and efforts to further decentralise business activities and commercial centres away from the city. He listed the Tampines regional centre and Changi Business Park as a twin hub to focus on major business and commercial activities, which would benefit from Changi Airport’s expansion. Mr Lim also discussed URA’s long-term planning for land use development, such as the port consolidation in Tuas, to free up space in Keppel and Pasir Panjang. In the interview, Mr Lim also outlined Singapore’s plans to develop underground space to create a “compact city”.
More shop owners flocking to heartland districts, driving up rentals
Rental rates for shops are rising rapidly in popular heartland areas in Singapore. Average rents have increased from S$4 to S$5 per square foot (psf) per month in 2010, to over S$8 psf now, according to Jones Lang LaSalle (JLL). Districts like Haji Lane, Tiong Bahru, Simon Road in Kovan and Tyrwhitt Road in Jalan Besar were listed by analysts as some of the neighbourhoods experiencing a surge in rental rates.
Gross median retail rents for non-mall space in established areas like Tiong Bahru and Haji Lane were at S$8.64 and S$6.50 psf per month respectively, while newer areas like Jalan Besar and Lavender saw lower prices of S$3.53 psf per month. This was according to Colliers International data as at Q4 2014.
Nevertheless, rents at these trendy districts are still far below rentals in traditional commercial areas. Colliers International reported that rental rates at prime retail space in the central business district and suburban malls are at S$29 psf and S$33.80 psf per month respectively and S$36.20 psf per month in Orchard Road.
Plans for Sengkang’s columbarium cancelled
National Development Minister Khaw Boon Wan announced that the commercial columbarium in Sengkang Link will not be built. Mr Khaw clarified that the Sengkang site is not intended for a commercial columbarium and that Eternal Pure Land is indeed a private company without any religious affiliation. Mr Khaw revealed that plans to review the tender process for places of worship are under way.