Week in Review – 6 May 2016

Local property news 
HDB imposes restrictions on flat ownership transfers
The Housing and Development Board (HDB) has revised the rules for the transfer of flat ownerships. With effect from April, the transfer of ownership between family members will only be approved under the following situations: marriage, divorce, death of an owner, financial difficulties, loss of citizenship and medical reasons. Ku Swee Yong, Chief Executive of real estate agency Century 21, said to Channel NewsAsia that such regulations will discourage “decoupling” – the transfer of property ownership to avoid the Additional Buyer Stamp Duty. The practice of “decoupling” became increasingly common since the ABSD was revised in 2013, with one to two out of ten couples who own flats opting to “decouple”, according to R’ST Research’s director Ong Kah Seng.

New requirements for developers to realise Walk Cycle Ride SG Vision
Property developers will need to prioritise the needs of pedestrians and cyclists in their development plans as a part of the government’s Walk Cycle Ride SG vision. Developers will be required to include a Walking and Cycling Plan (WCP) indicating cycling and walking paths from July onwards, according to a joint statement by the Land Transport Authority (LTA) and Urban Redevelopment Authority (URA). This will first be applied to commercial developments where high traffic is expected and developers need to ensure proposed pedestrian and cyclist paths are situated away from the roads. The result should be improved safety levels for vehicles. Facilities for cyclists including bicycle parking facilities, shower rooms and lockers are also required as part of the WCP. 

Prices of new homes increase as more luxury homes are sold
Driven by the positive sales growth and increased prices in the luxury property market, median price per new home unit rose by 11.6 per cent to $1.1 million in the first quarter of 2016. The higher priced Cairnhill Nine units are seen to be a driving factor for the price increases, according to CBRE. Overall, prices of non-landed homes in the Core Central Region (CCR) increased by 0.4 per cent in Q1. Alice Tan, Director and Head of Consultancy & Research at Knight Frank Singapore, said to Singapore Business Review that this signifies a gradual recovery of the luxury property market with greater interest from high-net worth investors. However, she noted that the market might not be able to sustain such recovery in the coming quarters due to the uncertain global economic outlook. 

Foreign interest in Singapore commercial property on a decline
Data from the Royal Institution of Chartered Surveyors (RICS) shows a decrease in enquiries from foreign investors of commercial properties in Q1 2016. The fall in enquiries was recorded for the third consecutive quarter and corresponds to the sharp decline in tenant demand in the commercial property market. Based on a survey conducted by RICS, 64 per cent of respondents expect a greater drop in rents in the next quarter while 65 per cent believe that rents will continue to fall in 2017. The respondents believe that rental values will decrease by 5.8 per cent in the following twelve months.
Landlords have therefore increased the length of rent-free periods in order to capture greater tenant demand while developers, especially those in the retail and industrial market, are putting development plans on hold. 
Global property news 
Bangkok luxury home prices see an uptick with increased foreign demand
Foreign demand has led to an increase in luxury home prices in the prime districts of Bangkok despite a decline in condominium sales. Surachet Kongcheep, Associate Director of Research at property consultancy Colliers International, said to South China Morning Post that developers in the luxury property market are targeting China and Hong Kong buyers. According to Mr Kongcheep, the foreign quota for condominiums along Sukhumvit Road in Bangkok was snapped up in days. An example was Four Seasons Private Residences Bangkok by Country Group Development which saw foreign buyers account for almost 40 per cent of the sales. Chief Executive of Country Group, Ben Taechaubol, said to South China Morning Post that most of the buyers were from Hong Kong. While Hong Kong buyers show greater interest in the higher price luxury segment, Chinese buyers focus more on the low-priced properties, said Bunthoon Damrongrak, Head of Residential Sales at JLL Thailand.

Growth of UK home prices moderate in April
Mortgage lender Nationwide has reported a moderation in the annual pace of price growth for UK properties from 5.7 per cent in March to 4.9 per cent in April – even as house prices increased month-on-month in April by 0.2 per cent. According to Robert Gardner, Chief Economist at Nationwide, residential property transactions surged in March as homebuyers rushed to make their purchases ahead of the additional stamp duty that was to be imposed from April. This led to a temporary boost in prices in March. Mr Gardner said that the recent strong employment growth, rising real earnings, low borrowing costs and constrained supply may tilt the demand/supply balance in favour of sellers and once again exert upward pressure on price growth in the quarters ahead.