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SG Property auction sales maintain tepid pace

Property Here - Friday, January 03, 2014

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Singapore’s property auction market saw a total of S$3.9 million in sales closed in Q4 2013, down 15.1 percent in quarterly sales value from the previous quarter's S$4.6 million, revealed a Jones Lang LaSalle report.  

Nonetheless, the number of properties sold during auction rose marginally to four from three in Q3.

The report also noted that Q4 sales value declined 88.1 percent from the five-year quarterly average sales of S$32.7 million, or down 91.5 percent from the 10-year average quarterly sales of S$46.0 million.

On a yearly basis, the number of successful auctions fell 19.2 percent from 26 in 2012 to 21 in 2013. However, the corresponding total sales value soared 69.5 percent to S$99.6 million from S$58.7 million in 2012.

The increase “is primarily due to a higher number of large deals closed in 2013”, said the report. 

Meanwhile, the number of residential properties listed in Q4 was higher than the combined number of commercial and industrial properties. However, properties sold during auction in the recent two quarters all came from the industrial segment.

Moving forward, “mild and gradual recovery is expected in the coming quarter”, with the majority of players believing that market fundamentals remain strong, said Mok Sze Sze, Head of Auction and Sales at Jones Lang LaSalle.

“Increase in sales volume compared to 2013 is predicted as buyers and sellers seek ways to absorb the additional costs incurred due to the cooling measures.”

“In the near term, the auction market is likely to gain back the sales momentum and recover at a faster pace as investment sentiment improves. Generally speaking, we expect higher success rate and better market performance in 2014.”

SG Singapore's Q4 GDP grew 4.4%

Property Here - Friday, January 03, 2014

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Singapore's economy grew by 4.4 percent on a year-on-year basis in Q4 2013 compared to 5.9 percent in the previous quarter, revealed advance estimates from the Ministry of Trade and Industry (MTI). 

On a quarter-on-quarter seasonally-adjusted basis, the economy contracted by 2.7 percent, a reversal from the 2.2 percent expansion in the previous quarter. 

For the whole year, the economy is estimated to have grown by 3.7 percent.

This is in line with MTI's growth forecast of 3.5 to 4.0 percent for 2013.

SG Prime office segment ends year on bright note

Property Here - Friday, January 03, 2014

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Singapore’s office property market ended 2013 on a firm footing with rents, occupational rates and capital values on the uptrend, said a report from Colliers International.  

As of December, average monthly gross rents of premium and Grade A office space in the CBD increased 2.2 percent quarter-on-quarter to reach S$8.72 psf, the highest level in two years.

On an annual basis it climbed 2.9 percent, reversing a 6.9 percent contraction seen in 2012. 

The report noted that “the average occupancy rate of Grade A office space across the different micro-markets held relatively firm in Q4 2013”, rising by up to 2.2 percentage points quarter-on-quarter.

Marcus Loo, Executive Director of Office Services at Colliers, said while there is continued strong demand for premium grade office space driven by tenants’ flight to quality, secondary office space in older buildings is also recording good take-up. 

“The absorption of such office space was driven by both existing tenants expanding their space requirements within the building and new tenants relocating to the locality.” 

Overall, the average occupancy rate of premium and Grade A office space in the CBD went up 0.4 percentage points in Q4 to 93.9 percent.

Meanwhile, average capital values of premium and Grade A office space in the Raffles Place/New Downtown micro-marketclimbed 1.0 and 0.2 percent in the quarter to S$2,667 and S$2,395 psf respectively.

This is the first time that average capital values in that segment’s micro-market witnessed positive growth since Q4 2011. 

According to Chia Siew Chuin, Director of Research & Advisory at Colliers, the near-term outlook for office leasing is bright as most economic and market indicators seem positive.

There is potential for rents to grow another 10 to 15 percent in 2014, while office capital values will likely remain stable with marginal upsides of up to five percent, she added.

SG Singapore jeweller buys Melbourne property for S$46.5m

Property Here - Friday, January 03, 2014

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Singapore-based jewellery group Aspial Corporation has made its first major foray into the overseas property market with the acquisition of 383 King Street in Melbourne (pictured) from MWM Australia for A$41.5 million (S$46.5 million).  

Strategically located directly opposite Flagstaff Gardens, 383 King Street is a freehold commercial development comprising a ground level and nine upper office levels, including two levels of basement carpark. The site has a land area of about 2,206 sq m and a lettable area of around 13,136 sq m.

The building features wide frontage while the higher floors offer panoramic views of Flagstaff Gardens and North Melbourne. It is also within proximity to Queen Victoria Market as well as Melbourne's central shopping area. 

“This acquisition is significant as it marks our first major acquisition in our overseas expansion. We see great potential in Australia's property market and firmly believe that this property presents tremendous opportunity for the group,” said Aspial’s CEO Koh Wee Seng.

He added that the company is currently exploring various options for the property, which includes redevelopment for mixed commercial and residential use. 

The sale will be financed through the group’s internal resources and borrowings, and is expected to be completed this month.

SG PM Lee's 2014 New Year message forecasts strong economic growth

Property Here - Thursday, January 02, 2014

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The Singapore economy grew 3.7 percent in 2013, better than initially expected, revealed Prime Minister Lee Hsien Loong in his New Year message. 

This year, he said the economy is expected to grow by two to four percent.

He added that while the country encountered a few rough spots in 2013, Singaporeans still managed to come through together.

In fact, the median salary rose 3.9 percent while salaries for the lower-income group also increased.

“We will share the fruits of progress more widely, including through home ownership schemes and support for low wage workers,” PM Lee said. 

“We are making steady progress. The first-timer queue for HDB flats has shortened, housing prices have stabilised, and targeted subsidies have made homes more affordable.”

“We are transforming our physical environment: Opening new train lines and expressways, and working through their teething problems; in the longer term expanding Changi Airport, reclaiming land for Tuas Port, and planning the Southern Waterfront City.”

As for the foreign worker situation, he explained that the country will be taking a balanced approach – reducing but not cutting off their inflow since they are needed to keep the economy running and to build critical infrastructure such as homes, schools and MRT lines. 

“We will continue to treat foreign workers fairly, but we expect them to obey our laws and social norms,” he noted, highlighting that the recent riot in Little India was “inexcusable”. 

He said that the riot reminded all Singaporeans that they can never take good order, peace and stability for granted. 

Overall, “provided nothing untoward happens in Asia, I am confident that Singapore will do well”.

SG Industrial property market likely to be subdued this year

Property Here - Thursday, January 02, 2014

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The industrial property market is expected to be subdued this year following a fairly eventful 2013, a media report said quoting market watchers.

Notably, the cooling measures introduced last year were more aligned towards end users.

“Generally there were some measures introduced by the government with the intention to support industrialists over speculators,” said Desmond Sim, Associate Director at CBRE Research.

They include the Seller’s Stamp Duty, Total Debt Servicing Ratio, a longer holding period for industrial properties on JTC-leased sites and an extension of the minimum occupation period for anchor tenants.

Chia Siew Chuin, Research Head at Colliers International, noted that the measures did not only prevent a runaway in industrial property prices and rents, it also helped rein in the real estate cost of industrialists.

In 2014, the industrial property market is expected to see a moderation in rentals as well as strata sales.

“Industrial property prices and rents could soften in 2014 – on the back of new market measures, loan policy tweaks and higher supply amid a cautiously optimistic economic outlook and industrialists' continued cost-conscious stance,” Chia said.

Based on URA data, around 20.9 million sq ft of industrial space is due to come onstream.

“While demand might be buoyed by a recovering manufacturing sector, there is the possibility that it might not be able to digest the high level of future and existing supply available,” said CBRE’s Sim, noting that industrial rents are also expected to face downward pressure.

Aside from sifting out most speculators, property measures may also lead to a more stable strata sales market, he added.

Overall, the situation is unlikely to be too different from 2013.

Meanwhile, Nicholas Mak, Head of Research and Consultancy at SLP International, said: “We don't expect much change in the industrial property market landscape.”

SG S'pore developers suffer worst performance in 2013

Property Here - Thursday, January 02, 2014

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After posting the highest gains in 2012, Singapore’s developers recorded the worst performance on the Straits Times Index in 2013 as property cooling measures slowed price gains and pushed down home sales, media reports said. 

Ranked the most expensive city to purchase luxury homes in Asia after Hong Kong, property stocks in Singapore are expected to languish further this year.  

Chesterton Singapore expects home sales to decline 10 percent while prices may drop for the first time in two years.  

With the measures which included stamp duties and other taxes on home buying, the country’s residential developers were rated underweight by UBS AG and Citigroup in the last two months. 

Even the two largest Singapore-listed developers, CapitaLand and City Developments, were among the three worst performers on the index. 

City Developments fell 25 percent in 2013 compared to a 45 percent gain the year before while CapitaLand dropped 18 percent following a 67 percent increase in 2012. 

“Singapore property developers have been out of fashion for some time,” stated Tim Gibson, Head of Asian Property Equities at Henderson Global Investors.

“We would remain cautious of developers with exposure to the residential sector, given that demand for primary units have cooled post the numerous rounds of government measures.”

Notably, the dip in property stocks saw the Straits Times Index dip 0.4 percent, the only decline among developed markets in 2013.

Nonetheless, developers could get a reprieve following the government’s announcement to reduce the number of land sites sold in 1H2014, said SLP International Property Consultants, citing its analysis of URA data. 

Nicholas Mak, Executive Director of Research & Consultancy at SLP Singapore, said the decrease “could bring some relief to developers who have unlaunched residential projects or projects with substantial number of unsold units”. 

“The reduction in land supply could be to prevent an oversupply in the private housing market.”

SG HDB resale prices fell 1.3% in Q4

Property Here - Thursday, January 02, 2014

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HDB resale flat prices fell 1.3 percent in Q4 2013, according to flash estimates from the housing board.

Year-on-year, this is a reversal from the 2.5 percent increase reported in the last quarter of 2012. 

For the whole of 2013, this is also the biggest drop seen in the market, HDB data revealed.

In comparison, resale flat prices fell 0.9 percent in Q3, and increased 0.5 percent and 1.3 percent in Q2 and Q1 respectively.

More detailed public housing data for Q4 2013 will be released on 24 January.

SG Suburban home prices fall for first time since 2009

Property Here - Thursday, January 02, 2014

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Private residential property prices fell 0.8 percent in the fourth quarter of 2013, compared to a 0.4 percent increase in the previous quarter, revealed flash estimates of the URA price index.

In the Core Central Region (CCR), prices decreased 2.2 percent, which is significantly larger than the 0.3 percent decline in Q3. 

And for the first time since Q2 2009, prices dropped in the Outside Central Region (OCR), by 0.6 percent compared with the previous 2.2 percent increase.

On the other hand, prices in the Rest of Central Region (RCR) rose by 0.8 percent in Q4 compared with the 0.9 percent dip in the previous quarter. 

For the whole of 2013, prices in the CCR fell 2.1 percent, while prices in the RCR and OCR increased by 0.3 percent and 6.8 percent respectively.

SG More 2-rooms, but fewer larger flats in 2014

Property Here - Tuesday, December 31, 2013

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In order to meet the high demand from singles, the housing board on Monday announced that it will ramp up the supply of two-room Build-to-Order (BTO) flats in non-mature estates to 5,000 units by 2014 from just 2,600 this year. 

Moreover, unsold two-room flats from previous BTO exercises that were set aside for families will be offered to singles due to unmet demand. 

“For example, in the July 2013 BTO exercise, 34 percent and 51 percent of the two-room flats offered in Sengkang and Yishun respectively were booked by singles. These proportions are higher than the quota of 30 percent,” said HDB. 

It also plans to cut the supply of new three-room and larger flats by 18 percent from 22,600 units in 2013 to around 18,600 by 2014. Despite this, the planned supply of larger flats surpasses the estimated 15,000 new Singaporean family formations next year. 

“This (move) is timely as the supply and demand for BTO flats by families has achieved a better balance,” noted HDB, adding that it will also provide 700 studio apartments for seniors looking to right-size their homes. 

In total, HDB will offer 24,300 flats next year, down from the 25,100 in 2013. 

Meanwhile, data shows that BTO application rates among families have fallen, with the average first-timer application rate slipping to 1.7 times in 2013, average second-timer application rate falling to 7.1 times, while the average BTO application rate eased to 3.0 times from 5.3 times in 2010.

Nevertheless, HDB will continue to prioritise families, allocating at least 70 percent of the flats in each non-mature estate project for them.