RESIDENTIAL MARKET
Going, going . . . but not totally gone
Singapore's property auction market had a quiet year, chalking up its lowest sales value in 15 years and selling barely one-tenth of the properties put up for auction, as a result of the government's property curbs.
24 out of a total of 377 properties - across various sectors such as residential, retail and industrial - that were put up for sale ultimately changed hands. The total sales value of these properties was $62.4 million, down 35 per cent from the $95.6 million recorded last year.
This year's sales value was 54 per cent lower than the $135.7 million achieved during the Asian financial crisis of 1998, and 25 per cent lower than the $83.7 million during the global financial crisis in 2008.
The market is expected to perform just slightly better next year, and the forecasted sales value at property auctions next year to reach about $70 million, as ample liquidity and low interest rates continue to fuel the sellers' market in the first half of 2013.
Buyers will continue to search for value buys in the auction market, as properties are still considered as a good hedge against the inflation rate, which was at a high of 5.2 per cent in 2011 and averaged at 4.7 per cent from January to October this year.
The auction sales this year had been hit by a series of cooling measures that were implemented by the government in the residential sector.
In particular, the high- end market has been badly hit by the introduction of the Additional Buyer's Stamp Duty (ABSD) last December, which was aimed at taking some steam out of the private residential property market here and targeted non-PR foreigners and corporations in particular. These two categories of buyers have to pay the highest ABSD rate of 10 per cent on any residential property purchase.
In the secondary residential market, a stalemate has been playing out between buyers and sellers.
Residential properties continued to account for the lion's share of auction sales, with $29.7 million or 48 per cent of total sales coming from this segment.
For retail properties, the total sales value at auctions this year was $8.1 million, down 79 per cent from last year, even though they are typically sought after by investors for their higher yields. Industrial space recorded total auction sales of $10.1 million.
Source: Business Times –13 December 2012
High-end rents seen easing further
High-end rental rates look set to continue their downward trend, with market watchers predicting a price correction of between five and 10 per cent next year stemming from tightened budgets and an increasing supply of completed luxury homes.
This would bring rents of luxury homes to below $5 per square feet (psf) per month.
Rents of top-tier condos showed a drop for a sixth consecutive quarter, bringing rents down 7.4 per cent to $4.88 psf per month in Q4, from $5.27 psf per month in the year-earlier period.
The Urban Redevelopment Authority (URA) said that 91,869 new homes will be released to the market over the next five years, more than half of which have been sold.
Some major completions over the past year include Caspian (712 units), Mi Casa (457 units), Reflections (1,129 units) and The Trizon (289 units).
The vacancy rate in the Central region was 7.9 per cent in the third quarter of 2012, above the five-year average of 7.5 per cent. Vacancy rates in the eastern and western regions of Singapore were 4.5 per cent and 4 per cent in Q3, higher than the 3.5 per cent and 3.6 per cent five-year averages, respectively.
But it's not all gloom and doom for the rental market in the coming year.
Demand for mass-market units is rising and is expected to remain buoyant throughout 2013, in line with the tighter rental budgets of the new entrants.
Data released by URA showed that island-wide median rents for condos and apartments (excluding executive condominiums) hit a record $3.75 psf per month in October, up 7 per cent over the previous year.
Median rates for houses, however, slipped 0.4 per cent month-on-month in October to $2.65 psf per month.
The total value of all leasing transactions for the first 10 months of this year hit $208 million, surpassing the yearly totals for the period from 2000 to 2010, and the figure is expected to surpass the $218 million record set in 2011 once contributions from November and December are included.
Source: Business Times –13 December 2012
Investment sales of property reach $28.7b this year
Investment sales of property - which refer to transactions of $10 million and above - have fallen to about $6.9 billion so far this quarter (up to Dec 11), from the $9.3 billion in Q3.
The slowdown came amid a halving in deals originating from the private sector to $3.7 billion so far in Q4 from $7.2 billion the previous quarter.
The weak global economy and a still-wide bid-ask gap remained key reasons for the tepid investment activities in the private sector.
Big-ticket deals originating from the public sector - predominantly Government Land Sales (GLS) - climbed to $3.2 billion in the Oct 1-Dec 11 period from $2.2 billion in Q3.
To replenish their land banks, local and even foreign developers contested aggressively at GLS tenders. In particular, riding on the current buoyant sales market for executive condos (ECs), strata offices, shops and medical suites, record prices were set for some sites slated for such use.
Including outstanding state tenders, caveats for other transactions which have yet to be lodged and the expected sale of 79 Anson Road, Q4's final tally could hit $7.6 billion.
Year-to-date (up to Dec 11), $28.7 billion of investment sales deals have been transacted, though 2012 could end at around $29.5 billion, it estimated. That would be slightly shy of the $30.1 billion last year and $32 billion in 2010.
The en bloc sale market has been anaemic this year, with 24 deals totalling just under $2 billion, down from 51 transactions at $3.2 billion last year.
Although Savills defines investment sales as deals of at least $10 million, it includes transactions below this threshold for GLS sites, residential en bloc sites and acquisitions by real estate investment trusts.
Of the $28.7 billion transacted year-to-date, the residential sector continued to make up the lion's share - of about 45 per cent amounting to $13.1 billion. Including today's tender closing of a Sembawang EC plot and caveats for other residential transactions that will be lodged by Dec 31, the full-year figure could be close to 2011's $13.5 billion.
Commercial (office and retail) property deals have reached $7.5 billion year-to-date, down from $8.2 billion in 2011.
Private-sector office transactions declined from $6.2 billion in 2011 to $4.9 billion so far this year. Savills attributes this to global economic uncertainty, a moderation in office leasing and the buyer-seller price gap. DBS' purchase of a 30 per cent stake in Marina Bay Financial Centre Tower 3 at $1.035 billion has been the biggest office deal this year.
Retail property deals in the private sector doubled from $1.1 billion in 2011 to $2.3 billion year-to-date, buoyed by the sale of several shopping centres, including a half stake in nex in Serangoon for $825 million and the $519 million sale of Compass Point.
Investment sales of hospitality assets in private and public (GLS) segments combined jumped from $1.6 billion in 2011 to $3.8 billion so far this year, thanks to the flotation of Far East Hospitality Trust. This involved the sale of seven hotels and four serviced residences worth $2.1 billion to the trust by its sponsors.
Industrial property deals slipped from $4 billion in 2011 to $3.4 billion year-to-date, amid a decline in the public sector's contribution. The fall is from a high base in 2011 which saw the second phase of JTC's divestment, along with shorter-tenure GLS sites.
Source: Business Times –13 December 2012
Cash premiums soar for Marine Parade resale flats
To Mrs Ng Siew Lay, 48, the $60,000 cash premium she paid to close the deal on her five-room Marine Parade flat a few weeks ago was "very reasonable".
This, despite the fact that the $825,000 flat is on a low floor and will require a $50,000 renovation job.
"It's near my son's school, near the city, near the good eateries, near the beach," said the stay-at-home mother of three.
"If only I had more cash, I would pay for a flat with a sea view."
House-hunters like Mrs Ng are why cash-over-valuation (COV) payments - what buyers pay above a flat's valuation to secure its purchase - have skyrocketed in Marine Parade in the last 12 months.
Data from the Singapore Real Estate Exchange (SRX) show that the median COV in the neighbourhood rose 47 per cent to $55,000 in the past year, the biggest jump islandwide.
Second place went to Bukit Merah, where median COV climbed 31 per cent to $42,000.
Agents said that Marine Parade has always been a top draw, thanks to nearby schools such as Tao Nan School, CHIJ Katong Convent and Ngee Ann Primary, and the scarcity of units for sale. It is a small estate of only 23,300 residents.
But in the past year, the high prices of private property in the area, which pushed buyers to the HDB resale market, and the news that the Eastern MRT line will run through Marine Parade, have stoked the COV fire, they said.
Among the top five Housing Board towns where COVs climbed the most, the stand-out to market-watchers was Punggol, in fourth place: Median COV there rose 27 per cent to $43,000.
Unlike the rest, Punggol is a new town with fewer amenities. Plus, there has been a deluge of new build-to-order flat launches there. An abundant supply of new flats in an area usually takes the wind from its resale market.
One factor the top-performing towns have in common is the high prices of executive condominium and private property launches in their vicinity.
These catapulting COVs have contributed to nationwide cash premiums reaching a median of $34,000 in the fourth quarter so far, just $2,000 shy of a five-year historic high, said SRX last week.
But, as its data revealed, COVs are not rising across the board: 11 towns out of 26 overall have seen drops in the past year.
Median COV in Bukit Panjang fell 12 per cent to $29,000, while in Jurong West, it dropped 9 per cent to $30,000.
Source: The Straits Times –13 December 2012
No comments:
Post a Comment