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S’pore homes cheaper compared to those in other major markets

Posted by Singapore Property Launch on 22nd December 2017 in Blog
S’pore homes cheaper compared to those in other major markets

Residential prices here are more affordable compared to many major markets across the world, reported the Singapore Business Review.

In fact, a report from JLL showed that a family only needs to spend 4.8 years’ worth of their income to purchase a typical property in 2016 versus 7.3 years in 2010.

This is cheaper than those in Sydney, Tokyo, San Francisco, London and Hong Kong, where the multiple ranges from 8.5 to 18.1.

Similarly, a chart from DBS Equity Research revealed that the price-to-income ratio in the city-state has remained fairly steady in the past few years at between 5.6 and 9.3.

“Using the price-to-income ratio for the 80th income percentile and five-room HDB dwellers as proxies for upgrader demand show that the ratio is stable at 7.3 and 9.3, respectively, similar to levels in 2003.”

“The ratio stands at 5.6x for condominium dwellers, one of the lowest since 2003. Even if prices increase by a five percent CAGR over 2018-2019, based on 2016 income levels, the price-to-income ratios remain reasonable.”

Furthermore, DBS Equity Research thinks that there is still room for property developers to raise home prices before buyers find them unaffordable, as the present price-to-income ratio is close to levels seen in 2003 and the multiples in the republic are lower compared to those in other major markets.

credits: propertyguru

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“Far too early” to worry of a private home oversupply

Posted by Singapore Property Launch on 21st December 2017 in Blog
Singapore Private Homes data April 2015

Despite the Monetary Authority of Singapore’s (MAS) warning that private home supply may significantly rise over the next few years on the back of the surge in en bloc deals, Maybank Kim Eng believes it is “far too early” to be worried of a potential oversupply, reported Today Online.

This comes as the redeveloped properties from the en bloc sales would not be entering the market until 2020 to 2021, said Maybank Kim Eng analyst Derrick Heng in a report.

He noted that the average net supply would still not be excessive – at a little more than 11,000 units per year – even after taking into account the completion of such projects in three to four years.

In fact, the figure is way lower compared to the 19,500 units added annually from 2014 to 2016 as well as the five-year average absorption rate of 13,200 units.

“As long as home buying sentiment is maintained, we believe fresh inventory from the Government Land Sales (GLS) and en bloc deals done can comfortably be absorbed,” said the report.

The availability of new inventory for sale may also be affected by delays or disputes in the collective sales deal.

“This should keep the supply of unsold units in the market in check,” it added.

In agreeing, JLL national director of research and consultancy Ong Teck Hui noted that instead of worrying of an oversupply, the potential supply coming from the en bloc sale sites sold since mid-2016 should be considered as “timely” in adding to the recent GLS programmes’ “low” supply.

Ong revealed that the unsold inventory of new private homes fell by about 50 percent over the last four years – from over 32,000 units in Q3 2013 to 17,421 units as at Q3 2017.

“Developer sales volume could end the year at around the 10,500 to 11,000-unit level. If this buying momentum is sustained into 2018 and 2019, the unsold stock of 17,421 units would be depleted in less than two years,” he said.

credits: propertyguru

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Private home sales to cool down in Dec, Jan

Posted by Singapore Property Launch on 20th December 2017 in Blog
Parc Botannia crop

Parc Botannia is a 99-year leasehold condominium development located at Fernvale Rd in District 28.

Excluding executive condominiums (ECs), private home sales in Singapore slightly increased to 785 units in November compared to 760 units in the prior month, according to data from the Urban Redevelopment Authority (URA).

On a monthly basis, this represents a 3.3 percent gain versus than 15.7 percent growth seen in October, said OrangeTee. On a yearly basis, it translates to an 8.7 percent drop, but this is an improvement from the 39.3 percent plunge in the preceding month.

For the first ten months, private home sales surged by 31.6 percent compared to the same period in 2016, noted the property consultancy.

In November, the best-selling project was Parc Botania in the Outside Central Region (OCR), which found buyers for 253 units at a median price of $1,287 psf.  Second, is Queens Peak in the Rest of Central Region (RCR), which moved 71 units at $1,694 psf. The third is Kingsford Waterbay in OCR, where 38 units changed hands for $1,346 psf.

For the whole of 2017, PropNex Realty CEO Ismail Gafoor expects private home sales to surpass 11,600 units (excluding ECs), while executive condominiums deals could reach around 4,100 units.

“Sales performance in December and January will likely taper due to the seasonal school holidays and the start of a new year and lack of major projects slated for launch,” he added.

credits: proeprtyguru

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HDB to maintain a steady supply of flats next year, Wong

Posted by Singapore Property Launch on 16th December 2017 in Blog
Colour-Scheme-HDB

The Housing and Development Board (HDB) will maintain a steady supply of around 17,000 new flats in 2018, comparable to the 17,584 flats launched this year, revealed Minister for National Development Lawrence Wong.

“We will continue to calibrate our flat supply carefully, taking into account underlying demand and the stability of the HDB resale market,” he said in a blog post.

Wong noted that around 1,000 flats will be launched in Yishun, Sembawang and Sengkang in the second half of 2018. The flats will have shorter waiting periods of around 2.5 years, instead of the usual three to four years for most other Build-to-Order (BTO) projects.

New flat buyers can expect a “good spread of projects across mature and non-mature estates, including flats in the new Tengah town”.

For this year, Wong said the government focused on helping first-timer families acquire their own home.

To help such couples better afford a flat in the open market, the government raised the Central Provident Fund Housing Grant from $30,000 to $40,000 or $50,000 in February 2017.

The enhanced grant has benefitted close to 6,900 first-timer households, said Wong.

The government also raised the rent subsidies for the Parenthood Provisional Housing Scheme (PPHS), benefiting around 840 households who are waiting for their new flats to be ready.

In August 2017, the government also launched the first Re-offer of Balance Flats (ROF) exercise for those with urgent housing needs or who are not so particular about location.

“While the flat selection exercise is still ongoing, about 800 households have already managed to book a flat,” shared Wong.

“All these mean that young couples will have even more affordable and accessible housing options to start their marriage and parenthood journey early.”

credits: propertyguru

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Derby Court sold to Roxy-Pacific unit for $73.88mil

Posted by Singapore Property Launch on 14th December 2017 in Blog
Derby Court

Third time’s a charm for Derby Court, which was sold for $73.88 million to Roxy-Pacific subsidiary, RH Developments Two Pte Ltd.

Based on the development’s “as built” gross plot ratio of 2.872, the sale price translates to a land rate of around $1,390 psf per plot ratio, said Tan Hong Boon, regional director at JLL, which is the property’s sole marketing agent.

JLL noted that owners of the development stand to receive between $3.36 million and $6.65 million in gross sales proceeds per unit, reported Business Times.

Nestled on an 18,506 sq ft freehold site, Derby Court comprises two penthouses and 18 apartment units. It is located along Derbyshire Road within the Novena locale, near the Anglo-Chinese School (Junior) and just across the road from St Joseph’s Primary Institution (Junior).

In an SGX filing, Roxy-Pacific revealed that it intends to finance the acquisition by bank borrowings and internal funds.

It added that the acquisition is “not expected to have a material impact on the group’s consolidated earnings and net tangible assets per share of the company for the current financial year ending 31 December 2017”.

credits: propertyguru

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Home prices to rise 8% in 2018: Morgan Stanley

Posted by Singapore Property Launch on 13th December 2017 in Blog
Singapore Condominium

With an “up-cycle” for Singapore property expected to last until 2020, Morgan Stanley sees home prices rising by as much as eight percent next year, reported Bloomberg.

Signs of a revival in the property market include the first hike in home prices in four years, record land deals, and the first gain in office rents in two-and-a-half years.

And while the Monetary Authority of Singapore has tempered the buoyant sentiment by flagging the risk of rising vacancies on the back of slowing population growth, Singapore developers are still expected to extend their share rally into next year.

Morgan Stanley property analyst Wilson Ng, who has “overweight” ratings on City Developments (CDL) and CapitaLand, noted that developers’ valuations are attractive based on discounts to net asset value as well as price-to-book ratios.

Morgan Stanley expects CDL and CapitaLand’s shares to jump by 24 percent and 42 percent respectively in the next 12 months.

Analysts believe that the risk of a housing oversupply may not be imminent due to the lead time needed to finish projects.

The government has only started to increase land supply recently, noted Raj Vaswani, director of the Tolaram family office in Singapore. As such, the resulting developments are not expected to enter the market before 2020.

His firm, which manages US$500 million (S$676 million), owns shares in Singapore-listed developers CapitaLand, GuocoLand and Frasers Centrepoint.

However, not everyone is bullish on the housing market.

KGI Securities (Singapore) trading strategist Nicholas Teo said many factors could weigh on home prices’ sustainable rally, such as weakness in rental demand, rising vacancy rates, and the prospect of increasing global interest rates.

Aside from this, some stringent home purchase restrictions are still in place in Singapore, which could limit the possibility of runaway house prices.

credit: propertyguru