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Property auctions bounce back, but there’s a downside

Posted by Singapore Property Launch on 21st January 2015 in Blog

Singapore’s property auctions market has bounced back from lower sales activities to become an efficient platform for homeowners to make a quick sale on their properties, according to JLL research analyst Shuyu Sun.

She noted that in the last two years, auctions were affected by softer investor sentiment and transaction volume in the property market due to the government’s cooling measures.

But from the second half of 2014, auction sales picked up with a significant increase in the total value of successfully auctioned properties.

Part of the reason for the higher activity is the growth in mortgagee sales. Since the introduction of the Total Debt Servicing Ratio (TDSR) framework in June 2013, the number of mortgagee listings has risen from only 28 in 2013 to 150 last year.

Another contributing factor is the narrowing price expectation gap due to compromises between sellers and buyers which has led to quicker sales at auctions.

“From the buyers’ perspective, the anticipation of a potential relaxation of cooling measures alongside the expected rise in interest rates in the immediate horizon could have encouraged these purchases,” said Sun.

At the same time, sellers are also more willing to lower price expectations as a result of weaker market conditions.

“Observations at recent auctions revealed that sellers have become more flexible in terms of pricing, dangling sweeteners, including discounts on opening prices, to entice potential bidders and, in some instances, accepting offers below the reserve price,” Sun shared.

Moving forward, the greater parity between buyers and sellers on price expectations is expected to increase activity in the auctions market this year.

Having said that however, there are downsides for potential investors. For instance, the softer leasing market means more properties are being sold with vacant possession. According to JLL, 26 of the 32 properties sold at auction in 2014 were on a vacant possession basis.



TDSR left its mark on home prices: experts

Posted by Singapore Property Launch on 16th January 2015 in Blog


TDSR left a mark


The Total Debt Service Ratio (TDSR) framework, which takes into account all loan obligations, has successfully brought sales volume and cooling prices down.

According to Desmond Sim, Head of CBRE Research in South East Asia, the latest URA figures released show current price levels of Singapore properties are now similar to levels recorded in H2 2011, just before the first set of Additional Buyers’ Stamp Duty (ABSD) was imposed.

“The one percent quarterly fall is not unexpected; it demonstrates once again what previous quarters have shown – that the TDSR framework has clearly achieved what it set out to do in the private property market. Where it previously impacted volume, having halved sales volume to 7,500 units from the 14,948 units sold in 2013, the TDSR framework has now begun to make its mark on prices.”

He added market watchers are now largely in agreement that the TDSR framework has served its purpose in bringing down sales volume and cooling prices and at the same time ensuring the gearing health of the market. This also means homebuyers who can afford homes have stronger financial muscle and should be able to weather any rise in interest rates in the near future.

The current market sentiment is expected to prevail in 2015, Sim added. “Developers will monitor the market closely and price units at affordable levels, applying the same approach they have used for the past few quarters.”

CBRE expects new homes sales volume to reach a stable level at around 7,500 to 8,000 units in 2015, and prices are likely to come under pressure but remain stable.


credits: propertyguru


Residential investment sales surge over 100% in Q4

Posted by Singapore Property Launch on 16th January 2015 in Blog

Residential investment sales surge over 100percent in Q4

Residential property investments in Singapore shot up 102 percent to $316 million in Q4 2014 from $156 million during the previous quarter, according to a DTZ report.

In the fourth quarter, there were several major deals such as Blackstone’s acquisition of 18 units at Paterson Suites for $83 million from Real Estate Capital Asia Partners.

There was also the reported sale of 48 units at Treasure on Balmoral by Hiap Hoe to its controlling shareholder Hiap Hoe Holdings for $185 million.

But most of the residential investments were undertaken by Chinese developers who actively bid for Government Land Sales (GLS) sites in Q4.

Nanshan Group Singapore was awarded a private residential site near Upper Thomson Road for $173.6 million, while an executive condominium (EC) site in Sembawang was awarded to Qingjian Realty for a bid of $229.4 million, about $21 million above the next offer.

But the report also stated that residential investment sales are expected to slow down this year due to the soft market conditions.

“The government has hinted that the Additional Buyers’ Stamp Duties (ABSD) will not be removed barring a “meaningful correction” in the market in 2015. Together with the continued enforcement of the Total Debt Service framework, investors are likely to stay put until they receive clearer signals that the market has bottomed out,” DTZ said.

Meanwhile, investors and developers will continue to adopt more innovative ways to manage their portfolios.

For example, CDL has partnered with Blackstone’s Tactical Opportunities Fund and CIMB Bank Berhad Labuan Offshore Branch to invest in the cashflows of its properties in Sentosa Cove, shared Swee Shou Fern, DTZ’s Senior Director of Investment Advisory Services.

credits: propertyguru


3-month SIBOR rise expected: experts

Posted by Singapore Property Launch on 14th January 2015 in Blog
3-month SIBOR rise expected

Image: Stproperty

The Republic’s SIBOR increased sharply since 2 January and many home loans are to be affected. Experts say some home owners and buyers are already looking at other options to avoid the impact.

Singapore Interbank Offered Rate (SIBOR) is the rate at which banks lend to one another and is a widely-used measure of the cost of funds.

In recent months, SIBOR was seen inching up to around 0.4 percent for most of last year to 0.45 percent on 2 January due to the weakness of Singapore dollars.

Last week, however, figures of the 3-month SIBOR increased sharply from the first trading day of 2015 to 0.57 last Monday (5 January), and increased further to 0.62 per cent the next day.

SIBOR increased even further to 0.63920 percent on 8 January after a slight movement to 0.63707 percent the day before.

While this represents a 40 percent surge since 2 January, and to the rates recorded for most of 2014, experts believe that the current rating is still well below historic levels.

In an interview with a local media, UOB said “[SIBOR] is coming up from a very low base, so the increase looks magnified, but on a historical basis, we are still not anywhere near normal interest rates levels.” The bank explained that the rates for the 3-month SIBOR back in 2007 were many times higher than the current rate of 0.6 percent.

However, the rising benchmark rate would negatively impact homeowners and buyers, considering given that most housing loans in Singapore are pegged on the 3-month SIBOR. Media reports recently cited loan specialists saying they have been receiving more inquiries since the recent spike in benchmark rate.

In 2014, financial analysts expected the 3-month SIBOR to reach around 0.7 percent in June, and could potentially hit 1 to 2 percent at the end of 2015, with the US Federal Reserve set to raise interest rates by Q3 this year.

Due to this impending increase in monthly instalments, more mortgagors, who took out variable-rate loans on their houses, are now seeking to refinance to a fixed-rate loan, while loan specialists have received more inquiries since the recent SIBOR hike. It is noted that these mortgagors do not include those who took out refinancing options based on variable rate.

credits: propertyguru


URA may rezone part of Geylang

Posted by Singapore Property Launch on 14th January 2015 in Blog
URA may rezone part of Geylang

Image: URA

A section of Geylang could be rezoned from residential/institution purposes to commercial/institution use if the Urban Redevelopment Authority (URA) gets public approval to amend the area’s Master Plan.

The affected region is bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang, but excludes roads and a sports field bounded by Talma Road and Lorong 12 Geylang.

According to URA, land use changes may arise when development proposals do not conform to the Master Plan 2014.

Other areas currently being reviewed are at Lorong 27A Geylang, Lorong Chuan, Jalan Samulun in Jurong and Alexandra Road.

Under Singapore’s planning rules, such proposals must have broad community support to be approved. They are then incorporated as amendments to the Master Plan.

The public can submit their feedback to the proposal in writing to the Permanent Secretary, Ministry of National Development, 5 Maxwell Road, Singapore 069110, by 11 February 2015

For more information on the proposal, go to:


credits: propertyguru


Heftier housing loans amid SIBOR hike

Posted by Singapore Property Launch on 8th January 2015 in Blog

Heftier housing loans amid SIBOR hike

Home owners who took out floating-rate loans instead of fixed-rate loans on their houses are expected to pay higher monthly interest rates, following the sharp increase of the three-month Singapore Interbank Offered Rate (SIBOR) yesterday. Based on Bloomberg data, the three-month SIBOR surged to 0.62052 percent on Tuesday compared to 0.57762 percent on Monday and 0.45738 percent last Friday. For the most part of 1H 2014, the benchmark rate remained unchanged until it started to slowly increase since August, then rose steadily as the US dollar strengthened further. According to OCBC, the three-month SIBOR may have trended upward due to the weakness in the Singapore dollar dropping to a four-year low against the green back. As of last Friday’s exchange rate, one Singapore dollar is equivalent to 1.328 US dollar, down from the peak rate of 1.238 on 23 July 2014. Notably, the benchmark rate is used by Singapore banks as a reference interest rate for funds they lend to other financial institutions and it also determines the interest rate of housing loans. For instance, the interest rate of some of OCBC’s mortgages is based on SIBOR plus 0.85 percentage points for the first three years of the loan tenure. Basically, as the rate goes up so does the interest rate of loan packages dependent on this benchmark rate. According to media reports, OCBC said: “If interest rates rise at a slow and steady pace, home owners will be able to adjust. But if it is unwieldy and volatile, then that makes it a bit more tricky, because what you are seeing now is some correction in terms of property prices.” “It might be overshooting, as it is still the first few trading days and the market is still reacting to conditions in 2015,” it noted, adding that the benchmark rate could reach nearly 0.7 percent by mid-year, then between 1 and 1.2 percent by the end of 2015. If the three-month SIBOR hits 0.7 percent, the monthly instalment of a S$100,0000 loan with a 20-year tenure is estimated to rise by S$11.45 to $484.85 for mortgages based on this benchmark rate.

credits: propertyguru