Although many people are still working from home, the office rental market in the Central Business District (CBD) of Singapore is expected to grow.
During the third quarter, net demand for office space in the Grade A category of CBD reached 215,000 sq. ft. Note that the net demands during the third quarter of this year are approaching 283,000 sq. ft in comparison to 183,000 sq. ft. during the same period of the year 2020.
But at the same time, the net supply for available space is also getting higher while contributing to a 5.8% vacancy rate in the third quarter of this year, which is 4.6% higher as compared to the previous quarter.
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Author: My Exclusive Condo
HDB Throws new Hopes to Contractors for Minimizing Delays to BTO Buyers
The construction companies handling projects in the Singapore Housing Board market have been offered new hopes with the lock-in supplies and prices for raw materials. This new move of the Government in the country is expected to bring construction progress on track while minimizing delays for target home buyers.
The new measures include the extension in steel price protection duration from HDB for additional nine months. As a result, the contractors in the area now do not need to worry about steel price fluctuations, and they can run their projects smoothly.
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Housing Sector Risks in China Falling into Bear Market
The residential property prices in China are experiencing meaningful downside, and it may affect the economic growth of the country in the long run.
It is already observed that even after orderly restructuring, China’s real estate market is going to experience downside pressures.
On one side, where authorities are trying to limit the real estate prices due to Evergrande based fire sales, price controls are still not working, even after the implementation of price floors. Note that Evergrande is one of the most indebted developers in the entire world, and the company has yet to reveal whether they paid interest due to holders as per Doller bonds in the United States. The company will get a grace period of 30 days to make payments, following which a technical default may occur.
HDB Resale Prices Rise to 13.7% in August with Record High Sale of 26-Million-Dollar Flats
It has been a long duration of 14 months to observe a consecutive rise in the Housing Board resale prices. As per the recent data of August month received from the SRX real estate portal, the property resale prices climbed at a pace of 1.1% in comparison to July.
Moreover, the resale prices are high by 13.7% this year when compared with the August month of 2020. With these fluctuations in the price, it is expected that September month prices may hit a record high in the scenario of strong demands.
Although August month came like a hungry ghost month, the construction delays increased, and flat resale demands strengthened with a lesser number of sales. If we look at the reports from the previous month, five Built-To-Order housing projects are already experiencing longer delays due to Greatearth – the main contractor’s decision to run after ongoing financial difficulties. The expected dates for completion of these famous BTO projects as well as many others, got delayed due to supply disruptions and lack of manpower. Furthermore, the covid-19 pandemic left a considerable negative impact on the construction sector.
Several affected buyers have now decided to pay an additional amount for resale flats, even if available units are less suitable for their needs since these flats are in ready-to-move condition. With a well-settled home, they can now plan their life with enhanced certainty.
Pasir Panjang Based Flynn Park Sold en Block for $371 Million
Flynn Park, located in Pasir Panjang, was recently sold to a joint venture between Sunway Developments and hoi Hup Realty for $371 million. The sale price for this property comes out to be around $1355 per sq ft per plot ratio that further exceeds the reserve price of $365 million for this development.
The first attempt of this development for leading collective sale ended earlier in June 2018 without any buyer. There are 7 percent well-designed bonus balconies on this property, and the land price comes out to be approx $1318 psf ppr.
This particular deal was handled by the famous company Savills Singapore, and they state that this was the largest collection sale site for the year.
2 Public Projects and 5 BTO Projects Delayed as Contractor Goes Bust
Recent reports reveal that two public projects and five upcoming Built to Order projects are on hold for an indefinite time as the main contractor behind these projects goes bust.
This situation is going to affect more than 2900 home buyers associated with these BTO-projects, including Marsiling Grove in Woodlands, Senja Ridges in Bukit Panjang, Senga Heights, and Sky Vista @ Bukit Batok. The fifth project on the list is located opposite West Coast Park and is known as West Coast Parkview. This one is recognized as a replacement site under Selective En Bloc Development Scheme for residents living in Block 513 to Block 520 on the West Coast Road.
Land Availability to Serve as Solid Foundation for Analysing Mature and Non-Mature Status of HDB Towns
Analysts in the Singapore Housing Board market states that instead of property age, land availability can serve as a solid measure for the classification of non-mature and mature estates.
It gives investors and buyers a clear sense of amenities and pricing expected in the HDB towns. If we talk about the recently concluded Built to Order sales exercise at Jurong East and Hougang, both these HDB flats received non-mature estate classification.
Nicholas Mak, ERA Reality Head, states that it is more suitable to use land availability as an essential metric from a land planning and policy perspective; however, the age of the flats can be considered as a moving target. He also added that we could not judge a town by its age when some parts are built years ago, and many others are built up recently. Therefore, instead of using the age factor for estimating the mature or non-mature status of towns, it is better to consider the availability of land that can be developed in the future for designing new housing units.
Red Hot Housing of Australia to Experience Affordability Crises: Poll
Routers Poll results reveal that the red-hot Australian housing market may heat up by a considerable level this year as well as in the coming year. The main contributors to this condition are the fallen borrowing costs and the reduced availability of homes.
Right since the pandemic started hitting the world hard, the Reserve Bank of Australia brought the interest rates to a record low level. As a result, the financial system got flooded with cash that worked like a potential trigger for the most expensive real estate market in the world.
Dover Forest Plans Revised: Info on Events Leading to Change
On July 30th, Housing Board revealed that it has Dover Forest revised plans, and as per the new approach, the eastern half of the property will be utilized to develop housing, whereas the western house development plans are currently put on hold.
It is planned that a major portion of the western half that has rich biodiversity as compared to the east sector will be used to create a nature park.
Below we have provided some historical details about the latest plans for the events relevant to the Dover Forest area:
Five-Room Flat at Bishan HDB Sold for Record $1.295 Million Price
A luxurious flat having five-rooms in Bishan has been recently sold for a noteworthy price tag of $1.295 million, smashing all the previous records, including a $1.268 million estimate of the previous month.
The 120 sq m housing unit located at 273A Block of Bishan Street 24 was covered under Design, Build and Sell Scheme project, which is widely recognized as Natura Loft. As per the ERA Realty property agent, it was sold almost 3 weeks right after its inclusion in the sale.
This unit has a well-designed 40-storey block which is recognized as the most pricey resale unit, and the said five-room unit sits right above 35th level.
One Out of Work From Home Trends to Discontinue in Asia as Companies Making More Commercial Real Estate Investments HDB Resale Flat Buyers Preferred Paying Cash Above Valuation in 2021
As the cases of Covid-19 coming down in Asia, companies are returning to work from office trends. Most of the companies in Asian countries these days are looking for an extension of office spaces to accommodate more employees in the near future.
A recent survey reveals that almost 66% of the Asia-based firms prefer to add more area to their commercial space in the coming three years. Moreover, around 35% of multinational companies consider the growth of their office portfolios with time.
The states show that once the pandemic-related crises fade, most of the Asian companies are likely to return to their traditional working arrangements as compared to their United States and Europe-based peers. However, many of them are still considering the continuation of work from home trends to save real estate purchase and office maintenance costs.
Record Bids Reported for Tampines EC plot and Lentor Central Residential Site
Several records were broken when bids for residential plots of 2 different locations were lodged recently under the GLS (Government Land Sales) program.
The news about the tender of both 99 years leasehold plots was circulated recently. Of these 2 sites, one an upcoming Executive Condominium (EC) land parcel at Tampines while the other one will be a residential site for private housing along Lentor Central. The tenders for both were closed last night with nine bids each from influential investors. Reports reveal that both these sites were already added to the confirmed list of sites under the first quarter 2021 Government Land Sales program. Moreover, they were now launched right as per the previously mentioned schedule. In combined form, they can lead to 1195 residential units.
The best bid that most won the EC plot of the Tampines Street 62 was ultimately lodged by a joint venture run by Santarli Constructions and Qingjian Reality at a price tag of $422 million which translated to $659 psf ppr.
This bid was almost 1.4% above in comparison to the second bid placed for the property with the estimate of $416.3 million. It is also important to mention that $422 million is the highest land rate that could be paid for an EC site ever.
The current bids have broken all previous records of land rate (around $603 psf) for the EC site located at Tengah Garden Walk. Analysts also observed that among the bid for the Tampines EC plot which consists of total space for approximately 590 residential units, six of the bids actually were right above the $603 per land rate. The developers in the area may have to sell the Tampines EC Project in the future with $1250 psf based on the land bid price. The ongoing median transacted price for whole new EC units is $1154 psf for the second quarter of this year.
The experts working in the research and consultancy departments of the local real estate market believe that the main reason behind rising demands for this site is the close proximity to Tampines town amenities and the upcoming Tampines North MRT station.
The median price for the Piermont Grand site was reported to be $1151 psf, whereas it was $1173 psf for Parc Central Residences. Therefore, there are chances for breaching of median selling price for the new ECs above $1200 psf on the launch of the site.
On the other side, the GuocoLand unit was also listed among the top bidders for the Lentor Central residential land parcel. The offer was closed at $784.1 million, which was 4.5% higher as compared to the second-highest bid ($750) for this property.
This plot was also listed by Urban Redevelopment Authority, and it is earmarked for the impressive private residential development along with the commercial space available on the first floor. This property could lead to around 605 units. The commercial component of this site will ensure easy access to the retail options and other essential amenities for the residents. Therefore, this site has gained more confidence from developers in the entire suburban market.
More information on the above land tenders can be found in the article below,
https://www.straitstimes.com/business/property/record-bids-lodged-for-tampines-ec-plot-lentor-central-residential-site
Property heirs urge to make changes in Hong Kong’s Land Policy
Recent stats show that the property heirs in Hong Kong are criticizing the land policies of the local government while suggesting the overhaul considering increased priorities of industry leaders towards housing problems in the most affordable residential market of the world.
Some local heirs in the city reveal that most of the traditional systems and procedures are time-consuming, and many of them have now become obsolete as well. Moreover, the current generation does not want to get involved in such issues, which leads to the present situation in the real estate market. The local heirs with this type of opinion are also accompanied by scholars and lawmakers these days; they are all eager to urge immediate changes to the land policies so that ongoing housing shortage issues can be addressed.
One Out of Three HDB Resale Flat Buyers Preferred Paying Cash Above Valuation in 2021
Recent reports reveal one out of three buyers in Housing Board resale flats preferred paying an amount above-market valuation in the current year. Note that this range was one out of five in the previous year.
It is observed that this rise occurred as a result of the backdrop of few steadily rising prices in the HDB resale flat category.
As per the figures released from the Ministry of National Development, the median cash over valuation, which is paid by the buyers, was restricted to $0 per year for a long time. But a large proportion of buyers that paid increased cash over valuation price reflected the ongoing broad-based demand for the housing properties. It also included the private housing market that is widely supported by the low-interest-rate environment.
No Heat in the Singapore Property Market but Authorities Keeping an Eye on Prices
The experts at the Monetary Authority of Singapore recently said that they would stay vigilant about possible rises in property prices, even if the market is not overheated. Mr. Menon revealed that the Singapore property market has been very resilient during the pandemic and the recession period; however, it shows an uncertain movement during the Covid-19 caused risks of the current year as well.
Stats reveal that gross domestic product and economy contracted by a considerable level in 2020; however, the residential property price index improved by 1.6%. During the first quarter of the year 2021, the PPI was observed to be around 5.6% higher as compared to the pre-pandemic level.