Buyer & Seller Must Know

There are quite a few property developers in Singapore that anticipated the much-desired property market recovery, having a good level of activity in the past year so that they are ready when things start turning around. Now that it is happening, investors are looking for those developers that are capable of delivering according to their expectancies. In these conditions, how can a property developer ensure his success? He can do so with the help of solid sales of properties and higher prices for their units and, according to analysts, they will continue enjoying re-rating in the near future.

For quite a while, players in the property market of Singapore anticipated a turnaround of the market, some developers choosing to postpone the launches of their new properties until the coming of this moment. Thus, according to experts, the ones that will be ready to welcome these changes with brand new launches, more than needed to suit the requirements of growing market, will be the winners of the season, especially if they managed to secure the land for their property developments before the prices started going up. Mr Derek Tan, the DBS senior vice-president in charge of group equity research, believes that the stocks of developers will be subjected to increases ranging between 10 and 15%. According to what he says, developers that want to be successful in 2018 will have to deliver and meet the demands of the market, as the volume of transactions will continue to grow this year. This also means that the take-up rates for the new launch condos will be rather consistent.

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According to the data compiled by the Urban Redevelopment Authority (URA) in Singapore, executive condominiums and Singapore Condos are sitting at a four-year high for sales.

The Urban Redevelopment Authority notes that there were twenty-three percent more units sold last year coming in at 14,707 units whereas, in 2016, only 11,971 units were sold. Out of these 14,707 units, 10,682 of these were private residential units which make up a thirty-four percent increase than the 7,972 private residential units sold in 2016. This type of sales volume is a good indication that the private residential market is looking at an upturn which will help with its recovery and according to Ms. Tricia Song, head of research at Colliers International, this is very encouraging. Ms. Tricia Song added in that another twenty-five major private non-landed projects have the potential to be put on the market this year, yielding a potential of 15,000 – 16,000 units. Executive condos such as Hundred Palms Residences EC was also 100% sold during their preview.

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This year, according to an evaluation agreed upon by majority of the global organizations, global economic sentiment has risen to be far more positive.

Asia’s trade-dependent countries, like Singapore have had the opportunity to gain extensively from the far-reaching recovery in trade, investment, and manufacturing, and have benefited largely from the increasing global demand.

Although these risks are considered short-term, including mounting geopolitical pressures and financial strain, the main question at this moment is how far this recovery will continue. Longer-term problems such as ageing populations and flagging productivity have given rise to numerous concerns.

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In many occasions, the neighbors you have in the building where you live are almost like a second family, as you share your stories and experiences with them for so many years. So, when the times come to part, you feel the need to do it in a way that will make everybody remember the time spent together. This is what happened in the case of a group of people that owned apartments in Block 317, Shunfu Ville, a property that was recently put out for a collective sale and bought. But, before moving out, the residents of this bloc that lived on the 6th floor, decided to throw a farewell party, on the corridor of their floor.

This building has 358 units and all the residents of these units will have to move out very soon, as demolitions are scheduled to begin at this location next month. Qingjian Realty is the company that won the bid for the collective sale and acquired the estate in Bishan for $638 million. This means that each owner got somewhere around $1.78 million. The property was built in 1985 and now it is going to be demolished, making way for lander and high-rise residences. This collective sale was special right from the start, when it appeared in the newspapers, front page, in 2016, due to the fact that 82% of the owners expressed their agreement for the selling of the property. At that point, the sale of this property was the biggest since 2007, when Farrer Court got sold.

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SingHaiyi, a leading developer in Singapore, has won their third bid for a residential site in Clementi during an active sales frenzy. The residential site, Park West, is ideally located on Jalan Lempeng and nearby Clementi MRT Station.

This joint venture is SingHaiyi Land and Haiyi Wealth which are both subsidiaries companies of SingHaiyi.

Marketing agent Huttons Asia stated that the success of the transaction is the third attempt for a collective sale by the owners. Huttons Asia said the site could possibly yield 1.33 million square feet of space, once redeveloped.

Park West is a 99-year-old estate sitting on land that is approximately 633,644 square feet with a ratio of 2.1. With an additional $290.6 million differential premium and the lease upgrading premium, it is estimated to reach approximately $850 per square foot per plot ratio.

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In spite of the fact that quite a few apartment buildings were put up for a collective sale during the year that passed, plus the developers that launched themselves in bidding in a rather courageous manner, making everybody believe that the collective sale phenomenon will go through the roof, things are beginning to calm down. For 3 years in a row, the prices of properties were in a continuous drop, until this year started. Apparently, 2018 will bring the much-needed turnaround point in the property market of Singapore, as signs of improved traction are beginning to appear. Even so, we shouldn’t get ahead of ourselves with too much optimism because the change is far from being too significant at the moment.

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In April 2017, URA released a piece of land (Parcel C) in Tampines 10 for Government Land Sales (GLS). City Development Limited has placed a bid for a large condominium site in Tampines. Tampines is a residential area located in the Eastern region of Singapore. There were a total of 9 bids placed for the property which is much lower than was expected.

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It’s been a very good year for those who live in the HDB flats of the West Region of Singapore. Currently, as of March 2017, the government has spent 1.93 billion on Jurong West, a public housing development and residential town. The developmental town was made after the dissolution of Jurong Town and is the second largest town in terms of population within Singapore. The 1.93 billion was spent on the Home Improvement Program (HIP), with another 40 million spent on the “Enhancement for Active Seniors” (EASE) program.

The Home Improvement Plan was put in place in 2007, as a way to address maintenance problems that would crop up due to the age of the flats within the town. Issues like pipe sockets, laundry drying racks, and even broken concrete were the main concerns covered by the government as necessary essentials.  Since the creation of the Home Improvement Plan, over “101,000 flats” have been either upgraded, maintained or had maintenance done to them, with another 139,400 homes still eligible.  Once the program has run its course, it is estimated that over 300,000 flats will have been a part of the program.

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The residential homes prices were dropped to 3.1 percent in 2016. However, later on, all prices were increased to 1 percent.

If we compare everything then the increase in prices is as follows:

• Core Central Region (CCR): 0.8 %
• Rest of Central Region (RCR): 1.6 %
• Outside Central Region (OCR): 1.2 %

Note: These estimates have been based on two main things:

1. All the units that the developers have sold until 15 December
2. All the contracts that contain transaction prices

Let’s have a thorough look at the rise in prices and how it has affected the overall real estate operations.

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In Singapore, purchasing a public housing flat requires one to login to the HDB portal and submit their purchases online. Through the HDB portal, purchasers and sellers are then being allocated the first and second appointments at the HDB to complete the buying and selling procedure.  Recently, HDB launched its new technology of transformation that has revolutionized the marketing procedures.

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The owners of City Towers, a freehold condo that is located on the Bukit Timah Road, had to face three unsuccessful collective sales for their property so far. But, they are perseverant, continuing to pursue their goal, by launching another collective sale for this particular property, the fourth of this kind. If anyone is interested in the City Towers, then this person must know that the owners set a reserve price that reaches $355 million. How will this sale go? Well, we will just have to wait and see.

The construction for this development ended in the 60s, currently providing a total of 77 relatively spacious units, consisting of maisonettes and apartments alike, plus a penthouse and a unit designated for a shop. The Colliers International Group Inc., which is the company that is in charge with the marketing of this property, promoting it for the collective sale, stated that the reserve price actually contains a charge for development as well, of $3.505 million, so that the future owner of the property will be able to take the most of out the land’s use. According to the managing director of the company, Mr. Tang Wei Leng, City Towers is a property that has a great potential while coming at a great price, considering that property prices have dropped with approximately 20% since 2013 and are about to go up in the years that follow. Thus, if anyone would like to invest in District 10, now it’s the best time to do it.

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Australia is one of those countries where the home prices were on the rise for a very long time. Apparently that’s not the case anymore. In fact, it seems that home buyers have a delight, as the national property prices fell with around 0.3% in the entire country during the month of December. This does signal that there are some challenges to overcome on the market, but it’s safe to say that more and more people are afraid of this situation.

Sidney and Darwin in particular had a major problem, as both cities had a 0.9% decline when compared to the previous month. Sidney in particular ended up having prices 2.4% smaller when compared to the last quarter, so there are some issues there.

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Economist announced that Singapore’s economic growth rose approximately 3.1% over the last three months of 2017. Then, thanks to the growth in manufacturing, it rose slightly more though overall growth has been quite slow. This slight growth was higher than anticipated but lower than the quarter before at 5%. The growth rate was in accordance with findings by the MTI (Ministry of Trade & Industry).

The Prime Minister stated that Singapore’s 3.5% was double what was originally forecasted due to the increase in global growth. Although both manufacturing and construction have moved to a crawl, it is estimated that Singapore’s growth is through the service sector which is expected to continue in 2018. The external service sectors are growing faster than domestic services such as business growth.

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Recently the Singapore Government has released 2 land plots for bidding, so the private developers can start working on them. These include the SengKang Central (Next to Buangkok MRT station) and the Hillview Rise one. The two sites are brought in the confirmed list for the second half of 2017.

The land parcel at Hillview Rise has a site area of 14296 sq m, so it’s quite large and definitely among some of the best out there. The residential gross floor area is around 40030 sq m. The project is set to add around 535 housing units in total, so it really is a large project.

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When Prime Minister Lee Hsien Loong announced in his 2013 National Day Rally speech the government’s plans to relocate Paya Lebar Air Base, few could have foreseen the impact – both good and bad – it would have on so many Singaporeans, from the east of the island to the west. We look at the history of the airbase, and what effects the proposals will have to the different parts, and communities of Singapore.

Paya Lebar Airbase (PLAB)
Building work, on what was originally known as Singapore International Airport, began in 1952 with its official opening being on 20 August 1955. As well as being a hub for Malayan Airways and the birthplace of Singapore Airlines, the airport was most notable for its being a destination for Concord between 1979 and 1980, when British Airways flew there from London Heathrow.

The airport’s location – it was hemmed in by established housing estates, meant that it was always going to struggle to compete in a rapidly expanding air industry. By 1975 the number of passengers going through the airport had risen to 4 million, more than twice the number of just 5 years before, but a new airport was beginning to be built not far away in Changi. When that opened in 1981, Paya Lebar was closed for civil aviation and became a purely military airbase, a transformation that had begun several years earlier.

The closing of the airbase – scheduled to take place from 2030 – will be the final chapter in its short but colourful history.

What the Move Means for Paya Lebar…
First and foremost, the move will free up a massive swathe of land – up to 800 hectares. To put it into context, that is larger than Ang Mo Kio or Bishan. In an island the size of Singapore, that is very significant, coming in the way that it has, and in the area it sits. The prime minister promised that that land would be used to build new homes, offices, factories, parks, living environments and communities.

Another consequence of PLAB’s closure is that the current height restrictions that cover large sections of that part of Eastern Singapore will be relaxed. This will pave the way for the possibility of current low-rise buildings being redeveloped.

…and for Tengah Airbase and its Surroundings
Two existing airbases will take up the slack from the closure of PLAB. Changi Airbase East will have a new base built on its grounds, as well as a fourth runway. It is at Tengah Airbase in the West of Singapore where most disruption will occur however.

The government will acquire 106 hectares of land – approximately the size of the Marina centre – which includes several private lots. These include three fish farms, a nursery, an egg farm and an orchid farm. Nearby Choa Chu Kang Cemetery will see a third of its land taken, meaning that 45,500 Chinese and 35,000 Muslim graves will have to be exhumed.

The expansion of Tengah Airbase, will also mean a section of Lim Chu Kang Road will need to be moved, including almost 2 kilometres of its heritage road section.

New launch condos near Paya Lebar

• Sims Urban Oasis
• Kallang Riverside (Freehold Condo)
• Carpmael Thirty-Eight 

New Launches near Tengah Airbase

• Le Quest
• Lake Grande