Property Strategist

Healthy home sales in the past five months whittled down property developers' inventory, which has in turn boosted their appetite for land.

This came through in the stronger-than-expected top bids for two 99-year leasehold sites at state land tender closings on Thursday. The absolute price quantum, deemed relatively palatable for developers, helped boost their attraction in what was the first residential Government Land Sales (GLS) tender closing since the Phase 2 re-opening of Singapore's economy following partial lockdown imposed to contain Covid-19.

Of the two plots, the more hotly contested one is next to Tanah Merah MRT station at Tanah Merah Kechil Link.

The site, zoned for residential, with commercial units on the first storey, drew 15 bids. The top bid by MCC Land (Singapore), part of a diversified Chinese state-owned enterprise, was S$248.99 million or about S$930 per square foot per plot ratio (psf ppr). This was 4.6 per cent higher than the second-highest bid by a tie-up between City Developments Ltd (CDL) and TID.

The other plot, an executive condominium (EC) housing plot in Yishun Avenue 9, fetched seven bids.

The top bid from Sing Holdings came in at S$373.5 million or S$576 psf ppr; this was 8.9 per cent above the second-highest bid from a partnership between CDL and Hongkong Land subsidiary MCL Land.

CBRE's head of research for Southeast Asia, Desmond Sim, said: "Given the environment of rising construction costs, the respective bid prices are likely to set new benchmark S$psf launch prices for their respective markets and asset classes in the future."

ERA Realty's head of research and consultancy, Nicholas Mak, estimates MCC Land's breakeven cost for the plot in Tanah Merah Kechil Link to be between $1,480 and S$1,540 psf.

Showsuite Consultancy's chief executive, Karamjit Singh, commented that the top bid would require the developer to sell the new apartments for about S$1,700 to S$1,800 psf, which is "bullish, considering that new units in that area are currently trading at between $1,500 psf and $1,600 psf."

Tan Zhiyong, chief executive of MCC Land (Singapore), said: "We are very confident of developing an exciting residential landmark with about 2,000 sq m of retail space on this relatively sizeable site. It will be a highly liveable environment brimming with smart and sustainable features."

The company is a subsidiary of Metallurgical Corporation of China, a Fortune Global 500 company listed in Hong Kong and Shanghai.

Developers in Singapore sold 1,256 private homes in August, 16 per cent higher than July's take-up.

This is the fourth consecutive month of increase in monthly sales since the circuit breaker in April this year, analysts noted. The buoyant recovery has led to upward revisions by analysts with some even projecting that 2020 transactions may even exceed 2019's 9,912.

"It appears to be a paradox that despite a bad recession, the private residential market is keeping well afloat with fairly cautiously optimistic sentiments," said Ong Teck Hui, JLL senior director of research and consultancy.

This could be due to bright spots in the economy where some businesses are stable or even growing, he added.

So who are these confident buyers? 84.5% are Singaporean buyer, 11.2% are Permanent Residents, 4.3% are Foreigners.

In the first eight months of this year, developers sold an estimated 6,198 new private homes, just 4.5 per cent lower than that in the same period last year.

"Based on current trends, new private home sales from September to November could still remain fairly positive while December sales could be better than in previous years if travel restrictions keep homebuyers on the market. We may then see full-year sales of new private homes close to the 9,912 units sold in 2019 or perhaps even exceeding it," said Mr Ong. Other new launches The Ryse Residences at Pasir Ris mrt are ramping up to launch soon.

The National University of Singapore (NUS) released today the Singapore Residential Price Index (SRPI) for June and July 2020. SRPI, which measures the price movement of private residential non-landed resale properties, increased 1.2% month-on-month in July, the highest rate of monthly growth since the 1.7% increase in May 2018.

The price increase was led by resale home prices in the prime districts, which jumped by 1.8% m-o-m in July, the fastest growth in the past two years.

Developers sold more housing units than the numbers released last month. In the Core Central Region (CCR), 25 new housing units were released for sale and 113 were sold. Overall, excluding executive condominiums, 869 new private housing units were released for sale islandwide in July, and 1,080 units were sold.

In the private resale housing market, only 149 private resale housing units were transacted in May. The resale volume increased to 279 units in June, and jumped to 739 units in the following month. In the CCR, the number of private resale housing units sold more than quadrupled from 35 in May to 154 in July.

Nicholas Mak, head of research & consultancy department at ERA Realty, says that overall, “homebuyers put aside their fear of Covid-19 and re-entered the private housing market with vigour in July”, which was reflected in the three of the resale price indices. The exception is smaller units, which slipped 0.7% m-o-m in July.

New home sales posted a surprise rebound, with developers selling 998 non-landed private homes in June, up 105 per cent from 487 private homes in May, as showflats were allowed to reopen on June 19 after a two-month partial lockdown ended.

The numbers - the highest monthly sales for June in seven years - seem to indicate resilience in the property market, as also evidenced by a 22 per cent rise in new home sales from 821 a year ago. This data is consistent with property consultants' expectation of virus' impact on new home sales to be short term, and demand to pick up in H2 2020.

Fewer new private homes were launched for sale: 597 in June, slightly lower than 615 units in May, and down nearly 11 per cent from 670 a year ago.

The figures, released by the Urban Redevelopment Authority on Monday (July 15), exclude executive condominium (EC) units, which are a public-private housing hybrid.

First-time home buyers taking advantage of a drop in prices and lower interest rates, plus workers in sectors that have not yet felt the pain of the pandemic-induced recession, such as technology and the civil service, are underpinning demand, Mr Nicholas Mak, head of research and consultancy at ERA Realty, told Bloomberg.

New sales were propped up mainly by Treasure at Tampines, Parc Clematis, The Florence Residences, Parc Esta, Stirling Residences and JadeScape. Kopar at Newton remained as the top-selling project in the CCR, with 25 transactions in June.

Elsewhere at Sengkang Grand Residences, sales has been brisk  with 10 units sold since the start of Phase 2.

A six-month extension in May for the completion of residential, commercial and industrial projects and for developers to sell off housing units was "quite generous", said Education Minister Lawrence Wong.

It had taken into account the fact that the construction sector would still take some time to resume its activities and provided "some buffer" for that, he added yesterday.

Mr Wong, who was previously National Development Minister, was responding to a question on whether the Government would consider further extending the six-month reprieve that it had given to developers and contractors.

The Government will continue to monitor the situation, and continue to discuss with stakeholders in the built environment sector to see what measures "might be necessary to help the industry progress along and overcome this particularly difficult period", Mr Wong said at a virtual press conference.

He added that relevant agencies like the Building and Construction Authority are mindful of the difficulties faced by developers and contractors.

Mr Wong noted that almost all construction projects should be able to resume by next month, as the vast majority of foreign workers living in dormitories are expected to be cleared to return to work by the end of this month.

Irwell Bank Residences is prominently located along Irwell Bank Road. It is a mere 200m from the upcoming Great World MRT Station on the Thomson-East Coast Line. This Irwell Bank Road development is located in within a well-established residential neighbourhood in River Valley, Prim District 9 of Singapore. Residents can enjoy choice city living in close proximity to lifestyle, dining and entertainment options in Orchard Road and Great World City. Irwell Bank Road condo is also minutes walk from the Singapore River with a bustling night life and riverside dining. The Central Business District and Marina Bay Financial District is just 8-min drive away.  Residents will enjoy the quintessential cosmopolitan living here in Irwell Bank Residences, with convenient access to work, play and lifestyle destinations. This development will form part of an iconic development in the River Valley neighbourhood.

The Urban Redevelopment Authority's benchmark overall private home price index fell for the second consecutive quarter. It eased 1.1 per cent quarter-on-quarter (q-o-q) in Q2 2020 based on the flash estimate issued on Wednesday, after slipping 1.0 per cent in Q1 2020.

Suburban non-landed private home prices remained unchanged in the April to June period.

Property consultants generally said that a price decline in Q2 was to be expected, given the drop in transaction volumes during the circuit- breaker partial lockdown to contain the Covid-19 bug.

From April 7 to June 18, showflats were shut and property viewings disallowed.

All things considered - the severe setback in terms of disruption to business activity and movement of people during the circuit breaker - most consultants termed the drop in URA's benchmark index in Q2 as "mild" or "gentle".

Said PropNex chief executive Ismail Gafoor: "We think the 1.1 per cent price drop in Q2 was measured and reflected some resilience amid this pandemic."

Since the end of last year, the index has eased 2.1 per cent.

Property consultants' forecasts for the full-year drop in the index vary. At the lower end of the range is Mr Ismail of PropNex, who is projecting a fall of up to 3 per cent, "with the potential rebound in new homes sales lending support to prices in the second-half of the year".

For the whole of last year, URA's private home price index appreciated 2.7 per cent, a slower pace compared with the 7.9 per cent hike in 2018.

Looking ahead, ERA Realty's head of research and consultancy Nicholas Mak said: "The property market will be balancing opposing forces. There will be market forces that will depress property prices, such as economic headwinds and the weak job market.

"There will also be market forces that would support property prices, such as low interest rates, ample liquidity in the market, some pent-up demand, more active real estate marketing, foreigners seeking a safe haven outside their home countries and HDB upgraders' demand."

Mr Mak points out that HDB upgraders have helped to support demand for new suburban condo projects.

New private home sales rebound in May despite virus curbs.

75% rise comes even as show-flats were shut, in-person viewing of property was prohibited.

New private home sales rebounded last month from April, even as Singapore was in the second month of its Covid-19 circuit breaker.

Developers in Singapore sold 484 new private homes last month, going by sale caveats, Knight Frank Singapore said yesterday. This is 74.7 per cent more than the 277 new private homes they sold in April.

A total of 967 caveats for private homes were lodged during the circuit breaker from April 7 to June 1, said Knight Frank. Of these, 577 were new sales, while 380 were resale transactions and the remaining 10 were sub-sales. It is also noted that Q1 2020 posted the highest quarterly resale volume in eight years.

This comes even as show-flats were closed and in-person property viewing was curbed during the circuit breaker as strict safe distancing measures were in place.

Mr Leonard Tay, head of research at Knight Frank Singapore, said: "The sales volume of new homes dominated private residential transactions in May. Despite the restrictions on physical interaction, there is life yet for the real estate market."

He said new home buyers have shown "a degree of adjustment and adaptation to the prevailing circumstances" amid the pandemic.

The Government has launched the sale of a second residential site this year, while again giving developers more time to assess the property market under the Covid-19 situation before submitting any bids.

The land parcel in Tanah Merah Kechil Link is for a mixed residential development, with the first storey slated for commercial space. It has a site area of 8,880 sq m and a maximum gross floor area (GFA) of 24,864 sq m.

The 99-year leasehold site, which is off New Upper Changi Road, can potentially house about 265 apartments, fewer than the 310 units initially estimated when the site was first announced in December 2019.

It can also yield 2,000 sq m of commercial space that can be developed into strata-titled retail units or offices.

Property developer City Developments Limited (CDL) and its joint-venture associates sold 185 units with total sales value of $278.1 million for its first quarter ended March 31, versus 173 units with sales value of $516.3 million a year ago, CDL said in a business update on Tuesday (May 12).

The lower sales value was due to a majority of residential units sold being mass and mid-market projects such as Piermont Grand, Whistler Grand and The Tapestry. In contrast, CDL said it sold units mainly from ultra-luxury projects such as Boulevard 88 in the first quarter a year ago.

CDL said it expects its sales volume to decline during the circuit breaker period. "Notwithstanding the temporary setback, the group continued to register sales in April for projects such as Amber Park, Boulevard 88, Coco Palms, Piermont Grand, Sengkang Grand Residences, South Beach Residences, The Jovell and The Tapestry," it said.

The Urban Redevelopment Authority (URA) flash estimate for the first quarter of 2020 shows that its overall price index for private homes shrank 1.2 per cent over the preceding quarter.

This contrasts with an increase of 0.5 per cent quarter on quarter in the fourth quarter of last year.

Year on year, the index is up 2.2 per cent, according to the URA flash data released on Wednesday morning. The statistics will be updated on April 24, 2020 when the URA releases its full set of real estate statistics for Q1 2020.

Cushman & Wakefield's senior manager for research in Singapore and South-east Asia, Wong Xian Yang, said: "Going forward, private home prices are expected to trend lower as Singapore heads into a recession. Buying sentiment is expected to remain muted over the short term until uncertainty in the labour market eases.

"However, prices may prove to be more resilient as compared to previous recessions. For example, during the Global Financial Crisis, URA's overall private home price index fell by 24.9 per cent over four consecutive quarters."

Developments at good locations, such as Pasir Ris Central Residences, and sensitive pricing from developers will continue to attract buyers who are looking for value buy opportunities in the current market.

The Covid-19 outbreak and economic slowdown have started to bite; the Urban Redevelopment Authority's flash estimates for the first quarter shows its benchmark overall private home price index shrank 1.2 per cent over the previous quarter.

The drop followed three consecutive quarter-on-quarter gains. Year on year, the index is up 2.2 per cent. Analysts expect private home prices to continue heading south, to the tune of up to 8 per cent for the whole year. However, they are not predicting a steep fall like the 24.9 per cent slide over four quarters during the Global Financial Crisis.

In the suburbs or outside central region (OCR), prices fell one per cent, contrasting with the increase of 2.8 per cent in the previous quarter. "In the fourth quarter of last year, Sengkang Grand Residences was launched, selling 226 units at a robust median price of S$1,742 psf whereas top-selling projects in Q1 2020 such as Treasure at Tampines, Parc Clematis and Parc Botannia had median prices below S$1,600 psf," said Mr Ong.

Allgreen Properties and Kerry Properties, which are both under Kuok Group of companies, have tied-up to launch another new launch condominium at Pasir Ris MRT. The white site land parcel at Pasir Ris Central was awarded to build an integrated development that is expected to TOP in 2024/ 2025. The development will consists of around 480 units above the shopping mall. Residents can enjoy unparalleled convenience to have retail, amenities, food and beverage options all at their doorstep. Pasir Ris Central Residences offers units from 1bedroom to 4bedroom unit types. Every unit will have the finest appliances and fitted with branded sanitary wares.

Pasir Ris MRT mixed development sits on a white site tendered for sale by HDB in August 2018. Spanning 3.8 hectares, it will be jointly developed by Allgreen Properties and Kerry Properties into an integrated development with a bus interchange, polyclinic, retail mall and a town plaza. The completed development will serve as a community focal point with its open spaces and pedestrian friendly pathways. It will provide residents with seamless connection to public transportation and amenities.

The economy expanded at a faster pace in the 3rd quarter with the city state projecting the recovery will take hold next year. The economy is set to expand 0.5%-2.5% next year, compared with 0.5%-1% this year, reported by Ministry of Trade & Industry.

Avenue South Residence

Avenue South Residence at Silat Avenue is a new launch condo developed by renown developer UOL, UIC and Kheng Leong Property. Avenue South Residence is situated off Kampong Bahru Road with 1,074 residential units, 8 commercial units and 1 childcare centre. The site is set to be integrated with the upcoming 5 blocks of conserved Singapore Improvement Trust flats and the 24-km Rail Corridor. Avenue South Residence has received great attention due to its strategic location at Bukit Merah planning area, and being the first residential development at the new district in the Singapore's Greater Southern Waterfront transformation region.