NEWS & VIEWS Monday, 14 July, 2014 RESIDENTIAL MARKET Cooler demand could hit EC launches The stricter buying rules that have hit executive condominium sales could also end up hurting upcoming launches, property consultants say. There were 779 launched but unsold exec condo units as at May 31 - the highest level for three years. National Development Minister Khaw Boon Wan told Parliament earlier this week that about 6,800 exec condo units are expected to be launched over the next 18 months. Exec condos, a hybrid of public and private housing, are designed to cater to a sandwiched class of buyers who might not qualify for public housing but find private property beyond their reach. They are sold with Housing Board restrictions but built by private developers, and become fully privatised after 10 years. Consultants said yesterday that the slowdown in the sales of exec condos was likely due more to reduced affordability than buyer fatigue among HDB upgraders. Consultants said the affordability of exec condos had been reduced due to a resale levy and tighter loan rules imposed on the sector late last year. Exec condo buyers who have already bought an HDB flat or exec condo unit must pay a resale levy of $15,000 to $55,000, depending on what their first subsidised home was. Monthly mortgage payments for exec condo loans were capped last December at 30 per cent of a borrowers monthly pay. The drop in demand for exec condos could mean sales at upcoming launches may take a hit. No exec condos have been launched this year due to a restriction imposed on the sector in January last year. That rule requires developers to wait at least 15 months after getting an exec condo site before they can launch the project for sale. The next few exec condo developments to hit the market after this 15-month period could include one in Woodlands and one in Sengkang, both by Qingjian Realty. A Straits Times check found that there were seven exec condo projects on the market with unsold units, which together accounted for the 779 unsold units as at the end of May. The Waterwoods exec condo in Punggol East had 170 unsold units at the end of May, which was 45.6 per cent of the 373 units in the project - the highest percentage of the seven exec condos. The project at Punggol Field Walk, which is being developed by Sing Holdings and UE E&C, is the first exec condo to have private lift lobbies and maisonettes. It went on sale last November. The second-highest percentage of unsold units was at the Skypark Residences exec condo in Sembawang Crescent, which also began sales in November last year. There were 205 unsold units as at the end of May - 40.5 per cent of the 506 units in the project. That was also the biggest absolute number of unsold units across the seven exec condo projects. The five other exec condo projects with unsold units were Forestville and Twin Fountains in Woodlands, Sea Horizon in Pasir Ris, Ecopolitan in Punggol and The Tampines Trilliant in Tampines Central. Source: The Straits Times – 12 July 2014 Unlocking the Gate to the citys charms The impending launch of the City Gate mixed development in Jalan Sultan is drawing attention back to the Kampong Glam district. Its charm as a historical and cultural zone may give it a head start over many areas but it is its location - on the edge of the city centre and close to retail and entertainment amenities - that is its strongest suit, property consultants said. Plans to develop the surrounding Beach Road and Ophir-Rochor corridor into a district of mixed- use projects will underpin the investment outlook in the mid- to long term, they said. The 30-storey City Gate is on the site of the former Keypoint, which was acquired by World Class Land for $360 million from Frasers Commercial Trust in 2012. The 99-year leasehold project in Beach Road will feature 311 flats - one- and two-bedroom units of 431 to 570 sq ft, two-bedroom and three-bedroom dual-key units of 678 to 1,066 sq ft and one- to four-bedroom penthouses that range from 484 to 1,819 sq ft. It will also have 188 commercial units, ranging from 280 to 3,735 sq ft. Residential units are expected to go for $1,900 to $2,000 per sq ft (psf) and commercial units could sell for $4,000 to $5,000 psf, marketing materials show. Two 829 sq ft units at the 360-unit Concourse Skyline, developed by Hong Fok Land, went for $1,810 to $2,075 psf in the fourth quarter last year. But 101 units remain unsold since the completed project was launched at about $1,590 psf in 2008. Older developments in the area include the 132-unit Textile Centre, where four units have sold at median prices ranging from $911 to $926 psf over the past year. At The Plaza - a strata-titled 32-storey mixed-use building owned by UOL Group - two units changed hands at a median price of $1,257 psf a year ago. In this years first quarter, 13 leases were signed at The Plaza at a median rent of $4.06 psf, said Mr Ong. He felt that owners of units in the new developments can expect strong rental demand, saying this is a convenient location. Source: The Straits Times – 12 July 2014 COMMERCIAL MARKET Shophouse prices fall as demand weakens Prices of shophouses here have started to see resistance from the market, an increasing mismatch between sellers high asking prices and prices that buyers are willing to pay. Sellers who need to let go of their properties have thus had to lower their asking price, which has sent the prices of shophouses down. The average transacted prices of freehold shophouses have taken a tumble, falling 10.8 per cent from $3,626 per sq ft in H2 2013 to $3,235 per sq ft in H1 2014. The demand for shophouses among food and beverage (F&B), and retail businesses is also waning, pushing their prices down, said the report. Prices of leasehold shophouses registered a steeper drop of 23 per cent, from $6,163 per sq ft in the second half of 2013 to $4,717 per sq ft in the first half of this year. The sharper fall was due mainly to a high base in the preceding half-year, where a property on Duxton Hill went at $8,779 per sq ft and one on Peck Seah Street for $7,818 per sq ft. Mortgage loan constraints from the property cooling measures could have also shrunk the pool of prospective buyers. The report pointed out that the heightened competition from foreign players in the F&B and retail space has also hit demand for shophouses. On top of this, hiring difficulty and a crunch on manpower have put a crimp on businesses expansion plans. They may choose to rent instead of buying. Transaction volumes for the first half of the year totalled 40, a drop from 49 transactions in the preceding half-year. While transactions for leasehold properties held steady at seven, transactions for freehold properties in this half fell to 33, from 42 in the previous half. With shophouse owners holding on to their assets betting on the limited supply of such properties, buyers waiting on the sidelines and retailers opting to lease, Knight Frank expects prices of shophouses to fall 10 to 15 per cent in the next six to eight months. Source: Business Times – 12 July 2014 URA policy may reduce demand for shophouses A new Urban Redevelopment Authority (URA) policy to tighten approval of new development applications for hotel, boarding house and backpackers hostel uses will likely dampen demand for contiguous shophouses - unless they already have prior approval for such use. In a circular last week, URA noted that hotels, boarding houses and backpackers hostels - which provide accommodation for visitors to Singapore - are generally found in commercial areas. However, such uses should not dominate and displace other commercial activities in these areas. In addition, they are generally not permitted within or at the fringe of residential estates so as to protect the amenity of nearby residents, URA said. The planning authority added that in recent years, it has received more applications for new hotels, boarding houses and backpackers hostels, including change-of-use proposals to such uses on sites that are not zoned for hotel use. To address the potential proliferation of such developments, URA minted the new policy, which took effect on July 7; it will be reviewed in two years. Within the Central Area, proposals for new hotels, boarding houses and backpackers hostels, including any change-of-use proposals to such uses on sites that are not zoned or permitted for hotel use, will generally not be allowed within certain areas inside the Outram, Rochor, Downtown Core and Singapore River Planning areas. The affected areas include a big chunk of Chinatown and Little India shophouses. In Chinatown, the affected area is bounded by Upper Cross Street, New Bridge Road, Cantonment Road, Neil Road, Craig Road, Tanjong Pagar Road and South Bridge Road. The stretch includes Mosque, Pagoda and Temple streets, Keong Saik and Kreta Ayer roads, Duxton Hill and Duxton Road. In Little India, the affected area is bounded by Sungei, Race Course and Kitchener roads extending to Rochor Canal. Other areas hit by the new policy include a stretch near Bugis MRT Station - covering Tan Quee Lan, Liang Seah, Purvis and Seah streets. Also affected is an area surrounded by North Canal, South Bridge, Upper Circular and New Bridge roads. For proposals in other parts of the Central Area, URA will evaluate them individually, considering its planning intention for the locality and the potential traffic impact generated by the proposal. Currently, most people buy a row of adjoining shophouses with the intention of converting them to a hotel or hostel. URA, in its circular, also stated that Outside the Central Area, it will generally not allow proposals for new hotels, boarding houses and backpackers hostels including any change-of-use proposals to such uses, on sites that are not zoned or permitted for hotel use. As for existing approved hotels and boarding houses on sites that are zoned or permitted for hotel use, any proposed intensification of the gross floor area (GFA) will continue to be subject to evaluation. Expansion of the existing approved boarding house and backpackers hostel uses that are on Temporary Permission (TP) will be considered individually, up to the total GFA of the existing building that it occupies. URA will only allow further renewal of the TP for these uses if they have not caused any adverse traffic impact and disamenity to the surrounding users, according to the circular. Source: Business Times – 14 July
Posted on: Mon, 14 Jul 2014 08:44:23 +0000
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