NEWS & VIEWS Update by ERA Research & Training Division Tuesday, 8 April, 2014 RESIDENTIAL MARKET HDB resale prices edge up, strong rebound in volume Resale prices of Housing and Development Board (HDB) flats crawled slightly higher last month as price increases in smaller units offset the declines in larger ones, going by the latest data from the Singapore Real Estate Exchange (SRX). But transaction volumes staged a strong rebound as buyers returned to the resale market after the Chinese New Year lull. Flash estimates by SRX showed HDB resale prices edged up 0.3 per cent in March from a month ago. Prices for three- and four-room units rose by 0.5 per cent and 0.8 per cent, respectively as more buyers sought units with smaller quantums, given the loan cap under the Mortgage Servicing Ratio (MSR). Prices of larger flats, however, softened by 0.2 per cent for five-room units and 0.7 per cent for executive flats from a month ago. Overall HDB resale prices slipped 4.9 per cent year-on-year in March, SRX flash estimates show. The total number of resale transactions, however, jumped 40 per cent from Februarys 951 units to 1,319 in March - the highest monthly volume observed since October. Property consultants are encouraged by the latest data from SRX, expecting that resale activity will pick up though prices might correct further. With this trend continuing, we may see transaction volume increase in the coming months as more buyers come back to the resale market in view of stabilising prices, said ERA Realty key executive Eugene Lim. He sees the rental market under pressure from new supply of completed private homes. HDB data showed an estimated 1,627 flats being rented in March - the highest rental volume in eight months, while overall median rental prices remained flat at $2,300 for the fourth consecutive month. This is the first time SRX is not publishing flash estimates for cash-over-valuation (COV) following its introduction of the X-value two weeks ago, which estimates the value of a property based on past transacted prices of comparable units. The introduction of X-value came shortly after HDB tried to turn off the spotlight on COV by changing its resale process, requiring buyers to sign the option to purchase first before getting a valuation. SRX rolled out another price indicator yesterday - TOX or transactions over X-value - that looks at how much buyers pay over the X-value. The median TOX for the HDB resale market in March stood at negative $3,000, which means that buyers are paying below recent transacted prices. Like the COV, TOX is a forward indicator on how heated the market is, said Jeremy Lee, co-founder of SRX, adding that SRX will start providing the median TOX by HDB towns and property types next month. Sam Baker, co-founder of SRX, pointed out that TOX is a neutral measurement that is forward-looking but will not lead to prices spiralling higher or lower because the underlying X-value is based on past transactions. In tandem with the negative TOX value, market watchers are expecting a downward trend in HDB resale prices. There have been more than 60,000 requests for the X-value since its launch two weeks ago, according to SRXs Mr Lee. SRX will release the median TOX for the private residential market by district and property type next week. Mr Lee noted that the X-value has closely tracked actual valuations so far, with about 98 per cent of all HDB resale transactions this year within a 10 per cent deviation from the actual valuations and about 81 per cent of transactions are within a 5 per cent deviation. SRX will roll out the X-value in Hong Kong by June based on data from the Hong Kong Land Registry. Source: Business Times – 8 April 2014 Hillview House site on the block again The former Hillview House site is back on the market. The asking price for the freehold property, which is zoned for residential use, is $55 million. This works out to $875 per square foot of potential gross floor area inclusive of an $18.2 million estimated development charge payable to the state. This unit land price is believed to be similar to the last round, when the property was offered for sale through a tender exercise that closed last July. This time, the tender will close on May 21 and the propertys owner, a low-profile Singaporean family, is offering it as a vacant site, having pulled down the old Hillview House industrial building earlier this year. Thus the owner met Urban Redevelopment Authoritys Feb 23, 2014 deadline to cease industrial activities and clear the site in order to qualify for 1.92 plot ratio, including a 0.3 additional plot ratio. The 43,557 sq ft site can be developed into a 10-storey condo project with about 83,630 sq ft maximum gross floor area. The plot is about 730 metres from the Hillview MRT Station, currently under construction on the Downtown Line. Closer to the station, the 99-year leasehold Hillview Peak condo site along Hillview Avenue fetched a top bid of $638 psf per plot ratio (psf ppr) at a state tender that closed in March 2012. The Hillview House site is a stones throw from Lam Soon Industrial Building, a 10-storey industrial building where Cambridge Industrial Trust last year sold its stake to Enviro-Hub Holdings and BS Capital, both controlled by Raymond Ng Ah Hua. The $140.8 million sale was for space that translates to 69.4 per cent strata share value in the freehold building. The former Hillview House site located at 1 Jalan Remaja. Source: Business Times – 8 April 2014 COMMERCIAL MARKET Prime office rents rise 5.5% in Q1 The average grade A overall rent hit $9.90 per square foot (psf) per month - up 5.5 per cent over the previous quarter and the fourth straight quarter of increases. It was also up 10.1 per cent on the same period a year ago. Rents for offices in Raffles Place were the big mover, up about 10 per cent over the previous quarter to $9.90. Marina Bay rent had the next highest jump - rising 9.3 per cent to an average of $12.90. Newer buildings in Marina Bay can command even better prices, with average monthly effective rents coming in around $13 to $14 psf. The positive market sentiment coupled with a limited supply drove the hike in prime rents. The tightening of supply and sustained demand also sent the vacancy rate down 0.2 percentage point to 4 per cent for the first quarter. Raffles Place again benefited the most, with vacancy rates down to 3.1 per cent compared with 4 per cent in the previous quarter. The vacancy rates for Marina Bay, Shenton Way and Orchard stayed the same. City Hall, however, saw vacancies rise to 1.2 per cent compared with 0.5 per cent in the previous quarter. The leasing market also stayed active, with a healthy number of enquires
Posted on: Thu, 10 Apr 2014 18:19:38 +0000