Private home price index down 0.6% q-o-q in Q1 2019: URA flash estimate

The Business Times - April 01
The Urban Redevelopment Authority's (URA) flash estimate for the first quarter of 2019 shows that its overall price index for private homes fell 0.6 per cent over the preceding quarter. This is a bigger decline than the 0.1 per cent quarter-on-quarter dip in the fourth quarter of 2018. Year on year, the index is up 3.2 per cent.

URA data released on Monday morning also showed that prices of non-landed private homes fell 1 per cent quarter on quarter in the first quarter of 2019, contrasting with the 0.5 per cent gain in the fourth quarter of 2018.

Tricia Song, Head of Research:
Prices of private residential properties in Singapore fell for the second straight quarter, dipping by 0.6% in Q1 2019 from the previous quarter, according to flash estimates released by the Urban Redevelopment Authority (URA) on Monday (1 April). The price decline was steeper than the 0.1% drop recorded in Q4 2018.

The fall in private home values in Q1 was generally unsurprising amid the weaker market sentiment that carried through from the end of last year, following the implementation of fresh cooling measures in July. With the two straight quarters of price drop, overall private home prices are now 0.7% below the most recent peak in Q3 2018 and 3.8% below the all-time peak in Q3 2013. 

Based on caveats downloaded, overall transactions (excluding Executive Condos) in Q1 2019 fell 16% quarter-on-quarter (QOQ) and 47% year-on-year (YOY) to 3,215 units. The Outside Central Region segment (non-landed) bucked the trend as transactions picked up 5% QOQ to 1,535 units, with progressive takeup in large launches, in particular those near the Cross Island Line stations, announced during the quarter. Click here for our full analysis


Different tales for two cities in latest URA tender

The Business Times - March 29
The latest state land tender closing has yielded a mixed bag of results for the two 99-year leasehold sites offered.

A land parcel along Middle Road in the buzzing Bugis locale, which is slated for residential with commercial at first storey use, drew 10 bids, with Wing Tai's highest bid of nearly S$492 million or S$1,458.33 per square foot per plot ratio (psf ppr) within expectation.

Over in the Sims Drive locale in Geylang, a private housing plot drew just five bids. The top bid of almost S$383.53 million or S$732.01 psf ppr - from a Hong Leong Holdings and City Developments Ltd (CDL) tie-up - was below expectations.

Tricia Song, Head of Research:
The relatively conservative bids for the two sites - particularly for Sims Drive which fell short of our expectation - reflect developers’ measured approach toward land banking following the imposition of fresh property cooling measures in July 2018 amidst new guidelines on minimum private residential unit size which took effect in October 2018.

The Middle Road site (zoned residential with 1st storey commercial) garnered positive response with 10 bidders – the highest number of contenders for a residential GLS site since Mattar Road site in May 2018 which also received 10 bids. Although the site was hotly contested, the bid prices were fairly conservative in our view, with bulk of the bids bunched below SGD1,300 per square foot per plot ratio (psf ppr). 

Wingcharm Investment, a unit of Wing Tai Holdings, placed the top bid for the site at nearly SGD492 million, translating to about SGD1,458 psf ppr – in line with our forecast. This would be Wing Tai’s first residential site acquisition since Garden Residences in August 2017. Click here for our full analysis


Tan Quee Lan Street site expected to grab developers' attention

The Business Times - March 30
The Urban Redevelopment Authority (URA) has launched the tender of a site on Tan Quee Lan Street under the Confirmed List of the first half 2019 Government Land Sales (GLS) programme which is expected to attract keen interest from developers owing to its location.

The 99-year leasehold site sits on an area of 11,530.9 square metres and has a maximum gross floor area (GFA) of 48,430 sq m. It can potentially yield up to 580 residential units while a maximum of 2,000 sq m of the total GFA can be used for commercial use on the first storey.

Tricia Song, Head of Research:
We expect the tender to set benchmark land pricing for a residential site the area in view of the plot’s superior city-centre location and good connectivity, being on top of the Bugis (Downtown Line & East-West Line) MRT interchange station. 

It is also near the Beach Road area which is being rejuvenated, with the upcoming integrated Guoco Midtown development, and newly completed mixed-use projects such as DUO and South Beach. This site will contribute to the ongoing makeover in Beach Road and offer private housing to support the growing commercial enclave in the area. 

In addition, the Tan Quee Lan Street site will not be subject to the rule on minimum unit size as it is located in the Central Area. This would give the developer a freer hand in crafting the unit-mix at the future development. Click here for our full analysis.


Two incentives to rejuvenate the city

The Business Times - March 28
The Urban Redevelopment Authority (URA) has unveiled two incentives: one seeks to liven up the central business district (CBD) with a broader mix of uses including residential; the other aims to encourage owners of existing commercial buildings in strategic areas including Orchard Road to team up with neighbours for comprehensive redevelopment with bold proposals that will transform the street or precinct.

The URA also announced on Wednesday in conjunction with the release of its Draft Master Plan 2019 that it is doing away with the Bonus Plot Ratio scheme.

Tricia Song, Head of Research:
This latest blueprint demonstrates the urban planner’s intent to continue to position Singapore as a one of the most liveable cities in the world, taking into account the needs and aspirations for the future.

To encourage the redevelopment of older buildings in strategic areas into new, bold and innovative developments, the Master Plan 2019 introduces a few initiatives, such as increasing plot ratios. The uplift in actual Gross Plot Ratio based on the Master Plan 2019, however, could be marginal or substantial, depending on the sites, compared to the previous master plan where there was a bonus plot ratio which allowed up to 5-25% increase on the base plot ratio for sites in close proximity to designated MRT Stations (Orchard, Somerset, Dhoby Ghaut, Raffles Place & Tanjong Pagar), as well as those which met a minimum plot size requirement. This bonus plot ratio scheme will be rescinded. In place, there will be two new rejuvenation schemes:  1) Strategic Development Incentive (SDI) Scheme; and 2) CBD Incentive Scheme. Click here for our full analysis.