Home prices flatten in Q3 as curbs arrest gains

The Business Times - October 2
The July cooling measures are starting to show in the moderation in the pace of the quarter-on-quarter increase of the official private home price index: Growth was 0.5 per cent in the third quarter. 

Most property consultants interpret the latest flash estimate from the Urban Redevelopment Authority (URA) as the beginning of a period of stable prices.

The fate of private home prices will be determined by how opposing forces pan out. Factors weighing negatively include the cooling measures, the substantial supply pipeline, rising interest rates and the adverse impact on the economy from US-China trade tensions and rising oil prices. The uncertainty in the stock market is also not helping sentiment.

Tricia Song, Head of Research:
The new cooling measures introduced in July have put the brakes on rising home prices in Q3 2018. Flash estimates by the Urban Redevelopment Authority showed that private home values rose by 0.5% quarter-on-quarter (QOQ) in Q3 – a much slower pace of QOQ growth compared to increases of 3.4% in Q2 and 3.1% in Q1. 

That said, the 0.5% rate of price increase in a quarter where fresh measures were implemented was still quite decent, considering the 0.4% rise in Q3 2013 when the Total Debt Servicing Ratio (TDSR) kicked in effective in June 2013. Then, prices in the Core Central Region (CCR) and Rest of Central Region (RCR) fell 0.3% and 0.9% QOQ respectively, while Outside Central Region (OCR) rose 2.2% QOQ. 

Broadly, the 0.5% overall price growth in Q3 was within our expectation and we believe it heralds more sustainable price movements in the quarters to come. Cumulatively, private home prices have risen by 7.9% in the first three quarters of 2018, 9.6% above the recent trough in Q2 2017. Home values are still 3.2% lower than the peak in Q3 2013. Click here for our analysis.

URA launches sale of 390-room hotel site in Club Street

The Business Times - September 27
A Chinatown site slated for hotel use is up for grabs, with the Urban Redevelopment Authority (URA) launching the land parcel for sale by public tender from the government land sales (GLS) programme's confirmed list on Thursday.

The 99-year leasehold, 5,121.4 square metre (55,130 square foot) site, at the junction of Cross Street and Club Street, has a maximum gross floor area of 24,310 sq m and could yield up to 390 rooms.

It will have direct connections to Chinatown and Telok Ayer MRT stations, according to the tender brief, and will be within walking distance of the upcoming Maxwell MRT station.

The development, to be completed within five years from the date that the tender is accepted, can be built up to four storeys in the low-rise zone and 75 metres above sea level in the high-rise zone.

Govinda Singh, Executive Director, Valuation & Advisory Services:

As the old mantra goes ‘location, location, location’. Club Street has this in spades and is well-positioned to benefit from the growing commercial area that is Downtown/Tanjong Pagar. Ideally, developers should be looking at an upper upscale offering, managed by a leading international hotel company. Consideration must also be given to a dual-branded offering which will maximise the use of the site, especially given the high land costs.

Tricia Song, Head of Research: 

The Club Street site is the first hotel land parcel to be placed on the Confirmed List since the Bukit Chermin plot in GLS H2 2008. The last time a standalone hotel site in the CBD that was sold on GLS was the Oasia Hotel Downtown at Tanjong Pagar in January 2011. The 99-year leasehold hotel site which now houses 314 rooms had attracted seven bids with a top bid of SGD194.77 million or SGD932 psf ppr. In January 2011, the 60-year leasehold So Sofitel site along Robinson Road attracted eight bids with a top bid of SGD86 million or SGD1,072 psf ppr. 

Given a less competitive supply pipeline, we estimate this well-located Club Street site could fetch 7-8 bids and a top bid of SGD320-350 million or SGD1,223-1,345 psf ppr.   

Busy weekend for condo hunters with new launches

The Business Times - October 1
It was a busy weekend for property hunters, with several condominium launches taking place at the same time.

Among them were 99-year leasehold condominiums The Jovell located at Flora Drive and Mayfair Gardens at Rifle Range Road. At The Jovell, about 40 units were snapped up, out of the 250 units launched.

The 428-unit condominium is the latest residential project offering developed by Tripartite Developers comprising Hong Leong Holdings Limited, City Developments Limited, and TID. It was unveiled on Saturday at an average selling price of around S$1,200 to S$1,400 per square foot (psf) with a range of one- to four-bedroom apartments.

Tricia Song, Head of Research: 

The recent takeup at the launches had been encouraging, signaling underlying genuine demand - likely owner-occupier demand which has been undeterred by the cooling measures. We see stronger demand for well-located properties near transport links, amenities and good schools among other qualities, while less competitive dynamics would support pricing. Mayfair Gardens saw a relatively good takeup rate probably due to its location near good schools in a city-fringe location with relatively limited supply.