Find us on Facebook

DTZ Evan Chung Branch

Find out what's happening in the Real Estate industry and about our group at DTZ. Hear first-hand on our service commitment to our clients and discover the prospects of being a Real Estate Agent with us!

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
Newsroom

Newsroom

Get the latest News for Singapore Real Estate and Properties around the globe here!

June 2013 was when the Total Debt Servicing Ratio (TDSR) was being introduced. Since then, between July to December last year, mass market private homes saw take-up rates plunge to its lowest level.

Ong Teck Hui, Research Director at Jones Lang LaSalle Singapore concluded that after TDSR was imposed in June 2013, sales of most projects launched had slowed down, unlike previously where realistic priced projects were able to achieve substantial take-up within a reasonable time frame. He noted that buyers were more attracted to purchase projects that had reduced prices than optimistically priced projects; and revealed that due to poor market sentiment, developers had shy-ed away from launching new projects. Therefore there were only 2,796 suburban private homes launched which was more than 50% less than the 6,309 units launched in first half of 2013. Likewise in the outskirts, new home sales fell precipitously -- a drop of 64% in the second half of 2013.

On September 9, 2013, it was stated that the Total Debt Servicing Ratio (TDSR) had began to bite and developers are lowering the launch prices of new projects.

Concurrently, the matter was noted by Liam Wee Sin, President (property) at UOL, that they could have priced their project at S$1,500 per-square-feet (psf) at the very least but due to TDSR, they were tasked to price it at a more realistic level, at S$1,350-S1,400 psf. TA Corporation’s Group CEO Neo Tiam Boon siad he was looking at nearly S$1,300 psf on average pre-TDSR but instead released it at S$1,250 psf. It was commented that the issues were not on the buyers but was due to the ability to secure a bank loan.

In April this year, it was recorded that new home sales was 55% higher than in March but still well below pre-TDSR levels; stating that realistic prices are crucial in moving sales. Following JLL’s perspective on private residential units sold by developers, it seemed that developers remained cautious in launching units for sale, resulting in only 586 new units being placed on the market and 745 private homes being sold by developers in April.

July 26, 2014 - Private home prices continued to slip. According to the Urban Redevelopment Authority (URA), the prices of private homes had fallen by one percent in the second quarter of 2014, following the 1.3 percent decline in the previous quarter; and it was observed that across all segments of the private residential property market, prices were declining. 

    Prices of non-landed properties in the Core Central Region (CCR) declined by 1.5 percent, following the 1.1 percent decrease in the previous quarter

    The Rest of Central Region (RCR) recorded a decline by 0.4 percent, after decreasing by 3.3 percent in the previous quarter

    In Outside Central Region (OCR), prices declined by 0.9 percent, significantly more than the 0.1 percent decline in the previous quarter

    Prices of landed properties declined by 1.7 percent, significantly more than the decrease of 0.7 percent in the previous quarter

The steady recession of the private property price index and the number of units sold by developers had shown that the residential market has adjusted to the effects of the TDSR, reported in a statement by JLL. With the prices progressively ameliorating, that was the balanced outcome expected as transactions moderated significantly from pre-TDSR levels.

In Aug 2014, it was reported by DTZ that a weak housing outlook and the possibility of further reduction in price would hamper sales volumes in the private housing market, especially for resale homes. It was highlighted in the report that buying interest was kept down due to various reasons which include the government’s reluctance to relax the property cooling measures, buyers' continuation in adopting a wait-and-see approach and rosier investment opportunities abroad.

Although there were units realistically priced within the secondary market, some sellers were still dawdling for market circumstances to be more desirable. Positively, it was expected that demand for new homes will hold up better as developers were able to strategically and creatively promote their projects to attract buyers.

The report further stated that given the results from the past quarter, projects with good location and were priced affordably would achieve reasonable interest. However, due to the limited number of buyers and financing concerns, sales rates were not expected to hit pre-TDSR levels. Thus, selected new projects were launched in phases to test market reaction as developers remained cautious and might slash prices to move units.

It was predicted by DTZ that there would be a severe decline in the number of units in the whole of 2014, as compared to the previous two years; total transaction volumes this year would also fall far short of the annual average recorded in the past five years. Also, assuming that the economic environment remained the same, transaction volume is likely to be comparable to the levels seen in the pre-GFC period, which was viewed as a healthy correction for the residential market.

Hits: 18478 Continue reading

Recent BTO Flat Prices - MND

Posted by on in Singapore Real Estate News

On September 8, it was revealed that the average selling prices of BTO flats in the non-mature estates were stated at $110,000, $187,000 and/or $295,000 for a two-room flat and $386,000 for a five-room flat by the Ministry of National Development (MND). Medium prices falls within the same range as well.

According to HDB, currently in the mature estate, there is only one BTO project being launched this year in July, that is the Toa Payoh Apex, a BTO project centrally located between Lorong 6 Toa Payoh and Toa Payoh East. There are 557 units housed in four 36-storey residential blocks and those BTO flats were constructed with various eco-friendly features; it was estimated to be completed in late 2018. The prices of three-room and four-room were around $321,000 and $470,000 respectively.

Khaw Boon Wan, Minister for National Development, mentioned that it is all due to having locational advantages and vast availability of facilities, that is why in the mature estate, the prices of BTO flats are much higher; also, he added that it took about three years to complete the BTO 2013 projects which involved the waiting time to the process of booking the flat to key collection.

This September, there will be four upcoming sales launches in Bukit Batok, Hougang, Kallang/Whampoa and Jurong West, as per information on HDB website.

Last three civil contracts was awarded

On July 25, Singapore’s Land Transport Authority (LTA) has awarded the last three of 25 major civil contracts for the 30-km long fully-underground Thomson Line, which comprises 22 stations that will connect the northern and central parts of Singapore to the city and the rest of the MRT network, thus providing additional capacity along the north-south corridors, to strengthen the overall resilience of the rail network.

Thomson Line includes six interchange stations: Woodlands, Caldecott, Stevens, Orchard, Outram Park and Marina Bay; which will link to the North-South-East-West Line, Downtown Line , North East Line and Circle Line, providing greater accessibility and significantly improving travel time for their daily passengers.

The contracts are for Orchard, Marina South and Gardens by the Bay stations and associated tunnels at a total value of around $1.32 billion.

LTA’s Deputy Chief Executive Chua Chong Kheng reported that the full tally of the 25 major civil contracts for Thomson Line, is worth at a total cost of approximately $7.77 billion from the award of those three civil contracts. He further commented that Thomson Line construction are in full swing in which the line will be expected to be open in phases between 2019 and 2021.

Transport Minister Lui Tuck Yew also commented that with Thomas Line completed, there would be more than 400,000 commuters, living and working along the Thomson Line, enjoying a greater ease of access, more travel options and also shorter and more direct journeys. He noted that the line, with six interchange stations, will give commuters more alternative routes and minimize inconvenience during disruptions and added that the northern tip will eventually link up with Johor Bahru in Malaysia, while its southern tip will continue eastwards to serve areas like Marine Parade and Changi.

A breakdown scope of contracts awarded

1) The construction of Orchard station

Penta-Ocean Construction – Bachy Soletanche Singapore Joint Venture was awarded the contract at an amount of about $498 million. LTA stated that this interchange station will connect Thomson Line with the North-South Line, which will allows a greater accessibility to the Thomson and Havelock precincts. As Thomson Line will run largely parallel to the North-South Line, it will bring significant time savings to the passengers boarding along the north-south corridor.

2) The Marina South station and tunnels

Sinohydro Corporation (Singapore Branch) – Sembcorp Design and Construction Joint Venture was awarded the contract at a value of $488 million.

3) The Gardens by the Bay station and tunnels

Nishimatsu Construction – Bachy Soletanche Singapore Joint Venture was awarded the contract at a sum of $331 million. Alongside Woodlands, Lentor, Mayflower, Bright Hill and Mount Pleasant stations, Gardens by the Bay station will serve as the sixth Civil Defence shelter along the Thomson Line. Also, in the near future, it will link Thomson Line to the Eastern Region Line when both lines are completed.


Brief summary of the three companies constructing the respective stations

An established construction company in Japan, Penta-Ocean Construction Co Ltd is involved in the construction of Downtown Line’s Bendemeer station, Thomson Line’s Woodlands North and Bright Hill stations and the Marina Coastal Expressway. While Bachy Soletanche Singapore Pte Ltd specialises in geotechnical and civil engineering works. It was involved in the construction of Bugis and Telok Ayer stations for Downtown Line.

Sinohydro Corporation, a hydropower engineering and construction company which has been involved in a wide range of international infrastructure works such as hydroelectric dams, power plants, road and rail projects, is involved in the construction of Thomson Line’s Napier Station. Their local joint venture partner, Sembcorp Design and Construction Pte Ltd, is a Singapore company set up in 1994 which provides design-and-build construction services including architectural, civil and structural, mechanical and electrical engineering and quantity surveying.

Also an established construction company in Japan, Nishimatsu Construction Co., Ltd is involved in the construction of tunnels between Downtown Line’s Ubi and Kaki Bukit stations. Their local joint venture partner, Bachy Soletanche Singapore Pte Ltd, specialises in geotechnical and civil engineering works.

Hits: 14515 Continue reading

The MAS, working with other government agencies, has introduced several rounds of measures to cool an overheated property market. However, it assessed that it is premature to ease property cooling measures now. They believe that it is important to secure the gains that are made in stabilizing the market and restoring financial prudence.

On July 21, National Development Minister Khaw Boon Wan told Parliament that Singaporean home-buyers, especially those with the eagerness to upgrade will not welcome the results of the measure. He stated that such move would lead to an improvement in demand, which would increase the number of transactions and raise housing prices.

On July 24, the Monetary Authority of Singapore (MAS) related verbally and on paper that even if the property market may be stabilizing currently due to the cooling measures taking their effect, it is still "too early" to relax those measures since property prices remain high.

Concurrently, MAS Managing Director Ravi Menon, in regards to unwinding cyclical measure at the MAS annual report 2013/2014 press conference, reported that it is too early to relax as risk factors remained. He mentioned that while housing prices have moderated, they have remained at elevated levels. In the previous four years, property prices had risen 60% but have declined by a mere 3.3% during the last three quarters. Mr Menon further added that if property measures are relaxed at a time of low global interest rates, it may set off another spiral of price increases.

It was stated by MAS that household balance sheets are in better shape - that the property cooling measures have helped strengthen overall household balance sheets - household debt growth has been tempered. For example, year-on-year growth of household debt has moderated to nearly 13% in the third quarter of 2011 from the same quarter of 2010 and to 5.5% in the first quarter of 2014. Mr Menon remarked that this comes amid a considerably brighter economic outlook, with a modest pickup expected in the second half.

The level of debt among highly leveraged households, which takes time to reduce, remains high, thus there is a need for them to work with their banks and commit to debt repayment plans, he added. The cooling measures introduced are divided into two categories – structural measures such as the total debt servicing ratio which are meant for the long term, and cyclical measures such as loan-to-valuation limits and stamp duties that can be "re-calibrated according to market conditions".

"The prices are just beginning to soften,” said Mr Menon. With high level of prices, low interest rates and high debt levels for the highly leveraged households, he said that it would take time to adjust, and required close monitoring over supply and demand conditions, credit and liquidity environment and a variety of other factors. Furthermore, he stated that the objective is to have an orderly correction and stabilization of the market and not just to see a collapse in prices.

Similar to China, which had introduced numerous measures that include credit curbs and restrictions on buying more than one home, Singapore is worried that inflation may increase as a result of a potential property bubble destabilizing the financial industry; thus, a series of property-market curbs was implemented since 2009. However, it was reported by analysts that measures had slowed housing demand beside increasing processing times for home loans.

Currently, MAS expects inflation to grow at a pace of between 1.5 percent and 2.0 percent, compared to an earlier forecast of a 1.5 percent to 2.5 percent increase. Mr Menon attributed the decline in overall inflation to moderating car and property prices.

Hits: 17433 Continue reading