Local Property News
Second EC launch of 2017 – Hundred Palms EC in Choa Chu Kang
A new executive condominium (EC) launches tomorrow, bringing new life to the market which has been quiet for awhile now. The Hundred Palms Residences EC in Choa Chu Kang is only the second EC to be launched in 2017, following the iNz Residences, also in Choa Chu Kang, which was launched earlier this year in February.
Property players are expecting the Hundred Palms Residences to have equally, if not more fervent response from the public as it is primely located within the vicinity of Hougang and Serangoon North and close to Rosyth primary school. As there has not been many EC launches this year, and the next one could be launched only next year, the developer is likely to be banking on the momentum from recent months to carry forth into the next quarter, at the very least. Out of the 1,394 apartment units sold last month, about over a quarter were ECs. In fact, the best-selling project in May was Sol Acres in Choa Chu Kang Grove. If anything, it seems like the estate is gaining attention amongst buyers and tomorrow’s launch may hit new highs.
Release of new land sites in H2 may not satisfy developer demand
After holding back for the past few quarters, 16 new land sites will be released under the Government Land Sales (GLS) programme in the second half of this year. That is in addition to other private land sites which might go on sale as well during the same period.
Despite this ramped up supply of land plots, property analysts expect continued aggressive bidding from developers as they seem to be on the hunt for resources to replenish their land banks and especially as the demand for new homes has grown steadily in the last few months. As the nation’s population continues to grow, the authorities also recognise the need to keep up with the demand for new private housing in the years ahead.
The 16 sites from the GLS programme can potentially yield up to 8,125 private homes. And yet, analysts still consider this allocation inadequate in meeting developer demand. The sites most likely to draw the most number of bids are those in Jiak Kim Street, Fourth Avenue and Cuscaden Road due to their locations. New record high bids are expected for these sites.
With the possibilities of more joint ventures between developers and funds, the potential for higher bids for limited land plots may very well drive land prices up. Could that mean eventual increases in property prices, even if not now then sometime in the future? How would that then affect the market then?
3-month short term rental of private homes now allowed
Though the short-term lease of properties on sites such as Airbnb is still not legal in Singapore, leasing of private homes for a period of 3 months is now allowed. Under previous regulations which was implemented in 2009, the minimum rental contract period was 6 months.
Landlords and tenants alike may rejoice as this means greater flexibility in terms of negotiating lease arrangements. For tenants looking for an option to serviced apartments or hotels, an entirely new market has opened up as those who were in between housing options (e.g. renting a place while waiting for renovation work to be done in their current or future home) or in Singapore for short-term study or work purposes.
This welcome change stems from a public consultation exercise in 2015 which showed a majority of its respondents supporting a shorter minimum lease period. This new move may bring good cheer for some private home owners though it may not be much of a change for agents specialising in rental properties as the yields for short-term rents are considerably lesser than say a one- or two-year contract. Property analysts are not expecting much change in the rental market as landlords may still favour longer contracts as it saves them the trouble of waiting on new tenants.
The rules are already in place and take effect immediately. Violations of the regulations may warrant fines of up to $200,000.
Third time lucky for Tampines Court?
One of the biggest collective sale of a privatised ex-HUDC of the decade may go down should developers go for the $960 million sale price put by for Tampines Court.
Launched just this Tuesday, the development has secured 82 per cent approval from the residents and each owner will stand to received $1.7 million from the sale. The 702,000 sq ft Tampines street 11 site currently holds 560 apartment units across 14 residential blocks but could potentially yield 2,100 new private homes in the future. Tampines Court is located in a mature estate with very good possibilities of being redeveloped into an eco-establishment suitable for families.
Property analysts are hopeful for a successful sale this third-time round as the collective sale sector has shown itself to be performing exceedingly well in the last few quarters. This is despite of the $348 million additional charges required to intensify land use and to top up the lease to 99 years. But the home owners are optimistic about current market sentiments. The most recent collective sale tenders include the private property The Albracca in Meyer Road and another ex-HUDC, Serangoon Ville in Serangoon North Avenue 1 and a Stirling road site was recently sold for $1 billion.
There may be a small window of opportunity before the market becomes too saturated with sales bids and also as the government intends to ramp up supply of land sites in H2. Success or not, it may all come down to timing.
Global Property News
CapitaLand Capitalising on integrated developments in China
Singaporean developers are looking to China in their search for market expansion opportunities.
CapitaLand for one is hoping to leverage on their expertise in developing integrated developments, which are harder to replicate than residential, retail or commercial office projects, to help them get ahead in China’s intensely competitive real estate sector. They believe these cross-segment developments have their place in the Chinese property market and while they are in knowledge of the need to constantly improve quickly or risk falling behind, are confident enough to invest significantly. CapitaLand currently has the largest portfolio of integrated developments of any foreign developer in China.
Their next project is for a 24 billion yuan (S$4.9 billion) Raffles City Chongqing, their biggest yet in China. The project is expected to be ready by H2 of 2018. In the meanwhile, they already hold 1 million sq m over 4 integrated developments which opened in April this year – Raffles City Shenzhen, Raffles City Changning, Raffles City Hangzhou and CapitaMall Westgate in Wuhan.
The “Raffles City” brand is doing well thus far and the CapitaLand group has set their sights high but wise, with plans to invest $2.1 billion into integrated developments in China’s gateway cities such as Shanghai, Beijing, Guangzhou and Shenzhen.