Category: Blog

The additional buyers’ stamp duty hike (ABSD), as well as the decline of 71 per cent in condo sales by foreigners, has dampened demand.

From April 27 to May 2023 (as per April 27), only 306 units of condos were bought by international buyers after the ABSD rate increased from 30% up to 60%.

The foreign buyers of condo units accounted for 5,4% of condo sales from May 2022 until April 2023. This figure decreased to 1.8 percent between May 2023 and April 2024.

Analysts reported that the drop in foreign purchases was greater in the CCR (core central region), which usually attracts a higher level of interest from investors and foreigners.

In the year leading up to ABSD, foreign purchasers accounted approximately 14 percent of condos sold in CCR. This fell to just 6 per cent during the last year.

Urban Redevelopment Authority’s (URA) statistics showed that the number of units sold decreased after ABSD was raised. Sales volume decreased by 36.6% in the CCR, from 4 215 to 2672 units.

The CCR saw a drop in luxury apartments over $10 million, from 73 sold units in 2020 to 50 sold units in 2030, though the average unit cost of such units was relatively stable at $3.800 per square feet.

Many investors possess financial power and are not in a hurry to sell. They would rather lease their property than to do so at a reduced price. The prices of properties have not fallen despite a decrease in the number of transactions.

Grand Dunman

Luxury home sales have also likely slowed, possibly due to the longer sales processes and stricter due diligence checks performed by financial institutions when purchasing large-ticket items.

Recently, more foreigners that are exempted of paying the ABSD (60%) have inquired or made commitments about purchasing luxury non landed private residential property here.

Quite a number are of South Asian ancestry but have US citizenship. Most foreigners who buy luxury non-landed properties prefer to get the best deal possible, instead of paying more for emotional reasons.

ABSD does not apply to buyers from the US (including residents of Iceland, Liechtenstein Norway or Switzerland) and their first Singapore residential home.

After the ABSD rise, Chinese buyers have significantly decreased in the luxury sector.

Chinese nationals topped both the lists of foreign buyers and sellers of condos at the CCR for 2020 and 20, with 112 – and 155 – caveats respectively. PropNex Research, URA data indicated that this fell to 113 units in 2022 and only 93 units in 2023.

A caveat registered with the Singapore Land Authority ensures that the buyer is protected when purchasing a home.

American buyers have now topped the list of the foreign buyers who lodged caveats with the CCR. There were 110 in 2023 compared to 91 in 2010 and 59 in 2010.

URA’s data from the 26th of April showed that in the three months leading up to 2024, private residential sale volume had fallen by 2,4%. It was the second consecutive quarter with a decline.

Read more: Leedon Green

From January 2024 to March 2020, 43 transactions took place with foreigners. 22 of these were US buyers. For the 11 remaining transactions, we still do not know who bought them.

In the period January to march 2024, foreigners accounted for 1,2 % of new and resale units. This is down significantly from 1.7 percent in the last quarter of 2023. It also represents the lowest level since 1995. As foreign demand drops, local buyers will drive home sales.

Over the last twenty years, the club has been subjected to several protracted legal actions brought by its founding shareholders.

In 2000, around 5,000 members of the club sued the shareholders for contract breach and misrepresentation. The members claimed the club’s owners misrepresented RTC, saying it would be “a prestigious private city-club” with only 19000 members. They won their lawsuit in 2005, demanding a refund for the S$28,000 they paid as membership fees.

In the course of the lawsuit, RTC was also accused of lowering the price for membership.

According to court documents BT obtained, the membership fee dropped from S$28,000 per month in May 2000 to S$16,000 per month in June 2000. The price was reduced to S$13,300 in December 2000.

The winning land bid per plot ratio could be higher than S$1,500/psf if the site is put on sale today. Assuming that the project has 99-year leases, finished units should sell for more than S$3,000/sqf.

A private preview of the Watten House Project, a freehold new launch in the vicinity, saw condo units sold at a price per square foot of S$3,230 at a private event held on Nov 18. The property developers UOL Group, Singapore Land Group, and Singapore Land Group, sold 57 percent, or 180 out of the 360 units, at District 10 Condominium near Tan Kah Kee MRT.

The Singapore Land Authority’s (SLA) joint statement of Monday (Nov. 20) said the redevelopment of RTC is consistent with Singapore’s policy to redevelop as many brownfields sites as possible to satisfy future demand for housing and land.

The redevelopment of the precinct will “enhance its residential character”. Future residents will be able benefit from transport infrastructure, connectivity and the city as well.

Raffles Town Club has issued a press release to The Business Times stating that it will continue to offer services to all its members. Members can use the club’s facilities until 2026.

RTC will continue to be able operate as usual until its lease expires. At that point, it will need to return its land to the government. SLA said they would work closely with RTC on the return.

Europa Holdings was successful in its bid of S$100,000,000 to acquire the site that had been zoned as a sports and recreational use.

Leedon Green

Raffles Town Club’s (RTC) prime plot at Bukittimah, which it currently occupies under a lease that expires October 20, 2026, will be used for residential development.

As the site is likely to be in demand by developers, this could further reduce the cost of membership.

RTC Memberships were initially sold at S$28,000. Now they can be found on the secondary markets for S$7,000 – S$8,000.

The lease at the RTC, 1 Plymouth Avenue ends on October 17, 2020. The parcel would be a rare 99-year leasehold residence on Bukit Timah Road. Given its proximity of an MRT station and popular schools as well as the Botanic Gardens and other attractions, it will likely be highly desired.

Singapore Chinese Girls’s School, Anglo-Chinese school, Nanyang Primary School and St Joseph’s Institution are some of the nearby schools.

In 2008, Chinese investors Lin Jian Wei (who had acquired RTC’s assets in July 2001) and Singaporean Margaret Tung brought a S$130m lawsuit against the founding four.

The club Lin and Tung argued the four founding members had stolen the club’s money through director’s fees as well management fees paid to an external company of which they were shareholders or beneficial investors.

In November of 2012, the billionaire Peter Lim as well as the three other RTC founders were successful in their appeal. The claim against them was then dismissed.

SLA and URA have said that, if RTC wishes to continue its operations, it will open a tender for the government agencies to engage RTC about the availability state properties suitable for the club.

There is no information on when the club ceased selling memberships. However, there are some still available for sale on the secondary market.

Carousell revealed that RTC Memberships were offered on the site as recently three months ago for S$7,000 – S$8,000.

Wong Xian Yang from Cushman & Wakefield’s research team for Singapore & Southeast Asia said that the Downtown Core accounted the largest portion of the net demand during 3Q2023.
The net office demand was 398,264 square feet. The net demand growth was the fastest q-oq since 1Q2020.

Wong says that financial services and professional services remain the most important demand drivers in the CBD. In the first nine month of 2023, 58% of all new leases were in the CBD – up from only 26% during 2022.

Tricia song, CBRE’s Singapore and Southeast Asia head of research, said that more diversified drivers of demand have helped to compensate for the slowdown in tech.
The most active sectors during 3Q2023, were asset management, private wealth and consumer products.

A tighter market due to project redevelopments has also helped boost occupancy rates from 89.2% during 2Q2023 up to 90% during 3Q2023.

URA headline property rental index showed a dramatic 4.9% jump q-o q in 3Q2023, more than double the 2.3% increase in the quarter before.

URA real estate statistics for 3Q2023, however showed that median rents dropped for the very first time in five years for Category 1 offices, which URA defines to include buildings in the Core Business District (including the Downtown Core) and Orchard Planning Area. They were down by 2.3% on a quarter-over-quarter basis.

The median rents of Category 2 office space, which URA defines as any other office area outside Category 1, fell 4.5% quarterly in the 3Q2023.

JLL also found that CBD grade-A office rents dropped in 3Q2023, marking the end of nine quarters consecutively growing.

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JLL reported that the average gross rents for CBD Grade A office spaces tracked by the company fell 0.3% quarterly to $11.29 psf/month (pm) in the 3Q2023, down from $11.32 pm/psf in the 2Q2023.

URA data show that approximately 0.45 million sq. ft. was removed from the stock in 3Q2023, a result of the redevelopments to Central Square, Faber House and Central Mall.

In 3Q2023, 57 transactions for office strata were recorded in the Central Region. This is the lowest figure since 3Q2020 (47 transactions).

CBRE Research expects the rents of Grade-A offices in the Core CBD area to rise by 1.5% to 2.5% over the entire year. This growth will be faster than projected GDP but still slower than the 8.3% increase in rental growth that is expected in 2022.

In the Central area, however, it is anticipated that rental growth will moderate in future quarters as a result of an increased interest rate regime expected to last longer and global uncertainty.

JLL has predicted that by 2024, the number of offices completed on the island will have reached a record high. Close to 1.9msq ft of Grade A offices is due for completion within the CBD.
The majority will come from the IOI Central Boulevard Towers, which are 1.3msq ft in size, and Keppel South Central, which is 0.6msq ft.

JLL estimates a total of 1.1M sq ft uncommitted as of 3Q2023.

Public tender is being held to sell a freehold shophouse located at 255 Jalan Besar at a price guide of $22million. The three-storey building occupies an area of 3,145 sq ft, with a GFA of approximately 7,750 sq. ft.

The property is located in the Jalan besar Secondary Conservation Area and has a gross plot-ratio of 3.0 according to the Master Plan 2019.

It has an untapped GFA (gross floor area) of approximately 1,685 square feet.

The shophouse guide price is $2,838 per square foot based on GFA or $2,331 per square foot based upon the maximum floor area of 9 435 sq ft.

Read also: Leedon Green condo

Michael Tay is the head of CBRE’s capital markets in Singapore. He says that given the unique attributes, such as the freehold tenure, large frontage and potential for signage and naming rights, both investors and owners-occupants are expected to show a lot of interest.

In the last 12 months, he says that the demand for shophouses on the edge of the city has increased. Notable sales include the sale of 203 and 209 Jalan Besar earlier this month, for $38.5m. 301 Jalan Besar sold in May for $26m.

Joshua Giam of CBRE’s associate director for capital markets in Singapore highlights the fact that the new owner could maximise the plot ratio through a rear extension, or by enlarging their current floor plan. The shophouse can be used for F&B, clinics and serviced apartments. Giam says that “these initiatives will allow the owner to maximize rental returns and the capital value of the building.”

The bid for 255 Jalan Besar closes on November 30 at 12pm.

For the first time since the Federal Reserve started raising interest rates, all aspects of the housing market is now likely to get worse.

The housing market has reacted very differently in 2022 to the recent rise in mortgage rates. Then, the strike by home sellers boosted the demand for new homes. Homebuilders became the one bright market. Lack of inventory kept the costs high. This allowed businesses to profit from healthy profits for the mortgage rates of buyers. This doesn’t seem to be the situation anymore. It’s now easier to lower the cost of a home-loan to 5.5 percent – which is the minimum for potential buyers – at around 7% than around 8 percent. Confidence among builders is going in the direction of their stock prices and profit margins. In this month the National Association of Home Builders/WellsFargo sentiment gauge fell to its lowest level since January. We should expect builders to reduce their production plans moving forward.

Multi-family housing starts saw relatively stable conditions earlier in the year, and units under construction were rising as delays to supply chain processes kept projects from completion. Over the last two months, there’s been a noticeable decrease in the number of housing beginnings. The September numbers were 31.5 percent lower than the previous year and construction units fell for two straight months. This indicates that we’re likely to be over the peak of this cycle. The rental market will continue to drag the economy into 2024 as less units are being constructed and less under construction.

From the perspective of an investor the issue is at a time of robust consumption and lofty expectations for third quarter real GDP growth has led to a shocking selling off in Treasuries. JPMorgan Chase. JPMorgan Chase estimates that the economy grew at an average of more than 4 percent last quarter. Part of that boost comes from housing, which is expected to boost GDP in the first time since early 2021 because of the recent increase in single-family home begins. This is unlikely to continue into the current quarter, and possibly until 2024, unless interest rates come off.

The resumption in student loan repayments as well as the United Auto Workers’ strike and the union that represents radio and television actors are all possible factors to affect consumption.

Leedon Green Singapore

This convergence could finally give investors some respite from the run of hot economic data, which has been weighing on bonds and stocks as it bolsters the prospects of further tightening of monetary policy. If that is not the case, it could mean that the economy as well as the labour market are gaining more momentum than they anticipated, an extremely uncomfortable scenario when one of the markets has already been shattered by the most high borrowing rates since the mid 2000s.

Since the beginning of 2022 the resale market for housing has slowed as sellers resist to surrender their mortgage rates that are low. New houses had offered buyers some respite. However, they are no longer. Builders have been overwhelmed by the recent rise in mortgage rates that reached as high as 8%. Since profit margins are declining, they will most likely cut their construction spending in the months to come. Apartment construction has also rolled over in recent months as developers are afflicted by the slowing rent growth and high costs for financing.

It’s easy to understand the frustration of potential homeowners. What are the implications for macroeconomics? Due to the importance of housing to overall activity and the importance of residential construction, a slowing pace in construction will slow the pace at which the economy can grow but not enough to trigger recession in the next few quarters. To the extent that the brutal sell-off in Treasuries has been in response to hotter-than-hoped-for economic data, a paralysed housing sector will offer some respite.

Developers may choose to delay launches until 2024, when rates stabilize and sentiment improves, due to the lower sentiment and the nevertheless high interest rates, as well as due to the holiday season in December.

Because of the variety of products available on the market, consumers are becoming more selective in their selections.

Developers will need to be careful in pricing these new projects in order to guarantee that they sell at a high volume. There will be no substantial price cuts as the developers are already committed to capital expenses.

The OCR will be the center of most major project launches within the next few months. These include the 265-unit Lentoria and the 474-unit Hillock Green in the new Lentor Hills estate. In Jurong in Jurong, the J’den Condo, located in the site of the former JCube Mall, will have 368 units. The 440-unit Sora condominium, located at Yuan Ching Road, will also be built. The 341-unit Hillhaven at Hillview Rise.

In addition to ECs, 335 units were sold in September, and launched 68 units. In August, 649 units were sold and 950 were launched.

The September sales figures that does not include executive condominiums (ECs), is less than one-quarter of the 987 units that were sold in the same period in 2022. It’s also the month that has the lowest number of sales in the year thus far, in addition to the month of December 2022 where developers sold 170 units.

In addition, buyers’ sentiment remained “cloudy and a little chilly” due in part to the cooling measures rolled out in April.

Leedon Green is obtaining TOP status soon in December 2023.

According to the figures that was released on Monday (16th October) by the Urban Redevelopment Authority, developers sold 217 homes for sale in September. This is a drop of 44.9% from the 394 units removed in August.

Just one new project was launched in September: leasehold of 999 years The Shorefront at Jalan Loyang Besar in the Outside Central Region (OCR) that had three units being sold for a median of S$1,902 psf.

The rising additional Buyer Stamp Duty (ABSD) and the soaring economic uncertainty and inflation, along with the rising amount of housing options for public like Build-to-Order, for instance are just a few of the factors buyers consider when weighing their options.

The number of private homes sold decreased in September, which was exacerbated by an absence of new projects launching during the gloomy Hungry Ghost Festival.

The freehold Pullman Residences Newton was the second-highest, having 21 units sold for a median price of S$3,258 psf. In the three segments of the market that are available, the Core Central Region (CCR) held up “relatively better” than the other two segments. The 76 CCR units sold accounted for 35 per cent of condo and private apartment sales in September.

Overall, market watchers predict that private new home sales, excluding ECs are expected to range between 6,000 and 7,000 this year, a little less than the 7,099 homes sold last year.

The only bright area was the EC market, which saw 118 units moved last month. The demand for ECs has been high as price-sensitive buyers seek the best alternative to buying a home. Additionally, those who purchase ECs are given upfront remission on ABSD

Of the 118 EC units, some 100 were sourced from Altura located in Bukit Batok, the only EC project to be launched this year. The overall sales for the project to 88 per percent. Altura was also the top-selling project for a second consecutive month, selling units at a median price of S$1,473 a square foot (psf) during September.

In the OCR the sales of real estate fell by 64 percent month-over month, to 70 units. For the Rest of Central Region, it dropped 33 percent from month to month.

Some buyers avoid buying a home during the festival because of traditional beliefs. Developers tend to steer away from launching new projects during that period too.

Altura also set an industry benchmark in the EC market by selling an area of 980 square feet for S$1.6m or S$1,585 psf. This is higher than the previous psf price high held by Copen Grand, which stood at S$1,499 psf.

This brings the number of primary home sales for the first 9 months of 2023 to 5,407 units – 15.6 percent lower than the 6,409 units transacted in the same period in the year before. This is the lowest since 2016, when 5,656 homes were sold.

It’s not too surprising that home sales fell following the Hungry Ghost Festival, which was over in mid-September.

The increasing geopolitical tensions across the world and the potential effects of the conflict in the Middle East may also dampen the spirit of the real estate market.

Looking ahead, analysts expect that sales for developers to remain subdued and the mood of buyers to stay muted amid growing macroeconomic uncertainty as well as rising interest rates.

Two of CDL’s executive condominium (EC) developments were recognized as the best projects in their respective categories. Piermont Grand received the award for the Best Executive Condominium in the category Completed (Non Central) while Copen Grand was awarded the award for the Best Executive Condominium in the category Uncompleted.

City Developments Ltd. has had an eventful year. In October, the property group celebrated its diamond jubilee and won the Top Developer Award at EdgeProp Singapore Excellence Awards 2020 (EPEA) for the seventh consecutive time.

ECs, a unique project of public housing developed by private developers, is sold to Singaporean families who meet the requirements. ECs are a great way to fill a niche on the housing market by providing condo amenities for incredibly low prices. CDL was able to achieve this at Piermont Grand and Copen Grand.

Chia believes that EC homes should remain a viable alternative to private residences. CDL, as one of Singapore’s leading property developers, is eager to encourage innovations that will raise the bar in future residential developments.

Find out more: Leedon Green Farrer Road by MCL Land

CDL’s innovative plans are centered around digitalisation. The company will integrate CDL Home Sales – its proprietary electronic system – which provides homebuyers with a transparent and efficient purchasing experience – with other digital solutions in its wider in-house ecosystem, such as the My CDL Home app. The app will allow home buyers to receive monthly updates about the progress of construction in their project, including an estimated TOP and specific information for their unit. Home buyers can also view their payment schedules and billing schedules and make an appointment to collect keys after TOP.

CDL, in addition to its strengths as a developer of a diverse residential portfolio, ranging from ECs and high-end luxury developments, will look to elevate its track record for developing iconic mixed-use residential projects.

CDL is not immune to the challenges of the market, such as a series of cooling measures for property over the last few years, high interest rates, and a cautious macroeconomic outlook in Singapore and globally.

CDL is also preparing for two new launches by 2024. The first project to launch in 2024 will be Lumina Grande, a 512 unit EC at Bukit Batok Avenue 5. The project is scheduled to launch in the 1Q2024. CDL won the site at a government land auction in September of last year, after it submitted a winning bid of $336.07 millions. The land rate was $626 per plot ratio.

Market watchers will also be looking out for CDL’s upcoming project in Woodlands, Champions Way. Last month, the developer won the site after submitting a winning bid of $294 million. This equates to a land rate per square foot of $904

After the government announced a series of cooling measures for property in April of this year, the company decided to delay the preview of Newport Residences. This 246-unit residential project is located on Anson Road, in Tanjong Pagar. These measures included the doubling of foreign buyers’ additional stamp duty to 60%, from 30%. Newport Residences was developed from the former FujiXerox Towers.

The EPEA jury recognized several CDL residential projects that were completed or unfinished, but which showed excellence in design, landscape, sustainability and innovation. The award-winning CDL projects of this year were designed to cater to a wide range homeowners and buyers from Singapore.