More HDB upgraders buying condos as resale flat prices rise
The Straits Times, 15 Nov 2021, Mon
By Grace Leong
More Housing Board upgraders are snapping up condominium units in a buoyant property market, spurred by resale flat prices climbing faster than those for private housing.
The robust HDB resale market has enabled them to upgrade more easily to private homes.
Some 7,169 buyers with HDB addresses bought new and resale private homes in the first three quarters this year, a jump of over 21 per cent compared with the same period last year, said property consultancy JLL, citing transactions recorded in the Urban Redevelopment Authority's (URA) Realis database.
This puts the number of new and resale private homes sold to HDB upgraders on track to surpass 2020 levels, with resales poised to hit a five-year high, analysts say.
A key driver is the rapid increase in HDB resale prices, which have risen at a faster rate than those of private housing over the past year, said Mr Nicholas Mak, ERA Realty Network's head of research and consultancy.
Prices of HDB resale flats surged 9.1 per cent in the first nine months this year, compared with a 5.3 per cent rise in the URA price index for private homes.
As a result, many HDB flat owners are upgrading to private homes after having sold their flats for sizeable sums, said Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.
Underpinning robust resale flat prices is a recovering economy, low mortgage rates and fresh demand arising from construction delays to Build-To-Order flats.
As at Oct 31, 192 resale flats were sold for at least $1 million this year, a record high. In comparison, 82 such HDB flats changed hands for the whole of last year.
"Some are also buying now because they expect prices to head higher, in view of the recovering global economy and a declining supply of new condos," added Ms Sun.
Resale condos proved to be more popular among HDB upgraders, with about 62 per cent of the 7,169 transactions falling in this category, according to JLL. This is because they are more affordable than new homes, noted Mr Ong Teck Hui, senior director of research and consultancy at JLL Singapore.
Citing caveats lodged in the first nine months this year, PropNex said 4,212 resale condo units were sold to buyers with HDB addresses, up 119 per cent from the 1,924 sold in the same period last year. There have been about 13,000 resale condo transactions this year.
Meanwhile, new condo units sold to HDB upgraders were up nearly 26 per cent for the first nine months, compared with the same period a year ago, said PropNex.
The number of private homes sold to buyers with HDB addresses has risen across the board, with the strongest sales growth in the $1.5 million to $3 million price range.
"This is more than twice the number from 2020, and has reached higher levels than that from 2017 to 2019," said Ms Tricia Song, head of research for South-east Asia at CBRE.
In the first three quarters of this year, 4,967 private homes priced between $1 million and $3 million were snapped up by HDB upgraders - a 109 per cent increase year on year, according to JLL.
"This is indicative of a recovering market after the severe recession in 2020, and also due to support from the HDB resale market," Mr Ong said.
"The aspiration to own private homes among HDB residents is longstanding. The 2018 cooling measures were imposed not to dampen that aspiration, but to slow rapidly rising prices at that juncture."
PropNex Realty chief executive Ismail Gafoor said the measures helped to cool new launch prices in the latter part of 2018, and helped upgraders with tighter budgets.
With the sweet spot pricing for HDB upgraders at between $1.1 million and $1.3 million, most are flocking to projects in the suburbs, or outside central region, analysts say.
Projects such as Treasure at Tampines and Midwood were popular options, while Normanton Park in the city fringe had the most buyers with HDB addresses, they said.
Singapore new private home sales rebound in October, up 8.3%
The Business Times, 12 Nov 2021, Fri 5:51 pm
By Fiona Lam
NEW private home sales rose in October, reversing the downward trend seen in previous months. Based on caveats lodged, analysts estimated that property developers sold 903 residential units in Singapore last month, up 8.3 per cent from September's 834 units.
On a year-on-year basis, the latest estimates are 38.1 per cent higher than the 654 new private homes sold in October 2020.
Buying momentum was boosted by the near sell-out of Jervois Mansion on its first weekend of sales, said Lee Sze Teck, Huttons Asia senior director (research).
In September, when developers were holding back on major launches, new sales had dipped 31.4 per cent from August, representing the second consecutive monthly decline.
No new executive condominiums (ECs) - a private-public housing hybrid - were launched in October. Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said this led to the estimated tally of new sales, after including ECs, slipping by 19.8 per cent month on month to 1,039 units.
The Urban Redevelopment Authority will release the official monthly sales data for October on Nov 15.
Bottom of Form
Including ECs, last month's top-performing project by sales volume was the freehold, low-rise Jervois Mansion, near the Tiong Bahru and Redhill MRT stations. Caveat data compiled by OrangeTee & Tie showed that the developer Kimen Group moved 99 units at a median price of S$2,553 per square foot (psf).
Nicholas Mak, ERA Realty Network head of research and consultancy, noted that some buyers found the unit prices attractive for a new freehold property in District 10.
Huttons' Lee said Jervois Mansion recorded what was possibly the best first weekend sales for any project in 2021. He added that buyers were drawn to the development's expansive land, which is a rarity in the Chatsworth-Bishopsgate vicinity, as well as its healthy and sustainable living concept.
The next best-selling project in October was the 99-year leasehold Parc Greenwich, where 84 units fetched a median price of S$1,251 psf. Mak pointed out that the 496-unit EC along Fernvale Lane was launched in September, which contributed to robust EC sales of 450 units in the primary market that month.
In contrast, the absence of launches in October resulted in EC sales returning to the usual monthly range of 70 to 160 units, he added. Developers moved 136 EC units last month.
Based on transaction prices, the biggest proportion of new private homes sold, excluding ECs, continued to come from the S$1.5 million to S$2 million bracket. They accounted for 30.8 per cent of total transactions in October.
Homes in the S$1 million to S$1.5 million range made up 26.6 per cent of the volume, while those fetching between S$2 million and S$3 million contributed to 25.9 per cent.
The most expensive new non-landed private residential property purchased last month, based on caveats lodged, was the S$75 million or S$6,210 psf penthouse unit at Shun Tak's ultra-luxury development Les Maisons Nassim, The Business Times earlier reported.
That far exceeded the second-highest price quantum in October - S$14.2 million for a fifth-storey unit at low-rise condominium MeyerHouse, translating to S$2,499 psf.
Sun from OrangeTee & Tie noted that the next 9 priciest transactions for non-landed homes were from Park Nova. The units, on levels 5 to 19, went for between S$10.6 million and S$13.8 million. The luxury project is located along Tomlinson Road and also developed by Shun Tak.
Geographically, last month's new sales were more evenly spread than in September.
The outside central region (OCR) or suburbs again took the lead, making up 38.2 per cent of transactions excluding ECs.
The rest of central region (RCR) or city fringe contributed 31 per cent of the volume.
Meanwhile, the core central region (CCR) accounted for 30.8 per cent last month, a bigger share than September's 20.1 per cent.
Lee from Huttons said the proportion of total new sales that were priced at S$2 million and above climbed to a high of 39 per cent in October, on the back of more transactions in the CCR, including significant deals such as the Les Maisons Nassim penthouse purchase.
ERA’s Mak noted that the CCR primary market usually has the smallest market share among the 3 regions. However, as the available stock of unsold units in suburban residential projects gradually decreased, the market share of CCR new sales increased in October, he said.
He expects new sales this November and December to rise, in part due to the launch of a few highly anticipated projects such as The Commodore, CanningHill Piers and Cairnhill 16.
Furthermore, some potential homebuyers in Singapore may continue to put their overseas vacation plans on hold and remain in the city-state, which means the primary market could still be active in Q4 2021. “Although there is a growing number of vaccinated travel lanes, the onset of winter is causing new waves of Covid-19 infections (in certain countries). This could deter some people from travelling,” he said.
New sales in 2021 could thus reach their highest volume since 2013, when developers had sold 14,948 private housing units, Mak predicted. “This year, property developers could sell between 12,000 and 13,000 private homes as well as about 2,000 EC units.”
New projects on AXA Tower, PIL Building sites set to yield more office space
The Business Times, 15 Nov 2021, Mon 5:50 am
By Kalpana Rashiwala
THE redevelopment of ageing office properties in the central business district (CBD) may not necessarily lead to shrinkage of office space in the district in the mid to long-term, contrary to what some market observers expect.
This is reflected in details from the provisional permissions granted by the Urban Redevelopment Authority (URA) in the third quarter for the redevelopments of AXA Tower in Shenton Way and PIL Building along Cecil Street.
The new project on the AXA Tower site, granted URA's provisional nod, is seen to generate about the same if not slightly more office space on a net lettable area (NLA) basis than currently in the building, while the proposed redevelopment of PIL Building will result in a substantial increase in office space on the site.
A joint-venture between Alibaba Singapore and a consortium led by Perennial Holdings has received URA's provisional nod to redevelop the AXA Tower site into a mixed-use project with 847,808 sq ft gross floor area (GFA) of offices, 86,187 sq ft of retail space, 268 apartments and 100 hotel rooms.
BT's back-of-the-envelope calculation suggests the office space could translate to about 678,000 sq ft to 720,000 sq ft NLA, assuming 80 per cent to 85 per cent building efficiency ratio (ratio of NLA to GFA). This is close to or slightly above AXA Tower's existing office NLA of about 680,000 sq ft.
AXA Tower is on 118,230 sq ft of land opposite Tanjong Pagar MRT station with a balance leasehold tenure of 60 years. Its owners are understood to have made an application to the Singapore Land Authority (SLA) to top up the site's lease to 99 years.
Last year, Alibaba Singapore, a subsidiary of Alibaba Group Holding, acquired a 50 per cent stake in the entity that indirectly owns AXA Tower; the deal priced AXA Tower at S$1.68 billion. Alibaba Singapore will jointly redevelop AXA Tower with Perennial-led consortium members, which continue to own the remaining half-stake in the property.
Analysts expect Alibaba to eventually hold the bulk of the office space in the new mixed-development, with a view to occupying it. Alibaba entities including Lazada have been operating in AXA Tower but are relocating to leased premises at Lazada One at 51 Bras Basah Road - while AXA Tower undergoes redevelopment.
Also receiving URA's provisional nod in Q3 was TE Capital Partners, which has formed a consortium that is buying the 17-storey PIL Building for slightly above S$330 million. It has approval to redevelop the property into 212,888 sq ft GFA of offices and 7,707 sq ft of retail space.
BT's calculation points to the office NLA being about 170,000 sq ft to 181,000 sq ft, a big jump from the existing 107,000 sq ft. PIL Building is being acquired by a joint venture between a TE Capital Partners-managed vehicle and LaSalle Investment Management.
TE Capital Partners is a real estate investment management firm founded by siblings Terence and Emilia Teo, children of Teo Tong Lim, managing director of Tong Eng Group.
Under the URA's Master Plan 2019, the PIL Building site is zoned for commercial use with 11.2 plot ratio. The property is on 3 plots of land totalling 1,812 square metres (19,504 sq ft). The biggest plot of nearly 1,392 sq m has freehold tenure. It is flanked by two smaller land strips of about 142 sq m and 278 sq m on 99-year leasehold tenures starting from May 1977.
In-principal approval to upgrade these 2 plots' tenures to freehold is understood to have been granted.
In Q2 this year, URA gave provisional permission to City Developments Ltd (CDL) to redevelop the Fuji Xerox Towers site at 80 Anson Road into a mixed-use project comprising 251,272 sq ft GFA of offices, 10,764 sq ft of retail space and 484 apartments (comprising apartments for sale and serviced apartments).
On NLA, the office component may amount to 201,000 sq ft to 214,000 sq ft - a big drop from the 342,000 sq ft in the former Fuji Xerox Towers. CDL's redevelopment proposal is under the URA's CBD Incentive Scheme.
Edmund Tie's research and consulting head Lam Chern Woon noted that the redevelopment of older office buildings in the CBD will result in displaced tenants looking for alternative spaces in the near term and support leasing activities.
"We see limited supply pressure from the redevelopment as the new office supply is similar to the volume of stock being removed on the whole."
Lam added: "The government is clearly steering away from pure-office uses in the CBD, by providing incentives for more mixed uses to create a live-in environment and improve vibrancy and use of the land. The redevelopment of the older office assets into mixed-use projects will allow various real estate uses to complement one another and enhance the overall living, working and socialising environment for users."