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The Star
7 days ago
- Business
- The Star
Singapore's property market is hard to read
TWO years ago, Singapore doubled the stamp duty on foreign homebuyers to a steep 60%. Since then, residential property has become a twin-speed market. Prices of high-end downtown condominiums, which used to attract heavy Chinese demand, have grown at a much slower pace than more affordable suburban apartments aimed at local owners. This divergence is starting to cloud the outlook for real estate in the Asian financial centre. Sales of new homes fell to 663 last month, down from 729 in March. Does that mean that economic concerns, particularly around trade, are making prospective owners cautious? I'm not quite willing to buy into the pessimism – not yet. Local demand is still robust. But it isn't reflected in developer sales that are skewed toward the central region, which is more of a playground for the global rich. Real estate activity is no doubt sluggish in downtown Singapore, where condo prices have risen 19% in the past five years, compared with a 46% surge in the outskirts. A protracted slump in the Chinese property industry is partly to blame. Coupled with weak consumer spending, the downturn has shrunk the number of super-wealthy on the annual Harun China Rich List by 25% over three years. Still, mainland Chinese had held on to their No. 1 position among foreign buyers for six straight years, until the city-state raised its stamp duties in April 2023. One Marina Gardens, situated on the edge of the central business district, sold only 41% of the 937 units released in April, according to broker CBRE. That, it says, compares with a sell-through rate of 68% for major projects over their launch weekends in the first quarter. Expect the sales numbers to remain lackluster in the coming months, too. That's because most of the supply pipeline is from the city centre or its fringes. These pricey homes can't possibly whip up as much excitement – or volumes – as more reasonably priced suburban dwellings. Singapore's wealth engine Gains from reselling public housing units are supporting private apartments. When developers did make them available earlier in the year, the take-up rate for budget-friendly projects in the island's east and northeast, far from the bustle of its business and shopping districts, was 90% to 95%. The source of this resilience is the booming resale market in public housing, where prices have increased faster than private homes since the pandemic. Gains from selling Housing and Development Board (HDB) apartments are getting parked in private property, putting local Singaporean demand in the driving seat of the overall market. (Citizens are allowed to sell their subsidised HDB apartments to eligible buyers after occupying them for at least five years.) Singapore's private home prices could grow by up to 7% in 2025, according to a recent Savills report. That would be better than last year's near-4% increase. Not everyone agrees with the cheery prognosis. Analysts at Bloomberg Intelligence are penciling in only a 3% rise. Rival Hong Kong could do better, they say, because of its lower interest rates and solid pent-up demand. Although borrowing costs have also cooled in Singapore, the decline in Hong Kong's benchmark interbank rate – from 4% in late April to 0.6% now – has been nothing short of dramatic. Singapore has competition Plunging interest rates are making Hong Kong property more attractive. The other key factor will be affordability. At a little over 2%, the unemployment rate in Singapore is one percentage point lower than in Hong Kong, while median household income from work last year was 20% higher than just before the pandemic. The resident population has gotten used to paying more than S$2,000 ($1,550) per sq ft even in far-flung neighbourhoods, provided there are major government plans to improve transport connectivity and quality of living in those areas. One-bedroom units outside the central region are in high demand. This is slightly puzzling because the buyers are mostly Singaporeans, who don't quite like to live in Hong Kong-style matchboxes. But what if these smaller homes are not for self-occupation? As long as rental demand stays strong, the wealth accumulated in public housing could keep translating into one million to two million checks for investment properties. The possibility of a technical recession is not very high on the domestic investor's list of worries. The fate of Hong Kong property this year may be decided by an influx of foreigners and mainland Chinese into the city, pushing rents higher. House keys in Singapore, however, will very much remain with the locals. — Bloomberg Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. The views expressed here are the writer's own.
Business Times
28-05-2025
- Business
- Business Times
Government may remove 15-month wait-out period when HDB resale prices begin to moderate: Chee Hong Tat
[SINGAPORE] The government may review or remove the 15-month wait-out period imposed on private property owners seeking to downgrade, when prices of resale flats begin to moderate, said Minister for National Development Chee Hong Tat on Wednesday (May 28). 'The restriction was put in place as a temporary measure precisely because there were concerns about higher resale flat prices,' said Chee. The wait-out period before private property owners are allowed to purchase a non-subsidised Housing and Development Board (HDB) resale flat was introduced in 2022, and HDB had said it will be reviewed depending on overall demand and market changes. Chee pointed out that resale prices have started to show some moderation. Resale prices of public housing flats grew at a slower rate of 1.6 per cent over the previous three months. This was lower than the 2.6 per cent price increase in the fourth quarter of last year, and the average quarterly growth of 2.3 per cent in 2024, latest data released by HDB showed. The 1.6 per cent growth also marked the slowest pace of price increase since Q1 2024. Chee, who was addressing the media after a visit to the Toa Payoh Ridge Build-To-Order (BTO) project, attributed the increase in resale flat prices to a 'supply and demand issue'. The Covid-19 pandemic resulted in construction delays of some BTO projects, severely impacting supply. A total of 72,101 BTO flats across 92 housing projects were affected by Covid disruptions. As at Mar 8, HDB has completed all 75,800 flats in these projects. Fear of housing delays, alongside changing social norms, led to an increase in demand for resale flats, ramping up prices. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up However, Chee is hopeful that prices will moderate further when more of the new flats built in the last few years reach their five-year minimum occupancy period (MOP) starting from 2026. Some analysts expect resale prices to remain elevated as they estimate 6,974 resale flats to hit the market in 2025 after owners fulfil their MOP – the lowest in 11 years since 5,301 units reached their MOP in 2014. Still, supply of MOP flats is expected to recover and more than double to 13,480 units in 2026. 'Once we see more supply coming in, coupled with more new BTO flats entering the market, I think we will see moderation in the resale flat prices in the years ahead.' Chee also paid tribute to Education Minister Desmond Lee, whom he succeeded. Under Lee's tenure, HDB launched more than 100,000 flats from 2021 to 2025. Over the next three years, it will build at least 50,000 new flats. Key collection for 2025 is on track, with 19,000 households expected to collect keys to their new HDB flats. Apart from ramping up housing supply, MND will also work with other government agencies to improve the living environment of new BTO estates. This includes HDB estates that are located further away from the town centre and amenities, said Chee. The ministry plans to revitalise and rejuvenate older HDB estates and towns. Chee said a few blocks in the Toa Payoh area will be among the first batch of HDB flats to participate in the new silver upgrading programme, which aims to make the living environment more conducive for seniors.
Business Times
09-05-2025
- Business
- Business Times
Some 12,000 new homes to come up on sites rezoned for housing across 11 areas
[SINGAPORE] A slew of land parcels in 11 areas across the island are set to be rezoned for housing, in a move that will give a major boost to supply in popular residential areas. These include plots of land in established regional centres such as Toa Payoh and Tampines, where previous government land sales saw strong interest from developers and where new projects were recently launched at fresh benchmark prices. Sites are also being lined up for rezoning or higher-density development in other in-demand housing areas such as Bedok and Pasir Ris, upcoming neighbourhoods such as Tengah, and fresh supply on the former Keppel Golf Course land. The planning changes, proposed in amendments to the Master Plan 2019 gazetted by the Urban Redevelopment Authority on Wednesday (May 7), could produce some 12,000 new housing units in both private and public projects in the near term. A parcel carved out of the former Keppel Golf Course site, along Telok Blangah Road, has been earmarked with a high-intensity gross plot ratio of 4.3, which analysts estimate could yield up to 1,000 public housing flats. These would add to the first 740 new homes from the Keppel site, to be built on a plot being sold in this year's Government Land Sales (GLS) programme. Lee Sze Teck, senior director of data analytics at Huttons Asia, reckons the Housing and Development Board (HDB) project will be a Prime category Build-to-Order (BTO) one. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up 'The response to this Prime BTO is likely to be overwhelming,' he said. The last BTO project in the area, Telok Blangah Beacon, attracted more than 30 first-timers for each four-room flat in 2021, he noted. BTO prices of the four-room flats ranged from S$602,000 to S$710,000, while three-room flats were priced from S$419,000 to S$504,000. The project is expected to be completed in 2027. In the city fringe area, Toa Payoh and Bishan may soon see new residential projects. Both locales are popular with homebuyers for their proximity to elite schools and central location. The most recent new condo launch in the area, The Orie at Toa Payoh Lorong 1, sold 86 per cent of its 777 units at S$2,704 psf on average over its launch weekend. Plots bounded by Toa Payoh Link and Toa Payoh Rise may be rezoned to residential with commercial use on the first storey. A high gross plot ratio of 4.7 has been proposed for the area, which is next to Caldecott MRT station and could yield a total of 4,000 to 5,000 dwelling units, according to Lee. Lee said the sites could turn out a mix of public and private homes. 'Toa Payoh is a very popular area among buyers, and almost all the four-room and five-room flats that fulfilled their minimum occupancy period in 2024/2025 achieved a selling price of S$1 million and above.' Another parcel along Lorong 4 Toa Payoh with a proposed gross plot ratio of 3.4 could yield some 300 to 350 condo units or 200 to 250 HDB Plus flats, estimated OrangeTee's chief researcher and strategist Christine Sun. In the Sin Ming area, a plot at Lorong Puntong spanning slightly more than 4,000 sq m is expected to be used for condo development and could see about 130 to 150 units, said chief research officer Nicholas Mak. Land plots along Upper Thomson Road are also expected to be turned into residential use, and could yield around 2,200 to 2,300 condo units, or 1,500 to 1,600 HDB flats, said Sun. In the east, a residential site with a health and medical zone is being proposed for Tampines Street 11. With a land area of about 14,433 square metres (sq m) and gross plot ratio of 2, Sun expects the site to yield 200 to 250 HDB flats. The site is near a GLS site also on Tampines Street 11, which was awarded in 2023 to UOL, Singapore Land and CapitaLand Development at S$1.21 billion, or S$885 per square foot per plot ratio. The project, Parktown Residence, was launched in February 2025 and posted strong sales. About 87 per cent of the 1,193 units in the large mixed-use development were sold within the first two days, at an average of S$2,360 per square foot (psf). In the neighbouring planning area of Pasir Ris, a parcel bound by Pasir Ris Drive 3 and Pasir Ris Drive 10 has been proposed to be rezoned as residential with a gross plot ratio of 3.2. The site is likely to be sold under the GLS programme, said Mak, and could potentially yield 1,100 to 1,180 condominium units. Pasir Ris has not seen a GLS site for private condo development since 2012, and demand in the east is strong, said Mak, pointing to the robust take-up rate of Parktown Residence. The last GLS site sold in Pasir Ris was developed into Vue 8 Residences. Also in the east, Bedok South Road will see more new homes being built. Land that housed schools is expected to be rezoned to residential use, while an adjacent parcel will have its plot ratio raised. OrangeTee's Sun said the earmarked area can yield about 1,000 to 1,100 condo units or 700 to 800 HDB Standard flats. Up in the north at Yishun, a site located near Chencharu Park is being set aside for residential use. An estimated 1,000 or more BTO Standard flats may be built on the site, said Huttons' Lee. The government had earlier announced plans to grow a new estate in Chencharu, where it sees potential for 10,000 homes. The first GLS site to be put up for sale in Chencharu is coming up for tender on May 22, with a 3-hectare parcel on offer for 875 condo units and 13,000 sq m of commercial space. Land parcels at Sunbird Avenue, Simei Road and Upper Changi Road may also be redeveloped into residential projects. The proposed amendments will inject more homes and amenities into the Upper Changi Road area and facilitate infrastructural works to serve future developments, noted URA. Lee said: 'If there are flats with shorter waiting time at Chencharu, Bedok South Road, Tampines Street 11, Sunbird Avenue/Simei Road and Pasir Ris Drive 3, they may potentially pull demand away from the resale market and help to stabilise prices.' HDB resale prices were up 1.6 per cent in the first quarter of 2025, lower than the 2.6 per cent price increase seen in the previous quarter. In the west, plans are in the pipeline to redevelop several parcels within Brickland District in Tengah Town into housing sites, parks, places of worship, health and medical care facilities, educational institution and civic and community institutions. The three parcels could yield around 1,400 flats, said OrangeTee's Sun. Apart from housing, the URA on May 9 earmarked land parcels along Eunos Avenue 5 and Dover Road to be redeveloped into health and medical care zones. A new nursing home is likely to be built in Dover to meet the anticipated demand for such services in the area, said the authority.
Business Times
28-04-2025
- Business
- Business Times
Mortgagee listings climb in Q1 as interest rate strains hit market: Knight Frank
[SINGAPORE] Mortgagee listings in Singapore property auctions surged in the first quarter of 2025 as distressed sales due to the last two years of high interest rates have started to enter the market, said a report by property consultancy Knight Frank on Monday (Apr 28). Mortgagee sales made up the majority of auction listings in Q1 2025, with 83 properties out of 136 total listings. Owner sales numbered 43, along with 10 listings of other types. Of the 83 listings, 37 were residential properties, and 18 were commercial mortgagee listings. Industrial mortgagee listings numbered 26, while two Housing and Development Board (HDB) shophouses were mortgagee sale listings. This is the first time an HDB shophouse has been put up for auction since Q1 2022, said Knight Frank. Notably, residential mortgagee listings also rose by 48 per cent from the previous quarter's 25 listings. Overall, auction listings rose 7.1 per cent from the previous quarter and 51.1 per cent year on year to 136 units, despite the Chinese New Year period, which typically sees slower auction activity. The report attributed the rise in mortgagee sale listings to the lagged effects of tighter financial conditions through 2023 and much of 2024. 'An increase in distressed assets have only now started to be observed entering the auction market,' Knight Frank noted. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Further, the consultancy expects that widespread economic disruptions would subject more properties to distress, leading to a further increase in listings. 'While there was no substantial surge in listings in Q1 2025, this could be the calm before the storm of sweeping global tariffs and a looming trade war hits,' said Sharon Lee, head of auction and sales at Knight Frank. Owner sale listings remained relatively stable, with 43 listings recorded in Q1 2025. Among these, 19 were residential units (comprising 15 non-landed and four landed homes) and 20 were retail properties. The remaining listings included one office and two shophouses. The report noted that interest rate easing in late 2024 may have encouraged some owners to refinance, rather than sell, their properties. Seven properties including five mortgagee sale listings were sold, resulting in a success rate of 5.1 per cent, higher than the 1.6 per cent recorded in the previous quarter. Total gross sales value stood at S$11.9 million. Buying sentiment appeared to have shown a slight increase during the quarter, said Knight Frank. 'Buyers on the lookout for opportunities were motivated by the easing of interest rates from September 2024 into making acquisitions,' the firm said. However, global uncertainties could weaken buyer sentiment as more cautious approaches are adopted, the consultancy added. As the market expects more interest rate cuts, Knight Frank noted that buyers may be attracted to return to the auction in search of reasonably priced assets, as financial strains add more distressed assets to mortgagee sale listings. The firm maintained an auction success rate of around 5 per cent for 2025.
CNA
25-04-2025
- Business
- CNA
GE2025: RDU says it wants to fix what 'feels broken', calls for 'new social compact' in party political broadcast
Mr Philemon pointed to the country's 4.4 per cent economic growth in the past year, but questioned who this benefitted. 'If growth only shows up in freehold property values and luxury cars, while you're tightening your belt to pay your electricity bill, then that's not prosperity. That's inequality,' he said. To combat this, the party proposes that the Goods and Services Tax (GST) be reverted to 7 per cent, from its current 9 per cent. RDU has also proposed the establishment of a 'Citizen's Dividend', which it said would be a 'direct, unconditional payout' to Singaporeans. Mr Philemon said the payout is not intended as a handout, but as a 'rightful share' of the wealth that they helped to create. He clarified that the dividend would not be funded through the country's reserves, which 'we believe in safeguarding'. Instead, it would come from the nation's surpluses, from cutting 'government wastage' including the salaries of mayors, and from modest tax adjustments imposed 'not on ordinary citizens, but on the billionaire class'. For housing, Mr Philemon questioned if it was fair to be paying 'top dollar' for public flats, only for many to one day be 'worth zero' when their 99-year leases end. The party has proposed making every Housing and Development Board (HDB) estate eligible for redevelopment. It also wants to introduce rent-to-own schemes and expand public rental housing, especially for young singles and low-income families. 'Housing isn't just about buying. It's about belonging. No Singaporean should fear growing old under a roof that's losing value,' the RDU chief said during the broadcast. On the healthcare front, the party recommends expanding MediShield Life, restructuring MediFund, and capping out-of-pocket costs. 'Healthcare should not be a privilege. It should be a promise,' Mr Philemon said. He also said that the party would prioritise citizens in housing, jobs and opportunities, promising to recognise contribution over connections. 'If you've worked hard, served the country, paid your dues – you shouldn't be treated like second-class citizens just because you weren't born into privilege,' he added. Towards the end of the broadcast, Mr Philemon said a 'fairer Singapore' cannot be built without trust. The party believes that more raw data and information – whether for housing, healthcare or jobs – must be made available to the public, so that Singaporeans can be involved in solving the problems they face together. 'In a knowledge-based economy, we must relook laws that stifle critical thinking and honest discussion. We cannot be afraid of tough questions,' said the secretary-general. Ultimately, Mr Philemon said that RDU believes in a Singapore where 'no one is left behind' and where dignity is not only 'reserved for the rich'.
