Issue 68Copyright © 2011-2012 www.Propwise.sg. All Rights Reserved. CONTENTS p2 p7 p11 Sayonara Shoeboxes? Singapore Property News This Week Resale Property Transactions (August 22 – August 28) FROM THE EDITOR Welcome to the 68th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise Contribute Do you have articles and insights and articles that you’d like to share with thousands of readers interested in the Singapore property market? Send them to us at
[email protected], and if they’re good enough, we’ll publish them here, on our blog and even on Yahoo! News. Advertise Want to get your brand, product, service or property listing out to thousands of Singapore property investors at a very reasonable cost? Head over to www.propwise.sg/advertise/ to find out more. SINGAPORE PROPERTY WEEKLY Issue 68 Sayonara Shoeboxes? By Mr. Propwise On September 4th, 2012 the URA announced new guidelines that will effectively curb the future development of shoebox units, typically units smaller than 500 square feet, in suburban areas. Effective November 4th, 2012, the total number of homes that can be built for non-landed private residential developments outside the Central Area will be capped. We have previously covered the problems with shoebox homes, looked at their historical profitability, and even examined the issue of shoebox industrial units. Back to Contents Page | 2 SINGAPORE PROPERTY WEEKLY Issue 68 The proliferation of shoebox units became a cause for concern One of the key factors for the government’s concern about shoeboxes is the four-fold increase of the stock of shoebox units from 2,400 units at the end of 2011 to around 11,000 units by 2015. The key question is how strong the real end user demand is, whether from tenants or owner-occupiers, especially in the suburban areas. The sharp growth in shoebox units did not come from end user demand, but instead came from a rush by developers to flood the market with these units due to strong demand by mass market investors looking to dip their feet into a property investment that required only a moderate capital outlay with the promise of potentially high rental yields. This was a no-brainer for developers as it let them Back to Contents sell their developments at much higher per square foot prices and thus boost their margins. While there is probably end user demand for these units from singles, childless couples and retirees, the URA became alarmed when shoebox units made up 50% to 80% of some housing developments. The increasing density of these developments would also put a strain on the ability of the local infrastructure such as roads to support a higher population than was originally planned for. The new formula that will cap shoebox units Thus from November 4th all new non-landed private residential developments outside of the Central Area will be subject to a cap on Page | 3 SINGAPORE PROPERTY WEEKLY Issue 68 the number of homes based on the following formula: Maximum number of homes allowed will be less than or equal to the Maximum Permissible Gross Floor Area (GFA) divided by 70 square meters So for example, if the maximum GFA is 7,000 square meters (excluding bonus GFA), then a maximum of 100 units (= 7000 / 70) will be allowed to be built. This formula doesn’t mean that shoebox units will no longer be built. It just means that developments can no longer be predominantly comprised of shoebox units. Following our example above, the developer can still choose to build 50 shoebox units of 30 square meters each (approximately 323 square feet), but it means that the remaining 50 units must be an average of 110 square meters each (or approximately 1184 square Back to Contents feet). Specific areas, such as Kovan and Joo Chiat/Jalan Eunos, will have a more stringent cap on the total number of homes per development as they are already in a situation where the local transport infrastructure is strained. For these places, the maximum number of homes will be less than or equal to the maximum permissible GFA divided by 100 square meters, similar to the cap currently in place for the Telok Kurau area. The impact of these shoebox guidelines on the property market Minister Khaw in his blog has called the guidelines “measured and moderate”, and I agree. The guidelines are not draconian but are meant to encourage developers to build a range of different unit sizes and not just build “shoebox slums”, which are not considered to be family-friendly. Page | 4 SINGAPORE PROPERTY WEEKLY Issue 68 For current shoebox owners, this new regulation is not necessarily a bad thing, as the lower supply of new shoebox homes will reduce the competition for tenants for their units. The net effect will also be to slow the rate of growth of the number of shoebox homes, and limit this category as a proportion of the total housing stock. This will also potentially moderate overall home price increases as the mix of homes shifts away from shoebox homes with their higher per square foot pricing. Back to Contents Page | 5 SINGAPORE PROPERTY WEEKLY Issue 68 Back to Contents Page | 6 SINGAPORE PROPERTY WEEKLY Issue 68 Singapore Property This Week Residential New measures to curb growth of shoebox units URA has introduced new measures to control the growth of shoebox units. Large number of shoebox units is a concern as they may result in more cars in the neighbourhood than the local road infrastructure can support and there may not be sustained demand for such units. The maximum number of units in nonlanded private housing projects outside the Central Area (Raffles Place, Tanjong Pagar, Singapore River, Marina Bay, Orchard Newton, Beach Road, Ophir Road, Jalan Sultan, Syed Alwi Road, Tekka Lane and Outram Road) and residential component of mixed-use developments will be capped Back to Contents based on an average area of 70 sq m from Nov 4. Likewise, the maximum number of homes based on an average size of 100 sq m which was introduced last year in Telok Kurau Estate, will be extended to Kovan and Joo Chiat/Jalan Eunos estates from Nov 4. However, developers can still include small units in their projects provided that there is a mixture of large and small units so that the guidelines can be met. These new guidelines are generally welcome though there are concerns that small en bloc sites will see depreciation in land values and collective sale premiums since such sites tend to attract smaller developers building a higher proportion of shoebox units in their projects. (Source: Business Times) Page | 7 SINGAPORE PROPERTY WEEKLY Issue 68 Punggol EC site draws $189.87 m top bid The 99-year leasehold EC site at Punggol Way/Punggol Walk attracted a meagre three bids, with the top bid of $189.87 million, or $313.63 psf of GFA from Qingjian Realty. The expected breakeven cost and the average selling price of the site are $580-650 psf and $700-750 psf respectively. Developments on the site are likely to attract young buyers. (Source: Business Times) New guidelines may not create pressure on prices There are some who think that new guidelines on shoebox units which will come into effect on Nov 4 will result in lower prices, since shoebox units were responsible for the higher average psf price of residential projects. To meet the cap on the number of units, developers will have to build larger units with Back to Contents higher lump sum price which may discourage some buyers. Hence they may keep psf prices affordable in order to attract buyers. However, since most developers can maintain their current unit-size mix without violating the new guidelines, prices may not actually fall. Furthermore, developers may build more twoor three-bedroom units which could have relatively high psf prices rather than building large four-bedroom units. In fact, prices for shoebox units may even rise due to the falling supply. (Source: Business Times) URA launches 60-year leasehold residential site and hotel site in Jurong The 1.02-ha residential site in Jalan Jurong Kechil offers a 30, 45 or 60-year-lease period, the first for residential sites released under the GLS. It has a 153,267.17 sq ft maximum GFA Page | 8 SINGAPORE PROPERTY WEEKLY Issue 68 and can be developed into a condominium, flats or retirement housing with a maximum of 203 units and a part-five-storey-part-eightstorey height restriction. The site is expected to be fairly popular since there are amenities and easy access to public transportation in the area and could potentially attract five to 10 bids for the 60-year land tenure with a top bid of $200250 psf ppr, an estimated breakeven cost of $450-500 psf, and an estimated sale price of $550-600 psf. Also to be launched along with the residential site is a 60-year leasehold 0.9-ha hotel site located at Jurong Town Hall Road. This first hotel site in the Jurong Lake district has a 204,051.25 sq ft maximum GFA. It could potentially attract five to 10 bidders, with a top bid of $650-700 psf ppr and an estimated breakeven price of $1,050-1,100 psf assuming the successful bidder intends to build a fourBack to Contents star 700-room business hotel on the site. (Source: Business Times) Thomson View finally sold for $590m in collective sale After two failed attempts in the en bloc market, Thomson View condominium, located along Upper Thomson Road, has finally been sold to a consortium led by Wee Hur Development Pte Ltd and Lucrum Capital Pte Ltd for $590 million. If a $107 million premium to enhance the property's use and a $90 million premium to top up the lease from the remaining 62 years to 99 years is included, the price would be $712 psf ppr. The 540,314-sq-ft residential site with a 2.1 plot ratio and 24-storey maximum height can potentially be redeveloped into a 950-unit condominium project with each unit averaging 1,200 sq ft. (Source: Business Times) Page | 9 SINGAPORE PROPERTY WEEKLY Issue 68 99-year leasehold mixed-use site near Potong Pasir MRT Station drew $245 m top bid The top bid of $245 million or $793.02 psf ppr came from a tie-up between City Developments Ltd (CDL) and Hong Leong Holdings, beating out seven other bids. The developer plan to have 28 commercial units with an average size of 71.43 sq m (nearly 769 sq ft) based on the maximum commercial quantum of 2,000 sq m (21,528 sq ft) GFA on the ground floor of a development up to 19 storeys, and possibly release some for sale. The number of residential units is also capped at 267 units with an average unit size of 100 sq m. The expected breakeven cost and selling price of the residential units are $1,250-$1,300 psf and $1,450- $1,500 psf respectively while the retail units have an expected strata selling price of $4,000-4,500 psf. The high top bid Back to Contents reflects the popularity for residential sites near MRT stations, especially those with a commercial component. (Source: Business Times) Commercial Freehold Geylang properties to be redeveloped by TEE, KSH, Heeton joint venture TEE International, KSH Holdings and Heeton Holdings will jointly redevelop the 13,282 sq ft worth of land area at 48A, 50A, 52A, 54A, 56A, 58A and 60A in Lorong 32, Geylang Road. With a 2.8 plot ratio, the site can be developed up to a gross saleable area of 40,910 sq feet, including balcony. The development is located near Aljunied MRT Station, the Eunos and Ubi industrial parks and the CBD. (Source: Business Times) Page | 10 SINGAPORE PROPERTY WEEKLY Issue 68 Non-Landed Residential Resale Property Transactions for the Week of Aug 22 – Aug 28 Postal District 2 2 2 3 3 3 3 3 3 4 4 4 5 5 5 5 5 7 9 9 9 9 9 9 Project Name ICON THE BEACON SPOTTISWOODE PARK TWIN REGENCY CENTRAL GREEN CONDOMINIUM THE METROPOLITAN CONDOMINIUM QUEENS THE ANCHORAGE QUEENSWAY TOWER CARIBBEAN AT KEPPEL BAY THE AZURE MOUNT FABER LODGE PARC IMPERIAL THE PARC CONDOMINIUM THE PARC CONDOMINIUM HERITAGE VIEW PARK WEST SUNSHINE PLAZA ORCHARD SCOTTS THE SUITES AT CENTRAL THE LIGHT @ CAIRNHILL THE SUITES AT CENTRAL THE PATERSON ROBERTSON BLUE Area (sqft) 581 1,163 850 980 775 840 1,184 1,507 1,679 1,722 1,765 2,594 398 1,302 980 1,195 1,894 1,313 969 1,442 2,443 1,572 1,421 1,432 Transacted Price ($) 1,150,000 1,500,000 820,000 1,500,000 1,150,000 1,188,000 1,520,000 1,850,000 1,468,800 3,150,000 3,177,000 2,900,000 688,000 1,588,440 1,170,000 1,300,000 1,500,000 1,650,000 2,350,000 3,100,000 5,200,000 3,280,000 2,900,000 2,778,080 Price Tenure ($ psf) 1,978 99 1,290 99 964 99 1,531 FH 1,484 99 1,415 99 1,284 99 1,228 FH 875 FH 1,829 99 1,800 99 1,118 FH 1,727 FH 1,220 FH 1,194 FH 1,088 99 792 99 1,256 99 2,426 99 2,149 FH 2,128 FH 2,087 FH 2,041 FH 1,941 FH Postal District 9 9 9 9 9 9 10 10 10 10 10 11 11 11 11 12 14 14 15 15 15 15 15 15 Project Name TRIBECA ELIZABETH HEIGHT MAKEWAY VIEW PARC EMILY UE SQUARE THE REGALIA ARDMORE II ST REGIS RESIDENCES SINGAPORE THE CORNWALL STUDIO 3 FAIRLODGE PARK INFINIA AT WEE NAM SKY@ELEVEN TREVOSE PARK SUFFOLK PREMIER DE PARADISO ASTON MANSIONS EUNOSVILLE THE SOVEREIGN THE ESTA THE SEA VIEW SANCTUARY GREEN THE ARIEL WATER PLACE Area (sqft) 1,765 2,573 1,442 1,238 1,055 1,249 2,024 2,153 1,044 883 1,658 1,464 2,271 1,249 1,076 1,238 1,302 1,679 2,637 1,001 1,410 786 872 1,389 Transacted Price ($) 3,388,800 4,600,000 2,500,000 2,120,000 1,600,000 1,870,000 5,600,000 5,750,000 1,780,000 1,400,000 1,950,000 2,880,000 3,747,150 1,873,500 1,450,000 1,490,000 1,050,000 1,300,000 4,300,000 1,460,000 2,050,000 1,000,000 1,080,000 1,650,000 Price Tenure ($ psf) 1,920 FH 1,788 FH 1,733 FH 1,713 FH 1,517 929 1,498 FH 2,767 FH 2,671 999 1,705 FH 1,586 FH 1,176 FH 1,967 FH 1,650 FH 1,500 FH 1,347 FH 1,204 FH 806 99 774 102 1,631 FH 1,458 FH 1,454 FH 1,273 99 1,239 FH 1,188 99 Back to Contents Page | 11 SINGAPORE PROPERTY WEEKLY Issue 68 Postal District 15 15 15 15 15 15 16 16 16 16 16 16 17 17 17 17 18 18 18 18 18 19 19 19 19 20 20 Area (sqft) 1,076 1,130 1,776 1,636 1,324 1,302 506 1,227 1,066 1,259 1,055 1,012 657 1,238 990 1,313 1,238 1,227 1,539 936 1,528 829 1,130 1,539 1,604 1,163 1,141 Transacted Price ($) 1,268,000 1,326,000 2,080,000 1,865,000 1,420,000 1,100,000 715,000 1,650,000 1,060,000 1,238,000 968,000 860,000 666,000 1,150,000 785,000 1,005,000 1,180,000 1,130,000 1,380,000 771,000 890,000 905,000 1,200,000 1,460,000 1,470,000 1,320,000 1,058,000 Price Tenure ($ psf) 1,178 FH 1,173 99 1,171 99 1,140 FH 1,073 FH 845 FH 1,413 FH 1,345 99 995 FH 983 FH 918 FH 850 99 1,014 FH 929 FH 793 FH 765 999 953 99 921 99 897 FH 823 99 582 99 1,092 FH 1,062 99 949 99 917 999 1,135 99 927 99 Project Name SANTA FE MANSIONS WATER PLACE COSTA RHU THE MAKENA EMERY POINT CRESCENDO BUILDING EASTWOOD REGENCY COSTA DEL SOL SUNHAVEN SUNHAVEN CHANGI GREEN EASTWOOD GREEN ESTELLA GARDENS THE EDGEWATER BALLOTA PARK CONDOMINIUM AZALEA PARK CONDOMINIUM THE TROPICA SAVANNAH CONDOPARK RIS GRANDEUR MELVILLE PARK ELIAS GREEN LEITH GROVE THE QUARTZ THE SPRINGBLOOM JANSEN 28 BISHAN 8 SEASONS VIEW Postal District 20 20 21 21 21 21 21 21 21 21 22 22 22 23 23 23 23 23 28 Project Name THOMSON VIEW CONDOMINIUM LAKEVIEW ESTATE THE STERLING CLEMENTI PARK SOUTHAVEN II HUME PARK II PARC PALAIS HUME PARK I REGIS MANSIONS PINE GROVE THE CENTRIS PARC OASIS LAKEHOLMZ PARK NATURA CHANTILLY RISE MERAWOODS GUILIN VIEW MAYSPRINGS SELETAR SPRINGS CONDOMINIUM Area (sqft) 1,313 1,615 1,485 1,873 1,485 958 1,238 1,356 1,023 1,701 1,302 1,378 1,249 1,378 1,539 1,345 1,572 1,292 947 Transacted Price ($) 1,180,000 1,333,000 2,190,000 2,180,000 1,658,788 925,000 1,150,000 1,200,000 845,000 1,330,000 1,430,000 1,240,000 1,050,000 1,515,000 1,515,000 1,300,000 1,234,000 940,000 790,000 Price Tenure ($ psf) 899 99 826 99 1,474 FH 1,164 FH 1,117 999 966 FH 929 FH 885 FH 826 FH 782 99 1,098 99 900 99 841 99 1,100 FH 984 FH 966 999 785 99 728 99 834 99 NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data. Back to Contents Page | 12