Home Latest News Border Reopening Not to Significantly Affect Rental Market, Easing of Safe Distancing Measures at Sales Galleries to Support New Home Sales and More

Border Reopening Not to Significantly Affect Rental Market, Easing of Safe Distancing Measures at Sales Galleries to Support New Home Sales and More

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Border Reopening Not to Significantly Affect Rental Market, Easing of Safe Distancing Measures at Sales Galleries to Support New Home Sales and More, svg%3E
Border Reopening Not to Significantly Affect Rental Market, Easing of Safe Distancing Measures at Sales Galleries to Support New Home Sales and More

22nd March to 28th March 2022

Property analysts do not expect the reopening of land borders with Malaysia to have a major impact on Singapore’s residential leasing market. They also expect the relaxation of safe management measures at sales galleries to help boost new home sales.

 

1) Border reopening not to significantly affect rental market

Property analysts do not expect the reopening of land borders with Malaysia to have a major impact on Singapore’s residential leasing market. In fact, they expect the increased arrivals and departures to boost the volume of rental deals, reported The Business Times.

From 1 April, fully vaccinated persons will be allowed to enter Singapore and Malaysia, which could prompt many Malaysians not to renew their rental contracts upon expiry.

“Based on feedback from property agents, most of their Malaysian clients who are working in Singapore tend to lease HDB flats, but even so, they still account for a small portion of overall leasing demand. Therefore, their potential exit is not expected to impact the rental market significantly,” said Wong Siew Ying, Head of Research and Content at PropNex.

Related article: HDB Rental Flat Price in Singapore: How Much You Need to Earn to Afford Different Flat Types (2022)

However, the opening of borders would make it easier for Singapore companies to bring in foreign workers, giving a boost to demand, said Lee Sze Teck, Senior Director of Research at Huttons Asia.

In concurring, Christine Sun, OrangeTee & Tie’s Senior Vice-president of Research and Analytics, said she expects the increased demand from Malaysian workers to “push Singapore rents up further in the future”.

According to the PropertyGuru Singapore Property Market Report Q1 2022, demand for rental units in Singapore is likely to persist in 2022. Aside from the expected boost in rental flat volumes from foreign workers, young couples affected by BTO construction delays and the increasing trend of single millennials moving out of their family homes for more space and privacy will continue to drive demand.

 

2) Easing of safe distancing measures at sales galleries to support new home sales

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A showroom before the COVID-19 pandemic. Source: Qingjian Realty

Property analysts expect the relaxation of safe management measures at sales galleries and travel curbs to help boost demand for new private homes, reported The Business Times.

In a recent circular to housing developers, the Urban Redevelopment Authority’s Controller of Housing announced that group sizes at show galleries have been expanded to 10 persons starting 29 March.

For crowds of more than 1,000 people at any one time, the show galleries’ capacity limit has been revised from 10 sq m per person to 8 sq m per person.

Analysts believe the hike in group size may help with sales since more prospective buyers would be able to visit sales galleries.

PropNex Chief Executive Ismail Gafoor expects the easing of travel curbs to bring more foreign buyers, benefitting residential developments within the Core Central Region (CCR).

Meanwhile, Christine Sun, Senior Vice-president of Research and Analytics at OrangeTee & Tie, believes some developers may capitalise on the positive news by bringing their launches forward, while others may relaunch their existing projects with unsold units.

Less computer-savvy buyers who are unfamiliar with virtual tours and prefer on-site viewings will welcome this news. For those who are looking to purchase new launch condos and executive condominiums (ECs),  check out this list of upcoming launches for 2022.

 

3) Foreign worker levy rebate extended for three more months

The government has decided to extend the foreign worker levy rebate for work pass holders within the construction, marine shipyard and process (CMP) sectors for another three months, reported Channel News Asia citing the Ministry of National Development (MND) and Ministry of Manpower (MOM).

For April and May, the rebate stands at $250 per month and $200 for June. Initially, it is due to expire by end-March.

MND and MOM explained that the move is in line with the continued manpower shortages as well as the higher business cost arising from the pandemic.

They noted that the lower rebate for June mirrors the “improving manpower inflow” for the CMP sectors.

“As the (foreign worker levy) rebate is meant to be a temporary support, we encourage firms to press on with longer-term productivity improvements to be more manpower-lean and resilient against future manpower disruptions,” said MND and MOM.

With the ongoing construction delays for many HDB BTO projects, the news will come as a boost to the construction industry facing a manpower crunch. Also, HDB BTO buyers can feel relieved knowing that steps are being taken to help them expedite the keys collection for their flats.

Related article: Bachelor Pad in Singapore: How to Buy or Rent Your Own Place (2022)

 

4) Lakeside Apartments launched for collective sale at $240mil

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Lakeside Apartments has been put up for collective sale with a reserve price of $240 million. Source: SLP International

Lakeside Apartments, a 120-unit residential development at 9E, 9F Yuan Ching Road, has been put up for collective sale with a reserve price of $240 million, revealed PropNex Realty.

This translates to a land rate of $1,077 per sq ft per plot ratio (psf ppr), including the development charge and lease top-up premium.

Located near the Jurong Lake Gardens and the Jurong Lake District, the 99-year development occupies a 134,177 sq ft site that is zoned for residential use under the 2019 Master Plan with a gross plot ratio of 2.1. PropNex noted that the site could be redeveloped into a 24-storey condominium with 307 units averaging 915 sq ft each.

The collective sale tender for Lakeside Apartments closes on 25 May.

The condominium site is a 10-minute commute from Lakeside MRT station and falls within a 1km to 2km radius of several primary schools, including Fuhua Primary School, Rulang Primary School, Shuqun Primary School, Yuhua Primary School and more. If the en-bloc project is approved, couples who may want to enrol their children in these schools would find this location attractive.

Related article: Would You Move House to Live Nearer to a Choice Primary School? We Ask 6 Parents

 

5) High Point relaunched for en bloc sale at $550mil

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High Point has been relaunched for collective sale with a guide price of $550 million.

High Point, a 22-storey residential development at 30 Mount Elizabeth, has been relaunched for collective sale with a guide price of $550 million.

This works out to a land rate of $2,508 psf ppr after factoring in the 7% bonus gross floor area (GFA) for balconies. Exclusive marketing agent Savills noted that the development charge payable for the 7% bonus GFA is around $18.8 million.

“A few developers have been monitoring High Point with us over the last few weeks and we feel that it is timely to relaunch the public tender now to give developers ample time to evaluate the opportunity,” said Savills Managing Director, Investment Sales and Capital Markets Jeremy Lake.

However, he shared that the tender closing date will only be set “once we have received confirmed interest from a developer(s)”.

“This is somewhat similar to the URA Reserve List approach to selling sites,” he said.

Located in District 10, the site offers residents easy access to many amenities in the vicinity and convenient transport links. As of late, the Orchard Road shopping belt has seen several building owners putting properties for collective sale, most notably Orchard Towers was put up for collective sale with a $1.6 billion price tag last month.

Related article: 8 Super Penthouse Condo Units for Sale in Singapore For Those Who Want to Live the High Life (2022)

 

6) Bukit Batok West EC site awarded to Qingjian-Santarli JV

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The executive condominium (EC) site at Bukit Batok West Avenue 8. Source: URA

The executive condominium (EC) site at Bukit Batok West Avenue 8 has been awarded to a joint venture (JV) between Qingjian Realty and Santarli Construction, revealed the Housing and Development Board (HDB).

This comes after they submitted the highest bid of $266 million, which works out to a land rate of $662 per sq ft per plot ratio (psf ppr). This means the JV broke their own record price of $658.9 psf ppr for the EC site at Tampines Street 62 in August 2021.

Spanning 12,449.3 sq m, the 99-year leasehold site has a maximum gross floor area of 37,348 sq m and is expected to yield 375 housing units.

It was launched for tender on 23 December 2021 and closed on 8 March with nine bids received.

This will add to the list of upcoming ECs we can expect in 2022 with the other three developments at Tampines, Tengah and Yishun.

 

7) Rental scammers target non-active property agents, impersonated agents worry of name being tarnished

Property agents, who have not been active recently, have become the targets of an emerging scam, in which scammers impersonate real estate agents to ask clients for money even before viewing, reported Channel News Asia.

“The scammer provided the client with an invoice with a proper letterhead, everything, so they called head office to say … ‘How come your agent didn’t appear (for the viewing)?” shared Goh, one of the agents who had been targeted.

“From there, they realised it was a scam.”

Goh knows it was a scam since he had not made any transactions in recent years nor had he actively promoted his services.

Meanwhile, Alan Wee, a property agent from ERA Realty who had also been targeted by scammers, worry about his name being tarnished.

“Someone using my name, my name will be tarnished in a way,” said the 42-year-old, who shared that he was “a bit annoyed but also concerned” about customers being scammed.

“I just hope this episode can clear (up),” said Wee.

If you intend to rent a property, avoid making cash payments directly to agents and verify that their credentials on the Council of Estate Agencies (CEA) website match the contact number on the listing page before speaking to them.

Related article: 6 Myths About Hiring Property Agents in Singapore (Plus, What the Agents Have to Say About Them)

 

8) Possible stagflation may affect Singapore’s private home market

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Singapore’s private residential markets may face downside risks following the softer economic outlook.

Singapore’s private residential markets may face downside risks following the softer economic outlook as well as the possibility of stagflation which may be aggravated by the continued conflict between Russia and Ukraine, reported Singapore Business Review, citing OCBC.

Citing the Urban Redevelopment Authority’s (URA) Private Residential Property Index (PPI), OCBC noted that private home prices rose 10.6% last year, adding that the index also increased 14.1% from its last trough in Q1 2020.

While the new property cooling measures in December 2021 are expected to dampen consumer sentiment and demand, OCBC expects the private home market to remain resilient, particularly for first-timers and upgraders, given that the Additional Buyer’s Stamp Duty (ABSD) rates for permanent residents and Singapore citizens have been left unchanged.

Meanwhile, the new private home sales, excluding executive condominiums (ECs), grew 30.5% to 13,027 units last year.

OCBC pointed out that historically, “volume changes have been more sensitive and volatile than price changes” due to potential buyers taking on a wait-and-see stance.

The adjusted ABSD rates target those who speculate on Singapore property and those who wish to purchase investment property. As it is, figures for new private homes sales in Singapore for February 2022 are at their lowest since May 2020, with the Chinese New Year lull period and lack of new major launches likely contributing to poor sales.

Related article: Guide to Your First Investment Property: Singapore or Overseas?

 

9) Singaporean capital dominates Asian outbound real estate investment in 2021

Capital from Singapore dominated Asian outbound commercial real estate investment, which stood at US$54.6 billion (S$74 billion) in 2021, revealed CBRE.

It noted that outbound investment from Asia surged 69% year-on-year to such amount last year, surpassing the pre-pandemic volume in 2019.

Singaporean capital accounted for six of the top 10 outbound transactions as investors from the city-state deployed US$32 billion (S$43.4 billion) abroad, or up 164% year-on-year. The US emerged as their preferred destination, with a strong appetite for logistics assets.

Investors from Hong Kong were the second most active source of capital last year, investing US$6.7 billion (S$9.08 billion) overseas, up 60% year-on-year.

“Investors from Singapore and Hong Kong were the most active due to the size of their markets and available liquidity. The United States was the preferred international market for Asian investors due to attractive US dollar hedging costs and its robust economy relative to Asia as business travel normalises,” said CBRE’s Head of Capital Markets for Asia Pacific Greg Hyland.

 

10) Mapletree REITs add cash-only consideration option to proposed merger

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VivoCity at Habourfront, Singapore. Source: MCT

Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust (MCT) have offered MNACT unitholders an alternative option to receive the entire scheme consideration wholly in cash – still at $1.1949 per unit.

This is on top of the existing options of cash-and-scrip consideration and scrip-only consideration reported Singapore Business Review.

MNACT and MCT noted that the inclusion of the program – which came following a request from MNACT – provides greater flexibility to select the form of scheme consideration.

“The addition of the alternative Cash-Only Consideration to MNACT Unitholders gives them complete flexibility in electing the form of Scheme Consideration. However, this does not change the Merger’s previous terms, and we continue to believe in its strategic and financial rationale,” explained Sharon Lim, CEO of MCT Manager.

 

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Benjamin Su, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: benjaminsu@propertyguru.com.sg

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