Singapore Property Market | Lush Dream Home

Tag Archives: Singapore Property Market

Shoebox units may grow 70 percent over next three years

Posted on 28 Jun 2012 | Comments Off

From around 2,500 units, the number of completed shoebox homes could grow to 9,700 by 2015, according to Khaw Boon Wan, Minister for National Development.

He added that 80 percent of shoebox units are located in the central region.

In addition, OCBC Research noted that the number of shoebox units in the OCR (Outside Central Region) could grow more than 450 percent by 2015.

But with the limited supply of completed units, the rental market in the OCR remains untested. One major risk is that buyers of uncompleted units in the primary market are basing their decisions on current rental levels, which could be skewed upwards by a small completed supply.

“If rental levels fall due as supply spikes dramatically after 2015, then capital values are likely to face corresponding downward pressure. This is particularly so if interest rates start to increase as well, reversing the virtuous cycle of liquidity fuelled demand,” OCBC said.

It added that the number of households in Singapore that can afford a S$1 million condo have increased by 86 percent. This is due to the fact that the income hurdle in buying such property fell by 18 percent.

“From 2008, we saw interest rates decline from ~2.5 percent to their current levels around 0.4 percent,” it noted.

Using a S$1.0 million condo as a benchmark, OCBC noted that monthly mortgage payments dropped by about 18 percent in Q1 2012 from S$3,400 to S$2,600.

“Assuming mortgage payments constitute at most 30 percent of household (HH) income, the income hurdle for a S$1.0 million property fell 18 percent from S$10,600 to S$8,700 per month.”

Source : PropertyGuru – 2012 Jun 27

Comments Off on Shoebox units may grow 70 percent over next three years

Posted in Property Market / Real Estate

Tagged National Development Board, shoebox apartment, shoebox unit, Singapore Property, Singapore Property Market, Singapore Real Estate

Singapore’s northeast at risk of housing oversupply

Posted on 27 Jun 2012 | Comments Off

While home prices in the northeast district are expected to be stable in the coming year, analysts say the area may potentially see an oversupply of homes in the future.

In the next few years, Punggol, Sengkang and Pasir Ris will continue to see intense construction activity, with market watchers expecting some 17,000 residential units to come onstream in the area over the next five to six years.

Later this year, developers are expected to bid for 4 sites in the northeast which are expected to yield some 2,000 executive condominium units. This will add to the 3,295 units from sites released in the area by the government in the first half of the year.

Despite this, experts predict a well-located site to see eight to 10 bids from developers.

“Pricing will be competitive in Punggol area and Pasir Ris, more so because there have been a couple of launches in the second half of last year GLS programme and also the first half of 2012,” Alan Cheong, Research Head of Savills Singapore, said.

“There will be a bit of competition among developers, but prices will remain competitively stable.”

Under the Government Land Sales, a commercial site at Punggol will be put out for tender in the second half of 2012. Still, some market watchers point out that Singapore’s northeast precinct lacks economic activity, reducing its attractiveness in residential leasing and resale.

Analysts also say the lack of education and commercial activities to anchor the area could drive buyers to consider homes in other estates.

For now, prices are expected to remain stable over the next one to two years.

According to analysts, median prices of new private homes in Sengkang are nearly S$1,000 per square foot, and nearly S$900 per square foot in Sengkang and Pasir Ris.

Source : CNA – 2012 Jun 27