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Three-bedder at Marina Bay Residences sold for $1.9 mil profit

Posted on 10 Sep 2015 | Comments Off

A 1,636 sq ft unit at Marina Bay Residences condominium was sold in August for a profit of $1.9 million, according to recent caveats lodged with URA. This translates into a profit margin of 76% or annualised return of 8.9%. The seller purchased the property in January 2009 for $2.5 million ($1,528 psf) and resold it for $4.4 million ($2,683 psf) this year.

Completed in 2010, the 55-storey condo was jointly developed by Hongkong Land, Keppel Land International and Cheung Kong Holdings. It comprises 428 units and sits on a site with a balance of 89 years in its leasehold tenure. The condo offers panoramic view of the city, including Marina Bay Sands.

The nearest MRT station is the Downtown Station of the Downtown Line. Marina Bay Residences is also within walking distance from the Bayfront Station of the Circle Line and Raffles Place, which is an interchange station of the North-South and East-West Lines.

Nearby amenities include Marina Bay Link Mall as well as shop and F&B outlets at The Sail @ Marina Bay and Marina Bay Financial Centre. Marina Bay Link Mall is a subterranean mall that houses retail and F&B units with multiple entry points on street level and below ground. They allow convenient access from various developments, such as One Raffles Quay, Marina Bay Residences and Marina Bay Suites.

A new retail amenity, which is part of the high-profile Marina One development, will come on-stream next year or in 2017. The retail space in Marina One is expected to have a net lettable area of approximately 139,000 sq ft. Based on the transactions in the past six months, prices in Marina Bay Residences range from $2,186 to $2,683 psf and rents range from $4.26 to $8.00 psf a month. This translates into an implied rental yield of 3.11%.

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Posted in Property Market / Real Estate, Property Transactions

Tagged Cheung Kong (Holdings), Hongkong Land, Keppel Land International, Marina Bay Residences, Singapore Property

S’pore home prices may continue slide amid rising rates

Posted on 9 Sep 2015 | Comments Off

A weaker currency and rising borrowing costs do not bode well for Singapore’s home prices amid its longest drop in over 10 years, reported Bloomberg.

Notably, the three-month Singapore interbank offered rate (SIBOR) more than doubled within a year to its highest level since 2008. The main benchmark for home loans was seen rising further and narrowing the gap with the swap offer rate (SOR), a measure of borrowing costs mainly influenced by exchange rate expectations.

The spread was the greatest since 2009, as the Singapore dollar fell seven percent this year. Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd, said: “If the SIBOR catches up with the SOR in the next three to six months, that premium may be eroded, and we will get further softening in property prices. Buyers are going to factor in rate increases, so a further price correction is difficult to avoid.”

Knight Frank LLP said home prices may decline by as much as five percent this year, the biggest drop since 2001. Property developers are already struggling with lower sales and falling values after the government introduced curbs on residential transactions, as demand from foreigners, alongside low rates, prompted concerns of an overheating property market.

The curbs included higher stamp duties on home purchases, an increase in real estate taxes, and a cap on debt repayment costs at over half the borrower’s monthly income. This saw property prices fall for the seventh consecutive quarter in the three months ending in June, its longest losing streak in 13 years. Private homes sales also plunged to a six-year low last year.

In August, the three-month SOR increased 41 basis points to 1.405 percent as the Singapore dollar fell to its lowest level in over five years. The corresponding SIBOR increased 13 basis points to 1.008 percent in August, with its discount to the SOR reaching 49 basis points on Tuesday. At the same time, the three-month SIBOR stood at 1.074 percent, its highest level since November 2008. Mizuho’s Varathan expects it to increase to 1.5 percent by end-2015.

Meanwhile, the Singapore dollar is set for its largest annual loss since 1998. The currency stood at S$1.4296 against the US dollar on Tuesday, its weakest since September 2009. This came amid concern that the Federal Reserve will begin raising interest rates, and as the devaluation of China’s yuan triggered weakness in Asian exchange rates.

The city-state’s export-driven economy has been dampened by China’s slowdown, a commodities slump and uneven recoveries in Europe and the US. In Q2 2015, the economy contracted the most since 2012, while annual growth slowed following a record high in 2010.

“The outlook for the Singapore economy is very weak,” noted Hee-Eun Lee, a rates strategist at Standard Chartered Plc. As such, investors “think the currency will keep on depreciating,” she said.

With this, Alice Tan, Singapore-based head of consultancy and research at Knight Frank, expects this year’s home sales to range between 6,500 and 7,500 units, compared with 2014’s 7,316 units.

“The impact of rising rates would exert a downward pressure on prices for homes,” said Tan. “If the rate of increase is faster, then a recovery may not be in sight next year.”