reporter2
03-01-23, 11:47
Private property market to stay resilient in 2023, city fringe to outperform
Dec 28, 2022
SINGAPORE’S private residential market will remain resilient in 2023, with the city fringe, or Rest of Central Region (RCR), leading the way in price performance and new launches, say analysts.
The supply of homes is likely to increase. Yet, market analysts believe pricing will be supported by the quality of projects up for sale next year. Demand is likely to come from those looking to upgrade their homes, as well as foreigners drawn to Singapore’s safe and hospitable environment.
This expected resilience in property prices could make Singapore an outlier among major global cities, as the likes of London and Hong Kong grapple with falling prices in reaction to central banks aggressively hiking interest rates.
Based on Huttons Asia’s estimation, overall supply of new condos will pick up in 2023 to around 10,000 to 12,000 units spread over 40 launches. About half the units will be located in the RCR, 30 per cent in the mostly mass market Outside Central Region (OCR), and 20 per cent in the city centre or Core Central Region (CCR).
In comparison, developers launched 4,592 units of private non-landed homes in the first 11 months of 2022. Around 37 per cent of these units were situated in the OCR and about 30 per cent each in the RCR and CCR.
https://i.imgur.com/FfrUq28.png
Among the new launches in the RCR next year, ERA Realty head of research and consultancy Nicholas Mak noted that a few “rather large projects” will be located at the Jalan Tembusu and Katong areas, with 600 to 800 units and estimated median prices of around S$2,200 to S$2,400 per square foot (psf).
“Very rarely do we get such big projects,” he said. “Once launched, I think they will move the market.”
Other RCR districts that are likely to see further price growth include District 5 (West Coast, Pasir Panjang and Clementi) and District 16 (Bedok and Upper East Coast), said Tricia Song, CBRE’s head of research for South-east Asia. She attributed this to attractive upcoming launches in the area, including mixed developments such as MCC Singapore’s Sceneca Residence along Tanah Merah Kechil Link; EL Development’s Blossoms by the Park at Buona Vista; and The Reserve Residence at Jalan Anak Bukit, jointly developed by Far East Organization and Sino Group.
District 26 (Mandai and Upper Thomson) could also “continue to see sustained higher prices” since new launches are expected in the Lentor area, from the Government Land Sales (GLS) sites that closed in 2022, said Song. These include the Lentor Hills Road Parcel A site, which was sold in January 2022, as well as the Lentor Central and Lentor Hills Road Parcel B sites, which were sold in September 2022.
As for the OCR, Mohan Sandrasegeran, senior analyst of research and content creation at One Global Group, expects developers to build on the new benchmark price of S$2,000 psf set by recent launches such as AMO Residence at Ang Mo Kio, Lentor Modern and Sky Eden@Bedok.
Market talk suggests that AMO Residence – jointly developed by UOL Group : U14 -1.19% and its consortium partners Singapore Land Group : U06 0% and Kheng Leong Group – was launched at around the S$2,100 psf level in July. GuocoLand : F17 -0.62%’s Lentor Modern fetched a median price of S$2,108 psf when launched, while Frasers Property : TQ5 -1.08%’s Sky Eden@Bedok pulled in a median price of S$2,118 psf.
Meanwhile, analysts predict that prices in the CCR will hold firm, mainly due to the lack of notable new launches in the area.
ERA Realty’s Mak expects just one large project to be launched in the CCR next year: the GLS white site at Marina View, developed by IOI Properties, which he believes will be launched at about S$3,000 psf. “Other than that, the rest are medium-sized projects with less than 300 units, so these projects won’t move the needle much,” he said.
The fairly positive market outlook comes on the back of a strong performance in 2022, with the OCR leading the way.
In the first three quarters of 2022, the price index of non-landed private residential homes across the island rose by 8.2 per cent. Growth was driven by higher prices in the OCR and RCR, up a respective 9.8 per cent and 9.4 per cent. CCR prices rose by less than half that, at 4.2 per cent.
OCR and RCR properties have historically grown at a faster pace. Between Q3 2017 and Q3 2022, condo prices in the CCR grew 14.6 per cent while prices in the OCR and RCR surged by a respective 44.6 per cent and 43.7 per cent.
https://i.imgur.com/dzmhiP4.png
PropertyGuru head of real estate intelligence, data and software solutions Lee Nai Jia said this was also the case during a previous upcycle. From Q2 2009 to Q2 2013, the price index for condos in the CCR grew by 48.6 per cent. Prices in the OCR and RCR soared by 71.2 per cent and 62.8 per cent, respectively.
“When the residential market sees an increase in demand relative to supply, the effects are often felt at OCR and RCR because this segment often targets upgraders or those who have just started their progressive asset accumulation journey,” he said.
“Their demand is more elastic and responsive to changes in income or Housing and Development Board (HDB) prices.”
Condos in the CCR, on the other hand, cater to the top 5 to 10 per cent of wealthy Singaporeans, said Lee. “The volume of sales in the market tends to be lower as the pool of prospective buyers is smaller and there are fewer homes in this segment,” he said.
Another reason for the OCR’s lead is that it had more attractive new launches in the past year than the CCR and RCR.
Median prices in District 26, an OCR market that covers Mandai and Upper Thomson, recorded the highest growth of 134 per cent between Q3 2017 and Q3 2022, with the launch of Lentor Modern, the “first major launch in the district in over 13 years”, noted Song from CBRE.
District 28 (Yio Chu Kang and Seletar) and District 20 (Ang Mo Kio, Bishan and Thomson) posted a price surge of 56 per cent and 54 per cent, respectively, in the same period, following the launch of AMO Residence.
These “attractive new launches” fuel price growth, especially in areas with pent-up demand from upgraders and a lack of supply, such as in mature towns like Ang Mo Kio”, said Song.
Knight Frank head of research Leonard Tay highlighted that prices in the OCR are also driven by HDB upgraders who had made “substantial” price gains in the HDB resale market.
“This group of buyers provided much uplift for prices in the OCR to increase 26.4 per cent from the trough in Q1 2020 to the present peak in Q3 2022,” he said. This led to further upgrading along the private home ladder, he said, with prices in the RCR increasing 32.5 per cent from their trough in Q2 2022 to the current peak in the third quarter of 2022.
Next year, many of these upward price pressures are likely to persist.
Lee from PropertyGuru said HDB upgraders and first-time owners who are “flushed with equity from intergenerational transfers” will continue to drive the market, supporting new price benchmarks despite rising interest rates.
“Unless the HDB resale market slows or unemployment statistics pick up significantly, prices should hold,” he said.
Huttons Asia senior research director Lee Sze Teck added that the market’s resilience might also be due to “low speculative activities and ample liquidity” to absorb the higher interest rates.
Furthermore, investors, especially ultra-high-net-worth individuals, are attracted to Singapore’s business-friendly environment and high quality of life.
“The global uncertainties have also elevated safe havens like Singapore as a prime location for investment properties,” he said, “(and) the robust property market may even draw more interest from overseas buyers.”
https://www.businesstimes.com.sg/property/private-property-market-stay-resilient-2023-city-fringe-outperform
Dec 28, 2022
SINGAPORE’S private residential market will remain resilient in 2023, with the city fringe, or Rest of Central Region (RCR), leading the way in price performance and new launches, say analysts.
The supply of homes is likely to increase. Yet, market analysts believe pricing will be supported by the quality of projects up for sale next year. Demand is likely to come from those looking to upgrade their homes, as well as foreigners drawn to Singapore’s safe and hospitable environment.
This expected resilience in property prices could make Singapore an outlier among major global cities, as the likes of London and Hong Kong grapple with falling prices in reaction to central banks aggressively hiking interest rates.
Based on Huttons Asia’s estimation, overall supply of new condos will pick up in 2023 to around 10,000 to 12,000 units spread over 40 launches. About half the units will be located in the RCR, 30 per cent in the mostly mass market Outside Central Region (OCR), and 20 per cent in the city centre or Core Central Region (CCR).
In comparison, developers launched 4,592 units of private non-landed homes in the first 11 months of 2022. Around 37 per cent of these units were situated in the OCR and about 30 per cent each in the RCR and CCR.
https://i.imgur.com/FfrUq28.png
Among the new launches in the RCR next year, ERA Realty head of research and consultancy Nicholas Mak noted that a few “rather large projects” will be located at the Jalan Tembusu and Katong areas, with 600 to 800 units and estimated median prices of around S$2,200 to S$2,400 per square foot (psf).
“Very rarely do we get such big projects,” he said. “Once launched, I think they will move the market.”
Other RCR districts that are likely to see further price growth include District 5 (West Coast, Pasir Panjang and Clementi) and District 16 (Bedok and Upper East Coast), said Tricia Song, CBRE’s head of research for South-east Asia. She attributed this to attractive upcoming launches in the area, including mixed developments such as MCC Singapore’s Sceneca Residence along Tanah Merah Kechil Link; EL Development’s Blossoms by the Park at Buona Vista; and The Reserve Residence at Jalan Anak Bukit, jointly developed by Far East Organization and Sino Group.
District 26 (Mandai and Upper Thomson) could also “continue to see sustained higher prices” since new launches are expected in the Lentor area, from the Government Land Sales (GLS) sites that closed in 2022, said Song. These include the Lentor Hills Road Parcel A site, which was sold in January 2022, as well as the Lentor Central and Lentor Hills Road Parcel B sites, which were sold in September 2022.
As for the OCR, Mohan Sandrasegeran, senior analyst of research and content creation at One Global Group, expects developers to build on the new benchmark price of S$2,000 psf set by recent launches such as AMO Residence at Ang Mo Kio, Lentor Modern and Sky Eden@Bedok.
Market talk suggests that AMO Residence – jointly developed by UOL Group : U14 -1.19% and its consortium partners Singapore Land Group : U06 0% and Kheng Leong Group – was launched at around the S$2,100 psf level in July. GuocoLand : F17 -0.62%’s Lentor Modern fetched a median price of S$2,108 psf when launched, while Frasers Property : TQ5 -1.08%’s Sky Eden@Bedok pulled in a median price of S$2,118 psf.
Meanwhile, analysts predict that prices in the CCR will hold firm, mainly due to the lack of notable new launches in the area.
ERA Realty’s Mak expects just one large project to be launched in the CCR next year: the GLS white site at Marina View, developed by IOI Properties, which he believes will be launched at about S$3,000 psf. “Other than that, the rest are medium-sized projects with less than 300 units, so these projects won’t move the needle much,” he said.
The fairly positive market outlook comes on the back of a strong performance in 2022, with the OCR leading the way.
In the first three quarters of 2022, the price index of non-landed private residential homes across the island rose by 8.2 per cent. Growth was driven by higher prices in the OCR and RCR, up a respective 9.8 per cent and 9.4 per cent. CCR prices rose by less than half that, at 4.2 per cent.
OCR and RCR properties have historically grown at a faster pace. Between Q3 2017 and Q3 2022, condo prices in the CCR grew 14.6 per cent while prices in the OCR and RCR surged by a respective 44.6 per cent and 43.7 per cent.
https://i.imgur.com/dzmhiP4.png
PropertyGuru head of real estate intelligence, data and software solutions Lee Nai Jia said this was also the case during a previous upcycle. From Q2 2009 to Q2 2013, the price index for condos in the CCR grew by 48.6 per cent. Prices in the OCR and RCR soared by 71.2 per cent and 62.8 per cent, respectively.
“When the residential market sees an increase in demand relative to supply, the effects are often felt at OCR and RCR because this segment often targets upgraders or those who have just started their progressive asset accumulation journey,” he said.
“Their demand is more elastic and responsive to changes in income or Housing and Development Board (HDB) prices.”
Condos in the CCR, on the other hand, cater to the top 5 to 10 per cent of wealthy Singaporeans, said Lee. “The volume of sales in the market tends to be lower as the pool of prospective buyers is smaller and there are fewer homes in this segment,” he said.
Another reason for the OCR’s lead is that it had more attractive new launches in the past year than the CCR and RCR.
Median prices in District 26, an OCR market that covers Mandai and Upper Thomson, recorded the highest growth of 134 per cent between Q3 2017 and Q3 2022, with the launch of Lentor Modern, the “first major launch in the district in over 13 years”, noted Song from CBRE.
District 28 (Yio Chu Kang and Seletar) and District 20 (Ang Mo Kio, Bishan and Thomson) posted a price surge of 56 per cent and 54 per cent, respectively, in the same period, following the launch of AMO Residence.
These “attractive new launches” fuel price growth, especially in areas with pent-up demand from upgraders and a lack of supply, such as in mature towns like Ang Mo Kio”, said Song.
Knight Frank head of research Leonard Tay highlighted that prices in the OCR are also driven by HDB upgraders who had made “substantial” price gains in the HDB resale market.
“This group of buyers provided much uplift for prices in the OCR to increase 26.4 per cent from the trough in Q1 2020 to the present peak in Q3 2022,” he said. This led to further upgrading along the private home ladder, he said, with prices in the RCR increasing 32.5 per cent from their trough in Q2 2022 to the current peak in the third quarter of 2022.
Next year, many of these upward price pressures are likely to persist.
Lee from PropertyGuru said HDB upgraders and first-time owners who are “flushed with equity from intergenerational transfers” will continue to drive the market, supporting new price benchmarks despite rising interest rates.
“Unless the HDB resale market slows or unemployment statistics pick up significantly, prices should hold,” he said.
Huttons Asia senior research director Lee Sze Teck added that the market’s resilience might also be due to “low speculative activities and ample liquidity” to absorb the higher interest rates.
Furthermore, investors, especially ultra-high-net-worth individuals, are attracted to Singapore’s business-friendly environment and high quality of life.
“The global uncertainties have also elevated safe havens like Singapore as a prime location for investment properties,” he said, “(and) the robust property market may even draw more interest from overseas buyers.”
https://www.businesstimes.com.sg/property/private-property-market-stay-resilient-2023-city-fringe-outperform