New Reporter
18-09-23, 10:14
Over 3,500 new private homes set to be launched in Q4
Analysts expect new launch prices to hold at current levels; projects to be pegged above S$2,000 psf
Sep 17, 2023
MORE than 10 private residential projects offering over 3,500 housing units are slated to be launched in the fourth quarter of this year. Prices are likely to hold at current levels, despite signs of homebuyers’ waning appetite, with financing and land costs still high in the wake of market cooling measures, analysts say.
Five projects said to be lined up for a Q4 launch will yield around 2,370 units. These will add to an existing stock of uncompleted properties that is steadily accumulating as take-up at new projects slows.
Against a background of slowing sales, latest caveats data from the Urban Redevelopment Authority’s (URA) Realis platform indicates that in the year so far, the median price for the mass-market segment is around S$2,074 per square foot. This includes new suburban private homes, excluding executive condominiums (ECs), in the Outside Central Region (OCR).
In the city fringe or Rest of Central Region (RCR), the median price of new home sales is S$2,511 psf; in the prime Core Central Region (CCR), it is S$2,903 psf.
According to CBRE, developers launched 15 new private residential projects with 4,528 units (excluding ECs) for sale in 2022. CBRE further estimates that developers have launched in the year to date 17 private non-landed projects with a total of 6,773 units.
One of the first projects expected to come to market in the coming weeks will be Hillock Green, a 474-unit condo being developed by Yanlord Land Group, China Communications Construction Company and Soilbuild Group Holdings.
Another project in the immediate pipeline is freehold condo Watten House at Shelford Road in the city centre, or CCR, from UOL and Singapore Land.
Both are likely to launch in late September or early October, at prices of around S$2,150 to S$2,250 psf for Hillock Green and S$3,300 to S$3,400 psf for Watten House, said ERA key executive officer Eugene Lim.
Three launches of mixed-use developments are also in the works: The massive 748-unit Marina View Residences condo on the Marina View Government Land Sale (GLS) site, developed by IOI Properties; CapitaLand’s redevelopment of JCube mall into the 368-unit J’Den condo; and the 215-unit Skywaters Residences at the former AXA Tower site on 8 Shenton Way, developed by a Perennial Holdings-led consortium.
https://i.imgur.com/5piW2GW.png
More than half of the new launches expected within the last three months of the year can be found in the suburbs, or OCR – one being located in District 23 (Upper Bukit Timah), one in District 17 (Changi), two in District 22 (Jurong), and two in District 26 (Lentor and Upper Thomson).
In District 23, homebuyers can expect to see the launch of the 341-unit Hillhaven at Hillview Rise, developed by Far East Organization and Sekisui House. The site was acquired at a state tender in November 2022 for S$320.8 million or nearly S$1,024 psf per plot ratio. Analysts previously pegged launch prices at S$1,800 to S$1,900 psf.
In District 22, CapitaLand’s J’Den condo is expected to be pitched at S$2,000 to S$2,100 psf. The Jurong area will also see the 440-unit Sora from Chip Eng Seng, KSH Holdings and SingHaiyi Group. The 99-year leasehold condo is sited at the former Park View Mansions, which was sold en bloc for S$260 million or S$1,023 psf ppr in July 2022.
At the new Lentor Hills estate in District 26, Hillock Green and Lentoria will join two new condos already on the market. The consortium building Hillock Green had won the site at a GLS tender for S$481 million or S$1,108 psf ppr in September 2022. The 265-unit Lentoria, meanwhile, sits on land acquired by Hong Leong Holdings and Mitsui Fudosan at the same tender, for S$276.4 million or S$1,130 psf ppr.
In the CCR, eyes are on the launch of Marina View Residences. The 748-unit project is coming up on a sprawling site for which IOI Properties bid S$1.51 billion or S$1,379 psf ppr in a state tender two years ago. For the freehold Watten House, UOL Group and Singapore Land Group had acquired the site, the former Watten Estate Condominium, in a collective sale tender in October 2021 for S$550.8 million or S$1,786 psf ppr.
Rising benchmark prices
New launches this year have mostly commanded psf prices of above S$2,100. Market watchers believe pricing will hold in the coming months.
ERA’s Lim predicts that launch prices of OCR projects such as Sora, Lentoria and J’Den will range from S$2,000 to S$2,500 psf.
Prices of RCR projects, such as the 172-unit Sky Botania along Serangoon Road and 144-unit The Hill @ One-North, are projected to be around S$2,400 to S$2,600 psf, Lim said. In the CCR, Watten House is likely to see launch prices of S$3,300 to S$3,400 psf.
This is primarily due to still-high financing and construction costs, said PropNex chief executive officer Ismail Gafoor. “Developers (also) do not have much room to adjust pricing due to their fixed land cost.”
Nicholas Mak, chief research officer at Mogul.sg, noted that land prices have slipped since 2022, when most developers acquired their sites for projects launched or to be launched this year.
The two top bids for the GLS tenders that closed last week, for example, came in at under S$1,000 psf ppr. “The developers of each of the sites could potentially launch the new projects at between S$1,850 psf and just below S$2,000 psf” when they come onto the market in the future, said Mak.
Developers may keep their launch prices high today to have the flexibility of lowering them in the future, depending on the market or the project’s performance, said Sing Tien Foo, provost’s chair professor of real estate at the National University of Singapore.
“This is especially as (the projects) approach their Additional Buyer’s Stamp Duty (ABSD) deadline,” he said. For residential projects with five or more units, developers are subject to an ABSD of 40 per cent on the land price, of which 35 per cent is remissible if the developer sells all units within five years. Otherwise, that portion of the ABSD has to be paid with interest.
The ABSD payable is 25 per cent, with a non-remissible component of 5 per cent, for sites acquired between July 2018 and December 2021.
Still, Christine Sun, OrangeTee & Tie senior vice-president of research and analytics, emphasised that developers will be careful when pricing new launches. “Buyers are still price-sensitive, and prices need to be attractive to keep sales momentum going.”
Dr Lee Nai Jia, PropertyGuru’s head of real estate intelligence, data and software solutions, also pointed out that most cost pressures, including construction costs, appear to be easing.
Data from the Department of Statistics Singapore showed that the price of steel reinforcement bars – an essential material in building works – dropped by 27.7 per cent year on year in July.
There is also a “discernable decline in the appetite for homes”, said Dr Lee. “This is mainly attributed to the volatile economic environment and heightened interest rate.”
While developers’ immediate cost pressures have waned, rising holding costs and interest rates may deter them from lowering prices. And higher prices will be difficult for the market to stomach, with this year’s higher stamp duty rates already holding investors and foreign buyers at bay.
“With geopolitical uncertainties… costs could potentially climb, necessitating developers to account for such unpredictabilities,” said Dr Lee. “Given these dynamics, a significant increase in new launch prices seems unlikely. We foresee a more stable pricing landscape in the near future.”
https://www.businesstimes.com.sg/property/over-3500-new-private-homes-set-be-launched-q4
Analysts expect new launch prices to hold at current levels; projects to be pegged above S$2,000 psf
Sep 17, 2023
MORE than 10 private residential projects offering over 3,500 housing units are slated to be launched in the fourth quarter of this year. Prices are likely to hold at current levels, despite signs of homebuyers’ waning appetite, with financing and land costs still high in the wake of market cooling measures, analysts say.
Five projects said to be lined up for a Q4 launch will yield around 2,370 units. These will add to an existing stock of uncompleted properties that is steadily accumulating as take-up at new projects slows.
Against a background of slowing sales, latest caveats data from the Urban Redevelopment Authority’s (URA) Realis platform indicates that in the year so far, the median price for the mass-market segment is around S$2,074 per square foot. This includes new suburban private homes, excluding executive condominiums (ECs), in the Outside Central Region (OCR).
In the city fringe or Rest of Central Region (RCR), the median price of new home sales is S$2,511 psf; in the prime Core Central Region (CCR), it is S$2,903 psf.
According to CBRE, developers launched 15 new private residential projects with 4,528 units (excluding ECs) for sale in 2022. CBRE further estimates that developers have launched in the year to date 17 private non-landed projects with a total of 6,773 units.
One of the first projects expected to come to market in the coming weeks will be Hillock Green, a 474-unit condo being developed by Yanlord Land Group, China Communications Construction Company and Soilbuild Group Holdings.
Another project in the immediate pipeline is freehold condo Watten House at Shelford Road in the city centre, or CCR, from UOL and Singapore Land.
Both are likely to launch in late September or early October, at prices of around S$2,150 to S$2,250 psf for Hillock Green and S$3,300 to S$3,400 psf for Watten House, said ERA key executive officer Eugene Lim.
Three launches of mixed-use developments are also in the works: The massive 748-unit Marina View Residences condo on the Marina View Government Land Sale (GLS) site, developed by IOI Properties; CapitaLand’s redevelopment of JCube mall into the 368-unit J’Den condo; and the 215-unit Skywaters Residences at the former AXA Tower site on 8 Shenton Way, developed by a Perennial Holdings-led consortium.
https://i.imgur.com/5piW2GW.png
More than half of the new launches expected within the last three months of the year can be found in the suburbs, or OCR – one being located in District 23 (Upper Bukit Timah), one in District 17 (Changi), two in District 22 (Jurong), and two in District 26 (Lentor and Upper Thomson).
In District 23, homebuyers can expect to see the launch of the 341-unit Hillhaven at Hillview Rise, developed by Far East Organization and Sekisui House. The site was acquired at a state tender in November 2022 for S$320.8 million or nearly S$1,024 psf per plot ratio. Analysts previously pegged launch prices at S$1,800 to S$1,900 psf.
In District 22, CapitaLand’s J’Den condo is expected to be pitched at S$2,000 to S$2,100 psf. The Jurong area will also see the 440-unit Sora from Chip Eng Seng, KSH Holdings and SingHaiyi Group. The 99-year leasehold condo is sited at the former Park View Mansions, which was sold en bloc for S$260 million or S$1,023 psf ppr in July 2022.
At the new Lentor Hills estate in District 26, Hillock Green and Lentoria will join two new condos already on the market. The consortium building Hillock Green had won the site at a GLS tender for S$481 million or S$1,108 psf ppr in September 2022. The 265-unit Lentoria, meanwhile, sits on land acquired by Hong Leong Holdings and Mitsui Fudosan at the same tender, for S$276.4 million or S$1,130 psf ppr.
In the CCR, eyes are on the launch of Marina View Residences. The 748-unit project is coming up on a sprawling site for which IOI Properties bid S$1.51 billion or S$1,379 psf ppr in a state tender two years ago. For the freehold Watten House, UOL Group and Singapore Land Group had acquired the site, the former Watten Estate Condominium, in a collective sale tender in October 2021 for S$550.8 million or S$1,786 psf ppr.
Rising benchmark prices
New launches this year have mostly commanded psf prices of above S$2,100. Market watchers believe pricing will hold in the coming months.
ERA’s Lim predicts that launch prices of OCR projects such as Sora, Lentoria and J’Den will range from S$2,000 to S$2,500 psf.
Prices of RCR projects, such as the 172-unit Sky Botania along Serangoon Road and 144-unit The Hill @ One-North, are projected to be around S$2,400 to S$2,600 psf, Lim said. In the CCR, Watten House is likely to see launch prices of S$3,300 to S$3,400 psf.
This is primarily due to still-high financing and construction costs, said PropNex chief executive officer Ismail Gafoor. “Developers (also) do not have much room to adjust pricing due to their fixed land cost.”
Nicholas Mak, chief research officer at Mogul.sg, noted that land prices have slipped since 2022, when most developers acquired their sites for projects launched or to be launched this year.
The two top bids for the GLS tenders that closed last week, for example, came in at under S$1,000 psf ppr. “The developers of each of the sites could potentially launch the new projects at between S$1,850 psf and just below S$2,000 psf” when they come onto the market in the future, said Mak.
Developers may keep their launch prices high today to have the flexibility of lowering them in the future, depending on the market or the project’s performance, said Sing Tien Foo, provost’s chair professor of real estate at the National University of Singapore.
“This is especially as (the projects) approach their Additional Buyer’s Stamp Duty (ABSD) deadline,” he said. For residential projects with five or more units, developers are subject to an ABSD of 40 per cent on the land price, of which 35 per cent is remissible if the developer sells all units within five years. Otherwise, that portion of the ABSD has to be paid with interest.
The ABSD payable is 25 per cent, with a non-remissible component of 5 per cent, for sites acquired between July 2018 and December 2021.
Still, Christine Sun, OrangeTee & Tie senior vice-president of research and analytics, emphasised that developers will be careful when pricing new launches. “Buyers are still price-sensitive, and prices need to be attractive to keep sales momentum going.”
Dr Lee Nai Jia, PropertyGuru’s head of real estate intelligence, data and software solutions, also pointed out that most cost pressures, including construction costs, appear to be easing.
Data from the Department of Statistics Singapore showed that the price of steel reinforcement bars – an essential material in building works – dropped by 27.7 per cent year on year in July.
There is also a “discernable decline in the appetite for homes”, said Dr Lee. “This is mainly attributed to the volatile economic environment and heightened interest rate.”
While developers’ immediate cost pressures have waned, rising holding costs and interest rates may deter them from lowering prices. And higher prices will be difficult for the market to stomach, with this year’s higher stamp duty rates already holding investors and foreign buyers at bay.
“With geopolitical uncertainties… costs could potentially climb, necessitating developers to account for such unpredictabilities,” said Dr Lee. “Given these dynamics, a significant increase in new launch prices seems unlikely. We foresee a more stable pricing landscape in the near future.”
https://www.businesstimes.com.sg/property/over-3500-new-private-homes-set-be-launched-q4