ERA Daily Research - 14 June

Singapore property agents expect to benefit from relaxed Covid measures

The Business Times, 12 Jun 2021, Sat    

By Lisa Kriwangko

SINGAPORE property agents are optimistic about the effects of relaxed Covid-19 measures.

The Multi-Ministry Taskforce (MTF) announced on Thursday that social gathering group sizes will increase from two to five persons, effective June 14.

Occupancy limits of shopping malls and show galleries will also increase to one person per 10 square metres (sq m) of gross floor area, up from the current one person per 16 sq m.

This brings the occupancy rule back to pre-Phase 2 (Heightened Alert) levels. However it is still stricter than the one person per 8 sq m limit implemented when Singapore first entered Phase 3 on Dec 28, 2020.

Steven Tan, managing director at OrangeTee & Tie, said the increased group size will be "significantly helpful" to sales. He noted that the current group size of two means that an agent can take only one client to a viewing each time. This affects many buyers, especially couples, who often like to visit the sites together.

"With the relaxation of the policy, they can even bring a child or parent, and they can make decisions on the spot," said Mr Tan.

Propnex's chief executive officer (CEO) Ismail Gafoor added that the shift will give buyers confidence. He noted that during Phase 2 (Heightened Alert), some homeowners did not want clients to view their resale flats because they were worried about rising community cases.

That being said, he expects the current sentiments to be reflected only in July's figures, as the first half of June will still be under tighter controls.

Mr Tan also added the current restrictions have created "pent-up demand" and expects to see more buyers wanting to view flats in the coming weeks.

But customers are not the only ones with a backlogged agenda.

ERA CEO Jack Chua is expecting more developers to begin their launches in June or July.

"Some of the projects were ready, but the developers decided to put them on hold after additional restrictions were introduced last month," said Mr Chua.

One of the launches ERA is expecting soon is The Watergardens, a condominium located at Canberra Drive by developers UOL and Kheng Leong.


New private home sales take a hit in May on the back of heightened measures

The Business Times, 12 Jun 2021, Sat    

By Nisha Ramchandani

TIGHTER restrictions to curb a resurgence in Covid-19 cases dampened new private home sales in May, although the impact wasn't as severe as during the circuit breaker in the corresponding month last year.

According to estimates from analysts (based on caveats lodged), developers sold 863 private homes in May - excluding executive condominiums (ECs), which are a public-private hybrid - nearly 32 per cent less than the 1,262 units moved in April.

However, comparing year-on-year, the tally for May surged over 77 per cent from the 487 homes sold in the corresponding month in 2020 when the circuit breaker forced developers to shutter their sales galleries.

The Urban Redevelopment Authority will release the official monthly sales data for May on June 15.Bottom of Form

OrangeTee & Tie senior vice-president (research & analytics) Christine Sun highlighted that the month-on-month fall in sales volume in May wasn't as drastic as during the circuit breaker last year.

Ms Sun said: "During the first month of the movement restrictions, there were only 277 new transactions recorded in April 2020, tumbling 58 per cent from 660 units sold in March 2020. Comparatively, last month's new home sales were 211.6 per cent higher."

Nicholas Mak, head of research & consultancy at ERA, reckons that the smaller drop in transactions this time around could be a result of homebuyers having grown more accustomed to the new normal, which includes virtual viewings.

He went on to say: "The relatively good housing sales record for May this year could also be due to fact that the first two weeks of May was not affected by the new tightened restrictions. As a result, some developers managed to launch their projects within the earlier weeks of the month."

Property launches were in short supply in May as the government urged the public to stay home. The few launches that did take place included MCC Group's 413-unit EC Provence Residence at Canberra Crescent, MCC Group and HY Realty's One Bernam at Tanjong Pagar and Shun Tak's super luxury freehold development Park Nova at Tomlinson Road. According to PropNex, 12 units at Park Nova were transacted at a median price of S$5,006 per square foot (psf).

Under the government's heightened measures, which kicked in on May 16, sales galleries are limited to groups of two including the property agent, while the maximum capacity is reduced to 16 square metres (sq m) per person.

Safe-distancing measures will be relaxed from June 14 onwards, with the maximum capacity at show galleries increased to 10 sq m per person, while the maximum number of people in each group will go up from two to five.

Including ECs, new home sales in May reached 1,189 new homes, 11.4 per cent lower than the number of homes sold in April and more than double the 510 homes developers sold in May 2020.

The top selling project last month was the 413-unit EC, Provence Residence, where 229 units were sold at a median price of S$1,155 psf. Sales in May were also driven by One Bernam, where 82 units were purchased at a median price of S$2,465 psf. Meanwhile, Sim Lian's previously launched project, Treasure at Tampines, sold another 63 units at a median price of S$1,423 psf.

New home sales in May were led by the Outside Central Region (OCR), which accounted for some 45 per cent of sales despite no new launches in the OCR during the month, according to data from PropNex.

Meanwhile, the Rest of Central Region (RCR) comprised roughly a third of all transactions (excluding ECs), thanks partly to 52 units moved at Normanton Park.

Stripping out ECs, the bulk of the top 10 best selling developments in May were located in the OCR, "reflecting the sustained demand from owner-occupiers and HDB upgraders," said Ismail Gafoor, chief executive of PropNex.

He added: "We expect the unsold supply of new mass market homes to remain tight, and some buyers may turn to resale properties, if they are unable to find a suitable unit in the primary market."

Data from OrangeTee showed that homes in the S$1 to S$1.5 million range remained the sweet spot for buyers, with over 41 per cent of transactions (excluding ECs) in May falling within this price range. A little over 25 per cent of homes were between S$1.5 and S$2 million, while nearly 20 per cent of transactions were for new homes in the S$2 to S$3 million bracket.

The dearth of launches continues in June, which suggests that new home sales could remain soft this month, said Mr Gafoor, adding however that buying interest remains healthy. He added: "We should see a pick-up in sales momentum from July onwards as developers roll out more launches."

Extrapolating from February - where there were no launches - sales for June could clock 700 to 750 units, said Huttons' director of research, Lee Sze Teck.

According to Mr Mak, upcoming launches in the OCR include Allgreen Properties and Kerry Properties' mixed-use development Pasir Ris 8, which has 487 units, and Frasers Property's 496-unit EC project Parc Greenwich at Fernvale Lane.

"(Pasir Ris 8) is likely to be highly anticipated as it is conveniently linked to Pasir Ris MRT station," Mr Mak added.


Million-dollar HDB flats: Half of S'pore's 24 towns have them, including Hougang, Geylang and Ang Mo Kio

The Straits Times, 14 Jun 2021, Mon    

By Michelle Ng

While The Pinnacle @ Duxton is arguably the "poster boy" for million-dollar Housing Board flats in Singapore, such flats are not exclusively located in the central area.

Half of Singapore's 24 Housing Board towns are home to million-dollar HDB flats, official HDB data shows.

Among them is a 177 sq m executive maisonette in Block 851 Hougang Central in the non-mature estate of Hougang that sold for $1 million in January 2018.

The unit, located between the 13th and 15th storeys, had a remaining lease of 78 years and one month at the time of sale.

To date, it remains the only unit in a non-mature estate out of the 389 flats to hit the $1 million mark.

The remaining 388 units were spread across 11 mature estates: Ang Mo Kio, Bishan, Bukit Merah, Bukit Timah, Central area, Clementi, Geylang, Kallang/Whampoa, Queenstown, Serangoon and Toa Payoh.

A total of 389 HDB resale flats have changed hands for more than $1 million as at May 31 this year.

At present, the central area takes the top spot with 118 million-dollar flats - with all transactions coming from The Pinnacle @ Duxton on Cantonment Road.

In second place is Bishan with 74 units, with the majority of the units coming from Natura Loft, a Design, Build and Sell Scheme (DBSS) project in Bishan Street 24.

Bishan Street 13 and 12 are the next most popular areas in the mature estate. A handful of units sold for more than $1 million were in Shunfu Road, Sin Ming Avenue and Bright Hill Drive.

Queenstown takes third place with 55 units, and is followed by Toa Payoh with 40 units.

Typical traits of a million-dollar HDB flat are large young units on high floors with unblocked views in a central location - such as those found in The Pinnacle @ Duxton and Natura Loft.

But a closer look at HDB data shows that not all fit the mould - older units or those on lower floors can also fetch top dollar if compensated by other attractive attributes such as a prime location or a larger-than-usual size.

For instance, a 140 sq m five-room unit in Block 60 Dakota Crescent changed hands for $1,008,888 last December - the only transaction in the mature estate of Geylang so far.

It had just 61 years and 11 months left on its lease.

It sits next to Dakota MRT station on the Circle Line and is within walking distance from Old Airport Road Food Centre.

Last May, a 178 sq m jumbo flat in Ang Mo Kio - the first of two deals for the mature estate - was sold for $1.03 million, even though it was 40 years old at the time of transaction.

It is made up of two adjoining three-room flats in a one-time move by the HDB in 1989 to give unsold flats a new lease of life.

There are only around 2,900 jumbo units in Singapore, out of a total pool of more than one million HDB flats, making them a sought-after rarity.

Some HDB terraced houses - such as those in Jalan Ma'mor in Kallang/Whampoa - can go up to 280 sq m, equivalent to three four-room flats combined.

About a third of million-dollar flats were DBSS units and about 16 per cent were maisonettes, terraced homes and premium apartment lofts, HDB data shows.

Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said the value of that last group lies in their sprawling living spaces which are no longer offered under the current Build-To-Order (BTO) exercises, where a five-room flat is typically around 110 sq m.

Analysts have predicted a robust year for the HDB resale market, as major delays in construction activities due to Covid-19 have caused some would-be Build-To-Order (BTO) buyers to turn to resale flats.

In turn, this boost to overall resale prices will also prop up million-dollar flats - the top end of the spectrum.

ERA Realty head of research and consultancy Nicholas Mak said he expects a 7 per cent to 8 per cent rise in the HDB resale price index this year.

In recent years, more flats in mature estates have also reached - or are reaching - their mandatory five-year minimum occupation period and some buyers may not mind paying top dollar for these flats, said OrangeTee's Ms Sun.

These include Selective En bloc Redevelopment Scheme replacement units in Boon Tiong Road in Bukit Merah, and Clementi Avenue 3, and SkyVille @ Dawson and Sky Terrace @ Dawson in Queenstown.

So long as private home prices continue to rise and the supply of new mass market condos remains limited, demand for premium HDB resale flats should stay strong, said Ms Sun.


Are $1m HDB resale flats going to be ‘normal’ from now on?

The Straits Times, 14 Jun 2021, Mon    

By Michelle Ng

A record number of Housing Board resale flats changed hands for at least $1 million so far this year - and we are only half way though 2021.

This performance would have been remarkable in any year, let alone a pandemic-stricken one that saw an upswing in property prices, which has set off concerns about home affordability.

A total of 87 million-dollar HDB deals were inked from January to May this year, surpassing the 82 units sold for at least that amount in 2020.

As at May 31, 389 HDB resale flats have sold for more than $1 million since the first such transaction occurred in 2012.

All 11 priciest transactions took place in 2020 and 2021, official HDB data shows.

May's HDB resale prices also climbed for the 11th straight month, despite tightened Covid-19 measures in the latter half that largely curtailed in-person property viewings.

If the current trend continues, twice as many million-dollar HDB flats could change hands this year, compared with 2020.

Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, noted that over the last 12 months, the monthly average of million-dollar transactions has been around 13 units.

This means there may be more than 150 million-dollar HDB flat transactions inked this year, barring further economic shocks or cooling measures, she said.

A recent report by real estate firm Huttons Asia showed that the price gap between HDB resale flats in mature estates and non-mature estates has narrowed in recent years.

A further reduction of the price gap could very well see another million-dollar HDB flat deal - now a rarity - inked in non-mature estates soon, said Huttons Asia director of research Lee Sze Teck.

This is because buyers have started to look askance at decaying leases in older estates despite their amenities and accessibility, and increasingly favour new flats in younger estates, especially those that have promising transformation plans in the pipeline such as Punggol, said Mr Lee.

"Age, or remaining tenure of a flat, plays a more important role in the value of flats, rather than its location in a mature or non-mature estate," he added.

There has only been one million-dollar HDB flat deal in a non-mature estate so far: In January 2018, a mid-floor 177 sq m maisonette in Hougang Central sold for exactly that much.

But in March, a two-storey, 147 sq m five-room nine-year-old HDB loft in Treelodge@Punggol was sold for $910,000.

Analysts called it a significant transaction that could pave the way for future $1 million deals in the north-east new town.

Since 2012, 15 resale flats in the non-mature estates of Bukit Batok, Choa Chu Kang, Hougang, Jurong East and Punggol have been sold for more than $900,000, according to an OrangeTee's report in April.

However, analysts have also pointed out that million-dollar HDB transactions are few and far between.

Since 1990, million-dollar transactions were only about 0.05 per cent of the total 845,100 HDB resale transactions.

While this figure has increased to 0.8 per cent in the first five months of this year, OrangeTee's Ms Sun said the growth rate is marginal, spread out as it is over the past 30 years.

Still, the growing number of million-dollar HDB flats has stirred both resentment and envy among different people.

That is particularly as Build-To-Order (BTO) projects - the most affordable housing option for Singaporeans - are currently facing up to a year's delay due to manpower shortages in the construction industry.

Critics and netizens have been questioning if home prices could be increasingly out of reach for common folk, while a select group of home owners enjoy the "lottery effect" of reselling their well-located flats for high prices.

The Government plans to build new flats in prime areas - such as the city centre and Greater Southern Waterfront - in the coming years.

This has caused many to wonder if these flats will be the next The Pinnacle @ Duxton, where, so far, 118 units have fetched more than $1 million since completion of the minimum occupation period (MOP) at end-2014.

To address this, National Development Minister Desmond Lee announced in December that the Government is working on a new housing model to keep these flats affordable.

Suggestions previously raised include selling the flats with shorter leases, imposing a longer MOP, and selling them back to the HDB.

But, noted Mr Lee, each of these suggestions has its merits and trade-offs.

An online survey by the Ministry of National Development to gather feedback from the public is ongoing till the end of this month.

So, here is the $1 million dollar question:

Is this kind of price tag for HDB resale flats going to be "normal" from now on?

Yes and no.

Yes, because it is statistically likely that more flats will fetch more than $1 million in the coming months. In fact, 2021 will be a record year, unless the Government intervenes with cooling measures.

But also no, because these transactions make up a small proportion of total resale deals.

This means overall resale flat prices are unlikely to increase by too much.

So while million-dollar deals may make headlines from time to time, there will still be many affordable resale flats in the market to pick from.


Striking a balance in building HDB flats in prime locations

The Business Times, 12 Jun 2021, Sat    

By Indranee Rajah

"THIS is home, truly" - the lyrics of the National Day song Home are familiar to all. For Singaporeans, home is the place which anchors our emotional sense of belonging.

This includes the homes we live in and own, where we have raised families and built strong communities. Home ownership has always been a key national policy and foundation for Singapore.

Our public housing programme is underpinned by the values of accessibility, inclusivity and diversity. Singapore's home ownership rate is around 90 per cent, which is remarkable by any standard.

Data for 2019 from the Organisation for Economic Cooperation and Development indicates it is 65 per cent in the United States, 72 per cent in the European Union, and 63 per cent in Australia.

Perhaps more remarkable, 85 per cent of our low-income households own their homes.

This did not happen by chance. It happened because of our clear conviction that home ownership should be within reach of all working Singaporeans.

We designed our policies to achieve this, including:

  • Ensuring a steady supply of public housing;
  • Pricing new flats at a generous discount to market; and
  • A progressive subsidies and grants structure heavily tilted towards the lower and middle-income.

We made key interventions to enable inclusivity and diversity of home ownership:

  • The Ethnic Integration Policy ensures a balanced mix of ethnic groups in all Housing Board neighbourhoods;
  • We build different flat types in every Build-To-Order (BTO) project so that Singaporeans of different income levels and backgrounds can live together as a community; and
  • We build public rental flats and BTO flats in the same precincts, and have started integrating them in the same blocks for the same reason.

These policies have strengthened our social cohesion and community bonds. In so doing, we have largely avoided the racially and socio-economically segregated neighbourhoods seen in so many other countries.

The land challenge

As we continue our journey as a nation, land constraint is a challenge.

In the past, we could build new homes on swathes of undeveloped open land. Now, after 55 years of building and development, there are far fewer of these, and it has become more challenging to balance competing uses for land.

In order to continue providing good homes for Singaporeans, we will have to recycle previously developed land. Some of this is in prime locations, like the city centre and the Greater Southern Waterfront.

But here is the rub. Housing in prime locations will be significantly more expensive.

So what approach should we take?

Private or public?

One way would be to simply maximise the economic value of land and tender all prime location sites to private developers.

However, that would mean only those who can afford expensive private housing will be able to live there. Such homes would be beyond the reach of most Singaporeans.

But, as seen above, for this government, it has never been only about economics. It is our values that drive our policies. In the housing context, these are accessibility, inclusivity and diversity.

Thus, we believe that housing in prime locations should not be restricted only to the rich and affluent. Singaporeans from all walks of life should have the chance to live there too. To achieve this, we will have to inject public housing into these locations.

Prime locations dilemma

This, however, presents dilemmas.

First, how to make it affordable? We already provide generous subsidies to keep HDB flats affordable. But HDB flats in prime locations will likely have much higher market values than those in non-prime locations.

If we give the same subsidies as for non-prime areas, chances are, the prime area housing would be unaffordable for many.

Additional subsidies would be required for HDB flats in prime locations to be priced affordably. But this raises legitimate questions about fairness - should those buying HDB flats in a prime location receive higher subsidies than other HDB flat buyers, when:

  • They will enjoy the benefits of living in a prime location; and
  • They will likely get much higher windfall gains if they sell the flat after the minimum occupation period (MOP).

Second, how to avoid the lottery effect or speculative buying?

The prospect of higher windfall gains may attract buyers who purchase these flats with the sole intent of selling after the MOP or renting them out for investment income, rather than as a home.

Third, how to keep such resale flats affordable for subsequent buyers?

The resale value of prime location flats will also likely be higher than other resale flats. Without intervention, only wealthier buyers will be able to afford them.

If so, over time, the essential characteristics of public housing will be eroded, and the objective of this endeavour defeated.

Need for a different model

Clearly, a different public housing model will be needed for new HDB flats injected in prime locations in future. Exactly what form this model will take is still under consideration. We are consulting Singaporeans widely on this.

We are encouraged by our early engagements, which indicate that Singaporeans support our fundamental objective of keeping HDB estates accessible, inclusive and diverse.

Some suggestions put forward include:

  • Giving additional subsidies for the initial direct purchase from HDB but balancing this with a subsidy recovery regime upon resale;
  • Restricting access to the resale units to moderate resale prices, for example, allow resale only to buyers who meet all prevailing eligibility conditions for a new flat (similar to when the resale of HDB flats was first allowed), or minimally to buyers who meet an income ceiling; and
  • Imposing a longer MOP.

These are useful suggestions and we will consider them carefully. Those making these suggestions recognised there are no easy answers and that trade-offs will have to be made.

For example, restricting resale buyers to those who meet prevailing eligibility conditions for a new flat will dampen demand and rein in resale prices, but would exclude certain groups from purchasing such flats.

The implementation of a new public housing model in prime locations is an important evolution in our public housing journey. We are deliberating this carefully, to strike the right balance.

We remain committed to ensuring that our future generations can continue to access affordable housing, and that our public housing remains inclusive and diverse. The Ministry of National Development looks forward to working with fellow Singaporeans to achieve this.


Largest integrated transport hub in Singapore opens in Woodlands

The Straits Times, 13 Jun 2021, Sun     

By Fang Yiyang

Commuters in Woodlands can look forward to a smoother and more comfortable journey with the opening of the Woodlands Integrated Transport Hub (ITH) on Sunday (June 13).

The ITH - a term for fully air-conditioned bus interchanges linked to MRT stations and nearby shopping malls - connects a new bus interchange below Causeway Point shopping mall with Woodlands MRT station, which serves the North-South Line and Thomson-East Coast Line.

The bus interchange replaces the open-air Woodlands Temporary Bus Interchange, which had been in operation since 2016.

Read more at:

Drop me a message

I will get back to you soonest possible!