Residential Market News Extract - 15 June 2012

Another round of cooling measures unlikely: analyst

CURRENT market conditions probably do not warrant another round of property cooling measures, according to Bank of America Merrill Lynch (Singapore) economist Chua Hak Bin.

In a report yesterday titled "Singapore: More property measures?", Mr Chua wrote: "A fragile economic outlook and softness in the broader property market suggests that another round of measures may be unwarranted at this point. The last round of measures in December last year already dealt quite a severe blow to overall sentiment and transaction."

He noted, in his report, that prices of private residential properties have fallen 0.1 per cent in Q1, compared with an increase of 0.2 per cent in the same quarter last year. Transaction values and volumes were worst hit following the last round of cooling measures, plunging some 26 per cent and 14 per cent respectively from the final quarter of last year.

Singapore's luxury property market - which is defined by homes exceeding $5 million in worth - has also "practically collapsed" with transactions in the segment declining by some 61 per cent, according to the same report.

Not surprisingly, activity from foreign buyers was also significantly lower after the additional 10 per cent stamp duty kicked in with foreign purchasers (including permanent residents) accounting for a muted 22.7 per cent of transactions during the first 5 months of 2012, as compared with 34.7 per cent over the same period a year ago.

Foreign purchasers as a whole were also down 48 per cent from last year.

But this was not the case for buyers that hailed from countries that were exempted from the ABSD due to bilateral free trade agreements, such as the US, Switzerland, Norway, Iceland and Liechtenstein.

In fact, Mr Chua pointed out that buyers from these exempted countries maintained their buying habits post-ABSD, suggesting that the cooling measures were the key driver behind the recent lacklustre foreign buying activity, as opposed to weaker global economic conditions.

Source: Business Times – 15 June 2012

 

Kallang development plans under review

DEVELOPMENT plans for the Kallang area are being reviewed in a bid to breathe new life into the rejuvenation of the precinct.

The Government is looking at amalgamating smaller development sites there into larger sites that could then be used for major mixed-use developments.

As part of this shake-up, the vacant Kallang Airport site, which once housed the People's Association (PA) headquarters, could be added to redevelopment plans.

The issue entered the spotlight this week when the National Development Ministry announced that it is removing two hotel sites on the Kallang Riverside from the reserve list of the Government Land Sales programme for July to December for review. The sites were made available for sale in June 2009, and again in June last year, but did not draw any acceptable bids from developers.

Experts say feedback from developers might have led the Urban Redevelopment Authority (URA) to reassess plans for the area.

Industry players say the review is likely to draw interest as Kallang is one of the three commercial hubs selected to provide alternative business locations. The other two are Jurong and Paya Lebar.

But some experts say the Kallang hotel sites might not have attracted adequate bids as other hotel sites in more established city locations were on offer.

Mr Teo Hong Lim, executive chairman of developer Roxy-Pacific Holdings, said he would be keen to give the Kallang area another look once the URA firms up its plans. The area has good potential for growth, given its proximity to Marina Bay and the upcoming sports hub.

Source: The Straits Times – 15 June 2012