Residential Property Report
Industrial Property Market Overview for 3Q 2019
Official 3Q2019 statistics indicate that Singapore’s industrial real estate market remained relatively stable over the past 12 months despite strong headwinds in the manufacturing sector due to the trade tensions between the US and China.
All major performance indicators of the industrial property market remained relatively unchanged over the past 12 months:
(1) The all industrial property price index decreased marginally by 0.1% year-on-year in 3Q2019;
(2) Rental indices for both the all industrial properties and multiple user factory remained unchanged quarter-on-quarter. When compared to 3Q2018, the industrial rental index grew by 0.1% and the multiple user factory rental index contracted 0.1%;
(3) The vacancy rate for all industrial property remained unchanged at 10.7% for four consecutive quarters.
We believe that the stable industrial property market gives confidence to investors and property owners seeking steady returns. Looking ahead, approximately 1.9 million sqm of new industrial space is expected to come online in 2020. Whilst this new supply is 60% more than the 5-year average demand of 1.2 million sqm per annum, we believe that this will only be temporary as the supply would drop to less than 0.6 million sqm in 2021.
Developers’ Sales in the Private Residential Market
In 9M2019, the residential real estate primary market saw more activity as developers launched 9,237 private housing units, an increase of 29.9% from 9M2018. During this period, developers sold 8,028 units (excluding EC), reflecting an increase of 15.4% from 9M2018.
Whilst developers sold more housing units in September 2019 and the URA flash estimates of the private residential property price index continued to increase in 3Q2019, we believe that the market is not overheating and that the authorities should not be implementing additional cooling measures for three reasons: (1) higher primary market sales in September was on the back of more units launched in that month; (2) although the private residential property price index grew 0.9% q-on-q in the previous quarter, the rate of growth decelerated; (3) the market needs time to digest the large supply of unsold residential units that have been launched or are in the pipeline.
Any additional market curbs would reduce buying demand, resulting in a glut that would negatively impact the property market as well as the banking sector. At the current rate of sales in the primary market and barring any unexpected shocks to the market, we believe developers’ sales could range from 9,000 to 11,000 private housing units in 2019, higher than 8,795 units sold in 2018.
The Perspective – Singapore HDB Resale Market Overview (August 2019)THE PERSPECTIVE
Singapore HDB Resale Market Overview
Synopsis: HDB resale prices are stabilizing while facing some downwards pressure. However, the price decline is not universal across the entire resale market. There is occasional expansion in the median prices of HDB flat in certain estates. At the same time, the increase in HDB resale transactions indicate a healthy market. If the current buying momentum is sustained, the HDB resale volume could expand by 3% to 5% year-on-year, translating to an estimated 23,800 to 24,300 flats exchanging hands for the entire year. This issue also looks into the government’s announcement that not all ageing HDB flats are eligible for the Selective Enbloc Redevelopment Scheme (SERS), the amendment to Central Provident Fund (CPF) regulation for the purchase of older leasehold residential properties and HDB flats, and the Proximity Housing Grant (PHG).
ERA Singapore Residential Property Report Q2’2019THE BULLETIN
HDB Resale & Private Residential Property Market
Synopsis: While the HDB resale price index continued to stabilize in the second quarter of 2019 with a downwards bias, the overall price of private residential real estate recovered after initial weaknesses following the tighter market curbs in July 2018. The strength of the housing demand is illustrated by the increase in the transaction volumes of both HDB resale flats and private homes, despite the cooling measures. The outlook for HDB resales transactions is expected to remain healthy for the next 6-12 months due to HDB upgraders needing to sell their existing properties. Private residential real estate rentals are expected to remain stable with a gradual upward growth as the supply for next 18 months is limited and below the 5-year average. The private residential price index is projected to end the year 1.5% to 2.5% higher than the previous year, primarily led by prices of private non-landed new launches.
ERA Singapore Residential Property Report Q1’2019RESEARCH REPORT
Singapore Residential Property Report
Synopsis: With the introduction of the cooling measures in July 2018, the private residential resale market has slowed down quite substantially. However, the new sale market has been resilient as transaction volumes increased by 16.3% in 1Q2019 from 1Q2018. The new sales market is expected to do well for the rest of 2019 as developers are lining up a string of new project launches. Although the take-up rate for each project is likely to be lower compared to early last year, we expect to see a similar total new sale transaction level this year compared to last year. Demand for private properties is holding up well as income levels in Singapore continue to rise, creating a larger pool of buyers looking to purchase property for either owner occupation or long-term investment. Displaced home owners of properties from recent en bloc sales will also be on the look out to re-invest in the property market. The URA Draft Master Plan 2019 was announced in March 2019 and is expected to drive the country’s urban development over the next 10-15 years, including the revitalisation of the Central Business District and Orchard Road, providing the opportunity for property prices in the CCR to recover.