Newsletter Mar 2024
By Kelvin Sin | Livefree.sg | 26 Mar 2024
1. Market
2. New Projects
3. Land Sales & Enbloc
1.1 Seven East-Coast TEL Stations to open on 23rd June
The fourth stage of the TEL, spanning from Tanjong Rhu to Bayshore, will commence passenger service on June 23, enhancing accessibility to the East Coast region. Seven new MRT stations will be operational along the 10.8km stretch, connecting the TEL's first three stages from Woodlands North to Gardens by the Bay. Free preview of the stations will be available on June 21 for passengers to familiarize themselves with the facilities. Approximately 235,000 households will be within a 10-minute walk of a TEL station with the opening of Stage 4 and is expected to reduce travel time significantly, with commuters potentially saving up to 50% of travel time compared to current bus and train routes. The completion of civil and structural works for stations, along with testing and commissioning of trains and systems, has been accomplished. Post-opening, trains on TEL Stage 4 will operate every three minutes during peak hours and six minutes during non-peak hours. Future expansions include additional MRT stations, such as Bedok South, Sungei Bedok, and Xilin, as well as the East Coast Integrated Depot, all slated for completion by 2026.
1.2 Condo Rental Market Declines in Feb
Condominium rental prices experienced a 1% decrease from January, marking negative growth for the 13th consecutive month, attributed to a supply glut since 2023. Rental volumes for condos fell by 21% month-on-month and 7.7% year-on-year, with the majority of rentals coming from the Outside Central Region (OCR). HDB rents increased by 1% from January, reaching a new all-time high, with a decline in rental volumes attributed to the Chinese New Year festivities. Strong demand for HDB rentals was observed, especially in mature estates, with rents increasing across all room types. Year-on-year, HDB rental prices rose by 8.4%, with executive flats experiencing the highest increase at 9%. The decline in rental volumes for both condos and HDB flats in February is expected to pick up in the second quarter of 2024. Policy changes may have influenced tenants to move to larger HDB flat types, potentially contributing to the increase in rents for bigger executive flats. Forecasts suggest condo rents may stabilize in the second half of 2024, while HDB rents could increase by up to 8% for the year due to a lower supply of flats reaching minimum occupation period (MOP).
1.3 FED Signals Interest Rate Cuts in 2024
The United States Federal Reserve indicated its expectation to implement three rate cuts in 2024, a departure from previous policy. The decision reflects the Fed's intention to assess the necessity for further policy adjustments. The inclusion of the word "any" in the statement suggests a potential shift away from previous expectations of rate hikes, which may bolster hopes for rate cuts among investors. Lower interest rates stimulate borrowing and consumer spending, which positively impacts company earnings. Despite tightening monetary policy, the US economy experienced significant growth in the third quarter of 2023, alongside declining consumer inflation and low unemployment rates. There is optimism regarding achieving a "soft landing," where inflation is curbed without causing recession, although the outcome relies on the Fed's skill and a degree of luck. Treasury Secretary Janet Yellen expressed confidence in achieving a soft landing and anticipates inflation to fall below 3% in 2024. The Fed's Federal Open Market Committee (FOMC) revised economic forecasts, expecting moderate economic growth in 2023 and a slowdown in 2024. Headline inflation is projected to decrease gradually, reaching 2.4% in 2024 after peaking at 2.8% in 2023.
The Singapore Land Authority (SLA) raised the average land betterment charge (LBC) rates for all key use groups from March 1 to August 31, 2024. LBC rates for landed residential properties increased by an average of 7.8%, with 116 geographical sectors experiencing rises, driven by the uptrend in the Urban Redevelopment Authority (URA) price index for landed homes in 2023. Notable increases were observed in prime sectors such as Sector 65, where two Good Class Bungalows (GCBs) were transacted, and Sector 109, where GCB transactions were notable. Non-landed residential LBC rates rose by 0.1% on average, with diverse performance across geographical sectors. Notable increases were seen in sectors where government land sale (GLS) tenders attracted healthy interest. Commercial LBC rates increased by an average of 3.8%, indicating returning investor interest in assets with substantial commercial components, influenced by impending US Federal Reserve rate hike cuts. Hotel LBC rates rose by an average of 0.7%, reflecting increases in sectors where hotel properties were transacted. Industrial LBC rates saw an average increase of 1.7%, driven by rising industrial rents and prices for 13 consecutive quarters, with notable rises in sectors where land sales exceeded implied land values based on previous LBC rates. https://www.sla.gov.sg/articles/press-releases/2023/revision-of-land-betterment-charge-rates-from-1-september-2023
2.1 Cuscaden Reserve Sells 45 units by Placement
Cuscaden Reserve relaunched with 45 out of 79 released units sold via private placement, accounting for 57% of the total remaining units. The two-week preview period saw over 80 expressions of interest (EOI) collected, indicating strong demand for the upscale development. Predominantly, two-bedroom units were sold, starting from $2.292 million or $2,823 per square foot (psf), with only one three-bedroom unit sold. About one-third of the buyers were below 35 years old, primarily Singaporeans or permanent residents (PRs) purchasing their first property, with an even split between those buying for personal use and investment. Joint developers, SC Global, New World Development, and Far East Consortium, slashed selling prices by up to 20%, attracting buyers with the attractive quantum for a prestigious address. Cuscaden Reserve features a mix of one-, two-, and three-bedroom apartments, with larger four-bedroom units and a duplex penthouse available. Before the relaunch, 12 units were sold at an average price of $3,625 psf, with the additional 45 units sold, bringing the total take-up rate to around 30%. The remaining units will be sold on a first-come, first-served basis, indicating continued interest in the development.
2.2 Lentoria Sells 18.7% at Launch
Developer TID, a joint venture between Hong Leong Holdings and Mitsui Fudosan, sold 50 units (18.7%) of Lentoria over the weekend of March 2-3, with an average price of $2,120 per square foot (psf). Two- and three-bedroom premium units were preferred, constituting over 40% of sales, mainly to owner-occupiers, many of whom currently reside in private properties in the north and northeast regions. Lentoria, with 71% of its units being two- and three-bedroom units, caters to families seeking suburban homes, aligning with the trend in the Lentor Hills estate. Lentoria is the fourth new residential project in the Lentor Hills estate, following Lentor Modern, Lentor Hills Residences, and Hillock Green. The launch of Lentoria coincided with the preview of Lentor Mansion by GuocoLand, marking the fifth project in the Lentor Hills estate, indicating growing competition in the area. Despite subdued new launch sales in recent months, industry experts expect the market to pick up with more new launches scheduled from March onward. The mid-sized Lentoria project is anticipated to sell out its inventory without significant difficulty.
2.3 Lentor Mansion Achieves 75% Sales
GuocoLand's Lentor Mansion achieved impressive sales, with 400 units (75% of the total) sold over the weekend of March 15-16, including nearly 100 units sold at the VIP launch. The development, jointly developed by GuocoLand and Hong Leong Holdings, features a mix of two- to five-bedroom units across six towers. Prices for units ranged from $1.149 million for a two-bedroom unit to $3.512 million for a five-bedroom unit, with two-bedroom units being the most popular. Lentor Mansion is the first development to adopt URA's new guidelines on harmonization of strata and gross floor area, resulting in prices ranging from $2,104 to $2,478 per square foot. The strong sales were driven by efficient unit layouts, flexible use of space, and integrated amenities like a childcare center, attracting primarily owner-occupiers and a mix of singles and young families. Despite recent tepid sales in the market, Lentor Mansion's performance stands out, making it the best-selling project of 2024 and the second best-selling in the Lentor precinct. The project's success is attributed to its competitive pricing strategy, with starting prices lower than other projects in the area, appealing to price-sensitive buyers. Lentor Mansion's sales contribute to the transformation and rejuvenation of District 26, with improved connectivity due to the opening of Lentor MRT Station and upcoming infrastructure developments like the North-South corridor.
3.2 Two GLS Sites at River Valley up for grabs
The Urban Redevelopment Authority (URA) announced the release of two residential sites at River Valley Green as part of the 1H2024 Government Land Sales (GLS) Programme. These plots, located near Great World MRT Station and Great World City mall, offer attractive investment opportunities. Parcel A, on the Confirmed List, spans about 99,972 sq ft and could yield up to 380 units, while Parcel B, on the Reserve List, covers about 126,290 sq ft and could yield 580 units, including 220 long-stay serviced apartments. Experts foresee strong interest in Parcel A due to its proximity to the CBD and entertainment options, making it appealing to professionals and couples. Additionally, River Valley Primary School's proximity makes it attractive to families. Parcel B, with integrated amenities and a smaller size, may appeal to developers interested in serviced apartments. The article notes the recent success of nearby developments like Irwell Hill Residences and The Avenir, indicating potential demand for these new units. Predictions for bid ranges vary, with estimates ranging from $1,380 to $1,600 psf ppr for Parcel A. Despite Parcel B's appeal, experts believe developers may prioritize Parcel A due to its purely residential nature and smaller size. The tender for River Valley Green (Parcel A) closes on June 19, with expectations of healthy interest. However, Parcel B may not be tendered soon due to upcoming supply from other sites. Developers may prefer Parcel A for its straightforward residential focus compared to the mixed-use nature of Parcel B.