Newsletter Aug 2024
By Kelvin Sin | Livefree.sg | 30 Aug 2024
2. New Projects
3. Government Land Sales
4. HDB
1.1 Draft Master Plan 2025
The Draft Master Plan 2025 lays out a bold vision for Singapore’s future, with a strong focus on sustainable development and creating more inclusive communities. One of the key elements of the plan is the redevelopment of brownfield sites in central areas, such as Bukit Timah Turf City, the former Keppel Club golf course, and the Old Police Academy at Mount Pleasant. These areas will be transformed into vibrant new housing estates that will feature a mix of public and private housing, ensuring that different segments of the population can live together in these prime locations. 10-minute Neighborhoods A significant highlight of the plan is the introduction of “10-minute neighborhoods.” These neighborhoods are designed so that key amenities, including public transport, are within a 10-minute walk for most residents. This concept is part of a broader push to make new developments more pedestrian-friendly and less reliant on cars. Some of these neighborhoods, like Marina South, will also be developed as “sustainable towns,” where all buildings are required to meet the highest environmental standards, including the Green Mark Platinum Super Low Energy rating. Connectivity Connectivity across the island is set to improve significantly with the expansion of the MRT network. The Thomson-East Coast Line (TEL), which opened several new stations earlier this year, will be fully operational by 2026, linking the East Coast to the Downtown Line. Additionally, construction is underway on the new Cross Island Line (CRL), which will connect major hubs like Jurong Lake District and Punggol Digital District when completed in phases by 2030. The Jurong Region Line (JRL) will further enhance connectivity in the western region. Green & Blue Spaces Another exciting aspect of the plan is the focus on green and blue spaces. The new Recreation Master Plan aims to make parks, forests, lakes, and rivers more accessible to the public, encouraging active lifestyles and a stronger connection with nature. One ongoing project is the revitalization of the 10km Kallang River, which will create a continuous green corridor from Bishan to the city. Reimagining Spaces The plan also reimagines several existing spaces. For example, Jurong Hill and the former Jurong Bird Park site are being considered for new recreational and workspaces. Changi Point is set to become a leisure hub with sports, arts, and heritage centers, and even a potential retirement village. Sentosa and Pulau Brani will be transformed into world-class leisure and tourism destinations, while Pulau Ubin’s natural beauty will be preserved and made more accessible. Identity Nodes Preserving the heritage and unique identities of different areas is also a priority. Paya Lebar Airbase, once Singapore’s international airport, will be redeveloped into a new town with 150,000 homes, while retaining its aviation history through the conservation of key structures like the old airport tower and runways.
1.2 Luxury Market Trends
The Good Class Bungalow (GCB) market in Singapore has seen a resurgence, with transactions in the third quarter of 2024 surpassing those of the previous two quarters. High-profile deals, such as the sale of GCBs at Bin Tong Park and Jervois Hill, have contributed to a significant increase in transaction value. One of the standout transactions was the sale of a GCB at Bin Tong Park for an impressive $84 million. This property, sitting on a 28,111 sq ft plot, was purchased by the daughter of a Chinese nickel billionaire. Another notable sale was at Jervois Hill, where a GCB changed hands for $58 million. The buyer, linked to one of Indonesia’s largest conglomerates, paid $3,843 per square foot based on the land area. These transactions are part of a broader trend in the GCB market, where high-net-worth individuals are actively seeking out these rare and prestigious properties. Despite a period of subdued activity, partly due to concerns around a major money-laundering case last year, the market has bounced back, with buyers and sellers finding more common ground on pricing. Meanwhile, the luxury condo market has also seen increased activity. In the second quarter of 2024, sales of high-end condos, particularly those in the Core Central Region and priced above $5 million, saw a 7.5% increase compared to the previous quarter. The total transaction value for these luxury condos rose by 26%, driven by the return of ultra-high-net-worth individuals to the market. One of the most expensive luxury condo transactions during this period was the sale of a penthouse at Skywaters Residences for $47.34 million. This development, part of the mixed-use project at the former AXA Tower in Tanjong Pagar, is set to be completed by 2028 and was the top-selling luxury condo project in the second quarter. Despite the current momentum, there are some concerns about the future. Increased scrutiny by the Singapore government on the source of wealth for ultra-high-net-worth individuals could introduce some friction in the market. This could potentially lead to a slowdown in luxury property deals as some investors may opt for other global wealth hubs like Hong Kong or Dubai. While the GCB and luxury condo markets have shown strong performance in 2024, the second half of the year may bring new challenges as regulatory pressures increase. For now, though, it’s clear that the demand for luxury properties in Singapore is picking up momentum.
1.3 New Cooling Measures for HDB
As of August 20, the loan-to-value (LTV) limit for HDB housing loans has been lowered from 80% to 75%, bringing it in line with the limits set by financial institutions. Enhanced CPF Housing Grants (EHG) quantum for new and resale flats also increased. This change is part of the government’s ongoing efforts to cool the HDB market, marking the fourth round of such measures since December 2021. The LTV ratio for HDB loans has been steadily reduced over the past few years, starting from 90% in late 2021. However, I don’t think this change will significantly impact the HDB market. For properties priced below $500,000, buyers now need to pay an additional 5% upfront, which translates to around $25,000. While this might seem like a big deal at first glance, the reality is that many buyers in this segment could actually come out ahead thanks to the extra grants available. These grants can offset the higher upfront cost, making the impact of the LTV change minimal for these buyers. For properties priced below $1 million, most buyers are already putting down more than 25% as a down payment. Additionally, many of these buyers can’t fully utilize the grants due to their higher income levels. This means that the reduced LTV limit isn’t really going to affect them much, since they’re already prepared to make substantial down payments. As for the high-end HDB flats priced above $1 million, the new LTV limit is almost irrelevant. Buyers in this category don’t qualify for HDB loans in the first place, and they aren’t eligible for the maximum Enhanced CPF Housing Grant (EHG) due to their income levels. For these buyers, the LTV reduction is a non-issue. So, while this measure might slow things down a little by nudging some buyers to rethink their financing strategies, I don’t see it shaking up the HDB market in a big way. The impact is likely to be limited, with only minor adjustments needed for certain buyers, while the broader market continues on its current path.
1.4 Home Ownership Trends
More young Singaporeans are making the move to purchase private condos as their first homes. It’s estimated that around 30% of new private home buyers are now aged 35 and below, up from just 20% five years ago. This shift highlights the growing appeal of private condos for younger generations. One of the main reasons behind this trend is the flexibility that private condos offer. Unlike HDB flats or Executive Condos (ECs), private homes come with fewer restrictions, making them a more attractive option for those looking for a bit more freedom in their living arrangements. Additionally, private condos are seen as a better investment. Over the years, private home prices, especially in the Outside Central Region (OCR), have increased significantly, outpacing the growth of HDB resale prices. The numbers tell the story. Since 2011, the number of residents under 35 living in private homes has steadily risen. In 2023 alone, there were 380,459 young residents in private housing, a slight increase from the previous year. This shows that more young people are aspiring to the lifestyle and investment opportunities that come with owning a private condo. Affordability is also playing a key role. With the median household income in Singapore rising, many young people find it increasingly achievable to buy a private condo. For those in their 30s looking to enter the private property market, budgets often range between $1.2 million and $2 million. While this may seem daunting, with careful savings and financial planning, many find that owning a private condo is within reach. However, it’s essential for young buyers to stay mindful of their financial situation. While the dream of owning a private condo is appealing, it’s important to avoid overspending on housing and underestimating other costs, especially if children are involved. Keeping within one’s financial means and avoiding excessive debt is crucial to maintaining a balanced and stress-free lifestyle. The trend of younger buyers entering the private property market reflects their desire for flexibility, exclusivity, and better investment opportunities, making private condos an increasingly popular choice among the next generation of homeowners in Singapore.
2.1 Meyer Blue to Preview on 21 Sep
UOL is set to make waves in the luxury residential market with the upcoming launch of Meyer Blue, a highly anticipated development on Meyer Road. Slated for a September preview, Meyer Blue promises to be a standout project in District 15, offering an exclusive living experience in one of Singapore’s most coveted neighborhoods. Meyer Blue sits on a freehold 96,671 sq ft site along Meyer Road, just a short walk from the Katong Park MRT Station. The development will feature 226 thoughtfully designed units, ranging from spacious two- to five-bedroom apartments to two luxurious penthouses, catering to a variety of lifestyle needs. One of the standout features of Meyer Blue is its unblocked views, a rarity in Singapore’s densely populated landscape. Residents will be able to enjoy breathtaking vistas of the sea right from their homes, a key selling point that sets this development apart from others in the area. Meyer Road is synonymous with exclusivity, offering residents a serene environment close to East Coast Park. As a freehold property, Meyer Blue offers long-term value, making it a sound investment for discerning buyers. UOL Group, which holds an 80% stake in the project with joint venture partner Singapore Land (SingLand), has ensured that Meyer Blue will meet the highest standards of luxury and comfort. The development promises top-notch amenities and thoughtfully designed communal spaces, ensuring a superior living experience. Preview of the Project starts on 21 Sep 2024, subject to approval.
3.1 Jalan Loyang Besar EC
Qingjian Realty, in partnership with CCC. and ZACD Group, secured an Executive Condominium (EC) site at Jalan Loyang Besar in Pasir Ris with a top bid of $557 million. This bid translates to $729 per square foot per plot ratio (psf ppr), setting a new record for EC land rates in Singapore. The site, spanning 305,757 square feet, offers a maximum gross floor area of 764,395 sqft. This allows for the development of up to 710 new homes. The competition for the site was strong, with three other bids coming close. This plot is particularly noteworthy as it is the first EC site in Pasir Ris to be released in 12 years. The last one was developed into the 495-unit Sea Horizon, completed in 2016. The new development will join the ranks of existing ECs in the area, including Watercolours and Eastvale, which are both within 500 meters of the site. Pasir Ris is a mature estate beloved by many, and it’s undergoing further rejuvenation with developments like the upcoming Cross Island Line, which will enhance public transport connectivity. The area is also close to popular spots such as Pasir Ris Park and Downtown East, making it an attractive location for Singaporeans. The demand for this new EC project is expected to be high, especially given the limited number of EC developments in the eastern part of Singapore in recent years. With proximity to schools like Casuarina Primary and Pasir Ris Primary, the site is also appealing to families with children. Prices for the units in this development are expected to range between $1,600 and $1,700 psf, with a three-bedroom unit estimated to cost around $1.5 million. Given that EC buyers need to meet certain income criteria, the pricing strategy will aim to balance affordability with the premium location.
3.2 Margaret Drive
A consortium led by GuocoLand, along with Hong Leong Holdings’ Intrepid Investments and Hong Realty, has secured a prime site on Margaret Drive. They placed the highest bid of $497 million, works out to about $1,154 per square foot per plot ratio (psf ppr), for the 102,498 sq ft government land sale (GLS) site. This bid was 5% higher than the next offer on the table. This site, which comes with a 99-year leasehold, is poised to be developed into a 460-unit private condominium. Given its location, it’s set to be a desirable address for future residents. The site is conveniently situated within walking distance of the Queenstown MRT station, providing easy access to the East-West Line. It’s also next to Queenstown Primary School, making it an attractive option for families. The Margaret Drive site is adjacent to SkyOasis @ Dawson, where a five-room flat recently set a record by selling for $1.73 million, translating to $1,444 psf. This suggests strong interest in the area and hints at the potential value of the upcoming development. Interestingly, the last time a GLS site was released on Margaret Drive was back in 2016, when MCL Land won it with a bid of $238.4 million ($998 psf ppr). They later developed the 309-unit Margaret Ville, which launched in 2018 at an average price of $1,880 psf and sold out completely. Recent transactions at Margaret Ville have seen prices climbing to an average of $2,139 psf, showing the strong appreciation in property values in the area. The new condo on Margaret Drive is expected to benefit from the planned redevelopment of the nearby Tanglin Halt HDB estate. This redevelopment will bring new amenities, including a hawker center, market, and polyclinic, all under one roof, alongside 5,500 new homes. Prices for the new development on Margaret Drive are anticipated to be in the range of $2,500 to $2,600 psf.
4.1 Sales of Older HDB Flats reach Yearly High
Demand for older resale HDB flats in Singapore, especially those 40 years or older, has been rising, reaching a record high in the first half of 2024. The number of transactions for these older flats has significantly increased, accounting for 22% of total HDB resales. Several factors, including policy changes and the relative affordability of these older flats, are driving this trend. The improved appeal of older estates due to renovation programs and better financing options have also contributed to this demand. Additionally, resale prices have appreciated across many HDB towns, with a growing number of flats being sold for over a million dollars. It’s interesting to see how the demand for older resale HDB flats in Singapore has been steadily increasing. More people are buying flats that are 40 years or older, and this trend doesn’t seem to be slowing down. The first half of 2024 alone saw a record number of these transactions, which is a clear sign that older flats are becoming more popular. One of the key reasons behind this shift is affordability. Compared to newer flats, older ones are generally more affordable, which makes them an attractive option for many buyers. Even though these older flats might have shorter leases, the fact that they’re cheaper still makes them a good deal for a lot of people. Moreover, the government’s efforts to improve older estates have made these areas more appealing. Renovation programs have breathed new life into these neighborhoods, making them better places to live. On top of that, changes in housing policies have made it easier for people to get loans for these older flats, even if they have less than 60 years left on their leases. It’s also worth noting that the resale market as a whole has been doing well, with prices going up in many HDB towns. The fact that more flats are selling for over a million dollars shows just how strong the demand is. This is likely due to the overall economic growth in Singapore, which has boosted consumer confidence. Looking ahead, it seems like this trend will continue, especially with more buyers turning to the secondary market. However, with the government planning to release more BTO flats, it will be interesting to see how this affects the competition in the resale market. All in all, it looks like older resale flats will remain a popular choice for many homebuyers in Singapore.