Newsletter Sep 2024
By Kelvin Sin | Livefree.sg | 29 Sep 2024
2. New Projects
3. Government Land Sales
1.1 Federal Reserve Cuts Interest Rates
The US Federal Reserve recently lowered interest rates for the first time in four years, cutting it by 50 basis points. While most expected a cut, the size of the reduction caught some people off guard since it’s usually reserved for emergencies. Why Did the Fed Cut Rates? The Fed has been fighting high inflation, which spiked due to the COVID-19 pandemic. They raised rates aggressively between 2022 and 2023 to control it, bringing inflation down to around 2.5% in August. But with inflation stabilizing, they’re now focusing on a different issue: jobs. Unemployment has crept up to 4.2% from 3.7% earlier in the year, and the Fed expects it to rise further. This shift suggests the Fed is now prioritizing job creation. What Does This Mean for Singapore? Singapore’s interest rates often follow the US, so we’re likely to see a lower rate environment soon. Returns on safer investments, like fixed deposits and Treasury bills, have already been dropping, and they’ll probably fall further now. For example, T-bills, which were offering yields of 4.4% last year, are now at 3.1%, and this could go even lower. If you’ve been enjoying great returns on your savings accounts, brace yourself. Banks may start adjusting interest rates downwards soon, especially since the rate cut was larger than expected. Mortgage Rates – What to Expect? Mortgage rates have also been dropping. Fixed-rate home loans, which keep their interest rates unchanged for a certain period, are averaging around 2.6% now, down from 3% earlier this year. With fewer new private property launches, banks are competing for a smaller pool of loans, which could push rates down further. However, it’s still important to be cautious before taking out a home loan – consider your financial situation and future plans before committing. We’re likely entering a period of lower interest rates, which will affect savings returns, investment yields, and mortgage rates. Stay informed and plan your finances carefully as the landscape shifts.
1.2 August sees Big Drop in New Home Sales - Here's Why
In August, developers sold just 208 new private homes (excluding ECs), a huge 63.6% drop from July’s 571 sales. Including executive condos (ECs), the decline was still sharp at 59.9%. What caused this? No new launches! Developers held off releasing new projects because of the seventh lunar month, which is seen as unlucky in Singapore, running from Aug 4 to Sept 2. Fewer Projects, Fewer Sales Instead of selling homes from fresh launches, developers moved units from older projects. August saw only 272 new homes being put on the market, a big drop from the 616 released in July. July’s numbers were boosted by launches like Sora in Jurong and Kassia in Changi. But with no major launches in August, sales took a dive. Sales Are Lower Compared to Last Year Compared to August last year, sales were down 47.2%. In fact, 2024 is shaping up to be one of the weakest years since 2008, with only 2,668 units sold so far this year, nearly 50% less than the same period last year. Buyers seem hesitant due to high interest rates, a slow economy, and resistance to rising property prices. Prices Are Up, Despite Lower Sales Interestingly, while sales dropped, the median price of new homes actually jumped 42%, from $1.7 million in July to nearly $2.4 million in August. This is mainly because a higher proportion of expensive homes were sold. In July, many affordable units were snapped up, but in August, fewer lower-priced homes were available, leading to higher average sale prices. But here’s the exciting part – Keep an eye out for the rest of 2024, several popular and much-anticipated projects are lined up for launch. Exciting new projects like Chuan Park, Emerald of Katong, and possibly Parktown Residence. These developments have already generated a lot of interest and could reignite the market. With these new launches, we may see sales pick up in the coming months, especially with the fresh excitement they’re bringing to potential buyers. So, while August was slow, the market could soon get a lift from these highly anticipated projects.
2.1 8@BT over 50% Sold on Launch Weekend
Bukit Sembawang’s latest project, 8@BT, launched on September 21 and saw great success over the weekend. Out of 158 units, 83 units (52.5%) were snapped up by September 22, with an average price of $2,719 psf. Most buyers were locals and permanent residents, with only one foreign buyer from the US. Families made up the majority, along with some upgraders and right-sizers. What Were the Most Popular Units? The one-bedroom units were a big hit, with 91% of them sold. Two-bedroom units were also in demand, with 60% taken up, while the three-bedroom units saw nearly half sold (49%). The appeal? The efficient design of these units, with minimal wasted space like long corridors, made them attractive. Plus, the finishes are top-notch, making buyers willing to pay a bit more. Positive Market Vibes This year, 8@BT is one of the top-performing projects, doing just as well as other popular launches like Kassia. The new home market seems to be picking up, with September sales expected to be between 300 and 350 units. This would bring total sales for the third quarter to around 1,000-1,100 units, a much better performance compared to the previous quarter. Why Bukit Timah Is So Popular Properties in the Bukit Timah and Beauty World area always seem to do well. Nearby projects like The Reserve Residences have sold 97% of their units. And with The Linq @ Beauty World fully sold, there aren’t many new options left in this popular neighborhood. Buyers, especially younger ones who grew up in the area, are eager to settle here. Some seniors are also right-sizing their homes but want to stay close to their community. Great Location and Convenience What makes 8@BT stand out is its fantastic location. It’s just a two-minute walk to Beauty World MRT, close to Bukit Timah Nature Reserve, and near several schools like Pei Hwa Presbyterian Primary. This mix of convenience, nature, and education options adds to the appeal, making it a top choice for homebuyers looking to live in this well-loved part of Singapore.
2.2 Chuan Park Previews from 19 to 29 October
Chuan Park is getting ready to launch soon, and previews will be available from 19 to 29 October. The project offers 916 units, with options ranging from 2-bedroom to 5-bedroom layouts. There are also two commercial shops within the development. Best of all, it’s located right above Lorong Chuan MRT Station on the Circle Line, making it super convenient. You’re just one stop away from Junction 8 and Bishan MRT, and one stop from Serangoon Bus Interchange and MRT. Background on the Project The new Chuan Park is the result of a collective sale of the old Chuan Park, which was purchased for $890 million back in 2011. There was some legal drama when a few owners sued the developers for not revealing certain details about a higher development baseline, which they claimed could have led to discounts for buyers. However, on 5 July 2022, the High Court ruled that the sale was done in good faith. In fact, 342 units, representing over 80% of the share value and strata area, had agreed to the collective sale. What to Expect from the New Chuan Park The new development will have five 19-storey blocks with 80% of the units having parking spaces. The location is also fantastic for families – it’s within 2km of 8 primary schools, including popular ones like Kuo Chuan and CHIJ (Our Lady of Good Counsel). Plus, residents can enjoy Floor plans have already been released, so if you want more details, feel free to reach out!
3.1 URA Launches Tender for Residential Land at Faber Walk
On September 12, the Urban Redevelopment Authority (URA) opened the tender for a Government Land Sale (GLS) site at Faber Walk in Clementi. This site, which is part of the 2H2024 GLS Confirmed List, covers about 277,660 sq ft and is expected to produce up to 400 new homes. It’s a 99-year leasehold plot, fully zoned for residential use. Last Piece of Land in Faber Walk This site is the last available piece of land for sale in the Faber Walk private residential area. The previous land sale here was back in 2013, which became the Waterfront @ Faber project. As a result, there may be built-up demand, especially from people living in the neighboring landed homes who might want to downsize or buy homes nearby for family members. A Less Attractive Location, But Still Connected While there may be demand, developers could approach this site cautiously. Unlike other GLS sites in more established housing areas like Bayshore and Chuan Grove, Faber Walk is a bit more isolated. It’s close to the Ayer Rajah Expressway (AYE), which means it’s a short drive to places like the upcoming Jurong Lake District and the National University of Singapore, but it’s not within walking distance of many amenities. Still, the proximity to major employment hubs could make it appealing to homebuyers and investors. Developer Interest May Be Muted Recent GLS tenders have seen fewer bids, and the same might happen for the Faber Walk site. Developers are likely to be cautious, with bid prices expected to be in the range of $800 to $1,050 per plot ratio (ppr). Since there’s limited demand from HDB upgraders, this adds some risk for developers, but there’s still potential given the location’s access to key areas. While the site has some challenges, it could still attract interest from those looking for a quieter residential area with good connectivity to key employment districts.
3.2 Jurong Lake District Land Tender Rejected
The 6.5-hectare master developer site at Jurong Lake District (JLD), launched for sale in June 2023, wasn’t awarded. Even though a group of developers submitted a bid, the price they offered, at $640 psf per plot ratio (ppr), was seen as too low. This site was expected to kickstart the next big phase of development in JLD, with plans for office spaces, private homes, and other uses like retail and hotels. Big Project, Big Risks This site is huge – meant to house over 1.6 million sq ft of office space and 1,760 new homes. But the developers probably bid cautiously because this project is no small feat. It could take 10-15 years to fully develop, and given the high costs, financing challenges, and uncertain demand for office space, developers didn’t want to overcommit. One big concern is whether there will be enough demand for that much office space, especially with the pandemic affecting how we work and the need for office spaces. Plus, the cost of building and implementing systems like district cooling added to the cautious approach from developers. What’s Next for JLD? Even though the tender wasn’t awarded, this doesn’t mean the project is off the table. The site will be placed on the Reserve List, meaning it can still be sold later if the price meets the government’s expectations. This also gives the office supply market a bit of a breather, as some of the potential new office spaces will be delayed to beyond 2030. If the high-speed rail (HSR) between Singapore and Kuala Lumpur becomes a reality, it could speed up development in JLD. That would definitely make the area more attractive for developers and businesses alike. Why JLD Still Has Potential Despite the challenges, Jurong Lake District is still a hotspot. Recent residential projects in the area, like J’den, saw strong demand, selling 88% of its units on launch day. With more projects lined up, it’s clear that people are interested in living in this growing district. So while the tender may not have gone through this time, the area still has a lot of potential, and we’ll likely see more developments and interest in the future.
3.3 Media Circle Land Tender Gets Only One Bid – Here’s Why
The GLS site at Media Circle in one-north closed with just one bid of $120.09 million, or $461 per square foot per plot ratio (psf ppr). This bid came from a group led by Frasers Property. The site covers 62,046 sq ft and is zoned for long-stay serviced apartments (minimum stay of three months) with commercial space on the first floor. It’s on a 60-year lease and will provide 520 units. First of Its Kind This is the first time a GLS site has been fully zoned for long-stay serviced apartments, which makes it a bit of a unique offering. While there’s strong demand for rentals in the one-north area, developers seem to be cautious about this type of property. It’s an untested product, and they’re likely worried about the risks and the longer time it might take to make a return on investment. Location and Future Competition One downside of this site is that it’s not particularly close to any MRT station, which could make it less appealing to developers. Also, with other private residential developments expected in the area, there could be more competition for renters in the future. The Upside One positive for developers is that long-stay serviced apartments offer a steady stream of income over time and don’t come with the usual five-year deadline for additional buyer’s stamp duty, making them an attractive investment in the long run. Recent Sales in the Area Earlier this year, another GLS site in Media Circle was sold for $1,191 psf ppr to a joint venture between Qingjian Realty and Forsea Holdings. That site will have 355 residential units with commercial space on the ground floor, highlighting the higher price developers were willing to pay for residential projects in the same area. While this site has potential, developers may be cautious due to its untested nature, location, and future competition. However, for those looking for long-term rental income, this could still be an interesting opportunity.
3.4 Tampines Land Sale Draws Six Bids, Highest at $668.28 Million
A government land sale (GLS) site at Tampines Street 94 received six bids, with the highest coming in at $668.28 million ($1,004 psf per plot ratio). This bid was submitted by a joint venture between Hoi Hup Realty and Sunway Developments. The 99-year leasehold site is set to house about 585 residential units. Why This Site Is Popular Located in a prime spot in Tampines, the site will be connected underground to Tampines West MRT station, making it highly convenient for residents. It’s also close to three schools – St Hilda’s, Junyuan, and Tampines Primary – making it a great choice for families. Tampines has always been popular with homebuyers, so it’s no surprise that developers were keen on this site. Mixed-use projects, especially those near MRT stations, tend to sell quickly, so there’s a lot of confidence in this development. How It Compares to Other Projects Tampines has seen strong interest in mixed-use projects. For example, Mixed-use projects near MRT such as J’den & The Reserve Residences saw a high percentage of their units sold on launch day. The last time a mixed-use site in Tampines was sold was in June 2023, when a consortium bought a site at Tampines Avenue 11 for $885 psf ppr. That project will include 1,190 units, a shopping mall, a bus interchange, and other community features. Expected Prices Experts predict that the future homes at Tampines Street 94 could start selling from $2,100 psf, with average prices ranging between $2,200 and $2,300 psf. With Tampines being a mature estate and a strong upgrader market, this new project is expected to be well-received by buyers. The site at Tampines Street 94 looks set to be a hot spot, offering convenient access to transport, schools, and amenities, which makes it a promising development for homebuyers and investors alike.
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