A closely watched condo launch nets better-than-average take-up

This week in Property

• Will healthy sales for the latest condo launch bring good tidings for others?
• How Singapore developers are reading the market  
• Malaysia dishes out new incentives while Hong Kong struggles

When a 50% take-up at launch is positive news

Sales at Bukit Sembawang’s launch of its 8@BT project at Upper Bukit Timah got off to a healthy start over the weekend. The developer sold 83 units, or slightly over half of the 158 units available, at an average selling price of S$2,719 per square foot (psf). Take-up was above average - the new launches that have made it to the market since the start of the year have scored 30-plus per cent sales at launch on average. 

Notably, one-third of the buyers at 8@BT were aged between 31 and 40, and 21 per cent were between the ages of 21 and 30, Jessie Lim reports. The best-selling units were the smallest - one-bedders starting from S$1.34 million. 

Will the positive result seen at 8@BT – admitted a relatively small project with 158 units – encourage developers to roll out their new projects sooner? A large backlog has built up, with several launches delayed while sales data continues to show low numbers. New private home sales came in under 2,700 units in the first eight months of 2024, and are on track for their worst year since the Global Financial Crisis of 2008. 

The authorities are also cracking down hard on buyers trying to circumvent higher additional buyer’s stamp duty (ABSD) payments. A mother and son have been charged in Iras’ probe into ‘99-to-1’ stamp duty tax avoidance cases, in the first prosecution of taxpayers who give false and misleading information to the taxman, Ry-Anne Lim reports.

Singapore’s declining birth rate is a worrying trend, and fresh measures are in place to nudge more towards parenthood. Leslie Yee suggests that encouraging more Singapore residents to marry at a younger age could also help bring about higher birth rates, and property ownership could be a strong motivating factor. 

The median age at first marriage in 2023 was 31 years for men and 29.5 years for women. Both groups are tying the knot about a year later than in 2013 when the male median was 30.2 years and for women, 28.1 years. Early property ownership gives young people a head start on their wealth-building journey, Leslie writes in The Level Ground. He spells out why here. 

Commercial concerns

Against a still-depressed market outlook, developers signalled in the latest state land tenders that they would rather stick to the tried and tested and steer well clear of risk. 

A plot slated for residential and commercial use in the well-established regional centre of Tampines got a strong vote of confidence, with six parties bidding and at relatively firm prices. In contrast, developers stayed away from an experimental parcel designated for a new category of serviced apartments - the one-north area site saw only one bid. Market watchers give Samuel Oh and Jessie Lim their take on the outcome.

With risk and cost escalating in recent times, developers are treading carefully with their eyes solidly trained on cost. Incentive schemes to spur redevelopment and urban renewal in Singapore’s key commercial districts are due to come to the end of their five-year term. 

How have the schemes fared in a market still swirling with the fast-changing tides and sea changes in demand for office space since the pandemic? Do the schemes need tweaking? Should they be extended? Kalpana Rashiwala talks to market players and the Urban Redevelopment Authority for a deep dive into the mechanics and progress of the Central Business District Incentive (CBDI) Scheme and the Strategic Development Incentive (SDI) Scheme. 

Prime office vacancies jumped in the July-September quarter to their highest since 2022, a JLL report showed. The rise in vacancies was largely driven by the opening of a new office building, IOI Central Boulevard Towers, which added about 1.26 million square feet of office space to market stock.

In other markets

Malaysia is offering a 0-per-cent tax rate for family offices to set up shop in its struggling mega-project Forest City, as it hopes to revive investor interest in the US$100 billion development near its border with Singapore. The single-family office programme “aims to attract regional and Malaysian families to manage their family wealth from Malaysia”.

Hong Kong’s biggest developer, Sun Hung Kai Properties, is marketing a new project at a 20 per cent discount to lure buyers after a recent interest-rate reduction by the city’s banks. The company’s Cullinan Sky project in the former airport Kai Tak area was priced at HK$19,668 (S$3,261) per square foot on average for its first batch of sales, it said. That’s about 20 per cent lower than the stock in new projects nearby, according to Midland Realty.

The lower interest rates have yet to spur buying, as weekend sales in Hong Kong dropped to their lowest in two months, days after banks in the city reduced borrowing costs. Sales fell 53 per cent in the 10 biggest housing estates over the weekend from the previous week to seven deals, the smallest in eight weeks, according to Centaline Property Agency.

UK investment managers Legal & General (L&G) and Schroders are poised to buy the dip in commercial property in the US, but are largely steering clear of the hard-hit office sector, the companies said. The fund managers, which oversee more than £1.9 trillion (S$3.3 trillion) of assets between them, said they had separately been building up their US real estate teams to make the push, anticipating that property prices will recover, aided by falling interest rates.

Will market sentiment and home sales pick up in the last quarter as developers nudge out delayed launches? Let me know your thoughts at mich@sph.com.sg

Top reads this week

• What’s deterring developers from tapping perks to juice up Singapore’s urban centre?
• From a property perspective, many good reasons to marry young
• Mother and son charged in Iras probe into ‘99-to-1’ stamp duty tax avoidance case
• Bukit Sembawang’s 8@BT sells just over half of units at average S$2,719 psf at launch
• Developers give Tampines mixed-use site vote of confidence, snub Media Circle serviced apartment plot