Developers play pass (on) the parcel, homebuyers feel priced out

THIN interest, low bids. You may have heard this story before. In the latest batch of state land sales, three sites on offer drew sparse bids and offers on the low end of expectations. 

The tepid interest (two bids) in the Zion Road parcel could be put down to concerns about oversupply in the immediate area, where another two sites have been sold and one more plot will be put up for sale in October. The other two sites tendered in the Sembawang and Upper Bukit Timah areas – both locations with potential demand from upgraders – saw bids close to prices of land for executive condo projects. Kalpana Rashiwala and Samuel Oh have the details. 

Developers are pricing more risk into their land bids or are staying away completely. Does it bring to mind the old party game of Passing the Parcel? No one likes to be left holding the parcel when the music stops, and you have to pay the forfeit.  

The slowing market also presents a tricky situation for those looking to upgrade, downgrade or move house. For Singaporeans, buying a property when you own another subjects you to 20 per cent ABSD on the second property. The additional buyer’s stamp duty can be refunded if you sell your existing property within a six-month deadline.  

It makes much financial sense to buy the second home first and sell the existing one later when home prices are rising. “Buy first, sell later” also helps ease worries that may pop up in the interim. But such a strategy may not be so effective in a market that is shifting to a lower gear. Leslie Yee spells out why it may be better to sell first, buy later in The Level Ground. 

Even as home prices start to stabilise, a PropNex survey found that “extremely unaffordable” private home prices are the main obstacle for HDB upgraders.   

Roughly a quarter of those surveyed said new private residential project launches (26 per cent) and resale private homes (23 per cent) are “extremely unaffordable”. Overall, around 40 per cent said private housing prices were “unaffordable”. 

With prices of HDB resale flats strengthening in recent years, one third of respondents found public housing too to be “unaffordable”. (Did you click on the headline “Five-room HDB flat at Margaret Drive sold for a record S$1.73 million” ?) 

Outlier deals raise eyebrows, but also bring attention to a worrying convergence. HDB resale highs are approaching - and in some cases surpassing - private housing price levels.

Meanwhile, suburban condo project Kassia sold 52 per cent of its 276 units on its launch weekend, with prices starting at S$883,000 and most of the units sold transacted at below S$1.5 million. Agents pointed to competitive pricing for the freehold Upper Changi area project, where prices of units sold during the launch weekend ranged between S$1,821 and S$2,177 per square foot (psf).

Aside from affordable housing, one major issue on the radar is the provision of suitable and sufficient housing for seniors as Singapore rapidly approaches “super-aged” status. Find out what options are currently available, how much they cost and what industry players see in the landscape in Samuel Oh’s report.   

Corporate moves

Charoen Sirivadhanabhakdi’s Thai Beverage announced plans to exit its Frasers Property holding and restructure into a pure food & beverage play. The share swap involves ThaiBev trading its 28.8 per cent stake in Frasers Property for a 41.3 per cent stake in Frasers & Neave held by Sirivadhanabhakdi’s TCC Assets. Analysts viewed the reorg as positive for ThaiBev, as Frasers Property is seen as a non-core asset that has recently dragged on performance with relatively weak profit.  

Singapore-listed Reits, once a stronghold of firm payouts and solid earnings, have seen share pieces fall steadily. The coming quarter could be a turning point on expectations of a Fed rate cut, analysts tell Navene Elangovan. But S-Reits are still facing lower distributions, and a Trump presidency – which seems increasingly likely – could spell trouble in the longer term.