Thought Leadership

• Prices of non-landed private residential properties (excluding Executive Condominiums (ECs)) grew by a marginal 0.5% quarter-on-quarter (q-o-q) in Q3 2021** to 159.6, with transactions in the Rest of Central Region (RCR) being the main contributor to the rise. The quarterly increase was moderated when compared to Q1 and Q2 2021, where the index grew by 2.5% and 1.1% respectively.
• There were 7,103 non-landed private homes (excluding ECs) transactions in Q3 2021*, a slight 1.4% decrease q-o-q. While both Q2 and Q3 2021 included periods where Singapore was in or reverted to Phase 2 (Heightened Alert), quarterly sales volume largely held up above a respectable 7,000 units. Especially when compared to an average of about 4,162 units during the pre-pandemic year of 2019*.

This article was originally published in https://www.knightfrank.com/

• Keeping with the general upbeat pace of deals in the real estate market, the third quarter recorded some S$7.5 billion of investment deals, with 49.7% contributed by transactions in the public sector. This transaction volume represents a 38.7% quarter-on-quarter (q-o-q) increase from the S$5.4 billion in the previous quarter, and a 58.1% year-on-year (y-o-y) growth from the S$4.8 billion in the same period last year.
• The bulk of investment volume in Q3 was driven by the sale of four Government Land Sales (GLS) sites, with the award of the Marina View reserve site at S$1.5 billion being the top land sale, followed by the Jalan Anak Bukit parcel at S$1.0 billion. With frenzied bidding at certain recent GLS tenders, other land-hungry developers may shift their focus towards the greater diversity offered by smallersized plots in a variety of locations, such as sites with more palatable quantums where owners are attempting a collective sale. With the seal of the Flynn Park collective sale deal at S$371 million or S$1,355 psf ppr, this could cause a ripple effect in the en bloc market given that many owners are keen to collectively sell their ageing units. As such, projects in the range of S$600 million and below with about 600 units might just find willing buyers.

This article was originally published in https://www.knightfrank.com/

CBRE Research recently analysed the land and buildings held on balance sheets across 40 ASX200/NZX50 listed companies. What we discovered was that well over $AU24 billion of capital could be unlocked and reinvested into higher returning opportunities in the Materials, Healthcare, Telecommunications, Transport and Industrial sectors in Australia and New Zealand.

There is strong demand from listed and unlisted property funds for long-term leased properties. The ability to capitalise on improving market values, dispose of under-utilised assets and acquire capital to fund other business strategies are just some of the reasons why listed corporates are targeting owner-occupier sales. In the Pacific region alone, there has been a well-worn path of owner-occupier real with c.AU$11 billion already realised over the past five years.

With significant yield compression evident across all commercial asset types since 2015, particularly in the industrial property sector, the opportunity could be even higher than our initial AU$24 billion estimate as corporates in Australia and New Zealand revisit their property occupancy strategies to unlock value.

This article was originally published in https://www.cbre.com/

Australia’s residential pricing has reached record highs, with continued strong growth across almost all markets. The national median house price had risen 18.4% over the year to June with the national median unit price up 8.6%. There are signs, however, that price and lending growth is attracting the attention of regulators, with some forms of macro-prudential intervention looming. Initial curbs are likely to target highly leverage borrowers. APRA has already increased the minimum interest rate buffer ADI’s use in assessing loan serviceability from 2.5ppts to 3ppts above the actual loan rate, while Australia’s major banks have begun to take a more cautionary approach to some of their lending criteria.

This article was originally published in https://www.cbre.com/