Share: Share on Facebook Share on Twitter Share on LinkedIn I recommend visiting cushmanwakefield.com to read:%0A%0A {0} %0A%0A {1}
analysis-on-ura-3q-2019-residential-office-retail-statistics analysis-on-ura-3q-2019-residential-office-retail-statistics-mobile

Cushman & Wakefield’s Analysis on URA 3Q 2019 Residential, Office and Retail Statistics

Xian Yang Wong • 04/11/2019

Residential

The outlook for Singapore’s private residential market looks sanguine. Demand continues to enter the market despite the dim economic outlook and July’s cooling measures which have raised the barriers of entry for prospective investors.

Private property prices rose 1.3% q-o-q in 3Q2019 and prices are up 2.1% YTD. The rise in prices was broad-based, with all segments showing an increase. Both landed and non-landed prices rose by 1% and 1.3% q-o-q, respectively.

Within the non-landed segment, CCR, RCR and OCR prices rise by 2%, 1.3% and 0.8% respectively. The strong showing in numbers was driven by new launches.

A total of 5763 private residential units were sold in 3Q2019, of which 56.9% were from new sales while resales and sub-sales took up 41.3% and 1.8%, respectively.

3Q2019 new sales figure of 3,281 units was the highest quarterly sale figure since 2Q2013, when developers sold 4,538 units. This is evidence of steady market sentiments and latent demand for private residential investment, which has gravitated towards new launches. Though new launches tend to command a premium over the resale market, lower initial mortgage payments have made investing in new launches more palatable for buyers. With interest rates coming off their recent peaks and are expected to remain low due to the global monetary easing wave, buyers are more confident to enter the housing market.

Demand is diluted across multiple launches and competition for buyers remain keen. Buyers can cherry-pick across multiple launches all over the island. Given the keen competition for buyers, developers have to be strategic about pricing and offer buyers incentives and/or higher agent commissions. Nonetheless, we are unlikely to see any fire sales in the market soon as most developers still have healthy balance sheets.

Private residential non-landed rents have continued to move up, supported by low levels of new completed supply and higher population growth. Only 5,229 private residential units have been completed in the first 3 quarters of 2019 with an additional 2,704 units expected to be completed in 4Q2019, bringing total supply in 2019 to 7,933 units, substantially lower compared to the 10 year (2009-2018) annual average of 14,211 units.

Overall non-landed rents rose 0.4% q-o-q in 3Q2019, driven by RCR and OCR rents which rose 1.6% and 0.8% q-o-q, respectively. CCR rents bucked the trend, falling 0.7% q-o-q in 3Q2019, after a strong 1.5% rise seen for the previous quarter.

Rents are expected to continue their upward trend, given the low number of new completions over the next few years. The influx of new supply would only come onto the market in 2022 and 2023 when new completions are expected to reach 15,106 and 16,704 units, respectively.

Office

Economic headwinds such as the US-China trade war and ambiguity about the outcome of Brexit plaguing the Singapore economy have started to have an impact on office prices and rents. According to Urban Redevelopment Authority’s (URA) data, Central Region office prices fell 3.8% q-o-q, ending 8 quarters of consecutive price increases since 3Q2017. Central Region office rents fell by 0.6% q-o-q in 3Q2019. YTD, office rents have pretty much stagnated, only growing 0.1%. This is a sharp contrast to 2018 when office rents rose 7.4%. Going forward, we may see further depression in office rents with the uncertainties in market conditions.

The office market is also implicated by uncertainties in the co-working sector, which was a strong driver of CBD office spaces over the last few years. Although there are some concerns over the longer-term sustainability of the sector, co-working spaces will likely be a permanent feature in the office sector.

Capital expenditure still remains a challenge for many companies, and coworking spaces help fill that gap. Amidst an uncertain market environment, tenants may find coworking spaces increasingly attractive as they can better manage their CAPEX. The flexibility to increase or decrease the number of members on a monthly basis is also a big draw to companies who are facing an uncertain outlook.

Retail

Overall retail prices and rents rose in 3Q2019, rising by 1.1% and 2.3%, respectively. Nonetheless, this is unlikely the start of a recovery as the market remains bogged down by a challenging operating environment and declining revenues. Furthermore, given the poor economic outlook, consumers are likely to stay prudent, leading to lower retail sales. As of August 2019, retail sales (excl motor vehicles) have fallen by 1% y-o-y.

Given changing consumer expectations and e-commerce, there is a stronger focus on delivering an immersive retail experience to attract footfalls. This has led to increasing allocation of retail space to food and beverage, fitness, lifestyle and entertainment services. Mall owners are also exploring new tenant pools such as co-working operators to take up space in their malls.

The two-tier market continues to hold, with well-located and managed malls drawing the bulk of retail demand, whereas many strata-titled malls are experiencing dwindling footfalls and increasing number of vacant units.

Related Insights

Q3 Greater China Capital Markets Webinar: Spotlight on Beijing
Insights • Capital Markets

Cushman & Wakefield Q3 Greater China Capital Markets Webinar: Spotlight on Beijing

As China emerges from the COVID-19 outbreak ahead of other major global economies, what’s the current status of the country’s commercial real estate (CRE) market and where is it headed?
James Shepherd • 04/11/2021
Data-Center-Update_web-card
Research • Data Center

APAC Data Centre Update

Continued growth across the reviewed markets of Hong Kong, Singapore, Sydney, Tokyo, and Jakarta collectively have 750 MW under construction.
Kevin Imboden • 18/10/2021
Cushman & Wakefield Q2 Asia Pacific Webinar: Spotlight on Singapore
Insights • Investment

Cushman & Wakefield Q2 Asia Pacific Webinar: Spotlight on Singapore

As Asia Pacific begins to show signs of recovery from COVID-19, led by a rebound originating from China, what is the current status of the commercial real estate market and where is it headed?
Anna Town • 13/08/2021
With your permission we and our partners would like to use cookies in order to access and record information and process personal data, such as unique identifiers and standard information sent by a device to ensure our website performs as expected, to develop and improve our products, and for advertising and insight purposes.

Alternatively click on More Options and select your preferences before providing or refusing consent. Some processing of your personal data may not require your consent, but you have a right to object to such processing.

You can change your preferences at any time by returning to this site or clicking on Privacy & Cookies.
MORE OPTIONS
AGREE AND CLOSE
These cookies ensure that our website performs as expected,for example website traffic load is balanced across our servers to prevent our website from crashing during particularly high usage.
These cookies allow our website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced features. These cookies do not gather any information about you that could be used for advertising or remember where you have been on the internet.
These cookies allow us to work with our marketing partners to understand which ads or links you have clicked on before arriving on our website or to help us make our advertising more relevant to you.
Agree All
Reject All
SAVE SETTINGS