Research &

Forecast Report
Singapore | Residential
1Q 2015

Accelerating success.

Year Off to a
Dismal Start on
Multiple Downward
Pressures
Plagued by languid demand, Singapores private residential
home prices and rents continued to buckle under the weight
of multiple downside pressures, setting the year off to a dismal
start.
According to the Urban Redevelopment Authoritys (URA)
preliminary estimates, prices of Singapores private residential
homes island-wide headed south for the sixth consecutive
quarter, easing 1.1% quarter-on-quarter (QoQ) after falling by
the same magnitude in 4Q 2014.
The price correction in 1Q 2015 was broad-based across all
three market segments. Prices of non-landed homes in the
Core Central Region (CCR), Rest of Central Region (RCR) and

Outside Central Region (OCR) slipped 0.6%, 1.8% and 0.9%,

respectively, in 1Q 2015 on a QoQ basis. This followed their
corresponding quarterly moderations of 0.9%, 1.4% and 0.8%
in 4Q 2014.
Falling home prices came about as overarching concerns
pertaining to the sooner-than-expected rise in interest
rates and the mounting supply of homes amid the on-going
implementation of stringent cooling measures and strict loan
curbs continued to weigh on buying sentiments. To entice
homebuyers, some developers priced projects attractively
while others offered discounts.
Some homeowners who were previously holding out for higher
prices also softened their stances. This is particularly evident
in owners of luxury and super-luxury homes, especially those
with multiple properties acquired in 2007 at the peak of the
property boom before the financial crisis.
For example, a 2,626 sq ft luxury condominium unit at The
Coast at Sentosa Cove was sold in January for about $3.13
million or just $1,190 per sq ft. This price is about $1.21 million
below the original purchase price of $4.34 million or $1,653 per
sq ft that the seller paid in March 2007, according to the URAs
Real Estate Information System (REALIS) caveats.

Residential Property Price Movement

Quarter-on-Quarter Change in Price Indices of Private Residential Properties
NON-LANDED RESIDENTIAL
PERIOD

Source: URA

ALL RESIDENTIAL

CORE CENTRAL REGION

REST OF CENTRAL
REGION

OUTSIDE CENTRAL
REGION

1Q 2014

-1.3%

-1.1%

-3.3%

-0.1%

2Q 2014

-1.0%

-1.5%

-0.4%

-0.9%

3Q 2014

-0.7%

-0.8%

-0.4%

-0.3%

4Q 2014

-1.1%

-0.9%

-1.4%

-0.8%

1Q 2015*

-1.1%

-0.6%

-1.8%

-0.9%
*Flash Estimate

In yet another example, a 6,017 sq ft two-storey penthouse at

St Regis Residences on Tanglin Road was reportedly sold in
February at a price of $12.20 million ($2,028 per sq ft) with the
seller booking a loss of $15.80 million, the biggest loss ever
made on an apartment sale in Singapore.
As such, it came as no surprise that luxury and super-luxury
apartments located within the CCR sustained the heftiest fall in
prices in the first three months of 2015. Colliers Internationals
research showed that their prices, which recorded a QoQ
decline of 0.6% in 4Q 2014, trended down by another 3.7% in
1Q 2015 to average at $2,746 per sq ft by the end of March 2015.
Despite lower prices, homebuyers largely kept to the sidelines. Besides nagging concerns relating to the potential
supply overhang and the soft rental market amid a stringent
regulatory environment, the rise of interest rates also kept
homebuyers at bay. The three-month Singapore Interbank
Offered Rate (SIBOR), a key interest rate that determines
housing loans, reportedly rose to above 1% by 24 March 2015
for the first time in six years, further fuelling uncertainty and
denting home-buying demand.
With the odds stacked against them, developers acted with
caution. They released 1,249 units in the first three months of
2015, down 21.5% QoQ. Faced with strong inertia to commit,
buyers took up 1,329 units in 1Q 2015, just a mere 2.6% more
than the 1,295 units sold in 4Q 2014, which was a five-year low.

Market activity sluggish

Amid renewed affordability concerns brought on by the recent
sharp increase in interest rates, market activity centred on
mass-market homes in the OCR. The 818 units released by
developers constituted 65.5% of island-wide launches while
the 781 mass-market homes sold accounted for a significant
58.8% of all new home transactions in 1Q 2015. Due to the
step-up in project launches in the segment, launch volume
more than doubled from the 330 units launched in 4Q 2014
while sales of mass-market homes improved 39.0% QoQ.

Geographical Distribution of New Units

Launched & Sold in 1Q 2015
100%
80%
65.5%
60%
40%

29.1%

58.8%

34.3%

20%
5.4%
0%

6.9%

Core Central Region

Rest of Central Region Outside Central Region

Proportion of Units Launched

Source: URA/Colliers International Research

Proportion of Units Sold

Nonetheless, these are still a far cry from the average launch
and sales volumes of 5,025 and 4,927 units the market was
recording, respectively, in the two years prior to the imposition
of the TDSR in June 2013.
Reigniting interest in the segment were two major suburban
condominium projects. Collectively, these 99-year leasehold
projects accounted for 60.4% and 31.2% of all new units
launched and sold, respectively, in the OCR in 1Q 2015.
In the Northeast region, developer Kingsford Development
launched Kingsford Waterbay, on Upper Serangoon Road. The
development, which features 1,165 apartments served by six
retail units and a childcare centre, was reportedly launched below
its initial expected selling price of $1,200 per sq ft. Homebuyers
picked up 155 of the 314 units launched at prices ranging
between $904 and $1,181 per sq ft by the end of the quarter.
Designed with affordability in mind, EL Development released
180 units from the 660-unit Symphony Suites at Yishun in 1Q
2015. Priced at the lower end of market expectations, 89 units
were moved at prices ranging from $947 to $1,100 per sq ft in
the January to March quarter.
Additionally, units from some previously launched projects
were also released with price reductions to lure buyers back
into the market. These include non-landed projects such as the
freehold Trilive and 99-year leasehold The Skywoods. Located
on Tampines Road, Roxy-Pacific Holdings reduced prices
on selected units at the Trilive. Some 34 units were moved
at prices between $1,231 and $1,659 per sq ft in 1Q 2015.
Comparatively, prices achieved ranged from $1,435 to $1,674
per sq ft when it was launched in June 2014.
Similarly, homebuyers picked up 52 units at The Skywoods
located in the Bukit Timah vicinity after its developer launched
a star buy promotion for the project, which was first launched
in September 2013, in order to clear its unsold inventory that
stood at 241 units at the beginning of 2015.
Mirroring the OCR, primary market activity in the RCR
remained sluggish despite recording improved sales and
launch volumes. Some 456 new units were sold, up 46.6% QoQ
while launch volume rose 13.4% to 363 units.
Driving market activity in the city fringe was the debut of the
1,024-unit Sims Urban Oasis. Developer GuocoLand offered
discounts of up to 19% over the Lunar New Year holiday
period to lure homebuyers. Located within walking distance
of the Aljunied Mass Rapid Transit (MRT) Station, this 99-year
leasehold condominium project found buyers for 205 units at
prices ranging from $1,282 to $1,548 per sq ft by the end of March.
Marine Blue, which comprises four strata-landed and 120 nonlanded homes, also contributed to sales in the RCR. Developer
Capitaland reportedly offered a 10% discount off listed prices
to lure buyers during its preview in January. Of the 50 units
released, some 28 units at the freehold project located within
walking distance of the upcoming Marine Parade MRT station
were taken up at prices between $1,398 and $2,021 per sq ft by
the end of the quarter.

Research & Forecast Report | 1Q 2015 | Residential | Colliers International

Collectively, new homes in the RCR accounted for 29.1% and

34.3% of island-wide launches and sales, respectively, in the
first three months of 2015.

while the number of new homes sold in the CCR dropped

78.2% QoQ to 92 units in the three months ending in March
2015.

Sales performance pulled down by

CCR

No units were sold at Alias Villas, a freehold strata-landed

housing project located along Jalan Haji Alias. Instead, interest
was thinly spread across various previously launched projects,
such as V on Shenton and Goodwood Residence where 10
units were sold from each project.

Over in the CCR, only one smallish project the six-unit Alias
Villas was released in 1Q 2015. This stood in stark contrast
to the preceding quarter during which the mega 1,042-unit
Marina One Residences was launched for sale. As a result,
primary market launch volume plunged 14 fold to 68 units,

All in, the 68 units launched and 92 units sold by developers in

1Q 2015 accounted for 5.4% and 6.9% of all new private homes
launched and sold, respectively.

New Project Launches

Sample List of Newly-Launched Residential Projects for 1Q 2015
DEVELOPMENT

LOCATION

TENURE

TOTAL NUMBER
OF UNITS IN
DEVELOPMENT

UNITS
LAUNCHED IN
1Q 2015

UNITS SOLD IN
1Q 2015

TRANSACTED
PRICE RANGE
($ PER SQ FT)

1165

314

155

$904 - $1,181

NON-LANDED

Kingsford Waterbay

Upper Serangoon View

99 years

Marine Blue

Marine Parade Road

Freehold

124

50

28

$1,398 - $2,021

Sims Urban Oasis

Sims Drive

99 years

1024

205

205

$1,282 - $1,548

Symphony Suites

Yishun Close

99 years

660

180

89

$947 - $1,100

99 years

LANDED/STRATA-TITLED LANDED

Alias Villas

Jalan Haji Alias

Source: URA/Colliers International Research

$3,500

$7

$3,000

$6

$2,500

$5

$2,000

$4

$1,500

$3

$1,000

$2
$1

$500

$0

$0

Average Monthly Gross Rents

Average Capital Values

Source: Colliers International Research

rents eased 2.2% QoQ in 1Q 2015 to $5.02 per sq ft

per month as of the end of March 2015.

Research & Forecast Report | 1Q 2015 | Residential | Colliers International

Capital Values
($ per sq ft)

$8

1Q 2006
2Q 2006
3Q 2006
4Q 2006
1Q 2007
2Q 2007
3Q 2007
4Q 2007
1Q 2008
2Q 2008
3Q 2008
4Q 2008
1Q 2009
2Q 2009
3Q 2009
4Q 2009
1Q 2010
2Q 2010
3Q 2010
4Q 2010
1Q 2011
2Q 2011
3Q 2011
4Q 2011
1Q 2012
2Q 2012
3Q 2012
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
4Q 2014
1Q 2015

To stretch their dollar in a tenants market, more are looking

for larger apartments at the same rent and landlords are
hard pressed to revise rents downwards or accommodate
home improvement requests in order to secure renewals.
Consequently, according to Colliers Internationals research,
the average monthly gross rents of luxury and super-luxury
apartments eased a steeper 2.2% QoQ in 1Q 2015 following 4Q
2014s 0.8% QoQ decrease to $5.02 per sq ft per month as of the
end of March 2015.

Average Capital Values and Monthly Gross

Rents of Luxury (Including Super Luxury)
Apartments
Monthly Gross Rents
($ per sq ft per month)

The lackadaisical demand for homes exacerbated the already

weak leasing market. The unsold inventory and newly
completed homes competed with the existing leasing stock
to vie for a limited pool of tenants which comprised mainly
of existing ones looking for alternative accommodation. New
expatriate arrivals remained limited due to tight immigration
policies.

Intermittent threats will keep market

on its toes for the rest of the year
With intermittent threats keeping the market on its toes,
homebuyers are expected to exercise heightened prudence for
the rest of the year.

Consequently, the average monthly gross rents of luxury/

super-luxury apartments are projected to decline by some 8%
to 10% in 2015 after falling 2.2% QoQ in 1Q 2015 and 4.6% for
the whole of 2014.

As more homes obtain temporary occupation permits, the

reality of a record 21,359 new homes expected to be completed
in 2015 is fast sinking in. This contrasts with the 10-year
average net new supply of 8,691 units and is higher than the net
new supply of 19,444 private homes recorded last year.
While this bumper completion represents a greater variety of
housing options, some homebuyers are expected to stay on
the side-lines in anticipation of further price corrections, while
others purchasing homes for investment may be hesitant to
commit in view of the repercussions on the rental market.
Coupled with interest rates, which have already increased
sooner and steeper than expected, home-buying momentum
will remain curbed. Consequently, the total new sales for the
whole of 2015 is forecast to come close to 2014s 7,316 units,
hovering in the region of 6,500 to 7,500 units, as long as the
cooling measures and stringent loan curbs remain in place.
As both home sellers and developers direct their strategies
towards an increasingly price-sensitive group of homebuyers,
private home prices are anticipated to soften by about 5% to
8% in 2015 following the 4.0% moderation in 2014. This is also
taking into consideration developers measured bids in recent
land tenders that gives them more flexibility in adjusting prices
downward where necessary a sign of their expectations of
weakening home prices ahead.

private home prices are anticipated to

soften
Specifically for the luxury and super-luxury segment, prices,
which have fallen 15.1% since 2Q 2011, have prompted funds
and institutions to scour the segment for opportunities.
However, prices are expected to remain depressed as buyers
remain opportunistic in view of the headwinds facing the
high-end segment amid renewed affordability concerns.
Additionally, based on URAs monthly developer sales
figures as of March 2015, developers have on hand an unsold
inventory of 6,740 high-end homes with prerequisites for sale,
of which some 2,053 have been launched. This will put a drag
on prices. Hence, prices of luxury and super-luxury apartments
that have moderated by some 7.4% in 2014 and 3.7% in 1Q 2015
may slide by a steeper 10% to 15% in 2015.
Turning to rents, weak buying sentiments have prompted
developers to withhold launches and put units up for lease
instead, adding to the already mounting supply of homes
available in the rental market. With landlords getting the
shorter end of the stick, a tenants market is likely to persist.

Research & Forecast Report | 1Q 2015 | Residential | Colliers International

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67 countries on
6 continents
United States: 140
Canada: 31
Latin America: 24
Asia: 39
ANZ: 160
EMEA: 108

Contact:
Chia Siew Chuin
Director
singapore.research@colliers.com
Colliers International | Singapore
1 Raffles Place
#45-00 One Raffles Place
Singapore 046818
TEL +65 6223 2323
FAX +65 6222 4901
RCB No. 198105965E

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billion in
annual revenue

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billion square feet

under management

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professionals
and staff

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The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to
ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult
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