The Leading Professional and Representative Body for the Real Estate Industry

The Leading Professional and Representative Body for the Real Estate Industry



Daily News – 4th January 2017

Top Story

Singapore GDP surprises with 1.8% full-year growth in 2016
The health of the Singapore economy surprised many – even the government itself – with a full-year growth for 2016 of 1.8 per cent, advance estimates released by the Ministry of Trade and Industry (MTI) on Tuesday morning show.  This also meant that it averted a technical recession in the fourth quarter as manufacturing output surged. It grew a steady 9.1 per cent on an annualised basis from the previous quarter. It had shrunk by 1.9 per cent in the third quarter. On a year-on-year basis, the economy grew by 1.8 per cent in Q4, better than the 1.2 per cent in Q3.  Manufacturing grew by 6.5 per cent year-on-year in the fourth quarter, or a 14.6 per cent quarter-on-quarter growth.

Singapore Economy

Electronics, biomed clusters spur Q4 manufacturing growth
The electronics and biomedical manufacturing clusters powered the expansion of the manufacturing sector, which grew 6.5 per cent year on year in the final quarter of 2016.  This is a jump from the 1.7 per cent growth in the previous quarter, as shown by advanced estimates of the real gross domestic product (GDP) by the Ministry of Trade and Industry (MTI) on Tuesday.  But this growth is not broad-based; the transport engineering and general manufacturing clusters continued to contract.  On a quarter-on-quarter and seasonally adjusted basis, the sector grew by an annualised 14.6 per cent, a sharp rebound from a 8.1 per cent decline in the preceding quarter.

Singapore Real Estate

HDB resale prices stabilising, with 0.1% dip in Q4
The stabilising trend for HDB resale prices continued in the fourth quarter of 2016.  Prices dipped 0.1 per cent from the third quarter, putting the full-year decline at 0.1 per cent, based on flash estimates from the Housing & Development Board on Tuesday.  Ismail Gafoor, CEO of PropNex Realty said the “potent combination” of cooling measures has been effective in arresting the price growth of HDB resale flats.  “The HDB resale market had its biggest correction in 2014 at minus-6 per cent, and (this) tapered to a smaller correction of minus-1.6 per cent in 2015. HDB prices are going through a period of consolidation with marginal price movements.”

Singapore private housing prices down 3% in 2016
The residential market is showing signs of stabilising even as private home prices slipped for the 13th consecutive quarter, going by the government’s flash estimates for the fourth quarter.  For the full year, the estimated 3 per cent fall in private home prices and the 0.15 per cent decline in HDB resale prices were smaller than their respective 3.7 per cent and 1.6 per cent declines in 2015. The 0.4 per cent decline in private home prices during the fourth quarter was also milder than the 1.5 per cent fall in the preceding quarter.  Despite the moderating price declines, consultants are not expecting a quick turnaround given a slowing economy, rising interest rates and uncertainty in the jobs market. Some housing brokers also perceive the quarterly price uptick for landed homes in the fourth-quarter flash data as a statistical blip that does not signal the start of a price recovery.

Companies’ Brief

Regal signs RM90m offtake deal with Angkasa
Sarawak-based property developer Regal International Group has signed a residential unit offtake deal with Malaysia’s apex cooperative organisation worth about RM90 million (S$29 million) in total, it said in a press release on Tuesday evening.  MyAngkasa Bina Sdn Bhd or Ang-kasa, a unit of Angkatan Koperasi Kebangsaan Malaysia Berhad, has agreed to buy all 276 strata-titled homes to be built in the third phase of Regal’s Airtrollis project in Negri Sembilan, Malaysia.  Angkasa will market and sell the homes, and will purchase all units that are unsold when the project is completed, Regal said, adding that the aggregate total value of the en bloc sale was about RM90 million. That works out to roughly RM326,000 per unit.

Genting Singapore completes disposal of stake in South Korea-based integrated resort
Genting Singapore has completed the disposal of its stake in an integrated resort in Jeju, South Korea, chalking up a gain of about S$96.3 million.  The total sum received by the group for the stake was US$411.1 million.  In November last year, Genting announced that its wholly owned subsidiary Algona had entered into a conditional sale and purchase agreement with Landing International Development Limited (LIDL) to dispose of its 100 per cent interest in Callisto Business.

Majority shareholder vote saves APW from wind-up
AIMS Property Securities Fund (APW) will not be wound up after all.  After unitholders voted at a meeting which was requisitioned by certain minority investors hoping to close the fund, the results came in overwhelmingly against the motion.  This was mostly due to the fact that the majority shareholder AIMS Capital Management was able to successfully put its 38 per cent block of units to vote, culminating in a margin of 46.24 per cent against, versus 26.19 per cent for.

Views, Reviews & Forum

Demand still resilient despite weak property market
Falling home prices have become somewhat of a norm since they began their descent at the end of 2013. Experts predict more pain to come, but don’t expect cooling measures to be wound back just yet.  The raw numbers look compelling – prices are down around 11.2 per cent from a peak in the third quarter of 2013, but the Government will likely have a bigger picture in mind.  It is focused on keeping the real estate market stable amid rising interest rates and an uncertain economic outlook.

A nice new-year present, but headwinds ahoy
AS we embark on 2017, the Singapore economy has just delivered a nice little new year present.  Its 1.8 per cent year-on-year growth in the fourth quarter (based on advance estimates), beat just about every economist’s forecast and demolished some, including the measly 0.6 per cent by Reuters, based on a poll.  Full-year growth for 2016 – also 1.8 per cent – was another upside surprise, besting the government’s own forecast of 1 to 1.5 per cent and again, ahead of the consensus.

Global Economy & Global Real Estate

Britain to build 17 towns to ease housing squeeze

British manufacturing index hits 2 ½-year high

Biggest economies face US$7.7t bond tab as bull run fades

New York still the apple of foreign property investors’ eyes: survey

US construction spending hits 10-1/2-year high

Evergrande to raise 30b yuan for its Shenzhen backdoor listing

China’s economic growth to slow to 6.5%: Govt think-tank

Australian home values rise the most in 7 years on low rates

Medtecs sells Philippines properties for US$2.2 million

German inflation hits 3-year high in Dec, good news for ECB

Additional Articles of Interest – Local & Overseas Real Estate

Local & Overseas Real Estate – Full Article

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