150,000 New Homes to Be Built After Paya Lebar Airbase Relocates, Experts Say Public Housing Still Affordable for Singaporeans, New Private Home Sales up 70.9% And More

22 Aug 2022

16th August to 22nd August 2022

Prime Minister Lee Hsien Loong has unveiled plans to develop “a new business and lifestyle destination” right next to Changi Airport Terminal 5. They also announced that 150,000 new homes will be built over the current Paya Lebar air base site after 2030. Meanwhile, new private home sales in Singapore rose 70.9% month-on-month to 834 units in July, amid the astounding sale results of AMO Residence.


1) New business and lifestyle destination to rise next to Changi Airport Terminal 5

Prime Minister Lee Hsien Loong has unveiled plans to develop “a new business and lifestyle destination” right next to Changi Airport Terminal 5, reported TODAY.

To be called Changi East Urban District, the new business and lifestyle destination will create more jobs and opportunities for Singaporeans.

He also noted that Terminal 5 has been redesigned to be flexible, such that it can operate as small sub-terminals or be converted for use during contingencies, like for the segregation of high-risk passengers or for testing operations.

Special provisions will likewise be deployed within the terminal to reduce the transmission of diseases, which include enhanced ventilation systems and contactless systems at passenger touch points.

The Ministry of Transport revealed that the terminal will also be a Green Mark Platinum Super Low Energy Building as certified by the Building and Construction Authority. To reduce its carbon emission, smart building management systems, solar panels and district cooling combined with thermal energy storage will be deployed at the terminal.

This new development could potentially cause an uplift in prices for properties near Changi Airport.


2) 150,000 new homes to be built at Paya Lebar, following airbase’s relocation

Prime Minister Lee Hsien Loong announced during his National Day Rally speech that 150,000 new homes will be built in Paya Lebar, following the relocation of the airbase in 2030, reported The Business Times.

He noted that the 3.8km runway can be repurposed into the town’s central spine, as a community space or a green connector, with the new homes on its sides.

Since the runway is aligned along the direction of prevailing winds, developing the future town parallel to the runway will make it naturally breezy.

He pointed out that the relocation of the airbase will also mean the easing of some building restrictions around it, allowing for the redevelopment of surrounding towns such as Punggol, Marine Parade and Hougang.

The prime minister underscored that there is “enough space for future generations”, assuaging concerns that the city-state may “run out of space” or housing will not be affordable or available.

“Our problem is not finding the space to build enough flats, nor keeping homes affordable for Singaporeans; we know how to do that. Our problem is having enough babies to grow up and live in them,” he said.


3) New private home sales up 70.9% in July, driven by AMO Residence


New private home sales in Singapore rose 70.9% month-on-month to 834 units in July, albeit they were 47.9% lower year-on-year.

Huttons Asia’s Senior Research Director Lee Sze Teck attributed the 70.9% month-on-month hike in July sales to the “astounding sale results” of AMO Residence.

The only major launch last month, AMO Residence moved 366 out of its 372 units, contributing to the spike in sales within the Outside Central Region (OCR).

Notably, the OCR accounted for the bulk of sales last month at 58.2%. It is followed by the Core Central Region (CCR) at 22.2% and the Rest of Central Region (RCR) at 19.7%.

Tricia Song, CBRE’s Head of Research for Southeast Asia, noted that the biggest proportion of new private homes sold remained within the $1.50 million to $2 million range, accounting for 31.2% of July’s total sales.

“This was followed by the $2 million – $2.50 million bracket at 20.9% and the $1 million – $1.50 million bracket at 19.7%,” she added.

Looking ahead, Lee expects a quiet August as developers hold back on launches during the Lunar Seventh Month.

Related article: Hungry Ghost Festival: Are Singaporeans Superstitious about Buying and Moving House During the Seventh Month? (2021)

“Launch activity will pick up rapidly in September with a number of launches – Enchanté in CCR, Lentor Modern and Sky Eden@Bedok, both in the OCR,” he added.


4) Experts say public housing still affordable for the average Singaporean


The rising number of million-dollar HDB flats coupled with the sharp price hikes in private housing and HDB resale markets could cause anxiety among prospective first-time homebuyers on whether housing has become out of their reach.

Related article: Million-Dollar HDB Resale Flat vs a Condo in Singapore: Which Is Worth Buying? (2022)

Notably, private home and HDB resale prices rose 15% and 21%, respectively, since Q1 2020, while the number of million-dollar HDB flats rose to 33 units in July from 31 units in the previous month.

However, the number of million-dollar flats transacted last month comprised just 1.4% of July’s total resale volume, said Professor Sing Tien Foo, Director of the Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore (NUS) in an article posted in CNA.

He also pointed out that HDB homeownership remains “highly viable for the majority here in Singapore”, after factoring in housing subsidies and grants offered by the Government.

This comes even as the price-to-income ratio increased from 3.98 to 4.23 in the resale HDB market and 3.33 to 4.07 in the Build-to-Order (BTO) market between 2001 and 2021.


5) Eco-friendly homeowners can enjoy discounts on home loans

Home loan

Owners of eco-friendly homes can avail of the new “green” housing loans and enjoy some savings, thanks to its lower mortgage rates, reported The Straits Times.

Such home loans are offered only at UOB, HSBC, Standard Chartered Bank (StanChart), Maybank and OCBC Bank. For their quality criteria, these banks use the Building and Construction Authority (BCA) Green Mark standard.

UOB and StanChart require that the home has a rating of at least Gold, while Maybank and HSBC demand a GoldPlus rating and above.

OCBC, on the other hand, require loan applicants to answer 14 questions developed by BCA to assess their home’s energy efficiency.

StanChart offers a 0.05% discount off the prevailing SORA-pegged floating rate packages, with the minimum loan amount pegged at 100,000.

HSBC offers a 0.05% discount off its loan packages, with the minimum loan amount at $200,000, while UOB gives out a 0.05% discount off certain SORA-pegged floating packages, with the minimum loan amount at $100,000.

Related article: Green Home Loans in Singapore (2022): What They Are and How to Qualify


6) Lower borrowing cap may deter property buyers

Economic theory states that higher prices would negatively affect demand. Singapore’s red-hot property market, however, has been defying such expectations, reported The Business Times.

Analysts pointed to the low-interest rate environment as one of the drivers of demand.

OrangeTee & Tie’s Senior Vice President of Research and Analytics Christine Sun pointed out that the proliferation of one- and two-bedroom units over the last few years has also helped investors acquire more properties.

And while interest rates have recently increased, the Monetary Authority of Singapore’s stress test showed that most households should still “be able to service their debts”.

Sun, however, noted that rates would have an impact on a buyer’s total debt servicing ratio (TDSR) if it continues to increase. She added that housing affordability for many people will be “quite affected” if TDSR would be calculated based on an interest rate of 4.5%.

“It will affect both the HDB market and the private market,” she said. “When they hit that level, I would think TDSR will play a bigger role in impacting the market more than interest rates.”


7) Transacting homes off-plan a win-win proposition

Transacting new homes off-plan in Singapore can be a win-win proposition for both buyers and developers, reported The Business Times.

For buyers, purchasing off-plan allows them to pay for their housing units progressively.

“A buyer may have much more time to make full payment for an uncompleted new home versus a completed resale home. Unlike with buying a completed resale home, the said buyer need not quickly draw down and service the full mortgage loan,” said BT.

Moreover, units at new condominium developments offer better configuration, more efficient layouts, and better fittings. They also come with modern facilities and sustainable features.

From the developers’ view, selling projects off-plan and locking in strong sales during the start of construction helps to de-risk a project.

Notably, payments given by buyers can be used to help finance the development’s construction. This could lead to reduced financing costs as the project loan drawdown is smaller and to faster recovery of some of the equity put into the project.


8) 11 Thomson-East Coast Line MRT stations on track to open by year-end

mrt station singapore

The Land Transport Authority (LTA) has handed over 11 new stations along the Thomson-East Coast Line (TEL) – which are on track to open by the end of the year – to transport operator SMRT, reported CNA.

Coming under stage 3 of the TEL, the 11 new stations run from Stevens to Gardens by the Bay.

“This milestone marks the completion of all civil and structural works, as well as our systems integration and testing activities, for our TEL3,” said LTA in a Facebook post.

“With the handover, SMRT will carry out operational testing over the next few months to prepare 11 of the stations for welcoming commuters for passenger service by the end of this year,” it added.

Home seekers looking to live near these upcoming TEL stations may refer to this guide.


9) Freehold coffee shop at Jalan Besar on the market for $28mil

jalan besar shophouse for sale

A two-storey coffee shop unit at Hoa Nam Building has been put up for sale via expression of interest (EOI) with a guide price of $28 million, revealed exclusive marketing agent Savills Singapore.

Boasting a prominent street frontage along Jalan Besar, the freehold coffeeshop unit has a total strata floor area of about 4,510 sq ft. It also comes with rare food and beverage (F&B) approvals on both levels.

In fact, the current owner has secured approval from the MCST to place signage boards on the building’s façade.

The ground floor features six food stalls and one drink stall. Savills noted that the upper level can be accessed either via an internal staircase or an external escalator.

“This opportunity offers the incoming buyer flexibility to reconfigure the upper-level space for an additional seating area or subdivide it to be leased out separately to increase rental income,” it said.

The EOI exercise for the coffee shop unit closes on 21 September 2022.


10) Industrial strata sales up 28% in Q2 2022

Strata industrial sales in Singapore rose 28% quarter-on-quarter to 512 transactions in Q2 2022 – the highest quarterly increase since the third quarter of 2014, said Savills Singapore.

Notably, multiple-used factory sales climbed 25.3% quarter-on-quarter to 475 deals, mainly led by resale transactions at West Connect Building and Mega@Woodlands.

“Transactions in this sector are likely backed by local SMEs that acquired ramp-up facilities with modern specifications and reasonable remaining tenure for their own business operations,” said Savills.

Meanwhile, prime business park monthly rents continued to increase in Q2 2022, rising 0.7% quarter-on-quarter to $5.93 per sq ft (psf).

Savills attributed the upward trend to the scarcity and steady demand of business parks, particularly at Mapletree Business City, one-north and Labrador prime regions.

“Despite strengthening economic headwinds and geopolitical uncertainties, the industrial and logistics market remains as one of the most resilient sub-asset classes across the spectrum of the real estate market,” it said.


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Eugenia Liew, Content Marketing Manager at PropertyGuru, edited this story. To contact her about this story, email: eugenialiew@propertyguru.com.sg.


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