News roundup: More commercial and industrial listings in Singapore’s property auctions, and other headlines

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For PropertyGuru’s real estate news roundup, market experts expect more commercial and industrial listings in Singapore’s property auctions. In other headlines, mainland Chinese buyers snapped up Hong Kong luxury properties, while developers in Eastern Thailand slowed down on new launches.

Market watchers expect more commercial and industrial listings at Singapore property auctions

More commercial and industrial properties are likely to come up at property auctions this year amid a challenging business climate. This comes as owners and investors look to dispose of their underperforming assets, said market watchers in a report in CNA.

They added that with more options during the monthly property auctions held by real estate agencies, some investors are keeping a close watch for good commercial units that may yield solid rentals and profits. These are usually properties that are being let go by businesses in distress or units that have not found a buyer on the open market.

Property investor Daryl Ng and his partners, for instance, bought a 990 sq ft commercial unit at the Textile Centre in Jalan Sultan from the open market three years ago for around SGD1 million (USD0.75 million). The unit can be used either as an office or retail space. They are now renting it out to two tenants for a total of SGD4,500 monthly.

Mr Ng, who is constantly on the lookout for such good deals during property auctions, cited the facing orientation, footfall, and usage of the units as factors that investors look at.

Mainland Chinese buyers flock back to Hong Kong luxury properties in early 2024

Based on JLL’s latest Residential Market Monitor released this week, after the removal of all cooling measures announced in the budget speech at the end of February 2024, mainland Chinese buyers are observed to have accounted for around 70 percent of recent primary sales of luxury residential properties worth HKD30 million or above, rebounding from less than 50 percent before the removal. Mainland Chinese buyers are expected to remain active.

Within just nine days of the removal of all cooling measures, the primary market had already recorded 1,275 transactions, reflecting that buyers are now eager to enter the market, a reversal of the cautious wait-and-see stance prevalent before. Non-local buyers stand to gain the most from these policy relaxations. Recent sales of new projects have seen an increase in mainland Chinese buyers, in particular; they account for the highest proportion of buyers in new luxury residential projects.

According to The World Property Journal, Norry Lee, Senior Director of Projects Strategy and Consultancy Department at JLL in Hong Kong, said: “We expect the primary market transactions to remain robust in the second quarter as demand strengthens. Mainland Chinese buyers have benefited the most from the removal of cooling measures. With the addition of the Top Talent Pass Scheme, there has been a significant increase in the number of mainland Chinese buyers in the primary market and these buyers are expected to remain active in the market. However, non-local buyers have yet to return in full force due to the heightened foreign exchange restrictions, the rigors of mortgage applications, and the property viewing process. We believe that the overall transaction volume will receive a more significant boost once these restrictions are lifted and the Chinese economy improves.”

Eastern Thailand developers ease supply

The ability of local developers to adapt improved absorption rates across most housing categories in three eastern provinces, as they slowed launches amid unfavourable conditions.

Vichai Viratkapan, acting director-general of the Real Estate Information Center (REIC), said the higher absorption rates in the fourth quarter of 2023 were attributed to reduced supply as a higher volume of units sold. “The residential market in Chon Buri, Rayong, and Chachoengsao is dominated by local developers,” he said. “They slowed new launches when the number of unsold units increased or the absorption rate dropped.”

According to REIC in a report in Bangkok Post, the average monthly absorption rate of condos in the three eastern provinces in the third quarter of 2023 dropped to 3.9% from 4.2% in the second quarter but improved to 5% in the fourth quarter.

The total number of remaining unsold condos in the third quarter increased to 44,787 from 44,152 in the second quarter, before dropping to 41,240 units in the fourth quarter. The decrease was attributed to fewer new condo launches, with 2,579 units in the fourth quarter, down from 4,322 units in the third quarter. New sales totalled 3,007 units, up from 2,434 in the third quarter.

The Property Report editors wrote this article. For more information, email: [email protected].