Saturday, May 22, 2010

More land for private housing in 2nd half

The government is ramping up the supply of sites for private housing in the second half of the year to meet strong demand.

All in, the second half of the Government Land Sales (GLS) programme will have 27 residential sites and four mixed-use sites where private housing can be built.

21 are new sites and 10 sites will be carried over from the first half.

Overall, the 31 sites in the second half of the Confirmed and Reserve Lists can generate 13,905 private residential units.

The number is the highest potential supply quantum from any half-yearly period since the Confirmed List and Reserve List system started in 2001.

Most of the sites in the second half are located in the suburban regions or in the city fringes.

A National Development Ministry statement says it is placing 18 sites on the Confirmed List in the second half of the GLS programme.

Together, these 18 sites can yield 8,135 residential units – the biggest supply of private housing from the Confirmed List since the Confirmed List/Reserve List system was introduced in 2001.

The 18 Confirmed List sites comprise 15 residential sites, including five executive condo sites, two commercial and residential sites and a white site.

Of these sites, 12 are new sites and six sites will be carried over from the first half.

The Reserve List in the second half will have another 13 sites, which can together yield 5,770 residential units.

The 13 Reserve List sites comprise 12 residential sites and one commercial & residential site, where private residential units can potentially be built.

Of the 13 sites, nine are new sites and four sites will be carried over from the first half of the GLS programme.

National Development Minister Mah Bow Tan, speaking on the sidelines of an event, said: “I think the demand for land has continued to be very strong, as you can see from the latest bids. So I believe that with this situation, it warrants us to increase the supply.

“I hope that with this increased supply, home buyers will be assured that there is ample supply (of housing units) in the market and therefore there is no need to rush. So this will probably dampen some of the exuberance in the market.

“I think it should not be a surprise that we’re increasing the supply significantly as well – 14,000, yes, it’s much more than the (residential units generated in the) last GLS.”

Three new white sites will also be available in the second half of 2010. These are plots at Choon Guan Street/Peck Seah Street, Paya Lebar Road/Eunos Road 8 and Boon Lay Way.

However, the government says it will be removing the white site at Ophir Road/Rochor Road from its land sales programme. The development plan for the site is being reviewed.

The plot was made available for sale via the Reserve List in October 2008 and it is a strategic site earmarked as an extension of the commercial district.

The government is also keeping tabs on the European debt crisis.

Mr Mah said: “I believe there will be some short-term corrections but in any case, there is a flexibility for us to adjust because our government land sales programme is reviewed on a six-monthly basis. So there are ample opportunities for us to adjust if, really, demand slows down or reduce significantly in the second half.”

Mr Mah added that the government will continue to monitor the property market closely. He said that if property prices start to increase beyond what the fundamentals can justify, then the government is prepared to introduce new measures to prevent any property bubble from forming.

The last round of measures introduced to dampen prices was in February this year.

Donald Han, managing director of Cushman & Wakefield, said: “If you look at the market…..in the middle of last year when the government sales of sites were launched, land prices since then till now have gone up on average by 25 percent.

“If you look into the kind of numbers that we saw in the last couple of tender exercises….average of about 15 bidders, I think these bidders will probably have some opportunity to partake in the Confirmed List and trigger the Reserve List sites as well. I think demand will probably taper off, from the developers’ point of view, towards the end of the year.”

Source : Channel NewsAsia – 21 May 2010

Friday, May 21, 2010

China’s housing market: Boom or bubble?

Enormous investment opportunities lay in the emerging superpower, says Cityscape Asia 2010

China holds enormous opportunities for investment as its economy surges, say leading economists and investment experts at Cityscape Asia 2010 in Singapore yesterday.

Speaking at a keynote session on evaluating the economic outlook for China 2010 and beyond, David Wong, Chief Economist at Shui On Land, said the Asian giant is a market that investors can no longer afford to ignore.

“China is undisputedly growing in relevance. Early government intervention and lower levels of debt compared to its western counterparts helped it to weather the financial storm better than most.”

Since October 2008, the Chinese government has implemented aggressive macroeconomic expansion policies, along with fiscal stimulus packages and monetary expansion. These policies have led to the rapid recovery of the domestic market and also signs of a recovery in investment.

The rapid growth in the China economy has led to a 8.7% per cent annual economic growth rate in 2009. Among the world’s major economies, China is surging at an unmatched pace with 10 per cent growth forecast for 2010.

Wong said this indicates huge room for rapid, catch-up growth and thus investment opportunities.

Indeed, the Chinese’s domestic demand contributed 12.6% points to GDP growth in 2009 – the country’s strongest performance since the early 1990s.

With the rebound of the housing sector playing a prominent role in this recovery, the discussion has now moved to whether China is harnessing a housing boom, or bubble. Wong continued: “The current upswing is resulting in unprecedented liquidity easing after the global financial crisis and so there are some recent housing market developments that appear symptomatic of a bubble.

“Sales have nearly doubled over the past year, housing credit has increased sharply, and the price of houses in the secondary market has accelerated rapidly. Yet from an affordability standpoint, property prices appear expensive and seem to have factored in a certain amount of future income growth.”

Ample saving deposits of residents have helped to support mortgage lending, as well as contributing to China’s substantial property market boom.

Wong said: “Conventional wisdom holds that if China maintains its phenomenal economic growth, then last year’s loans need not turn bad. The asset bubble is no longer a major economic risk with the new tightening policies. Further, property market cooling measures will not derail economic recovery but enhance sustainability of future growth.

“Therefore there are enormous opportunities for investing in China’s long term growth and resurgence as the emphasis changes from growth speed to growth quality,” Wong concluded.

Source : Channel NewsAsia – 21 May 2010

Tuesday, May 18, 2010

Private property market getting hotter

The private property market here surged as 2,207 units were sold last month – the first time it broke the 2,000-unit mark in nine months since July last year. This was also 25.3 per cent higher than the 1,761 private homes sold in March, according to the latest data from the Urban Redevelopment Authority (URA).

Demand for such housing also far outstripped supply as only 2,084 units were launched last month, with most buyers snapping up mid-tier to mass market developments as the luxury market takes a back seat.

And despite anti-speculative measures introduced in February, market watchers said intervention to further cool the market is unnecessary.

Mr Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said that “while there may be a slower buying momentum, developers are not cutting prices and yet there is demand, so the whole market is able to support the price increase”.

He said while the Greek debt crisis may worry buyers, others feel that China and India’s rapid growth will balance out market sentiment.

Dr Chua Yang Liang, head of research of South-east Asia at Jones Lang LaSalle, said market sentiment is bouncing back.

He added: “The positive growth in April can be seen as a sign of continued recovery for the residential market.”

The mass market and the mid-tier homes segments will likely lead the way going forward as affordability remains a main consideration for potential home buyers in this market, experts said.

“Based on these factors, the overall residential property price index is expected to expand at a moderate average rate of 1.5 per cent to 2 per cent per quarter going forward,” Dr Chua added.

The core central region, where most luxury properties are located, saw strong sales with 391 units sold, while only 252 units were launched.

The Orchard Residences, which adjoins ION Orchard, commanded a whopping $4,207 per square foot (psf) – the highest transacted price so far this year.

In the city outskirts, the sale of 1,044 units was lower than the 1,120 new homes launched.

UOL’s Waterbank@Dakota was the best-selling property for April, with 573 units sold at $1,178 psf while Tree House at Chestnut Avenue, outside the central zone, took second spot with 374 units sold at $835 psf.

Property analysts believe such high transactions volume is unlikely to be sustainable, as there are reportedly fewer visitors to showflats over the last two weeks.

Source : Today – 18 May 2010

Monday, May 17, 2010

Shoebox units a lifestyle choice?

Sales of small apartments, also known as shoebox apartments or mickey mouse flats, skyrocketed last year. And demand continues to be robust this year.

A total of 696 flats of 500 sq ft or smaller and another 1,285 of between 500 and 800 sq ft were sold last year.

Buyer interest has remained strong this year with 533 units of 800 sq ft or less sold in the first four months.

Such apartment sizes comprise about 23 per cent of the 2,300 units sold in the primary market.

Some industry experts have attributed the strong demand to a change in lifestyle choices in an increasingly cosmopolitan environment.

LIFESTYLE CHOICES?

Hotel rooms are typically about 300 sq ft. A 500-sq-ft apartment is not much bigger. I would say nobody, not even singles, would choose to live in one, given the choice. It is more a case of having no choice.

It is no secret that developers continue to provide such units to an increasingly investor-dominated market. In a rising market, investors prefer such units as they are more affordable than family-sized flats. Developers can also maximise their returns by selling these units at a higher price per sq ft.

There is nothing wrong with the market providing micro units. The problem is when they form a significant proportion in a development – as high as 70 per cent in some cases.

The most likely occupants of such units are singles, with some couples. And the overwhelming majority of occupiers would be tenants. So, there is a transient feel about the place, with the occupiers more likely to use them as temporary shelter until they can afford something better. Singles relocate much more quickly than family tenants.

With singles dominating, there is also the lack of a family environment. Singles prefer to be out rather than cooped up in a tiny apartment. So, it can be very quiet at certain times and very rowdy when the singles invite their friends over to enjoy the common facilities.

The characteristic of a landlord-dominated project is also such that the majority of owners prefer to spend less to upkeep the estate. In a downturn, the small units become even more affordable and attract more financially-disadvantaged tenants. There will be even greater resistance to “unnecessary” maintenance expenditure.

So, the estate tends to age prematurely. Should home prices continue to stay down, the estate acquires an unsavoury image.

This trend is not easily reversible when prices return to high levels. No owner will want to take the lead and spend more to upkeep his unit if his neighbours do not do the same. Nobody wins in this waiting game.

If such projects are in a central location or close to the business district, some may be used as office premises when office rents are high. This will translate into more visitors and increased use of the lifts, which will mean longer waiting times and more noise.

So, if you are an owner- occupier, single or otherwise, do think carefully about whether you want to live in such projects.

By Colin Tan, Head of Research and Consultancy at Chesterton Suntec International.

A Matter of Time - Thomson View en-bloc

Private home sales breached the 2,000-unit mark for the first time in nine months since July 2009.

Figures from the Urban Redevelopment Authority (URA) show that 2,207 units were sold in April on the back of positive sentiment and resilient demand.

While the transaction volume exceeded market expectations, analysts said it is unlikely to be sustainable.

Private home sales in April were also 25.3 per cent higher than the 1,761 units sold in March.

In fact, the number of units sold outpaced the number of units launched in April, with only 2,084 units launched last month.

UOL’s Waterbank@Dakota was one of the star performers in April, with 573 units being snapped up at a median price of S$1,178 per square foot.

CapitaLand’s The Interlace saw 144 units sold at a median price of S$1,067 per square foot.

The two projects, along with Tree House’s 374 units accounted for nearly half or 49.4 per cent of the total sales transactions.

Tempers flared at Thomson View condominium yesterday when a scheduled extraordinary general meeting (EOGM) for the establishment of a new en bloc sales committee had to be called off due to a lack of quorum.

Thomson View’s appointed managing agent CKH Strata Management called off the meeting after it declared that the minimum 30 per cent of share value, made up of residents or their proxies, required to attend the EOGM was not fulfilled by 1pm – the scheduled time to start the meeting.

However, residents of the 15-year-old, 55,000 square feet condominium had a different view and accused CKH of being tardy in its administrative process hence causing the delay.

Some residents claimed there were far too few staff tending to the registration process at the registration counter and that contributed to the delay. They also said CKH should have given them some leeway as the delay was over administrative matters at the registration counter and residents also claimed that the law requiring the minimum threshold to be met by a specific time was not clearly stated as a caveat to residents in the EOGM notice.

The Land Titles (Strata) Act requires a quorum of a minimum of 30 per cent of the share value to be reached in order to begin the meeting.

CKH said it had called off the meeting because they wanted to abide by the current law of dissolving the EOGM if the quorum is not met by its scheduled time.

They maintained that allowing for the EOGM to continue may thwart the process of an en bloc sale if a minority group chooses to contest its validity at a later date.

“I’m only a managing agent and I have to act according to the law. If I was lenient, then people who were against the en bloc sale could declare this whole election of the new sales committee null and void as the law was not strictly adhered to,” said Mr Chan Kok Hong, managing director of CKH.

However, a proposed change to the Land Titles (Strata) Act announced last month has provided for an hour’s leeway for the quorum to be reached, but this new ruling is expected to take effect only in June.

The dispute was resolved when Mr Tan Kin Lian, former chairman of the previous sales committee and ex-chief executive of NTUC Income, offered to facilitate the reconvening of the next EOGM through email with the residents.

A resident, who only wants to be known as Mr Ng, said the inflexibility from CKH was uncalled for.

“People put in so much trouble to come in and the EOGM was cancelled just because some people cannot be reached or are late.

“The managing agent should be more flexible and give us half-an-hour more instead of saying there is no quorum,” he said.

Source : Today – 17 May 2010

Strong demand for private homes with 2,207 units sold in April 2010

 The most expensive unit sold last month was The Orchard Residences at Orchard Boulevard which went for S$4,207 per square foot.

Unlike the trend in recent months, luxury projects were not the most popular among buyers, with mid-priced developments taking over the rein.

“In a way, we can look at it as a second ring, second tee-off compared to the core central region. In terms of pricing, certain pockets are still lower than outlying suburban areas like Ang Mo Kio , Bishan. So there is that attractiveness – near to the city, and yet pricing is still quite affordable,” said Chua Yang Liang, head of Research, Southeast Asia, at Jones Lang LaSalle.

Compared to March, home sales in the city fringe jumped 290 per cent with 1,044 units sold last month.

Meanwhile, fewer new homes changed hands in other areas.

392 new homes in the city were sold, down 45 per cent from March, and sales in the mass market segment dipped by 1 per cent to 771 units.

Overall, market players attribute the strong demand to better economic and job prospects.

Some home buyers may also be eager to lock-in their purchases in anticipation of an interest rate hike in the second half of the year.

Despite the positive sentiment, analysts warned that there are uncertainties ahead due to the debt crisis in Europe.

“The last 2 weeks has seen some cooling off. If you were to visit some of the showflats, the attendance has been small,” Colin Tan, director & head of Research & Consultancy at Chesterton Suntec International.

“I think developers recognise this, so when they price their projects, they will have to bear this in mind that they either have to push for sales or push for prices,” he added.

Going forward, analysts project quarterly home prices to grow by 1.5 to 2 per cent.

CBRE said it expects demand of new homes to reach 4,000-4,500 units in the second quarter, similar to the 4,380 new homes sold in the first quarter.

They also expect between 13,000 and 16,000 new homes to be sold for the whole of 2010.

Source : Channel NewsAsia – 17 May 2010