A higher proportion of them are profitable and the gains have shot up, too
(SINGAPORE) Subsales are becoming more and more profitable.
At the low point of the market in the first quarter of 2009, only 67.5 per cent of the subsales of private apartments and condos yielded a profit.
That proportion grew to 95.1 per cent in Q1 this year and 96.1 per cent in April, according to Savills Singapore's analysis of URA Realis caveats data.
It attributes the trend to improving sentiment and prices in the first four months of this year.
Meanwhile, the average gain per unit from profitable subsales of non-landed private homes increased from $105,663 in Q1 last year to $284,764 in Q1 this year and $363,465 in April.
In terms of percentage return, the average gain from profitable subsales has risen from 13.1 per cent in Q1 2009 to 22.4 per cent in the first four months of 2010.
Subsales, often used as a proxy of speculative activity, refer to secondary-market transactions in projects that have yet to receive Certificate of Statutory Completion. This can take place three to 12 months after Temporary Occupation Permit (TOP).
Caveat matches that Savills traced up to May 12 this year show that the number of subsales that yielded gains exceeding $1 million shot up from seven transactions in Q4 last year to 32 in January-April 2010. Twentyfive of these lucrative deals this year were for properties in Districts 1 (which covers Marina Bay), 9 and 10 (in Singapore's traditional prime districts).
The highest subsale gain this year, of about $3.3 million, was reaped on a 30th-floor unit at Marina Bay Residences; it had been bought (also in the subsale market) in January 2007 for $4.97 million and divested in April this year for $8.29 million.
The next most profitable subsale this year involved a 13th-floor unit at The Oceanfront @ Sentosa Cove. The unit was bought from City Developments in July 2006 for $7.02 million and sold for $10.08 million in March 2010 - a gain of $3.06 million.
The Oceanfront recorded six subsales this year with gains of more than $1 million each. All these units were bought in 2006, before the big push in luxury home prices in 2007. Recent launches in the location - The Residences at W Singapore Sentosa Cove and Seascape - could have encouraged the Oceanfront subsales, said Savills Singapore director of prestige homes and investment Steven Ming.
Oceanfront received TOP in March this year, and it is often around this time that a flurry of subsale activity occurs as projects then have added appeal to buyers seeking properties that they can move into or rent out soon.
This year, up to April, One Amber in Katong had the most subsale transactions (51 deals), followed by The Parc Condominium in West Coast (41 deals) and Marina Bay Residences (MBR) with 39 subsales. One Amber and MBR received TOP in April; The Parc Condominium's TOP is expected in Q3.
Those who bought units on the old deferred payment scheme may also find it opportune to cash out of their investment instead of paying the bulk of the purchase price to the developer at TOP and having to find a bank loan and, possibly, a tenant.
Savills calculated profit or loss as the difference between sale and purchase prices, without factoring in other expenses such as agent fees and stamp duty.
It found 919 subsale caveats for non-landed private homes in Q1 this year, as reflected in URA's Realis system as at May 12. Of these, it found previous caveat records for 86.1 per cent or 791 units. It then compared the latest subsale price with the earlier price. Out of 203 subsale caveats for April, it found earlier caveat matches for 87.7 per cent.
Less than 5 per cent of subsales in January-April 2010 incurred a loss. On average, the loss was $215,802, down from $343,982 in Q1 2009.
The biggest subsale loss this year was for a unit at Leonie Parc View that sold in February for $5 million, or $1.24 million below the $6.24 million it had previously transacted at in July 2007. The seller had bought his unit from the developer.
The 919 subsale caveats in Q1 this year reflect a pick-up from 749 deals in Q4 2009. Savills' Mr Ming attributes this to spillover from strong buying sentiment in the primary market in Q1.
'We believe new launches, which are usually at higher prices, could also have fuelled subsales in projects launched earlier in the vicinity,' says Mr Ming.
Knight Frank managing director (residential services) Peter Ow predicts subsale volumes are likely to soften over the next six months amid worries about the fallout from Europe's economic woes. At home, there are concerns about an increase in private housing supply from the bumper state land sales scheduled for H2 2010.
The proportion of profitable subsale deals as well as profit margins could ease as prices enter a period of 'stabilisation', Mr Ow says.
Much will also depend on the entry point of these specuvestors. 'If they bought in 2008 or early 2009, it may still be possible to walk away with gains.'
Source: Business Times, 4 Jun 2010
Friday, June 4, 2010
An eerily quiet May
The ongoing European debt crisis has had greater success in cooling Singapore’s red-hot private housing market than a cluster of anti-speculation measures or even the recent announcement of a sharply-accelerated Government land supply programme.
Show flats, which at times have resembled crowded scenes at a sale, have grown eerily quiet. This is partly because many developers have delayed their project launches; but there is no denying the huge dent in market confidence.
Compared to a very vibrant April, feedback from housing agents described May as a total washout.
One agent who closed six deals for completed properties in the secondary market in April, drew a blank for the whole month of May. Agents relate that some of their peers who normally guard their turf fiercely, are now more than willing to co-broke.
Apartment owners are also starting to get more unsolicited calls asking them if they are willing to sell their properties. Opening their letter boxes, they find them filled with brochures and flyers. Their mobile phones are receiving frequent SMSes from unfamiliar agents.
Especially prone are those who have bought properties over the past six months. For them, the scare tactics begin. Owners, especially those known to be active sellers, are urged to sell their properties before the market begins to correct.
These efforts, coming consistently from almost every other agent they meet, are beginning to take effect and are really giving some owners the jitters.
It is a nervous market out there, especially for those who are highly geared.
However, amid all these desperate moves by agents, developers continue to bid higher prices for housing sites.
In the most recent tender, a 99-year condo site at Upper Serangoon Road, close to the Potong Pasir MRT station, received the second highest bid price ever in Singapore’s Rest of Central region.
This result can mean two things – either developers have a different perspective on the market, or, they are confident that they can transfer ownership of the individual apartments to investors before any price correction can take place.
Either way, this is not good news for genuine homebuyers.
So, what can we expect in terms of housing prices going forward?
If the market remains downcast for May and June, prices cannot come down in the second quarter for the very simple reason that there would be very little sales. At most, they will remain at April’s price levels.
Can we expect a price correction soon? It depends. Will the debt crisis in Europe go away soon? I suspect it will but because the problems there are so deep-seated, it is not the end of the story and the problems will resurface.
Source : Today – 4 Jun 2010
Show flats, which at times have resembled crowded scenes at a sale, have grown eerily quiet. This is partly because many developers have delayed their project launches; but there is no denying the huge dent in market confidence.
Compared to a very vibrant April, feedback from housing agents described May as a total washout.
One agent who closed six deals for completed properties in the secondary market in April, drew a blank for the whole month of May. Agents relate that some of their peers who normally guard their turf fiercely, are now more than willing to co-broke.
Apartment owners are also starting to get more unsolicited calls asking them if they are willing to sell their properties. Opening their letter boxes, they find them filled with brochures and flyers. Their mobile phones are receiving frequent SMSes from unfamiliar agents.
Especially prone are those who have bought properties over the past six months. For them, the scare tactics begin. Owners, especially those known to be active sellers, are urged to sell their properties before the market begins to correct.
These efforts, coming consistently from almost every other agent they meet, are beginning to take effect and are really giving some owners the jitters.
It is a nervous market out there, especially for those who are highly geared.
However, amid all these desperate moves by agents, developers continue to bid higher prices for housing sites.
In the most recent tender, a 99-year condo site at Upper Serangoon Road, close to the Potong Pasir MRT station, received the second highest bid price ever in Singapore’s Rest of Central region.
This result can mean two things – either developers have a different perspective on the market, or, they are confident that they can transfer ownership of the individual apartments to investors before any price correction can take place.
Either way, this is not good news for genuine homebuyers.
So, what can we expect in terms of housing prices going forward?
If the market remains downcast for May and June, prices cannot come down in the second quarter for the very simple reason that there would be very little sales. At most, they will remain at April’s price levels.
Can we expect a price correction soon? It depends. Will the debt crisis in Europe go away soon? I suspect it will but because the problems there are so deep-seated, it is not the end of the story and the problems will resurface.
Source : Today – 4 Jun 2010
Fewer cluster homes for S’pore market
HOME buyers and investors keen on getting a cluster house may soon find themselves with an increasingly limited pool of new choices to select from.
This is because the number of new cluster-housing launches looks set to fall after this year, following a recent change in Government regulations, say property experts.
In the new ruling, which came into effect last February, the Government stipulated a cap on the number of units which can be built in each development, depending on the total size of the land.
For developers, this means that it is no longer as viable for them to use the land purchased to build cluster homes, as they usually want to build more units to maximise profits, said Mr William Wong, managing director of RealStar Premier Property Consultant, which specialises in marketing cluster houses and other landed properties.
Instead, Mr Nicholas Mak, realestate lecturer at Ngee Ann Polytechnic, said that developers might find it more profitable to develop land from the Government Land Sales programme into low-rise apartments.
Usually about two to three stories high, cluster houses are similar to landed properties, with their size ranging from about 2,500 sq ft (terrace) to as much as over 6,000 sq ft (bungalow).
Cluster houses, however, do not come with land titles but are instead strata-titled – the land in the development is shared by all owners, who do not have the flexibility of tearing down their properties and rebuilding them.
With communal facilities such as gyms, clubhouses, swimming pools and security service, cluster housing is more like condominium developments.
Mr Wong noted that there have already been fewer new cluster homes launched lately, and, of these, almost all were for land bought before the new ruling came into place.
“This is probably going to be the last year where we’ll see more launches of new cluster houses, especially for developments consisting of as many as 20 to 30 units,” he said.
The demand for cluster homes has been relatively strong since the concept first made its appearance in Singapore in 1993, say experts.
One example is Estrivillas, a cluster- housing project in Jalan Lim Tai See, near Sixth Avenue, which comprises 38 semi-detached houses and one detached unit. Two months after its launch last November, 24 of the 39 units had already been sold.
According to real-estate group Knight Frank, cluster houses are popular among larger families, who prefer the bigger built-up space typical of landed homes but want to have condo facilities as well.
Hybrid feature popular among investors
This hybrid feature proves to be popular among investors, too.
Said Mr Wong: “Investors are beginning to show more interest in cluster houses, as they fetch a relatively high rental yield as compared to other types of landed properties.
“A rental yield of 4 to 5 per cent is possible for some of the new cluster bungalows, as opposed to about 3 per cent for some landed properties.”
The fall in supply of new cluster homes, however, is unlikely to push prices up too steeply, with many buyers taking a wait-and-see approach because of the crisis in Europe and its effects on other parts of the world, he said.
With the new regulation, cluster-housing developments now typically consist of bungalows, instead of semi-detached houses or terraces.
This means that each unit would have more space for its own pool or private lift, said Mr Dennis Yong, head of Special Projects at HSR Property Group.
Recently launched clusterhousing projects such as Verdana Villas near Lorong Chuan, 80 Meyer Road, and Shamrock Villas at Namly Place, for example, all come with private pools.
To attract buyers, cluster homes here are banking increasingly on exclusivity and innovative design.
“Besides the usual quality furnishings, developers are now also including special features such as water fixtures to run within the whole unit, to give residents a paddy-field experience,” said Mr Yong.
With these additions, each unit is estimated to be able to fetch 10 to 15 per cent more in price, depending on location and size.
The price for cluster houses is expected to move in tandem with that of other types of premier landed properties in general, which has the potential to climb, say industry players.
“The price-per-square-foot transacted for landed properties is still relatively low compared to condominiums… but in view of land scarcity in Singapore, there is good potential for it to increase to a level to match that of condominiums,” said Mr Wong. “An increase of at least 5 per cent by the end of the year is within reach.”
Source : my paper – 4 Jun 2010
This is because the number of new cluster-housing launches looks set to fall after this year, following a recent change in Government regulations, say property experts.
In the new ruling, which came into effect last February, the Government stipulated a cap on the number of units which can be built in each development, depending on the total size of the land.
For developers, this means that it is no longer as viable for them to use the land purchased to build cluster homes, as they usually want to build more units to maximise profits, said Mr William Wong, managing director of RealStar Premier Property Consultant, which specialises in marketing cluster houses and other landed properties.
Instead, Mr Nicholas Mak, realestate lecturer at Ngee Ann Polytechnic, said that developers might find it more profitable to develop land from the Government Land Sales programme into low-rise apartments.
Usually about two to three stories high, cluster houses are similar to landed properties, with their size ranging from about 2,500 sq ft (terrace) to as much as over 6,000 sq ft (bungalow).
Cluster houses, however, do not come with land titles but are instead strata-titled – the land in the development is shared by all owners, who do not have the flexibility of tearing down their properties and rebuilding them.
With communal facilities such as gyms, clubhouses, swimming pools and security service, cluster housing is more like condominium developments.
Mr Wong noted that there have already been fewer new cluster homes launched lately, and, of these, almost all were for land bought before the new ruling came into place.
“This is probably going to be the last year where we’ll see more launches of new cluster houses, especially for developments consisting of as many as 20 to 30 units,” he said.
The demand for cluster homes has been relatively strong since the concept first made its appearance in Singapore in 1993, say experts.
One example is Estrivillas, a cluster- housing project in Jalan Lim Tai See, near Sixth Avenue, which comprises 38 semi-detached houses and one detached unit. Two months after its launch last November, 24 of the 39 units had already been sold.
According to real-estate group Knight Frank, cluster houses are popular among larger families, who prefer the bigger built-up space typical of landed homes but want to have condo facilities as well.
Hybrid feature popular among investors
This hybrid feature proves to be popular among investors, too.
Said Mr Wong: “Investors are beginning to show more interest in cluster houses, as they fetch a relatively high rental yield as compared to other types of landed properties.
“A rental yield of 4 to 5 per cent is possible for some of the new cluster bungalows, as opposed to about 3 per cent for some landed properties.”
The fall in supply of new cluster homes, however, is unlikely to push prices up too steeply, with many buyers taking a wait-and-see approach because of the crisis in Europe and its effects on other parts of the world, he said.
With the new regulation, cluster-housing developments now typically consist of bungalows, instead of semi-detached houses or terraces.
This means that each unit would have more space for its own pool or private lift, said Mr Dennis Yong, head of Special Projects at HSR Property Group.
Recently launched clusterhousing projects such as Verdana Villas near Lorong Chuan, 80 Meyer Road, and Shamrock Villas at Namly Place, for example, all come with private pools.
To attract buyers, cluster homes here are banking increasingly on exclusivity and innovative design.
“Besides the usual quality furnishings, developers are now also including special features such as water fixtures to run within the whole unit, to give residents a paddy-field experience,” said Mr Yong.
With these additions, each unit is estimated to be able to fetch 10 to 15 per cent more in price, depending on location and size.
The price for cluster houses is expected to move in tandem with that of other types of premier landed properties in general, which has the potential to climb, say industry players.
“The price-per-square-foot transacted for landed properties is still relatively low compared to condominiums… but in view of land scarcity in Singapore, there is good potential for it to increase to a level to match that of condominiums,” said Mr Wong. “An increase of at least 5 per cent by the end of the year is within reach.”
Source : my paper – 4 Jun 2010
Thursday, June 3, 2010
Office rents in prime financial district up by 25% over next two years: analysts
Rentals for international Grade A office space in Singapore’s financial district may climb at least 25 per cent in the next two years.
Analysts said Grade A office rents have already hit bottom, and will likely pick up from the second half of this year.
Singapore’s Marina Bay Financial Centre is one of prime areas in the city offering a new generation of office buildings.
They are less than 10 years old and are classified as “International Grade A” office space.
Analysts said these newer premises are normally in high demand from companies like financial institutions and law firms, which want to expand and consolidate their offices in one location.
And that is giving support to rentals.
“Because the economic condition is better than expected, as compared to the same time last year, tenants are more confident in expanding, and landlords are becoming more confident holding their rents,” said Donald Han, MD of Cushman & Wakefield.
Cushman and Wakefield expects prime Grade A office rents to rise between 5 and 10 per cent in the second half.
But analysts said what may drop or remain soft are the rents of Grade A or Grade B buildings, or those that are more than 10 years ago.
OCBC Investment Research believes there could still be an oversupply in non-Grade A office property space in Singapore.
Official figures show that some 8.3 million square feet of office space is due for completion between 2010 and 2012. And this may increase available office space by 11 per cent in two years.
Nomura said over the past six months, there has been a surge of pre-commitment deals for international Grade A office space, as companies look to house their operations under one roof.
“We think that office rents will start to pick up quite significantly over the course of 2009 to 2012. We are looking for rental levels to pick up around 28 per cent for international Grade A office space, and about 16 per cent for the normalised Grade A space,” said Tony Darwell, executive director of Nomura Singapore.
Looking ahead, analysts said some companies are already committing as early as one year before their current leases expire.
Source : Channel NewsAsia – 3 Jun 2010
Analysts said Grade A office rents have already hit bottom, and will likely pick up from the second half of this year.
Singapore’s Marina Bay Financial Centre is one of prime areas in the city offering a new generation of office buildings.
They are less than 10 years old and are classified as “International Grade A” office space.
Analysts said these newer premises are normally in high demand from companies like financial institutions and law firms, which want to expand and consolidate their offices in one location.
And that is giving support to rentals.
“Because the economic condition is better than expected, as compared to the same time last year, tenants are more confident in expanding, and landlords are becoming more confident holding their rents,” said Donald Han, MD of Cushman & Wakefield.
Cushman and Wakefield expects prime Grade A office rents to rise between 5 and 10 per cent in the second half.
But analysts said what may drop or remain soft are the rents of Grade A or Grade B buildings, or those that are more than 10 years ago.
OCBC Investment Research believes there could still be an oversupply in non-Grade A office property space in Singapore.
Official figures show that some 8.3 million square feet of office space is due for completion between 2010 and 2012. And this may increase available office space by 11 per cent in two years.
Nomura said over the past six months, there has been a surge of pre-commitment deals for international Grade A office space, as companies look to house their operations under one roof.
“We think that office rents will start to pick up quite significantly over the course of 2009 to 2012. We are looking for rental levels to pick up around 28 per cent for international Grade A office space, and about 16 per cent for the normalised Grade A space,” said Tony Darwell, executive director of Nomura Singapore.
Looking ahead, analysts said some companies are already committing as early as one year before their current leases expire.
Source : Channel NewsAsia – 3 Jun 2010
Tuesday, June 1, 2010
To buy or not to buy?
Prominent developers share their views on where the property market is headed
PRIVATE residential prices in Singapore have been climbing since the second quarter of last year, prompting home seekers and investors who haven’t gotten their feet wet to wonder: ‘Should I still buy now?’
Some of the most prominent developers in Singapore – who are also past winners of the Singapore Business Awards – shared their views on where the property market is headed with The Business Times in April (before the government announced its land sales programme for H2 2010).
Ho Bee Investment chairman and CEO Chua Thian Poh, who took home the Businessman of the Year award for 2006, sees the residential market continuing to do well. Hong Leong Group executive chairman Kwek Leng Beng, who won the same award for 1996, believes Sentosa will be where the action is in the next five years. And CapitaLand president and CEO Liew Mun Leong, who was the Outstanding CEO for 2005, reminds us that location is key when it comes to buying a home.
BT: Many market watchers say that 2010 is the year for high-end private home sales to pick up. Do you agree, and why?
Chua Thian Poh: Prices for mass market homes have already surpassed the previous peak but not those for high-end private homes, which are still about 20 per cent to 30 per cent below the peak. As this recovery is led by the mass market, I believe the recovery is more sustainable and as such, the momentum of the recovery would filter upwards to the high-end segment.
Kwek Leng Beng: High-end private home sales are beginning to pick up definitely, but not as fast as one would expect. There is a strong sentiment in the market with low interest rates for housing loans and high liquidity. The market is now moving very nicely. Signs of economic recovery are real as the first quarter GDP confirms that Singapore is fast recovering from the recession. The definition of high-end is very broad and those exceeding $2,500 per sq ft find slower pick up than those below $2,500 psf. A lot also depends on the districts and locations of this type of property.
Liew Mun Leong: This year, we foresee prices rising by between 10 per cent and 20 per cent for the mid- to high-mid segments of the market. While sales remain brisk, prices for mass market projects are likely to remain steady and affordable.
Market sentiments improved significantly since the third quarter of 2009 as the global financial situation has stabilised and economies worldwide show signs of recovery. The Ministry of Trade and Industry has said that the overall outlook for external economies has improved for the rest of 2010 and that it expects the Singapore economy to grow by 7-9 per cent in 2010.
Late last year, we launched our high-end condominium, Urban Suites; it enjoyed strong sales. From then on, we saw strong buying interest for projects in the high-end segment of the market.
Sales of mass-market private homes remain brisk. Do you see this trend continuing, and why?
Chua: As long as the economy is on the recovery path, demand for mass market homes should continue to be strong. Most people would want to upgrade.
Kwek: I agree that the mass market continues to perform well though it is not as hot as before. You can see genuine investors who realise that spare cash earns very little interest. Prices in this sector are still affordable.
Liew: For 2010, the Singapore real estate market will reap the benefits of the remaking of Singapore with the opening of the two integrated resorts. Well located projects, particularly those at the city fringe or near MRT stations, will do well.
In April, we started phase two sales of The Interlace, a new residential destination at Depot Road/Alexandra Road. It is one of the largest and most ambitious residential developments in Singapore and will be a new postcard landmark for Singapore. The site has a good location at the Southern Ridges of Singapore and is seeing strong interest from homebuyers.
Liquidity, low interest rates and lack of investment products or opportunities will lead to further interest in property investment.
The government will be releasing more residential sites for sale. Do you think this will bring land prices down, and to what extent?
Chua: This is a fundamental economic principle. With more land supply, prices should moderate to a more reasonable level.
Kwek: The release of more residential sites is a welcome move for developers as many are looking to replenish their land banks. However, land prices have been increasing with each tender because developers believe the market will continue to trend up with anticipation of better economic numbers. Offering more sites will not bring prices down immediately but the tender prices going forward will not be so fierce.
Most important is to bear in mind that there is a lag time between actual supply of land and the completion of the condominiums. The actual demand in terms of occupancy can be ascertained only on completion of the projects. Before completion, it is only a projection which may not be accurate.
Liew: We welcome the release of more residential sites. This will give developers a chance to replenish their land banks and cater to a broad spectrum of homebuyers across different market segments and locations.
What opportunities do you see in Singapore’s property market in the next five years?
Chua: Owning a private home has always been the aspiration for most Singaporeans. With the economy doing well, and coupled with the intention of the government to increase the population, we should see the residential market continuing its good run.
Kwek: As Singapore’s economy recovers from the economic downturn, I am optimistic about the property market. The integrated resorts (IRs) are basically aiming at visitors of a different kind and when their operations stabilise within the next two years, we should see more foreigners buying condominiums in Singapore.
Liew: Looking ahead, Singapore’s economic prospects are positive, coupled with rising business and consumer confidence. MTI expects the Singapore economy to grow by 7-9 per cent in 2010. We expect the renewed momentum of the Singapore economy to drive growth in the real estate market, as the two are closely interlinked.
In particular, the opening of the two integrated resorts in 2010 is widely anticipated to benefit the Singapore residential market, with prime projects attracting strong interest from both local and foreign buyers.
How is your company positioning itself to exploit these opportunities?
Chua: We will be selective in sourcing for land that has good attributes and amenities to build homes that are demanded by the general public.
Kwek: We continue to believe in Singapore’s market and will continue to offer customers good value and quality projects at realistic prices.
I see within five years, prices of property units in Sentosa going up a lot more than those on the main island as there could only be 2,500 units in Sentosa and there is no more land for tender or for en bloc sale there. Supply is limited in Sentosa but demand will continue to grow.
Liew: For us, we have a strong brand position as a leading developer in Singapore with an established track record of building premier homes. We have consistently delivered quality projects that are beautifully designed and well-located, and this will keep us in good stead in the coming years.
We are encouraged by the renewed strong buying interest for our projects. We have a number of projects in the pipeline that will be launch-ready over the next 12 months, including the development on Farrer Road, Urban Resort Condominium and The Nassim.
We are comfortable with our healthy pipeline of over 2,600 residential units. Even with this healthy pipeline, we will be interested in any well-located and attractively priced site available.
Source: Business Times, 1 Jun 2010
PRIVATE residential prices in Singapore have been climbing since the second quarter of last year, prompting home seekers and investors who haven’t gotten their feet wet to wonder: ‘Should I still buy now?’
Some of the most prominent developers in Singapore – who are also past winners of the Singapore Business Awards – shared their views on where the property market is headed with The Business Times in April (before the government announced its land sales programme for H2 2010).
Ho Bee Investment chairman and CEO Chua Thian Poh, who took home the Businessman of the Year award for 2006, sees the residential market continuing to do well. Hong Leong Group executive chairman Kwek Leng Beng, who won the same award for 1996, believes Sentosa will be where the action is in the next five years. And CapitaLand president and CEO Liew Mun Leong, who was the Outstanding CEO for 2005, reminds us that location is key when it comes to buying a home.
BT: Many market watchers say that 2010 is the year for high-end private home sales to pick up. Do you agree, and why?
Chua Thian Poh: Prices for mass market homes have already surpassed the previous peak but not those for high-end private homes, which are still about 20 per cent to 30 per cent below the peak. As this recovery is led by the mass market, I believe the recovery is more sustainable and as such, the momentum of the recovery would filter upwards to the high-end segment.
Kwek Leng Beng: High-end private home sales are beginning to pick up definitely, but not as fast as one would expect. There is a strong sentiment in the market with low interest rates for housing loans and high liquidity. The market is now moving very nicely. Signs of economic recovery are real as the first quarter GDP confirms that Singapore is fast recovering from the recession. The definition of high-end is very broad and those exceeding $2,500 per sq ft find slower pick up than those below $2,500 psf. A lot also depends on the districts and locations of this type of property.
Liew Mun Leong: This year, we foresee prices rising by between 10 per cent and 20 per cent for the mid- to high-mid segments of the market. While sales remain brisk, prices for mass market projects are likely to remain steady and affordable.
Market sentiments improved significantly since the third quarter of 2009 as the global financial situation has stabilised and economies worldwide show signs of recovery. The Ministry of Trade and Industry has said that the overall outlook for external economies has improved for the rest of 2010 and that it expects the Singapore economy to grow by 7-9 per cent in 2010.
Late last year, we launched our high-end condominium, Urban Suites; it enjoyed strong sales. From then on, we saw strong buying interest for projects in the high-end segment of the market.
Sales of mass-market private homes remain brisk. Do you see this trend continuing, and why?
Chua: As long as the economy is on the recovery path, demand for mass market homes should continue to be strong. Most people would want to upgrade.
Kwek: I agree that the mass market continues to perform well though it is not as hot as before. You can see genuine investors who realise that spare cash earns very little interest. Prices in this sector are still affordable.
Liew: For 2010, the Singapore real estate market will reap the benefits of the remaking of Singapore with the opening of the two integrated resorts. Well located projects, particularly those at the city fringe or near MRT stations, will do well.
In April, we started phase two sales of The Interlace, a new residential destination at Depot Road/Alexandra Road. It is one of the largest and most ambitious residential developments in Singapore and will be a new postcard landmark for Singapore. The site has a good location at the Southern Ridges of Singapore and is seeing strong interest from homebuyers.
Liquidity, low interest rates and lack of investment products or opportunities will lead to further interest in property investment.
The government will be releasing more residential sites for sale. Do you think this will bring land prices down, and to what extent?
Chua: This is a fundamental economic principle. With more land supply, prices should moderate to a more reasonable level.
Kwek: The release of more residential sites is a welcome move for developers as many are looking to replenish their land banks. However, land prices have been increasing with each tender because developers believe the market will continue to trend up with anticipation of better economic numbers. Offering more sites will not bring prices down immediately but the tender prices going forward will not be so fierce.
Most important is to bear in mind that there is a lag time between actual supply of land and the completion of the condominiums. The actual demand in terms of occupancy can be ascertained only on completion of the projects. Before completion, it is only a projection which may not be accurate.
Liew: We welcome the release of more residential sites. This will give developers a chance to replenish their land banks and cater to a broad spectrum of homebuyers across different market segments and locations.
What opportunities do you see in Singapore’s property market in the next five years?
Chua: Owning a private home has always been the aspiration for most Singaporeans. With the economy doing well, and coupled with the intention of the government to increase the population, we should see the residential market continuing its good run.
Kwek: As Singapore’s economy recovers from the economic downturn, I am optimistic about the property market. The integrated resorts (IRs) are basically aiming at visitors of a different kind and when their operations stabilise within the next two years, we should see more foreigners buying condominiums in Singapore.
Liew: Looking ahead, Singapore’s economic prospects are positive, coupled with rising business and consumer confidence. MTI expects the Singapore economy to grow by 7-9 per cent in 2010. We expect the renewed momentum of the Singapore economy to drive growth in the real estate market, as the two are closely interlinked.
In particular, the opening of the two integrated resorts in 2010 is widely anticipated to benefit the Singapore residential market, with prime projects attracting strong interest from both local and foreign buyers.
How is your company positioning itself to exploit these opportunities?
Chua: We will be selective in sourcing for land that has good attributes and amenities to build homes that are demanded by the general public.
Kwek: We continue to believe in Singapore’s market and will continue to offer customers good value and quality projects at realistic prices.
I see within five years, prices of property units in Sentosa going up a lot more than those on the main island as there could only be 2,500 units in Sentosa and there is no more land for tender or for en bloc sale there. Supply is limited in Sentosa but demand will continue to grow.
Liew: For us, we have a strong brand position as a leading developer in Singapore with an established track record of building premier homes. We have consistently delivered quality projects that are beautifully designed and well-located, and this will keep us in good stead in the coming years.
We are encouraged by the renewed strong buying interest for our projects. We have a number of projects in the pipeline that will be launch-ready over the next 12 months, including the development on Farrer Road, Urban Resort Condominium and The Nassim.
We are comfortable with our healthy pipeline of over 2,600 residential units. Even with this healthy pipeline, we will be interested in any well-located and attractively priced site available.
Source: Business Times, 1 Jun 2010
The Minton sells 180 units over weekend
Knight Frank managing director (residential services) Peter Ow, also reckoned the 99-year leasehold project could have sold about 300 units in its initial weekend had it been put on the market a couple of months ago. He said: 'The government land sales announcement has definitely had an impact. When we talk to (potential) buyers, they're now taking a bit longer to decide. They're worried that with the new supply coming up, prices might fall.'
As has been the case with other launches, the most popular units at The Minton's holiday-extended weekend preview were one and two-bedroom units.
Kheng Leong's general manager (property) Luk Kwok Wing said prices of one bedders sold (as of 6 pm yesterday) ranged from about $480,000 to $590,000 per unit. Two bedders cost $750,000 to $870,000. The project also has three and four bedders, penthouses as well as dual-key units.
Buyers were predominantly young Singaporeans, including families. Generally, buyers have HDB addresses, including Hougang, Serangoon and Tampines (all in the north-east part of Singapore).
Mr Luk said buyers were drawn by The Minton's lush landscaping and generous facilities afforded by the large site area of close to half a million square feet.
The Minton will have a 50-metre lap pool, a 20-metre heated pool, a treehouse playground, a tennis court and an air-conditioned badminton hall that doubles as a function room. It will also boast a big library, a sky-terrace and spas/gyms. The grand clubhouse will accommodate activities like yoga, karaoke and billiards/table soccer, apart from an indoor children's playground.
Kheng Leong, a privately owned property group controlled by the family of banker Wee Cho Yaw, is developing The Minton on the former Minton Rise site that it bought in 2007 through a collective sale.
Source: Business Times, 31 May 2010
As has been the case with other launches, the most popular units at The Minton's holiday-extended weekend preview were one and two-bedroom units.
Kheng Leong's general manager (property) Luk Kwok Wing said prices of one bedders sold (as of 6 pm yesterday) ranged from about $480,000 to $590,000 per unit. Two bedders cost $750,000 to $870,000. The project also has three and four bedders, penthouses as well as dual-key units.
Buyers were predominantly young Singaporeans, including families. Generally, buyers have HDB addresses, including Hougang, Serangoon and Tampines (all in the north-east part of Singapore).
Mr Luk said buyers were drawn by The Minton's lush landscaping and generous facilities afforded by the large site area of close to half a million square feet.
The Minton will have a 50-metre lap pool, a 20-metre heated pool, a treehouse playground, a tennis court and an air-conditioned badminton hall that doubles as a function room. It will also boast a big library, a sky-terrace and spas/gyms. The grand clubhouse will accommodate activities like yoga, karaoke and billiards/table soccer, apart from an indoor children's playground.
Kheng Leong, a privately owned property group controlled by the family of banker Wee Cho Yaw, is developing The Minton on the former Minton Rise site that it bought in 2007 through a collective sale.
Source: Business Times, 31 May 2010
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