Singapore Property Watch

HDB RESALE PRICES MODERATE IN Q4

2012-01-04T10:44:00.001-08:00

The tide could be turning in favour of buyers, with home prices in Singapore showing signs of moderating.

Prices of resale Housing and Development Board (HDB) flats grew 1.7 per cent in the last quarter of last year, compared to the 3.8 per cent growth seen in the third quarter.

This brings the HDB Resale Price Index - which provides information on the general price movements in the public residential market - to 190.4.

The figures confirmed what the market had been expecting - a moderation in home prices following a year of policy tweaks by the Government to cool the red-hot property market, while home buyers are becoming more cautious in light of the uncertain economic outlook.

Market watchers also pointed out that cash-over-valuation - the cash premium paid upfront for resale flats - is showing signs of softening, dropping between S$5,000 and S$8,000 in the last quarter of last year, and could bottom out at around S$20,000 to S$30,000.

Mr Mohd Ismail, CEO of PropNex, said buyers could have more bargaining power in areas where prices are very high, where houses are on low floors, or affected by ethnic ratios.

"And when such houses are put on the market, you don't even get a buyer at zero cash-over-valuation. Therefore, if you say are there possibilities of picking houses today without paying any cash ... yes there are. But they may not have the best of the panoramic view and so on," he said.

Some expect HDB resale prices to correct by up to 3 per cent this year, with the ramped-up supply of Build-To-Order (BTO) flats expected to continue to draw first-time home buyers away from the resale market.

Said Mr Eugene Lim, executive officer of ERA Realty: "The success rate is higher now. It is a lot better. In fact, any first-timer who applies for a flat is almost certain of getting one. So, this improved success ratio ... translates into lower demand in the resale market."
Last year, the HDB offered about 28,000 flats - 25,000 under the BTO system and about 3,000 units under the Sale of Balance Flats exercise.

This year, buyers can look forward to 25,000 BTO flats coming on the market.

The HDB said "these projects will have a good geographical spread in the various towns".

It will offer nearly 3,900 BTO flats in Choa Chu Kang, Punggol, Sengkang and Tampines this month.

Source: Today - 4 January 2012

PRIVATE PROPERTY PRICES CONTINUE TO MODERATE

2012-01-04T10:41:00.001-08:00

Despite the property market still not feeling the full impact of the latest cooling measure, flash estimates showed prices of private homes were almost flat - rising by just 0.2 per cent - between October and December last year.

In a press release yesterday, the Urban Redevelopment Authority noted: "The rate of increase in private residential property prices has continued to moderate for the ninth consecutive quarter". The 0.2-per-cent increase in the fourth quarter was in contrast to a 1.3-per-cent rise in the previous quarter.

With buyers adopting a wait-and-see attitude, property analysts Today spoke to pointed out that the estimates do not reflect the impact of the recent cooling measure, which has been described as the harshest yet.

Which is why some of them felt that prices of private homes could fall - for the first time since 2009 - in the coming months.

An increased supply of private homes, coupled with the impact of the cooling measure, could see private home prices fall by about 3 per cent in the year ahead, said Propnex CEO Mohamed Ismail.

However, Orange Tee director of research and consultancy Tan Kok Keong told Today that he expects prices to fall by between 1 and 2 per cent at most between January and March.

On Dec 7, the Government announced additional buyer's stamp duties (ABSD) which will be imposed in addition to the existing tax. Foreigners and corporations will be hardest hit, with a 10-per-cent ABSD imposed on any private homes they buy.

While the indications are that private home prices are stabilising, analysts noted that the fourth quarter is the traditional lull period for the property market.

According to the URA, its flash estimates are compiled "based on transaction prices given in caveats lodged during the first 10 weeks of the quarter supplemented by information on the number of new units sold by developers".

The statistics will be updated next month, when more data on the caveats lodged and the take-up of new projects are captured.

The URA said: "Past data has shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. The public is advised to interpret the flash estimates with caution."

SLP International research head Nicholas Mak said the revised figure would likely vary by between 0.1 and 0.2 per cent.
He said: "But if the final figures are low, it's hard to tell if it is a direct impact from the ABSD. There are other factors such as the euro zone crisis and the Singapore economy."

He added: "The ABSD alone will not cause prices to drop, as it does not eliminate demand. Singaporeans and permanent residents, who are not so affected by the new measure, will sustain demand and hence prices."

Concurring, Chesterton Suntec International research and consultancy head Colin Tan said buyers should not hold their breath for prices to drop.

He said: "So long as we have slow growth or at least positive growth, so long as employment holds up, I think we do not expect prices to correct anytime soon."

Source: Today - 4 January 2012

Demand for mass market homes 'to be stable'

2011-12-21T02:12:00.001-08:00

BUYERS may be reeling from the tough property measures announced earlier this month but analysts do not expect this to last long.

They say in a report that demand for mass market homes will be unaffected although prices could fall 5per cent to 10 per cent.
The report stressed that the measures are largely targeted at foreign buyers, a group that is not prominent in the mass market property segment.

Data from the Urban Redevelopment Authority shows that locals dominate the private home purchases in the suburbs where mass market homes are located.

Singaporeans accounted for 69.9 per cent of caveats lodged for homes outside the central region, while foreigners took up a 14.4 per cent share.

Foreigners were more active in the city centre and city fringe districts, accounting for 28.7 per cent and 20.2 per cent of the caveats lodged in those areas.

The report also suggested that the various property measures introduced since September 2009 have failed to dampen new home sales. It added that the market has been supported by mass market and upgrader-type homes.
The measures were introduced to counter the excessive inflows of foreign liquidity.

The new measures are unlikely to be permanent due to the nature of Singapore's open economy. Still, foreigners who had been thinking of buying a home here are probably having second thoughts in the light of the added stamp duty.

Under the new measures, foreign buyers will have to pay an extra 10 per cent on top of the existing buyer's stamp duty of about 3 per cent.

The impact would be felt the most in prime and luxury residential properties with prices expected to fall between 10per cent and 15 per cent next year. Mass market homes could fall by 5 to 10 per cent. Separately, landed home prices will likely see a smaller correction of less than 5 per cent, since foreigners are generally not allowed to buy and supply is limited.

Some developers of properties in the prime districts are already trying to woo buyers back to the market by offering discounts.
Agents marketing the Verv at River Valley said the developer is shaving 10 per cent off the prices of its remaining apartments. A 1,010 sq ft apartment now costs $2.25 million.

At Loft at Nathan, another River Valley project, a 1,980 sq ft penthouse that would previously cost about $1.8 million now costs about $1.7 million.

Both projects are not new launches. The Straits Times understands that the two offers were made in response to the recent measures.

Developers are definitely watching the market now. They will probably re-assess the sector again towards the end of January, and perhaps we might see more offers then.

Source: The Straits Times – 19 December 2011

MUCH ADO ABOUT NOTHING

2011-12-16T08:38:00.001-08:00

The dive in property stock prices following the Dec 7 announcement of additional cooling measures is an admission by the market that it believes that the bulk of home buying in recent quarters - if not years - were investment purchases and not driven by owner-occupiers or upgraders as many had claimed for so long.
How else can we interpret the strong reaction and thinly-disguised anger and bitterness in some of the comments in news reports over the recent days? I was actually more taken aback by these comments than the actual measures themselves. However, the party which should be the most aggrieved - the developers - appears to have taken the latest measures far better than others.

The day after the announcement of the additional buyers' stamp duties of between 3 and 10 per cent on certain transactions, the developers came out in droves - 22 in all - to bid for a landed housing site in Chestnut Ave in Upper Bukit Timah. There is no doubt that the buyers of landed homes are less affected by the cooling measures, but the number of bids and the prices were above expectations. Only one developer was successful, which means 21 others had spare cash to spend. Is this a sign of vulnerability?

If indeed the majority of home purchases this year had been underpinned by strong demand fundamentals - shrinking household sizes and rapid population growth that had resulted in severe undersupply as suggested by some analysts four to five months ago - why is there a panic reaction now?

We have been overwhelmed by numerous negative comments, with almost all analysts predicting at least a 10-per-cent drop in home prices in the next year, with some forecasting a plunge as much as 30 per cent. This translates to an average loss of 2.5 per cent per month or 7.5 per cent per quarter.

Such a steep drop in such a short period - if it occurs - indicates a severe loss of market confidence. Maybe we are thinking about the last decline during the global credit crisis that followed the collapse of Lehman Brothers. However, we should not forget that Singapore experienced its deepest post-independence recession then. Are we expecting a recession of the same magnitude next year? The latest economists' forecast is that the Singapore economy will grow 3 per cent next year.

If you had read the report in question, the 30-per-cent drop was predicated on slower population growth and unprecedented home supply, not on slower economic growth or a recession. Some analysts have also drawn comparisons to the 1996 price decline which was precipitated by the introduction of anti-speculation measures in May that year. It is not a fair comparison as the problem then was rampant speculation and it was nipped in the bud. There was no low-interest rate environment.

From the statements accompanying the announcement of the latest measures, it is clear that the authorities see potential destabilising investment flows as the problem. Clearly, they are saying that it is a money issue first before it is a real estate problem. However, most of our market analyses thus far have largely ignored this aspect or dwelt on it only in passing.

Many continue to treat it as a real estate problem, ignore the economic aspect of it and then still expect buyers to be rational in their buying. It will be by pure chance if their calls turn out to be right. I am not saying these analysts are wrong but if you truly understand the complexity of the real problem, it is premature to call a drop in prices at this point in time.

I would also not be unduly worried by some analysts' comments that the heavier stamp duties are making a dent in Singapore's standing as a major property investment destination while giving rivals such as Hong Kong a boost. These comments do not give due recognition to what many respected economists are warning about - the destabilising investment flows into our part of the world.

To continue with a non-interventionist approach in the face of such hot money would be foolhardy - it would be courting disaster. In fact, I would say the current measures have enhanced Singapore's standing as a safe haven and an extremely attractive property investment destination.

Colin Tan is head of research and consultancy at Chesterton Suntec International.
Source: Today - 16 December 2011

COOLING MEASURES BITE MARKET SEGMENTS DIFFERENTLY16

2011-12-16T07:16:00.001-08:00

The year is ending on a sombre note for the private residential market, with severe cooling measures announced earlier this month imposing an additional buyers' stamp duty (ABSD) of 10 per cent on purchases by foreigners.

While prospective buyers, including locals who may be affected by the 3 per cent ABSD, are expected to remain on the sidelines in the next few months, not all private homes will suffer the same impact from the measures.

Landed homes seen resilient

Landed homes will likely be the most unscathed, while speculative products, such as shoebox apartments, will likely experience weakened buying interest. The difference is underpinned by product heterogeneity, foreigners' participation and also the financing capabilities of the buyers' for each product type.
Landed homes are expected to enjoy resilient buying interest next year, as the buyers are predominantly locals who are the least affected by the cooling measures while the supply of such homes is limited. However, non-landed residential properties in the prime districts, which are fairly exclusive, may be more affected as foreigners account for a large share of buyers.

Shoeboxes to be worst hit

Shoebox apartments, particularly those smaller than 500 sq ft each, have gained popularity from 2009 but the success is set to come to a halt next year. There is less motivation to consider buying smaller-sized apartments, particularly when average prices moderate. The typical buyer who finds the shoebox unit acceptable during the price run-up from 2009 to this year may no longer prefer such a home or investment if there are better and larger offerings.

Even before the latest cooling measures were imposed, various developments with shoebox units had been scheduled for completion next year, meaning there will be increased competition between sellers. Although owners will generally hold shoebox units, especially those who had purchased this year and want to avoid paying the hefty sellers' stamp duty, there are some who bought in 2009 and last year who have enjoyed capital appreciation and are considering selling.
Moreover, if a Singaporean can at most hold two private residential properties to avoid paying ABSD for his new purchase, there is less incentive to purchase a smaller-sized apartment. The buyer will likely wish to exercise his limited option on buying a larger or standard-sized unit. There may also be some shoebox home owners who hope to relinquish their units in order to go for more attractive larger sized apartments if prices ease next year.

Suburban condo interest not excessively weakened

The suburban condominium market, with fairly homogenous offerings, will likely see moderated buying interest due to economic challenges. However, as the buyers are mostly HDB upgraders or those owning fewer than two private properties, interest is unlikely to be excessively weakened by the ABSD.
Although the economic slowdown will severely affect job stability, there are still home seekers working in the "evergreen" or fairly recession-proof industries, such as oil and gas, education or statutory boards. They may have continued confidence in financing their homes and appropriately-priced suburban condominiums can appeal to this profile of buyers.

This year has been intense for the private residential market as prices jumped notwithstanding the cooling measures implemented in January that included sellers' stamp duties of as high as 16 per cent. While there is less justification for this month's cooling measures given that economic conditions had moderated late in the year, the latest measures are likely to achieve the best effect in reining optimism in market sentiment.

The dichotomy in the market means that owners of properties which are expected to see weaker buying interest should strive to hold on and emerge from the uncertainty. Property owners can also take a longer-term view by consenting to competitive rental rates, as ultimately there may be opportunities to renew leases at higher rents or even resell at better prices, should the economic and intrinsic property market fundamentals eventually improve.

Source: Today-December 2011
Ong Kah Seng is a director at R'ST Research, an independent property market research firm in Singapore.

HDB resale prices to hold up, say experts

2011-12-11T21:26:00.001-08:00

PRICES of Housing Board (HDB) resale flats are expected to hold up as supply is tight but sales volumes could soften as buyers assess their options in the light of new cooling measures.

Experts say a stand-off between buyers and sellers is likely over the coming weeks as the stamp duty rules sink in. They believe most buyers will take a wait-and-see attitude, with some holding off purchasing a resale flat in anticipation of private home prices falling.

HDB resale prices rose 3.8 per cent to a record in the three months to September and are now 35 per cent higher than in the fourth quarter of 2009 - the last time prices fell. Resale prices then dipped just 0.8 per cent before rebounding and heading north again.

But while HDB resale prices are correlated to how values move in the private mass market, they are likely to be more insulated from the stamp duty measures as many buyers, unlike in the private market, are first-timers and owner-occupiers rather than investors or foreigners.

Analysts do not expect the public market to be overly affected unless private home prices fall 'significantly'.
But even if private home values drop by 15 to 20 per cent next year, HDB resale prices might dip by a more moderate 5 to 10 per cent instead.

There is enough demand for such homes... Even though HDB housing supply has been ramped up, these flats have not entered the market yet as they are either still being built or serving out their minimum occupation period.

Mass-market home prices to ease by between 5 and 10 per cent next year, which could lead to HDB resale prices dipping 3 to 5 per cent in tandem. Even during the global financial crisis, the HDB market was still manageable with sales activity remaining healthy.

While HDB resale volumes might come off slightly, prices are expected to remain stable or dip slightly... But I would expect the HDB resale price index and cash-over-valuations paid to start coming down by the first quarter of next year.

Any dip in prices is likely to occur only in the second or third quarter of next year.

If sales of new private homes slow to below 1,000 units a month for a period, developers might have to reduce prices and this might have a knock-on effect on the HDB resale market.

Experts say developers will also have to rethink pricing for executive condominiums (ECs) if mass-market home prices fall sharply.

There has to be a comfortable price gap between ECs - a public-private housing hybrid - and mass-market private homes.

If mass-market home prices fall, EC prices will have to drop accordingly. If EC buyers think that mass-market home prices are going to decline, they may wait for EC prices to follow suit. Or if some of them think that they may be able to afford private homes when prices correct, they may opt to buy private.

ECs are usually about 20 per cent cheaper than private mass-market condos, experts note.

The new measures are the toughest on foreign buyers and corporate entities. They will now be hit with an additional buyer's stamp duty of 10 per cent. This is on top of the existing stamp duty of about 3 per cent.
Permanent residents buying their second and subsequent homes and Singaporeans buying their third and subsequent homes will have to fork out an additional buyer's stamp duty of 3 per cent.

The proportion of foreigners in the mass-market segment has been increasing over the past few years.
Foreigners accounted for 15 per cent of all suburban home purchases in the three months to September. This is up from 5 per cent in 2009 and 7 per cent last year.

Source: The Straits Times – 10 December 2011

Developers dangling discounts for buyers

2011-12-11T20:47:00.001-08:00

DEVELOPERS are already offering packages on homes to offset the stiff new stamp duty measures that came into effect only two days ago.

Far East Organization is offering a 5 per cent relief package to affected buyers at all of its already-launched projects.

It will reimburse buyers 3 per cent of the unit price to offset the new stamp duty. Buyers will also get a furniture voucher worth 2per cent of the flat price.

They will get the voucher only after putting down a 30 per cent deposit if the project has not been completed.

The package applies across the board to Singaporeans, permanent residents (PRs) and foreigners, so foreigners will still be worse off after the new measures.

Far East's already-launched projects have another discount that differs between properties.
Prices of units at its Seastrand project in Pasir Ris Drive 3 are discounted by up to 14per cent, making the cheapest unit an estimated $937 psf. But with only three- and four-bedroom units left and the smallest three-bedder at 1,109 sq ft, the minimum purchase now would cost about $1.04 million before stamp duty.
With an additional 10per cent buyer's stamp duty for foreigners of $104,000 now, Far East's relief package would help a buyer save almost $52,000 - about $30,000 initially and the rest subsequently.
However, a Far East agent said that unofficially the discount rate could go up to 16 per cent of the original unit price. This means buyers can negotiate a 21 per cent discount off the original total price by combining the uniform 5 per cent cut with the discount that applies to the Seastrand.

This would more than offset the extra stamp duty incurred, although it is believed that the discount applies on a case-by-case basis.

Far East has not announced a deadline for its relief package but the agent said it could last until the end of this month.

The Seastrand's temporary occupation permit (TOP) is expected on Dec31, 2016.
Wing Tai's luxury Helios Residences at Cairnhill Circle is also offering a relief package, said a company sales agent.

Buyers will get a cash rebate of up to 2per cent of the total price upon payment. That goes up to 2.5 per cent at the start of the second year of occupation and 3per cent at the start of the third year.
They will not be allowed to sell their unit for three years following purchase.

The smaller units can cost around $4.2million, said the agent, adding that the relief package is meant to help 'lessen the burden' on customers.

The agent said the deal is only applicable to Helios Residences, as its target market is foreigners, who are more likely to be affected by the stamp duty imposition, but did not specify a deadline. Helios Residences obtained its TOP on Jan 28.

Sales agents at Keppel Land, UOL and CapitaLand did not know of any discount packages being offered.

Agencies said their firms were not offering discount packages, but some said they might be able to negotiate an additional 1 per cent cash rebate.

Source: The Straits Times – 10 December 2011

REACTIONS TO NEW PROPERTY MEASURES

2011-12-11T07:05:00.001-08:00

Sentosa Cove property may be impacted: analysts
By UMA SHANKARI

(SINGAPORE) The residential market in Sentosa Cove - where foreigners and corporations accounted for 46 per cent of home purchases in the first 11 months of 2011 - could be hit especially hard by the latest round of cooling measures, say analysts.

With properties there going usually in excess of $15 million, the stamp duty increases for those segments would now work out to close to $2 million - which buyers might be unwilling to swallow, said International Property Advisor chief executive Ku Swee Yong.

According to data compiled by SLP International, the proportion of homes in Sentosa Cove bought by foreigners rose to 41 per cent in the period from January to November 2011. And corporations picked up another 5 per cent of all homes sold, according to the firm's analysis of caveat data from URA Realis.

This is a jump when compared to foreigners' and corporations' share of 33 per cent from January 2009 to December 2010.

Sentosa Cove is the only part of Singapore where foreigners don't need to be permanent residents (PRs) to buy landed homes, so the residential enclave has typically been popular with that segment of buyers.

Their share of purchases grew even as overall transaction volume dipped. And now, volumes could fall even further as foreigners hold off on buying in the wake of new measures - which include an additional buyer's stamp duty of 10 per cent for foreigners and corporations, on top of the existing buyer's stamp duty of up to 3 per cent.

'I think the sales in Sentosa Cove were already slowing recently, in line with the rest of the market,' said DTZ's chief operating officer for South-east Asia, Ong Choon Fah. 'And now, things will be even slower for a while.'

Analysts estimate that about 60 per cent of the units in the high-end residential enclave are owned by foreigners.

And while a fair number of these foreigners are owner occupiers, there are also a fair number of investors who will now face a shrinking pool of buyers when they try to re-sell their properties.

Analysts noted that the 'intent' of the latest round of measures seems to be to limit foreign purchases.

'While the impact from higher entry cost is broad-based, we see more heightened risk in the prime segment (such as in Sentosa) where foreigners and PRs account for some 44 per cent of all sales (up from 20 per cent in Q1 2009),' said Goldman Sachs analysts Paul Lian and June Zhu in a note yesterday.

But DTZ's Mrs Ong noted that the limited supply of homes in Sentosa Cove - just around 2,400 - works in favour of the micro-market there.

And developers and investors who are looking to sell their units on the island generally have good holding power, she added. 'Sellers are likely to adopt a wait and see attitude, rather than offload their properties through fire sales.'

Source: Business Times - 9 December 2011

A different take on latest property curbs

2011-12-11T06:38:00.001-08:00

Let's have more carrots for Singaporeans instead of wielding the stick on foreign buyers.
By Ku Swee Yong

THE latest round of measures to promote what the government claims would be 'a stable and sustainable property market' begs many questions. Let's begin with the basic parameters. First of all, the additional buyer's stamp duty (ABSD) is applicable only to the private residential segment, not to other segments such as office, retail, industrial, HDB shops, HDB flats, Executive Condominiums (ECs), etc. So perhaps a more appropriate claim should be 'a stable and sustainable private real estate sector'.

Next, the key objective listed was 'to promote a sustainable residential property market where prices move in line with economic fundamentals'.

Prices of private residential properties have continued to rise, albeit more slowly in the last two quarters. According to the Urban Redevelopment Authority, prices are now 13 per cent above the peak in Q2 1996 and 16 per cent above the more recent peak in Q2 2008.

In the many overseas seminars I have spoken at, I am always happy to reassure investors that as a broad guiding principle, foreigners and Singaporeans are not treated any differently when investing in Singapore. However, now we have imposed a 10 per cent ABSD on foreigners who purchase residential units. If we apply these stamp duties on the residential real estate asset class, does it imply that other asset types, such as commercial properties, stocks, capital equipment, cars, COEs, etc are also likely future candidates for additional stamp duties if the public perception is that a particular asset is beyond Singaporeans' reach?

Or, if the stock market becomes too hot and the Straits Times Index surpasses the October 2007 peak of 3,850 points by 20 per cent, reaching, say, 4,600 points, will the authorities also implement higher stamp duties on foreigners' stock investments, 'owing to the small market size of the SGX' to make the stocks more affordable for Singaporeans?

What about stamp duty on foreigners' purchase of COEs because the COE pool is limited? What is the significance of measuring our private residential prices against the previous peaks? And what has this got to do with foreigners today, given that in 2006-2008, prime properties such as St Regis Residences, Ardmore II, Sentosa Cove, Orchard Residences and were snapped up mainly by foreigners.

Most foreigners invested in Singapore's long-term future as part of their portfolio diversification and wealth protection for their families. Why were such measures to curb foreign ownership (individuals, families or institutional funds) of residential properties not implemented at that time when the luxury residential sector was booming hot?

I have expressed in several articles that the climb in the private residential index is the result of strong sales at new record prices in mass-market launches. This climb is mainly contributed by Singaporeans and Singapore permanent residents (PRs). The proportion of foreigners purchasing in the mass market is low, at 10-20 per cent as the mass-market residential segment is not considered 'investment grade'. I have also provided data to show that foreigners have not been significant contributors to the increase in mass-market home prices.

The fundamental cause of the climb in mass-market prices has been the strength of HDB resale prices, where the rate of growth is higher than that of the private residential index. Owners of HDB flats feel confident about the rising values of their flats. And since money in savings accounts devalues due to the prolonged 5 per cent inflation, and mortgage costs are low, they look for safe, secure investments. This leads them to purchase private residential properties for rental income and as an inflation hedge.

Unfortunately, the new measures do not address the rising HDB resale prices and so the effect on mass-market private apartment prices may be limited. Likewise, newly launched ECs and ECs that are not yet privatised will not be hit hard in terms of volume and price.

I believe that landed properties may suffer a direct, but limited, impact. A handful of Singaporean investors who buy many landed properties for the long term will be affected. They may not mind paying the extra 3 per cent ABSD if they can find their ideal landed property investments. That said, a Good Class Bungalow (GCB) collector wishing to invest in a $30 million house will be paying around $1.8 million (6 per cent) stamp duty if this were his third or more residential property. If he were to purchase the GCB under a trust, for wealth transfer purposes, a $3 million stamp duty would also apply.

This round of measures will positively benefit the strata office, retail and industrial segments of the property market. Many mass-market investors will surely flock to these products, as well as more exotic overseas properties. We should expect to see more 150-sq-ft retail units or tiny industrial units for sale. Time will tell whether such investments will turn out to be stable and sustainable for the property market, or not.

The biggest impact will be felt by developers of luxury residences who are more dependent on foreign investors. Several developers have overseas sales offices to promote their Singapore residential products. However, foreign investors wishing to buy a $10 million Orchard Road property will now think many times about paying almost $1.3 million (13 per cent) in buyer stamp duties. This is not a measure that increases the amount of equity foreign investors need to put into their properties; it is a tax which once paid cannot be recovered. Our residential market has just got uglier in terms of investment returns.

The other stakeholder group directly hit by the measures are the real estate agents, many of whom are active in promoting Singapore residential properties in Indonesia, China, Malaysia and Hong Kong. Following closely behind would be the relationship managers in private banks active in prospecting foreign high-net-worth individuals (HNWIs) and getting them to park their investments under Singapore trusts. Then we have the priority bankers, the mortgage bankers, the contractors and interior designers who serve the high end market. Many rice bowls, if not already shaken by the global jitters, will surely be shaken now.

My main worry remains: What is the signal perceived by foreigners?

There are genuine foreign buyers who prefer to purchase the roofs over their heads. For example, A*Star and our medical fraternity have gone overseas to attract foreign doctors and medical researchers to work in Singapore. They may relocate here for our high quality of medical practice but these professionals also need homes for their families. Not every foreigner likes to pay rent. Many prefer to build up equity through purchasing their own homes and taking bank loans.

There is another group under the MAS Financial Investor Scheme (FIS) worth mentioning. HNW families applying for the FIS invest $10 million into Singapore are allowed to apply $2 million towards the purchase of a residential property for their own use. Probably the most expensive PR scheme in the world, the FIS has a long queue of HNWIs, some having waited over a year for approval. The latest measures mean that if they choose to apply $2 million of their $10 million investment into a residential unit, they need to pay ABSD in excess of $260,000 depending on the value of the property purchased.

Overall, I think these measures will effectively grind the luxury residential segment to a crawl. Foreign residential property funds will also surely stay out while this tax is in place. The measures could be less effective in the mass markets, given the bulk of Outside Central Region (OCR) launches are snapped up by Singaporeans who feel confident about their rising HDB valuations. Recall the queues and fast-paced sales at recent OCR launches.

I would hope for a tweak in the policy to allow foreigners to buy their first home at the existing 3 per cent buyer stamp duty. Many foreigners are here to work and to settle down with their families and they have a genuine need to own one home for shelter. Singapore is a country made successful by the influx of foreigners in the last two centuries and it must remain an open economy in order to survive. The Economic Development Board, the Monetary Authority of Singapore and other government agencies' efforts to attract foreign investors to our shores may be tougher if this signal were read negatively as a protectionist measure.

Foreigners who are already settled here but who have not purchased their homes may feel short-changed by such discriminatory policies, especially when there is insufficient evidence that foreigners are the main cause for the rise in home prices.

With the new measures, are we signalling: Our right hand welcomes you while our left hand blocks you from getting a comfortable life? Would we want the government agencies to slow down the pace in attracting foreign financial institutions and MNCs to expand in Singapore? That will reduce demand for housing but it will also weaken the robust job environment.

This policy aimed at foreigners will harm our reputation as an investment capital. Instead of penalising foreigners with heavy taxes, we could give more incentives to support Singaporeans and Singapore PRs. Already, loan-to-value ratios for purchasing properties are more attractive for Singaporeans than those for foreigners. Let's have more carrots for Singaporeans instead of wielding the stick on foreigners.

The writer is CEO of International Property Advisor Pte Ltd and author of the book: 'Real Estate Riches - Understanding Singapore's property market in a volatile economy'

Citizens of 5 countries to pay same stamp duty as S'poreans

2011-12-10T01:05:00.001-08:00

CITIZENS of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.

When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens, the taxman said in a guide on Wednesday. This will enable them to avoid the new 10 per cent additional buyer's stamp duty that foreigners now have to pay when they buy a private home.

Free trade agreements usually ensure that a country's citizens are accorded certain trade protections when they are in the partner nation.

The Additional Buyer's Stamp Duty (ABSD), as the new levy is called, was announced by the Government on Wednesday and hits foreigners hardest. They have to pay an additional stamp duty of 10 per cent when buying a home. But the foreigners from these five countries can apply for remission or relief.

The Inland Revenue Authority of Singapore (Iras) website says they must provide identification, acceptance to option to purchase/sale, the purchase agreement and the ABSD declaration form.

Under the new rules, permanent residents (PRs) buying a second and subsequent property will pay an additional 3per cent stamp duty, while Singaporeans buying their third or subsequent homes must pay an extra 3per cent.

The rule is also that for purchases made by two or more parties with mixed residency status, such as a Singaporean with PR, the higher rate will be imposed.

But Iras also gave examples of situations where remissions can apply. These are in cases where married couples have mixed residency status.

For example, a PR who currently owns a property while his Singaporean spouse owns none can apply for relief from the additional stamp duty when they co-purchase a home.

In another scenario, a PR and a Singaporean spouse co-own a property. When they next jointly buy a property, they can apply to be exempt from the 3 per cent levy.

The relevant documents have to be submitted to Iras.

Relief will also be provided for qualifying developers.

Iras also said that people who want to downgrade from private housing to an HDB flat will be allowed a concessionary period to sell their private residential properties. The application for relief in such cases can be made through the HDB.

Source: The Straits Times – 9 December 2011

Private property prices may slide in next 6 months

2011-12-09T15:25:00.001-08:00

The Government's latest round of property market cooling measures – imposing a range of additional buyer's stamp duties on private home purchases – helps most genuine owner-occupier buyers, specifically citizens and permanent residents who may be affected by affordability issues.

More importantly, it gives a clearer direction for the private home market, which had exhibited optimism despite the last round of cooling measures in January and the uncertainty in the external environment. Prices are expected to fall up to 8 per cent in the first half of next year.

Direct impact on foreigners

The most immediate impact of the measures will be a slowdown in foreigner purchases – a natural result of the hefty 10 per cent additional duty. The duty can be considered appropriate as foreigners have had sufficient opportunities to enter the market and have been stepping up purchases of private homes in recent years, with no policies specifically targeted at them.

The measure may also provide some support for the leasing market now that fewer foreigners are expected to buy a private home. There will be some foreigners who will not be put off by the 10 per cent additional duty as Singapore appeals to them as a politically stable and physically safe country. But this group is expected to consist of the really affluent, whose wealth is unscathed by the current economic headwinds from the United States and Europe, and who need a property in a place with excellent fundamentals.

Demand for non-residential property to rise

The January measures sparked a move to strata-titled non-residential property as investors sought out alternatives. The new measures will likely encourage investors to continue to sniff out such non-residential units – i.e. office, retail and industrial spaces.
But it must be highlighted that an excessive run-up in the prices of such properties may also prompt the Government to react as the viability of smaller businesses is challenged. Nevertheless, the shift to non-residential property investments in a bid to avoid the private home buyer stamp duty can be viewed as a positive for an investor as he or she will be diversifying his or her entire property portfolio.

Psychological deterrence

Singaporeans and PRs who are genuine owner occupiers, as well as citizens not buying a third or subsequent home, will not have to pay the additional buyer's stamp duty. While the number of locals who do not "stop at two" may not be large in the first place, the new measures mean that what is left in the pool of private property purchasers will now be strictly first and second home buyers.

Although the Singaporeans or PRs who have to pay the additional buyer's stamp duty will pay a lower rate than foreigners, they may still be deterred. Psychologically, the duty creates a disincentive, for such buyers are indeed paying more than their peers, particularly in the case of developer sales where prices are fairly uniform.

Selective property re-pricing

With the new measures, a persistent demand contraction leading to price falls will be more likely, especially amid global economic challenges. Private home prices may fall by up to 8 per cent in the first half of next year but this is still expected to be fairly property-specific and short-lived as there are many opportunistic buyers looking to purchase their dream property.

The desire for the dream property has intensified as society becomes increasingly sophisticated and individuals aspire to a higher quality of life. Also, as first time private home buyers do not have to pay the additional duty, they may stop hesitating on the purchase decision and realise their dream.

By Ong Kah Seng – director at R'ST Research, an independent property market research firm in Singapore.

New cooling measures: Shifting the goalposts

2011-12-09T15:19:00.001-08:00

Are the latest cooling measures – specifically targeted at the private housing market – what many Singaporeans have been waiting for since the General Election in May?

Wednesday's announcement of an additional buyer's stamp duty of 10 per cent for foreigners and 3 per cent for Permanent Residents already owning one or more properties and for Singaporeans already owning two or more properties caught the market by surprise.

The reaction of the Real Estate Developers Association of Singapore (REDAS) was understandably one of deep disappointment. Almost a whole year of residential land sales have been snapped up. Millions of dollars have been poured into these ventures. The sudden introduction of the measures is akin to shifting the goalposts halfway during the game.

The problem is probably one of miscommunication. In all its actions to date, the authorities have not let on that investment buys could be a problem. In fact, all four earlier sets of cooling measures were aimed at reducing speculation and stabilising prices. Now, it seems all of us were fooled. A statement or two indicating otherwise would have been greatly appreciated. At least, some developers would have factored this in as a risk when bidding for sites.

Then again, aren't developers supposed to factor in such risks?
Many analysts have singled out luxury homes as the market segment that stands to lose the most. Are we not forgetting that buyers in this segment are more concerned with the product than its price. Is an outlay of a mere 10 per cent more going to deter the ultra-rich from any of these purchases.

For sure, nobody likes to be discriminated against. All the developer has to do is to raise the price by 10 per cent but offer to absorb the additional stamp duty. The problem is psychological rather than real. Admittedly, sales for this market segment have been slow but it will not be any slower because of the new measures, unless of course, the product is more high-priced than high-end.
Wednesday's announcement came very soon after Minister of National Development Khaw Boon Wan's wish that the HDB first-timers' application rate for the Build-To-Order launch would fall below 2 times was fulfilled way beyond his expectations. Has the focus now shifted to fulfilling citizens' upgrading aspirations? It appears to be so.

The supply of Executive Condominiums (ECs) has been raised for next year. On the Government's Confirmed List of land sales for the first half of next year, five are for ECs. It is also probably recognition of the fact that the latest stamp duty changes would not correct private property prices soon enough or at least not enough to fulfil some of the upgrading aspirations. Depending on demand, we can expect more EC sites to be offered for sale in the coming years.

Apart from what is likely to have been miscommunication, I would say the measures are finally addressing the problem of excessive liquidity and the dangers it could pose for a small open economy like Singapore's.

Compared to the earlier changes in January, where up to 16 per cent in seller's stamp duty may be imposed depending on the timing of the divestment, the current set of changes is actually less drastic but more effective. But will it be enough?

To potential first-time private home buyers expecting a sharp drop in prices, it is too early to cheer. Even if property prices were to start to correct from today, it may be many months before they reach your affordability levels.
Time and time again, I have advised against under-estimating the liquidity challenge. How many of us thought that the cooling measures imposed in January marked the start of a decline of the residential market. I can tell you there were many red faces thereafter, some of them of very prominent market analysts.
How many times have our neighbours played our local investors out by changing the rules mid-way, but has this stopped property investments in these countries? The answer is no.
It is well-known that Hong Kong and Singapore are two favourite property investment destinations for mainland Chinese investors. If you have not been monitoring Hong Kong property prices, take a look now and then look at Singapore's. Then tell me whether the effectiveness of the current measures can be sustained over time.

by Colin Tan – head of research and consultancy at Chesterton Suntec International.

Source: Today - 9 Dec 2011

COOLING MEASURES: A BOLT OUT OF THE BLUE

2011-12-09T15:11:00.001-08:00

The announcement of the latest set of cooling measures for the residential market yesterday probably drew extreme emotions from many in Singapore - either cheers or despair, depending on which side you are on.

The emotions - accentuated by the fact that it came right out of the blue - are probably enough to induce a heart attack, some would say.

The new rules were specifically targeted at investment buys, while the announced plans to increase the supply of Executive Condominiums recognises the fact that the majority of potential upgraders have been largely left out of the current market run-up.

The announcement probably came as a shock to many but you could say the warning signs were there, the increased buying from foreigners and the ever shrinking apartment sizes being offered on the market.

However, it does not mean that all investment buys will be affected as the rules left just enough room for some investment buys by Permanent Residents (PRs) and Singapore citizens. PRs buying their first property and citizens their second property onwards are not affected.

Already people are asking me whether the new measures will induce a price correction? It really depends on the reaction of developers and how much of the current purchases are investment buys.

If the majority of buyers have been investors, the measures have the equivalent effect of a sudden price increase of 3 per cent or more on the market.

Sales will be a lot slower in the coming weeks or maybe even months. Investors may stay away while genuine buyers will take their time to commit. Depending on how long this phase drags on, some developers may panic and start offering bigger discounts.

However, if they hold their nerve, there is enough liquidity in the market to overcome this latest set of measures, provided of course, the expected economic slowdown next year does not hit us hard.

Source: Today - 8 December 2011
by Colin Tan, head of research and consultancy at Chesterton Suntec International.

GOVT MOVES TO CURB FOREIGN HOME OWNERSHIP

2011-12-09T15:10:00.001-08:00

To curb excessive investment demand on private homes, the Government is imposing additional stamp duties - over and above the existing tax - on certain categories of property purchases from today.

It also announced yesterday that it will inject sites that can potentially yield a total of 14,100 units in the Government Land Sales (GLS) Programme for the first half of next year. Of these, about 7,000 units will be from sites on the Confirmed List.

The imposition of the additional stamp duties surprised analysts and industry players, with the Real Estate Developers' Association of Singapore (REDAS) criticising the timing of the cooling measure which comes as the Singapore economy is headed for a slowdown next year.

Foreigners and corporations will be the hardest hit, needing to pay a 10 per cent Additional Buyer's Stamp Duty (ABSD) on any private residential property.

Singaporeans will pay a 3 per cent ABSD on the third and subsequent properties, while permanent residents (PR) will pay a 3 per cent ABSD on the second and subsequent properties.

Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected.

Some relief will be provided to alleviate the impact on affected Singaporeans, for instance those who marry foreigners or PRs and will be subject to the higher ABSD as a couple.

Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore's international trade agreements.

Details of the reliefs will be provided on the Inland Revenue Authority of Singapore website.
Explaining the move, the Ministry of Finance and the Ministry of National Development said in a joint press statement that "even with the current economic uncertainties, the demand for private residential property remains firm. Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract investors, local and foreign."

It said: "Excessive investment demand will however make the property cycle more volatile, and thus increase the risks to our economy and banking system."

The authorities noted that private home prices are currently 13 per cent above the peak in the second quarter of 1996 and 16 per cent above the more recent peak in the second quarter of 2008.

The joint statement added: "A higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market."

Move is 'drastic', say analysts
Property analysts described the cooling measure as "drastic". However, they noted the rising foreign ownership of private homes and increasing prices.

Adding that a very small percentage of Singaporeans own a third home, head of research and consultancy at SLP International Nicholas Mak said: "This is a pre-emptive strike in preventing an increase in buying demand from foreigners, especially the non-residential foreigners."

Mr Chris Koh, director of Dennis Wee Group, noted that foreign ownership of private properties has increased from 30 per cent last year to 33 per cent to date, pushing prices to unrealistic levels.
However, International Property Advisor chief executive Ku Swee Yong felt the measure "aimed at foreigners may be missing the mark".

He argued that the recent spike in private home prices - especially in outside central regions (OCR) areas such as Ang Mo Kio, Pasir Ris and Chua Chu Kang - were driven primarily by Singaporeans.
"I worry that the price index will continue to rise (albeit more slowly) while at the same time we leave foreign investors with a bad taste in their mouths," said Mr Ku. He added: "Many foreigners are here to work and settle their families down and they need to own one home for shelter over their heads."
REDAS said in a press release that it was "disappointed in the lack of consultation on the latest measures". It said: "They came as a surprise as the current market outlook is uncertain. The good take up rate in the primary market is driven by the increased number of new launches and unique selling points of certain projects. It is not indicative of a return to a speculative market."
It added: "Given that the local economy is expected to slow down next year, we believe these measures are untimely."

On the GLS programme for the first half of next year, the Government said the supply - which is less than the 8,100 units offered under the Confirmed List in the second half of this year - takes into account "the ample pipeline supply and the dampening effect of the ABSD".

The Government added that it will "continue to monitor the property market and adjust our property policies in step with changes in the market and the economy".

Source: Today- 8 December 2011

British property entrepreneur eyeing Singapore luxury market

2011-12-09T02:18:00.001-08:00

A property entrepreneur who is behind London's luxurious One Hyde Park project and who has decked out yachts and jets for tycoons is turning his sights to Singapore.

Briton Nicholas Candy told The Straits Times that he sees 'massive opportunities' here.

A mixed-use project possibly comprising a hotel, high-end homes and luxury retail valued at 'hundreds of millions', for example, would be something he would be keen to work on.
'It's finding the right site and the right partner; we wouldn't do it without a local partner,' Mr Candy says.

'We haven't got anything specific today but if we could find something, we would be very happy to. I think in the next year or so, we should be able to hopefully find a site.'

Mr Candy, 38, who set up the interior design and development management firm Candy & Candy with younger brother Christian, also said that he has spoken with some potential partners although nothing has been signed.

The brothers built the One Hyde Park residential development in London's Knightsbridge, where a penthouse unit sold for £136 million (S$274 million) to Ukraine's richest man, tycoon Rinat Akhmetov, in April.

Only 18 apartments in the 80-unit project designed by star architect Richard Rogers remain unsold. The remaining units have been sold for a total of £1.4 billion.

The firm is known for its super-luxury standards and has designed and outfitted yachts, jets, luxury cars and lavish homes for wealthy and famous clients, including royal families, Indian steel magnate Lakshmi Mittal and Hollywood actress Gwyneth Paltrow.

While money has been flowing from Asia to London, especially in the past five years, Mr Candy said he is looking in the opposite direction for expansion.

'Asia already is one of the financial hubs of the world but there are lots more opportunities. Also, it hasn't suffered as badly in the global financial crisis... and seems to be quite resilient.'

Mr Candy said Hong Kong, Singapore and Shanghai, where the firm is working on a project designed by architect Zaha Hadid, are the Asian cities he likes best.
But he added that Singapore seems to be a easier place to do business than Hong Kong, where many established players dominate the purchases of sites.

'What's the great thing about somewhere like Singapore is that you can do things at a very quick speed. What you dream, you can build here,' he added.

Source: The Straits Times – 1 December 2011

Property prices in Asia heading towards correction

2011-12-09T00:58:00.001-08:00

Recent reports have signalled that property prices across China and other parts of Asia are heading towards a correction.

But regional developers and market observers say it is not all doom and gloom yet for the sector.
The integrated resorts and international events like the F1 have brought the spotlight on Singapore.

They have also piqued foreign investors' interest to invest in luxury properties, say analysts.

But now investors and analysts are bracing themselves for a looming correction in the property market.
And this time, even luxury properties will not be spared.
Panache Management CEO Alex Schlaen, said: "It will be very minor because the luxury (property market) didn't recover to the heights of 2007, versus the mass market which went way beyond the peak of 2007. This market will see a correction of between 10 and 20 per cent. The correction will probably last for two years and it will probably start recovering back to the new peaks that we haven't seen yet in Singapore."

Now, he reckons that Singapore's property prices still lags Hong Kong and has a lot of room to catch up.

And he says prices in Singapore will only reach at par with Hong Kong in 10 years.

This means investors can potentially make a profit from the Singapore market.

While China's real estate market is seeing more cities with lower property prices, some property developers Channel Newsasia spoke to are still bullish on the property market in China.

Candy & Candy founder Nick Candy, said: "The best locations are in Shanghai. I won't think it will have a 30 per cent drop. If there is a large correction, I believe it would recover quickly again. I am very bullish on China. I believe that China is a great place to invest. I think people will do very very well there."

The Pudong River is where Nick Candy, who made his fortunes developing homes for High Networth Individuals including Hollywood stars, will be making his mark in Asia.

Source : Channel NewsAsia – 29 Nov 2011

21 HDB blocks in Redhill Close chosen for SERS

2011-12-08T19:32:00.001-08:00

Twenty-one blocks of HDB flats in Redhill Close have been chosen for the government's Selective En bloc Redevelopment Scheme (SERS).
They are blocks 1 to 3 and blocks 5 to 22, with a total of 878 units.

The Housing and Development Board (HDB) will build about 1,200 units of two-room, three-room, four-room and five-room flats in Henderson Road to re-house the flat owners.

The new blocks, to be ready in 2017, will be built up to 48-storeys high, offering panoramic views of the city skyline.

The current flats, built in 1955, will be more than 60 years old by the time the residents move out.
The HDB said the replacement flats are at a prime location, within walking distance from Redhill and Tiong Bahru MRT stations.

Facilities such as shops, markets and food centres are just a stone's throw away.

Many recreational facilities and spaces such as children's playgrounds and fitness corners for adults and the elderly, a hard court and community garden, as well as a multi-storey car park will be provided. The HDB said these facilities will provide ample opportunities for social interaction.

Eligible flat owners will be invited to register for the new replacement flats in the fourth quarter of 2012.

The HDB will hold an exhibition from December 7 to 13 at Bukit Merah Community Centre to provide more information on the development.

The site is the 76th site to to benefit from SERS, which offers residents the opportunity to move to a brand new flat nearby with a fresh 99-year lease, better design and modern facilities.

Source : Channel NewsAsia – 3 Dec 2011

High-end home deals fewer this year: study

2011-12-08T08:49:00.001-08:00

Transactions in Singapore's high-end residential market, such as upmarket apartments/condos in choice districts and bungalows on Sentosa Cove, have fallen this year, but non-permanent resident foreigners' share has gone up for both categories of properties.
Analysts attribute the increase partly to mainland Chinese fleeing restrictions on property buying in their home market and instead parking their monies in Singapore's property market. As well, some investors may be inclined to escape the economic gloom in Western economies and to favour the relatively healthier economies in Asia. Singapore stands out as a property buying destination in Asia for its transparency, political stability and relative safety.

In the first 11 months of this year, 1,285 caveats were lodged for apartments and condos in districts 1, 4, 9, 10 and 11 priced at least $2,000 per square foot of strata area - down 33 per cent from the same year-ago period. The figure for full-year 2010 was 2,156.
However, non-PRs' share of purchases of non-landed homes in these five districts priced at over $1,951 psf (or $21,000 per square metre) has increased from 28.4 per cent last year to 37.8 per cent in the first 11 months of 2011.

The latest figure surpasses the 31.1 per cent in 2007 and 33.2 per cent in 2008 - during the earlier foreign buying frenzy. Based on URA Realis caveats data as of Nov 30, the total foreign buying pool (PRs and non-PRs combined), Indonesians have been the top buyers since 2007.

Their share of the total number of caveats (including purchases by Singaporeans and companies) edged up from 15.4 per cent in full-year 2010 to 16.4 per cent during Jan-Nov 2011. However, the 236 upmarket apartments/condos they have bought this year is about 35 per cent shy of the 363 units they acquired in full-year 2010.

On the other hand, the number of upmarket apartments picked up by mainland Chinese has risen from 136 for full-year 2010 to 170 in Jan-Nov 2011. Their share of total buying also doubled from 5.8 per cent to 11.8 per cent.

A longer-term comparison reflects a similar picture. The number of high-end apartments bought by Indonesians has roughly halved from 438 in 2007 to 236 in Jan-Nov 2011, while the number of caveats lodged by mainland Chinese has quadrupled from 43 to 170.

Indians - who did not even feature among the top five nationalities of foreign buyers in 2007 - were the fourth largest foreign buyers of high-end apartments in Jan-Nov 2011, with 31 caveats or a 2.2 per cent share of total purchases.

Traditionally Indonesians have been the predominant buyers of high-end apartments in Singapore. But recently, the Chinese and Indians have increased their presence in this segment, as wealth levels rise on the back of strong economic growth.

As well, property buying curbs in China are driving some mainland Chinese to park monies in Singapore. Overseas Chinese buyers are also finding that they fit hand-in-glove in Singapore because of the ethnic similarity. When they walk into a showflat here, they find sales people speaking to them in Mandarin, and sometimes even entertaining them with a nice Chilli crab dinner.
Over at Sentosa Cove (where foreigners don't need to be PRs to qualify to buy landed homes), the Chinese are the biggest foreign buyers (PRs and non-PRs combined) of bungalows. They purchased five of the total 20 bungalows transacted in Jan-Nov this year. Singaporeans bought eight bungalows.

As a whole, non-PR foreigners picked up seven bungalows in the upscale waterfront housing district in January-November 2011, giving them a 35 per cent share of total purchases, up from their 33.3 per cent share in full-year 2010.

The average price of bungalows transacted on Sentosa Cove has risen 11.1 per cent from $1,910 psf on land area for full-year 2010 to $2,122 psf for January-November 2011. In absolute dollar quantum, the average price per bungalow transaction has appreciated 7.7 per cent from $17.1 million to $18.4 million. The total number of Sentosa Cove bungalows transacted has slipped from 54 last year to 20 in Jan-Nov 2011.

Transaction activity in Singapore's high-end residential sector is expected to remain subdued in the next few quarters against the backdrop of a turbulent global economy.

But the market should continue to attract regional and global high net worth clientele interest, as they look for safe havens to store their wealth. Singapore is one of the two AAA-rated countries in Asia.

Source: Business Times – 5 December 2011

Good Class Bungalows, high-end condos in district 10 see buyer interest

2011-12-08T08:46:00.001-08:00

Good Class Bungalow (GCB) transactions in the prestigious Tanglin Hill are very rare. The most recent, according to a caveat lodged on Nov 3, was for a 21-year-old GCB on a freehold site of 34,585 sq ft. It was sold for $57 million ($1,648 psf) in a private-treaty deal. Both the seller and buyer were Singaporeans. The psf price is just slightly higher than that of a GCB located across the street that was built in 1992 and sits on a 23,982 sq ft plot. This GCB changed hands in April for $38.8 million ($1,618 psf).

Meanwhile, a GCB at Victoria Park Road on a freehold elevated site of 32,077 sq ft was sold for $48 million ($1,496 psf) a fortnight ago. A caveat has yet to be lodged. The last time the property changed hands was just two years ago, when it was sold for $38.67 million ($1,205 psf). Hence, the seller saw a 24% capital appreciation.

Given the rather gloomy economic outlook and market uncertainty, the recent Tanglin Hill and Victoria Park Road deals took about three months to negotiate and close. This is because there aren't too many buyers at this end of the market, given the large quantum price and most of the buyers being owner-occupiers looking to tear down and redevelop the existing property into a luxurious bungalow for their own use. Large GCB plots of at least 30,000 sq ft that can be sub-divided into two smaller GCBs are also becoming increasingly scarce.

Including the recent transaction at Tanglin Hill, there have been only three transactions that have crossed the $50 million mark in the last 12 months.

Smaller GCBs with land areas of 15,000 to 16,000 sq ft in prime districts 10 and 11 (Bukit Timah, Chancery Hill and Bukit Tunggal) that had asking prices of $24 million to $26 million at the beginning of the year have been transacted at $22 million to $23 million. The transaction prices of these GCBs are probably 5% to 8% below what the owners were asking for at the start of the year — an indication that sellers were prepared to adjust their prices downwards to meet buyers' expectations.

HIGH-END CONDOS

In the Tanglin area, there have also been some transactions in the high-end condominium segment. In the Tanglin area is the 46-unit luxury condo 8 Napier, located next to Gleneagles Hospital and Medical Centre and the Singapore Botanic Gardens. According to URA, as at end-October, 27 units in the luxury condo have been sold. The project was completed last year.

Last year, some units purchased for $3,550 psf four years ago were sold on the secondary market at an average of $3,200 psf. From last December to September this year, units sold in the low-rise development ranged from $3,000 psf for second-floor units to $3,527 psf for higher-floor units.
There seems to be interest in old condos with spacious apartments. At the 274-unit freehold Tanglin Park condo developed by City Developments Ltd (CDL) 22 years ago, there were two transactions in the week of Nov 1 to 8, based on caveats downloaded from URA Realis as at Nov 23. A 1,593 sq ft three-bedroom apartment on the eighth level was sold for $3.2 million ($2,009 psf). This is the fifth time the unit has changed hands in the last 16 years (URA's database of caveats go back only to January 1995).

Tanglin Park's main attraction is its location; being in a quiet and exclusive neighbourhood is definitely an advantage.

Another condo that is known for its luxurious and spacious apartments is the 330-unit Ardmore Park by Wheelock Properties that was completed 10 years ago. Ardmore Park is a perennial favourite not only because of its spacious units but also its facilities and landscaping.

The condo attracts a good mix of investors and occupiers, although these days, most of the buyers are looking to buy for their own occupation.

Source : The Edge – 28 Nov 2011

2nd Bedok waterfront project to be launched

2011-12-07T07:44:00.001-08:00

Another new waterfront private residential development is about to be launched for sale in the Bedok neighbourhood, hot on the heels of CapitaLand's controversial Bedok Residences project.

Called Archipelago, the 577-unit development is a collaboration between the UOL Group and Singapore Land.

Between 180 and 200 units will be up for sale during the first phase of the launch, with preview sales expected to start from tomorrow.

Situated in Bedok Reservoir Road, facing the reservoir, it is priced below the recently launched CapitaLand project nearby, which sparked debate on its queuing system for applicants.

Average prices for Archipelago are slightly above $1,000 psf. It is understood that the smallest 527 sq ft one-bedroom units will be priced below $600,000, which translates to around $1,138 psf.
Apartments at Archipelago are a mix of one-, two-, three-, four- and five-bedroom units and penthouses.

Units with studies are also available. Homes are larger too, averaging 1,332 sq ft.

The Straits Times was also told bigger units make up a majority of the homes at the development, with two- and three-bedroom apartments making up 63 per cent of the total homes.

Twenty-four strata-titled landed homes are also included. Foreigners will be eligible to buy the three-storey homes of more than 4,000 sq ft, expected to cost above $3 million each.

Source: The Straits Times – 1 December 2011

Is the Singapore property market headed for a fall?

2011-12-07T06:19:00.007-08:00

Property has been enjoying a boom like no other in the past two years but if Standard Chartered's experts are right, the good times are coming to an end.

The bank's analysts have turned markedly bearish, with a report predicting residential rents and prices plunging 30 per cent over the next three years.

This will be a painful reversal given that prices surged 18 per cent last year - as Singapore bounced back from the global financial crisis - and a further 6 per cent in the first nine months of this year.

Stanchart sees problems ahead, including slower population growth due to stricter immigration policies and the unprecedented supply of completed homes coming onstream.

Rock-bottom interest rates could also edge up from 2013, further dampening the market. The debt crisis in Europe and concerns of a severe downturn in China could also have a significant impact on demand and prices.

After four rounds of cooling measures since September 2009, the Urban Redevelopment Authority (URA) has found price gains moderating for eight consecutive quarters.

They inched up just 1.3 per cent from the second quarter to the three months to Sept 30.
Transaction volumes also dropped 25 per cent in the third quarter as global uncertainty and stock market volatility took their toll on sentiment.

So with all asset classes said to move in cycles - the classic boom and bust scenario - is the Singapore property market headed for a sustained downcycle and a correction in prices?

Economic outlook

The euro zone crisis is one of the big factors determining where the property market heads, experts note.

Singapore's economy, buffeted by global weakness and uncertainty, is expected to grow at a sluggish 1 per cent to 3 per cent next year but that could worsen if Europe's woes escalate or a full-blown financial crisis erupts.

Experts add that while any contraction in the global economy will hurt Singapore, the extent remains unknown as the European crisis plays out in slow motion.
There are also other mitigating factors in play.

Property markets go through cycles, just like economies. Only if you are in an emerging market where there is a long period of strong economic growth, might you have a long property market upcycle.

Employment and businesses are affected when the economy contracts so this will affect buying sentiment and the ability to buy homes.

Prices will fall if the major global economies deteriorate as Singapore's economic growth will be affected.

DBS economist Irvin Seah said slowing economic growth typically places a heightened risk of depreciating asset values.

But housing demand in Singapore has remained in good shape as unemployment remains low with wages continuing to rise.

The local property market is also known to be fairly resilient, experiencing just a short blip during the global financial crisis before a sharp rebound at the end of 2009, Mr Seah noted.

However, he highlighted the scenario of a hard landing in China - Singapore's largest export market - as possibly impacting the market most severely.

But the risk of a hard landing in China is 'moderate' and not big enough to warrant concern as yet.
A recession coupled with job losses is likely to drag prices down.
The moment when potential buyers feel insecure about their future source of income is when they pull back from buying or begin to divest.

In a downturn, foreign capital could also become defensive and pull back from investing overseas, some experts say.

On the other hand, while another global crisis might also dampen sentiment, it might lead to more money being pumped into the markets as governments act to salvage their economies.

Already, there is talk of a third round of quantitative easing by the United States Federal Reserve.
These high levels of liquidity flooding the market might find their way to Asia and continue to support property prices.

Interest rates

Low interest rates that are making mortgages far more affordable have also helped to support the housing market.

And with the United States Federal Reserve pledging to keep rates low until mid-2013, rates here are also likely to remain flat.

However, Stanchart property analysts say that low borrowing costs are not enough to sustain the market.

The increase in the public housing income ceiling and the lower pricing of new HDB flats - expected to siphon demand from the private sector - should still lead to price falls.

Private home buyers are estimated to spend more than 38 per cent of their monthly gross income on mortgage repayments even though rates are only at 1.1 per cent, the report noted.

This is slightly higher than the Government's target of 30 per cent to 34 per cent. 'If interest rates normalise to the 10-year average of 4 per cent, we estimate the proportion of income spent on mortgage repayments to rise to 50 per cent,' it added.

Rising interest rates are expected to reduce affordability and trim market demand, possibly leading to prices dipping as well.

However, as some experts note, any decision by the US Fed to raise rates will mean that its economy is finally on the mend and that could signal that the global economy is out of the doldrums, which is good news for investors.

Slower population growth
Tighter immigration policies have recently been introduced in response to unhappiness over strained infrastructure and congestion.

The Stanchart report noted that population growth is expected to be halved to 1.5 per cent to 2 per cent for the next three to five years as the Government looks to encourage productivity gains and reduce its reliance on foreign workers.

But this reduction might have a knock-on effect on leasing demand and rents, especially with foreigners - including permanent residents - making up 37 per cent of the population.

Experts note that if demand from tenants falls, rents and correspondingly yields - which are already low at 2.6 per cent to 3 per cent - will fall, with prices following eventually.

But AmFraser Securities equity analyst Lau Wei Chong noted that although the intake of foreigners has slowed, the Government maintains its open door policy to talent, which will see the population continue growing. This continued influx will mitigate any sharp fall in property prices, he said.

Oversupply

The large number of completed units from the bumper supply of state land releases raises the question of whether these homes can be absorbed by the market.
The report noted that the number of homes to be launched for sale is similar to that in 2000, when prices plummeted 20 per cent.

As of the third quarter, 37,400 homes are in the pipeline seeking the required pre-requisite conditions to be launched.
This is similar to the 36,400 units in the first quarter of 2008 and the 37,500 units in the second quarter of 2000.

Prices fell 25 per cent in 2009 and 18 per cent in 2001, the report pointed out.

Completions are also expected to peak in 2015 with a staggering 47,000 units built. This is almost three times the number of private homes developers sold last year, which was itself a record.

The unprecedented supply of new HDB flats - 50,000 in total for this year and next - will also divert buying demand from the private sector.

However, the population has expanded by about 2.8 per cent a year over the past 10 years while the number of completed homes has increased by 2.1 per cent a year.

Given the way the growing population has outpaced the housing stock, this has led to a backlog of demand for homes.
If the economic crisis is not too severe, this will help to mitigate the sharpness of any price correction.

Source: The Straits Times –27 Nov 2011

Opportunistic buying at the high end

2011-12-07T06:19:00.005-08:00

Property consultants have noted that there has been some opportunistic buying at the top end of the market. Many of those on the hunt are looking for condominium units for their own stay, and therefore prefer completed projects with spacious units. With the ongoing European debt crisis, and global market uncertainty, people prefer not to flash their wealth and adopt a more conservative outlook.

One such condo that has seen a pick-up in interest is the 164-unit freehold Grange Residences, which was completed in 2004. Older condos that have seen transactions of late are the 39-unit Nassim Jade in Nassim Road, which was completed in 1999 and the 72-unit Nassim Mansion on Nassim Hill that was completed 34 years ago.

Even though these transactions are at their near record-highs, they are still lower than the prices achieved at new luxury condos in the same neighbourhood as these tend to command a premium.

Further up along Nassim Road is the newly completed, fully-sold, 100-unit Nassim Park Residences. Buyers don't mind the older condos in prime locations as these tend to have spacious units. Those who value space but who may not wish to stretch their budgets beyond $10 million for the new offerings in the market tend to look at the three- and four-bedroom units in the older estates, which are generally priced in the $5 million to $10 million range. And they are not necessarily going for the high-profile condos either.

These older condos also represent value as developers of new luxury projects that are completing or recently completed are holding on to their asking prices. Some of these were launched at the peak of the market before the global financial crisis and generally, prices at the top-end of the market are still slightly below the peak in late 2007. Hence, older condos in the same neighbourhood that are priced below these new condos are attracting value-for-money buyers.

Analysts sees more "opportunistic buying interest" in the top-end of the market. Some buyers are hunting for 'fire sales', but most owners are holding on to their asking prices, and that's why there are few transactions.

New condos that are realistically priced are also attracting buyers. One of the newly completed luxury projects that is seeing some buying interest is The Orange Grove with just 72 exclusive units located in Orange Grove Road, just off Stevens Road.

The 120-unit, 999-year leasehold Duchess Residences located in Duchess Avenue was completed recently. It is located within a quiet and established housing estate with mainly semi-detached and detached houses, off Bukit Timah Road. The condo saw two units change hands in sub-sales recently.

Units at Duchess Residences are sought after because of their proximity to good schools such as Chinese High School, Hwa Chong Institution, Nanyang Primary School and National Junior College. It is in a quiet location surrounded by landed homes. Most of the condos in the area tend to be in the main road and are older. So, as the newest development there, Duchess Residences stands out.

Source: The Edge – 21 November 2011

GCBs sold at surprisingly high prices

2011-12-07T06:19:00.003-08:00

Two good-class bungalows (GCBs), one in Tanglin Hill and the other in Victoria Park Road, have been sold for a total of S$105 million.

According to The Strait Times, both properties were acquired by Singaporeans. The two-storey Tanglin Hill bungalow was sold for S$57 million (approximately S$1,648 psf). It was completed in 1990 and is located on a 34,579 sq ft site with a built-up area of 8,000 sq ft.

Meanwhile, the bungalow at Victoria Park Road was sold for S$48 million (around S$1,496 psf).
The report said the high prices fetched for the two properties were surprising, as many had expected the property market to cool before the end of the year.

Source : PropertyGuru – 28 Nov 2011

Far East sells 34 units of The Scotts Tower

2011-12-07T06:19:00.001-08:00

Far East Organization yesterday said that it has sold 34 units of its 231-unit The Scotts Tower at an average price of around $3,100 per square foot (psf).

Prices for the District 9 property nestled at the intersection of Scotts Road and Cairnhill Road start from $1.94 million for a 624 sq ft one-bedroom small office, home office (SoHo) apartment.

The 103-year leasehold The Scotts Tower is the first project to be rolled out under the Far East SOHO brand, which aims to provide a distinctive collection of modern, new-generation SoHo apartments in Singapore.

Conceptualised by the Red Dot award-winning co-founder and principal architect of UNStudio in Amsterdam, Ben van Berkel, the 31-storey The Scotts Tower consists of one to three-bedroom apartments and four-bedroom penthouses, expansive landscaped gardens, sky terraces, penthouse roof gardens and other recreational facilities.

Far East said that it will bring forward the official launch of The Scotts Tower to tomorrow
(Dec 7) following the positive response to preview sales which started on Nov 25. A total of 34 units out of the initial 56 one and two-bedroom apartments released for the preview were snapped up.

The developer has sold more than 1,000 SoHo apartments since 2004, when it launched Singapore's first SoHo development at Central, above Clarke Quay MRT station.

Since then, it has also launched two other SoHo-style projects - The Tennery at Upper Bukit Timah and The Cape at Amber Road.

Source: Business Times – 6 December 2011

Private homes launched may hit 10-year high

2011-12-07T06:17:00.001-08:00

THE number of new private homes hitting the market this year will likely be the highest in a decade thanks to a surge of launches recently, say analysts.

Experts say about 18,300 new homes could be released this year, surpassing the 16,500 or so last year - the highest so far in a decade - and easily trumping the annual average of 9,900 between 2001 and 2010.

The numbers have been rocketing this quarter as developers rush out homes in what is usually a quiet period.

There were several major launches in October and last month, including Sim Lian's Parc Vera condo in Hougang, City Developments' The Palette in Pasir Ris, and the CapitaLand project Bedok Residences.

More new projects are likely to follow this month, say industry watchers, bucking the festive-season trend for a sales slowdown.
Rushing to release projects earlier allows developers to ride on the prevailing home-buying momentum.

Some developers have managed to expedite the sales preparation process and shorten the period from a typical timeline of between nine and 12 months to between six and nine months.

Pushing homes out for sale now also means getting a head start on the large batch of government land sales sites that were sold this year and which are expected to debut in the market next month.

A UOL Group and SingLand joint-venture started sales of its Archipelago project last Friday with average prices hovering just above $1,000 psf. About 200 homes were expected to be launched in the first phase of sales. The UOL Group declined to reveal sales figures, adding that more details would be released next week.

Far East Organization's 231-unit The Scotts Tower in Scotts Road will be launched next week, two years after plans to reconfigure the then 68-unit luxury development into smaller units were announced.

Far East's The Hillier, a 528-unit project in Hillview Avenue, near the upcoming Hillview MRT station, and the 435-apartment The Nautical in Sembawang being built by MCC Land, will be launched within the next two weeks.

Agents said prices at The Hillier are expected to be around $1,200 psf, with 503 sq ft one-bedroom units to go for about $750,000.

Indicative prices for The Nautical are expected to range between $850 and $1,000 psf.

Source: The Straits Times – 6 December 2011

New building guidelines take effect

2011-11-29T16:12:00.003-08:00

A MINIMUM plot size requirement of 1,000 square metres and a guide on the maximum number of dwelling units (DUs) for non-landed residential estates were put into effect by the Urban Redevelopment Authority (URA) yesterday.

According to the new guidelines, the minimum plot size requirement for flat developments island- wide is now 1,000 sq m (about 10,763.9 sq ft), with the view to provide more space for landscaping and communal facilities.

In addition, for all breakaway proposals from existing landed housing for either flat or landed housing developments within non-safeguarded landed housing areas, the aggregate land area for the left-behind plots must also satisfy the minimum plot size.

The impact of this guideline will be felt particularly in the area of en bloc sales for landed housing.

Separately, a guide on the maximum number of DUs for flat and condominium developments within GPR (gross plot ratio) 1.4 residential estates was introduced.
The DU guide is also applicable to residential components of mixed-use developments, within GPR 1.4 residential estates, and other low-rise, low-density residential areas.

A more stringent formula was developed for areas such as Telok Kurau Estate, which has seen a rapid injection of a large number of units, resulting in significantly higher traffic volumes along the existing narrow local access roads, noted URA.

'If the number of units are being restricted, on average unit sizes will be larger. For developers looking to achieve the same per square foot pricing, you are looking at a higher total quantum that may or may not be supported by the market,' pointed out Ms Tang.

The guidelines will only take effect with respect to new applications, added Ms Tang, noting that any formal applications (excluding outline applications) submitted prior to Nov 24 which had been granted provisional permission or will result in provisional permission being granted will be evaluated under the old guidelines.
Kovan and Joo Chiat/Jalan Eunos estates were also identified as potentially problematic clusters.

URA and the Land Transport Authority are conducting a joint study to determine if more stringent DU guides are required based on the infrastructural capacity of the area.

The study is expected to be completed by the third quarter of 2012.

Source: Business Times – 25 November 2011

Private resale home prices remain flat, indicating cautious mood

2011-11-29T16:12:00.001-08:00

Resale prices of private homes rose a touch last month, reversing a slight dip in September, but the overall trend suggests a period of flat values.

The new Singapore Residential Price Index (SRPI) flash figures out on Monday showed that prices rose 0.9 per cent last month, rallying from a 0.1 per cent dip in September.

The overall SRPI - which tracks a basket of completed non-landed projects - points to a cautious market, with monthly price movements mostly fluctuating within a range of just one per cent or less this year.

Prices of centrally located homes, excluding small apartments of less than 500 sq ft, posted a gain of 1 per cent last month compared with the 0.4 per cent dip in September.

Non-central area values rose 0.8 per cent, building on September's 0.1 per cent increase. Prices for small apartments inched back 0.9 per cent after a 3.5 per cent drop in September.

Experts offered various reasons for the trends seen in the SRPI index, which is compiled by the National University of Singapore.
The index's ups and downs could be due to its nature as a monthly snapshot, and there were fewer caveats lodged in October.

The fluctuation could also be due to prices reaching a turning point.
The underlying trend is still up ever so slightly. This is to be expected as there is still positive economic growth.

There could be a to and fro between the HDB resale and private resale mass market segments, which could have led to the varying impact on prices. In addition, there is also a high correlation between new and resale prices.

Developers who command some sort of pricing power when they launch new projects will invariably bootstrap prices in the neighbourhood.

What this means is that if prices of new units increase too much, it will divert demand to the resale market, which then reacts by increasing prices.

Source: The Straits Times – 29 November 2011

Share of mainland Chinese buyers of Singapore private homes rises

2011-11-28T05:36:00.001-08:00

THE share of mainland Chinese buyers of private homes among all non-Singaporean buyers hit a record high in the third quarter, as property-cooling measures in China drove home hunters here.

Chinese bought 30.6 per cent of the private homes sold to non-Singaporeans between July and September, up from 26.1 per cent in the second quarter.

Singaporeans still made up the majority of buyers, with 64.8 per cent of all private home sales in the third quarter made to locals. But this is a drop from 67.9 per cent in the previous quarter.

Private home sales to all buyers in the third quarter slumped 24.5 per cent from the second quarter to 6,879 units, and were also lower than the average of 8,003 and 9,167 units per quarter in 2009 and 2010, respectively.

However, buying among mainland Chinese dipped to 682 homes in the third quarter, only a shade lower than the 707 in the previous three months.

Mainland Chinese buyers are increasingly looking to buy properties overseas, including Singapore, as a result of property cooling measures in China which have led to residential property prices falling in some cities.
The predominantly Chinese population, good infrastructure and education system, and the safe and clean environment make Singapore property an attractive investment option for mainland Chinese investors to park their money or buy a home for their children studying here.
Beijing's cooling measures as one factor driving buyers here. In recent months, China has taken steps such as tightening home lending.

One reason for the rising proportion of Chinese buyers is that some of the nationalities that have traditionally invested here are now more interested in their own home markets.

Indonesians, for example, are probably looking at their own home now as their own economy is growing rapidly.

Indonesians formed 17.5 per cent of foreign buyers in the third quarter, snapping up 389 units. In the second quarter, they bought 441 units, or 16.3 per cent of foreign buyers.

Other nationalities prominent among foreign buyers included Malaysians, with 18.9 per cent, and Indians, 11.1 per cent. Together, buyers from China, Malaysia, Indonesia and India made up 78 per cent of all foreign buyers.

For the first nine months, mainland Chinese bought 1,933 private homes, 8.4 per cent more than in all of last year. Most of the units cost $1 million each or less. They bought 835 units in this bracket, 503 units priced at $1 million to $1.5 million, and 62 units costing over $5 million.

The east was especially popular with this group of house hunters. Of the units bought by the Chinese from January to September, 419 - or 21.7 per cent - were in Districts 15 and 16. District 15 includes Katong, Joo Chiat and Amber Road while District 16 takes in Bedok and Upper East Coast.

Total private home sales could fall. Private home sales will continue to be supported by demand particularly from upgraders as long as the pricing is reasonable. However, if the scenario of a disorderly euro zone default or a China hard landing materialises, this will significantly dampen purchase demand and price growth in 2012.

Source: The Straits Times – 25 November 2011

New BTO launch brings 2011 total to record high

2011-11-28T05:31:00.001-08:00

Seven build-to-order (BTO) projects containing 4,200 new flats were launched by the Housing Board on Thursday - bringing the total for this year to a new record.

The projects are in Bedok, Bukit Panjang, Hougang, Punggol and Yishun. They include Acacia Breeze @ Yishun, Golden Cassia in Bedok town, and Fajar Spring in Bukit Panjang town, next to the Fajar LRT station.

This brings the total number of BTO flats offered this year to 25,200 - a record number of such units launched in a year. The Housing Board's target for this year was to launch 25,000 BTO flats.

Due to demand for 'leftover' flats, the September BTO launch saw a muted response, with some estates and flat types undersubscribed with just one day left to apply. But for a BTO launch in May, nearly 4,000 units were oversubscribed by more than three times, with more than 13,000 people applying.

For this round, the applications close on Nov 30 and at least 95 per cent of the flat supply - excluding studio apartments - will be set aside for first-timer households, which can also enjoy housing grants.

Minister for National Development Khaw Boon Wan said this month that second-timers could expect more chances of being invited to select a flat in the future.

He said then that after most of the first-timer queue was cleared, balloting rules would be tweaked to enhance the chances for second-timers, probably towards the end of next year.

Flats on offer range from 387.5
sq feet studio apartments with a starting price of about $78,000 in Hougang DewCourt to 1,237.8
sq feet five-room flats in Hougang Capeview, costing about $444,000.
The HDB also released prices of the flats inclusive of grants - a three-room flat in Yishun priced from $156,000 will cost from $121,000 after taking grants into consideration.

Analysts confidently expects the flats in Bukit Panjang, Yishun and Hougang to be oversubscribed by at least three times as they are in mature estates, complete with amenities like schools and shops, and close to public transport.

Three times is a good amount for flats to be oversubscribed by, as one can expect about a third of applicants to drop out of the process.

The HDB will offer another 25,000 BTO units next year. The next BTO launch will take place in January, with 3,890 flats offered for sale in Chua Chu Kang, Punggol, Sengkang and Tampines.

Source: The Straits Times – 25 November 2011

High-end housing project breaks ground at Capitol site

2011-11-23T16:58:00.001-08:00

A high-end residential project will soon rise at the site of the iconic Capitol Building and Stamford House as it broke ground yesterday for a possible launch between March and April next year.

The residential project, which is expected to house 34 units, is part of a landmark mixed-use development plan that will comprise retail, hotel, residential and theatre facilities when completed.

The Capitol Theatre will be conserved and transformed into a cinema with 800 seats.

Its developer, Capitol Investment Holdings, said it has awarded the S$338 million contract to Japanese firm Shimizu Corp for the restoration of the site.

The entire project is expected to be completed by the fourth quarter of 2014.

Source: Today -23 Nov 2011

Singaporeans advised to be prudent when purchasing property

2011-11-22T18:59:00.001-08:00

Minister for National Development Khaw Boon Wan said Tuesday that Singaporeans should be prudent when purchasing property.

There is a wide range of housing options and prospective buyers should think wisely and buy within their budget, he said.

Mr Khaw was responding to a question asked by Pasir Ris-Punggol Member of Parliament (MP) Gan Thiam Poh on whether there were plans to review the existing pricing policy for HDB flats to ensure that public housing remains affordable for Singaporeans.

He cited the deteriorating global economic situation as one of the reasons to be wary.

"The current low interest rate will not stay low forever. Any global economic recession may also affect their (Singaporeans') jobs.
"On the other hand, existing HDB owners should refrain from cashing out their flats without thinking through their subsequent housing plans," he said.

Mr Khaw also said several Build-to-Order(BTO) launches have stabilised prices of new HDB flats since May and that BTO prices are affordable for newlywed first-timers.

The minister also commented on the issue of second-timers purchasing flats.

"For second-timers, the issue is more complicated as they rely more on the resale market and our influence over the resale market is indirect.

"The current resale prices are the results of an imbalance in supply and demand. We are taking active steps to re-balance them, but we need time," he said.

Source: The Straits Times – 22 November 2011

Rochor flats hot property?

2011-11-21T08:27:00.001-08:00

Some housing analysts are predicting that HDB flats in Rochor Centre could become hot property now that they have been slated to make way for the North-South Expressway (NSE).

Residents have been offered a relocation package that includes priority for a new flat in Kallang.
This may appeal to those looking for a quicker way of buying into the Kallang area.

Such practices are not uncommon.
Housing analysts said such practices surfaced when the government carried out similar relocation programmes under the Selective En-bloc Redevelopment Scheme, which offered similar compensation packages as those offered to Rochor residents.

But analysts said potential buyers should think twice, as units in Rochor normally cost 10 to 20 per cent more, given their city location.
Recent resale data showed a three-room unit in the area went for S$470,000, with a cash premium of $50,000.

Tighter rules over the purchase of resale flats should also cause potential buyers to reconsider.
The HDB has suspended sales of Rochor Centre units for a month to give residents time to consider the relocation package before selling their units.

Source : Channel NewsAsia – 17 Nov 2011

Students help potential buyers queue for Bedok Residences units

2011-11-21T08:22:00.001-08:00

SINGAPORE: Units at a new property launch will go on sale on Wednesday, but some 500 people are already queuing for them.

And about 100 of them are students.

Most of the students said they are helping family or friends queue for a spot in Bedok Residences, a development coming up at Bedok New Town.

Interested buyers must get a queue number, and the students said they are being paid about S$10 an hour to do the job.

Residents in the area said some of them have been there since 10pm on Sunday.

Bedok Residences will have 583 units and is part of a 15-storey integrated development consisting of residential units, a shopping mall and a transportation hub.

The development is by CapitaLand Residential Singapore and CapitaMalls Asia.

Source: ChannelNewsAsia - 21 Nov 2011

Housing market set for prolonged downturn: Daiwa

2011-11-17T23:54:00.001-08:00

The housing market in Singapore is heading for a prolonged downturn and overall private home prices are forecast to fall between 22 and 26 per cent in the next three years, Daiwa Research said. "We believe the residential property market could remain depressed for several years, triggered initially by a likely forthcoming gross domestic product slowdown (in 2012) and lingering global economic uncertainty," it said.

From late next year, Daiwa said, structural issues such as the rapid build-up in unsold inventory in the primary market and vacant rental units will take centre stage and keep home prices and rents in check for several years.

The mass-market segment will hold up slightly better than high-end properties, supported by better affordability and the resilience in the resale prices of Housing and Development Board flats, Daiwa said.

The house has downgraded its view of Singapore's property sector to "Negative" from "Neutral", adding that "it is hard for us to see the developer shares outperforming the Straits Times Index over the next six months" despite their underperformance in the year to date.

Source: TODAY – 18 November 2011

NO EN BLOC, NOW BACK TO BUSINESS

2011-11-17T09:32:00.003-08:00

After its proposed en-bloc sale fell through earlier this year, Tanglin Shopping Centre is turning its attention to rejuvenating the mall and reminding shoppers it is still open for business.

The 40-year-old shopping centre took out a full-page newspaper advertisement yesterday, declaring: "We are staying".

Management council member Anil Bhatia, who sat on the now-dissolved en bloc committee, told Today the owners have "absolutely no immediate plans" for another en bloc sale attempt.

"A lot of it depends on price," said Mr Bhatia. "Everyone wants a good price and the market is not very good right now. If there's an uptrend, then it's a different matter."

Despite a one-month extension, the shopping centre failed to attract any bidders to meet its S$1.25 billion reserve price by the September deadline.

The management council plans to focus for now on reminding shoppers that it is business as usual at the shopping centre. It is also refurbishing the space. "With the en bloc, a lot of people thought it was the end, so one of our tasks is for people to know that we are still here," he said.

More advertisements will be run and the council is also working out a marketing strategy. "All the new malls that have come up are very comprehensive ... we are a very niche mall - antiques, tailoring, restaurants - and we are going to try to market that," said Mr Bhatia.

Source: Today -17 Nov 2011

MORE CHANCES FOR SECOND-TIMERS?

2011-11-17T09:32:00.001-08:00

Balloting rules for second-time buyers of new HDB flats will be tweaked to improve their chances, National Development Minister Khaw Boon Wan said yesterday.

Writing on his blog, Mr Khaw did not elaborate on the possible changes. But he said the changes will likely be made towards the end of next year, "after we have cleared most of the first-timer queue".

Sharing the statistics for the July Build-To-Order (BTO) exercise, Mr Khaw noted: "As only 5 per cent of new flats were reserved for second-timers, their success rate is low."

Apart from being eligible for just a small proportion of the new flats, second-time buyers - unlike first-time buyers - only have one chance at the ballot.

In the July BTO exercise, 3,556 flats were on offer. More than 11,000 applications were reportedly received.

According to Mr Khaw, about one in 10 of second-time buyers was invited to pick a flat, of whom 54 per cent chose to do so.

In comparison, 73 per cent of first-time buyers were successful in the queue. Of these, about 60 per cent took up the offer to select a flat.
This is an improvement from previous launches, when only about half of first-time buyers did so.

"With this ramped-up construction programme and priority in treatment, newlyweds now stand a very high chance of succeeding in BTO selection," Mr Khaw wrote.

Property analysts noted that there is a significant pool of second-time buyers including families with young children and upgraders. By turning its attention to this group - and increasing their balloting chances for new flats - the Government would also address the shortage of resale flats and stabilise the prices in this segment, they added.

SLP International research head Nicholas Mak said: "As more second-timers go for a new flat, this will reduce demand (for resale flats) and hence stabilise the price of resale flats - in line with the Government's policy of making homes more affordable for everyone."

ERA Realty key executive officer Eugene Lim said that apart from increasing the quota of new flats set aside for second-timers, the Government could also tweak the resale levy to help this group. "But I would not suggest removing the resale levy altogether as it will just send a flood of second-timers seeking a new flat," said Mr Lim.

PropNex chief executive Mohamed Ismail reiterated that the focus "must still be on the first-timers". He said: "New generations of first-timers will always come and their needs have to be addressed."

NEW BUS INTERCHANGE TO BENEFIT 8,500 COMMUTERS DAILY

2011-11-16T22:59:00.001-08:00

About 8,500 commuters are expected to benefit daily when the new Clementi bus interchange opens on Nov 26.
The new 8,100 sq metre facility will be the sixth Integrated Transport Hub, where bus interchanges and MRT stations are seamlessly linked with adjoining commercial developments.
It will allow residents to switch between bus and train in air-conditioned comfort.
The Land Transport Authority said more such interchanges will be constructed at Bedok, Bukit Panjang, Hougang Central, Joo Koon, Jurong East, Marina South and Yishun in tandem with redevelopment in the areas.
This is in addition to the existing five at Serangoon, Boon Lay, Toa Payoh, Sengkang and Ang Mo Kio which are fully integrated with the rail stations and adjoining commercial developments.

Source: Channel News Asia - 17 Nov 2011

Rochor residents sad to leave

2011-11-16T21:36:00.001-08:00

HDB residents affected by the land acquisition of Rochor Centre have said they are sad to leave their convenient and familiar surroundings.

Come 2016, the 567 households there will have to say goodbye to their estate.

This is to make way for the North-South Expressway's (NSE) southern stretch that will be an underground tunnel from Toa Payoh Rise to East Coast Parkway.
Some residents have been living there for more than 30 years, since the development went up in 1977.

They were informed of the land acquisition exercise when HDB officers went door-to-door on Tuesday to distribute the notification letters and information kits.

Sixty-two-year-old resident Sae-Huan Sinet said: "I'll miss this place, and I'm worried if the new place will be as convenient, if it's as convenient for elderly residents."

Another resident, Madam Tan, who is in her 70s, said: "Many of the neighbours here are my relatives, living in flats above and below mine."

"A change of environment might not be a bad thing. As long as we have a flat to live in, it's ok," said 62-year-old resident Chan Tuck Wah.

Residents who are affected will be offered a new flat in Kallang.
HDB said most residents will be able to move to a brand new flat that is at least of equivalent size.
In some cases, HDB said residents may also enjoy net proceeds.
For instance, a three-room Rochor flat of 67 square metres — the most common unit-type — has an estimated market value of S$445,000.

About 70 per cent of the residents own such units.

A new flat in Kallang, after factoring in a S$30,000 discount, will cost S$342,000.

The subsidy will only apply to home owners who have not enjoyed more than one housing subsidy so far, and do not own private property.

Home owners will be given an additional S$4,800 to cover other expenses such as stamp fees.
This means a flat owner stands to gain more than S$100,000 in proceeds.

Work on the NSE will start in 2013, but work will be conducted in phases.

Residents will be able to stay in their homes until their new flats in Kallang are completed in 2016.
Commercial tenants of Rochor Centre will also be moving out.
Those who took over the premises before 1999 will receive payouts of S$60,000 each.

An additional S$30,000 will be given to those who choose to continue business at an alternative premise.

But tenants said the compensation is too little.

Hiap Guan Goldsmiths & Jewellers manager Sammy Fong said: "This S$60,000 has been offered for many years; there's been no change in the amount over the years. It's not a big sum of money."
Turning Point Academy owner Amy Koh said: "I'm about to renovate my shop. The deposit has been paid. If I go ahead with the renovation now, when the government takes back the land, I'll not be able to earn back the money spent."

Another building that will make way for the new expressway is the 41-year-old Nanyang Pho Leng Building.

The building is home to a Teochew clan association, which has more than 1,000 members.

Channel NewsAsia understands there are hundreds of ancestral tablets housed on the third floor of the building, which will need to find new homes or be returned to the members.

The clan association directors could not be reached for comment.

Source : Channel NewsAsia – 15 Nov 2011

New expressway sparks big land acquisition

2011-11-16T21:24:00.001-08:00

The government has announced the full alignment for the 21.5-kilometre-long North-South Expressway (NSE), with the southern segment unveiled on Tuesday.

The final 5.6-kilometre stretch of the expressway will be an underground tunnel beginning from Toa Payoh Rise and ending at East Coast Parkway.

It will pass along Thomson Road, Bukit Timah Road and Ophir Road before leading to the East Coast Parkway Expressway.

In January, the Land Transport Authority (LTA) had announced the alignment for the northern segment between Admiralty Road West and Toa Payoh Rise.

When ready by 2020, NSE, which is Singapore's 11th expressway, is expected to cut travel time for motorists by up to 30 per cent.
For example, a journey between Yishun and the city currently takes about 30 to 35 minutes.

With the NSE, the same journey can be completed between 20 and 30 minutes.

LTA chief executive Chew Hock Yong said: "We were looking for the southern segment to link up in a nice way to the ECP so it has to take a certain alignment that comes round that way into city.

"The city is very built-up so the southern segment is all underground, and as much as possible, we follow the alignment of existing rounds, so as to minimise the acquisition of private properties and we use state land to build the expressway."

But several properties will have to make way for the southern segment. Two full lots and 21 partials lots will be acquired.
They include four HDB blocks of flats at Rochor Centre which has been around since 1977.

This will be the largest acquisition of HDB flats to date. Mr Chew said: "We studied the alignment, and in the city it gets very crowded and at that area, there are MRT lines that are running there.

"There's the Bugis MRT station and there's the Downtown Line station being constructed, there is a canal running along Rochor Canal and for engineering reasons, the road has to be of a certain level of straightness… because the cars would have to travel at a certain speed.

"So taking all that into account, that was the alignment that we have to settle on and unfortunately it will affect the blocks that are there."

Residents of 567 flats at Rochor Centre will be offered relocation benefits similar to those offered under the Selective En Bloc Redevelopment Scheme (SERS).
Eighty-three per cent of the flats acquired are three-room units.
HDB will build about 810 units of new flats at Kallang as replacement housing for the residents affected.

Located next to Kallang River, residents will also be well-served by a good transportation network, with the Kallang MRT station being a five-minute walk.

Some 187 rental shops and eating houses at Rochor Centre will also be affected.

They will be given a 10 per cent preferential discount off the monthly rental rates when they successfully tender for other HDB rental commercial properties, or when they take over other HDB rental commercial properties through assignment.

Nanyang Pho Leng Association, located at Keng Lee Road and which has been in operation since 1970, will have to make way for the NSE.

The Nanyang Pho Leng Building is home to a Teochew clan association, which has more than 1,000 members.

LTA said the association will be given assistance in their purchase of and relocation to a replacement property.
Land acquisition notices have been handed out since 12pm Tuesday and the Singapore Land Authority has gazetted the lands affected by the acquisition.
Some state properties will also be making way for the NSE.
They include Lee Ah Mooi Old Age Home and Victoria Street Wholesale Centre.
They will be able to complete their current tenancy or licence when the NSE works starts.
The lease for Lee Ah Mooi Old Age Home has been extended till September 2013.
Advance works for the NSE will start progressively from 2013, and major construction works will start in 2015.

The construction of the NSE will benefit residents living in the north and north-eastern sectors of Singapore as it caters to the expected growth in traffic demand generated by new developments there.

It will connect towns along the north-south corridor — Woodlands, Sembawang, Yishun, Ang Mo Kio, Bishan and Toa-Payoh — to the city centre.

Running parallel to the Central Expressway, NSE will help to alleviate the traffic load on the heavily-utilised expressway, as well as the major arterial roads nearby such as Thomson Road and Marymount Road.

The NSE is expected to cost the government some S$7 billion to S$8 billion.

Source : Channel NewsAsia – 15 Nov 2011

Two-thirds of previewed Palette units snapped up

2011-11-15T10:28:00.003-08:00

The Palette residential development at Pasir Ris Grove saw a brisk take-up of 200 units at its preview launch last weekend.
City Developments Ltd (CDL) released a total of 300 units in the 99-year-leasehold development at the preview.

The average selling price of the 892-unit residential project, located within walking distance to Pasir Ris MRT Station, was in the range of $870 per square foot, with prices beginning at $561,000 for a 495-sq-ft one-bedder on a low floor and $1.8 million for a 2,217-sq-ft penthouse.

Unit layouts in the 12-block project range from one-bedders (up to 700 sq ft) to four-bedders (up to 1,798 sq ft).

The residential development also has a total of 10 penthouses (from 2,217 sq ft to 2,562 sq ft), of which all four units launched last weekend have already been taken up.

Warm responses have also been noted in other project launches located primarily in the heartland regions.

Notably, Sim Lian's 99-year-leasehold residential project, Parc Vera, has met with keen interest from local buyers and has sold about 200 out of 240 units since its launch on Oct 28 at an average price of $800 per sq ft.

Located along Hougang Avenue 7, the 452-unit development is also close to recreational sites such as the Serangoon Park Connector and Punggol Park.

According to a property consultant, most of the buyers of Parc Vera already reside in the North-Eastern part of Singapore, with many citing proximity to their parents' homes as a priority.

Despite concerns that residential prices are near a top, continues to expect healthy sales in the heartland regions on the back of real demand from local buyers.

As HDB prices continue to soar, there is a narrow price differential between public and private homes.

Source: Business Times – 15 November 2011

Resale flat supply crunch calls for tweaks

2011-11-15T10:28:00.001-08:00

HOME-buyers hoping for a fall in home prices must have been disappointed by recent housing figures.

Housing Board (HDB) resale flat prices rose 3.8 per cent in the third quarter to a fresh record. Prices have risen some 35 per cent since the first quarter of 2009. That was the last quarter which saw a price fall - albeit by just 0.8 per cent.

HDB resale flat prices' ability to defy gravity is puzzling at one level, because HDB is already ramping up supply of HDB flats aggressively. But the new flats being built are available only to Singaporean couples and families and will be ready only in a few years.

Meanwhile, underlying demand remains strong. Singles, permanent residents and those who have already bought subsidised HDB flats before, have to turn to the HDB resale market for affordable housing.

But the biggest reasons underpinning the price rise in the HDB resale market could be the supply crunch created by a mix of recent and past policies.

Analysts say some measures introduced recently to cool the property market have created incentives for HDB flat-owners to hold on to their flats and not sell them. Rules were tightened to weed out would-be speculators who want to buy HDB flats to 'flip' (resell) or rent out in the short-term. The rules did not affect those who already owned HDB flats. The result: existing HDB owners hang on to their flats. Fewer put up their flats for sale, creating a supply crunch.

Analysts point to another rule that makes it difficult for buyers to move homes. This requires HDB flat-owners to prove they have sold their existing flat before they can qualify for higher 80 per cent financing on their next home. Otherwise, they get only 60 per cent.

ERA Realty key executive officer Eugene Lim said this policy is making sellers reluctant to let go of their units.

The rule was meant to discourage speculation in properties by increasing the cash amount buyers must pay for a second mortgage. But analysts say the rule is unnecessary in the HDB market since no household is allowed to own more than one HDB flat anyway.

This is one rule that merits review. One simple solution around this problem is that the Government allow 80 per cent bank financing for all HDB home-buyers, on condition that they sell their existing HDB homes within three to six months.

There is another big factor explaining the supply crunch. This is the fresh supply of new HDB flats that turn five years old and can be sold on the resale market.

New HDB flats are sold at subsidised prices to Singaporean couples and families, who must live in them for five years. After that, they can be sold to Singaporeans and permanent residents.

The number of flats built fell drastically after 2005 as the Sars outbreak and economic crises in the early 2000s had created an unsold stock of tens of thousands of HDB flats. In response, HDB scaled back its building programme. In 2006, 2007 and 2008, the number of flats completed were 2,752, 5,111 and 3,183 respectively.

What this means is that in the last decade, the resale market had an annual injection of 11,000 to 30,000 flats which turned five and could be resold. But the number will shrink in the next three years: from 2011 to 2013, there will be only about 11,000 flats for the entire period.

Of course, considered against the existing stock of one million HDB flats, this drop might not be significant. But it does exacerbate the supply crunch amidst a market with robust demand.

So the overall picture is that supply looks set to remain tight for the next two years at least. Resale prices are thus likely to remain firm.

Analysts say there are some short-term solutions that can be considered. One is to review the financing rule for HDB owners. Some people think the Government can go further, to introduce new policies to compel HDB owners who do not really need their flat to sell it.

HDB flat-owners are allowed to rent out the whole flat after five years. If they can afford to live elsewhere, perhaps they should let go of their flats to help ease the pressure in the market.

Another way to raise short-term supply of resale flats is to create incentives for HDB resale flat-owners to sell, rather than rent out, their units.

One way is to impose a levy on income from renting out HDB flats. Owners now have to declare all rental income as part of their personal income tax returns. But many have incomes below the threshold for paying income tax anyway, so they do not have to pay any taxes. A direct levy of, say, 30 per cent imposed on rental gains from renting out HDB flats may tip some owners into deciding to sell instead of rent out their units.

Unlike a change in ownership criteria, a levy on rental income has the advantage of being easier to tweak, or scrap when the market no longer needs it.

Source: The Straits Times – 15 November 2011

S'pore, US among top destinations for rich Chinese migrants

2011-11-15T10:13:00.001-08:00

About 60 percent of the rich Chinese people, each of whom has a net asset of at least 60 million yuan (S$12.12 million), said they intended to migrate from China, a report has found.

About 14 per cent of them have either already migrated from China or have applied for migration.

The three most favoured destinations by the Chinese rich are the United States, Canada and Singapore. The US is the first choice of some 40 per cent of the people interviewed, according to a white paper jointly released by Hurun Report and the Bank of China (BOC) on Saturday.

According to US Citizenship and Immigration Services (USCIS), the number of Chinese applicants for investment immigration has exceeded applications from any other country or region.

'Among all the destinations in terms of investment immigration, the US always outstands all other options as the country does not impose any quota,' said Jiao Lingyan, a client executive of the investment immigration department of the Beijing-based GlobeImmi International Education Consultation Co.

'The minimum amount required for investment immigration to the US is US$500,000 (S$641,130). But it should be noted that this applies to investments in projects recommended by authorities in the US. People considering these projects should take into account that they may not make profits,' Mr Jiao said.

'It is worth noting that the minimum amount for investment immigration will be raised in the coming years, because the number of rich people in China is rapidly growing,' she said.

While 32 per cent of the interviewees said they have invested overseas with a view to immigrate, half of them said they did so mainly for the sake of their children's education.

'A growing number of parents in China have realised that children growing up in the examination-oriented education system in China will find it hard to compete in an increasingly globalised world,' Mr Zhang said.

Chinese immigrants are also getting younger, with the largest group aged between 25 and 30, compared to the 40-45 age group in the past, Mr Zhang said.

Source: The Straits Times – 4 November 2011

Vista Park put up for collective sale again

2011-11-15T10:12:00.001-08:00

Vista Park at South Buona Vista Road is back on the market. This time the asking price for the collective sale site is the $323 million reserve price set by the majority owners - lower than the $338 million asking price when the leasehold site was put on the market in May.

Vista Park is on a sprawling 319,248 square foot site with a remaining lease term of about 66 years.
The $323 million reserve price would translate to a land price of $824 per square foot per plot ratio inclusive of an estimated $45.3 million payable for topping up the site's lease to 99 years.

This calculation is based on a maximum gross floor area of 446,947 square feet, reflecting a 1.4 gross plot ratio as stipulated for the site under Master Plan 2008.

No development charge is payable as the site has a high historical safeguarded development baseline.
The unit land price based on the $323 million reserve price could be lowered to $792 psf ppr if the developer builds an additional 10 per cent gross floor area allowed for balcony area, which would take the potential gross floor area to 491,641 sq ft.

The breakeven cost for a new project is expected to be $1,250 psf.

Source: Business Times – 10 November 2011

Two more sites up for en bloc

2011-11-15T10:09:00.001-08:00

The en bloc market is showing no signs of slowing, with two more residential developments being put up for collective sale.

Thomson View condominium has an indicative asking price of S$595 million to S$635 million, translating to between S$694 and S$732 per sq ft per plot ratio (psfppr) for the site located along Upper Thomson Road.

The 540,314 sq ft site has a gross plot ratio of 2.1 and gross floor area of about 1.27 million sq ft as well as a 24-storey height limit. The price includes a differential premium of about S$158 million to top up the lease tenure by 34 years to 99 years and an upgrading premium of about S$130 million to enhance the value of the land.

It said a new development could yield 1,012 units of apartments averaging 1,100 sq ft per unit and 33 strata landed houses averaging 2,500 sq ft. The tender closes on Jan 12.

Separately, Chateau Eliza, a freehold development at Mount Elizabeth, has been put up for sale with a guide price of S$111 million to S$115 million. The site is almost 18,000 sq ft in size and has a plot ratio of 2.8, although the current development has a plot ratio of 2.939.

This works to a land price of between S$2,099 to S$2,174 psf ppr based on the proposed gross floor area of 52,887 sq ft. The tender closes on Dec 15.

Source: Today – 15 November 2011

CDL unveils The Palette condo in Pasir Ris

2011-11-13T05:40:00.001-08:00

City Developments (CDL) and its joint venture partners, Hong Leong Holdings and Hong Realty have unveiled plans for their latest residential development, The Palette.

The 99-year leasehold condominium, located at Pasir Ris Grove / Pasir Ris Drive 1, has an area of about 461,315 sq ft and is expected to yield 892 apartments across 12 towers when completed in 2016.

Prices are expected to range from S$570,000 for a one-bedroom unit to S$2.2 million for a penthouse.

The development will be launched in phases and the consortium will begin private previews within the next two weeks, CDL said.

The site, located within walking distance of the Pasir Ris MRT Station, is close to The Japanese School, United World College of South-east Asia and Changi Business Park.

Source: Today - 11 November 2011

Punggol residential site draws top bid from Chinese firm

2011-11-10T15:01:00.001-08:00

A 99-YEAR-LEASEHOLD residential site at Punggol Central/Edgedale Plains drew a top bid of $215.87
million yesterday, or $330 per square foot per plot ratio (psf ppr).

Chinese firm Qingjian Realty (South Pacific) Group trumped four other developers to put in the top bid for the site, which measures 218,034.6 sq ft and has a maximum permissible gross floor area of 654,103.9 sq ft. It barely edged out the second-highest bid, by Soilbuild Group Holdings, which came in at $203.888 million, or approximately $312 psf ppr. The lowest bid came in from Opal Star and Lum Chang Building Contractors, at $290 psf ppr.

The narrow spread of bids indicates developers were more measured in bidding for the site. This could be due to the upcoming supply of around 1,500 private apartments and 700 executive condominiums in Punggol New Town, and the potential slowdown in demand for mass-market homes, in view of economic uncertainties.

While a slowing market may have deterred over-optimistic bidding, the top bid of $330 psf ppr is roughly in line with the $323 psf ppr fetched by the Punggol Field Walk site in September. It shows that tender bids in the Punggol location are holding, although there is lower tender participation today, with five bidders compared to eight in the previous one.

Zuo Haibin, managing director, Qingjian Realty Group, said they are planning for around 650 units of two to four bedrooms. The project should be launched within six to eight months, he added. The breakeven cost to should be around $700 psf.

Units at the nearby 882-unit A Treasure Trove have sold for a median price of $915 psf, based on the 750 units sold since its launch in early September.

Source: TODAY – 4 November 2011

Freehold still 'the preferred choice'

2011-11-10T10:12:00.001-08:00

FREEHOLD home prices have proved more resilient in recent months than those of 99-year leasehold properties, according to a new report.

Price gains for freehold condominiums and terraced homes have outpaced those for similar homes with 99-year leases since the third quarter of last year - a period marked by cooling measures and economic uncertainty.

For example, while prices of leasehold condos inched up by less than 1 per cent each quarter in the 15 months to Sept 30, freehold condos averaged quarterly rises of 2.2 per cent.

Freehold condo prices have rocketed 62 per cent in the past 10 years while leasehold condos appreciated 48 per cent in the same period.

It is a similar story with landed homes.

While prices of leasehold terraced properties dipped 0.1 per cent in the three months to Sept 30 - the first contraction in at least 15 months - freehold terraced prices shot up 4.9 per cent.

Prices have soared 97 per cent for freehold terraces in the past 10 years compared with 52 per cent for leaseholds, the firm noted.

Freehold or 999-year leasehold are the preferred tenure for many property buyers as many are concerned that the value of 99-year leasehold properties may not appreciate well when the duration of the leasehold reduces.

But transaction volumes and price increases for all home segments have taken a hit since July last year as the market coped with two additional rounds of cooling measures following similar moves in September 2009 and February last year.

More recently, the financial market turmoil and uncertainties surrounding the euro zone crisis have further dampened home buying sentiments.

While buyers should go for freehold properties from a purely investment point of view, 99-year leasehold homes will still be in demand.

They still have a price advantage over freehold equivalents and many 99-year leasehold projects are located near amenities and transportation nodes.

These are crucial factors, especially for upgraders, for whom affordability and convenience rank high on their priorities. Such attributes can be found in sites in or near HDB estates which the Government puts out for tender on a regular basis under its land sales programme.

Source: The Straits Times – 10 November 2011

Prices of DBSS flats now close to those of ECs

2011-11-09T21:48:00.001-08:00

Design, Build and Sell Scheme (DBSS) flats have been attracting such strong interest that they now cost nearly as much as executive condominium (EC) units.

Their overall median price is only $100 to $150 per sq ft (psf) lower than that of the condo units.

The scheme's popularity comes despite the fact that it is under review, following an outcry when Centrale 8 in Tampines made the news for its high asking prices in July.

The high demand was due mainly to the fact that the projects are located in mature estates, near MRT stations.

Prices for Trivelis, the latest DBSS launch in Clementi, were about $580 psf to $728 psf. The cost of new EC flats ranges from $501 psf to $820 psf, according to data from sources such as the Housing Board and Urban Redevelopment Authority.

DBSS properties were attractive also because, unlike resale flats, they require no cash over valuation (COV), the premium paid over and above the official value.
The cash down payment for a DBSS unit can be lower than the COV for a resale flat, making it more attractive. Although buyers have to wait for it to be constructed, they are also getting a brand new flat in the process.
DBSS has an inherent inflation mechanism as the tender goes to the highest bidder, which in turn sets the maximum price that the market can bear. This encourages a rise in prices.

Source: The Straits Times – 8 November 2011

Subsales lose their pull, especially with foreign buyers

2011-11-09T21:29:00.001-08:00

A smaller percentage of private home buyers - especially among foreigners who are not permanent residents - have turned to the subsale market to make their purchase this year, compared with the previous property bull-run in 2007.

These trends are attributable to an increase in the supply of new units launched by developers over the past two years as well as an overall slowdown in subsales activity following the introduction of steep seller's stamp duty rates in January to deter short-term trading of private homes.

Subsales are secondary market deals in projects that have yet to receive a Certificate of Statutory Completion (CSC) and are often seen as a gauge of the level of speculative activity in the market.
An analysis of URA Realis caveats data shows that of the total number of private homes bought by foreigners, the percentage that they pick up from the subsale market has fallen from 18-21 per cent in 2007-2009 to 13 per cent last year and 11 per cent in the first nine months of this year.

Foreign buyers occupy a higher percentage in the subsale market as usually, those who are here (mainly Singaporeans and PRs) have the first bite of the cherry when it comes to new property launches as they can easily attend the launches, view showflats and book their units. In the past, foreigners who missed out on these launches often had to turn to the subsale market.

Indeed market watchers note that in earlier property bull runs including the one in 2007, local buyers often punted on new property launches with the prospect of offloading their units to a foreigner in the subsale market at a handsome gain.

Things are different now. The government has acted strongly to discourage short-term property trades by imposing punitive seller's stamp duty rates of up to 16 per cent for those who have bought a private home on or after Jan 14, 2011 and sell it within a year. This has shrunk the pool of units available for sale in the subsale market.

There has also been a step-up in the volume of private residential properties launched in the past two years, on the back of increased state land sales.

Foreigners, especially from China, have also found it easier to clinch properties from Singapore developers these days. This is because of the aggressive marketing blitz by developers that includes offering potential buyers in China incentives to travel to Singapore to visit showflats.
PRs tend to rely on the resale market for a higher percentage of their private home purchases - possibly because many have been renting and are therefore looking for a completed home for immediate owner-occupation.

On the other hand, most Singaporeans already own a home and therefore can wait a few years for a private project to be completed. Investors - many of whom are Singaporeans and foreigners - can buy either completed or uncompleted units, which could explain the higher percentage of new sales among these two groups.

Foreigners are more inclined to turn to the primary market also because it's easier for them to view developers' showflats than to make appointments to view a completed property in the resale market, and to buy more than one unit in the same project from a developer, given the limited amount of time they have. Also, the overseas marketing of uncompleted projects has made them more accessible to foreigners.

Source: Business Times – 8 November 2011

The Cuscaden Residences hits $2,262 psf

2011-11-09T17:10:00.001-08:00

The neighbourhood of Cuscaden Road and Tomlinson Road, off Tanglin Road, is attracting the interest of high-net-worth individuals again, largely owing to the upcoming 29-unit boutique luxury condominium development, Hana, by Pontiac Land. The units at the 99-year leasehold Kerry Hill-designed project are said to average 3,500 sq ft each.

Nearby, Hotel Properties Ltd (HPL), one of the biggest stakeholders in the prime neighbourhood, launched the 70-unit Tomlinson Heights (on the site where Beverly Mai used to stand) in Cuscaden Road in August last year. Of the 30 units launched, 29 have been sold to date. The most recent recorded transaction according to URA was for a 4,004 sq ft, five-bedroom apartment that was sold for $12.53 million ($3,129 psf).
Existing high-end condos in the vicinity are also seeing renewed interest from buyers.

For instance, at the 150-unit freehold Cuscaden Residences, there were two transactions over the week of Sept 26 to 30, based on the latest caveats lodged and downloaded from URA Realis as at Oct 19. One was the sale of a three-bedroom, 1,485 sq ft unit on the 13th level, which changed hands for $3.33 million ($2,242 psf). The seller had purchased it for $2.28 million ($1,533 psf) in August 1999 when the project was first launched. The seller saw a price appreciation of about 46%.

Apartments at Cuscaden Residences have traditionally attracted investors, given the prime Orchard Road location as units there tend to be popular with high-level expatriate executives. The asking prices today
are considered attractive to buyers. However, buying activity is low at the moment as most investors are putting their property investments on hold owing to uncertainty of the global economy in recent months. The low transaction level could also have contributed to the sluggish prices.

Even though the current economic climate has affected transaction volume in the high-end segment as investors stay on the sidelines, interest for luxurious and exclusive condos in Singapore remain unaffected.

Source: The Edge – 24 October 2011

Foreign banks cutting jobs here

2011-11-09T17:07:00.001-08:00

Foreign banks in Singapore may be reluctant to disclose numbers but industry observers note that jobs are being cut at these lenders.

Mr Gary Lai, managing director of recruitment consultancy Charterhouse, said most of the banks that had reduced staffing here had done so to consolidate operations in countries like the Philippines or India.

"So while you may have one person that they let go here, they might be hiring one more in a lower-cost country," he said.

Foreign banks and financial institutions like Credit Suisse, Macquarie Group, Bank of America Nomura Holdings and Daiwa Securities are some of those that have retrenched staff in Asia recently.

Reuters also reported last week that South Africa's Standard Bank had cut three jobs at its oil trading desk in Singapore.

Still, Mr Lai said that the job losses in Singapore were not significant compared to 2008 and 2009, when markets were hit by the collapse of Lehman Brothers.

Still, with no quick solution to the euro zone debt crisis, banks are likely to scale back operations - and job cuts are likely to be in the investment banking sector.

Mr Lai pointed out that companies like Daiwa have big trading arms as "they've been trying to beef up their investment portfolio".

The job outlook at Singapore banks appears to be more secure.

Mr Leng Seng Choon, co-head of research at DMG, said the bulk of the earnings for local banks came from interest income.

"For that reason, I think the (Singapore) banks will continue to keep the headcount at a level that is suitable for their operations," he said.

Source: Today – 9 November 2011

Rents of apartments in city fringe on the rise

2011-11-09T17:02:00.001-08:00

Rents for apartments in the city fringe areas are on the rise and this is being attributed to the concurrent increase in the number of small units that are generally under 500 sq ft in size.

In a study, rents in the city fringe, which covers areas like Balestier, Bishan and Geylang, rose to S$3.36 per square foot (psf) per month (pm) by the third quarter of this year, up from S$3.15 last year. (Median rents in the city fringe were S$2.86 psf pm in 2008 and S$2.64 psf pm in 2009).

The increase in rents in the Rest of Central Region (RCR) corresponds to the rise in the number of small-format sized apartments in Serangoon, Balestier and Geylang over the last few years. Renting in the city fringe area, near the CBD, is a viable option with more expatriates having switched over to local packages in recent years.

Since 2009, the gap between city fringe areas (or RCR) and core central region (CCR) has narrowed from 29 per cent in 2009 to 24.5 per cent in Q3 2011. The gap will probably stabilise at around 26 per cent by the end of this year, as rents in both CCR and RCR remain at current levels in the coming months.

Rents in the CCR hit S$4.30 psf last year after having fallen to $3.72 psf in 2009. CCR rents have risen to S$4.45 so far this year, after recording a lower increase of 15.6 per cent over the 2009-2010
period compared to the RCR at 19.3 per cent.

Outside of the Central Region (OCR), rents have seen steady increases. Last year, rents increased 17.5 per cent to S$2.68 psf from a low of S$2.28 psf in 2009.

Compared to RCR, rents in OCR have increased at a slower rate partly because of the large supply of HDB flats that are available for lease in the OCR.

Rents are likely to stabilise in Q4 as leasing activity eases. The sluggish economic growth projected for 2012 may translate to reduced job opportunities for expatriates. Coupled with a high number of new completions in 2011 and 2012, there will be some pressure on rents going forward.

Source: Today – 7 November 2011

SUPPLIES, SUPPLIES, SUPPLIES!

2011-11-04T09:51:00.001-07:00

4 November 2011

The evidence for a price drop in Singapore's residential property market is stacking up even as investors here continue to buy up small units in the outskirts, setting new highs for average per sq ft prices.

The Urban Redevelopment Authority (URA) released last Friday the full set of third-quarter property data - sending a clear signal about the avalanche of supply of homes.

About 80 pages of the URA report were on the private residential market. Two things stuck out: The expected supply of homes getting the Temporary Occupation Permit (TOP) for this year and next year increased yet again, surpassing previous forecasts; and the vacancy total of non-landed properties at 12,975 units is just shy of that during the Lehman Brothers crisis peak in 3Q2009 at 13,084 units.

In a previous commentary in Today (Feb 11), we had cautioned that "we need to be wary about the supply in 2011 and 2012 because the global economic recovery remains elusive." At that time, the complete set of URA data for 4Q2010 was just published and the expected TOP supply for this year was 8,430 units and for next year was 8,116 units. In that same article, IPA's projections for the total completions this year and next year were 11,500 units each year.

Just nine months later, the official forecast for this year has risen 29 per cent to 10,889, with 9,196 completed in the first three quarters and another 1,693 due for completion in 4Q2011. The number for next year rose to 48 per cent to 12,043. If investors had made their decisions to invest this February thinking that the supply in this year and next year will be moderate at 8,000 over units, they may be stuck, especially because of the hefty seller's stamp duty.
The huge supply hitting the market will arrive earlier than official forecasts. In the interests of operational efficiency, including collecting progress payments, developers and construction companies are generally ahead of planned schedules, especially for projects that are by and large fully sold. We believe that, over the next few quarters, expected TOP numbers will continue to grow for 2012 and 2013 stock. We have revised our estimates for completions in 2012 to 2015 (See table).

The second point of note in the URA data is the number of vacant private homes. During the quarter, 4,565 units were granted TOP and that resulted in an increase of 2,173 vacant units. The overall vacancy rate rose from 5.1 per cent in 2Q2011 to 5.8 per cent in the last quarter. We are approaching and will soon breach the peak vacancy of 6.2 per cent in 3Q2009, about a year after the collapse of Lehman.

Vacancy rates will increase over the next few quarters if the take-up from tenants does not outpace the TOP supply. Looking at the pipeline of completions, we see for example, Alexis, Optima, Reflections, Parvis, etc., coming onstream. These are projects that attracted a significant proportion of investors rather than owner-occupiers. There will be strong competition among landlords for tenants.

On the surface, the market may look healthy to some as many of the recent launches were significantly sold out within the first two months of launch, including the HDB's record supply of Build-To-Order flats.

But, as emphasised in my book Real Estate Riches, we need to look beyond the take up at launches and match physical supply to real demand from families. When the completions of HDB and mass market condominiums swamp us in 2012 to 2015, we may end up paying for today's excesses, unless the doors to foreigners open wide again like in 2006 to 2008.

Around the world, many banks are retrenching or slowing down hiring, the electronics sector is downsizing and the current wave of corporate profits have been derived not from significant expansion of business but mainly from cost reduction. Inflation remains stubbornly high and economic growth stays low.

In Singapore, low interest rates support holding power and cash-rich investors seeking to beat inflation are still looking at real estate investments.

I believe the prices for landed properties will continue to rise, perhaps a little more slowly than the 2.4 per cent and the 3.6 per cent increase in the last two quarters, respectively.

Since holding power is steady and there is a strong deterrent in the form of the seller's stamp duty, the sub-sale and resale categories should not see significant discounting unless the residents' unemployment rate rises significantly. However, there is room in the new sales category for prices to dip. Recent transacted prices for new sales in the mass market show that developers have enough profit headroom to accept lower prices and still generate normal profits.

On balance, in the immediate term, we expect a 5 to 10 per cent reduction in private residential prices, i.e. a drop of the URA PPI from 205.7 points to around 190 within the next 12 months, mainly due to new sales from mass markets where the supply wave is strongest.

Where prices go beyond next year would depend on recovery of the global economy and how Singapore might benefit. For those who need to invest because their cash reserves are earning too little interest income, our advice is: Do not buy into an imaginary future rental income, invest in apartments that come with tenancy. Even in a seemingly high market like today's, good value can be found in districts 9 and 10, where 10-year-old condominiums might be gotten for around S$1,200 to S$1,400 psf, similar to the price levels of some of the new properties in the Outside Central Region.

by Ku Swee Yong, founder of real estate agency International Property Advisor, specialising in property services for high-net-worth clients. He is the author of Real Estate Riches: Understanding Singapore's Property Market in a Volatile Economy.

NOTHING WORKS LIKE CREDIT TIGHTENING

2011-11-04T09:30:00.001-07:00

Judging from the recent experience of countries in the region, it appears nothing is more effective in managing runaway real estate markets - in the absence of a recession - than a bout of credit tightening.

Other cooling measures like higher downpayment rules, steeper stamp duties and property taxes coupled with various caps and limits on purchases have been shown to be less effective without the accompaniment of some form of credit tightening.

In the region, the booming property markets in India and Australia were among the first to be tamed by interest rate hikes. These tightening moves were soon followed by the monetary authorities in neighbouring countries. The major motivation for the rate hikes was to combat runaway inflation but real estate and other businesses suffered collateral damage.

I remember a period when the pace of credit tightening in India was so relentless that it elicited loud howls of protest from the business community. Indian developers fanned out across the region, some of them coming to Singapore - which was seen as an oasis of liquidity - to seek fresh funds from investors or partners in a bid to rescue stalled projects.
What happened to India some years back is now happening to China. The debt crisis in the southern city of Wenzhou is a good example of how severe the fallout on other sectors of the economy can be.

For India, the housing market seems to have caught hold of a second wind and the property cycle for some cities is on the upswing again.

However, the problem of high property prices is so huge in China that, even as the screws on credit grow ever tighter, some city authorities see it fit to introduce even more drastic measures.

On Tuesday, the southern city of Zhuhai set a cap for home prices at 11,285 yuan (S$2,264) per sq m, possibly the most extreme property price-tightening measure imposed by a Chinese city so far. Developers asking for a price higher than that will be refused the permits to sell their projects.

Other blunt measures introduced earlier in some Chinese cities included limiting each household to a single purchase. This led to some "paper" divorces as some investors tried to get around the rule.

The compounding effect of the slew of cooling measures in China has now led to falling sales and prices in some cities and to huge discounts for some projects whose developers are having cash flow problems. If overall prices have not yet been corrected in China, it looks like this may happen within the next few months.

Chinese developers who were on the brink of tipping over three to four years ago were given a reprieve when Beijing pumped trillions of yuan into the economy in response to the global financial crisis resulting from the US sub-prime fiasco. Will another global crisis be their saviour this time?
Being so close to China, both in distance as well as in economic links, it was only a matter of time before trends taking place in China were mirrored in Hong Kong.

The overall value of housing transactions halved last month in Hong Kong from a year ago. In terms of residential units, sales dropped 2.2 per cent from September. Although direct purchases from developers rose from the previous month, these were not enough to offset the slide in secondary market transactions. Trend-wise, it was the 10th straight month of declining home sales.
A fund manager based there told me that Hong Kong developers will stubbornly resist lowering their prices until it begins to hurt. In the meantime, he feels sales volume will continue to decline.

Barclays Capital Research recently issued a report which predicted that Hong Kong residential property prices would drop 35 to 45 per cent over the next two years. Will it come to pass?
For Singapore property investors, the tension must be building up although they are not showing signs of panic.

Let us wait and see what happens to Hong Kong. It might also be comforting to know that a recent survey released in Shanghai showed that nearly half of Chinese who have assets worth more than 10 million yuan are considering emigration.

Can these be the potential new citizens who will come to our rescue?

Colin Tan is head of research and consultancy at Chesterton Suntec International.

Source: Today - 4 November 2011

Homebuyers less keen on HDB resale flats with new measures

2011-11-04T03:41:00.001-07:00

MORE build-to-order (BTO) flats introduced in September and the recent raising of the income ceiling for HDB homebuyers have slowed sales of resale public housing flats.

However, the ramp-up in public housing supply has failed to stop prices of resale units from rising.

Data from the Housing and Development Board (HDB) released Friday showed resale applications falling 10 per cent to 5,903 cases in Q3 from 6,581 the previous quarter.

At the same time, resale units continued to exchange hands at ever higher prices. The HDB Resale Price Index hit a record high of 187.2 in the third quarter, 3.8 per cent higher than the previous quarter, and 11.6 per cent higher than Q3 2010.

In Tampines, for example, the median resale price of an executive flat was $630,000 in Q3 - 4.8 per cent higher than Q2's $601,000.

In September, HDB attempted to cool demand in the secondary market by putting up 8,200 BTO and sale-of-balance flats (SBF) for sale.

It announced Friday that it would launch 4,200 BTO flats in Bedok, Bukit Panjang, Hougang, Punggol and Yishun in November. This brings the tally of public housing flats launched in 2011 up to 28,000 units.

Propnex Realty CEO Mohamed Ismail said that weakened resale transaction volumes show that the increased supply of public housing and the recently raised income ceiling for first- time buyers has persuaded some homebuyers to cross over to the BTO flat market.
'The lack of supply and high prices (of resale flats) have made it more difficult to conclude deals,' added ERA Realty key executive officer Eugene Lim.

Yet, resilience in resale flat prices means that demand for these units remains strong, say experts.
'The release of these new flats has not eradicated the strong demand for resale flats consisting of buyers who are singles, permanent residents, HDB upgraders and downgraders, as well as private property downgraders,' noted Mr Ismail.

The supply of HDB resale flats has remained tight, adding to price increases.

Homeowners grew reluctant to part with their property to get another after the government lowered the loan-to-value limit to 60 per cent for existing homeowners, leading to a supply crunch.

'This is worsened by the mindset that sellers add on a COV (cash over valuation) component despite increasing valuations. They are able to do this because supply is tight and demand is strong,' said Mr Lim.

For an executive flat in Tampines, median COV was chased up to $68,000 in the third quarter, from $51,000 in Q2.

Real estate analysts see resale transactions and prices moderating in Q4.
'With COV becoming a thorny issue with many young couples, it is expected that they will opt for new flats since the amount of cash they are forking out can be less or similar to what they pay for a resale flat,' said Dennis Wee Realty.
Mr Ismail thinks COV levels will rise further in Q4 before plateauing by mid-2012.
But there is a chance that COV levels will edge higher, he cautioned.

'If would-be HDB upgraders continue to be priced out of mass-market private properties, and the supply of resale flats does not rise fast enough or remains limited due to the minimum occupation period for both first-timers and non-first-time buyers, then increased demand for HDB resale flats may push COV levels up even further,' said Mr Ismail.

Source: Asia One - 1st Nov 2011

$15m top bid for Mountbatten Road transitional office site

2011-11-03T15:39:00.001-07:00

A TRANSITIONAL office site on Mountbatten Road, which was put up for sale by the government last month, drew 11 bidders at the close of the tender yesterday.

The top bid of $15.01 million or $119 per square foot per plot ratio (psf ppr) came from an individual, Chen Chew Yen. If the site is awarded, it will be the first time in more that 18 months that a transitional office site - that is, office sites that are launched for sale with 15-year leases - will be sold.

Mr Chen's bid was 12.6 per cent higher than the second highest bid from Heeton Holdings. Heeton bid $13.3 million or $106 psf ppr.
Analysts expected a top bid of $100-120 psf ppr when the site was launched for sale.

The Mountbatten Road land parcel has a site area of about 1.17 hectares and a maximum permissible gross floor area of about 126,000 sq ft. The site was first made available for sale through the reserve list in October 2008.

The Urban Redevelopment Authority (URA) first launched transitional office sites in 2007 as a creative solution to tackle immediate shortages in office space. Six sites have been sold since.

Analysts said that the site could be popular with office users who have budgetary constraints.
Some of these users may now be operating in industrial buildings, with questionable legality of use, paying rentals of $3.50-4.50 psf per month. Attractively priced office space would appeal to these users who could then operate openly without fear of enforcement checks, he added.

Source: Business Times – 2 November 2011

Green Lodge put up for collective sale, EOI at Oxley

2011-11-03T15:32:00.001-07:00

Green Lodge, a freehold development located on Toh Tuck Road, has been put up for collective sale.

Separately, an Expression of Interest (EOI) exercise was launched yesterday for 71 and 73 Oxley Rise, a freehold site zoned for 'commercial and residential' use.

The Green Lodge site has an asking price that is above $195 million, or about $866 per square foot per plot ratio (psf ppr). The sale is being conducted through a tender exercise which will close on Dec 8 at 3pm.

The freehold property sits on a land area of about 14,035 square metres (151,075 sq ft). According to the 2008 Master Plan, the site can be redeveloped into a five-storey condominium project at a gross plot ratio of 1.4. Green Lodge currently has an approved density of equivalent plot ratio 1.4896
, which means no development charge is payable.

Assuming an average apartment size of 1,000 sq ft and a building efficiency of 90 per cent, the site can accommodate about 210 residential units.

As for the Oxley Rise site, it has a site area of 25,630 sq ft and a gross plot ratio of 4.2 under the 2008 Master Plan.

This means it has the potential to be redeveloped into a new project with a gross floor area of 107,646 sq ft with 20 per cent commercial use and 80 per cent residential use, subject to approval from the relevant authorities.

Source: Business Times – 3 November 2011

HDB UNVEILS ROADMAP TO GUIDE IN ITS VISION FOR LIVEABLE TOWN S3

2011-11-03T08:52:00.001-07:00

The Housing & Development Board (HDB) has unveiled a "Roadmap for Better Living in HDB Towns", which is focused on three key thrusts: Well-designed, sustainable, and community-centric towns.

To do this, the HDB said its roadmap will set out key priorities for the board's professional focus over the next five to 10 years to "deliver a better living environment and meet the evolving lifestyle aspirations of HDB residents".

With so many external consultants playing a part in town development, the HDB said there is a greater need to guide them to attain the planning vision of its towns.

One example of this is the urban design guidelines for projects along the Punggol waterway to maximise access to the water by having tiered-building heights, with lower buildings in front and taller ones behind so more units can have a water view.

To support the Sustainable Singapore Blueprint, the HDB will also collaborate with private-sector professionals to create resource-efficient buildings.

The blueprint contains strategies and initiatives that could help Singapore achieve economic growth and a good living environment, over the next two decades.

For example, well-oriented buildings and micro climatic modelling will help towns capture cool breezes and improve ventilation, minimising the cost of air-conditioning.

Some 70 per cent of HDB's building components are also prefabricated compared to less than 30 per cent in private sector developments.

This means higher construction productivity of 2.28 man days per square metre as compared to 3.13 man days per sq m in private developments.

To further drive sustainability, the HDB has also been test-bedding solar generated power in several of its towns since 2009.

The HDB added while design and sustainability represent the "hardware" elements of public housing, physical infrastructure alone does not make a vibrant and endearing town. Hence, the third thrust will focus on the "heart-ware" of building cohesive and resilient communities.

To do this, the HDB aims to encourage more residents to take ownership of the facilities and to build stronger neighbourly ties in their towns.

The roadmap was unveiled at the HDB awards ceremony yesterday.
National Development Minister Khaw Boon Wan gave out 15 awards to HDB's consultants and contractors for exemplary performance and innovation in HDB projects.

Source: Today - 3 Nov 2011

Home sales unlikely to surpass 2010 record

2011-11-03T08:05:00.001-07:00

With uncertainties in the global economy affecting housing demand, private home sales in Singapore may come close to 2010's record high but are unlikely to exceed the figure, according to many experts.

The number of private homes sold in the first nine months of this year reached 12,301 units, compared with 12,051 units sold over the same period last year.

However, experts said a slower fourth quarter will likely leave this year's final figure below last year's total record. Property developers sold 16,292 homes in 2010, as rock-bottom interest rates and pent-up demand from first-time buyers and upgraders brought the real estate market to a new high.
Experts noted that a good local economy and low interest rates should underpin demand for private homes. However, the gloomy economic forecast has dampened market sentiment and the series of property cooling measures have also curbed speculative buying.

Source: Propertyguru – 2 November 2011

New home loans continue to dip in Q3

2011-11-03T07:53:00.001-07:00

THE volume of new home loans granted by banks here continued to fall in the third quarter, as volatile financial markets made both borrowers and lenders more cautious in the housing market.
Some $12.41 billion in new housing loans was granted in Q3, down 3.5 per cent from the $12.86 billion in Q2, according to the latest estimates by the Monetary Authority of Singapore. That follows a 4.2 per cent drop in housing loans granted in Q2 compared to Q1.

As in the previous quarter, new loans granted for owner-occupied property fell by more than loans for investment property.

The average loan-to-value (LTV) ratio for housing loans across the industry was unchanged in Q3, at 44.1 per cent, compared to Q2.
The industry-wide LTV average is calculated by weighting each financial institution's LTV ratio by the volume of outstanding loans it granted. It is based on an MAS survey of housing loans at financial institutions that account for over 90 per cent of the total outstanding housing loans extended by the industry, MAS said.

Source: Business Times – 1 November 2011

Laguna Park, Henry Park Apartments up for collective sale

2011-11-02T22:26:00.001-07:00

Laguna Park at Marine Parade Road is up for collective sale with a reserve price of S$1.25 billion.
Together with Henry Park Apartments, which is also up for collective sale at between S$170 million and S$180 million, the total value of properties that have come up for sale in October has hit close to S$5 billion.

With over 10 sites now available for sale, developers appear to be spoilt for choice.

Nicholas Wong, Executive Director (Investment) at Knight Frank, said that developers are looking at collective sales with some caution now and added that any sale will depend on the attributes of the site and the developer's risk appetite as well as market sentiment.

He also noted that the Government Land Sales Programme is offering developers many alternative sites.
Knight Frank is marketing the 677,493 sq ft Laguna Park site and it believes the proximity to the seafront would a key selling point for any new development. Based on the reserve price, the land price comes to about S$954 per square foot per plot ratio.

Laguna Park was put up for sale earlier this year with a reserve price of S$1.33 billion. But the tender closed without a successful bid.

While the downward revision of the reserve price suggests that sellers might be more motivated to sell now, Mr Wong said that new requirements for en bloc sales allow a development to be put up for sale for one year only after receiving 80 per cent approval from homeowners. When this lapses, sellers have to seek a new mandate. So some sellers choose to relaunch the site for sale within the year instead, added Mr Wong.

Tan Hong Boon, Deputy Director, Credo Real Estate, pointed out that no collective sale has been transacted at over S$200 million yet. "Generally, the key will be the land price and quantum," he said.
Credo is marketing the 99,000 sq ft Henry Park site. Based on its asking price, the land price works out to be S$1,216-S$1,287 per square foot per plot ratio.

Still, Mr Tan does not believe that the slew of collective sale sites will mean land prices will fall. "Some sellers may have lowered their asking prices but their reserve price has stayed the same," he added.

Mr Wong is still positive on the Singapore property market too. "Barring the worsening in the global economic situation, the property market here should remain stable," he said.

The tender for Laguna Park will close on December 6, while the tender for Henry Park closes on December 1.

Source : Channel NewsAsia – 31 Oct 2011

URA releases White site at Marina View / Union Street on the Reserve List

2011-11-02T22:13:00.001-07:00

The Urban Redevelopment Authority (URA) has released the detailed sales conditions for a White site at Marina View / Union Street today. The subject land parcel is made available for application under the Reserve List of the second half 2011 Government Land Sales Programme. Developers interested in purchasing the site can now apply to URA for it to be put up for tender.

With direct frontage to the planned Central Linear Park linking Marina Boulevard to Straits Boulevard, the land parcel is the third sale site to be made available for sale at Marina View. The first two White sites at Marina View were sold in 2007. The development on the first sale site (i.e. Asia Square Tower 1) was completed earlier this year. The development on the second sale site (i.e. Asia Square Tower 2) is currently under construction, and is scheduled for completion in 2013.

The development on the White site at Marina View / Union Street will contribute to building up the critical mass of office space in the Marina Bay area and developing the precinct as an international business and financial district.
The land parcel is ideally located within the Marina Bay area, a vibrant and exciting location to work, live and play in, and adjacent to the existing Central Business District (CBD) at Shenton Way.

With a site area of 0.78 ha, the land parcel will have a maximum permissible gross floor area (GFA) of 101,628 m2 and offers a unique opportunity for a distinctive landmark office development in a prime downtown location. A minimum of 71,140 m2 (about 70% of the maximum permissible GFA) will be stipulated for office use to continue with our momentum to grow Marina Bay into an international business and financial hub. The remaining GFA can be developed for additional office use or other complementary uses such as residential and other commercial uses, such as retail, hotel and entertainment uses.

The site also enjoys direct frontage onto the future Central Linear Park linking Marina Boulevard to Straits Boulevard and has panoramic views of the city skyline and Marina Bay. Well served by the Common Services Tunnel – a comprehensive system of underground tunnels which house and distribute utility service lines, the future office tenants will have access to uninterrupted supply of major utilities, emergency back-up services and the capacity for expansion to meet changing utility needs.

The Marina Bay area, Singapore's downtown district, is located within the heart of the city. It comprises the existing CBD at Raffles Places, Shenton Way and Marina Centre, together with the new development area around the Bay. The district will be an international business and financial hub and is envisaged to be a dynamic, 24/7, Garden City by the Bay.

Marina Bay is shaping up well with a number of key developments that have been completed such as One Raffles Quay, One Marina Boulevard, The Sail @ Marina Bay, Marina Bay Financial Centre, Marina Bay Sands Integrated Resort, Fullerton Heritage and Asia Square Tower 1.

Other exciting attractions that have been added to the loop of existing attractions around the bay, include The Singapore Flyer – one of the tallest observation wheels in the world, a 3.5 km long promenade and a new iconic pedestrian bridge featuring the world's first double helix design construction. In addition, the Gardens by the Bay (totalling 100 ha) which comprises three unique new waterfront gardens, each with its own distinctive character, will be completed in phases starting from end 2011.

Suntec City to undergo S$410m revamp

2011-11-02T22:07:00.001-07:00

Suntec Real Estate Investment Trust (Suntec REIT) has announced a S$410 million asset enhancement initiative (AEI) for its flagship asset, Suntec City.

The AEI is scheduled to start in mid-2012, and will comprise a S$230 million capital expenditure in remaking Suntec City Mall and a further S$180 million on Suntec Singapore International Convention and Exhibition Centre (Suntec Singapore).

Suntec REIT holds an effective interest of 60.8 per cent in Suntec City. On completion in mid-2015, the development will offer almost 1 million sq ft of retail lettable space.

In a statement released on Monday, the REIT manager said Suntec City Mall's net property income is expected to increase by 33 per cent or S$23 million. This would represent a 10.1 per cent return on investment for unit holders and an 84 per cent increase in capital value over capital expenditure.

Mr Yeo See Kiat, Chief Executive Officer of ARA Trust Management (Suntec) Ltd, which manages Suntec REIT, said: "During the execution of the AEI works, we would use part of the sales proceeds from Chijmes to mitigate the temporary dip in DPU."
Last week, Suntec REIT announced that it entered into a property sale agreement with PRE 8 Investments Pte Ltd for the sale of Chijmes at a price of S$177 million or S$2,218 psf on net lettable area.

Source : Channel NewsAsia – 31 Oct 2011

Clementi DBSS Trivelis receives 2,877 applications

2011-11-02T02:11:00.001-07:00

The latest Design, Build and Sell Scheme (DBSS) development, Trivelis, has received a total of 2,877 applications when it closed on Monday.

There are 888 units – this means there are 3.26 people vying for each unit.

The development along Clementi Avenue 4 is the first DBSS project in the area. 60 per cent of applicants are first time buyers.
The units have an average indicative price of S$650 per square foot, about 10 to 15 per cent higher than other DBSS projects.

Analysts said most buyers have an income of some S$10,000, and they are buying such developments because of the better location and facilities of DBSS flats. This will also help push the resale value up in the future.
All three DBSS projects launched this month – including Belvia in Bedok and Lake Vista@Yuan Ching – have been oversubscribed.

Source : Channel NewsAsia – 31 Oct 2011

Private housing prices moderate

2011-10-31T17:00:00.001-07:00

Prices of private residential properties increased by 1.3 per cent in the third quarter of 2011, lower than the 2.0 per cent rise in the previous quarter.

This was the eighth consecutive quarter in which the rate of increase in overall private housing prices had moderated, according to real estate statistics released on Friday by the Urban Redevelopment Authority (URA). Prices of non-landed properties in Core Central Region (CCR) — which includes postal districts 9, 10 and 11 — increased at a slower pace of 0.7 per cent in the third quarter, compared to the 1.6 per cent rise in the previous quarter.

Meanwhile, prices for Rest of Central Region2 (RCR) and Outside Central Region (OCR) increased by 1.2 per cent and 2.1 per cent respectively in the third quarter.

This is slightly higher than the 1.1 per cent and 1.7 per cent increase in the previous quarter. Rentals of private residential properties rose by 0.8 per cent in the third quarter, less than the 1.3 per cent increase in the previous quarter.

URA said there was a total supply of 76,255 uncompleted private residential units from projects in the pipeline, as at the end of the third quarter this year.

This supply is higher than the 71,111 units in the previous quarter, and also the highest ever recorded since such data was first available in 1999. Meanwhile, the total stock of completed Executive Condominium (EC) units remained unchanged at 10,430 units as at the end of the third quarter.

In addition,there were 5,332 EC units in the pipeline. URA added that another 1,115 EC units could come from the EC sites that have been released for sale via the 2nd Half 2011 government land sales (GLS) Programme.

Source : Channel NewsAsia – 28 Oct 2011

MCC Land wins tender to develop EC project at Yishun

2011-10-31T16:35:00.001-07:00

MCC Land has won the tender to develop an executive condominium project at Yishun Avenue 7 and Canberra Drive.

The Housing and Development Board said the tender was awarded at nearly S$214 million.
The site on a 99-year lease can yield 725 units.

Source : Channel NewsAsia – 31 Oct 2011October 31, 2011

Prices of resale HDB flats up 3.8% in Q3 2011

2011-10-31T16:26:00.001-07:00

SINGAPORE - Resale prices of Singapore government-built HDB apartments rose 3.8 per cent in the third quarter from the preceding three months, accelerating from the gain of 3.1 per cent in the second quarter, local TV reported on Friday.
The Housing and Development Board's estimate of the price increase was unchanged from the preliminary figure released earlier this month.

The number of transactions, however, fell to 5,903 from 6,581 in the preceding quarter.

Resale prices of HDB apartments, which house about 80 per cent of Singapore's 5.1 million population, have been rising faster than prices of homes built by private developers due to a shortage of lower-cost accommodation in the city-state.

Prime Minister Lee Hsien Loong said earlier this month the government hopes to stabilise the housing market in four years.
The Urban Redevelopment Authority said on Friday private home prices in Singapore rose 1.3 per cent in the third quarter compared with the preceding three months - the slowest pace of increase in eight quarters.

Source: Asia one -Oct 31, 2011

PRIVATE HOME PRICES HIT NEW HIGH, GROWTH PACE SLOWS

2011-10-29T10:38:00.001-07:00

Private home prices hit another all-time high even as the rate of increase continued to moderate, suggesting that caution had crept into the market amid heightened uncertainty in the macro-economic environment and a large supply pipeline.

According to the Urban Redevelopment Authority (URA), the price index of private residential properties increased 1.3 per cent in the third quarter this year from the previous quarter to hit 205.7. Still, the rise was significantly lower than the 2-per-cent increase in the previous quarter and the URA said it was the eighth consecutive quarter in which the rate of price growth had moderated.

Ms Chia Siew Chuin, director of Research & Advisory at property consultancy Colliers International, said: "This is the first time since 4Q 2010 when the final full-quarter price index remains unchanged from the flash estimate. This could be reflective of a more cautious market sentiment."

The URA said that as at the end of the third quarter, there were 76,255 uncompleted private homes from projects in the pipeline, higher than the 71,111 units at the end of the second quarter and the highest ever recorded.

A breakdown of the URA data showed that price growth in the city fringe and suburban areas outpaced that in the prime areas.
For the Rest of Central Region (RCR), prices increased 1.2 per cent, up slightly from 1.1 per cent in the previous quarter. In the Outside Central Region (OCR), prices rose 2.1 per cent, up from 1.7 per cent previously.

Prices of non-landed properties in Core Central Region (CCR) increased at a slower pace of 0.7 per cent compared to the 1.6 per cent in the previous quarter.
On the strength in OCR prices, Ms Chia said: "This is despite the grim global economic outlook and reflects demand from genuine home-buyers and longer-term investors as they remain confident about Singapore's economic fundamentals amid a continued low interest rate and ample liquidity environment."

Separately, the National University of Singapore yesterday released its Singapore Residential Price Index (SRPI) for September. The overall SRPI, which tracks prices of completed non-landed private homes, increased a marginal 0.1 per cent from the previous month after falling 0.2 per cent in August.
The SRPI Small, which tracks prices of homes under 506 sq ft, fell 1.9 per cent after rising 3 per cent in the previous month.

Source: Today - 29 October 2011

HDB resale flat prices up

2011-10-29T07:59:00.001-07:00

Private home prices increased at slower rate in third quarter.

In defiance of the expected economic slowdown, prices of the HDB resale flats and private residential properties continued to march upward.

And while private home prices increased at a slower rate in the third quarter - compared to the previous quarter - prices of HDB resale flats went up by 3.8 per cent between July and last month, compared to 3.1 per cent between April and June.

This, as the number of resale flat transactions fell by about 10 per cent, from 6,581 cases in the second quarter to 5,903 cases in the third quarter.

According to HDB's data released yesterday, the Resale Price Index has risen from 180.3 in the second quarter to 187.2 in the third quarter - an all-time high since HDB began tracking resale prices in 1994.

ERA Realty key executive officer Eugene Lim noted that the index has increased 11.6 per cent since the third quarter last year. Mr Lim attributed the falling number of resale flat transactions to "the lack of supply and high prices" which have made it "more difficult to conclude deals".

He said: "Demand in the resale market continues to be strong; and they are coming from first-timers and families that have immediate housing needs, singles, PRs, up-graders and down-graders. These buyers make up almost 80 per cent of the resale market."

Mr Lim reiterated that the rising prices were accentuated by the cash-over-valuation (COV) demanded by sellers. "They are able to do this as supply is tight and demand is strong," he added.

According to HDB's data, COV ranged from S$29,000 for a three-room flat in Woodlands to S$68,00 for an executive flat in Tampines.

SLP International executive director of research and consultancy Nicholas Mak noted that the number of resale transactions is the lowest since the first quarter of 2004.

"Home owners are not offering their flats for sale and are keeping it for rental instead," said Mr Mak.

Dennis Wee Group director Chris Koh added: "If you own a HDB flat and a private property, you won't want to sell the HDB flat because the next time you buy a HDB flat, you'll need to sell your private property. And for those who have just finished their minimum occupation period (MOP) and are upgrading to a private property, they will just rent the flat and move into the private property."

The number of HDB flats approved for subletting increased to about 39,100 units in the third quarter - up from 37,900 units in the second quarter. According to the HDB, subletting transactions fell from 7,177 cases in the second quarter to 6,549 cases in the third quarter.

PropNex chief executive Mohamed Ismail felt the resale flat prices will continue to rise in the next quarter.

But beyond that, he expects prices to stabilise with the new Build-to-Order flats that HDB will be introducing this year and next. This would draw more first-time buyers away from the resale market, he added.

Mr Mak pointed out that if the number of resale transactions continue to hover below 7,000 flats for the next "one or two quarters", the rate of increase of resale prices will slow.

Source: Today by Ong Dai Lin Oct 29, 2011

Of land costs and productivity

2011-10-28T00:55:00.001-07:00

This week, two major employer groups raised the alarm about the labour woes faced by Singapore businesses.

The Singapore Business Federation said companies in certain industries found it particularly tough to hire locals - notably in the food and beverage, construction and service sectors - and that foreign worker rules needed to be fine-tuned and tailored to specific industries.

The Singapore International Chamber of Commerce warned that the difficulties in hiring locals coupled with the strict constraints on hiring foreigners for service jobs or skilled staff for specialist positions might well mean that multinational corporations have to rethink and resize their operations here.

Their problems arose from the Government's recent tightening of work pass rules and raising of levies to manage the size of the foreign workforce in this country. The authorities have announced that they now want to keep the foreign workforce to about one-third of the total as our physical infrastructure has strained at the seams in recent years. As such, the continued heavy reliance on imported foreign labour is not sustainable in the long run.

At the same time, the authorities have been structuring programmes and encouraging employers to explore various ways and means to raise productivity levels.

However, if you speak to employers, they will tell you that foreign workers are necessary to keep costs down, raise productivity levels and keep Singapore competitive. You can automate in some industries or streamline work processes to enhance work efficiency but only up to a point. Beyond this, it takes a lot more effort to achieve that incremental increase in productivity.

The problem is complex, but I suspect this issue about our labour problems is one that neither employers nor the authorities can win by only raising productivity or right-sizing foreign worker inflows.

What, you may ask, has all of this to do with property?

Because, as all employers know, labour is not the only major cost faced by businesses. Rental costs are the other major expense.

Some years back, an American food and beverage firm asked a potential local partner about the rental costs for setting up a shop in Singapore. When told about the monthly rental the local firm was paying at a certain shopping centre, the American company asked if the amount was for a whole year.

To give you another example: Four years ago, our firm's office lease was up for renewal. The asking rate was almost double the previous amount.

What do you think that would have done to our productivity levels if we have committed to the new lease at that asking rate? All our efforts to streamline our work processes and improve staff productivity over the past years would have been completely negated.

I remember a speaker at a seminar some time back saying that Singapore's retail market had a lot of room to expand further. She said Singapore's retail space per capita was only about half that of Hong Kong. You have to ask why. Have our land costs risen too quickly such that demand from retail developers has been constrained?

But if you ask the retailers, there is still a lot of demand - but not at the current asking rentals. There are also a lot of potential entrepreneurs whose businesses cannot even get past the planning stage because of the lack of affordable space in our commercial market.

Land costs are significant in Singapore, and you could say there is a good correlation between rentals and land costs. If the land cost is high, everything else remaining constant, the asking rentals will have to be sufficiently high to eventually cover this cost.

In Singapore, the dominant supplier of land is the Government. As such, to a large extent, it determines the market price of land by the rate it releases sites to the market.

If it tightens supply, the price of land shoots up. If it increases the pace of land release, the price moderates.

With it being in such a dominant position, there are no true market guides as to the right amount to release. I turned to an academic for an answer. She only replied that it should be at a rate that is sustainable.

In any case, an out-of-the-box approach should be taken to solving our labour problems. I strongly suspect that, if it were just a matter of automation or improving work processes, we would have solved our labour problems by now.

Source: Today - Oct 28, 2011

by Colin Tan is head of research and consultancy at Chesterton Suntec International.

Sofitel Singapore to open in early 2013

2011-10-27T22:07:00.001-07:00

SINGAPORE'S first-ever Sofitel hotel will open in early 2013. The property, with 135 rooms and suites, will be located at the former Ogilvy Centre - a landmark conservation property opposite Lau Pa Sat.

Royal Group Holdings is pumping a total of about $130 million in the asset, including the $86 million it paid for the 60-year leasehold Robinson Road site at a state tender in January.

Sofitel is the luxury brand of the Accor Group. The property in Singapore will carry the Sofitel So label, which has been described as the boutique, trendy, and contemporary label for Sofitel Luxury Hotels.

Room sizes at Sofitel So Singapore will range from 24 square metres to 140 sq m (or 258-1
,507 square feet). The ratio of suites to regular rooms will be about 70:30. There will be various categories of rooms including loft suites and the blended average daily room rate is expected to be in the high $300 range.

Royal Group Holdings managing director Bobby Hiranandani revealed that the management contract with Sofitel Luxury Hotels is for 20 years. He and his father, Mr Asok Kumar, also said that Sofitel So Singapore will be 'for keeps' as a long-term investment. 'This will be the only hotel in the Shenton Way, Robinson Road and Cecil Street area,' said Bobby in an interview.

Source: Business Times – 25 October 2011

Offshore fund acquires 50% stake in Robinson Land

2011-10-27T17:54:00.001-07:00

AN offshore fund controlled by a few high net worth individuals has acquired a 50 per cent stake in a company whose sole asset is the 12-storey freehold Finexis Building (formerly known as GMG Building) at Robinson Road.

The transaction was based on the office block's latest valuation of $110 million in July 2011. This works out to about $2,043 per square foot on its total strata area of 53,830 sq ft, which is understood to be close to the building's net lettable area. The share purchase agreement was signed early last week.

The half stake in Robinson Land Pte Ltd was sold by a partnership that includes private real estate investor and ex-Goldman Sachs banker Kishore Buxani and offshore investors advised by Mukesh Valabhji of Seychelles-based Capital Management Group.
They will continue to hold the remaining 50 per cent in Robinson Land Pte Ltd.

The company acquired the office block, located at 108 Robinson Road, in late 2006 for $48 million and is said to have invested a further sum of about $6 million sprucing it up.

Finexis Building is more than 82 per cent let, with anchor tenant Finexis Advisory occupying five floors. Other tenants include Cliftons and BoxHill Institute, both from Australia, and Melior International College, which has a tie-up with Australia's CQ University.

Finexis Building does not currently have any immediate redevelopment potential. Its current gross floor area of 64,766 sq ft is 11.67 times the land area of 5,549 sq ft - exceeding the 11.2 maximum plot ratio for the site under Master Plan 2008.

The latest rental transaction in the office block was done at $7 psf a month, but the current average monthly passing rental (that is, what is being paid by existing tenants) in the building is lower, at about $5.60 psf.

Assuming the building is fully let at this rate, the net yield based on the $110 million valuation works out to around 2.9 per cent. The building is said to have been completed in the 1980s.

Source: Business Times – 27 October 2011

Many flock to launch of Trivelis

2011-10-27T17:51:00.001-07:00

The launch of the 888-unit Design, Build and Sell Scheme (DBSS) project Trivelis in Clementi yesterday saw crowds thronging its showroom, with more than 500 applications received on the first day - the third consecutive DBSS project to receive good responses since the public outcry over the prices of Centrale 8 in June.

The Government is reviewing the scheme after the outcry over Centrale 8, which led to the developer lowering the prices. To date, Centrale 8 sold only 40 per cent of its 708 units - a figure that did not impress analysts then.

But does the strong demand for subsequent DBSS projects make a case for the scheme to remain?

Although DBSS flats come with a premium ... if people have no issue paying for it and there's a good demand for DBSS flats, it may not hurt to keep the scheme. The Housing Board (HDB) gets to put new flats out and the flats are done by private developers - it's a win-win situation.

However, some analysts think that the scheme should be scrapped as HDB plays the role of providing affordable housing to Singaporeans. But when the flats are built by a private developer, the developer pays a premium for the land and they will also sell it for a profit.

At the end of the day, a DBSS flat is still a HDB flat and when it is priced so high and nearing the prices of executive condominiums … how much can the value of the DBSS flat increase in terms of capital appreciation.

Showroom visitor Chen Ming Feng, 38, said: "The location is good but the flats are a bit small ... the prices are also a bit expensive but I think it is reasonable as it is still cheaper than the resale prices in Clementi."

Source: TODAY – 27 October 2011

The Lake Vista DBSS at Yuan Ching received some 1,000 applications

2011-10-25T04:32:00.001-07:00

The Lake Vista project under the Design, Build and Sell Scheme (DBSS) at Yuan Ching received some 1,000 applications as at 4pm Monday.

With 682 units available, this means that there are three applications for every two units, said developer Hoi Hup Sunway Pte Ltd.

Applications will close at midnight on Monday.

Analysts said demand for the Lake Vista project was as expected and not overwhelming. Although prices were competitive, buyers were put off by its distance from the city area, said analysts.

Compared to two other DBSS projects launched this month, Lake Vista is the furthest from the city.

Analysts said future developments in the Jurong Lake district should help to add value to Lake Vista.
Being the first such project in Jurong Lake, Lake Vista has helped to satisfy the demand for applicants such as upgraders and couples.

While the government reviews the DBSS policy, analysts said if prices for these projects are reasonable, they will continue to be attractive for buyers

Source : Channel NewsAsia – 24 Oct 2011

Martin Place Residences hits $2,150 psf

2011-10-25T04:00:00.001-07:00

The fully sold, 302-unit freehold Martin Place Residences obtained its temporary occupation permit (TOP) just last month. Enterprising property agents are already milling about in the area, showing units for lease and sale on the secondary market.

There were two transactions at Martin Place Residences over the week of Sept 13 to 20, based on the latest caveats lodged and downloaded from URA Realis as at Oct 6. One was the sale of a one-bedroom, 592 sq ft unit on the 25th level, which changed hands for $1.25 million ($2,111 psf). The seller had purchased it for $1.022
million ($1,726 psf) in June 2009, when the project was relaunched. The seller saw a price appreciation of 22.3%.

Meanwhile, at the neighbouring block of the twin tower development, a 1,722 sq ft, three-bedroom apartment on the 31st floor changed hands for $3.7 million ($2,150 psf). The seller had paid $2.87 million ($1,664 psf) when it was purchased in August 2009, hence, recognising a 29.2% price gain in two years. The 1,722 sq ft, three-bedroom units have seen prices escalating on the secondary market, with owners asking prices in the range of $1,900 to $2,200 psf, despite the uncertainty hanging over the global economy in recent months.
The riverfront neighbourhood of River Valley- Mohamad Sultan- Robertson Quay has become a sought-after residential district, given the short driving distance to both the CBD and Orchard Road, say property agents. There's also the waterfront lifestyle, with the waterfront promenade so that people can enjoy a pleasant walk along the Singapore River, and the numerous retail and F&B enclaves at Boat Quay, and Clarke Quay.

Projects such as Martin Place Residences therefore appeal to local and foreign investors, especially those from China and Indonesia. Three-bedroom apartments in the area tend to fetch good rentals, ranging from $7,500 to $9,500 per month.

Source : The Edge – 10 Oct 2011

New waterway heralds dawn of waterfront living

2011-10-24T14:26:00.001-07:00

A space not just for kayaking, cycling and jogging but also a one-of-a-kind waterway unlikely to be built in other estates here - that was how Prime Minister Lee Hsien Loong described My Waterway@Punggol as he officially opened it yesterday.

Built over three years at a cost of S$225 million, the 4.2km-long waterway is the centrepiece in the Government's plan to transform the sleepy estate of Punggol into a waterfront town of the 21st century.
At 10 to 85m wide and 3 to 4m deep, the waterway - developed by Surbana International Consultants - spans about 22 football fields and connects to the Punggol and Serangoon reservoirs as well as the Lorong Halus wetlands.

Speaking at the opening ceremony, Mr Lee said he was happy to witness the completion of the waterway, a "green lung in the middle of our tight city".
Plans to build Punggol 21 were first conceived in the 1990s but were put on hold when the Asian financial crisis struck, he noted.

It was only after the economy had recovered that the plans were revisited and improved, culminating in Punggol 21 Plus, where waterfront living would become a reality.
The original idea was to build a simple pipeline connecting to Punggol and Serangoon reservoirs, "most practical, but unexciting", said Mr Lee. But it was the then-National Development Minister Mah Bow Tan who suggested a waterway instead.

"Make it something beautiful, something which Singaporeans can enjoy, something which can be special for the residents and which we can build on and appreciate for many more years," Mr Lee recounted of what Mr Mah had envisioned.

Looking ahead, around 21,000 public and private homes will be built along the Punggol waterway, including Waterway Terraces I, the first public housing precinct that was launched there, in June last year.
Three other Build-to-Order projects will also be built along the waterway. And by the end of this year, 23,000 families will call Punggol home.

In 2015, there will be a new commercial hub and town plaza by its MRT station, and the town will be almost as big as Ang Mo Kio.

Mr Lee said the Government is committed to improving amenties and conditions in older estates, too, like Yishun and East Coast, and is investing S$10 billion over the next 10 years in upgrading projects.
Lessons from Punggol's first "eco-precinct", the Treelodge@Punggol - from the use of solar panels to rainwater harvesting - will also be applied to other towns.

But even as Punggol is transformed, its heritage as a fishing village will be honoured, said Mr Lee. For example, a bridge along the waterway - the Kelong Bridge - is designed with stilt-like features along its structure.

Treelodge@Punggol resident Samuel Tan, who lives in a four-room unit overlooking the waterway, said he was pleasantly surprised by how much the waterway had been developed.

"In 2007 when I bought my flat, I thought the waterway would be something simple like a longkang (drain) ... but it has turned out well," said Mr Tan, who is in his 40s and works in the financial services industry.

Source: Today - Oct 24, 2011

NEW DBSS TO BE LAUNCHED IN CLEMENTI

2011-10-24T08:10:00.001-07:00

A new Design, Build and Sell Scheme (DBSS) project, Trivelis, will be launched this week at Clementi Ave 4, about five minutes from Clementi Mall and the MRT station.

The developer of the project, EL Development Pte Ltd, has also released indicative prices for the units - S$375,000 to S$470,00 for a 3-room flat, S$530,000 to S$650,00 for a 4-room unit, and S$658,00 to S$770,000 for a 5-room flat.

More than 50 per cent of the flats are also expected to be 4-room flats for first-time applicants.
E-applications start on Wednesday and will be on till Oct 31.
Trivelis will have three 40-storey towers with 888 units.

Each unit comes with fittings such as built-in wardrobes, high and low kitchen cabinets with cooker hob, hood and sink.

Air conditioning is also provided in all bedrooms and living/dining room.

EL Development said the size of the units will be from 646 square feet for a 3-room flat to 1,130 square feet for a 5-room unit.
The project is one of the few for which tenders were given out before the government announced earlier this year that it will put DBSS projects on hold.
The DBSS scheme is being reviewed following complaints over the high asking price for units at a DBSS project in Tampines, Centrale 8, where the price of a 5-room unit was revised to S$778,000 from S$880,000.

Source: CHANNEL NEWSASIA - 24 October 2011

Investors shift focus to industrial property

2011-10-24T02:22:00.001-07:00

Property investors with a budget of below $1.5 million are diversifying from the residential sector to other sectors, most notably industrial, in bigger numbers since the government began introducing measures to cool the residential sector in September 2009.

This is borne out by a study of URA Realis caveats data for private homes (excluding executive condos), as well as strata private industrial (factory) space, offices and retail properties (excluding shophouses) - all below $1.5 million.

The private residential sector's share of this pool of total caveats has fallen from a high of 96.6 per cent in Q2 2009 (before the first of four rounds of property cooling measures were rolled out) to 87.2 per cent in Q3 2011 (based on caveats data as of Oct 12). Over the same period, the percentage share of strata private industrial (factory) units has risen from 2.2 per cent to 8.8 per cent, while that for strata offices has gone up from 0.4 per cent to 1.4 per cent and strata retail, from 0.8 per cent to 2.6 per cent.

Analysts attribute the contraction in residential property's share to government measures to cool the housing market, such as a lower loan-to-value (LTV) limit for housing loans for property investors and seller's stamp duty to deter short-term trading of private homes.

Due to the punitive policies, investors have been seeking non-residential properties. The LTV an investor can obtain for commercial and industrial properties can be as high as 70 per cent, compared to only 60 per cent for a second residential property. Naturally, investors are driven towards the non-residential segment - especially industrial, which has a much larger stock of strata units than retail and office. Nonetheless, investor interest for strata retail and office space is still strong.

Another incentive for property investors to venture beyond the residential sector is yields. Net yields of 6.5 to 7 per cent for industrial property, 5 to 6.5 per cent for retail, and 3.5 to 4 per cent for office properties - are higher than the 2 to 3.5 per cent yield for private homes.
Industry observers say some marketing agents tout such premises for office use even though such use is unauthorised.
So far, residential volume is still a dominant force of about 80-odd per cent of total number of transactions. However, if the volume of non-residential transactions continues to rise, and speculation becomes rampant and affects the normal operations of businesses, the state may need to relook its policy.

Figures also show that the total number of caveats (for all property segments) rose about 33 per cent q on q to 6,949 in Q2 2011, reversing three consecutive quarters of contraction.

This rebound, however, may be shortlived. As of Oct 12, caveats were lodged for 4,268 deals in Q3 across all sectors, or 61.4 per cent of the Q2 volume - suggesting that market confidence has weakened on the back of global uncertainty.

Source: Business Times – 24 October 2011

Ramped up supply of BTO flats easing market imbalance

2011-10-24T02:08:00.001-07:00

The HDB has ramped up the supply of new flats to meet demand and the market imbalance is showing signs of improvement.

The September BTO launch saw a moderate to low application rate, which means almost everyone will get a chance to select a flat.

Excluding a project in Ang Mo Kio which drew six applicants for each 3-room unit offered, other BTO projects in areas like Jurong East, Sengkang and Punggol received fewer than three applicants per flat - a comfortable range based on past launches as many applicants drop out.

HDB will launch another 4,200 BTO flats in November.

The HDB will also be creating a new town in Bidadari that can house up to 12,000 units, or a population of about 40,000 people in the next 5 to 10 years ahead.

The site is a former cemetery that was closed in 1972 and authorities completed the extraction of graves in 2006.

Although there is a stigma attached to the current location, given its proximity to the business district and being serviced by two MRT stations, it may prove to be the needed nudge for home buyers.

Source: Channel NewsAsia – 23 October 2011

Koh Brothers' $163m tops bids for Flora Drive site

2011-10-24T02:00:00.001-07:00

KOH Brothers Group beat out seven other bidders with its top offer for a residential site at Flora Drive, in the Upper Changi area, at the close of the state tender yesterday.

The company offered $163 million or $361 per square foot per plot ratio (psf ppr) for the 99-year leasehold land parcel.

Koh Brothers managing director Francis Koh said that if his company is awarded the site, it will build a residential project with 'green' and 'sporty' elements and around 400-410
apartments.

Koh Brothers' bid was 10 per cent above the second highest offer, which was from Hong Leong Group unit Tripartite Developers. Tripartite bid $147.6
million or $327 psf ppr.

The location has a high expatriate tenant pool comprising Japanese and other nationalities working in Changi Business Park, Changi Industrial Park and Changi International Airport
The positive response to (yesterday's) tender follows the encouraging September sales data announced on Monday, which could have influenced tender participation as well a pricing for the site.

Some 1,631 private homes were sold by developers in September - a 21 per cent pick-up from August sales - suggesting firm underlying demand especially for mass market units. The bidders are obviously confident that demand can be sustained and would not be too dampened by the uncertain economic outlook.

Within the neighbourhood, units in freehold The Gale and Ferraria Park were sold at $900-1
,050 psf in August and September 2011. Units in the 99-year leasehold Hedges Park condominium have been marketed at $800-950 psf since April 2011; to date, about 65 per cent of the 501-unit project has been sold.

Source: Business Times – 21 October 2011

Private home market gaining momentum

2011-10-22T08:09:00.001-07:00

For the past couple of weeks, you get the sense that momentum is building up in the private housing market.

In an ironic twist, a private residential site tender at Flora Drive in Upper Changi broke new ground on Wednesday, the same day National Development Minister Khaw Boon Wan said it was not time yet to remove the property market cooling measures.

It was the first site sale to reverse the tide of cautious bids for the past few land tenders. The tender attracted eight bids, with the top offer coming at S$163 million or S$361 per sq ft per plot ratio. This is 11 per cent higher than the S$325 psf winning bid for an adjacent site sold in June which attracted only four bids.

You could say that this day was some time in the making. Even as the past few state land sales attracted lower - and fewer - bids, the point is that they still got sold. The past few years have been golden years for developers, with many achieving strong profits. Many are facing the "good" problem of how best to re-invest these profits.

But more important than profits for developers is that housing sales are continuing, albeit at stable price levels.

The latest developer sales numbers for last month showed housing units sold jumping by 20.7 per cent from the previous month, or by 25.8 per cent, including the sale of Executive Condominiums.

Can the buying momentum continue and surpass the record 16,292 private homes achieved last year? It is a tall order but why not, if - as many have predicted - developers are rushing over themselves to push out their units.

And if sales continue to be robust, can we expect prices to remain unchanged for long since rising prices and sales often always go hand-in-hand?

Adding to the momentum is the ongoing collective sales - but with a big difference this time. The en bloc sale scene has clearly entered a new phase where the majority of owners for some projects are "determined" to sell.

This week alone saw five developments being put up for collective sale - Faber Garden, Dragon Mansion, Newton Lodge, Dunearn Gardens and Jasmine Court.

For the majority of owners in Dragon Mansion and Dunearn Gardens, they are openly lowering their price expectations. If owners are determined to sell, I strongly suspect they will get it sold eventually.

What will be the impact of this continuous stream of collective sales? For one, they will remove some of the housing stock and possibly some rental units - which will lend some support to the rental market.

Some owners will choose to rent while others will downgrade for the time being. This will again impact both the rental market and raise housing sales for existing developments. Others will seize their opportunity to make big money, enough to possibly retire comfortably.

For these owners and other investors, the path is clear. There is price stability in the private housing market - which means no more cooling measures for the time being. They may even derive some comfort from Mr Khaw's announcement on Wednesday that his top priority for the next two years will be to tend to the housing needs of two groups: Newlyweds and vulnerable families.

As the saying goes, when the cat's away, the mice will play.

Source: Today, by Colin AM Oct 21, 2011

Colin Tan is head of research and consultancy at Chesterton Suntec International.

Supply of residential land unlikely to let up in short-term

2011-10-22T07:49:00.001-07:00

Supply of land for residential homes is not likely to let up in the short-term.

The government said it will release more land and calibrate measures to ensure property prices are in line with economic growth.

In the addendum to the President's Address in Parliament, National Development Minister Khaw Boon Wan said the government is releasing more land for private housing to meet the aspirations of Singaporeans.

This could mean that more sites will be made available for development when the Government Land Sales Programme for the first half of 2012 is announced in November or December.

Judging by the popularity of recent GLS tenders, executive condominium sites could be on top of the list due to high demand for executive condominium units, which is further strengthened with the revision in income ceiling.

Source : Channel NewsAsia – 12 Oct 2011

En bloc supply gathers pace

2011-10-22T07:48:00.003-07:00

More sites are being put up for collective sales, with more than S$1.5 billion worth of private property hitting the market yesterday.

The site with the biggest price tag is Faber Garden, going for around $830 million. Located along Upper Thomson Road, the 544,738 sq ft freehold site has a plot ratio of 1.6 and a potential gross floor area of up to 958,748 sq ft, including 10 per cent balcony space. It can potentially yield 760 units with an average size of 1,200 sq ft. An estimated development charge of about S$31.2 million is payable.

Given the freehold tenure of Faber Garden, the site would command a premium relative to the 99-year leasehold tenure of Thomson Grand, and the indicative price works out to be in excess of S$830 million.

Separately, Dunearn Gardens in Dunearn Road has been put up for sale with an indicative price of S$550 million to S$561 million. The freehold property has a land area of about 95,442 sq ft and a plot ratio of 2.8. With 10 per cent balcony space added to the proposed development, the price is about S$2,050 to S$2,090 psf ppr.

Meanwhile, the nearby Newton Lodge in Newton Road has been put up for sale with an indicative price of S$40 million. The freehold site has an area of approximately 21,409 sq ft and a plot ratio of 1.4. A development charge of about S$2.5 million is payable.

In Spottiswoode Park, the freehold Dragon Mansion has been put up for sale with an indicative price of S$132 million to S$142 million, or S$1,200 to S$1,290 psf ppr. The redevelopment site consists of two plots of land - Dragon Mansion and a substation - with a total area of 39,176 sq ft and a maximum gross plot ratio of 2.8.

Source: TODAY – 18 October 2011

Locals form over 80% of private home buyers, foreign ownership

2011-10-22T00:54:00.001-07:00

The number of foreigners owning private property in Singapore has grown to 16 per cent in the first half of this year, compared to 12 per cent for the whole of last year.

Despite the growing demand from foreigners, Mr Khaw said locals still account for more than four-fifths of all private home purchases this year.

While the private housing market is still rising, the rates of price increase have been trending down since the third quarter of 2009.

So far this year, the price increase was 6 per cent, compared to the 18 per cent rise for the whole of 2010.

For successful Singaporeans who aspire to own private properties, Mr Khaw said the government will ensure an adequate supply of land for such developments.

Mr Khaw said: "In response to strong demand, we have ramped up supply of land through the Government Land Sales programme. This year, we are releasing land for over 14,500 units to the market, compared to 10,000 units last year.

Today
, there are still 34,000 unsold private housing units, equivalent to more than two years of demand. We will keep up the land sales programme until the market stabilises fully. The new supply will take time to come on stream, but over time it will help stabilise our private property market."

Mr Khaw stressed that rising property prices cannot be attributed solely to foreign purchases.

He pointed to other factors such as low interest rates and Singapore's strong economic fundamentals.

Source: Channel NewsAsia – 20 October 2011

Unregistered property agent charged

2011-10-21T14:05:00.000-07:00

A second person was charged on Thursday with representing himself as a property agent without being registered with the Council for Estate Agencies (CEA).

30-year-old Raymond Sim Soon Leong was also charged with failing to obtain a written authorisation from a licensed real estate firm before practising.

Despite being unregistered and unauthorised, CEA said in a media release that Sim had advertised two HDB flats for rental on an online property portal describing himself as a sales director with a licensed estate agent.
CEA said he also represented clients in making offers, negotiated property transactions and conducted flat viewings.

Sim was exposed when his prospective clients checked the CEA's Public Register of Estate Agents and Salespersons, and reported him to the council.

For each of his offences, Sim could be fined up to S$25,000 or jailed for a year, or both.

Since January 1 this year, all property agents must register with the CEA and possess written agreements with their companies before they are allowed to perform their job. Failure to comply with these rules is an offence.

Source : Channel NewsAsia – 20 Oct 2011

En bloc sale wave unlikely sign of rebound in market

2011-10-20T22:27:00.001-07:00

Singapore is suddenly awash with properties up for enbloc sale.
A last splurge for developers for 2011, and possibly the last before the market cools – that's what some owners of en bloc properties are hoping for.

But, far from a resurgence, experts have dismissed any notion that the sudden rash of sales indicates a rebound in the market.

It is certainly not a resurgence of overall activity… It's probably a coincidence that there are several en blocs launching or relaunching their tenders.

In fact, higher stamp duty on sales has reduced the profit potential for some investors.

The recent new launches have not just achieved new high prices but also sold well at a very fast pace, so this has caused the developers to replenish their land bank and for freehold land which can only be replenish through the en bloc market.

Growth in the en bloc property market is slowing down. And unless the bigger properties find their unique selling point and maintain realistic expectations, chances of a successful sale will be pretty low.

Global economic uncertainty has played a big role in clouding the outlook, with credit from banks harder to come by for the residential market.

En bloc sales in the third quarter almost halved from the previous three months to S$580 million, with larger properties valued at over S$300 million meeting repeated failures.

The new crop of en bloc projects may not find buyers for another year, and with so many up for grabs, developers' money may be thinly divided.

Source : Channel NewsAsia – 19 Oct 2011

Fine-tuning of housing policies called for

2011-10-20T06:36:00.000-07:00

The MP for Holland Bukit Timah GRC, Christopher De Souza said that though housing policies need fine-tuning, the foundation of these policies are still sturdy.

“BTO flats do not solve the immediate housing problem, because it takes up to three years before the new flat owners get their keys. In the meantime, many are still without a home of their own,” said Mr Giam during his speech in Parliament.

Also speaking on the housing issue, MP for Nee Soon GRC, Dr Lim Wee Kiak called on HDB to return back to its basics, with home ownership as the main mission.

In addition to reviewing the pricing policy of new HDB flats, he also had these suggestions.

“No. 1, disallow HDB flat upgraders to private property from retaining their flats for rental, which means they have to sell. No. 2, impose additional tax conditions on PRs who have invested in HDB flats for rental or for capital gain. No. 3, increase HDB housing grant to low income families, but at the same time, extend the minimum occupancy period to prevent premature cashing out,” said Dr Lim.

On helping low-income Singaporeans plan for their retirement, Dr Lim suggested forming a common pool of pension funds apart from CPF, where everyone contributes according to their income level and is disbursed equally to all retiring Singaporeans.

Source : Channel NewsAsia – 18 Oct 2011

National Development Minister Khaw to focus on first-timers and vulnerable families

2011-10-20T06:34:00.000-07:00

Mr Khaw Boon Wan has outlined his priorities for the first two years of his term as the National Development Minister.

In his first speech on housing issues in Parliament on Wednesday, he said he will focus on the newlywed HDB first-timers and vulnerable families.

Mr Khaw said he is committed to help all newlywed first-timers earning below S$10,000 per month get their first HDB home as soon as possible.

In the past two years, home prices shot up by 30 per cent in the HDB resale market, and 50 per cent in the private housing market, driven by global liquidity overflows and an imbalance in housing supply and demand in the domestic market.

The government is building 50,000 HDB flats in the first two years. This is the equivalent of a new Ang Mo Kio Town.

If demand remains strong beyond 2012, Mr Khaw said there are resources and capacity to build more than 100,000 HDB flats during the current term of government. This may include starting Build-To-Order (BTO) project launches in the proposed Bidadari estate, which can potentially house up to 12,000 units.

Planning for a new HDB town in Tengah will also start. The new town could have 56,000 HDB units when fully developed.

While no BTO projects will be launched in Tengah during this term of government, Mr Khaw said the infrastructure like earthworks, roads, drains, sewers, and other facilities will be put in.

Mr Khaw said as long as construction costs do not rise dramatically, the BTO prices will stabilise.

And for families with household incomes of below S$1,500 per month, the government will ramp up the supply of rental flats. This includes opening the disused workers’ quarters at the former Tanjong Pagar train station.

It is estimated that there are about 16,000 first-timer families still waiting to buy a new HDB flat, and each year brings in 15,000 new applicants.

Currently only five per cent of BTO flats are kept for second-timers, even though they make up 40 per cent of BTO applicants.

By reducing the demand on the HDB resale market, resale prices should begin to moderate, benefiting other home buyers, like the singles.

As for calls by some industry players to remove the recent cooling measures for the property market, Mr Khaw said it is not quite time yet. That is because of the global economic uncertainties. He said the government will continue to monitor the market and make additional tweaks when necessary.

Source: Business Times – 19 October 2011

CEA clamps down on errant estate agencies & agents

2011-10-20T05:59:00.000-07:00

The authorities are getting tougher on errant estate agencies and agents.

Industry watchdog, the Council for Estate Agencies (CEA) has formed an Inspection and Compliance Section – aimed at detecting infringements and unethical behaviours.

Executive director of CEA, Chionh Chye Khye said: “Staff will carry out inspection and compliance checks to ensure that estate agents have in place proper systems for management and supervision of salepersons, complaint handling, advertisement control and maintenance of proper records.”

Being a customer-oriented industry, Mr Chionh said estate agencies should treat all complaints as customer feedback and strive to improve their frontline services.

A nation-wide survey was announced at the seminar Tuesday morning.

The survey is to gauge public perception of the real estate agency industry.

It will cover four areas, including consumer satisfaction and expectations.

Source : Channel NewsAsia – 18 Oct 2011

New home sales soar, despite global uncertainty

2011-10-18T06:12:00.001-07:00

New home sales in Singapore surged last month despite global macroeconomic uncertainties and stock market volatility, driven by strong demand in mass market condominiums from HDB upgraders.
Urban Redevelopment Authority (URA) data released yesterday showed developers sold 1,631 private homes last month, up 20.7 per cent from the 1,351 units in August. A total of 1,321 units were sold in the outlying areas, 260 in the city fringes and only 50 in the prime districts.

Including Executive Condominiums (ECs), September sales hit 2,064 units. This is the highest monthly volume this year and a strong 26 per cent jump from August's 1,638 units.

September's results were remarkable and largely contributed by the sale of A Treasure Trove closing 683 units, making up 42 per cent of the total transactions. These homebuyers are mainly HDB upgraders and the purchase rationale was the attractive pricing, with median price of S$915psf in this development, and its proximity to the Punggol MRT.

The number of private homes, excluding ECs, launched last month rose 39.1 per cent from the previous month to 1,919 units - and 1,504 of these, or 78.4 per cent, were in the OCR.

A total of 433 EC units were sold last month, up from 290 in August, it was likely that the latest Government move to raise the household income ceiling for EC buyers from S$10,000 to S$12,000 per month had given a boost to sales.

For the rest of the year, developers would be monitoring the impact of the euro zone crisis on the Singapore economy to time their project launches.

Looking at launch-ready projects in Q4 and with prices remaining stable, it is unlikely that there will be the same level of take-up as in Q2 and Q3. Total new home sales volume in 2011 is expected to exceed the 14,688 units sold in 2009, but it remains to be seen whether it can outdo the record 16,292 units sold in 2010.

Land for 1,900 more homes to go on sale.

To meet persistent housing demand, the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB) will be selling four sites this month that can yield about 1,900 homes, adding to the 13,825 units that have been launched under the Government Land Sales (GLS) Programme this year.
The first of the four sites, in Alexandra Road near the Redhill MRT, was launched yesterday under the Confirmed List of the GLS.

Based on a plot ratio of 4.9, the roughly one-hectare site can produce a maximum gross floor area of 48,768 sq m, or 540 to 580 housing units.

The Alexandra Road site is one of the more attractive sites on the current GLS programme. The tender could attract about 15 to 20 bids, with the top bids likely to be submitted by major developers with deep pockets and holding power because if the winning developer plans to sell the units in this project at prices above $1,350 psf in the near future, it could need more than a year to sell all the units.
Based on analysis, this site can be expected to fetch a winning bid of about S$305 million to S$341 million, or S$581 to S$650 psf per plot ratio.

The other three sites will be released on Oct 27 and can potentially yield another 1,345 housing units.

Source: TODAY – 18 October 2011

Days of DBSS numbered, says analysts

2011-10-15T08:45:00.001-07:00

Analysts said flats sold under the Design, Build and Sell Scheme (DBSS) may be losing their relevance, as the gap in the housing market they previously served is now covered by Build-To-Order (BTO) flats.
The income ceiling to qualify for a BTO flat was recently raised to S$10,000 - the same as DBSS flats.
Since the public outcry over the record-breaking asking prices of a previous DBSS launch, Centrale 8, and the following clamp-down on land sales for such projects, some analysts believe the days of DBSS projects are numbered.

But in the housing market, it's all about location and pricing.

Belvia in Bedok is the latest DBSS project to be launched.

It saw a healthy crowd, receiving more than 200 applications on its first day.
Mr Raymond Chia, CEO of CEL Development, said: "Bedok Reservoir is a mature estate; we feel there's a ready demand. If you look at houses around here, they are mainly 20 to 30 years old. People who've grown up in the area, they are familiar with the surroundings and amenities. Out of convenience and to be near their parents, this can be a choice to them."

And instead of being a negative impact, Mr Chia sees the outcry over Centrale 8 as a "talking point".
Developer Sim Lian's Centrale 8 made the news in June when its highest asking price for a DBSS flat was S$880,000 - almost as expensive as Executive Condominiums, which boast amenities such as swimming pools and tennis courts.

Sim Lim eventually backed down and slashed S$100,000 off its priciest units.
The 488-unit Belvia project has 3-room to 5-room units, and an indicative price of S$570 per square foot.
"Transport is quite convenient, and a new MRT is coming up. And it's near to the PIE and if you want to go somewhere it's very convenient," said one Singapore resident.

"I grew up in the East, and my parents are just staying nearby. I think the location is tied with the price. So I believe with the new MRT to be built, I think the price to pay is justifiable," said another.
Market watchers point out that DBSS projects are public housing and have to be priced accordingly.
Mr Mohd Ismail, CEO of PropNex, said: "DBSS price should be at least 20 per cent cheaper than executive condos, or slightly more; it could be about 25 per cent, that would be ideal.

"It would make very little sense for someone to pay a high price where the differentiation between executive condos and (DBSS flats) is not even 20 per cent. Then I think you're not entering into a good deal."
Two other DBSS projects will be launched later this month in Clementi and Jurong.

Source: CHANNEL NEWSASIA Updated Oct 15, 2011

Foreign ownership rules: When the Government intervenes ...

2011-10-14T21:02:00.001-07:00

The issue of foreign ownership of private residential properties has been a fairly hot topic of debate for newspaper readers recently.

Sensational news reports on foreigners buying private housing properties in Singapore never fail to draw many online comments, and some of the more unbiased and thoughtful comments have made it into print in the letters-to-the-editors section.

While some have called for some kind of ban, others asked that foreign buying be restricted to certain areas or types of properties or for us to adopt rules similar to those found in other countries such as Australia.
At the same time, there was also some robust defending of the status quo. It is not the duty of the Government to provide every local household with a private property as these are not basic but luxury goods. It is simply not possible with our scarce resources.

Foreign ownership of residential properties, particularly land, is an acutely sensitive topic in many countries, particularly in less developed ones. We do not have to look further than our neighbours, Malaysia, Indonesia and Thailand.

It has to do with the general income levels and with the economic progress achieved by the local population. Natives want a level-playing field and not have all the prime or quality properties taken away by rich foreigners, perceived to have an unfair advantage with their ample wealth.

Sometimes, it is psychological as land is considered sacred. In some of the oil-rich Middle-Eastern countries, the only way foreigners could own property in their own name was on man-made islands such as The Palm Islands - Palm Jumeirah, Palm Jebel Ali and Palm Deira in Dubai and The Pearl-Qatar in Qatar.
The Palm Islands are artificial peninsulas constructed of sand dredged from the bottom of the Persian Gulf on which major commercial and residential projects are built.

The Pearl-Qatar is a man-made island covering 400ha and consists of luxury apartments and town homes, penthouse and villas besides various other commercial developments.

Until recently, foreign ownership of private residential property was also a non-issue in Singapore and in Hong Kong, but talk to some Hong Kongers these days, even among the wealthier ones, and you sense a deep resentment against Chinese nationals who have been buying up residential properties in the former British colony in droves.

What capped the debate for me was a letter to the press published on Wednesday by Associate Professor Kelvin F K Low, the associate dean (external relations) of the Singapore Management University's School of Law.

He was responding to an earlier letter which argued for no government intervention in the private property market. Besides the strict rules on foreign buying of public housing flats, he reminded readers that there are already existing restrictions in the private housing market.

Non-Singaporeans cannot buy landed property without consent. Two days ago, Law Minister K Shanmugam said he expected the number of approvals given to permanent residents who want to buy landed homes in Singapore to fall by more than half after the criteria was tightened further recently.
In his letter, Assoc Prof Low said that with the property market regulated at the bottom and at the top, it is those in the middle income bracket who are left feeling the squeeze.

In 1973, the Government introduced measures to prohibit the sale of residential property to foreigners without its consent.

These measures were relaxed in 1975 to allow foreigners to purchase residential property in buildings of six or more storeys.

The measures took form as the Residential Property Act in 1976 but the Act has lost its bite over time. Exemptions were introduced for developments designated "condominiums", which today is almost every new development. In 2006, the need for "condominium" status was itself removed.

However, Assoc Prof Low warned that the decision to change the status quo should not be taken lightly. The Government derives substantial revenues from land sales and any restrictions may affect this revenue.
In his opinion, it may be unthinkable for measures as draconian as in 1973 but the idea of government intervention is "hardly ludicrous". He ended by saying the "precise extent of intervention is a matter of government policy which, in a democracy, must in turn be accounted for come the next General Election".

He took the words out of my mouth.

Source: Today Online by Colin Tan Oct 14, 2011

Landed property: Fewer foreigners to get approval

2011-10-14T03:19:00.001-07:00

With changes to the Residential Property Act (RPA) in January, Law Minister K Shanmugam expects the number of approved foreigner's purchase of landed property here to be cut by more than half.

Speaking to reporters after visiting a black and white bungalow, Mr Shanmugam said approvals are given to applicants who are making a "very significant economic contribution" or if the family is rooted in Singapore with children doing national service.

"After the further tightening up, I suspect we are looking at very few people who would qualify. I think probably less than half of those who had previously qualified under the earlier strict criteria would qualify now. I'd be surprised if approvals are more than 50 per year," he said.

Only foreigners who are Permanent Residents can purchase landed residential properties here and those who wish to purchase such properties must seek the approval of the Law Minister. Each approval is allowed one property purchase.

Mr Shanmugam said the Government has kept foreign ownership of landed property to under 5 per cent and has maintained it at 3.5 per cent currently.

The Government has imposed stringent conditions on approved PR purchasers of landed properties because landed property should primarily be owned by Singaporeans and "the exceptions will be very rare", Mr Shanmugam added.

The Law Minister was on a site visit to a black and white bungalow at 10AB Goodwood Hill, which was organised by the Singapore Land Authority.

The tenancy bid for the bungalow, which has a land area of 7,869 sq m, will close tomorrow.
Enhanced penalties under the RPA came into effect in January this year. For example, a PR owner who rents out his landed residential property without approval now faces a financial penalty of up to three times the rental income earned over the period of breach, or S$10,000, whichever is higher.

A PR owner who disposes of a restricted property without approval during the non-disposal period now faces a maximum fine of S$200,000.

The previous penalty for both offences was a maximum fine of S$5,000 and/or a three-year jail term on conviction.

Source: Today Online by Ong Dai Lin , Oct 13, 2011

More HDB flats and new towns planned to ease housing crunch

2011-10-14T03:13:00.001-07:00

Besides building Housing and Development Board (HDB) flats ahead of demand to ease the housing crunch, the Ministry of National Development (MND) will be preparing for new towns at Tengah and Bidadari, Minister Khaw Boon Wan said yesterday.

In the MND addendum yesterday to President Tony Tan's address at the opening of Parliament on Monday, Mr Khaw said: "They (Tengah and Bidadari) will not be needed soon but we are planning ahead so as to retain flexibility."

Tengah is near Choa Chu Kang, while Bidadari is near Woodleigh.

And, as Singapore's population continues to grow and age, new infrastructure will be built to make the Republic "a city for all ages".

"We will bring jobs closer to homes as new growth areas such as Jurong Lake District, Paya Lebar and Kallang take off. Housing will be gradually intensified, especially around MRT stations and in mature towns such as Queenstown and Bishan, to take full advantage of their excellent amenities," said Mr Khaw.

The undertaking of more complex projects in a denser Singapore also means the construction industry has to increase its capabilities and productivity, he added.

The Building and Construction Authority will target to raise the productivity of the sector by 20 to 25 per cent over the next 10 years.

Mr Khaw also said the MND is taking "active measures to address the temporary imbalance in supply and demand".

More flats will also be built to meet the demand for subsidised rental housing.

Mdm Parveen Bengam, 27, and her husband are among the families that managed to secure a rental flat with the HDB's help, after approaching them in 2009.

Mdm Parveen, a part-time operator, told Today: "I finally have a roof over my head. The house is small but we have our own privacy and we have created a small world here for ourselves."

Mr Khaw said the MND will strive for "even better-designed and sustainable towns that have ample public spaces and community facilities" in the next phase of public housing. "We are reviewing the Town Council Management Report so that it can better encourage and reflect how residents are participating in the daily affairs of their town council," he said.

Source: Today Online by Ong Dai Lin
04:47 AM Oct 13, 2011 SINGAPORE

Belvia: DBSS project to be launched in Bedok

2011-10-13T06:11:00.001-07:00

A Design, Build and Sell Scheme (DBSS) project in Bedok is set to be launched this week.

The project, Belvia, is one of a few projects for which tenders were given out before the government announced it will put DBSS projects on hold.

CEL Development said on Monday e-applications for Belvia — a 488-unit project comprising three-, four- and five-room units in
Bedok — will open from 14 to 18 October.

Balloting will start soon after application closes next Tuesday and buyers who qualify for DBSS flats will be allocated a booking slot from 7 November onwards, it said.

The project occupies a total land area of more than 16,000 square metres and is the first DBSS project in the mature estate.
CEL Development CEO Chia Lee Meng said he expects interest from buyers who wish to live near their parents.

The government had earlier this year put DBSS projects on hold to review the scheme.

This follows complaints from members of the public who asked for the scheme to be scrapped in the wake of high asking prices at Centrale 8, a Tampines DBSS project.

The developer of that project, Sim Lian Group, had initially asked for S$880,000 for a five-room unit, later revising it to S$778,000.

Source : Channel NewsAsia – 11 Oct 2011

Property rental, S'pore is world's 5th most expensive

2011-02-15T01:38:00.000-08:00

SINGAPORE is now the 5th and the 3rd most expensive country in the world and Asia respectively for two-bedroom rental property.

This ranking came about as a result of a 15 per cent increase in monthly rent to US$2,810 (S$3,600) last year for an unfurnished two bedroom property, according to a report by ECA International, a knowledge and solutions provider for international human resources professionals.

'The rebound in Singapore has been driven by a general recovery in house prices along with increased demand,' says Lee Quane, Regional Director, ECA Asia.

'Assignee numbers are up again in Singapore following falls during the economic downturn. This has placed pressure on rental accommodation, particularly in areas popular with expatriates.'

In addition, exchange rate fluctuations play an important role when making direct comparisons of residential property for rent. 'The strengthening of the Singapore dollar against its American counterpart has contributed to the relative increase in accommodation costs - when Singapore rents are quoted in local currency they have increased at the lower, albeit significant, rate of 9 per cent year-on-year,' says Mr Quane.

Tokyo is the most expensive location globally for two-bedroom rental property.

Source: AsiaOne 15 Feb 2011

A penchant for shoebox housing

2010-12-19T23:17:00.000-08:00

Gone are the days where size matters for home seekers. Smaller apartments are making their presence. In the public housing sector, 3-room and studio flats have been re-introduced in new Build-to-Order HDB projects, while new private residential offerings seem to be increasingly smaller, yet popular.

Colloquially referred to as "Mickey Mouse" or "shoebox" apartments, there has been an increased demand for such residential units. The year 2007 saw a spike in sales of units smaller than 500 sq ft, from an almost inexistence to 325 units.

The story continued from there, to 883 transactions last year. While it can be argued that last year was a recession year and therefore small apartments found favour among financially cautious buyers, the heightened interest in shoebox units this year seems to confirm the growing penchant for smaller apartments. This year, a total of 1,421 such units have so far been transacted.

Why the popularity?

To examine why shoebox units have become popular, one must look at the private residential sector in the form of sales activity, pricing trends and product offerings in recent times.

The private residential sector has created various market participants who entered and exited at the right time to achieve tidy profits, reflecting success stories from property transactions. This spurred many other aspiring private home buyers to quickly proceed with a purchase.

However, while one recognises the opportunity from property investments, there are often limitations in one's financing capabilities. Gaining entry into the property game is but a dream unless one has accumulated sufficient funds to make a purchase.

Shoebox apartments are hence a feasible option for interested participants who find it increasingly difficult to own a sizeable piece of private property as prices have continued to escalate. For one, the upfront capital and overall cost of shoebox apartments are smaller and more affordable.

For another, the cost of a shoebox apartment will at most be comparable to that of a larger HDB flat. For a private residential property owner, there is more flexibility in home ownership and re-selling his unit.

Developers who saw this trend were quick in pushing out such projects amid the scarcity. The response has been encouraging and the resale demand for such properties has further reflected the overwhelming interest.

Understanding Challenges

Potential buyers of shoebox apartments need to know that the tenant base for such housing is more restricted than ordinary apartments. Prospective tenants are likely to have significant budget constraints and are often either local professionals or junior expatriates on partial housing allowances.

Some of these tenants may also prefer an HDB flat as it is more spacious for a rent that is lower than that of a shoebox apartment. Companies are unlikely to accommodate upper-middle and senior expatriates in shoebox apartments, who have specific housing requirements. A shoebox apartment will not reflect well on the company, which may in turn affect career and relocation decisions.

Also, living in a shoebox apartment may not be entirely cost effective. Some occupiers may find that there are limited activities within the confined space and prefer hanging out, incurring more entertainment expenses. The real costs of living may be higher than expected.

Relevance for shoebox apartments

Although there are challenges in investments, it does not necessarily reduce the appeal of shoebox apartments. As home buyers are becoming cautious and refraining from buying apartments beyond their reach, shoebox apartments can be smaller, realistic purchases that minimise liquidity risks. Buyers are also able to channel the rest of their funds to other areas, such as travel or enrichment programmes.

There is a potential for shoebox apartments to become more popular among homebuyers. Small sized apartments are common in major cities in the world where properties are costly.

With Singaporeans increasingly exposed to overseas city living, many may become more open to living in confined premises so long as there is privacy and an opportunity to host small gatherings.

The success of the new developments can also potentially create a structural shift in housing preferences and living patterns.

Perhaps a key merit of shoebox apartments for investors is that the tenant does not have to share an apartment with others, including strangers and acquaintances. This minimises friction arising from different lifestyles among occupiers.

Shoebox apartments are also effective solutions to singles who may find regular size housing beyond their means. A single can only buy an HDB resale flat if he or she is at least 35 years old.

Shoebox apartments offer privacy for singles who are not only financially independent but are long psychologically ready for independent living.

A shoebox apartment, in this case, will be bought for owner occupation rather than for pure investment.

Consider the option carefully

The fact is that hardly any property can offer the perfect fit. A cost-effective property usually cannot provide the maximum benefit from both investment potential and capital appreciation standpoints. What is essential for a buyer is to be clear about the motivation in the property purchase - is it for investment or owner occupation?

When prudence is exercised in the home-buying decision, a shoebox apartment can be a worthwhile purchase, offering the opportunity to enjoy privacy and a potential for capital appreciation in sync with the sustained economic recovery.

By Ong Kah Seng, Senior Manager, Research at Cushman & Wakefield.

The economics of investing in shoebox units

2010-12-19T22:56:00.000-08:00

The term “shoebox” apartment is generally defined as a studio or a one-bedroom apartment that has less than 500 sq ft of strata area. The area includes, say, about 15 per cent allocated to balconies, planters, bay windows, aircon ledges and, in some cases, even bomb shelters. Therefore a 380-sq-ft one-bedroom unit might have a real usable space of about 330 sq ft in the living/dining room, kitchen and bedroom.

How do the economics stack up?

Per-square-foot prices and rentals generally go up when the sizes of the apartments go down. So in several recent launches, the one-bedroom units fetched, for example, $1,200 psf, while the three-bedroom units transacted at below $1,000 psf – a 20 per cent premium that arises because the smaller unit with a lower selling price quantum has a wider reach.

As for rentals, let’s take a hypothetical example, say, in River Valley. A one-bedroom, 550-sq-ft unit may lease for $3,800 a month, a 900-sq-ft two-bedroom unit for $5,500, while a 1,200-sq-ft three-bedroom unit, $6,500. The rentals per square foot increase as the sizes of the apartments drop (see Table 1). However, up to a point, the equation fails to apply. In this example, a 350 sq ft studio unit in River Valley may, for example, be able to fetch about $2,800 per month of rental. However, that is near the limit of how high rentals can go for shoebox units. This unit is similar in size as the deluxe hotel rooms in River Valley area.

If we tried to push rentals beyond $3,000 per month (ie above $100 per day), it may be more economical for the tenant to take a long-term let with a hotel around River Valley, given the more flexible lease terms that include daily housekeeping, electricity, fully furnished/equipped rooms and probably complimentary laundry. He would also save on rental whenever he travels out of Singapore.

As for costs, if every single apartment in a development were shoebox sized units, their share values would be five for every apartment. The maintenance fees and sinking funds for the common areas and shared services would be equally borne by all the owners of the development.

However, if a project has some shoebox units mixed with larger sized two- to four-bedroom units, then the shoebox units will contribute proportionately higher maintenance fees and sinking funds.

Under current share value allocation rules – apartments of less than 50 sq m are allotted share value of five, larger apartments up to 100 sq m are allotted six and so on, increasing by one share for every additional 50 sq m of strata area.

The yields – net of maintenance fees and sinking funds – become narrower between shoebox units and their larger sized cousins. Should the economy weaken and vacancies run high, and normal two-bedrooms are available for rent at $3,000 to $4,000 per month, how would shoebox units stand up to price competition?
I wonder what new social challenges may prevail in the future for the developments that contain a wide mix of units. In developments where the $600,000 shoebox or one-bedroom units were bought by investors and $2 million four-bedroom units purchased by owner-occupiers, will the low-budget tenants from the shoebox units make good neighbours for the rest?

Will there be poor cousins in a rich compound just like I was a poor student living in a 120-sq-ft bedsit within the posh Kensington neighbourhood? In such a mixed development, will investor-landlords be willing to contribute that little extra to maintenance and sinking funds as compared to house-proud owner-occupiers? We’ll have to observe as such heterogeneous projects, most still under construction today, become mature and fully occupied estates over the next five to 10 years.

From the list of about 130 projects that have shoebox units (see Table 2), it is interesting to note that the most common name used is “suites”. This is merely terminology and not to be confused with hotel suites (which are generally bigger than shoebox units) nor with several luxury projects that do not have shoebox units, such as Marina Bay Suites, Paterson Suites and Nathan Suites.

In land scarce Singapore, space is a real luxury. While trying to improve the quality of life, we also need to maximise the use of every square foot of land. HDB blocks have risen up to 50 storeys. Shrinking apartment sizes is another way to satisfy the demand from more, and smaller, households. The proliferation of shoebox apartments should be an expected consequence of the steadily rising population density. Cramped spaces, anyone?

By Ku Swee Yong, founder of real estate agency International Property Advisor.

RIVER PLACE ON HAVELOCK ROAD FETCHES $1,307 PSF

2010-12-07T03:30:00.000-08:00

The 509-unit River Place on Havelock Road has recently caught the attention of investors and property agents attribute it to the perception that it could be undervalued relative to other newer projects in the vicinity — for instance, The Pier at Robertson, completed in 2006, where transaction prices in late September/October ranged from $1,696 to $2,032 psf; and Watermark at Robertson Quay, completed two years ago, where the most recent transaction in October was at $1,579 psf.

The proximity of River Place to the CBD and the entertainment/F&B enclave of Boat Quay and Clarke Quay along the Singapore River makes it popular with expatriates.

The condominium saw four transactions in the Nov 9 to 16 period. Prices ranged from $1,143 to $1,307 psf, according to caveats lodged with URA Realis.

Developed by Far East Organization, River Place consists of four towers, with one- to fourbedroom units measuring 678 to 2,100 sq ft. The condominium along the Singapore River also contains 50 penthouses and maisonettes, measuring 1,292 to 3,649 sq ft.

Completed in 2000, the 99-year leasehold River Place was launched in early 1997, just before the Asian financial crisis. It was also when the property market was still toppish, although sentiment had been affected by the tough anti-speculation measures introduced on May 15, 1996. Thus, prices of units sold when the project was launched ranged from $1,100 to $1,200 psf, which is not far from prices today.

“Investors could get a unit at River Place in District 3 in the $1,200 to $1,300 range, which is considered an entry-level price for a condo located so near the CBD, and at the same time, the units offer views of the river,” says Alan Shue of PropNex, who has been marketing resale units at River Place for more than a decade.

In the Tanjong Pagar area, the 351-unit Spottiswoode Residences, located along Spottiswoode Park Road near the Tanjong Pagar railway station, was launched in early November at prices ranging from $1,720 to $2,150 psf. It is a freehold project, however, and located within a short walk to the Outram MRT station.

Even new launches of 99-year leasehold condos in the suburbs of Yio Chu Kang and Ang Mo Kio are priced at $1,100 to $1,200 psf today, notes Shue. As such, he considers River Place “a good buy”.
Prices at River Place may not have moved much, but rental rates certainly have, and investors there are therefore enjoying high rental yields, he notes.

Most recently, the owner of a 1,389 sq ft unit at River Place listed an asking rent of $7,000 a month, says Shue. Monthly rental rates are $4.50 to $5 psf, translating into a rental yield of 5%.
“Most of the buyers are local investors looking to rent out the units,” says Shue.

River Place has a strong take-up rate, especially among singles and young couples who are working in the CBD area such as Raffles Place. One-bedroom units, which make up more than 50% of River Place, are especially popular.

Another key contributing factor to the strong rental growth at the development is the spacious bedroom layout, says Shue, adding that one-bedroom units range from 678 to 925 sq ft, unlike some of the new city apartments, which measure 350 to 400 sq ft.

Situated along the Singapore River at Havelock Road and Clemenceau Avenue, River Place is a 10- to 15-minute walk to both the Clarke Quay and China Town MRT stations, as well as two bus stops away from the Raffles MRT station. Residents could also walk to Mohamed Sultan, Riverside Point, Clarke Quay and Boat Quay.

Most recently, a 1,819 sq ft unit on the first floor was sold for $2.08 million ($1,143 psf). This represents a 43% gain for the seller, who bought the unit in the sub-sale market for $1.45 million ($797 psf) in August 1999. The first owner bought the unit from the developer for $1.59 million ($875 psf) in June 1999.
On the seventh floor of another block, the owner of a 797 sq ft one-bedroom unit made a 33% capital gain when he sold it for $990,000 ($1,243 sq ft) on Nov 15. He had bought the unit from the developer for $742,600 ($932 psf) in August 1999. Meanwhile, a 786 sq ft one-bedroom unit on the eighth floor of the same block was sold for $1.01 million ($1,285 psf) on Nov 12, representing a 5.6% gain for the seller, who bought the unit for $956,232 ($1,217 psf) from the developer at its launch in 1997.

On the same floor, a 818 sq ft one-bedroom unit was sold for $1.07 million ($1,307 psf), representing a 4% gain for the seller, who had bought the unit for $1.03 million ($1,255 psf) from the developer in May 1997.
Not surprisingly, River Place is as sought after as the newer projects on the riverside, which are also popular among investors. For instance, there are City Developments’ The Pier at Robertson, a 201-unit condo located along Mohammad Sultan Road and completed in 2006; and CapitaLand and Hwa Hong Corp’s 545-unit RiverGate, a landmark project located on Martin Road and also fronting the river.

Source : The Edge – 7 Dec 2010

The Interlace hits high of $1,323 psf

2010-11-07T22:44:00.000-08:00

Prices of units at The Interlace hit an all time high of $1,323 psf in October, with apartments released in the first two phases almost sold out. So far, more than 90% of the 590 units released have been sold. In the first phase, 360 units were put up for sale in September last year, and in the second phase, 230 units were released in April this year. In the first phase, prices ranged from $850 to $1,150 psf, and in the second phase, prices ranged from $850 to $1,300 psf.

High-profile homebuyers at The Interlace include CapitaLand’s group CEO Liew Mun Leong, who purchased a penthouse on the 23rd floor for $3.7 million ($1,092 psf), and his son and daughter- in-law, who bought a four-bedroom unit on the 16th floor for $2.4 million ($996 psf) this year. The 1,040-unit condominium, which sits on a sprawling site of over 800,000 sq ft, is set to be an iconic development. Designed by star architect Ole Scheeren, a former partner at the Office for Metropolitan Architecture, The Interlace comprises 31 six-storey apartment blocks stacked to form eight courtyards. Jointly developed by CapitaLand and Hotel Properties Ltd (HPL), The Interlace is built on the former Gillman Heights HUDC estate and is expected to be completed in 2015. The 99-year leasehold condo sits next to the Ayer Rajah Expressway on one side and is just a short walk from the 9km green belt, which makes up the Southern Ridges, covering Mount Faber Park, Telok Blangah Hill Park and Kent Ridge Park.

Andrew Choi, a marketing agent with ERA, notes that the project is popular with families, both Singaporeans and expatriates, given that the units are larger than most new projects these days. The development is near popular educational institutions such as International School Singapore (high school campus) and the National University of Singapore and offices at Telok Blangah Industrial Estate. It is also near the upcoming Labrador Park MRT station on the Circle Line.

The project contains a mix of unit types, starting from two-bedroom apartments of 807 sq ft to penthouses of 6,308 sq ft. Penthouses range from 3,154 to 6,308 sq ft. All the two-bedroom units have been snapped up, according to CapitaLand’s spokeswoman. Choi says he is marketing several two-bedroom units in the sub-sale market at prices ranging from $1,200 to $1,300 psf.

There were three transactions in the week of Oct 5 to 12, two of which were sub-sales in the secondary market, while the other was a new sale from the developer. The new sale was for a 1,001 sq ft unit on the 10th floor of one of the blocks, which was sold for $1.197 million ($1,197 psf).

Meanwhile, one of the sub-sales was for a 2,454 sq ft unit on the 11th floor that changed hands for $2.5 million ($1,030 psf), according to a caveat lodged with URA on Oct 7. The seller had purchased the unit for $2.198 million ($896 psf) from the developer in January this year, representing a 15% capital gain in less than a year.

The second sub-sale involved an 807 sq ft, 12th floor two-bedroom unit that changed hands for $1.068 million, or $1,323psf. The first owner had purchased the property for $944,800 ($1,170 psf) just a year ago, hence seeing a 13% gain.

In terms of average price, $1,323 psf is the highest achieved so far for the project. The last time a unit crossed the $1,300 psf level was for the sale of another 807 sq ft, two- bedroom unit on the 11th floor, which was sold by the developer for $1.05 million ($1,305 psf) in April.

Source : The Edge – 1 Nov 2010