HDB prices up 1.4 per cent

Source : Straits Times – 25 Jul 2009

PRICES of Housing Board flats rose 1.4 per cent in the second quarter to a record high, reversing a first-quarter dip of 0.8 per cent.

The number of transactions also soared – up 58 per cent in the three months to June 30 – as confidence grew and buyers rushed back into the market.

One reason for the HDB market’s resilience amid testing economic times is the decline in the amount of cash required upfront to buy a resale flat. This amount is called cash-over-valuation (COV) and is falling or at least stable across all flat types.

Fresh figures released by HDB yesterday showed that the median COV for all flat types fell to just $3,000 in the second quarter compared with $4,000 in the first quarter. The median COV is at a relatively low $5,000 for three- and four-roomers and stayed at zero for five-room and executive flats, for both the first and second quarter.

Median COV for two-roomers declined from $7,000 in the first quarter to $6,000 in the second.

This is a marked change from the 2007 property boom, when median COV hit $22,000 in the fourth quarter, pricing many first-time buyers out of the resale market.

COV has come down due to valuations of resale flats catching up, said ERA Asia Pacific associate director Eugene Lim.

So even though values of HDB resale flats are high, they have become more affordable as buyers can get bank loans for the purchase and do not have to fork out high amounts of cash.

Sales activity was robust in the quarter with transactions up to 10,184 compared with 6,446 in the first quarter. They were also up 31 per cent from the 7,763 units sold in the same period last year.

Sales of five-roomers rose 80 per cent – 2,713 were moved – over the first quarter while executive flat transactions surged 100 per cent to 753. Four-room flat sales climbed from 2,488 to 3,787.

PropNex chief executive Mohamed Ismail noted that sales of the bigger flat types had suffered in the three quarters up to the end of March amid growing concerns about Singapore’s worst recession.

‘These numbers are a clear sign that people’s market confidence is growing,’ he said, adding that feedback on the ground indicated that demand in mature estates far exceeds supply.

The sales of larger flat types also explain the strong demand from HDB upgraders who sold their flats to buy private homes, said property veteran Nicholas Mak.

Private home sales, especially in mass-market suburban condos, have enjoyed brisk sales since February.

Meanwhile, HDB rents were stable. Median rents for two-room and five-room flats for the second quarter were unchanged but fell by $100 for three-room, four-room and executive flats.

HDB plans to launch a further 6,000 units under its build-to-order scheme over the next six months. About 2,400 will be three-room and smaller flats. The bulk of new flat supply will be in Punggol. So far, HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands this year.

Analysts predict that HDB flat prices will enjoy modest increases as confidence continues to grow.

But the falling COV for large flats could indicate limited upside for prices of these flat types, said Mr Mak. ‘This could also limit the HDB upgraders’ demand for private property in the short term,’ he said.

Mass market buyers prop up home prices

Source : Straits Times – 25 Jul 2009

THEY were shut out of the property market during the most recent boom in 2007, when furious demand for luxury homes drove up home prices far beyond their reach.

Now, buyers of cheaper mass market homes – defined loosely as bigger HDB flats and condominiums in the suburbs – are back in the market with a vengeance.

They doubled their purchases of five-room and executive HDB flats between March and June, pushing overall HDB prices up 1.4 per cent to hit a new high in the quarter, according to Housing Board (HDB) data released yesterday.

Mass market buyers also picked up four out of every 10 private homes sold, a shopping spree that resulted in twice the number of homes being sold in the second quarter than the first quarter, said the Urban Redevelopment Authority (URA). The number of resales nearly trebled while sub-sales more than doubled.

The strong demand for cheaper condos meant that while private home prices still fell 4.7 per cent in the second quarter, it was a far smaller decline than the plunge of 14.1 per cent in the first quarter.

What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop in the quarter – 2.3 per cent – compared to pricier prime and city-fringe properties, which saw prices fall by double that amount.

Rents for private homes continued to fall 5.2 per cent in the quarter, though 8 per cent more leases were signed.

Consultants had actually expected prices to increase in the second quarter, as home buyers flooded back and developers started to selectively raise prices.

‘Our own analysis showed that private home prices in the second quarter rose,’ said DTZ’s head of South-east Asia research Chua Chor Hoon. She said the price increases ranged from 3 per cent for some suburban resale homes, to 11 per cent for homes in the prime districts.

In response to queries, the URA said that while prices have risen in some projects, there were still other developments that saw prices fall in the quarter.

But private home prices are likely to show a definite pickup from the third quarter, consultants say. ‘The second quarter will possibly be the last quarter of price declines,’ said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.

‘If developers remain cautious and tread carefully with price increases, this momentum in the market could continue. But if developers are impatient and jack up prices too quickly, that may hurt demand as buyers are still price-sensitive.’

Mr Nicholas Mak, a long-time property consultant, said he expects overall prices to show an increase in the second half of this year. His reasons: the recovery in global stock markets, relief buying due to a shorter-than-expected recession, and low interest rates that make property purchases look more attractive.

The outlook has also been boosted by the fact that demand is no longer restricted to the mass market, he said. In recent months, more buyers have been keen on mid-tier and high-end condos such as The Arte at Thomson or One Devonshire in Somerset. Even at suburban condos, buyers seem to be opting for larger, more expensive units. Yesterday, developer UOL Group sold 180 units in a single day at Meadows@Peirce in Upper Thomson.

While the project offers smaller units from 517 sq ft in size, most units sold had at least three bedrooms and were priced at $1 million and above, said UOL’s chief operating officer Liam Wee Sin.

The improved economic outlook also meant that offices and shops also saw slower declines in prices and rentals in the second quarter. Office prices fell 3.9 per cent, while rents fell 7.7 per cent.

But these numbers are unlikely to turn positive soon as recent retrenchment exercises dampen the office sector, said Mr Li Hiaw Ho, executive director of CBRE Research. He was more upbeat about shopping malls, as there is still ‘healthy demand’ for existing shop space. Shop rents eased 2 per cent in the second quarter and prices fell just 1.4 per cent.

Home supply pipeline shrinks, prices stiffen

Source : Business Times – 25 Jul 2009

However, URA price index for private homes still shows fall in Q2, confounding analysts

LATEST government numbers are offering clues as to why some developers are busy looking for land and nudging up home prices. The supply pipeline for private homes has shrunk, from about 71,600 units at end-Q2 last year to 62,600 units as at end-Q2 2009. The stock of unsold units in uncompleted projects with planning approvals has also contracted from about 43,500 units to around 38,500 units over the same period.

Developers had not acquired much residential land over the past year or so in the aftermath of the financial crisis but have enjoyed a spectacular revival in home sales over the past six months. Lately, however, two sites from the government reserve list were triggered for launch by developers.

Developers have also regained some pricing power of late. Urban Redevelopment Authority’s (URA) price index for private homes fell 4.7 per cent in Q2 over the preceding quarter. The fall was less steep than the 5.9 per cent decline for the period that URA’s flash estimate had shown earlier this month. The latest decline is also much less than the 14.1 per cent quarter-on-quarter price drop in Q1. While a debate rages on why URA’s Q2 price index lags the price gains seen in the market during the period, property consultants are expecting further price increases in the current half.

‘But we’re not going to see runaway prices as there will be price resistance from buyers, especially in the upgraders market as there’s the issue of affordability,’ says Knight Frank chairman Tan Tiong Cheng. ‘Developers will be mindful of competition from the secondary market as new projects are completed. From a consumer’s viewpoint, if prices get too high, they could either give the market a miss or look for alternatives – like picking up a home from earlier investors who can afford to sell below developers’ prices,’ he said.

‘There’s another reason why prices are unlikely to run away, at least not in the mass market – and that’s because the government has, under its reserve list, a substantial supply of land for this segment,’ Mr Tan added.

Giving a more bullish take, Credo Real Estate managing director Karamjit Singh says private home prices started to turn in April/May and estimates that depending on market segment, prices have increased anywhere between 15 and 30 per cent from the bottom in Q1. He forecasts the total increase between April and year-end could be in the order of 20 to 60 per cent, with the biggest hikes in the high-end segment. ‘So far, the home buying has been led mainly by Singaporeans and PRs. When foreigners and institutional funds buy in a bigger way, then momentum in the high-end residential sector will receive a boost.’

URA’s real estate data yesterday showed a 79 per cent quarter-on-quarter jump in private home sales by developers to 4,654 units in Q2 – the third highest quarterly figure on record, according to CB Richard Ellis (CBRE). Significantly, there was a more even spread of sales across the regions in Q2, unlike Q1, when developer sales were concentrated in the Outside Central Region (OCR), where mass-market suburban condos are located.

In Q2, the Core Central Region (CCR), which includes the prime districts 9, 10 and 11, financial district and Sentosa Cove, accounted for 31.2 per cent of homes sold by developers. The Rest of Central Region (RCR) had a 39.2 per cent share, thanks to projects such as 8 @ Woodleigh, The Arte, The Mezzo and Vista Residences; while OCR’s share was 29.6 per cent. The housing recovery is filtering up.

The momentum of sales in the secondary market was also strong, with 3,059 units sold in the resale market in Q2, almost three times the 1,144 units in Q1. Subsale deals more than doubled from 412 in Q1 to 940 in Q2. In the residential leasing market, 10,327 leases were contracted in the April-June period, 7.8 per cent above the 9,579 leases done in Jan-March, CBRE said. With more expats being hired on local terms or smaller housing allowances, rents continued to slide in Q2, albeit more moderately.

HDB prices hit record high

Source : Today – 25 Jul 2009

IN WHAT appears to be confidence that the green shoots of the economic recovery are slowly bearing fruit, prices of resale Housing and Development Board (HDB) flats have hit a record high in the second quarter, and property agents say this is leading to a renewed climb in the cash-over-valuation (COV) for the secondary market transactions.

The HDB reported on Friday that its resale price index rose 1.4 per cent to 140.2, beating the earlier flash estimate of a 1.2 per cent increase and reversing the 0.8 per cent dip in Q1.

The rebound followed news earlier this month that Singapore had emerged from a technical recession as the 20.4 per cent sequential growth in the second quarter snapped four straight quarterly contractions.

The recovery in the COV started as recently as this month as market confidence continued improving over the last quarter, property agents told Today.

The COV refers to the amount that is paid above the valuation of a resale flat. A higher COV means that the buyer has to fork out more cash, as banks will only lend up to a certain percentage of the valuation.

The Q2 HDB data showed that COV for five-room and executive condominiums was almost non-existent for transactions in most estates. Yishun flats enjoyed the highest median COV of $8,000.

The COV has been dipping over the last year after surging to a high during the boom in 2007. In Q2 this year, average COV was $3,000 – down from $22,000 in Q4 of 2007.

With confidence returning to the market, the trend of higher COVs will be sustained if the recovery remains on track, but with higher and stable valuations, the COVs are unlikely to touch the levels seen in 2007, property watchers told Today.

“COV is pretty much a reflection of the way things are in the economy,” said Mr Eugene Lim, an associate director at ERA Asia Pacific. He expects the average COV to hit $5,000 to $15,000 in Q3.

At PropNex, sellers who have engaged the real estate agency have been asking for COVs of $10,000 or more on average in the last few weeks, said its chief executive Mohamed Ismail.

The rebound in HDB prices was accompanied by a 58-per-cent surge in transaction volume in Q2, when 10,184 applications were made, up from 6,446 in Q1.

Industry veteran Nicholas Mak noted that most of the increase was among the larger flats.

“(It) is a reflection of strong demand from HDB upgraders who sold their HDB flats to purchase private homes,” he said.

Indeed, HDB upgraders have been the focus of market watchers since they thronged private housing projects such as the Caspian and Alexis condominium showflats in February and stirred the property sector to life. Last month, developer sales recorded a high of 1,825 units.

Data from the Urban Redevelopment Authority (URA), also released on Friday, showed that prices of private homes fell by 4.7 per cent in Q2 – a more moderate decline than the flash estimate of 5.9 per cent released three weeks ago, and much better than the 14.1 per cent decline in Q1.

But amid all the euphoria, Chesterton Suntec’s research and consultancy director Colin Tan sounded a warning.

“If people see this as a recovery, they must recognise that it’s liquidity-driven (as buyers are using cash savings and earnings from the stock market rally) and based on something fragile called sentiment,” said Mr Tan.

“When it’s sentiment-driven, then everything can go wrong when sentiments fall.”

Fragrance Group buys two more properties

Source : Business Times – 25 Jul 2009

PROPERTY and hotel firm Fragrance Group has bought two more properties, taking the total value of its acquisitions in the past month to close to $100 million. The company yesterday announced the acquisition of a 4,453-square-metre plot of land on Telok Kurau Road for $36.5 million and a 2,056-sq-m freehold site on Pasir Panjang Road for $23 million. The company’s two other acquisitions since mid-June cost a total of $33.51 million.

Fragrance Group chief executive Koh Wee Meng declined to comment on the identities of the sellers and on his company’s specific plans for the new acquisitions.

Construction and sale of the Telok Kurau development is expected to begin in the second half of FY2009. Meanwhile, said Mr Koh, tenancy at the 14 two-storey shophouses at the Pasir Panjang location will continue for a ‘minimum of one to two years’.

The $59.5 million purchases cap a busy week for the company. On July 21, it acquired the seven-storey Premier Centre from Hong Leong Group for $18 million, or $1,076 per square foot (psf). The office block is located at the corner of Beach Road and Tan Quee Lan Street.

Early last month, the company was awarded the tender for a Short Street hotel site by the Urban Redevelopment Authority. Its winning bid of $15.51 million, or $353 psf, was 76 per cent higher than the $8.8 million trigger price, and 11 per cent more than the next highest bid.

Fragrance Group has launched more than 20 landed properties and apartments to date. Additionally, its Fragrance Hotel chain has 20 branches islandwide, including a hostel on Dunlop Street. In its latest financial results, the group posted an 11.4 per cent increase in net profit for the second quarter ended June 30 to $17.7 million. Turnover rose 33.1 per cent to $79.5 million. The group’s shares closed six cents up at 61.5 cents yesterday.

Negative take-up shrinks in Q2: URA

Source : Business Times – 25 Jul 2009

THE office market has posted a third consecutive quarter of negative take-up, according to government data for Q2. However, the negative take-up of 247,570 square feet in the second quarter was smaller than the 322,917 sq ft in Q1 and the 365,973 sq ft in Q4 last year.

CB Richard Ellis executive director Li Hiaw Ho expects take-up to remain in negative territory for the rest of the year. ‘The impact of downsizing will be felt in the office sector for the next six months at least.’

Urban Redevelopment Authority (URA) figures show that the islandwide vacancy rate for offices continued to increase, hitting 10.8 per cent as at end-Q2 2009, compared with 10 per cent at end-Q1 2009 and a low of 7.3 per cent in second half 2007.

The vacancy rate for Category 1 space – office space in buildings in the Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area – was 6 per cent at end-Q2, up from 5.3 per cent at end-Q1. The vacancy rate for Cat 2 space (the rest of Singapore’s office stock) rose from 11 per cent at end-Q1 to 11.9 per cent at end-Q2.

The median rental contracted in Q2 for Cat 1 offices was $10.59 per square foot per month, down 8.4 per cent from the preceding quarter. The drop was smaller than a 12 per cent decline in Q1.

However, the median rental for Cat 2 space fell 7.6 per cent to $5.11 psf per month in Q2 – a bigger fall compared with the 6.9 per cent drop in Q1.

Cat 1 median rental has eased nearly 28 per cent from the peak of $14.70 psf in Q2 2008. Over the same period, the Cat 2 median rental has slipped 21 per cent.

Looking ahead, property consultants are predicting gentler declines in office rents for the rest of 2009, while cautioning that the office market is unlikely to be out of the woods until demand turns positive.

In the retail property sector, the completion of ION Orchard and Orchard Central caused the vacancy rate for shop space in the Orchard Planning Area to spike to 16.2 per cent at end-Q2 from 4.7 per cent a quarter earlier. URA pointed to the lag time taken for tenants to retrofit and occupy the shop space in the newly completed malls.

CBRE’s Mr Li said: ‘These new malls already have high pre-commitment levels and vacancy rates in Orchard should move back to the 90 per cent level within a year, once tenants have moved in and started operations.’

The median rental signed in Q2 eased 2.4 per cent over Q1 in Orchard and Rest of City Area and fell a smaller one per cent in Outside City Area.

URA’s rental indices for flatted factories and warehouses slid 4.2 per cent and 9.2 per cent respectively in Q2 over Q1. Warehouse vacancy rate rose from 7 per cent in Q1 to 9 per cent in Q2. Factory vacancy increased from 7 per cent to 7.8 per cent over the same period.

A nod back to the past

Source : Business Times – 25 Jul 2009

Elements of ION’s building design reflect the cultural history of the shopping district’s past

GIVEN how busy and cosmopolitan Orchard Road is today, it is hard to imagine that it was once a fruit orchard. In the 1840s, that was precisely what it was – a home to nutmeg, pepper and fruit trees that used to line both sides of the street.

Although it is a fact that few people remember, much less pay attention to, it did catch the eye of the architects behind the new Ion Orchard who decided to take the road less travelled and pay homage to the garden history of the shopping district.

‘Elements of the design reflect the cultural history of what Orchard Road used to be like,’ reveals Graham Cartledge, chairman of Benoy, the architectural firm in charge of Ion Orchard.

‘The building’s design is based on the concept of a sprouting seed. The seed and skin of a fruit form the facade of the building, while the residential tower is the stem.’

The ‘germinating plant’ theme continues inside the building. A spectacular ceiling was constructed to encourage shoppers to move upwards within the mall. The design is an artistic expression inspired by the spines of a palm leaf.

Elsewhere inside the building though, the mantra was to remain clean and unfussy.

‘We had to make sure that the interior of the mall was simple without too many elements to overshadow the retailers,’ explains Mr Cartledge. ‘Imagine the mall to be a stage and the retailers the actors. The building is merely a shell created for the actors to shine because they are the ones that will bring the crowd in.’

Mr Cartledge goes on to add that on top of respecting the history of ‘the most prime location in town’, he was also highly impressed by the amount of respect that the developers – Orchard Turn Developments Pte Ltd (a joint venture between Singapore’s CapitaLand Limited and Hong Kong’s Sun Hung Kai Properties) – paid to the other malls in the vicinity.

‘It would have been so very easy to build a mall that is simply a retail box,’ he says.

‘Despite the fact that Ion Orchard is fortunate to be right smack on top of a train station, it is also doing its part to promote the retail flow on Orchard Road by playing the role of a connecting point.’

As a result, Ion Orchard is not only connected to malls such as Wisma Atria, Shaw Centre and CK Tang through Orchard MRT Station, a linkway called Ion Paterson Link was also constructed to connect Ion Orchard and Wheelock Place.

‘Such connectivity is key for the integration of Ion Orchard into Orchard Road,’ he muses.

‘At the same time it allows Ion Orchard to play the role of an obvious iconic landmark, not unlike Trafalgar Square in London that is a vastly popular meeting point for everyone visiting the area surrounding it.’

HDB resale flat prices surge to record high

Source : Business Times – 25 Jul 2009

Some industry watchers are predicting further upside for the year

THE HDB resale market seems to be chugging along nicely despite the recession. Soaring demand for resale flats sent prices to a record high in the second quarter, and some industry watchers are predicting further upside for the year.

Data from the Housing and Development Board yesterday showed the resale price index rising 1.4 per cent from the previous quarter to 140.2 in Q2. This is the highest level seen since 1990.

The increase surpassed HDB’s flash estimate of a 1.2 per cent rise. It also reversed a 0.8 per cent fall in Q1 – the first slide after nine straight quarters of growth. The price dip in Q1 now seems like a ’statistical blip’, said property consultant Nicholas Mak.

Executive flats saw the biggest percentage rise in median resale prices, up 2.2 per cent from a quarter ago to $455,000.

Strong interest in resale flats helped sustain the market. Buyers and sellers filed 10,184 resale applications in Q2 – swelling 58 per cent from Q1 and 31 per cent from a year ago. According to HDB, the quarterly resale registration volume last crossed the 10,000-mark more than four years ago – it was 11,562 in Q4, 2004.

Most of the 10,184 applications in Q2 were for four-room flats, followed by three-roomers and then five-roomers.

However, applications for executive flats showed the greatest increase, doubling from a quarter ago to 753 in Q2. Those for five-room flats also jumped 80 per cent to 2,713. The sharp surge in resale activity involving larger flats suggests that there were more owners who sold their flats to buy private homes, said Mr Mak.

Market analysts have flagged HDB upgraders as a significant group of buyers who revived the private property market. Many went for units in mass-market projects such as Mi Casa and Double Bay Residences.

C&H Realty managing director Albert Lu pointed out that owners of smaller flats are also moving to larger flats. Prices of five-room and executive flats have languished in the last few quarters, making the move more attractive, he said.

Upgrading activity aside, the inflow of permanent residents (PRs) also contributed to demand for resale flats. HSR Property Group chief operating officer Dennis Yong observed that his firm has up to 10 per cent more resale transactions involving PRs in the last few months, and many of them are from China and India.

Buyers remained unwilling to pay high premiums for HDB flats. The median cash-over-valuation (COV) was $3,000 across all flat types in Q2, down slightly from $4,000 in Q1. Notably, most five-room and executive flats were still unable to command any COV.

In a way, the low COV sustained demand for HDB resale flats, said PropNex CEO Mohamed Ismail. ‘As the demand is strengthening quickly, sellers are expected to demand a higher COV.’ Mr Ismail expects the resale price index to gain around 3 per cent to 145 points by the end of the year. C&H Realty’s Mr Lu also projects a 2-3 per cent increase in resale prices.

Just a few months ago, property consultants had feared that HDB resale prices would drop as much as 10 per cent for the whole year. Signs of a stabilising economy and improved sentiment in the property market seem to have soothed nerves.

Statistics from the Urban Redevelopment Authority yesterday also painted a more calming picture. While prices in the residential, commercial and industrial sectors still fell in Q2, the declines were smaller than a quarter ago.

UOL sells 180 units of Meadows condo

Source : Business Times – 25 Jul 2009

UOL yesterday sold 180 of the 250 units made available at a private preview of its condominium Meadows@Peirce.

Units in the 479-unit freehold project in Upper Thomson Road were sold for an average of $880 per sq ft, the developer said. Of these, 87 three-bedroom units were sold for between $1.1 million and $1.5 million each.

IN DEMAND – The development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocks

The development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocks. Units range from 517 sq ft one-bedroom apartments to 3,068 sq ft five-bedroom penthouses. Ten of the 49 penthouses were sold at yesterday’s preview.

UOL initially planned to release 150 units at the preview, but raised this to 250 due to demand, said group chief operating officer Liam Wee Sin.

At the official launch on Tuesday, 100 more units will be released at an average price of $880 psf. UOL is offering buyers an interest absorption scheme.

Mr Liam said that home sales have picked up strongly in recent months. ‘The successful preview demonstrates the pent-up demand in the Thomson area for a new development,’ he said.

Units at two 99-year leasehold condominiums – Far East Organization’s Centro Residences at Ang Mo Kio and TID’s Optima@Tanah Merah – are slated for release at previews next week.

Eager buyers snapping up home deals

Source : Straits Times – 24 Jul 2009

THE current recession-defying surge in home sales is being driven by pent-up demand from local buyers with enough savings to swoop on lower-priced units and a determination to invest or upgrade.

These buyers are not acting on impulse but have been saving up for years.

Another key factor is the fear of missing the boat ahead of another property boom, The Straits Times has found after speaking to buyers and market analysts.

Last month, an all-time record of 1,825 private homes were sold, continuing a major upswing that started in February. The June figure exceeded that of August 2007 – the height of the last property boom.

On recent weekends, showflats have been crammed with families, couples and singles. Some want to buy a condo as an investment with prices still quite low; others wish to upgrade from HDB flats.

A few others have been renting condos in the hopes of picking up a bargain later, while another group is just browsing.

‘I think that now is the right time,’ said investor Therence Tay, an engineering firm owner in his 30s who bought a two-bedroom-plus-study unit at Changi condo The Gale on Sunday. He lives with his family in an HDB flat.

On average, such a unit is about 1,120 sq ft with a price tag of about $770,000, based on a price range of $650-$725 per sq ft (psf).

Mr Tay said in Mandarin that he had slogged for over a decade to save enough cash. ‘Interest is very low from bank savings now, so we might as well put our money somewhere more useful,’ he said.

A company chief operating officer, who asked to be known only as Mr Chan, 51, said he is in the middle of negotiations to buy a unit at Bukit Timah Road condo Ferrell Residences, where units are 1,840 sq ft on average and cost at least $3 million.

The Singapore permanent resident is mainly using his cash savings to buy the investment property. He will live there alone; his family lives overseas.

‘I missed the boat in the last boom,’ he said. ‘By the time I decided to buy, prices were already $1,800-$2,000 psf. By then it was out of reach, and I was kicking myself very hard.’

Property consultants say a combination of pent-up demand and lower prices has sparked this strong sales streak, in contrast to the previous boom.

‘The last property boom was fuelled by foreign demand for luxury and high-end homes from investors and speculators, which eventually filtered down to the mid- and mass-market segments,’ said Colliers International property consultant Tay Huey Ying.

Dr Chua Yang Liang of Jones Lang LaSalle said: ‘Some upgraders were excluded from the market during the last property boom due to high prices and there appears to be a correction now.’

Ms Chua Chor Hoon, a property consultant at DTZ Debenham Tie Leung, noted that the price gap between HDB flats and condos has narrowed.

For instance, an executive HDB flat in a prime location like Bishan costs up to $650,000, while some suburban condos with facilities are about the same price.

HDB upgrader Abdullah Muhamad, 50, a supervisor, who has a wife and four children, said that he wanted to buy a condo for his family while prices were still affordable.

He had saved for 20 years before buying a two-room condo unit on Sunday at Oasis@Elias in Pasir Ris, which had 190 visitors that day. Units there are going for $670 psf on average. Mr Abdullah’s unit cost him about $640,000.

‘We liked the facilities here, and were worried that property prices will increase further,’ Mr Abdullah said. Executive HDB flats in Pasir Ris have sold for over $500,000 in the past three months.

Also waiting for a good buy is Dr Phoon Kok Fai, 56, a professor at the Singapore Management University who is currently renting a condo.

He did not buy a unit in the last boom as he had other financial considerations on his plate then. But this year, Dr Phoon has set his sights on a Ferrell Residences unit, which he plans to move into with his wife.

‘This condo is within my reach and I have the security of a good location with reasonable value. I also sense that real estate prices have bottomed out,’ he said.

Many others have enough cash and are interested, but are in no rush. ‘In the last few weeks, buying sentiment has been very strong, but there is no panic,’ said Mr Eugene Lim of property firm ERA Singapore.

‘We can afford to wait,’ said prospective investor Raymond Ting, 40, who works in building maintenance and lives in a condo with his wife and 10-year-old son.

‘I expect prices to drop because there are so many new developments being released. What goes up will come down.’

---

A GOOD TIME TO BUY

‘I think that now is the right time… Interest is very low from bank savings now, so we might as well put our money somewhere more useful.’ – Mr Therence Tay, an investor who bought a two-bedroom-plus-study unit at Changi condo The Gale

Preview of two condo projects planned for next week

Source : Business Times – 24 Jul 2009

One is next to Ang Mo Kio Hub and the other beside Tanah Merah MRT Station

TWO 99-year-leasehold condominium projects next to MRT stations are slated to be previewed next week – Far East Organization’s Centro Residences next to Ang Mo Kio Hub and TID’s Optima@Tanah Merah.

Prices at the 34-storey Centro Residences are tipped to start from $1,150 per square foot (psf). Far East bought the site at a state tender in September 2007 for $601 psf per plot ratio. That was a record price for suburban condo land.

Analysts reckon Far East’s breakeven cost for the project could be close to $1,000 psf.

They suggest that Far East is releasing the project, which is along Ang Mo Kio Avenue 8, to ride on the current home buying momentum but it may release only about 100 or so units initially and sell the rest as construction proceeds to extract higher prices progressively. The condo has a total of 329 units.

Far East is starting its preview on Wednesday evening and will release two and three-bedroom units.

A typical two-bedder of about 800 square feet could cost about $900,000, while a typical three-bedroom apartment of 950 sq ft may be priced on average at about $1.15 million.

As for Optima, beside the Tanah Merah MRT Station, market watchers suggest it could be priced at about $750-$800 psf on average.

They based this estimate on current average pricing for Waterfront Key in Bedok ($735 psf) and Dakota Residences ($900 psf) and adjusted for locational differences.

The 297-unit Optima will be a 14-storey project comprising one-bedroom studio apartments as well as two, three and four-bedroom apartments plus 18 penthouses.

Developer TID is a joint venture between Mitsui Fudosan of Japan and Hong Leong Group Singapore.

Another Hong Leong unit, Tripartite Developers, previewed The Gale along Upper Changi Road two weeks ago. The 329-unit freehold project, priced at $650 to $725 psf, is over 80 per cent sold.

With the release of Centro and Optima, the pipeline of suburban condos on 99-year-leasehold sites bought at state tenders will shrink further.

This will increase impetus on developers to trigger the release of sites on the government’s reserve list, analysts say.

Already, the government has announced the release of two sites from this list this week – at Chestnut Avenue and Dakota Crescent.

Resale prices of HDB homes up 1.4% in Q2

Source : Channel NewsAsia – 24 Jul 2009

The resale prices of HDB flats rose by 1.4 per cent in the second quarter of 2009, higher than an initial estimate of a 1.2 per cent increase made earlier this month.

This comes after a slight drop of 0.8 per cent in the three months ending March.

Resale transactions also increased, jumping from 6,400 cases in the first quarter to 10,000 cases in the second quarter.

The median cash-over-valuation (COV) amount among all resale transactions continued its declining trend.

COV fell to S$3,000 in the second quarter, down S$1,000 from the first quarter.

HDB flats which sold above valuation accounted for 57 per cent of all resale transactions in the second quarter, down from 62 per cent in the previous quarter.

HDB also announced plans to launch 6,000 new Build-to-Order flats over the next six months, of which some 2,400 units will be 3-room or smaller apartments.

The bulk of the new flats will be in Punggol.

In the HDB rental market, rents for 3-room, 4-room and executive flats fell by S$100, but remained the same for 2-room and 5-room units.

Private home prices fall 4.7% in Q2

Source : Channel NewsAsia – 24 Jul 2009

Private home prices in Singapore fell 4.7 per cent in the second quarter of this year, compared with the previous three months.

Although that marked the fourth straight quarter of falls, the pace of the decline appeared to be moderating.

Prices fell a record 14.1 per cent on quarter in the January to March period.

The second quarter decline was also better than 5.9 per cent fall predicted in the advance estimate released earlier this month.

Meanwhile, private residential rents fell 5.2 per cent in the second quarter, compared with an 8.5 per cent drop in the first quarter.

ION Orchard unveils commissioned art pieces at its mall

Source : Channel NewsAsia – 24 Jul 2009

Retail therapy takes an artistic twist along Orchard Road. Developers have commissioned multi-million dollar artworks to be put up at Singapore’s newest mall.

A two-tonne nutmeg greets shoppers at the entrance to ION Orchard. The sculpture by Singapore artist Kumari is a tribute to Orchard Road’s history, when it was once a nutmeg plantation.

“Urban People” is the name of six sculptures by a Swiss artist. It is an interpretation of the human presence in the mall.

All these are part of the mall’s efforts to provide more than just retail therapy. Also new is one of Singapore’s largest gallery within a shopping mall.

Soon Su Lin, CEO, Orchard Turn Developments, said: “Many of the super brands are incorporating art into their designs. And we feel that ION Art, as a programme within the mall, we are providing a platform for retailers, artists, curators, galleries, to be able to bring art to the shoppers.”

ION Orchard said the gallery space has been booked till the end of the year.

Some of the high-end tenants will be bringing travelling shows from places like Paris to Singapore.

Over 70% of units at Meadows@Peirce condominium sold

Source : Channel NewsAsia – 24 Jul 2009

Over 70 per cent or 180 units at the Meadows@Peirce condominium were sold at a private preview on Friday before the official launch next week.

In a statement, property developer UOL Group said a total of 250 units were offered at the preview. The developer had initially planned to release 150 units, but it added 100 more due to overwhelming response.

UOL said it will also bring forward its official launch by three days to next Tuesday instead of August 1. It will then release another 100 units at an average price of S$880 per square foot.

Meadows@Peirce is a 479-unit condominium located along Upper Thomson Road, opposite Peirce Reservoir. It occupies the previous Green Meadows condominium site.

UOL said it is one of the largest freehold sites to be launched recently. It occupies 43,000 square metres of land in the private residential enclave of Thomson, near Teachers’ Estate.

The last condominium launched in this area was in May 2005, located off Yio Chu Kang Road.

Sizes for the Meadows@Peirce units vary from 517 square foot one-bedroom unit to 3,068 square foot penthouse.

UOL will be offering interest absorption scheme to buyers of Meadows@Peirce, slated for completion in 2012.

S’pore Q2 pte home prices down 4.7%

Source : Business Times – 24 Jul 2009

Prices of Singapore’s private homes fell 4.7 per cent in the second quarter, less than earlier estimated.

The Urban Redevelopment Authority said in a news release on Friday that the price index of private residential property, for the three-month period ending June, dropped to 133.3 from 139.9 in the first quarter, falling for the fourth straight quarter.

Preliminary figures from the URA earlier this month showed prices easing 5.9 per cent.

It also said that house rentals were down 5.2 per cent in the second quarter after a 8.5 per cent drop in the first three months of this year.

Asian recovery looks to be on track: ADB

Source : Business Times – 24 Jul 2009

S’pore growth for 2010 forecast at 3.5%, and the rest of Asean 4.2%

ASIAN economies appear to have turned the corner from the global recession and should be able to double next year the anaemic growth rates they are expected to post in 2009, the Asian Development Bank (ADB) said yesterday. But it warns in its latest Asia Economic Monitor that the road to full recovery is strewn with hazards.

The biggest single threat to continuing recovery identified by ADB report is the danger that recession in the US and Europe, on which Asia relies heavily for export markets, will last longer then generally expected.

Singapore’s GDP growth rate is forecast by the report to reach 3.5 per cent in 2010, after an expected overall contraction of 5 per cent this year. The rest of Asean should recover from marginal growth of 0.7 per cent this year to 4.2 per cent expansion in 2010, ADB says.

China remains the region’s star performer, with growth expected to be maintained at a relatively high 7 per cent this year, rising to 8 per cent in 2010. Japan, on the other hand, is forecast to suffer a 5.8 per cent GDP contraction this year and recover to just 1.1 per cent growth in 2010.

South Korea and Hong Kong are forecast to recover to respective growth rates of 4 and 3 per cent in 2010 after sharp contractions this year, but Taiwan will remain one of the laggards of the region with growth recovering only to 2.4 per cent next year.

Recovery got under way in Asia during the second quarter of this year, the ADB report notes, fed largely by fiscal and monetary stimulus programmes. But while exports are showing some recovery as a result of inventory adjustment, underlying external demand remains weak.

Among the positive signs for Asia are ‘early indicators that the pace (of economic contraction) slowed in the second quarter of 2009′, while balance of payments positions have ‘turned positive’ again, stock markets have rebounded, several currencies have begun appreciating and inflation has eased.

Meanwhile, the region’s banking systems ‘appear capable of weathering the economic storm’, ADB says, ‘with prudential indicators strong and lending continuing to grow’ across much of the region.

Despite these positive indications, the report says: ‘The overall external environment for emerging East Asia remains difficult and uncertain, with the recession in advanced economies continuing and global financial conditions improving (but) still tight.’

Emerging East Asia – which excludes Japan and the newly-industrialised economies (NIEs) of South Korea, Taiwan, Hong Kong and Singapore – ‘could see a V-shaped recovery’, with growth dipping sharply in 2009 before recovering next year to its pace in 2008.

But this scenario could change for the worse if there is a more prolonged recession than forecast in advanced economies, with export demand remaining depressed longer than expected. Premature fiscal or monetary tightening could also damage the prospects for a V-shaped economic recovery in Asia.

And falling inflation could turn into deflation in some economies of the region, says ADB, noting that Singapore and Taiwan, whose economies have contracted most sharply among the NIEs in the current recession, have been ‘experiencing deflation over the past few months’.

Given the tentative nature of the expected recovery, ‘it is critical that authorities stay the course in supporting domestic demand and growth’ through fiscal and monetary stimuli, the ADB report adds.

No go for NTUC’s Sentosa resort

Source : Business Times – 24 Jul 2009

THE entertainment arm of the National Trades Union Congress (NTUC) has put the brakes on a $45 million resort project on Sentosa.

NTUC Club unveiled plans for the Palawan Beach resort in 2005, and the 200-unit development was to be ready in 2008. But by September last year, the project was still under review.

A joint statement yesterday by NTUC and Sentosa Development Corporation (SDC), which manages and promotes Sentosa Island, put an end to the wait.

‘Due to the rising land premium and construction costs, NTUC Club Investments (NCI) has reviewed the initial plans and concluded that it is no longer viable to continue with the project,’ the statement said.

Both parties have a ‘good understanding about the decision’, it said. SDC will review the site for future development.

As the integrated resort edges towards completion, visitor-number projections may have increased, leading to a higher land premium, property consultant Nicholas Mak suggested.

SDC could consider raising the commercial component of the site to make it more attractive to bidders, he added.

Earlier reports cited surging construction costs as a factor delaying the project’s progress. In September last year, NTUC Club that said it was ‘reviewing the concept and plans of the resort’.

NTUC Club had hoped to offer union members an affordable holiday spot – the resort would have had facilities such as a spa, an infinity pool and free wireless broadband Internet access. It would also have been near the upcoming integrated resort.

Results for two Reits paint different scenarios

Source : Straits Times – 24 Jul 2009

TWO real estate investment trusts (Reits) – CapitaRetail China Trust (CRCT) and Ascott Residence Trust (ART) – posted sharply differing second-quarter results yesterday.

ART’s distributable income lost 17 per cent to $11 million while CRCT’s gained 14.2 per cent to $12 million, compared to the second quarter last year.

CRCT owns eight retail malls in China. Its first-half distributable income was $25.3 million, a 31 per cent rise from last year. First-half distribution per unit (DPU) went up by 25.5 per cent to 4.08 cents. Its second-quarter DPU gained 0.24 cent to 1.94 cents. Unitholders will be paid on Sept 25.

Second-quarter gross revenue rose by 15.4 per cent to $30.4 million, due to a stronger yuan and higher occupancy in Shanghai’s Qibao Mall and Xinwu Mall in Anhui province. First-half gross revenue rose 23.4 per cent to $60.8 million.

Rental reversions were stable, with 79 new leases and renewals signed at 0.3 per cent below previous rental rates. It has locked in over 90 per cent of gross rental income with committed leases.

CRCT Management chairman Victor Liew said the firm was ‘confident in providing our unitholders with a sustainable and stable distribution for 2009′, adding it would benefit from the anticipated Chinese economic recovery.

ART, which owns serviced apartments in countries such as Singapore, Japan and the Philippines, suffered a 20 per cent fall in first-half distributable income to $21.9 million. Its second-quarter DPU lost 18 per cent to 1.79 cents, and first-half DPU fell 21 per cent to 3.55 cents. The distribution date is Aug 28.

Gross second-quarter revenue fell 7 per cent to $43 million and first-half revenue slid 7 per cent to $85.1 million, as business travel cuts and oversupply in Beijing and Shanghai weakened demand for serviced residences in Singapore and China.

‘The global economic downturn continues to impact the Asian hospitality industry,’ said ART Management chairman Lim Jit Poh, adding that ‘there are early signs that the decline in hospitality demand is levelling out’.

ART expects a profit from this year’s operating performance but less than last year’s.

CRCT units gained two cents to close at $1.23 and ART units gained 1.5 cents to close at 84 cents.

Here’s a house – and a $50k mattress

Source : Business Times – 24 Jul 2009

Hersing Corporation’s Harry Chua does not want to sell you just a house – he wants to sell you a mattress along with it, as well.

Two months after Hersing’s quiet opening of the Dozz Mattress showroom at its headquarters in Toa Payoh, the holding company of real estate agency ERA is going for gold.

At a private launch today with guests from the Ferrari and Lamborghini jet-set, it will be launching a mattress with a 22-carat gold cover from Italian brand Magniflex that will cost as much as $50,000.

This new venture will sit alongside Hersing’s eclectic assortment of dealings in the real estate, storage and money transfer industries.

In 2003, Hersing – which holds the local franchises for property broker ERA and remittance agency Western Union – set up a wholly-owned self storage firm, Storhub, which has since grown to five locations in Singapore.

To Jack Chua, Hersing’s president, the group’s move into mattresses makes perfect sense. ‘After buying a house, the customer needs a mattress. We’re just providing them with a customer service,’ he said.

With 18 mattress brands, the showroom has seen a 30 per cent increase in monthly revenue since its soft launch in May.

The group expects the showroom to break even this month, according to Hersing’s founder and chairman Harry Chua.

The latest feather in its cap where the mattress business is concerned is Hersing’s clinching of the exclusive distributor rights for the Magniflex brand for South-east Asia.

The group is currently looking into the mega-retail mattress store concept for its foray into the rest of Asia.

While $50,000 will get buyers a super king-sized Magniflex Gold – a personalised mattress with gold thread in its cover – normal Magniflex mattresses also retail at the showroom from a less eye-widening $1,298.

To date, more than 100 units of the Magniflex Gold have been moved globally, with the gold thread being touted for its anti-bacterial and anti-static qualities.

Despite the current downturn, Mr Harry Chua is unperturbed by the prospect of offering the Rolls Royce of mattresses to the Ferrari-owning crowd.

‘If you can pay a million dollars for a car, what is $50,000 for a mattress in which you spend eight hours a day? I think we will do very well. As well as Storhub,’ he said.

With the financial market currently displaying volatility, perhaps the monied classes can be persuaded to put their money in mattresses instead of under them.

Govt buildings leading green drive

Source : Straits Times – 24 Jul 2009

MR GRANT W. Pereira’s Forum Online letter, ‘Let’s walk the talk on green buildings’ (July 14), urged the Government to walk the talk by suggesting that ‘all new government buildings should be at least 10 per cent powered by solar energy’.

It is important to design buildings which will inherently consume less energy. This can be achieved through better building orientation, designs that minimise heat absorption through the building envelope and facilitate natural ventilation, and use of energy-efficient equipment and fittings.

The Building and Construction Authority’s (BCA) Green Mark scheme, which rates green buildings, emphasises such energy-efficient designs.

The incorporation of clean energy sources like solar panels is another solution to complement energy efficiency in buildings. BCA is currently test-bedding solar energy infrastructure at its new Zero Energy Building to ascertain its effectiveness and potential.

More HDB precincts will also have solar panels on their rooftops, as part of a $31 million largescale solar test-bedding scheme. The Government hopes this will encourage wider adoption of solar panels which will help lower the cost.

This two-pronged strategy of exploring clean energy supply and lowering energy demand is a balanced approach to overall energy conservation. Already, new buildings and existing buildings undergoing major retrofitting must achieve the minimum Green Mark certified standard.

The Government is taking the lead in the green building movement by committing its buildings to attain even higher Green Mark standards. Current buildings must attain at least Green Mark GoldPlus by 2020, and new air-conditioned government buildings must obtain the highest Green Mark Platinum rating, which will achieve at least 30 per cent in energy savings.

To date, the BCA Green Mark scheme has received strong support from developers and the industry.

From only 17 green buildings when the scheme started in 2005, we now have close to 300 buildings that have been certified to various Green Mark ratings.

There are also incentives available to encourage the private sector to achieve higher Green Mark ratings and energy savings in both new and existing buildings.

We will continue to review our policies and initiatives to ensure that Singapore’s future built environment remains green and sustainable.

We thank Mr Pereira for his suggestion.

Tan Tian Chong
Director, Technology Development Division
Building and Construction Authority

Agents’ ‘greed’ prompts warnings

Source : Today – 24 Jul 2009

THE sizzling-hot property market and the rush by buyers to secure choice units have led some property agents to turn greedy.

Some agents are offering potential buyers their services to secure a booking for their choice units if they pay them a commission. This has prompted at least two marketing agencies to warn their agents against this practice.

This scheme is reportedly rampant at the freehold Meadows@Peirce development near Teachers’ Estate, which is supposed to be open for preview only from today.

Some marketing agents, however, told Today that it is the potential buyers that are offering commissions to agents to secure for them their choice units.

The fee earned by these agents is said to be about 1 per cent of the property value. With unit prices at Meadows@Peirce ranging from $900,000 to more than $1 million, these agents could potentially earn between $9,000 and more than $10,000 for each unit that they can secure for an eager buyer.

In an email to its 3,000 associates on Wednesday, ERA Realty Network, one of the marketing agents for the project, warned: “Please do NOT collect commission from buyers for Meadows@Peirce or any other projects. Anyone caught doing so will be terminated from ERA and no commission will be paid to the associates.”

ERA’s associate director Eugene Lim said the email was a “preventive measure”.

“We want to stop it before anyone receives a commission. It is not right,” he added.

Of late, ERA has been cracking the whip on its agents in an industry where complaints of rogue or ignorant agents are rife. Last week, ERA warned its agents against submitting transactions under the names of senior colleagues to garner a higher share of the commissions.

And in February, a couple successfully sued ERA after its agents profited from “flipping” an apartment they were engaged to sell. The couple had sold their apartment through ERA agent Jeremy Ang, but it turned out that the buyer, Ms Natassha Sadiq, was the wife of his boss Mike Parikh, a senior director at ERA. She immediately resold the unit for a $257,000 gain.

Another marketing agent for Meadows@Peirce also issued an email warning a few days ago. Knight Frank reminded its 700 agents that they cannot receive or ask for commission from buyers, cannot collect an entrance fee into the showflat and cannot ask for blank cheques, which can subsequently cause the buyer to feel pressured to make a purchase.

The company’s executive director Foo Suan Peng said: “This is something we don’t condone because it will give rise to conflict of interest.”

Agents Today spoke to said the “fee for secured booking” practice happens with other projects, too. One said there was “nothing wrong” for buyers to pay agents, as both are willing parties.

Singapore Accredited Estate Agencies chief executive Tan Tee Khoon disagrees. He told Today: “The agent receives a commission from buyers when they are already hired by the developer to provide the services. That is unethical.”

Profile of showflat visitors

Source : Straits Times – 24 Jul 2009

1 PURE INVESTORS

Many investors have been waiting for an opportunity to jump into the property market – but timing is everything, and they have been waiting until the price is right.

Mr Ashok Veerappan, a 56-year-old manufacturing executive, wants to buy a unit at Parc Imperial on Pasir Panjang Road as an investment. One-bedders of about 400 sq ft cost around $550,000.

Some investors are in no hurry to buy. Ms Eunice Lee, 39, a customer service professional, is keen to invest but is holding back as she expects prices to fall further.

Another investor, Mr Chan, in negotiations to buy a condo unit, said banks are paying little interest. ‘Stocks are volatile but real estate is quite stable. I don’t think prices will go down because external investors from countries like Indonesia and China are still there,’ he said.

2 RENTERS

Many of those who are renting their current premises and other first-time buyers are also considering buying property despite the downturn.

Condo renter Sundaresan N., 46, a bank employee, recently visited The Peak @ Balmeg showflat.

A three-bedroom 1,500 sq ft apartment costs about $1.4 million.

‘Rents have gone up so much, so it makes sense to buy, but I will buy only if the price is right – I have no problem waiting and trying to squeeze a lower rent out of my landlord.’ He has been seriously searching for six months.

Mr Eddie Koh, 40, who owns a cleaning company, is renting a condo unit but is thinking of buying his own place to live in. ‘If prices are not very high, then it’s worth it, like now,’ he said in Mandarin.

3 HDB UPGRADERS/LONG-TERM INVESTORS

Some HDB upgraders want to buy property for both residential and investment purposes. Mr H.G. Cheng, a regional sales executive in his 40s, is keen to buy a unit soon and live there. ‘I’ll see in two to three years’ time whether to rent it out or stay on. If the price is high, I’ll sell it, otherwise I will live in it myself.’

He was viewing a showflat at Double Bay Residences in Simei, where units range from $850,000 for a three-bedder to $1 million for a four-bedder.

Mr E.C. Ho, 48, a construction industry worker, said his plan to buy a home is unrelated to the economy. ‘We are half-upgrading and half-investing. My family of three live in an HDB flat and we are considering buying a condo now only because we didn’t have enough money before,’ he said.

4 BROWSERS/SHOWFLAT-HOPPERS

Amid the furious buying, many people are just browsing at the showflats, curious about the recent property launches.

‘We happened to see so many developments all of a sudden, and thought we might as well look for one as a long-term investment and upgrade,’ said Ms Eileen Chua, a childcare centre worker in her late 40s with two teenage children.

Mr K. Leong, a 32-year-old banker who was at The Gale, is keen to buy but added: ‘I’m just trying to see the market pricing. There is a perception that the economy is getting better and that is probably why everyone is buying right now.’

Another condo site to go on sale

Source : Business Times – 23 Jul 2009

URA gets offer for 99-year leasehold site on reserve list at Dakota Crescent

For the second time this week, a 99-year leasehold condo site on the government reserve list has been triggered for launch.

Urban Redevelopment Authority said yesterday it has received a successful application for the 1.7 hectare site, which is located at Dakota Crescent and is next to the Dakota Residences condo being developed by Ho Bee.

The developer that successfully applied for the latest plot to be released has undertaken to bid for the site at a minimum $130 million, which works out to about $200 per square foot of potential gross floor area.

This is 62 per cent lower than the $524 psf per plot ratio (psf ppr) that Ho Bee paid for its site in June 2007. Ho Bee launched Dakota Residences at an average price of about $970 psf last year.

It relaunched the project a few months ago at an average price of about $900 psf. URA’s monthly developer sales figures for June show a total 27 units were sold in the project during the month at a median price of $870 psf.

Knight Frank chairman Tan Tiong Cheng reckons the top bid for the site could be about $350 psf ppr, which would work out to a breakeven cost of of slightly below $700 psf. ‘Bidding should be hot.

‘The site is next to Dakota MRT station and fronts the Geylang River. And it’s in a proven location,’ he added.

Based on URA statistics, Ho Bee had sold about 60 per cent of the 348-unit Dakota Residences as at the end of last month.

Earlier this week, the Housing & Development Board (HDB) said it will launch the tender for a 99-year leasehold site for a condominium development at Chestnut Avenue on the reserve list after receiving a successful application.

Following up on that announcement, HDB said yesterday that the tender for the site will close at noon on Aug 19. That plot was also from the government’s reserve list, and its launch follows a successful application by an unnamed party undertaking to bid at least $62 million at the tender, which works out to $120.83 psf ppr.

Mr Tan expects developers to trigger launches of more residential sites from the government reserve list, as it offers a good source of land for developing entry-level condos catering to HDB upgraders.

‘Right now, a lot of developers are focusing on the mass market; they’ve seen a recovery in the low end and it seems a safer bet. They may already have enough stock of high-end sites,’ he added.

Locations of residential sites in the second-half 2009 reserve list include Tampines, Jalan Jurong Kechil, Upper Thomson Road, Bishan St 14 and Serangoon Avenue 3.

$15m revamp for Parkway Parade

Source : Straits Times – 23 Jul 2009

PARKWAY Parade, one of the first suburban malls in Singapore, is undergoing an extensive $15 million revamp.

The renovations will add an annex block and an alfresco dining area to the popular shopping centre in Marine Parade.

The revamp, which began three months ago and is set to be completed in October, will integrate part of the mall’s ground-floor area – previously occupied by tenants like fast-food restaurants Burger King and Kentucky Fried Chicken – with its 720 sq m outdoor refreshment area.

Before the changes, the outdoor area housed food outlets and cafes such as Long John Silver’s and Starbucks.

When completed, the new wing will be air-conditioned and will feature new tenants, including an outlet of the Western casual dining chain New York New York and Pu Tien Restaurant, which serves Heng Hua cuisine.

To cater to Singaporeans’ love affair with food, more food and beverage outlets will be added and the alfresco dining area will be set up on the second level of the new wing. The rest of the mall will also be spruced up.

New floor tiles will be added to make it look brighter, while waterless urinals will be installed.

Parkway Parade, which turned 25 in March, sees about 1.7 million shoppers each month.

The main reason for the revamp, said its property manager Lend Lease, is to allow the mall to ’stay ahead of the competition…especially in the face of increasing competition from malls in the East and the others in the Orchard belt’. Several new shopping centres have opened this year, including Tampines 1, Orchard Central and Ion Orchard.

Parkway Parade, which has six floors of shops and a 17-storey office tower, opened in 1984. Once touted as the biggest shopping complex here, with a total floor area of 123,000 sq m, it was very popular at the start.

However, when MRT trains began running in 1987 – making it much easier for Singaporeans to travel from the suburbs to areas like Orchard Road or to other suburban malls – the centre lost some of its sheen.

Lend Lease, which took over management of the mall in 2000, carried out development works seven years ago, bringing in new tenants like Giant Hypermarket and upgrading parts of the centre.

Retailers at the mall are hoping the latest upgrade will give business a shot in the arm.

Ms Regine Lim, owner of the Nail De Classic salon, who has been a tenant there for seven years, said business has been hit this year because of the recession and recent H1N1 fears.

Young East-side dwellers such as student Byorn Tan, 14, are also looking forward to the new-look mall.

Said the Secondary 2 student: ‘Parkway has been there for as long as I remember. But there isn’t much to eat and do there, it seems to cater to older shoppers.

‘It will be more attractive if there are more cafes and fast-food joints for students to chill and hang out.’

Finding that jewel of a house

Source : Business Times – 23 Jul 2009

While most bungalow plots are in the central and eastern districts, they can be found anywhere in Singapore

IT’S not called house hunting for nothing. But if you find a gem of a home, the effort will be very much worthwhile.

Some of the more rewarding finds are big bungalow plots in areas outside central Singapore which, for one reason or another, have so far escaped redevelopment.

By definition, a bungalow here has to be on a site no smaller than 400 square metres and no less than 10m wide. This may be small compared with a Good Class Bungalow (GCB) – 1,400 sq m minimum – but it’s twice as big as a semi-detached plot and five times as big as an intermediate terrace (Type II) plot.

Most people associate bungalow plots with the few GCB areas in prime central districts. But at the turn of the 20th century, many of Singapore’s wealthy businessmen chose to build homes on the seafront – and it’s here that many of these bungalow plots still exist.

One such area is the East Coast. Propnex CEO Mohamed Ismail says Mountbatten and Siglap are good hunting grounds, where such plots may start around $700 per sq ft. ‘They make good investments because of the limited supply,’ he adds.

A large bungalow site in Mountbatten that was sold in recent years was Chan’s Ville, which belonged to the late Chan Ah Kow, patriarch of one of Singapore’s leading sports families.

The 55,000 sq ft site was acquired by SC Global for about $11 million in 2004, which worked out to be just $200 psf. In 2005, it was reported that the developer would add four bungalows to the site and sell them for about $5 million each.

About the time Chan’s Ville was sold, another bungalow in Mountbatten was sold for $11.8 million or $305 psf for the 38,662 sq ft site. And this site was redeveloped too.

Indeed, with many waking up to the opportunity for redevelopment, the number of large sites on the East Coast has been dwindling.

Still, there are other areas to hunt in, and Mr Ismail suggests Upper Thomson and Braddell Road.

Donald Han, managing director of Cushman & Wakefield, reckons there are about 20,000 detached houses in Singapore, not counting GCBs. Many are in District 15, but other areas include Sunset Way, Jalan Binchang, Westlake estate, Eng Neo Avenue, Faber Park and Serangoon Gardens.

But as Mr Han points out: ‘There is hardly enough supply to cater to demand.’

This demand comes from the desire of many Singaporeans to own a landed home.

As an investment, however, landed properties generally give a lower yield of 2 per cent per annum, compared with 3 per cent or more for condominiums, as bungalows are not as easily leased. ‘But landed properties tend to be closer to the hearts of owner occupiers and investors alike,’ Mr Han says.

William Wong, managing director of RealStar Premier Property Consultant, believes that while most bungalow plots are in the central and eastern districts, ‘there are quite a number of them and they can be found anywhere in Singapore’.

Occasionally, bungalow plots in unusual locations are offered by the government.

In 2007, the Urban Redevelopment Authority (URA) auctioned a 4,477 sq ft bungalow plot in Sembawang. After closely fought bidding, the plot sold for $940,000 or $209 psf.

Of course, Sembawang may not be quite the same as Queen Astrid Park – but not many will want to pay between $700 and $1,000 psf for a bungalow plot in a prime district.

What is important to note is that landed housing areas are strictly protected by urban design guidelines. For instance, if you do buy a GCB, you can be sure a condominium is not going to be built on the plot next to yours.

The same cannot be said about plots outside landed housing areas. Indeed, if you happen to come across a detached house sandwiched between condominiums, chances are the area has been gazetted for high-density living.

So before buying landed property – especially if it is outside a safeguarded landed housing area – make sure you check the zoning. This will reveal what can be built. For instance, Mr Wong says mixed zoning means that either terraced, semi-detached or bungalows can be built.

Another important consideration is height restrictions in particular areas. This can significantly alter the redevelopment potential of a site, especially if you intend to build a three-storey house when only two storeys are allowed.

In some instances, landed properties may be in areas that have been rezoned with higher plot ratios. A plot ratio of 1.4 is enough to see neighbourhoods of landed homes slowly redeveloped into apartment buildings. This means that even if most of the properties on the street are landed homes, any of them can be redeveloped as a high rise if the plot is big enough. Of course, for some this represents a windfall.

Steven Ming, Savills director for prestige homes, says the GCB market is extremely active. ‘And we can similarly expect demand for detached houses, even those outside GCB areas, to remain strong as well,’ he says. ‘Recent strong sales have been fuelled by vast liquidity, availability of cheap finance and a general belief that the worst of the global crisis is over and that the panic-selling phase has passed.’

Mr Ming believes that if current buying momentum continues, detached house prices can be expected to appreciate 10-15 per cent during the rest of the year.

KepLand to launch two projects soon

Source : Straits Times – 23 Jul 2009

TWO new residential projects will soon be launched by property developer Keppel Land (KepLand) in an indication of the rebound in market sentiment.

The firm has yet to launch any residential projects this year, unlike other developers which have launched projects week after week in recent months to capitalise on the new-found optimism.

KepLand said yesterday it will be launching luxury projects Madison Residences in Bukit Timah and The Promont at Cairnhill Circle in the next two months.

This comes only four months after it made the decision to defer the construction of Madison Residences in March, citing weak market conditions.

The Promont is due for completion this year, said the firm.

Group chief executive Kevin Wong said yesterday at its financial results briefing that as markets in the region improve, ‘we will accelerate our project launches in Singapore, China and Vietnam to achieve faster returns’.

The firm posted a 10.4 per cent increase in net profit to $58.2 million for the three months ended June 30, compared to the same quarter last year.

Revenue came in at $250 million for the second quarter, up 34.4 per cent from a year ago due to progressive sales from launched projects in Singapore such as Park Infinia at Wee Nam and The Tresor at Duchess Road.

Keppel Land’s growing footprint overseas also helped to boost turnover, as sales from projects in China and Indonesia were registered.

Overseas earnings accounted for 30 per cent of net profit, compared to 18 per cent for the same quarter last year, said KepLand.

The firm is determined to expand its presence in China, recently announcing its proposal to delist Evergro, a China-focused property group, to merge both entities.

It had offered 29 cents per share – a 16 per cent premium over Evergro’s last traded share price of 25 cents on the Friday before the announcement.

Shareholders can also opt for one new Keppel Land share for every seven Evergro shares they own. This plan will allow KepLand to ‘tap on combined operational expertise, industry knowledge and extensive networks’ for expansion in China, said Mr Wong.

KepLand had raised some $708 million in a fully subscribed, nine-for-10 rights issue at $1.09 a share in June.

This has improved the firm’s borrowing position, and it is now looking for land to buy, said its finance chief Lim Kei Hin.

For the first half of this year, net profit was down 15.8 per cent at $95.1 million from the same period last year because of poorer first-quarter sales arising from lower revenue recognition for projects in Singapore and overseas.

Overall, turnover was down 13.8 per cent at $395.6 million compared to the first half of last year.

Earnings per share for the half-year ended June 30 was 8.2 cents, down from 11.1 cents previously.

Net asset value per share stood at $2.29 as at June 30, compared to $3.39 as of Dec 31, 2008.

Keppel Land shares closed five cents up at $2.54 yesterday.

Allow live music near homes

Source : Straits Times – 23 Jul 2009

I REFER to Tuesday’s report, ‘Loud ‘no’ to live music near homes’. Singapore is constantly trying to position itself as a 24/7 entertainment city, and one example was the Urban Redevelopment Authority’s (URA) plan to allow live entertainment in pubs and restaurants near residential areas.

Unfortunately, the plan has been shelved after negative feedback in a poll of some 250 residents.

Is the number polled too small for a representative feel of general reception to such a plan? Why should Serangoon Gardens and Upper Thomson be known only for food, but not entertainment?

It’s not just about live music; it’s about local music too. Why not let these budding musicians start somewhere near home, possibly at community level?

Perhaps most are concerned about increased noise levels. I believe much can be done to prevent noise pollution, for example by soundproofing. Certain restrictions could also be considered, and live music areas could be converted to study areas on weekdays. It would be good for parents to know their children are hanging out or studying near home, rather than further away.

Singaporeans may have the stereotypical idea that live music means sleaze, but this is not true of Singapore. Nightlife in Singapore is not the hardcore, hardsell variety which some countries exploit to lure tourists.

We should be more open-minded, and open to the potential growth of a new and lively sub-culture, by saying yes to live music in the neighbourhood.

Fiona Heng (Miss)

Dealing with the agent from hell …

Source : Today – 23 Jul 2009

Complaints about property agents run the gamut from service quality to commission disputes.

Each week, the Singapore Accredited Estate Agencies (SAEA) deals with 15 to 25 such enquires and feedback from the public, comparable to the 1,000 to 1,200 that reach the Consumer Association of Singapore every year.

Based on the four most frequent complaints received, the SAEA offers tips on how you can deal with what appears to be the property agent from hell.

CASE 1

The owner of a five-room Housing and Development Board (HDB) flat engages an agent to help sell the unit. A prospective buyer calls the agent for a viewing and makes an offer, but says he does not wish to appoint an agent for the purchase. However, the agent insists that the buyer sign a commission agreement with his agency.

SAEA says: HDB owners and buyers do not need to engage a property agent in a resale transaction. Thus, the agent cannot insist that the buyer use his services; neither can he refrain from selling to a buyer who refuses his services. If a buyer does not wish to engage the agent, he may write directly to the seller and meet the seller personally to make the offer. At the meeting, the prospective buyer may verify that the person he is meeting is the seller by requesting for a copy of his property tax statement and identity card.

CASE 2

A man who bought his flat at the peak of the last property boom is sitting on big paper losses. If he sells the flat, the proceeds (after paying off the mortgage balance and returning the requisite amounts to his Central Provident Fund account) may not leave him with any cash. So to help the seller pocket some cash, the agent strikes a deal with the buyer to declare to the authorities that the flat was sold for a lower price. The buyer then pays the difference between the actual and declared price to the seller in cash.

SAEA says: It is illegal to make a false declaration of resale price in an HDB transaction. If the resale flat is likely to result in negative equity, sellers should explore alternatives such as renting out the flat or the Lease Buyback scheme. Alternatively, sellers can simply wait for a better time to sell.

CASE 3

An agent persuades a seller to sign an agreement allowing the agent sole rights to sell the property. He tells the seller that the agreement can be terminated at any time, but does not say that if the seller finds a buyer himself during the validity of the agreement, the agent would still be entitled to commission. A month after signing the agreement, the seller decides to terminate the agreement, only to be told it is irrevocable.

SAEA says: It is important for the agent to inform the seller of his rights and obligations in granting an “Exclusive Authorisation To Sell”. Once it is signed, it cannot be revoked for the period of validity. Sellers should read the agreement carefully before signing it.

CASE 4

When a tenant is writing a cheque for the tenancy deposit and one month’s advance rent, an agent tells the tenant to make out the cheque in the agent’s name instead of in the owner’s name.

SAEA says: Tenants should not make out cheques for tenancy deposits and the likes to the agent – unless the agent can prove that he or she was appointed to be Power of Attorney by the landlord. Landlords can protect themselves from rental scams by buying rent protection insurance.

No bidders for Watergate Hotel auction

Source : Business Times – 23 Jul 2009

Former owner still wants to transform it into a luxury hotel

The Watergate Hotel, part of the complex made famous by a US presidential scandal, failed to attract any bids at auction on Tuesday and was taken back by the lender that held the US$40 million note on it.

PB Capital Corp took back the property after the auction opened at US$25 million to a silent room. The lender will now try to find a buyer, said Paul Cooper, vice-president of the auction house, Alex Cooper Auctioneers.

But the former hotel owner, Monument Realty, still wants to transform the Watergate into a luxury hotel with a small residential component, according to Michael Darby, Monument’s principal.

‘We have investors who are ready to move the project forward and develop it back into a first-class hotel,’ Mr Darby said.

Opened in 1967, the hotel is one of six buildings in the Watergate complex, which also includes the office building where the 1972 burglary of the Democratic National Committee headquarters occurred – a crime that led to then-president Richard Nixon’s resignation. Four of the burglars stayed at the hotel.

Over the years, the hotel has drawn a number of famous faces, including Liberace, Katharine Hepburn, Andy Warhol and John Wayne.

When Monument Realty bought the hotel in 2004, it planned to covert it into upscale cooperative apartments. But some residents at existing co-op apartments in the Watergate complex challenged the conversion in court, arguing that a hotel was better for the health of the complex. Meanwhile, the housing bust made residential conversion less profitable for the company.

Ultimately, in 2007, Monument Realty decided to close the Watergate for an 18-month, US$170 million renovation. At the time, Mr Darby said that the landmark would be developed into a premier hotel, with plans for US$2,000-a-night suites.

But frozen credit markets scuttled plans for the multimillion dollar refurbishment, and Monument Realty defaulted on the loan from PB Capital.

About 10 bidders registered for Tuesday’s auction, Mr Cooper said.

Most of the bidders – who included developers and owners of hotel chains – sat in 11 white chairs in the front of a room packed with international media and spectators, including a handful of residents from the Watergate complex.

‘It’s really a privilege for our firm to hold this sale,’ said Joseph Cooper, president of the auction house, before he started the bidding at US$25 million. ‘This is an opportunity to invest in one of the city’s most famous landmarks.’

After asking twice for higher bids, he tried one more time. ‘Twenty-five million. Any advance?’ he said. ‘Third and final call!’ No one responded.

Frasers’ Aussie home projects on show

Source : Business Times – 23 Jul 2009

‘The Sydney Collection’ exhibition on at St Regis Singapore this weekend

Frasers Property Australia, an overseas arm of Frasers Centrepoint, is holding an exhibition of its Sydney residential projects here this weekend.

The Sydney Collection – comprising Lumiere Residences, Lorne Killara and Trio – is on show at the St Regis Singapore.

In addition, a panel of Australian property experts have been invited to give their views on the potential of the Australian market. The line-up includes Stanley Quek, Frasers Property Australia’s managing director, and Rory McLeod, a property analyst with Colliers International Research, Sydney. The third speaker, Carolyn Chudleigh, is a property lawyer and director of the Property Council of Australia, a body that represents developers.

Frasers Centrepoint chief executive Lim Ee Seng said the group hopes the positive buying sentiment in Singapore will spill over to its overseas projects.

‘Sydney, in particular, is currently enjoying a strong pick-up in its sales,’ he said. ‘Australia has long been a popular market for Singapore buyers, and this is a good opportunity to view some of Sydney’s best properties under the Frasers brand.’

Lumiere Residences is situated in Sydney’s historic mid-town. The project is 56 storeys high and comprises 456 apartments. Prices start at A$1.16 million (S$1.35 million).

Lorne Killara is in the heart of Sydney’s prestigious North Shore. The project is a boutique development of 36 apartments and four pavilion-style penthouses. Prices start at A$795,000.

Trio is in an established residential community in Sydney’s Inner West, near major universities and teaching hospitals. Prices at this project, which is yet to be completed, start at A$435,000.

60% of Nex mall at Serangoon Central leased

Source : Channel NewsAsia – 23 Jul 2009

The upcoming suburban mall Nex located at Serangoon Central has leased 60 per cent of its lettable space.

Its developer Gold Ridge said retailers like Isetan, Courts and Challenger are among its key tenants.

Gold Ridge added that Isetan has secured a 53,000-square foot space, spanning three floors.

This will be Isetan’s first new department store in Singapore since 1995.

Another first, the developer said supermarket chains Cold Storage and Fairprice Xtra, will be housed together under the same roof.

The six-storey mall will also have a wide variety of F&B and entertainment options.

To be developed at a cost of S$1.3 billion, Nex will be ready by the end of next year.

Optima@Tanah Merah to be launched by end-July

Source : Channel NewsAsia – 23 Jul 2009

Property developer TID will hold a preview of its newest condominium project – Optima@Tanah Merah – before the end of this month.

Located next to the Tanah Merah MRT Interchange along New Upper Changi Road, commuters will be able to get to the city centre by train in less than 20 minutes and to Changi International Airport in about 6 minutes.

The 99-year leasehold development has 297 units that feature one-bedroom studio apartments, 2- to 4-bedroom units plus 18 penthouses which come with open balconies and terraces.

TID is a joint venture between Japan’s largest listed developer, Mitsui Fudosan, and Hong Leong Group Singapore.

Its portfolio includes projects such as the St Regis Hotel and Residences, Parc Emily, Oceanfront on Sentosa, as well as The Gale, which was launched recently.

Hong Leong said interest in Optima is already building up, with over 1,000 enquiries received over the past two months.

The project is expected to receive its Temporary Occupation Permit (TOP) by 2014.