Think out of the shoe box: Analysts

Source : Today – 10 Oct 2009

If you are thinking of investing in small apartments measuring less than 500 sq ft because they are cheaper, you may want to think again, according to property experts.

As there are only a few “shoe box” housing units available on the market, and with a popularity that’s still in the early stages, analysts said the returns on investment in these properties could be limited.

“This is a non-standard investment which, in terms of size, may not appeal to some tenants,” said Cushman and Wakefield Singapore managing director Donald Han.

“If you’re thinking of leasing out and holding this as an asset typical to any studio-sized residential apartment, then this is something very different.”

Such “shoe box” apartments have been popular with property buyers recently, as sales of such units this year have hit an all-time high of 412, up from 299 last year and 275 in 2007. In 1995, there was only one such transaction.

The investment returns for such small-sized apartments depend on tenants’ preference for these types of units. And analysts said that in times of a market downturn, potential tenants tend to hold the bargaining power.

“A majority of tenants in Singapore are foreigners and they will have a lot of choices in time to come, with more developments to be completed in the next few years,” said Ngee Ann polytechnic lecturer Nicholas Mak.

Thus, “shoe box” units would likely attract tenants who prefer short-term leases rather than those looking for typical two-year leases, said Mr Han, who also believes that there would be buyers of such resale units.

Meanwhile, director of property agency Dennis Wee Group, Mr Chris Koh, said the returns on such small format apartments could be comparable to larger units.

He cited the example of the 463-sq-ft apartments at Avila Gardens in Loyang, which transacted at a resale value of between $300,000 and $320,000 in 2000.

This year, their prices are in the range of $370,000 and $410,000, translating to a gain of more than 20 per cent. This is comparable to bigger units in the same development.

“Maybe that’s why there are still people biting,” said Mr Koh, who remains optimistic about the investment potential of these small units.

Excess liquidity at the heart of the problem

Source : Business Times – 15 Sep 2009

With interest rates at a low, investors have few options other than property

CALIBRATION seems to be the operative word in the set of measures announced by the government yesterday to ensure a ’stable and sustainable property market’.

‘The measures are pretty measured, actually,’ a developer said.

That may be fitting. After all, as National Development Minister Mah Bow Tan noted, while the level of speculation is not yet extreme, the package will help pre-empt excesssive price swings.

The government has taken relatively small steps to try and cool the buying frenzy now, which if left unchecked could develop into a full-blown property bubble that will take more draconian measures to prick – as we saw in the historic May 1996 anti-speculation curbs.

These included taxing as income the gains from selling properties within three years of their purchase, slapping stamp duty on those who sell their residential properties within three years of purchase, limiting permanent residents to just one Singapore dollar housing loan each and banning such loans to non-PR foreigners.

Yesterday’s measures are a warning, a signal to the market of more things the government could do if the market gets out of hand. The authorities were mindful of being moderate with any measures for now. After all, if they overdo it, it may kill the recovery in private residential transactions and put a brake on a sector of the economy that is doing well amid the recession.

And that will have knock-on effects – on banks who have been enjoying brisk business dishing out housing loans this year; on the construction sector and related trades.

The supply-side measures in yesterday’s package – reintroducing confirmed list land sales in first half 2010 and enhancing the supply in the reserve list in the same period – will help meet developers’ ravenous appetite for land.

By sending a strong signal to the market that there is enough supply, hopefully home buyers will not panic and start forming long queues at project launches, for fear of missing the boat again.

The key demand-side measure in yesterday’s package is scrapping the interest absorption scheme (IAS) and interest-only loans for the purchase of private residential properties.

Under these schemes, a property buyer will not have to make any significant payment, aside from the initial 10-20 per cent downpayment, until the project is completed.

During the early stages of the latest recovery in private home buying – around the February/March period – the interest absorption scheme was important in luring home buyers from the sidelines. Right now, it is much less important.

CB Richard Ellis says that most buyers in recent residential launches chose the normal progress payment scheme with only about 30 per cent opting for the interest absorption scheme. After all, buyers have to pay a price premium, usually 2 to 3 per cent, for IAS.

Scrapping IAS will help lessen some of the speculative demand, but it may not address the root cause of the exuberance in the property market – excessive liquidity.

‘This isn’t a Singapore-centric problem. We’re seeing it in other major gateway cities, especially Asia, where housing transactions and prices have increased,’ as DTZ executive director Ong Choon Fah notes.

The whole world is flush with funds. And with the distaste for structured financial products in the post-Lehman era, investors are turning to ‘real assets’ – like property and commodities – as a hedge against inflation.

‘The reason there’s so much exuberance (in the Singapore property market) is interest rates are low. The public does not trust banks to give them alternative investment products. That’s why people are piling in property,’ says Wheelock Properties (Singapore) CEO David Lawrence.

Excess liquidity is also the reason ‘banks are giving speculators so much money to invest in property when six months ago they didn’t lend for property’.

The challenge for governments and financial institutions is to offer alternative investment options or platforms to regain the trust of investors.

HDB deserves praise

Source : Straits Times – 10 Oct 2009

I REFER to Thursday’s report, ‘Hard to get that first flat? Not so’. In the past weeks, there has been a fair amount of negative sentiment against the Housing Board over flat availability.

I urge Singaporeans not to forget what the HDB has done for so long for which we should be thankful.

Most Singaporeans have forgotten that HDB was set up to solve the gargantuan problem of providing high-standard public housing for all.

HDB has worked hard. How can we say it has done a bad job? Do we live in villages like our forefathers?

Second, are HDB flats really unaffordable?

If one compares buying an HDB flat with buying a condominium or landed property, the cash needed upfront for an HDB flat is minimal. A buyer who sets aside a few hundred dollars a month for a few years will have no problem with the down payment.

There is no excuse, especially for young professionals and executives. HDB also has grants and comprehensive loan schemes with interest rates lower than market standards.

To meet rising expectations and the desire for choice, HDB offers a myriad of options in new homes.

Statistics revealed by National Development Minister Mah Bow Tan show that a large number of Singaporeans allocated a flat reject the offer. Surely, Singaporeans are spoilt for choice.

The only identifiable issue is thus over-selectiveness by some individuals. Some do not wish to live on a low floor, others refuse anything less than a brand-new flat.

A solution is private property, but with greater freedom of choice comes an understandable price premium.

Some Singaporeans have short memories. They do not remember being offered flats by HDB on multiple occasions and tend to overestimate the number of applications.

I am sure the figures are well documented. Thank you, HDB, for your hard work all these years.

Dr Lee Kin Weng

Ethnic quota policy works fine, says HDB

Source : Straits Times – 10 Oct 2009

WE THANK Mr Chan Kok Keong for his feedback (’HDB’s ethnic quota policy needs tweak’, Sept 22). The ethnic integration policy (EIP) was introduced to achieve a healthy racial mix in HDB estates and prevent ethnic enclaves.

By providing HDB residents of different races with more opportunities to interact as neighbours, the policy fosters interracial understanding and strengthens social cohesion. The information on the eligible ethnic groups of buyers for resale flats is updated monthly to provide certainty to buyers and sellers on the availability of ethnic quota for the entire month. For instance, when the seller offers an ‘option to purchase’ to the buyer, the buyer will need time to exercise the option, obtain a letter of offer for a bank loan or an HDB Loan Eligibility letter for an HDB loan. Their resale application will not be affected by any changes in the ethnic proportion, as long as the resale application has been submitted within the same month.

However, applicants are more likely to be affected by any quota revision if updating the ethnic quota is done more frequently, as for example, Mr Chan suggested in shortening it to a bimonthly practice. The current combined quota for ‘Indians’ and ‘Others’ offers them a higher limit and greater flexibility. If they were treated as separate groups, their respective ethnic limits will have to be lower, making it harder for them in their flat purchases.

We will continue to review the EIP and the ethnic quotas regularly to ensure their relevance.

Lily Chan-Wong Jee Choo (Mrs)
Deputy Director (Policy & Property)
for Director (Estate Admin & Property)
Housing & Development Board

UOL taking half-share in Rainbow site

Source : Business Times – 10 Oct 2009

UOL Group is taking a half-share in the Rainbow Gardens site in Toh Tuck Road bought by the LaSalle Asia Opportunity II fund in a collective sale a few years ago.

The 999-year leasehold plot and an adjoining strip of state land total a land area of 130,164 sq ft. In its statutory filing with the Singapore Exchange (SGX) yesterday, UOL said planning approval has been granted for a condo project with a gross floor area of about 182,219 sq ft.

BT understands the Urban Redevelopment Authority’s (URA) approval for the site is for a five-storey condo with around 120 units although market watchers reckon that with UOL’s advent, the unit mix could be reconfigured.

In its statement, UOL said it will be investing a total of about $15.58 million for its half-share in a joint-venture company it has formed with the LaSalle fund. The sum UOL is investing comprises $1 million in ordinary shares, about $10.17 million in redeemable preference shares, and about $4.4 million in shareholders’ loans.

UOL said it and/or its subsidiaries will be appointed as the project and sales and marketing managers for the new condo to be built.

S’pore leapfrogs in global financial league

Source : Business Times – 10 Oct 2009

It soars to fourth spot from last year’s tenth in WEF’s latest Financial Development Report

SINGAPORE has jumped to fourth place from 10th in a list of global financial centres ranked in this year’s Financial Development Report from the World Economic Forum.

The island’s rise came as the large industrialised countries fell out of favour following the financial meltdown.

Countries such as Germany and France lost heavily in terms of absolute scores – down 0.74 points and 0.68 points respectively – and crashed out of the top 10 list.

The US dropped from pole position in 2008 to third place this year. Last year’s runner-up, the UK, claimed top spot this year. And Australia took second place, leaping from 11th position in 2008.

‘While the UK came in first and the US came in third, both experienced a sharp drop in their overall scores that significantly decreased the margin by which they lead other countries in the index,’ the report said. ‘Financial instability weighed heavily on both, a factor that was offset by strength in some measures of financial intermediation.’

The report – by economist Nouriel Roubini and the head of emerging markets finance at World Economic Forum USA, James Bilodeau – ranked 55 of the world’s leading financial systems and capital markets.

The rankings were based on seven factors including institutional and business environment, financial stability and banking services.

Singapore and Hong Kong – which came in number five – were praised for consistent strength across their institutional and business environments, and scored highly for financial stability.

‘Within the banking pillar, both economies show room for improvement with respect to financial information disclosure. However, this is offset by the efficiency of their banks,’ the report noted.

‘Although they both exhibit healthy equity and foreign exchange markets, bond market development is an area for improvement in both economies, particularly Hong Kong.’

On financial stability alone, the US was ranked 38th, the UK 37th and Japan 34th. Norway came in tops, Switzerland was second and Singapore fifth.

Some developing countries performed well in the financial stability section of the index, Chile coming in third and Malaysia, Mexico and Brazil making the top 15.

‘Developing countries exhibited a relatively strong showing in the financial stability pillar of the index,’ Mr Roubini said.

‘For some, this is the result of learning from the mistakes of past financial crises, while for others it may reflect the relative lack of complexity and global integration of their financial systems.’

Does Court of Appeal have powers to reopen own case?

Source : Straits Times – 10 Oct 2009

A CIVIL suit before the courts in Singapore has set a landmark poser.

The issue: Does the highest court in the land have the powers to reopen and set aside its own judgments?

It pitted one top lawyer against another in the High Court, in a debate behind closed doors before Justice Choo Han Teck on Wednesday.

He has reserved judgment.

The issue began in 2005, when a three-judge panel in the Court of Appeal ruled in a 2-1 decision that residents of Grange Heights condominium could use an access path leading to their development.

The path runs through a Grange Road property owned by Lee Tat Development.

In 2007, when Grange Heights went to the High Court to ask for a ruling on its building of a proper road, the court said it saw no need to do this, as the matter was bound by the 2005 ruling.

Lee Tat appealed. A hearing followed and each side subsequently presented four sets of submissions, at the end of which the court reserved judgment.

Then last December, the Court of Appeal ruled that the condominium’s right of access no longer existed. Lee Tat thus won the right to close off the access road.

Then came Grange Heights’ move. Its condominium management committee pored over the grounds of the judgment and hired lawyers from Rajah & Tann led by Senior Counsel Sundaresh Menon to apply to the Appeals Court to review and set aside its decision.

But for such a move to proceed, it had to be first established whether the Court of Appeal had the powers provided by the Supreme Court of Judicature Act, or under its own inherent jurisdiction, to reopen a case it had already heard and set aside the decision.

Also at issue was whether the Appeals Court could reconstitute itself to reconsider or rehear matters arising from the judgment.

In other words, how final are the decisions made in the highest court of the land?

The High Court hearing was thus convened this week to settle the matter of the powers of the court.

Senior Counsel Tan Cheng Han, assisted by lawyers from Arfat Selvam & Partners, represented the defendants Lee Tat in the hearing.

In submissions filed, they argued that the powers of the court were defined by the legislation and that it had no statutory powers to rehear its own case.

Among other things, they added that the Appeals Court here does not have as wide-ranging powers as do the courts in England, and that it operates within the scope conferred by the Singapore Parliament.

Grange Heights’ lawyers countered in their submissions that the Appeals Court, being the court of last resort, had the power to rehear a case and to set aside its decision.

They argued that the court was being asked to look at the process by which the decision was reached and not assess the substantive merits of the decision itself.

There was a public interest in the issue as it affected the legal rights of litigants generally.

---

About the case

FOR more than 30 years, Madam Ching Mun Fong, who owns and runs Lee Tat Development, has fought – and failed – to get the courts to close off an access road running through her Grange Road property to the adjoining Grange Heights condominium site.

But last year, the Court of Appeal overturned a decision that a previous Appeals Court made three years ago and granted Madam Ching her wish.

Her lawyer Ernest Balasubramaniam had argued before the court that the issue of right of way in the light of changed circumstances had not been previously addressed.

The Court of Appeal, comprising Chief Justice Chan Sek Keong and Judges of Appeal V. K. Rajah and Andrew Phang, found that circumstances had changed and that the access road was neither needed nor an issue anymore.

Residents of Grange Heights have two other access points – at St Thomas Walk and River Valley Grove.

The management council of the Grange Heights Condominium now wants the Court of Appeal to reopen and rehear the case, but before the court can consider doing so, the High Court has to first establish whether it has the powers to do so.

HDB to Sheng Siong: 6 wet markets must stay

Source : Straits Times – 10 Oct 2009

They do not meet criteria for conversion into supermarkets

SUPERMARKET chain Sheng Siong, which is planning to take over six wet markets, has been told by the Housing Board that it cannot convert them into supermarkets.

The wet markets will have to stay because they do not meet the criteria for conversion into supermarkets, the HDB said yesterday.

Applications for such instances of conversion of use are assessed on a case-by- case basis, depending on the needs of residents, stall occupancy rate, operating hours and number of customers.

But while the HDB’s announcement should please residents who are loath to give up shopping in their neighbourhood wet markets, there is still a question mark over the stallholders’ livelihood.

This is because when Sheng Siong formally takes over ownership of the markets, it will have the power to decide whom to rent to, and at what price.

The six wet markets are in Choa Chu Kang Street 62, Choa Chu Kang Avenue 1, Serangoon Avenue 3, Bukit Batok West Avenue 8, Block 623 Elias Road and Fajar Road.

Sheng Siong had earlier said it planned to run ‘air-conditioned markets’ on these sites.

When contacted yesterday, Sheng Siong’s managing director Lim Hock Chee said the chain will wait until its purchase of the six markets is finalised before deciding on whether to let the stallholders stay.

He added: ‘We will be taking over the markets the way they are and we will do what HDB says. There will be no air-conditioning, the markets will stay the same.’

The HDB said that earlier this week, it received an application from Heeton Holdings, the current owner of five of the six markets, to sell them to Sheng Siong.

It has not yet received an application from Bai Sha Market, which owns the remaining market, to sell the property to the supermarket chain.

HDB said it held a meeting with Heeton and Sheng Siong representatives yesterday on the use of the five wet markets after the sale.

It said Sheng Siong was aware it was buying the five properties as wet markets and had confirmed that it would continue running them as such.

HDB said it would like to remind existing wet market operators in HDB premises that approval is needed before a market can be sold or subject to a change of use.

At around the time Sheng Siong’s plans first made the news, it also came to light that there were plans to turn the only wet market in Sembawang into an NTUC FairPrice outlet.

HDB is evaluating that proposal and plans to meet the parties to discuss the site’s proposed use.

Meanwhile, stallholders in the markets that Sheng Siong is planning to buy told reporters about their continued anxiety.

Fishmonger Sia Chen Theng, 39, who runs a stall in the Serangoon Avenue 3 market, said: ‘There is still a big question mark. HDB does not approve the change of use, but will Sheng Siong let us keep our jobs? And if they do, will they raise the rent? We don’t know.’

Over at the Elias Road wet market, vegetable seller Guo Shao Jie, 60, said: ‘We just have to wait and see. We still don’t know if they will rent spots to us or not.’

Housewife Winnie Tan, who shops at the Choa Chu Kang Street 62 market three times a week, is relieved the wet market is staying, but she is also hoping that ‘things don’t change with the new management’.

And teacher Jessie Liau, 55, a regular at the Serangoon Avenue 3 market, said: ‘I like the concept of the wet market. I don’t need the air-con, and I like the stallholders. They are very friendly, and I hope they can stay.’

Suburban home prices near highs of 2007-08

Source : Straits Times – 9 Oct 2009

HOUSE hunters: If it feels like that suburban condominium you are eyeing is just as expensive now as it was during the 2007-2008 property boom, that is because it probably is.

Although overall private home prices are still some 15 per cent below recent peaks, prices of mass market homes have already climbed back to the levels of early last year, right before the recession hit.

According to the Urban Redevelopment Authority’s (URA’s) latest estimate, released last week, prices of suburban private homes are just 3 per cent shy of their peak levels in the second quarter of last year.

Some individual projects – such as Seletaris in Yio Chu Kang and Casa Merah in Tanah Merah – have already surpassed these levels, going by calculations done by The Straits Times using data from URA’s Realis database.

For mid-tier properties, URA’s data indicated prices remain about 15 per cent off peaks last year.

But some condos in this category are also bucking the trend, with higher prices in the third quarter this year than in the property boom just past.

In the Jalan Besar area, for instance, three condominiums – Citylights, Southbank, and City Square Residences – are now commanding higher average prices per sq ft than they did at the height of the boom, according to The Straits Times’ calculations.

The calculations compared these condos’ average price psf in the third quarter this year with the second quarter of last year. All the projects had several sales in the most recent quarter, but some had as few as two in the second quarter of last year as sentiment tapered off ahead of the recession.

Similarly, in the East Coast area, projects such as The Esta and The Sea View have already breached their peak average psf prices. This pattern has also cropped up in selected condos from Clementiwoods in Clementi to The Regency @ Tiong Bahru.

While launches of suburban condos have seen a massive surge in demand in recent months, resales of existing homes have so far stayed out of the limelight. But they have also been appreciating in value as sentiment in the real estate market goes from strength to strength, said property consultants.

‘For mass-market leasehold projects outside the prime areas, just based on resale prices, we have almost gone back to the 2007-2008 levels,’ said Ms Chua Chor Hoon, head of South-east Asia research at DTZ Debenham Tie Leung.

According to her research, the average price of a leasehold non-landed resale home rose to $610 psf in the third quarter of this year, a mere $5 psf less than the most recent peak of $615 psf.

With private home prices still on an uptrend, having jumped a 20-year record of 16 per cent in the third quarter this year, it seems just a matter of time before suburban condo prices hit new highs.

But consultants say this may not necessarily happen, at least not by the end of this year.

For one thing, the Government’s measures to cool the property market, announced last month, could have a dampening effect on home sales and moderate price increases.

This is unlikely to hit actual demand for homes, but the announcement’s psychological impact could cause a knee-jerk reaction and help prevent private home prices from escalating at an unsustainable pace, said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.

‘As it is, the stand-offs between buyers and sellers in the secondary market are showing signs of a return,’ she said. Buyers are also starting to complain about the higher prices of mass market homes.

‘We have seen a slight slowdown in sales generally in the market, partly because of the prices, and partly because of the Government’s announcements,’ she said, adding that prices have yet to suffer.

‘I think some people are refusing to pay high prices, but sellers are not lowering their asking prices, so we are seeing the number of inquiries and also transactions come down a bit.’

1 agent for buyer, seller: OK, but get written consent

Source : Straits Times – 9 Oct 2009

WE REFER to Ms Kwok Yoke Pui’s letter yesterday, ‘Agents shouldn’t take on dual roles’. Housing Board flat sellers and buyers need not engage estate agents for their resale transactions, although there are benefits in doing so, such as leveraging on an agent’s network for expeditious sales or purchases.

A buyer and seller in a transaction should be represented by separate agents to avoid a potential conflict of interest.

While an agent should act and collect commission from only one party, the buyer or seller, it is also acceptable if the buyer and seller in a transaction agree to have the same agent represent them.

The agent should preferably obtain the written consent of both parties; the same should apply to two agents from the same company who are acting separately for sellers and buyers in the same transaction. Both the seller and buyer should be aware and agree to such an arrangement.

Agents should not insist on representing buyers to obtain a commission, failing which they would not accept any offers to buy on behalf of the sellers.

Such a position is an ethical breach that we do not condone.

We urge Ms Kwok to send us the details of the agents who acted for her so we can look into the matter.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

Harry’s to open boutique hotel

Source : Business Times – 9 Oct 2009

Hotel in Ann Siang Road is expected to open in Q1 2010

SINGAPORE’S largest bar chain operator Harry’s Holding will open a boutique hotel in Ann Siang Road.

The new venture marks the entry of the company – well-known for its bars in the central business district – into the hotel business. Harry’s will convert a row of shophouses into a hotel. The shophouses used to house the offices of advertising firm Batey Ads before they were bought by an investor, who has since leased them to Harry’s for 10-20 years.

The hotel is expected to open in the first quarter of next year, BT understands.

Harry’s chief executive Mohan Mulani said earlier this year that the group was looking for opportunities to buy a small hotel in Singapore as its food and beverage business was saturated. ‘We are not looking to expand more Harry’s. We are looking for a small boutique hotel to buy, a Harry’s hotel,’ he told Reuters in March, adding that he would like to find a property suitable for around 70-80 rooms.

Harry’s is listed on the Phillip Securities OTC Capital market. The company’s move to open a boutique hotel comes as interest in such hotels is picking up.

The 50-room Hotel Nostalgia was sold recently for $22 million, or $440,000 per room – a record for a boutique hotel. Singapore-based Lion Properties Group spent $20 million building the mid-tier hotel, housed in two conserved shophouses and a four-storey extension.

Another recent addition to the list is Aqueen Hotel Lavender. The 105-room hotel in Lavender Street opened last month. Its owner is Crescendas Group, which owns another three Aqueen sites.

Boutique hotels are becoming more popular as the profile of tourists arriving in Singapore changes, analysts say. More tourists are seeking mid-range accommodation.

‘There is a certain promise that the tourism landscape will change from 2010 because of the upcoming integrated resorts,’ said Cushman & Wakefield Singapore managing director Donald Han, noting that companies could be rolling out boutique hotels in anticipation of this.

S’pore ranks 4th in world’s financial system

Source : Business Times – 9 Oct 2009

Singapore’s ranking among the global financial centres has improved, said the World Economic Forum (WEF) on Friday.

The Republic jumped to fourth place in 2009 from 10th in 2008, the WEF’s second annual Financial Development Report showed.

The report ranks 55 of the world’s leading financial systems and capital markets by analysing the drivers of financial system development and economic growth in various countries.

The financial crisis was acutely felt in most global financial systems and caused most countries’ scores to drop significantly compared to the previous year.

The report showed that the world’s largest economies took the biggest hit – Germany and France, in particular, suffered a heavy fall in overall scores that pulled them out of the top 10.

The United Kingdom, buoyed by the relative strength of its banking and non-banking financial activities, claimed the Index’s top spot from the United States, which slipped to third position behind Australia largely due to poorer financial stability scores and a weakened banking sector.

Serangoon Ave 3 site sold at $221.21m: URA

Source : Business Times – 9 Oct 2009

The Urban Redevelopment Authority (URA) has awarded the tender for the residential site at Serangoon Avenue 3 to Intrepid Investments Pte Ltd.

The company submitted the highest bid of $221.21 million (US$158.84 million) in the tender for the site.

The 13,877.2 square metre (sqm) residential site has a maximum permissable gross floor area of 38,857 sqm.

Prices of Nuovo cross $600psf on ‘Centro-effect’

Source : The Edge – 5 Oct 2009

There’s been a spurt in sales at Nuovo in Ang Mo Kio recently, after the executive condominium (EC) crossed the five-year minimum-occupation period. Seven units changed hands from Sept 4 to 11, according to caveats lodged with URA Realis. In 2006 and 2008, there was only one transaction each, and two deals in 2007. Owners who sold recently are taking advantage of the “Centro-effect”, caused by the launch of giant property developer Far East Organization’s 329-unit Centro Residences in Ang Mo Kio Avenue 8. Units there have been sold at an average of $1,179 psf from its launch in August to Sept 11, according to figures from URA Realis. Between Sept 4 and 11, an 893 sq ft unit sold for $1.07 million, or $1,199 psf.

Given that it’s a private condominium, Centro Residences doesn’t have the same restrictions that Nuovo, an EC, has. Under HDB rules, owners of ECs are only allowed to sell their units to Singapore citizens or permanent residents five years after the project receives Temporary Occupation Permit (TOP), which, for the 297-unit Nuovo, was in 2004. It’s only 10 years after TOP that units in ECs can be traded like any other private condominium in the resale market, with sales to foreigners allowed as well.

However, the owners of Nuovo should be delighted at transaction prices in the range of $477 to $637 psf, as they are the highest achieved since the property was launched at end-2001. Prices at that time were hovering at $400 psf.

For instance, a 1,119 sq ft unit on the ninth floor went for $710,000, or $634 psf. This is a gain of 52% for the original owner, who had purchased it from developer City Developments Ltd (CDL) for $467,276 in 2002. A larger unit on the 17th floor went for $1.2 million, or $477 psf. The 2,594 sq ft condominium was purchased for $812,746 in 2001.

Other condominiums along Ang Mo Kio Avenue 9 have also benefited from the Centro effect, with a unit at Far Horizon Gardens, a condominium completed in the 1980s, changing hands in the resale market at $508 psf last month, the highest price psf achieved in the project this year.

Sellers are also benefiting from the recovery in the residential sector, which saw a marked 15.9% jump in the 3Q residential price index — the largest q-o-q increase seen in the index since 1981, according to URA’s 3Q flash estimate last week. As a result of this big increase, the 3Q price index is now 5.1% below that in 4Q2008 even though it registered a total decline of 18.1% in the first two quarters of 2009. The residential price index is more or less at the levels seen in 2Q2007.