A 99-YEAR-LEASEHOLD residential site at Punggol Central/Edgedale Plains drew a top bid of $215.87
million yesterday, or $330 per square foot per plot ratio (psf ppr).
Chinese firm Qingjian Realty (South Pacific) Group trumped four other developers to put in the top bid for the site, which measures 218,034.6 sq ft and has a maximum permissible gross floor area of 654,103.9 sq ft. It barely edged out the second-highest bid, by Soilbuild Group Holdings, which came in at $203.888 million, or approximately $312 psf ppr. The lowest bid came in from Opal Star and Lum Chang Building Contractors, at $290 psf ppr.
The narrow spread of bids indicates developers were more measured in bidding for the site. This could be due to the upcoming supply of around 1,500 private apartments and 700 executive condominiums in Punggol New Town, and the potential slowdown in demand for mass-market homes, in view of economic uncertainties.
While a slowing market may have deterred over-optimistic bidding, the top bid of $330 psf ppr is roughly in line with the $323 psf ppr fetched by the Punggol Field Walk site in September. It shows that tender bids in the Punggol location are holding, although there is lower tender participation today, with five bidders compared to eight in the previous one.
Zuo Haibin, managing director, Qingjian Realty Group, said they are planning for around 650 units of two to four bedrooms. The project should be launched within six to eight months, he added. The breakeven cost to should be around $700 psf.
Units at the nearby 882-unit A Treasure Trove have sold for a median price of $915 psf, based on the 750 units sold since its launch in early September.
Source: TODAY – 4 November 2011
Thursday, November 10, 2011
Freehold still 'the preferred choice'
FREEHOLD home prices have proved more resilient in recent months than those of 99-year leasehold properties, according to a new report.
Price gains for freehold condominiums and terraced homes have outpaced those for similar homes with 99-year leases since the third quarter of last year - a period marked by cooling measures and economic uncertainty.
For example, while prices of leasehold condos inched up by less than 1 per cent each quarter in the 15 months to Sept 30, freehold condos averaged quarterly rises of 2.2 per cent.
Freehold condo prices have rocketed 62 per cent in the past 10 years while leasehold condos appreciated 48 per cent in the same period.
It is a similar story with landed homes.
While prices of leasehold terraced properties dipped 0.1 per cent in the three months to Sept 30 - the first contraction in at least 15 months - freehold terraced prices shot up 4.9 per cent.
Prices have soared 97 per cent for freehold terraces in the past 10 years compared with 52 per cent for leaseholds, the firm noted.
Freehold or 999-year leasehold are the preferred tenure for many property buyers as many are concerned that the value of 99-year leasehold properties may not appreciate well when the duration of the leasehold reduces.
But transaction volumes and price increases for all home segments have taken a hit since July last year as the market coped with two additional rounds of cooling measures following similar moves in September 2009 and February last year.
More recently, the financial market turmoil and uncertainties surrounding the euro zone crisis have further dampened home buying sentiments.
While buyers should go for freehold properties from a purely investment point of view, 99-year leasehold homes will still be in demand.
They still have a price advantage over freehold equivalents and many 99-year leasehold projects are located near amenities and transportation nodes.
These are crucial factors, especially for upgraders, for whom affordability and convenience rank high on their priorities. Such attributes can be found in sites in or near HDB estates which the Government puts out for tender on a regular basis under its land sales programme.
Source: The Straits Times – 10 November 2011
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