News Update - 22 May 2012

RESIDENTIAL MARKET

Private homes for $1 million or less

BUYERS can still snap up private apartments of reasonable size for less than $1 million - but do not expect up-to-the-minute styling or prime locations.

Yet such buys could end up being a good deal if they are in an area that is set to be revitalised or developed. Buyers have been quick to jump in.

Homes costing less than $1 million can be found in both new launches and the secondary market but it is rarer in the former, because the increase in land prices has led developers to offer higher per sq ft (psf) prices and smaller units.

New launches of flats of at least 1,000 sq ft and costing below $1 million can be found in the north-eastern areas like Hougang, Sengkang and Punggol.

Deals can also be found in upcoming condos in Pasir Ris.

In Yishun and Sembawang, some similar transactions were made at The Nautical and Eight Courtyards.

These areas are also good scouting grounds for buyers looking to get a resale unit, which could be as big as 1,400 sq ft for that price.

Many shoebox units - measuring about 540 sq ft or less - cost less than $1 million but these are said to be too small for a family.

Decent-sized units can also be had for a similar price, but buyers have to bear in mind the trade-offs, like how an older condo may look dated.

While some people might not mind buying an older project, those looking for homes with lasting power may find it worthwhile to look into executive condominiums instead.

A freehold unit would be better value compared to 99-year leaseholds. The latter would have run down by quite a number of years and may not appreciate as well over the longer term.

Source: The Straits Times – 19 May 2012

CBD to keep buzzing after office hours

A TRANSFORMATION is under way in the heart of the Central Business District (CBD).

The area's traditional corporate profile is taking on a new after-office hours vibrancy as many more residents move into the district.

More than 4,600 homes are expected to be completed in the CBD by the end of 2015.

Many of these homes will be in Robinson Road, Shenton Way and the nearby Tanjong Pagar.

By the time these homes are ready, the CBD's once sleepy population will have sky-rocketed 14-fold since 2007.

And already, various upcoming projects there, though pricey, have attracted healthy interest.

Far East Organization's The Clift, for instance, has sold 250 units out of 312 available. The smallest unit there costs nearly $2 million.

In Tanjong Pagar, the same developer's Altez has sold 213 condominium units out of 280 available.

Altez, a 62-storey condo at 16 Enggor Street, is being sold at an average of $2,206 psf.

Some distance away, at 70 Shenton Way, mixed-use Eon Shenton will be built with 132 apartments. About 95 units have been sold.

Other upcoming projects like the mixed-use Oxley Tower and Skysuites @ Anson, will also be thrown into the mix.

Yet to be launched, a GuocoLand development directly above Tanjong Pagar MRT station will be completed by 2016 - the first in the CBD to have homes, offices, shops and a hotel.

These projects join several in the area that were completed earlier, such as Marina Bay Residences, Icon and Lumiere.

The added residential buzz means the CBD could bring in the crowds even after hours, property experts said - in line with the Government's plan for the CBD to be a place to work, live and play.

Downtown living could prove to be popular, especially among the younger professionals.

In other mature cities like New York, downtown living is part of the city fabric. In fact, in some cities in the US, the silver population will move back into the city because of the amenities.

Source: The Straits Times – 19 May 2012

Tweak prior cooling measures before imposing new ones

Those who were uncertain over whether the robust home sales by developers chalked up in recent months can be sustained have been left with no doubt following Tuesday's release of April's sales figures.

In all, a total of 2,487 new private homes - excluding executive condominiums (ECs) - were sold last month. This is a near 4-per-cent jump from March and is the highest monthly level since 2,772 units were sold in July 2009.

With actual evidence overthrowing the doubts of property experts in the private sector, could the people in the public sector have similarly misread and misunderstood the factors driving the private housing market? And if they did, surely it would be in the interest of the long-term stability of the private housing market that they review some the earlier cooling measures implemented, especially those that have not quite met their objectives.

Already, we can see the distortions in the market created by some of these cooling measures. In general, all segments of the housing market should behave in the same way, in terms of price trends or volume of sales. After all, they all provide the same service - accommodation - and are substitutes.

Today, we see the volume of resale transactions shrinking while new sales boom. Prices of suburban homes move in opposite direction to those in the central areas. This is simply not normal.

And new apartment sizes are getting smaller and smaller. Shoebox units of 50 sq m (538 sq ft) or less bear the brunt of criticism but how many of us are aware that half of all new apartment sales today are for those below 75 sq m? And if more small units are being built, does it not mean that the supply of large or normal-sized apartments have been interrupted.

They have been lots of hints that the next set of cooling measures may target the shoebox unit.

But before we introduce another set of cooling measures, we should fine tune some of the earlier ones. As I see it, both the sellers' and buyers' stamp duty measures have more or less the same impact on the market. With the introduction of the additional buyers' stamp duty, surely there can a case for the sellers' stamp duty measure to be made less punitive.

If we keep adding on to the cooling measures - and my feeling is that there will be more to come as we have not quite addressed the liquidity problem - without a review of the earlier ones, there will come a time when the market will be caught in some kind of gridlock.

Source: Today – 18 May 2012

INDUSTRIAL MARKET

Govt curbs on industrial property?

SINGAPORE - The demand for and prices of property here have remained buoyant despite measures by the Government to cool the sector, sparking concerns that another round of measures may be on the cards.

This time around, however, analysts say the Government may focus on curbing demand for industrial properties.

Prices of industrial property increased 7.2 per cent in the first quarter, according to the Urban Redevelopment Authority's Property Price Index. Part of the reason for this is a shift in buying sentiment to industrial properties from residential units.

This has led to calls by property experts for more enforcement on real estate agents to accurately market and advertise industrial premises.

Challenges in regulating the industrial property sector are present though and some analysts observe that it will not be easy to differentiate genuine buyers from speculative investors.

Any government attempt to further detail what a particular industrial space can be used for would also stifle businesses which have to be flexible in a volatile global economy.

One of the methods the authorities are using to soften prices is to increase industrial land supply.

Some experts also expect demand to decline naturally amid the current gloomy economy and for industrial rents to stabilise in the current quarter and possibly even drop at the end of the year.

Source: Today – 22 May 2012