News Update - 4 June 2012

RESIDENTIAL MARKET

Smaller firms join hands to battle big developers

SMALLER firms are taking on the big boys in the battle to buy development land plots.

By joining hands and pooling funds, these upstarts have secured various prime sites around town despite stiff competition in a robust property market.

At least three out of the 11 residential sites sold under the Government Land Sales (GLS) programme this year have been snapped up by consortiums of smaller investors. Smaller firms have also done well in the private land sale market. They are redeveloping sites including McDonald's Place at King Albert Park and Seletar Garden.

For instance, a group of investors comprising SingXpress, Creative Investments and Kay Lim Realty secured an executive condominium (EC) site in Tampines for $234 million last month, outbidding others like Sim Lian Group and MCL Land.

Experts say that smaller firms are banding together as it helps them spread the risk involved in the development of larger sites.

This is especially vital amid market uncertainties such as the possibility of a fresh round of cooling measures here and global concerns over the euro zone crisis, they added.

Contractors are able to control their costs better and they might be able to translate the savings from the lower costs into a higher bid instead.

Source: The Straits Times – 4 June 2012

Room with a view? Not always

VIEWS from the top are often coveted and many buyers are willing to pay a premium to secure high-floor apartments.

But these prized views of the city skyline or the sea front, for instance, are not always guaranteed to stay as long as the home buyer.

At times, new developments spring up right next to an existing project, obstructing both the breeze and the panoramic views.

For instance, The Bayshore near East Coast Park used to enjoy sea views, but most of the units there are now blocked by Costa Del Sol. Silversea in the same area, expected to be completed by the end of 2014, is also likely to block the views of some apartments at The Sea View.

But buyers should be savvy enough to know what to expect, experts said. Even if marketing agents push the unblocked views as a key attraction of a newly launched project, their claims can be checked, they added.

By checking the Master Plan and the gross plot ratio given for surrounding sites, home buyers can get a sense of what project might get built in front of them.

The masterplan indicates whether an undeveloped land parcel, for instance, might be earmarked for residential, commercial or mixed-use development.

The gross plot ratio also determines how intensively the land can be used. For example, a ratio of 1.4 allows developers to build up to five storeys.

The Government Land Sales (GLS) programme on the URA website - which lists the land parcels the Government puts up for sale every half-year - is also a good resource to check where new projects might soon rise.

Research is crucial because buyers can either negotiate the asking price or think twice about purchasing a unit if they know that its views will not last.

Source: The Straits Times – 2 June 2012

91 Pasir Ris EC units sold on first day of booking

MORE than 90 units have been sold at executive condominium (EC) Watercolours on its first day of booking.

The 99-year leasehold project in Pasir Ris opened for booking at noon yesterday and will close at 9pm today.

The 416-unit exec condo - the latest of a number of new projects in the area - will be built at the junction of Pasir Ris Drive 3 and Pasir Ris Link.

Huge Development - a consortium made up of Ho Lee Group, UE E&C, GPS Alliance Development and Investment, and Evia Real Estate - is behind the project.

Buyers - an even mix of first- and second-timers - snapped up a range of units, although the three-bedders proved more popular.

Per sq ft (psf) prices at Watercolours range from $570 to $750, and work out to an average of $706 psf.

Mr Hong said two-bedders start from $530,000, three-bedders from $639,000, four-bedders from $885,000, and penthouses from $1.07 million.

However, yesterday's sales figure is lower than expected, and that the developers may have to review their marketing strategy.

It could mean that this exec condo is facing stiff competition from others that have been launched. Some buyers might also be waiting for new ones, which could be in a location they prefer.

Source: The Straits Times – 2 June 2012

Changing face of Pasir Ris

PASIR Ris is easily dismissed as a sleepy outpost at the end of the East-West MRT line, but property experts say home hunters could do well to consider the area.

They say the face of Pasir Ris will change significantly in the years ahead as numerous projects, both private and public, add buzz to the well-established area.

Buying interest in projects launched so far has already been strong, thanks in part to the affordability factor, the experts say.

Pasir Ris is a 'value-for-money purchase', especially for those who like the east and being close to amenities.

Homeowners may see longer-term resale potential and rental upside when such decentralisation of office space takes better shape in years to come.

This, coupled with the plethora of new launches there, could explain why resale activity has been subdued recently.

Still, prices have held up. For instance, the freehold Ferraria Park sold 13 units at a median price of $940 psf in the first five months of the year. It was completed in 2009. That price is fairly similar to that of new freehold launches.

Source: The Straits Times – 2 June 2012

SINGAPORE

17% of Singapore households are millionaires

SINGAPORE leads the world in terms of the proportion of households classed as millionaires after the ranks of the wealthy swelled again last year.

A new study has found that the number of households with investable assets of US$1 million (S$1.26 million) or more rose 14 per cent to 188,000 last year. That means 17.1 per cent of households - or one in six - are millionaires.

The findings come from management consultancy Boston Consulting Group (BCG) in its Global Wealth Report 2012, which does not include property and other non-financial assets.

BCG said the 17.1 per cent figure was the 'highest density' of millionaire households across all the 63 countries it surveyed.

Singapore came in 11th in terms of the absolute number of millionaire households.

That figure was definitely boosted by the appreciation of the Singapore dollar over the past few years, while wealth was generated by the strong growth in the property market, said Mr Warren Lim, chief executive of Finexis Advisory.

Singapore was slightly lower down the ladder when it came to ultra-high net worth households, which BCG defined as those holding over US$100 million in wealth.

It had 108,000 of these ultra-rich households last year. This is roughly equivalent to 10 out of every 100,000 households, according to BCG.

While Singapore was in 26th position when ranked by absolute numbers, it was still No. 2 in terms of the density of such households.

The Republic was trumped narrowly by Switzerland, where 11 out of every 100,000 households were considered ultra- high net worth last year.

The Asia-Pacific region grew richer at a faster rate than most other regions last year, due more to solid economic growth than to equity market gains.

Private financial wealth in Asia excluding Japan expanded 10.7 per cent last year to about US$23.7 trillion. The region is expected to hold US$40.1 trillion in wealth by 2016.

In contrast, developed economies like the US, Europe and Japan experienced a decline in the amount of wealth held in 2011.

Source: The Straits Times – 2 June 2012