News Update - 6 June 2012

RESIDENTIAL MARKET

Bumper supply of new HDB flats benefits all, says Khaw

BOTH first and second timers are said to have enjoyed an improved chance of securing an HDB flat following the year's bumper supply of new units, according to National Development Minister Khaw Boon Wan's latest blog entry yesterday.

"The mega launch in March of a combined BTO (Build-To-Order) and SBF (Sale of Balance Flats) offering with 8,000 new flats, gave us an opportunity to test out the revised balloting rules, to favour second-timers in non-mature estates. The resultant application rates showing that second-timers significantly improved on their chances, while first-timers' rates remained satisfactory, were greatly reassuring," Mr Khaw posted in his blog.

Notably, as at 5pm yesterday, the overall first-timer application rate stood at 1.6, much lower than the 2.2 recorded in March and similar to the 1.6 registered in January this year.

Application rates were also lower in non-mature estates at 1.3 as compared to 1.9 in March for the group.

The blog also noted that 11,410 applications have been received thus far for a total of 4,600 new flats, giving an overall application rate of 2.5, which was deemed to be "quite encouraging".

Mr Khaw also highlighted that the new Ageing-in-Place Priority Scheme - which was announced during the Budget Debate - was a success in the studio apartment project as it managed to ensure that all the Toh Yi residents who applied (around 12 per cent of total applications), had an opportunity to select a unit, allowing them to "age in place".

Source: Business Times – 6 June 2012

Pasir Ris Drive 3 residential site receives five bids

THE latest tender closing for a 99-year leasehold residential site at Pasir Ris Drive 3 saw cautious bidding yesterday, with only five bids received.

Despite the measured response, the top bid of $211 million, or $418.3 per square foot per plot ratio (psf ppr), was within expectations.

The top bid was put up by Capital Development, whose shareholders include Lee Siaw Ling, Low Khoon Huat, Lakshmanan s/o Seenivasakan, Lee Keng Tiong and Lim Yong Ying Calvin. It narrowly beat the second highest bid of $416.1 psf ppr which was put up by Singland Development.

The next three weeks will see weekly tender closings on attractive sites in the form of Buangkok Drive/Sengkang Central (near Buangkok MRT station), Farrer Drive, and Pheng Geck Avenue Parcel B (near Potong Pasir MRT station), he noted.

Developers may be cautious about the site as there is no MRT station nearby. The project's estimated breakeven cost to be about $800 psf.

Recent launches in Pasir Ris have been well received. Ripple Bay (679 units) at Pasir Ris Drive 4 has sold nearly 500 units at the average price of $880 psf to-date.

Source: Business Times – 6 June 2012

Far East sells record 2,200 homes in first five months

FAR East Organization, Singapore's largest closely held real estate developer, said it sold a record 2,200 homes in the first five months.

The developer marketed projects in Singapore's suburbs this year, including Watertown in the northeast and Hillier in the northwest, which includes homes modelled after New York and London apartments over a mall with a Dean & Deluca store.

Far East will offer discounts of as much as 3 per cent to mark the record sales, it said on its website.

The company's projects led the rebound in the country's home sales this year. Watertown in the Punggol suburb accounted for more than half of the total 1,872 units sold in January, when the city's residential transactions rebounded from a two-year low. April's home sales climbed to a three-year high of 2,487, boosted by developments including Far East's Hillsta, according to government data.

The government has been attempting to rein in prices since 2009, when it barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built. Analysts said in April they all expect the government to introduce further measures to curb price increases.

The darkening economic climate affects buying sentiment, given that credit is the lifeblood of real estate, in the event of a credit crunch due to fallout in the Eurozone region, the local property market will be severely affected.

Source: Business Times – 6 June 2012