News Update - 31 Aug 2012

RESIDENTIAL MARKET

Property prices to ride high on Thomson Line

Residents in the northern region of Singapore can expect the announcement of the upcoming Thomson MRT Line to boost property prices almost immediately, say consultants, although they differ on the extent of the rise.

Homes in the Springleaf/Springside area will see prices rise by 10 per cent at least. Prices will move, starting now; we do not have to wait until the line is completed before prices go up. They will usually move for a few months and then stabilise.

Broadly speaking, consultants BT spoke with expect home prices to spike closer to the completion of the line.

A near term price increase of 5-10 per cent is expected, with a price appreciation in the range of 20-30 per cent when the MRT line is completed.

That being said, prices of properties close to major construction work sites may take a momentary dip to the tune of 5-15 per cent.

The area spanning Woodlands to Upper Thomson will likely see the largest increase in price given that they benefit most from the reduction in travelling time to town.

The Thomson MRT Line will be launched progressively in three stages from the north to the south, with three stations from Woodlands North to Woodlands South ready by 2019, six stations from Springleaf to Caldecott ready in 2020, and 13 stations from Mount Pleasant to the Gardens by the Bay fully operational by 2021.

However, there may eventually be less disparity in prices in different parts of Singapore as the transport network improves connectivity and reduces travelling time, said DTZ's Ms Chua.

The uplift on prices will progressively be less pronounced compared with in the past when there were much fewer properties that enjoy proximity to MRT stations.

Source: Business Times – 31 August 2012

Housing costs bother most US firms here

The cost of housing here has been irritating most US businesses in Singapore although they are quite happy with personal security and a stable government here.

According to the latest survey of senior executives from US companies operating here, 77 per cent of respondents were dissatisfied with housing costs in Singapore, making it the factor they were most displeased with in doing business here.

This mirrors the findings of the survey from the previous year when the exact same proportion of American business executives placed housing costs as the factor they are most unhappy with in Singapore.

Labour and land costs were also factors that featured prominently on their dissatisfaction charts. A total of 48 and 40 per cent of the management of US companies here indicated that they were dissatisfied with office lease costs and the availability of low-cost labour in Singapore respectively, placing them as factors they were most unhappy with after housing costs. The same three concerns topped last year's list.

At the other end of the spectrum, US companies in Singapore feel much safer and have greater confidence in government stability and institutions here this year.

Personal security was the factor that most companies surveyed listed as them being most satisfied with, with 96 per cent of respondents indicating so. Last year, 84 per cent felt the same way.

Some 94 per cent were happy with the stable government and political system, against 89 per cent last year.

Overall, American companies here were satisfied with most of the factors of doing business in Singapore - with the laws and regulations, (lack of) corruption, tax structure, the movement of goods in and out of the country, and the availability of trained personnel all performing well in the survey.

Another area that US companies in Singapore raised concern about is the ability to find adequate space in international schools here, with 38 per cent of respondents in Singapore believing it will be a significant problem in the next 1-3 years.

Despite this, overall expatriate employee satisfaction among the respondents remains high with 97 per cent of them indicating so, 85 per cent of expatriates here wanting to extend their time in Singapore, and 75 per cent of US companies indicating they regularly receive requests for assignments in Singapore from their staff in other locations.

Source: Business Times – 31 August 2012

Valuation suspense grips Pearls Centre

Consultants peg the market value of the strata-titled Pearls Centre in Chinatown between $450 million and $600 million. One consultant suggested that the government compensation may fall within this range, or 5 to 10 per cent either side of the valuation.

According to Dennis Chiu, managing director of the Tang Group of Companies, talk of launching the property onto the collective sale market was floated about three months ago, and a sales committee was formed recently.

Discussions were at a preliminary stage, and the committee was supposed to select a valuer yesterday, said Mr Chiu, whose family controls the Far East Consortium International Limited group in Hong Kong.

Tang Group, which is developing Dorsett Regency Hotel and Dorsett Residence near Chinatown, owns about 47 per cent of Pearls Centre, which spans some 47,000 sqm (about 505,903.3 sq ft).

Of this, about 17 per cent is office space, 43 per cent is shopping space, and 10 per cent is residential. The remaining 30 per cent is carpark space, said Mr Chiu.

According to a Singapore Land Authority spokesperson, compensation will be pegged to the market value of the property, taking into account past transactions, the condition of the property, and other reasonable expenses including legal fees, relocation costs, and stamp duties.

Collective sales that do transpire tend to fetch a 20-30 per cent premium over current market value. That being said, this property has a leasehold tenure, so any premium depends on whether the government will allow the current stakeholders to refresh their lease.

Retail units at Pearls Centre are transacting in the range of $1,100-$2,500 psf depending on the size and floor on which the unit is located. Residential apartments range from about $850-$1,050 psf.

Residential units on higher floors may fetch between $950 psf and $1,050 psf while those on lower floors may fetch between $850 psf to $950 psf.

Following the acquisition of Pearls Centre, the site will be integrated with the adjoining state land for a high-density mixed-use development to optimise land use around the future Thomson Line station at Outram Park.

According to a spokesperson from the Urban Redevelopment Authority, the gross plot ratio for both sites is 5.6. The total area after amalgamating the land is around 2.8 ha (0.53ha from Pearls Centre and 2.29ha from the vacant state land).

Source: Business Times – 31 August 2012

News Update - 29 Aug 2012

RESIDENTIAL MARKET

Singles twist puts boot in shoebox units

Shoebox homes will likely see a drop in demand if the government allows singles to directly purchase new flats from the housing board, say property consultants that BT spoke to.

The extent of the drop will depend on the strength of the restrictions that these experts believe will likely be placed on singles purchasing built-to-order (BTO) flats.

Private apartments in the shoebox category (which singles below 35 used to have to buy because they cannot purchase HDB flats) might see demand wane.

Such homes are 50 square metres (538.2 square feet) and below in size, and have been quite well-received by affluent singles in the market.

But how large a dent this will create in the shoebox apartment market will hinge on whether limits, such as income ceiling restrictions, will be imposed on singles who buy BTO flats.

Discerning singles with more sophisticated living requirements may find that HDB flats have a fairly mixed profile of residents. But in a private apartment development, buyers are generally more educated and matching in backgrounds.

The impact on the HDB resale market will depend on how restrictive the regulations concerning the purchase of BTO flats by singles would be. The government has not released the details of such regulations and conditions yet.

HDB is already running at almost full capacity to produce as many new HDB flats as possible to meet demand from eligible buyers. It will put additional stress on the system and the environment if the HDB now has to to produce even more flats to satisfy demand from singles.

Another factor that will impact singles' demand for BTO flats is the type of homes that the HDB will allow them to buy, and the supply of such new flats. If the supply is low, then the impact on both the new and resale markets will be minimal.

Source: Business Times – 29 August 2012

Far East tops bid for Farrer Rd site, beating 14 others

PROPERTY giant Far East Organization yesterday muscled out 14 other bidders to emerge as the top bidder for a smallish 99-year leasehold plot at Farrer Road (next to Lutheran Towers). The plot can potentially generate up to 54 apartments.

Far East was the only major residential player that took part in the state tender.

Its unit, Far East Soho, bid $45.777 million, or $1,107.80 per square foot per plot ratio (psf ppr), for the 29,509 sq ft plot. Its bid was 3.3 per cent higher than the second-highest bid of around $44.3 million or $1,072.73 psf ppr - from industrial property developer Soon Hock group's unit, Soon Hock Tuas Development.

The latest plot tendered yesterday, within walking distance of Botanic Gardens MRT Station, can be developed up to five storeys and can have no more than 54 units, based on a formula which assumes an average home size of 70 square metres (753.47 sq ft) gross floor area under development control guidelines issued last November on the maximum number of units for flat and condo developments within residential estates with 1.4 plot ratio.

The proposed scheme will comprise a mix of one and two-bedroom apartments with high ceilings, "with the majority of units being two-bedders to cater to young families who appreciate trendy and flexible spaces in an urban setting", he added.

The site enjoys a central location near the shopping, dining and recreational amenities in the Botanic Gardens and Orchard Road, Far East said.

Far East's estimated break-even cost at $1,500-1,600 psf and expects the selling price for the new project to be around $1,800-1,900 psf.

Source: Business Times – 29 August 2012

Suburban condos resist price pressure

COMPLETED private apartments and condos (excluding small units) in the suburbs have been the best price performers year to date, according to National University of Singapore's Singapore Residential Price Index (SRPI) series.

The subindex for Non-Central Region (excluding small units) rose 1.3 per cent between December last year and July this year, based on the flash estimates for July released yesterday.

Over the same period, the subindex measuring prices of small units (up to 506 sq ft) islandwide dipped 0.1 per cent, while the subindex for Central Region (excluding small units) posted a 3.9 per cent loss, making it the worst performer.

The overall SRPI has declined 1.1 per cent in the year-to-date, based on the July 2012 flash estimate issued by NUS' Institute of Real Estate Studies. SRPI tracks prices of completed private apartments and condos (excluding executive condos).

For July itself, the overall index declined 1.1 per cent month-on-month, after inching up 0.1 per cent m-on-m in June.

The subindex for small units (up to 506 sq ft) islandwide rose 1.1 per cent m-on-m in July after slipping 0.9 per cent m-on-m for June.

The subindex for Central Region (excluding small units) dipped 1 per cent m-on-m in July, identical to its June performance.

The Central Region is defined as Districts 1-4 (which include the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11.

Many high-end homes were launched in 2007 and purchased on Deferred Payment Scheme. Hence property financing would have commenced upon project completion and various investors may feel the financing pressure as leasing has moderated with companies tightening expat allowances. Buyers who made profits from such homes may relent slightly to cash out.

The subindex for Non-Central Region (excluding small units) fell 1.3 per cent in July, reversing June's 1 per cent gain.

According to analysts, the number of shoebox apartments (less than 500 sq ft) transacted fell 10 per cent from 828 units in the first quarter of this year to 748 units in Q2. These figures are based on URA Realis caveats data and cover both completed and uncompleted units.

A caveats analysis showed that the number of shoebox units sold in Outside Central Region (where suburban projects are located) declined by 34 per cent quarter on quarter while elsewhere on the island, shoebox transactions rose 36 per cent quarter on quarter. As a result, the OCR's share of islandwide shoebox transactions fell from a record high of 65 per cent in Q1 to 47 per cent in Q2.

In tandem with this trend, islandwide, the proportion of shoebox units picked up by those with HDB addresses declined to 11 per cent in Q2 from a record high of 17 per cent in Q1.

Source: Business Times – 29 August 2012

'Balance' flats: Priority for couples with young kids?

PUBLIC flats that are close to completion could be earmarked by the authorities for couples with young children, property analysts predicted.

These units, left unsold in previous launches, could figure in changes to housing policy as the Government seeks to raise fertility rates, they added.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong said the Government was looking at a range of measures to help stem declining birth rates. One was to afford "some consideration to giving couples with young kids priority when they book HDB flats".

Giving them priority in "balance" flats, in particular, would be useful as they would have to wait a substantially shorter time before they get their keys.

Balance flats are those not taken up at previous launches for reasons such as there not being any takers, or the buyer rejected the unit. These flats are either close to completion or have been built.

On the other hand, those who opt for Build-to-Order (BTO) flats may have to wait more than three years from the time they book the flat to moving in.

This year, so far, the Housing Board has put up for sale about 17,000 BTO flats and about 4,000 balance flats.

Giving couples with young children first dibs on such flats will not only ease the concerns for such couples but it could also encourage them to have more children earlier.

Currently, up to 95 per cent of the supply of new flats in well- developed towns are reserved for first-timers, or those who have yet to get a housing subsidy. In less-developed towns, up to 85 per cent of flats are reserved for this group.

In addition, first-timers have twice the chance at the ballot box than second-timers. And they have more chances under the Married Child Priority Scheme - at least four tries - if they live near or with their parents.

Source: The Straits Times – 29 August 2012

Singles don't expect same chance as couples

PRIME Minister Lee Hsien Loong may have hinted at the National Day Rally that singles will soon be allowed to buy new flats from the Housing Board (HDB) - but singles are not holding their breath.

While they welcomed the prospect of having access to brand new, subsidised flats and not just being confined to the resale market, they do not expect to be put on a level playing field with married couples.

In fact, observers predict that given the HDB's longstanding goal of using public housing to encourage marriage and child-bearing, the policy change for singles will come with many caveats.

There is a precedent: Before 2001, the HDB allowed singles to buy resale flats of only three- room or smaller size, and only in towns outside the central area.

The minimum age for a single to buy any HDB flat has always been 35. Singles above that age are allowed to buy any resale flat, and those earning $5,000 or less a month are eligible for a cash grant of $15,000 and an HDB loan.

Singles bought 3,972 HDB resale flats last year, 16.1 per cent of the total.

Analyst speculate that it is possible that the HDB will sell new flats to singles at a marked-up price to what couples pay.

When a couple buys a Build- to-Order (BTO) flat, the discounted price enjoyed is the HDB's subsidy for two Singaporeans. So if a single can buy at the same price, he or she is enjoying a double subsidy.

He said new HDB flats are still a scarce commodity, with new projects in mature towns still oversubscribed. This may give rise to public backlash over allowing singles access to BTO flats.

It remains to be seen if the supply of new flats promised by the HDB - 25,000 this year, with 20,000 promised for next year - will be sufficient to accommodate a buyer base that will include singles, said observers.

That is because it is not clear yet which singles are allowed to join the BTO queue, and what criteria they will be subject to.

Despite uncertainty over what the final policy change will be, singles were happy with PM Lee's acknowledgement that with high resale prices, they have few options for a home of their own.

Source: The Straits Times – 29 August 2012

News Update - 28 Aug 2012

RESIDENTIAL MARKET

Residential DC rates poised to climb

Development charge (DC) rates are set to increase from Sept 1 for non-landed residential use, say property consultants. This is based on land sales in the past six months at prices above land values implied by prevailing DC rates.

Most also forecast higher DC - payable for enhancing the use of some sites or building a bigger development on them - for industrial use, again citing winning land bids at state tenders.

However, rates are predicted to remain either flat or increase only slightly for landed residential and commercial use.

Even if DC rates have limited impact, they are monitored as they are an indication of the government's reading of land values.

At the last DC rate revision on March 1, the average DC rate for non-landed residential use was trimmed 3 per cent, marking the first decline for this use group since September 2009. This round, most consultants expect a hike.

The increases are likely to be concentrated in geographical sectors such as 100 (which includes Punggol, Sengkang and Buangkok) and 99 (covering Pasir Ris and Loyang), where four 99-year leasehold state land parcels have been sold in the past half-year at 42-64 per cent above land value.

A rate hike is also expected in geographical sector 113, which covers Hillview, where a plot was sold at a state tender at 79 per cent above the DC-rate implied land value. Colliers notes that three other private housing plots - on Boon Lay Way, Bright Hill Drive and in Tanah Merah - fetched premiums of 52, 55 and 81 per cent above their respective DC-rate implied land values.

In the March revision, landed residential DC rates were left untouched. If anything, there could be marginal increases for geographical sectors that include Good Class Bungalow Areas.

For commercial use, the average DC rate appreciated 6 per cent in the March revision. However, come Sept 1, commercial DC rates are expected to be flat on average, despite falling office rents, as prices have held up with strong investor interest as a result of residential cooling measures.

Industrial DC rates were left untouched in the March revision, after being jacked up 30.9 per cent on Sept 1, 2011.

However, for the upcoming revision, expectations are running high for a rate hike - on the back of evidence of strong demand, leasing and sales markets, and unrelenting price appreciation.

For hotel use, a 5 per cent hike is predicted in the average DC rate from Sept 1. The increase in hotel occupancies has resulted in a positive outlook for the sector. The sole hotel plot sold in the past half- year, on Rangoon/Farrer Park Station Roads, was 157 per cent above the DC-rate implied land value.

Source: Business Times – 28 August 2012

Foreign buyers returning to S'pore property

Foreign interest in non-landed private residential properties is returning, following a slump in interest after the Additional Buyer's Stamp Duty (ABSD) was introduced in December last year.

Looking at the four largest groups of foreign purchasers by nationality, Malaysians made up the largest portion of foreign purchasers in Q2, at 6.3 per cent, followed by Indonesians at 4.7 per cent, Mainland Chinese at 4.4 per cent, and Indian nationals, at 3.0 per cent.

Indonesians accounted for the biggest jump in transactions, from 247 in Q1 to 391 in Q2, followed closely by Malaysians from 398 in Q1 to 521 transactions in Q2. Mainland Chinese transactions rose to 365 in Q2 from 311 the previous quarter while transactions done by Indian nationals rose from 173 in Q1 to 252 in Q2.

For the period from July to Aug 23, mainland Chinese demand perked up, accounting for 6.2 per cent of foreign purchases, just behind that of Malaysians at 7 per cent. This was followed by buyers from India and Indonesia, which constituted 4.2 and 3.7 per cent respectively.

Malaysians were involved in 120 transactions between July and Aug 23, followed by mainland Chinese (107), Indian nationals (72), and Indonesians (63).

The percentage of foreign buying in Q1 and Q2 was 22.96 per cent and 23.58 per cent respectively. Based on data from July to Aug 23, this figure rises to 27.06 per cent.

Chinese buyers, in particular, continue to show much potential for Singapore property.

Between January and August 2012, non-landed residential properties in districts 19 (Serangoon Gardens, Hougang, Punggol), 18 (Tampines, Pasir Ris), 12 (Balestier, Toa Payoh & Serangoon) and 23 (Hillview, Dairy Farm, Bukit Panjang & Choa Chu Kang) were popular with Chinese buyers.

The Chinese government's move to reduce interest rates twice since June has spurred buying especially among genuine home buyers. This has resulted in an increase in new home prices in 49 out of 70 cities in July 2012 (according to the National Bureau of Statistics. With the global economic outlook remaining cloudy and further upside to residential prices at home, Chinese investors will likely be turning their attention back to home ground (including Hong Kong).

Source: Business Times – 28 August 2012

Rents for private housing climb to new high

PRIVATE housing rents have kept climbing to hit a fresh high last month, as a growing number of small apartments drove up prices in per sq ft (psf) terms.

A report found median rents for non-landed homes were up 7 per cent to $3.60 psf a month while rents for landed homes rose 2 per cent to $2.81 psf a month.

Across the board, rents for last month came in at a record $3.52 psf a month. This is higher than the previous record of $3.46 psf a month in May.

Leasing volumes have also risen in both the landed and non-landed segments, with 4,717 contracts inked last month - 11 per cent more than in June.

In the first seven months of the year, contracts were up 5 per cent to 27,932, compared with the same period last year.

This led to total transactional value reaching $137 million - 8 per cent more than the $126 million recorded in the same period last year.

Although newly arrived expatriates appear to have more constrained rental budgets, rents as measured on a psf basis have increased as these tenants lean towards smaller homes.

The number of leases is expected to stay high, although overall rents are expected to fall. At the moment, we are not yet witnessing the completion of the bulk of small-format homes sold from 2010 onwards, and this has the effect of keeping the rental indices up.

However, once more get completed from 2013 and if the euro zone situation does not improve, rents may see an inflexion point.

Rents inched up 0.3 per cent in the second quarter compared with the first three months of the year, according to the Urban Redevelopment Authority (URA).

Terraced homes lodged the biggest increase of 1.6 per cent.

All other segments also enjoyed higher rents except for detached homes, which saw a 1 per cent dip, and non-landed homes in the city centre, whose rents fell 0.1 per cent, URA data showed.

Source: The Straits Times – 28 August 2012

News Update - 27 Aug 2012

RESIDENTIAL MARKET

New HDB flats for singles?

THE Government is studying whether singles can buy flats directly from the Housing Board, Prime Minister Lee Hsien Loong hinted last night.

Currently, singles, and only those aged 35 and above, can buy resale HDB flats and use government grants. They cannot buy new flats directly from the HDB.

But with resale flat prices rising, it has caused concern as singles find buying a home increasingly unaffordable. "It is something on the minds of many Singaporeans, because the singles numbers have gone up," he said.

Mr Lee was addressing what the Government is doing to address current concerns over housing, as well as jobs, transportation and health care, in his National Day Rally speech.

The Government is looking to cut the waiting time needed to book HDB flats, and has been launching new HDB flats.

He added that he is confident there is enough space to accommodate an expanding population through developing more housing estates and reclaiming more land in the long run.

The Government is also tackling problems related to jobs and infrastructure, Mr Lee said.

It is bringing in new investments to create new and better jobs. The new Singapore-Industry Scholarship, for example, has already sponsored 90 Singaporeans who go to university and then work in a local firm, he said.

It is also investing $60 billion over 10 years in building up the train transportation network, and building more hospitals, nursing homes and day care centres.

On transport, he said that while the long-term investment was being laid out, new bus services will start being rolled out from next month to ease the crunch.

Source: The Straits Times – 27 August 2012

Living in the city is catching on

CITY living is taking off, with thousands of new apartments downtown and thousands more in the pipeline.

One key factor is the exponential growth of office space in the Central Business District (CBD) - specifically the Marina Bay, Shenton Way, Cecil Street and Robinson Road areas.

Office space in these areas has jumped 38 per cent to 17 million sq ft over the last five years and that demand for homes is likely to spike in tandem.

Moreover, another 1.425 million sq ft of office space is expected to be completed by 2015, which will likely bring another 16,000 professionals to work there.

This increase will fuel demand for more homes, especially after the Government's push to cultivate an area where professionals can "live, work and play".

Housing stock is set to grow sharply from the 3,000 to 3,500 completed apartments now, with an estimated 17,000 people already living in the area.

Already, a further 3,400 homes are expected to be built in the city from now to 2018.

Ever since the 646-unit Icon and mega 1,111-unit The Sail @ Marina Bay were completed about four years ago, new residential projects such as One Shenton and Marina Bay Residences have mushroomed in the district.

Newer projects such as EON Shenton, V on Shenton and Marina One, which are all still under construction, have followed.

And both investors and tenants seem to have remained keen on the area, with recently launched projects seeing positive interest.

Median rents at the existing projects in Marina Bay and Shenton Way have risen from $5.50 psf in the third quarter of 2010 to $6 psf in the first three months of the year.

Yields at the Icon near Tanjong Pagar MRT station were about 4.6 per cent in the second quarter, The Clift in McCallum Street pulled in 4 per cent and The Sail @ Marina Bay, 3.5 per cent.

Yields at Marina Bay Residences, however, were lower at 2.7 per cent while those at One Shenton were 2.95 per cent.

F&B outlets and retail and hotel establishments being planned will ensure that life in the CBD carries on well into the night.

Source: The Straits Times – 25 August 2012

Condo strip boosts Bedok Reservoir's appeal

A QUIET stretch in Bedok Reservoir Road has been transformed in recent years into a row of private condos housing more than 2,300 units.

The new developments have helped to raise home-buyer interest for the entire area.

Four condos in the Waterfront collection developed by Far East Organization and Frasers Centrepoint dominate the strip.

Farther down the road is UOL Group's Archipelago, which was launched in December.

About 485 flats have been sold at the 577-unit project. It was launched at a median price of about $1,118 psf, slightly pricier than Waterfront Isle, which was launched in January last year at a median price of $980 psf.

Waterfront Key, launched in 2009, was sold for a median price of about $734 psf. A year later, Waterfront Gold went for a median price of about $996 psf.

While the Waterfront condos are separated from the reservoir by a road, most of the units have unblocked water-facing views, especially those on the higher floors, but some apartments at the lower-rise Archipelago may not enjoy the same view.

Older condos nearby are recording higher median resale prices. For instance, Aquarius by the Park had a median price of $864 psf in the second quarter of this year, on $799 psf a year earlier.

There is no MRT station at Bedok Reservoir yet but that will change in 2017 when the new Downtown Line opens. The spruced-up reservoir park will also add to the area's appeal, with an outdoor adventure centre and restaurant.

Source: The Straits Times – 25 August 2012

Good response to eCO, One Dusun Residences

BRAVING the traditionally inauspicious Hungry Ghost Festival has boded well for both eCO and One Dusun Residences, which saw keen interest from buyers.

Indeed, the 99-year-leasehold eCO at Bedok South Avenue 3, which is jointly developed by Far East Organization, Frasers Centrepoint and Sekisui House, and is priced at some $1,250 per sq ft (psf), has received in excess of 300 registrations of interest for the 222 units rolled out, since marketing activities for the project started last week.

Most of the interest has been directed at the two-bedroom units, which can range from about 597 sq ft to some 1,181 sq ft, depending on the unit type.

The 752-unit project consists of 246 suites, 220 small-office-home-office (Soho) apartments, 34 townhouses and 252 condominium units, according to marketing brochures.

Residential units at the freehold mixed-development One Dusun Residences, which consist of 154 apartments and 76 shop units, also flew off the shelves.

BT understands that less than 10 apartments are left at the project, which is located at Jalan Dusun (off Balestier Road). The units were priced at $1,400 to $1,500 psf.

According to the marketing material, majority of the units, which are two-bedders, range from about 452 sq ft to 786 sq ft. There are also seven duplex penthouses of two and three-bedroom mix, which range from 796 sq ft to 980 sq ft and 1,087 sq ft to 1,098 sq ft, respectively.

Despite buoyed sentiments, transactions in the market have slowed.

Non-landed private resale transactions dipped 25.4 per cent, from 193 transactions per week year-to-date (on average) to 144 transactions in the first week (Aug 17-23) of the Hungry Ghost Month. Rental transactions too dipped 31.5 per cent, from 648 transactions on average per week year-to-date to 444 transactions in the first week of the seventh lunar month.

HDB resale and rental transactions fell too, from 513 to 278 (45.8 per cent) and from 448 to 307 (31.5 per cent) respectively.

Source: Business Times – 25 August 2012

News Update - 24 Aug 2012

RESIDENTIAL MARKET

3 residential sites put up for tender

THREE residential sites - two for private flats and one for an executive condominium - were launched for sale by public tender yesterday.

The plots - in Tanah Merah, Redhill and Woodlands - are all on 99-year leases and could yield about 1,600 units in total.

The 31,881.6 sq m site in New Upper Changi Road was one of two in the area that residents had petitioned the Government to keep undeveloped.

The other site is at the junction of New Upper Changi Road and Bedok South Avenue 3 and is on the reserve list of the government land sales programme.

It will be put up for sale if a developer makes an acceptable minimum bid.

Property experts expect some of the bigger developers to bid for the New Upper Changi Road site, which is near Tanah Merah MRT station and is able to accommodate about 540 units.

Competitive bidding is expected for the plot, especially from developers who failed to clinch a nearby site sold earlier this month.

Experts expect between five and 12 bidders, with the top offer coming in at between $550 and $700 per sq ft per plot ratio (psf ppr).

A condo site in Prince Charles Crescent in Redhill, also launched by the URA, can yield about 590 units on its 23,785.4 sq m.

It was triggered for sale after a developer agreed to bid at least $390 million.

Experts tip moderate interest of between six and 12 bidders with a top offer ranging from $720 to $950 psf ppr.

Bids are likely to be cautious, given the performance of projects in the central region, for instance. The quantum of the bid will limit it to bigger developers only.

The Housing Board has launched a 16,505 sq m site at the junction of Woodlands Avenue 6 and Woodlands Drive 16, earmarked for an exec condo of about 465 units.

The highest bid - from three to seven developers - could come in at between $300 and $350 psf ppr, experts said.

Source: The Straits Times – 24 August 2012

Bungalow market astir with several changing hands

Several big-ticket bungalow deals have been sealed recently including a few in Good Class Bungalow Areas (GCBAs).

A 999-year leasehold bungalow at Yarwood Avenue in the Rifle Range/ Dunearn roads area has changed hands for $19.5 million or $1,198 per square foot (psf) on land area of 16,278 sq ft. On site is a two-storey bungalow spruced up a couple of years ago.

The property, with a built-up area of about 9,500 sq ft, has three large bedrooms and a swimming pool.

Market watchers say this is the third property to be transacted since last year at this Yarwood Avenue cul de sac. A bigger bungalow on land area of 69,546 sq ft was sold in April last year for $59.5 million (or $856 psf) while another changed hands at slightly above $15.6 million or $968 psf in March 2011.

At Oriole Crescent, near Greenwood Avenue, a bungalow has fetched $18.2 million - or $1,726 psf on freehold land area of 10,546 sq ft. On site is a two-storey house said to be over 20 years old. It is leased out at a monthly rental of $18,000 until end-July 2014.

Talk in the market is that an option was granted recently for a bungalow on Camden Park. The price is understood to be $25 million, or $1,659 psf on land area of 15,070 sq ft. The property, said to have been rebuilt about four years ago, features a pool and gym in addition to six bedrooms.

Last month, a seasoned bungalow investor sold his GCB at Binjai Park for $32.9 million or $1,471 psf. On the 22,360 sq ft site is a new two-storey property, completed late last year, boasting seven en-suite bedrooms. The built-up area is about 17,000 sq ft.

A stone's throw away from Farrer Road MRT Station, a small freehold bungalow at Woollerton Drive was transacted a few weeks ago at nearly $12.6 million or $1,570 psf on land area of 7,987 sq ft. It has five bedrooms.

Typically GCBs have a minimum land area of 1,400 square metres (15,069 sq ft). However, when GCB Areas were gazetted in 1980, they included some slightly smaller existing sites. These are still considered GCBs as they would be bound by the other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further sub-divided and they cannot be built more than two storeys high (plus an attic and a basement).

Outside GCB Areas, other recent bungalow deals include a two-storey property at Trevose Crescent, in the Dunearn/Whitley roads vicinity, which changed hands at $13.7 million or $1,788 psf on land area of 7,662 sq ft. The property, completed six years ago, has four bedrooms and a roof terrace. The basement houses a home theatre and pool room.

GCB buyers these days are mostly Singaporeans seeking a property for their own occupation.

The number of bungalow deals in GCB Areas doubled from nine in Q1 this year to 18 in Q2, with the value of transactions rising from $224 million to $359 million.

Source: Business Times – 24 August 2012

Sales in luxury property market rebound

EVEN as investors stream back into the luxury property market, causing sales activity to almost double in the second quarter, further price correction may be in the offing given the growing number of unsold homes.

Data showed that there were as many as 4,000 luxury condominiums completed over the past year in Orchard Road, accounting for about 7 per cent of total non-landed stock in the luxury market.

Of this, 16 per cent (over 600 units) remain unsold, bringing total unsold stock in the prime segment to 12,855 units. This comprised 731 completed units and 12,124 uncompleted ones, half of which are ready to be launched.

Prices for non-landed new sales dipped 5 per cent quarter-on-quarter to $2,374 per square foot in Q1 2012, and slid further to $2,230 psf in Q2.

Reflecting the downtrend in prices, 19 units at Paterson Suites were purchased at an average price of $2,619 psf this year - 10 per cent below last year's $2,915 psf and 15 per cent off the peak price in 2007. A total of 12 units at Orchard View changed hands at an average price of $2,604 psf, down 21 per cent from 2010's peak price, while four transactions at St Regis Residences posted the largest drop of 28 per cent from the peak to $2,228 psf in H1 2012.

The spike in sales activity was observed across all market segments, with new sales up 246 per cent quarter-on-quarter at 235 units in Q2, sub-sales rising 34 per cent to 94 units, and resales increasing 86 per cent over the previous quarter to 585 units.

This pushed the number of units sold to 914, compared with a three-year low of 453 non-landed units sold in Q1, following the eurozone debt crisis and imposition of the additional buyer's stamp duty (ABSD) in December last year.

Specifically, demand for ultra-luxury homes (priced above $3,000 psf) almost trebled from 11 units in Q3 2011 to 31 units in Q2 2012.

These transactions include two units at Scotts Square sold for $4,566 psf in May and another for $4,803 psf in June; a 1,808 sq ft unit on the 52nd storey of The Orchard Residences for $4,399 psf; and two units at Boulevard Vue which sold for $4,326 psf and $3,934 psf.

A newly launched project, Twentyone Angullia Park, also drew keen market interest, with five sales completed over the last three months at prices of between $3,950 and $4,338 psf.

Source: Business Times – 23 August 2012

Thomson View condo back on en bloc market

Thomson View condominium is up for sale by public tender again.

The 99-year leasehold residential site located along Upper Thomson Road has a guide price of $580 million.

Including a $107 million premium to enhance the property's use and a $90 million premium to top up the lease, which has 62 years left, this translates to $685 per square foot per plot ratio.

Inclusive of the additional 10 per cent gross floor area for the balcony area - for which the site may incur a development charge payable to the authorities amounting to about $46 million - the unit land price is $659 psf ppr.

The project, which comprises 200 flats, 54 townhouses and a shop unit, has a land area of 540,314 square feet.

Under Master Plan 2008, it is zoned for residential use, with a gross plot ratio of 2.1.

The tender has been extended by a week and will close on Sept 4 at 3pm.

Source: Business Times – 22 August 2012

News Update - 23 Aug 2012

RESIDENTIAL MARKET

Parking crunch at new condos

 

THE growth of public transport and a chronic lack of space are prompting developers to cut back on the number of carpark spaces in private condominiums.

Many new condos now typically provide one space per dwelling unit - meeting the minimum requirement stipulated by the Land Transport Authority - while those for visitors are being chopped altogether.

"Owners have the flexibility to provide more parking spaces, over and above this requirement to cater to their development's needs," said its spokesman.

But certain projects in the city and Marina Bay and those close to MRT stations can have fewer carpark spaces than the prescribed minimum, and providing visitor spaces is not mandatory.

Experts say the high cost of land has led to developers looking to maximise their gross floor area on homes rather than on parking.

Consultants believe home buyers may not realise the parking crunch until they move in.

ERA Realty Network senior marketing manager Andrew Phee said owner-occupiers are often the ones concerned about parking while investment buyers are less worried, "as they feel most tenants do not drive, have one car at most or rely on public transport instead".

Condos like Kembangan Suites and Attitude @ Kim Yam have mechanised carparks - drivers drop off their cars to be parked under a computerised system - but Mr Phee said many buyers see this as inconvenient and often opt for projects with normal parking.

Source: The Straits Times – 23 August 2012

Red hot demand for new 99-year leasehold private homes

About three in four private residential projects launched in the past year are 99-year leasehold developments, according to some property analysts.

Demand for these units has been strong, and market watchers said home buyers should be aware of what they are buying into, as the capital value of leasehold properties depreciates progressively as the development ages.

Experts said the price premium for a freehold property could be as high as 40 per cent.

Demand for many new 99-year leasehold private homes has been red hot, partly driven by the large number of such projects in the market.

They account for about 77 per cent of new private homes placed for sale between June 2011 and June 2012.

Analysts said there’s also a mindset change among some home buyers now and they are highly mobile when it comes to housing.

For instance, some buyers may take a short-term view on their home purchase, opting to move to another property after five to 10 years, so it doesn’t matter if the project is freehold or not.

For investors, market watchers said new leasehold units offer a better rental yield at 3.5 to 4.2 per cent, compared to about 2.5 to 3.5 per cent for freehold homes.

But those looking at wealth preservation or handing down their homes to their children will be better off with a freehold property.

99-year leasehold is always considered with a little bit of discount. The theoretical treatment of a 99-year leasehold land should be a depreciation of about 1 per cent per year.

For freehold properties, when the property is more than 20 years old and is ageing, and it is time for re-development perhaps through collective sale, the value of the land in a way is a bit more preserved because the developer would not need to pay the government a land premium to top-up the lease.

Analysts said a freehold property also commands a price premium over a comparable leasehold project.

This price premium could vary between 10 and 40 per cent.

Source : Channel NewsAsia – 22 Aug 2012

Wing Tai sees correction in S’pore’s property market

Property developer Wing Tai foresees a growing possibility of a correction in Singapore’s property market.

This as the firm announced its fourth quarter (Q4) earnings on Tuesday.

Wing Tai’s Q4 net profit slipped 16 per cent to S$140.5 million. This is despite its revenue jumping 88 per cent to S$202.2 million.

The company said its lower Q4 profit was due to a change in accounting standards, which do not recognise profits from uncompleted units.

Full-year profit declined 35 per cent year-on-year to S$242.2 million, while turnover dropped 17 per cent to S$624.9 million.

A total dividend of seven cents per share was also declared.

At the results briefing, Wing Tai said it is targetting to launch its latest freehold residential development with 337 residential units with one commercial unit next year.

Formerly zoned for industrial use, the developer has successfully applied to change the use of its former headquarters to residential.

Located at Tampines Road near Kovan MRT station, Wing Tai said this latest project which sits on land acquired in the 1960s would help capture any potential uptick in the property market.

But the property developer believes the market is set for a correction ahead.

Chairman of Wing Tai Holdings, Cheng Wai Keung, said: “A number of you have been asking why have we not been tendering for URA projects and we have not been active in the market for quite some time.

“I would still maintain that the correction will be coming and the way I look at it, is that if there is a cycle, if you take away that 2008 temporary drop, you smooth out the curve, it is actually the eighth or ninth year of the rise in this cycle.”

Source : Channel NewsAsia – 21 Aug 2012

 

News Update - 21 Aug 2012

RESIDENTIAL MARKET

Iras: Property tax flat for most landed homes

THE taxman's review of the annual values of 56,000 landed homes so far this year has left about two-thirds unchanged, so the owners will not have to pay higher property tax.

The other homes have had their annual values adjusted upwards by an average of about 10 per cent, generally below last year's rises, the Inland Revenue Authority of Singapore (Iras) told The Straits Times.

A small number were increased over 20 per cent, as they had not been revised for a year or more.

There are 72,000 landed homes in Singapore and 193,000 private high-rise apartment units.

Iras is still reviewing the annual values of the private apartments and the rest of the landed homes. The review is expected to be completed by the end of the year.

Home owners typically keep an eye on a property's annual value, as it determines how much tax they pay. The annual value is the estimated annual rent the property may fetch.

This value can be revised up or down, based on market rentals of similar properties in the vicinity, said Iras. Valuation notices will be sent to owners when the annual values are revised, Iras added.

Reviews are generally held every year, but do not always result in changes to the annual values.

Property analysts say rents in some segments have eased, with the global crisis hitting expat budgets.

But because the annual value is a lagging indicator, it is more likely to capture last year's rates, and may not fully reflect the current market.

Source: The Straits Times – 21 August 2012

HDB rents soar as tenants flee private flats

TENANTS moving into Housing Board flats to escape pricey private accommodation have driven up rent levels.

Overall median HDB rents rose 10 per cent in the 12 months to June, to $2,200 a month, the highest since it started collecting data in the first quarter of 2006.

Landlords in popular, mature estates like Toa Payoh and Marine Parade are asking for much more.

Median monthly rents for five-room HDB flats in Toa Payoh, Geylang and Marine Parade are $2,900 with some choice units close to the MRT station eclipsing $3,000, agents say.

A Ministry of Trade and Industry statement about June's inflation rate noted that accommodation cost increases, while moderating, have been stronger than expected.

The gain is largely due to the strong Singapore economy that has seen continued employment of foreigners across various sectors.

Demand from permanent residents (PRs) is also propping up rents, as the slew of residential cooling measures has made renting, rather than buying, the preferred choice for some.

Housing budgets are also being reduced across the board due to firms tightening their belts, prompting many employees to opt for the more affordable HDB option.

Tighter immigration policies are also likely to cap further rental gains.

Source: The Straits Times – 20 August 2012

New buzz soon for quiet Hillview

THE sleepy Hillview enclave between Bukit Batok and Bukit Panjang is about to get a shake-up with a range of new projects to be completed over the next few years.

Property consultants say the new additions will boost the desirability of the upper-middle class area among home seekers, given that many condominiums there are now at least a decade old.

At least 1,500 new homes are expected to be completed in the next few years, including units to be built on a plot in Hillview Avenue that can yield 534 units.

Kingsford Development bought the 99-year-leasehold site in March.

Other projects include Far East Organization's The Hillier, which has sold 506 units out of a total of 528 at an average price of $1,267 per sq ft (psf) since its launch in January.

The mixed-use development includes the hillV2 mall, which will be ready in 2014, while the flats will be completed by 2016.

About 120 units have also been sold at The Lanai, also by Far East. The 214-unit condo, launched in 2010, has been selling at an average price of $1,354 psf this year. It will be ready in 2014.

The 193-unit Natura@Hill-view, a joint development between Macly Group and Roxy-Pacific Holdings, sold 157 units by July at a median price of $1,318 psf. It was launched in the first quarter of this year.

While new launches were priced at between $1,300 psf and $1,500 psf, median resale prices were lodged at between $750 psf and $1,000 psf.

Still, prices have generally been on the uptrend in the past three years, lifted partly by buyer interest for suburban homes.

Home owners who have held their units for at least 21/2 years have seen profitable transactions.

The rental range is quite mass market but the condos are of fairly good quality, noting that the area is still "remote" and hard to reach without a car.

But its transport options will improve once the Hillview MRT station opens in 2015.

Source: The Straits Times – 18 August 2012

Developers dangling rental guarantees as a draw

SOME developers are turning to rental guarantees as a carrot to attract buyers for properties in Singapore and emerging markets in the region.

As competition hots up, these schemes are used to sweeten deals, with some helping investors to secure tenants and ensure they get a minimum predetermined yield.

But some experts warn that buyers need to examine the details carefully before signing up - and realise that a rental guarantee may already be built into the price.

They add that these enticements can amount to an indirect discount and are often dangled for overseas projects to attract investors to emerging and unfamiliar markets.

But the offer is also made during times of market weakness by developers convinced of a property's long-term potential.

They believe this will entice buyers to bite, as an alternative to lowering prices, which might depress the value of a project.

If developers start offering rental guarantees for Singapore projects, it would reflect the slow take-up of units as a result of cooling market sentiments, rather than Singapore being an unfamiliar market.

Source: The Straits Times – 18 August 2012

News Update - 17 Aug 2012

COMMERCIAL MARKET

Lavender hotel site open for tender

 

A HOTEL site in Lavender, close to key tourist precincts, was launched for sale by public tender yesterday.

The site, which can hold a hotel with about 650 rooms, went on sale after a developer triggered the process by committing to bid at least $148.7 million.

Property consultants said the 0.84 ha site could see a relatively high level of interest from developers given its good location and the healthy hotel sector here.

The 99-year-leasehold land parcel was first made available for sale through the Government Land Sales' Reserve list in 2007.

But the Urban Redevelopment Authority (URA) received an application to put the site to public tender only recently.

Either a hotel or a commercial and residential development can be built there, although the latter must devote at least 30 per cent of the total gross floor area for hotel rooms and hotel-related uses, URA said. The building must adhere to a maximum height of four and 30 storeys for different sections.

In a news release yesterday, the URA noted that the plot is near the historic districts of Kampong Glam and Little India.

The top bid is expected to be between $850 and $930 per sq ft per plot ratio, which works out to between $283 million and $310 million in total.

Between five and 10 bidders can be expected, experts said.

Since no hotel sites had been released under the confirmed list of the GLS programme this year, which could make this one more attractive to developers.

But its triangular shape may pose some challenges when it comes to designing the building.

Hotel occupancy rate percentages are still in the high 80s, thus adding to the appeal of hotel investment. It also pays to develop a hotel now because the cost per room will be cheaper than buying a hotel off the market.

Source: The Straits Times – 17 August 2012

Marina Bay area looking extraordinary successful

Even in its infancy, Marina Bay, the new growth area slated to be the new extension of the traditional CBD, has achieved much success both in terms of leasing rates and return on investment.

While more than $7.5 billion has been invested in Marina Bay by the government to date, more than $6.2 billion has been received by URA from the sale of land parcels (which so far constitute about 20 per cent of the available stock).

There has also been more than $25 billion of local and foreign equity pumped into developments in the area.

Marina Bay is expected to deliver potentially 30.4 million sq ft of office space when fully developed. In addition to the traditional central business district (CBD), which yields about 21.6 million sq ft of office space, Singapore's office space is expected to more than double to 52 million sq ft over the next 20-25 years.

To date, the six office towers (totalling 5.5 million square feet) in Marina Bay enjoy an average pre-lease commitment level upon completion of 82 per cent.

Taking floor plate size as a benchmark, there are at least 14 office developments in the CBD that can offer floor plates of more than 20,000 sq ft, with three more in the pipeline. These buildings can offer approximately 13.5 million sq ft of large column-free contiguous space. Of these 14 developments, more than half are located in Marina Bay.

The banks were the first to lead the charge into Marina Bay. But the make-up has been changing. The proportion of financial institutions in Marina Bay has shrunk, from 80 to 65 per cent, and the key reason for that is there has been a stronger take-up of late by complementary industries.

Legal firms now account for the second-biggest occupier share at 8 per cent. The information technology sector made up 6 per cent, while commodities and insurance firms both recorded 5 per cent.

That said, the concern over the hollowing out of the traditional CBD with the new buildings at Marina Bay coming on board has not come to pass, said Mr Armstrong.

The emergence of the new buildings in Marina Bay has upped the ante in terms of building specifications particularly for older buildings in the traditional CBD area. Several older office developments, including 71 Robinson Road, Ocean Financial Centre, and One Raffles Place Tower 2, have been recently redeveloped.

Interestingly enough, rents in the CBD and Marina Bay are on a par, with Grade A rents averaging $10 psf.

Residential developments in the CBD, too, have expanded. From 2007, the stock has doubled, with 2,360 residential units added to the market. Currently, there are between 3,000 and 3,500 residential apartments in the CBD.

Upcoming projects, including Cecil Suites (272 units), Marina One (1,006 units), and a residential development at what used to be Chow House (128 units), are expected to launch between the second half of this year and 2014.

Source: Business Times – 17 August 2012