Friday, 24 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
 

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