Monday, 1 October 2012

News Update - 01 Oct 2012


RESIDENTIAL MARKET
Redas: Cool down on cooling measures
The property sector does not need another round of cooling measures, at least not before a thorough review of the earlier measures put in place has been conducted.
This was the main message put forth by Wong Heang Fine, president of the Real Estate Developers' Association of Singapore (Redas), at the organisation's Mid-Autumn Festival yesterday.
BT had earlier reported that the latest round of quantitative easing (QE3) in the United States has raised the possibility that a fresh wave of capital flows into Singapore could cause the property market to heat up again, which, in turn, would spark off the possibility of a fresh round of government measures, or tweaks to existing policies to keep prices in check.
That being said, "if history is any guide, reaction to the residential market to QE3 in Singapore will probably take the form of a limited, short-term boost in buyer sentiment that will probably peter out before end of 2012", said Mr Wong.
A host of issues, ranging from the potential oversupply of housing in Singapore, and fears of a slowdown in the macroeconomic resulting from economic woes in both Europe and the US, continue to plague developers, said Mr Wong.
The property sector's "harvests" for the year are "somewhat uneven and somewhat calibrated", he said.
"While we see 'withering harvests' in certain segments of the residential market, crops in other sectors like the industrial market are reaping 'golden harvests'. 'Staple crops' in the commercial market have enjoyed relatively good harvests. We are also seeing 'new crops' emerging in the hospitality industry as well as 'new seeds' being sown in the Jurong Lake District for hotel developments."
According to Chia Ngiang Hong, group general manager at City Developments Limited, it is unlikely that further cooling measures will be implemented this year.
On the residential front, the month of August saw sales of private residential homes, excluding executive condominiums, fall 27 per cent to 1,421 units. This was mainly attributable to a dearth of major new project launches as developers avoided the Hungry Ghost month.
Source: Business Times – 29 September2012
Private apartments under $1m
 
News that a HDB flat sold for $1 million sent a chill through many home seekers but cheaper homes can still be bought without paying a king's ransom - just don't expect too much for your money.
Buyers willing to compromise on facilities, location, appearance and other features can land a private apartment for under the $619 per sq ft (psf) price paid for that 1,615 sq ft HDB home in Queenstown this month.
There are at least 10 private non-landed developments where units - not the shoebox variety - have sold for less than $600 psf this year, giving a total price tag of below $1 million.
Some of the projects are old and in suburban areas far from MRT stations while others may have been sold to relatives at a discounted price, were stress sales or recorded at a lower psf due to a flat's large size. Some might also not come with facilities.
The cheapest home sold this year was a 2,454 sq ft unit at Toh Tuck Lodge that went in January for $680,000 - or $277 psf, according to caveats lodged with the Urban Redevelopment Authority.
Other seemingly low-priced homes include a 2,282 sq ft unit at Sembawang Cottage that sold for $920,000 - or $403 psf - in June and a 1,970 sq ft apartment at Lakeside Tower in Yuan Ching Road that changed hands in January at $905,888 - or $460 psf.
The next most recent sale was in April last year when a unit went for a significantly higher $795 psf.
Developments like Lakeside Tower and Lakeside Apartments, both in Yuan Ching Road, and Phoenix Heights in Bukit Panjang have consistently recorded prices of less than $600 psf although the three developments are at least 35 years old and on 99-year leases.
A 1,335 sq ft four-bedroom unit at Phoenix Heights is being marketed at $780,000 - or $584 psf - while a 1,975 flat at Lakeside Tower has a negotiable $1 million - or $506 psf - price tag.
Source: The Straits Times – 29 September 2012
 
Geylang a growing hot spot for investors
Mention Geylang and an unappetising image of shabby shophouses, street girls and sleazy budget hotels springs to mind.
But the much-maligned area is a growing hot spot for savvy property investors chasing high capital gains and rental yields.
There are at least 40 projects, comprising 2,190 units, that will be launched or completed in the next five years or so.
This will bring the total number of homes in the area to more than 5,500.
There have been 22 launches since 2010 - putting a total of 1,438 units on the market - with 18 to come.
The 78-unit Casa Aerata at Lorong 26 and the 62-unit Centra Suites at Lorong 25A are the latest projects to be completed.
The buoyant market seems to fly in the face of conventional real estate wisdom, which demands good transport links and other key facilities to attract buyers.
Geylang, which is infamous for its red-light district and registered brothels, does not have an MRT station, although it is a short drive or bus ride from the city centre. But bad traffic conditions often plague drivers, a situation worsened by the quick pace of development in recent years.
Traffic has increased markedly, leading to parking space shortages along the narrow lanes, also known as "lorongs".
There are no big malls in the area and at night, it is a common to see prostitutes plying their trade along some of the even-numbered lanes.
Yet rental demand is strong, with yields of about 5 per cent, higher than those at suburban condos, Mr Lee said. For instance, a two-bedder at Casa Aerata that was bought for $600,000 has been rented out at $2,800 a month, a yield of 5.6 per cent.
The Government's plan to develop the 64ha Kallang Riverside and Paya Lebar Central areas will also give Geylang, sandwiched between both spots, an extra boost.
But experts warned that potential buyers or investors could face a problem getting bank loans, given the area's reputation and plethora of shoebox units.
OCBC Bank said it assesses all home loan applications on a case-by-case basis, regardless of the property's location.
Source: The Straits Times – 29 September 2012
 
August resale property prices up slightly
Resale prices of private homes inched up across the board last month, reversing the overall fall in July as buyers were lured by new project launches.
Prices picked up 1 per cent overall, according to flash figures from the Singapore Residential Price Index (SRPI) yesterday, after a 0.6 per cent overall fall in July.
The statistics are compiled by the National University of Singapore, and track a basket of completed non-landed projects.
Resale prices of non-central flats rose 1.5 per cent last month, the best performer for the month and a reversal of the 0.6 per cent drop recorded in July.
Central region home prices increased 0.5 per cent, rebounding from the 0.5 per cent fall the previous month.
Prices of "shoebox" units - typically 500 sq ft and less - rose 0.8 per cent, the same increase recorded in July.
Source: The Straits Times – 29 September 2012
 
Towns to get new roads to cope with BTO boom
The Housing Board has promised that by the time a bumper crop of Build-to-Order (BTO) projects are completed in the next two years, roads around them will be able to cope with the boom in the number of residents.
Anticipating possible congestion, it said it has started constructing new roads within towns, and widening existing ones.
Last month, MPs Lee Bee Wah and Liang Eng Hwa lamented in Parliament that bad traffic conditions in their wards would only get worse, once new BTO projects were completed.
Senior Minister of State for National Development Lee Yi Shyan had then acknowledged that in some instances, "vehicular network and rail access will take a much longer time than the construction of HDB flat precincts".
Responding to queries from The Straits Times, an HDB spokesman said it will "implement the local road improvement works where required, and will ensure that these road infrastructure are completed by the time the BTO projects are built".
More than 20,000 flats are expected to be finished within the next two years, given a construction time of about three years. These are in areas like Woodlands, Jurong West, Choa Chu Kang, Bukit Panjang and Yishun.
But MPs and residents said traffic is already congested in some areas.
The area's MP, Ms Lee, is worried that the road network to support residents will be ready only a year after three BTO housing projects yielding about 2,200 dwelling units are completed by 2014, taxing already strained roads like Lentor Avenue.
Likewise, Mr Liang questioned whether sufficient infrastructure is in place to support the influx of some 4,600 households in eight BTO projects in Bukit Panjang in the next few years.
The HDB said it works with the Land Transport Authority (LTA) during the planning stage of new BTO projects. Once approved by LTA, it builds road networks within towns while LTA constructs arterial roads connecting to other towns. The HDB is currently widening an existing road at Yishun Street 41, and will create a new road at Street 51 by mid-2014. LTA will improve connectivity between Yishun and nearby expressways by 2015. The HDB is also constructing a new road off Bukit Panjang Ring Road by next year to support new developments.
But the MPs wonder if the measures will be implemented quick enough. Said Ms Lee: "Lentor Avenue is already jammed during morning and evening peak hours. I've asked LTA to expedite the works before the BTO projects are completed, otherwise the jam will get worse, but I've yet to receive a reply."
Added Mr Liang: "My worry is that the agencies have their hands so full that they may not be able to urgently deal with such local issues in a timely manner."
Source: The Straits Times – 1 October 2012

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