RESIDENTIAL MARKET
They came, they saw, but only half signed up
Four hundred out of the 500 people who had indicated interest in buying a unit in Q Bay Residences showed up for the preview launch yesterday - but only 214 of them signed on the dotted line to do so.
Elson Poo, the general manager of marketing and sales at Frasers Centrepoint Homes, put their hesitation down to the effect of the government measures introduced to cool the property market.
"If not for the cooling measures affecting the loans available to buyers, we would have sold 300 units," he said.
Among the measures imposed last Friday was the one which lowered loan-to-value ratios from 60 per cent to 50 per cent for those taking up a second housing loan, and from 60 per cent to 40 per cent for those taking third or subsequent loans.
The LTV is a lending-risk assessment ratio which banks look at when deciding whether to approve a mortgage.
It is calculated by dividing the mortgage amount by the value of the property.
Individuals applying for second or subsequent home mortgages now have to pay a bigger cash downpayment too - 25 per cent, up from 10 per cent.
Mr Poo said, however, that those who did not make a purchase yesterday because of the new loan restrictions are likely to return to do so when they have worked out their financing issues.
"We talked to some buyers who said they liked the product very much, but owing to problems with the upfront cash payment, they may take a little more time to consolidate their loans."
Q Bay, which is in Tampines, is the first private condominium launched since the cooling measures were introduced. How well it sells is being closely watched for an indication of the property scene going forward.
Property consultants BT spoke to predicted reduced demand for Q Bay's one to two-bedroom units, since such small units are typically bought for investment by second and third home buyers. These small units make up nearly half of Q Bay's 630 units.
Among the units sold yesterday, however, 46 per cent were one and two-bedroom units.
The developers, a consortium of Frasers Centrepoint, Far East Organization and Sekisui House, launched the condominium at an average price of $985 psf yesterday, after dangling a 5 to 7 per cent discount on the stamp duty to cushion the impact of the additional buyer's stamp duty (ABSD) imposed on all buyers except Singaporeans buying their first home.
Source: Business Times –19 January 2013
200,000 new homes in the works
The large supply of units that will be coming on stream in the coming years, coupled with an inevitable end to the current low interest rate environment, are factors which those contemplating buying a property need to take into account.
This was the reminder from National Development Minister Khaw Boon Wan in his blog yesterday as he acknowledged that the market was temporarily not in balance because of under-building in the past and high investment demand today.
"But we have been ramping up supply and in 2, 3, and 4 years' time, supply will have caught up with pent-up demand," stressed Mr Khaw.
Indeed, some 200,000 new housing units will be constructed - 80,000 private properties, 10,000 ECs and about 110,000 HDB flats - which is the equivalent of building four new Ang Mo Kio towns, by 2016.
To help buyers track the number of units coming on stream, Mr Khaw said that he would update a chart giving a visual representation of the upcoming housing supply on his Facebook page with each successful sale of a land plot via the Government Land Sales programme, or release of Built-to-Order flats.
Separately, Mr Khaw maintained that the package of property cooling measures introduced last week is necessary to soften the market.
"The alternative of doing nothing, allowing the prices to run beyond economic fundamentals, will only invite a large and serious price correction in the future.
"The package was carefully formulated to protect first-timers. Investors buying additional properties may be disappointed but I hope they will in due course come to accept that the package will also be good for them. In any case, many of the new measures are counter-cyclical in nature, to be lifted when the market regains its balance."
As part of measures introduced last week, residential property buyers (except for Singapore citizens making their first purchase) are being slapped with steeper additional buyer's stamp duty. In addition, loan-to-value limits are being lowered while minimum cash downpayment on housing loans are being raised.
In the public housing sphere, measures introduced include tighter loan eligibility for the purchase of HDB flats.
Source: Business Times –19 January 2013
More projects offer discounts to offset ABSD
Property developers intensified their discounts and incentives to entice buyers to pull out their cheque books after the government took new steps on Jan 11 to cool the private property market.
After 99-year leasehold Q Bay Residences in Tampines offered a 5-7 per cent discount last week to offset the effect of additional buyer's stamp duty (ABSD), other property developers have joined the discount bandwagon.
Far East Organisation yesterday took out an advertisement in The Sunday Times offering additional discounts of up to 4 per cent on selected properties such as The Seawind at Telok Kurau, SeaHill at West Coast Link and euHabitat at Jalan Eunos, on top of discounts already in place.
SMSes sent by housing agents showed that discounts have deepened to 10-15 per cent at d'Leedon, the Farrer Road luxury condominium developed by CapitaLand. They said that prices are starting from more than $1,300 per square foot (psf).
CapitaLand was reported to be offering discounts of up to 10 per cent subject to eligibility since November in an ongoing promotion for the 1,715-unit d'Leedon. When contacted about whether it was offering more discounts since Jan 11, a CapitaLand spokeswoman said: "I'm not responding to that". On Jan 11, the government slapped a 5 per cent ABSD for permanent residents buying their first homes and 7 per cent for Singaporeans buying their second residential property.
In November 2010, d'Leedon units were launched with an average initial selling price of $1,680 psf.
The Frasers Centrepoint-led consortium that included Far East Organisation sold an "encouraging" 315 units out of its 630 during its first weekend on the market. This includes the 210 units moved during last Friday's preview.
Some land sales in the third and fourth quarter of 2012 saw aggressive bidding, and discounts may well peter out for those projects which will probably be launched from the second half of 2013 onwards.
It is also far from clear how effective the latest measures will be in cooling buying interest amid a volatile stock market and low interest rates offered by banks.
The first ABSD was introduced in December 2011.
Source: Business Times –21 January 2013
Bungalow plot at Chee Hoon Ave up for sale
A bungalow plot in District 11 has been put on the market for auction sale next month, and is expected to fetch more than $23 million.
The 15,184 square foot site - 8 Chee Hoon Avenue - is easily accessible and has a 37-metre frontage.
The property was put up for sale by the estate of the late Molly Ong Nee Chan, wife of the late Dr Ong Swee Law, chairman of the Public Utilities Board and founder of the Singapore Zoo.
The plot is located within walking distance of the Botanic Gardens, Cluny Court and Serene Centre, and is close to popular schools such Anglo-Chinese School, Nanyang Primary and Raffles Girls' Primary.
In 2012, the average price of GCBs surged 12 per cent over 2011 to $1,376 per square foot.
Over the past decade, GCB prices have grown at a compounded annual growth rate of 15 per cent. This compares with 10 per cent for overall landed homes and 4 per cent for non-landed homes.
The auction of the Chee Hoon Ave plot is on Feb 27.
Source: Business Times –21 January 2013
COMMERCIAL MARKET
Four shophouses up for auction in Kampong Glam
Four conservation shophouses in North Bridge Road will go under the hammer next week.
The shophouses, which are in a commercial zone within the historic Kampong Glam district, are among the few freehold commercial properties in the area.
The owners, a group of private investors, are selling the four shophouses as a single entity by auction on Wednesday.
This is because the four properties sit on two titles, making it difficult to sell separately.
He said: "The owners want to divest these properties to re-invest capital."
Sitting on a 5,765 sq ft site, the properties have a total floor area of about 9,600 sq ft and are surrounded by mixed-use developments like Bugis Junction, Bugis Plus and Key Point.
They are also near the upcoming Downtown Line and the site of the upcoming five-star hotel at the DUO project in Ophir Road.
The five-star hotel, which is expected to be completed in the second quarter of 2017, is being built by M+S, a 60-40 joint venture between Malaysia's Khazanah Nasional and Singapore's Temasek Holdings.
Source: The Straits Times –19 January 2013
Speculators may turn to commercial property
Buyer interest in commercial property is growing in the wake of last week's cooling measures, which included curbs on red-hot industrial property.
Experts said commercial property, as yet untouched by any of the seven rounds of cooling measures, could become the new target segment of speculators.
All eyes are now on upcoming launches of office and retail space, which analysts said could be oversubscribed.
The industrial cooling measures consist of a seller's stamp duty, imposed for the first time on the sector.
It ranges from 5 to 15 per cent and applies to industrial property or land sold within three years of purchase.
This is meant to dampen speculative activity in the industrial segment, where prices have doubled over the past three years.
But analysts suggested this was like plugging a leak only to have another spring up.
This time round, the seller's stamp duty for industrial property could drive speculative activity into other sectors, notably commercial and retail, analysts said.
Consultants said the level of buyer interest in the launch of SBF Center as well as that of upcoming Alexandra Central will be a good indicator of whether demand has shifted towards the commercial segment.
SBF Center, developed by Far East Organization, is next to Capital Tower and is expected to launch early next month.
Alexandra Central is a 99-year leasehold mixed development by Chip Eng Seng, located next to Ikea on Alexandra Road. It is expected to launch within the next few weeks.
Chip Eng Seng's property development and investment arm CEL Development paid $189 million for the 85,517 sq ft site in December 2011. This works out to $789 psf per plot ratio.
The strata shop units at Alexandra Central are likely to be $5,000 to $7,000 psf while strata office units at SBF Center are likely to go for $2,400 psf or above, according to The Edge magazine.
Source: The Straits Times –19 January 2013
Chinatown grows in commercial appeal
There is a buzz in Chinatown and not just because it is the festive season.
Property has become the new talk of the town in the past few months, particularly commercial real estate.
The heritage-filled district has just received a major boost with the opening on Wednesday of the 16-storey Parkroyal on Pickering hotel and launch of the revamped Chinatown Point mall.
The 367-room hotel, which was built for $350 million, is owned and managed by Pan Pacific Hotels Group, a unit of UOL, a firm controlled by billionaire banker Wee Cho Yaw.
Right next door is Chinatown Point, which officially opened its doors barely a week ago after a $90 million facelift to revitalise the complex's 20-year-old interior and facade.
It houses 170 shops, luxury watch retailer Cortina, and anchor tenants Daiso and FairPrice across five floors.
Chinatown Point is owned by a consortium which includes Perennial Real Estate Holdings, German fund manager SEB, NTUC FairPrice and Singapore Press Holdings.
But these two big openings are just the icing on the cake.
Interest in Chinatown's commercial segment has been growing, say property analysts, especially with the shift in investor focus towards non-residential property seen last year.
Source: The Straits Times –19 January 2013
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