Residential Market News Extract - 19 June 2012

Kemaman View sold en bloc for $45.5m

Freehold residential development Kemaman View has been sold to private developer Aylesbury Pte Ltd for $45.5 million, or some $935 per square foot per plot ratio (psf ppr).

The 17,388 sq ft site, located off Balestier Road, comprises 30 apartment units, each 1,324 sq ft in size. Located in District 12, the plot is zoned for Residential Use under Master Plan 2008, with a gross plot ratio of 2.8 and a maximum height of 36 stories subject to approval.

With the collective sale, each individual apartment unit owner will receive gross sale proceeds of about $1.5 million, a 30 per cent premium over the resale price if the unit were sold individually.

The site was launched in the collective sales market in April, with an indicative asking price of $46-48 million.

Development charges for the plot are not expected to be payable, unless the developer obtains approval for an additional 10 per cent gross floor area (GFA) for balconies in addition to a potential GFA of 53,813 sq ft. In this scenario, development charges are estimated to amount to $2.8 million, resulting in a unit land price of $816 psf ppr.

Source: Business Times – 19 June 2012

 

Suburban private home values outpace city prices

Prices of non-landed suburban private homes have outperformed those in the city over the last five years, a new report has found.

Across the board, private home prices have soared more than 50 per cent over the five years.

However, city centre homes have fared the worst, with many posh homes struggling to match robust gains posted by homes on the city fringe and in suburban areas.

The change in prices was taken between the first quarter of 2007 and the first quarter of this year.

The results showed that prices of non-landed homes in suburban areas enjoyed price rises of 68 per cent on average. This was a startling 30 percentage points more than city centre home price rises of 38 per cent, on average.

Driving the point home, the top five price performers in the period were all suburban projects.

And the bottom five were high-end homes, mostly in the prime districts of 9, 10 and 11.

St Regis Residences in Tanglin Road even registered a sharp 16 per cent drop in value and was the worst performer in the period.

While average selling prices were $2,671 per sq ft (psf) in the first three months of 2007, St Regis Residences units were languishing at an average of $2,237 psf five years later.

At the other end of the spectrum, Sherwood Tower within Bukit Timah Plaza led the pack in terms of gains, posting a staggering 175 per cent jump in average prices from $258 psf to $709 psf.

Supply in the high-end segment is limited. The subdued en-bloc market helps limit the supply to just what it is today. The mass market, on the other hand, is being inflated with new supply from the Government Land Sales programme.

But other experts pointed out that if a different period had been selected, the trend would have been reversed with non-landed city centre homes posting some of the strongest price rises instead.

For instance, they enjoyed solid price gains of about 69 per cent in the three-year period from the first quarter of 2005 to the first quarter of 2008.

Prices of city fringe homes jumped 39 per cent while suburban homes trailed with a 38 per cent rise in the same period.

The collective sale market for high-end developments boomed in 2007, lifting city centre prices then while the suburban market was still quiet.

This led to a high-base effect, he added, which when coupled with the lacklustre performance of the market over the past two years, leaves the high-end segment trailing far behind.

Source: The Straits Times – 19 June 2012

 

'More property cooling steps unlikely'

A fragile economic outlook and the soft property market have lessened the risk of new cooling measures, some experts say.

Bank of America Merrill Lynch economist Chua Hak Bin noted last week that despite increased speculation of a sixth round of cooling measures, they are likely to be unwarranted at this point.

But Mr Chua pointed out that the December round of cooling measures has dealt a severe blow to sentiment, with a resulting hit to transactions.

Prices of private homes dipped 0.1 per cent in the first three months of the year compared with a 0.2 per cent gain in the previous quarter, while total value of flats sold plunged 26 per cent in the same period.

Foreign buyers have also retreated. They accounted for 23 per cent of transactions in the first five months of the year - well down from 35 per cent in the same period last year.

'The luxury property market, defined as sales at more than $5 million, has practically collapsed, with the number of transactions falling by some 61 per cent (in the same period),' Mr Chua added.

‘Maintaining the threat of additional property measures is a sensible policy to cool the market, but current conditions probably do not warrant another round.'

Some experts even suggest that some existing measures might be scaled back.

Further measures, if any, could involve capping the percentage of shoebox homes - usually apartments under 500 sq ft - in a development to safeguard the interest of family units, but nothing specifically to dampen buying demand.

Source: The Straits Times – 19 June 2012