Residential Market News Extract - 4 June 2012

Smaller firms join hands to battle big developers

Smaller firms are taking on the big boys in the battle to buy development land plots.

 

By joining hands and pooling funds, these upstarts have secured various prime sites around town despite stiff competition in a robust property market.

At least three out of the 11 residential sites sold under the Government Land Sales (GLS) programme this year have been snapped up by consortiums of smaller investors. Smaller firms have also done well in the private land sale market. They are redeveloping sites including McDonald's Place at King Albert Park and Seletar Garden.

For instance, a group of investors comprising SingXpress, Creative Investments and Kay Lim Realty secured an executive condominium (EC) site in Tampines for $234 million last month, outbidding others like Sim Lian Group and MCL Land.

Experts say that smaller firms are banding together as it helps them spread the risk involved in the development of larger sites.

This is especially vital amid market uncertainties such as the possibility of a fresh round of cooling measures here and global concerns over the euro zone crisis, they added.

Contractors are able to control their costs better and they might be able to translate the savings from the lower costs into a higher bid instead.

Source: The Straits Times – 4 June 2012

Room with a view? Not always

Views from the top are often coveted and many buyers are willing to pay a premium to secure high-floor apartments.

But these prized views of the city skyline or the sea front, for instance, are not always guaranteed to stay as long as the home buyer.

At times, new developments spring up right next to an existing project, obstructing both the breeze and the panoramic views.

For instance, The Bayshore near East Coast Park used to enjoy sea views, but most of the units there are now blocked by Costa Del Sol. Silversea in the same area, expected to be completed by the end of 2014, is also likely to block the views of some apartments at The Sea View.

But buyers should be savvy enough to know what to expect, experts said. Even if marketing agents push the unblocked views as a key attraction of a newly launched project, their claims can be checked, they added.

By checking the Master Plan and the gross plot ratio given for surrounding sites, home buyers can get a sense of what project might get built in front of them.

The masterplan indicates whether an undeveloped land parcel, for instance, might be earmarked for residential, commercial or mixed-use development.

The gross plot ratio also determines how intensively the land can be used. For example, a ratio of 1.4 allows developers to build up to five storeys.

The Government Land Sales (GLS) programme on the URA website - which lists the land parcels the Government puts up for sale every half-year - is also a good resource to check where new projects might soon rise.

Research is crucial because buyers can either negotiate the asking price or think twice about purchasing a unit if they know that its views will not last.

Source: The Straits Times – 2 June 2012

91 Pasir Ris EC units sold on first day of booking

More than 90 units have been sold at executive condominium (EC) Watercolours on its first day of booking.

The 99-year leasehold project in Pasir Ris opened for booking at noon yesterday and will close at 9pm today.

The 416-unit exec condo - the latest of a number of new projects in the area - will be built at the junction of Pasir Ris Drive 3 and Pasir Ris Link.

Huge Development - a consortium made up of Ho Lee Group, UE E&C, GPS Alliance Development and Investment, and Evia Real Estate - is behind the project.

Buyers - an even mix of first- and second-timers - snapped up a range of units, although the three-bedders proved more popular.

Per sq ft (psf) prices at Watercolours range from $570 to $750, and work out to an average of $706 psf.

Mr Hong said two-bedders start from $530,000, three-bedders from $639,000, four-bedders from $885,000, and penthouses from $1.07 million.

However, yesterday's sales figure is lower than expected, and that the developers may have to review their marketing strategy.

It could mean that this exec condo is facing stiff competition from others that have been launched. Some buyers might also be waiting for new ones, which could be in a location they prefer.

Source: The Straits Times – 2 June 2012

Changing face of Pasir Ris

Pasir Ris is easily dismissed as a sleepy outpost at the end of the East-West MRT line, but property experts say home hunters could do well to consider the area.

They say the face of Pasir Ris will change significantly in the years ahead as numerous projects, both private and public, add buzz to the well-established area.

Buying interest in projects launched so far has already been strong, thanks in part to the affordability factor, the experts say.

Pasir Ris is a 'value-for-money purchase', especially for those who like the east and being close to amenities.

Homeowners may see longer-term resale potential and rental upside when such decentralisation of office space takes better shape in years to come.

This, coupled with the plethora of new launches there, could explain why resale activity has been subdued recently.

Still, prices have held up. For instance, the freehold Ferraria Park sold 13 units at a median price of $940 psf in the first five months of the year. It was completed in 2009. That price is fairly similar to that of new freehold launches.

Source: The Straits Times – 2 June 2012