Residential Market News Extract - 6 June 2012

Pasir Ris Drive 3 residential site receives five bids

The latest tender closing for a 99-year leasehold residential site at Pasir Ris Drive 3 saw cautious bidding yesterday, with only five bids received.

Despite the measured response, the top bid of $211 million, or $418.3 per square foot per plot ratio (psf ppr), was within expectations.

The top bid was put up by Capital Development, whose shareholders include Lee Siaw Ling, Low Khoon Huat, Lakshmanan s/o Seenivasakan, Lee Keng Tiong and Lim Yong Ying Calvin. It narrowly beat the second highest bid of $416.1 psf ppr which was put up by Singland Development.

The next three weeks will see weekly tender closings on attractive sites in the form of Buangkok Drive/Sengkang Central (near Buangkok MRT station), Farrer Drive, and Pheng Geck Avenue Parcel B (near Potong Pasir MRT station), he noted.

Developers may be cautious about the site as there is no MRT station nearby. The project's estimated breakeven cost to be about $800 psf.

Recent launches in Pasir Ris have been well received. Ripple Bay (679 units) at Pasir Ris Drive 4 has sold nearly 500 units at the average price of $880 psf to-date.

Source: Business Times – 6 June 2012

Far East sells record 2,200 homes in first five months

Far East Organization, Singapore's largest closely held real estate developer, said it sold a record 2,200 homes in the first five months.

The developer marketed projects in Singapore's suburbs this year, including Watertown in the northeast and Hillier in the northwest, which includes homes modelled after New York and London apartments over a mall with a Dean & Deluca store.

Far East will offer discounts of as much as 3 per cent to mark the record sales, it said on its website.

The company's projects led the rebound in the country's home sales this year. Watertown in the Punggol suburb accounted for more than half of the total 1,872 units sold in January, when the city's residential transactions rebounded from a two-year low. April's home sales climbed to a three-year high of 2,487, boosted by developments including Far East's Hillsta, according to government data.

The government has been attempting to rein in prices since 2009, when it barred interest-only loans for some housing projects and stopped allowing developers to absorb interest payments for apartments still being built. Analysts said in April they all expect the government to introduce further measures to curb price increases.

The darkening economic climate affects buying sentiment, given that credit is the lifeblood of real estate, in the event of a credit crunch due to fallout in the Eurozone region, the local property market will be severely affected.

Source: Business Times – 6 June 2012