Residential Market News Extract - 31 July 2012

Another week of brisk sales for private homes

Developers continued to do brisk private housing sales last week. In the CBD, United Industrial Corporation (UIC) is said to have moved close to 50 units at its V on Shenton project, taking total sales in the project to over 140 units. UIC began selling the project on July 20.

The average price for the 99-year-leasehold project is $2,200 per square foot (psf). UIC has released about 190 of V on Shenton's 510 residential units, which will be in a 54-storey tower.

Absolute prices start from just under a million dollars, for a city-facing studio unit of 441 sq ft on the 17th floor. UIC is said to have sold one of the project's six penthouses for $13.5 million.

Buyers are said to be mostly Singaporeans, with others from Indonesia, China and India.

Near Punggol MRT Station, Wee Hur Holdings is said to have found buyers for about another 100 units at the Parc Centros condo last week, the project's second week on the market.

This means that about 480 units in the 99-year project have been sold to date. Buyers are predominantly Singaporeans. The average price is $950 psf.

Absolute prices start from $550,000 for a one-bedroom apartment. Two bedders are priced from $750,000, while three and four bedders start from $880,000 and $1.22 million respectively.

Analysts have credited Parc Centros' strong sales to the current popularity of Punggol, especially the project's proximity to the MRT station and future Waterway Point mall.

In addition, Parc Centros' $950 psf average price is considered attractive compared with the Watertown condo, which was released in January and achieved a median price of $1,169 psf in the initial month, rising to $1,341 psf in the following month.

In the Upper Changi area, Koh Brothers is thought to have sold about 20-plus units last week at Parc Olympia, taking sales past the 200-unit level. It began selling the 99-year condo at Flora Drive on July 12 and to date has released 358 of the project's 486 units.

Parc Olympia was initially priced at $820 psf after a 16 per cent discount. Koh Brothers later clipped the discount to 15 per cent.

This, along with the release of choicer units in the latest phase, means that the average price is hovering around the $830-840 psf mark, BT understands.

At The Line@Tanjong Rhu, a freehold project of 107 units released last week, some 15 units are said to have been picked up. The average price is $2,100 psf. The project is developed by Lakeview Investments.

Meanwhile, the National University of Singapore yesterday released the June flash estimates for its Singapore Residential Price Index (SRPI) series, which tracks prices of completed apartments and condos.

The overall SRPI for June was flat from that in May. The May index reflected a 1.4 per cent month-on-month hike.

The sub-index for the Central Region (excluding small units of up to 506 sq ft) dipped 0.9 per cent in June over the preceding month, after rising 0.8 per cent month on month for May.

The sub-index for Non-Central Region (excluding small units) rose 0.7 per cent month on month in June, a slower rise than May's 1.9 per cent gain.

Prices of small units (up to 506 sq ft) islandwide registered a 1.4 per cent month-on-month dip in June, compared with a 0.7 per cent gain in May. The June sub-index for this category was down 1.5 per cent from the previous quarter.

The flash June sub-indices for the Central and Non-Central Regions (both excluding small units) were up 1.4 per cent and 2.6 per cent respectively from a quarter earlier.

Source: Business Times – 31 July 2012

Third reserve site triggered for sale this month

A developer has committed to bid at least $390 million for a reserve site in Prince Charles Crescent - the third such plot triggered for sale this month.

The 2.38ha residential parcel near Redhill MRT station will now be put up for sale, the Urban Redevelopment Authority (URA) said yesterday.

The bid works out to $725 per sq ft per plot ratio (psf ppr).

Experts say the regular-shaped site in Prince Charles Crescent within the prime residential area is expected to attract healthy interest from bigger players. It can yield about 590 apartments.

While the 99-year leasehold plot is attractive, the hefty overall quantum is likely to limit the number of bidders, although bids could hit $500 million.

Experts said developers who build mainly in the mid-tier to high-end segments are keen on triggering city fringe and city centre sites, as most plots on the confirmed list of the government land sales programme are in suburban areas like Punggol and Jurong.

Bidders for the Prince Charles Crescent site is expected to be cautious, given the muted performance of projects in the central region over the past year.

The requirement to build and sell all units within five years to avoid paying the additional buyer's stamp duty will also dampen bids.

A winning bid of $430 million to $457 million - or $800 to $850 psf ppr - is expected with up to six bidders.

Recent transacted prices of two newer condos near the site - Ascentia Sky and The Metropolitan Condominium - have hit about $1,300 to $1,400 psf, he noted.

ERA Realty key executive officer Eugene Lim called the site's location "supreme". He expects selling prices to begin at $1,500 psf and bid prices to come in at between $900 and $930 psf ppr, or $484 million to $500 million.

EL Development managing director Lim Yew Soon acknowledged that while the location is very attractive, the affordability of the end-product must be taken into consideration as well.

Source: The Straits Times – 31 July 2012

Resale prices of shoebox flats fall as investors turn cautious

Resale prices of tiny apartments dipped last month, with the once red-hot segment seeming to fall out of favour.

Prices of resale flats of 506 sq ft or less fell by 1.4 per cent in June compared with the month before, according to preliminary figures in the Singapore Residential Price Index yesterday.

Values in May rose 0.7 per cent over April.

Overall resale prices held steady last month compared with a 1.4 per cent increase from April to May. Prices of centrally located homes eased 0.9 per cent while that of non-central homes increased 0.7 per cent.

The figures were compiled by the National University of Singapore's Institute of Real Estate Studies.

Experts say that some investors might have been spooked by the Government's comments that it is watching the shoebox segment closely, with additional measures possible.

The uncertainty has caused these tiny homes to lose some of their lustre as investors - often the buyers due to their affordable quantum of less than $1 million - turn cautious.

Prices of shoebox units have also hit highs in recent months and the segment is now facing price resistance from buyers, experts add. While rental yields for smaller homes are still acceptable, many investors have decided not to take the risk, with the huge supply of such homes in the pipeline.

The total number of these small homes is expected to double from about 4,100 units later this year to 8,200 units by the end of 2015.

With the sellers' stamp duty, investors will also not be able to flip their units and might have to hold on for the next four years which is when the supply hits, so they are more cautious now.

Source: The Straits Times – 31 July 2012

Residential Market News Extract - 30 July 2012

'Good value' Loyang draws home buyers

Despite being in the far-flung area of Loyang and not close to an MRT station or other amenities, home buyers are turning to the area for its value for money.

New launches around Flora Drive, including Palm Isles and Parc Olympia, for instance, are averaging between $820 per sq ft (psf) and $880 psf.

That is markedly cheaper than homes in nearby Pasir Ris, which has more amenities, experts said. Pasir Ris' Ripple Bay and The Palette - both also 99-year leasehold projects - were both sold at an average of $900 psf.

Koh Brothers' Parc Olympia has moved over 180 out of 234 units released since its launch a fortnight ago. One-bedders at the 486-unit condominium start at $440,000.

Frasers Centrepoint's Palm Isles is around 70 per cent sold; one-bedders start from $530,000.

The 99-year leasehold Hedges Park, developed by Tripartite Developers - a joint venture between Hong Leong Holdings, City Developments and TID, is more than 75 per cent sold, with an average selling price of $880 psf.

Besides lower launch prices, resale prices in the area also appear to be more attractive than those of Pasir Ris and Tampines.

The freehold Azalea Park, on Flora Drive, achieved a median resale price of $704 psf, while freehold Ris Grandeur in Pasir Ris fetched $898 psf as of this year's second quarter.

In Tampines, 99-year leasehold The Tropica returned a median resale price of $832 psf.

But Flora Drive projects lose out in terms of rental yields, which hover from 3.8 per cent to 4.1 per cent.

Still, rental demand is buoyed by the nearby airport, Tampines Regional Centre, Changi Business Park and Japanese School, consultants said.

Source: The Straits Times – 30 July 2012

Private home buyers lured by attractive resale deals

Property buyers have been wising up to more attractive deals for private homes in the secondary market compared with pricey launches by developers of late.

Latest government figures show a 58 per cent or 1,281-unit quarter-on-quarter increase in resales or secondary market transactions of completed private homes to 3,487 units in Q2, which made up for a decline of 17.2 per cent or 1,124 units in developer sales to 5,402 units from the record Q1 volume of 6,526 units. The stronger resale demand probably led to prices of completed non-landed private homes faring better than uncompleted ones in Q2.

Urban Redevelopment Authority's Q2 numbers also threw up what could be an early sign of buyer-fatigue setting in for shoebox apartments. The number of small-format units (up to 50 sq metres/538 sq ft) sold by developers tumbled from 1,764 in Q1 to 1,038 in Q2. Their share of the total number of private homes sold by developers also slipped from 27 per cent to 19 per cent.

Developers' sales of units priced up to $750,000 halved, from 2,766 in Q1 to 1,435 in April-June this year. As a result, the share of such units among total developer sales also slid from 42 per cent to 27 per cent. ERA Realty Network key executive officer Eugene Lim said: "With new homes selling at higher prices, the supply of units below $750,000 is decreasing."

Market watchers also note that the authorities have highlighted potential pitfalls of investing in small-format units - for example, the substantial supply of these units and that their rental yields could decline as more such units are completed.

At the same time, some agents have also put the spotlight on sweet deals available in completed projects vis-a-vis new launches and this could have diverted some house hunters to the secondary market.

"Bargain hunters have been combing the resale market for the possibility of buying a property in Core Central Region (CCR) at almost the same price as new homes sold in the Outside Central Region (OCR)," notes Mr Lim.

"In general, across all regions, as the sellers are individuals rather than developers, it's quite possible to get good deals that may be cheaper or comparable to new home sale prices. Even so, these sellers would be making a profit," said Mr Lim.

Quarter-on-quarter, resale volume rose 86 per cent to 701 units in Q2 for CCR and by 54 per cent to 1,751 units in OCR. In Rest of Central Region (RCR), the increase was 50 per cent to 1,035 units.

Such strong demand has helped to firm prices for completed homes, as demonstrated in URA's non-landed private home price indices in all three regions. In CCR, the price index for completed properties rose 2.2 per cent Q-on-Q in the second quarter, against a 0.6 per cent price dip for uncompleted properties. In both RCR and OCR, completed properties posted a 0.9 per cent price rise, surpassing a 0.1 per cent gain for uncompleted properties.

In all, developers have sold 11,928 private homes excluding executive condos (a public-private housing hybrid) in first-half 2012 - or 75 per cent of the 15,904 units they sold in the whole of 2011. Analysts predict a full-year 2012 tally of 18,000-22,000, surpassing 2010's record of 16,292 units.

With the government continuing to roll out substantial land sales in the face of strong demand for private residential properties fuelled by low-interest rates and property's draw as a hedge against inflation, some industry players expect prices to be flat in the second half.

URA's benchmark private home price index rose 0.4 per cent Q-on-Q in the second quarter, after declining 0.1 per cent in Q1.

Foreigners (excluding Singapore permanent residents) picked up 8.3 per cent or 442 of the 5,313 uncompleted private homes developers sold in Q2 - up from 402 units and a 6.2 per cent share in Q1. The Q1 numbers marked a steep fall from foreigners' 17 per cent (or 601 units) share of developers' Q4 2011 sales. Foreign buyers thinned after last December's introduction of the 10 per cent additional buyer's stamp duty on their residential property purchases here. An industry player said the Q2 pick-up in foreign buying was due to developers bringing projects overseas, with some offering incentives like stamp duty absorption. "But some foreign buyers may be deterred from the messages that foreigners are no longer so welcome in Singapore. So they're asking: "Why should we invest here?" "

URA's private residential rental index rose 0.3 per cent Q-on-Q in the second quarter, matching Q1's gain. Its office and shop rental indices, however, dipped 0.5 per cent and 0.3 per cent in Q2. In the industrial segment, rentals rose 4 per cent for flatted factories but dipped 2 per cent for flatted warehouses. However, the All-Industrial property price index galloped at a faster pace of 8.4 per cent in Q2 compared with Q1's 7.3 per cent rise, which some analysts attribute to keen interest in strata industrial properties.

URA's spokesperson said that from Q2 2012 onwards the authority has worked with other government agencies to obtain more information on floor area of new industrial units transacted and thus has been able to include these transactions in the computation of its industrial property price index.

Source: Business Times – 28 July 2012

Rise in private, HDB resale transactions

More buyers have snapped up resale Housing Board flats and condo units in the second quarter even as prices have reached record highs.

Experts said this marks a reversal in the resale market that had seen a downward trend in transaction volume in previous quarters.

They added that reasons ranged from pent-up demand, to lower cash premiums asked by sellers of HDB flats.

On the private-property front, the 3,487 resale transactions in the second quarter, up from 2,206 in the first, represented a rise of close to 60per cent.

HDB resale deals rose 19 per cent to 7,011 from 5,892.

ERA Realty key executive officer Eugene Lim noted that buyers who are not going for expensive, new, top-end condo units in the suburban areas are instead turning to the core central area and 'finding good bargains'.

Citing an example, he said an 800sqft apartment at the 99-year-leasehold Watertown in Punggol recently sold for $1.1 million. By comparison, a similar-sized apartment at the freehold Levelz in Farrer Road went for about $1.2 million.

There were 701 transactions in the city centre in the second quarter, compared to 376 in the first.

Private non-landed home prices in the city centre and city fringe inched up 0.6 per cent and 0.4 per cent respectively, reversing a dip of 0.6 per cent in both segments in the previous quarter.

In suburban areas, it rose 0.5 per cent, down from a 1.1 per cent gain.

Overall, private homes increased by 0.4 per cent, compared to a decrease of 0.1 per cent in the previous quarter.

COVs are cash premiums paid above a flat's valuation. Based on data from various agencies, the estimated overall COV median is $26,000 so far this year, compared to about $34,000 in the fourth quarter of last year.

Mr Lim said those opting to buy resale flats also do not need to wait three years for new flats to be built. 'And if they are second-timers, it might be more worth their while to pay the COV than the resale levy,' he added.

The resale levy that a buyer going for his second subsidised flat must pay ranges from $15,000 to $50,000.

Despite the flurry of resale activity, experts are predicting that growth will be gradual for both the HDB and private segments, in part due to the big supply of new homes in the pipeline.

Source: The Straits Times – 28 July 2012

Landed properties still in hot demand

Landed home prices moved up a notch in the second quarter as demand for the pricey properties stayed buoyant.

Values increased 0.4 per cent from the previous three months, according to the Urban Redevelopment Authority (URA) index out yesterday.

Terraced homes showed the largest increase at 1.2 per cent, followed by semi-detached at 0.6 per cent, while detached homes declined by 0.4 per cent.

Property consultants noted that landed home prices have outperformed those of private flats since the third quarter of 2010.

Over the last seven years, prices of such homes have doubled. They are perceived as better investment given the limited supply of landed properties in land-scarce Singapore with a growing population, rising affluence of local families and influx of new wealthy citizens.

One example of the robust sector can be found at Haus@Serangoon Garden where buyers have snapped up 39 out of 50 landed houses released in just two weeks.

The two-storey homes - with an attic and basement - developed by City Developments and Hong Realty do not come cheap. A 1,615 sq ft intermediate terraced unit goes for at least $2.4 million while at least $2.8 million is needed for a 2,284 sq ft corner home.

Terraced homes in the west - favoured for its lower absolute prices - have risen 97 per cent in the past three years while those in the east and north-east were up 89 per cent

Consultants said demand for landed properties is expected to stay resilient given the limited pool of freehold landed properties find their share of the total housing stock shrink over time. Relatively quick capital gains will make it a superior hedge against inflation too.

But well-heeled buyers may look to non-landed homes in prime locations for their better rental yields and demand.

Source: The Straits Times – 28 July 2012

Developers lowering launch prices: URA data

Developers appear to be lowering the prices of their launches, with fresh figures showing prices for uncompleted homes falling slightly in the second quarter.

Data from the Urban Redevelopment Authority showed that prices of uncompleted non-landed homes dipped 0.9 per cent in the three months to June - the first fall since mid-2009.

Prices for completed private homes, however, climbed 2.3 per cent.

Experts say the fall could be explained by the fact that some launches in the period were in less desirable locations, including those further from MRT stations and amenities, thus fetching lower prices.

Another factor they cited is that some of the new launches were in estates such as Punggol and Pasir Ris, where many projects had already been pushed out. This led to stiff competition and more conservative pricing.

Prices for homes in the city centre have fallen 0.6 per cent. This is at a steeper rate than the 0.2 per cent slide in the first quarter.

This could be tell-tale signs of deepening fault lines in the high-end market, where some developers might be beginning to succumb to the pressure of persistent weak demand by reducing price in order to move sales.

Experts add that mass market home buyers are price sensitive, and projects priced less than $1,000 per sq ft (psf) have been seeing higher take-up rates.

Source: The Straits Times – 28 July 2012

Residential Market News Extract - 27 July 2012

GCBA deals double in Q2; transaction value up 60%

Activity in Singapore's Good Class Bungalow (GCB) Areas perked up in the second quarter after an initial knee-jerk slowdown in Q1 in reaction to the additional buyer's stamp duty (ABSD) introduced last December.

A caveats analysis from CBRE shows that the number of deals in GCB Areas has doubled from nine in Q1 to 18 in Q2. The value of transactions has also risen by around 60 per cent - from Q1's $224 million to $359 million in Q2.

And the momentum seems to be continuing into the third quarter. An option is said to have been exercised earlier this month for a two-storey bungalow on elevated grounds at Oei Tiong Ham Park off Holland Road at $17.5 million, which works out to $1,614 per square foot (psf) on freehold land area of about 10,844 sq ft.

A few days ago, a deal is said to have been entered into for a bungalow at Olive Road at $30 million or $1,185 psf. On the nearly 25,320-sq-ft site, in the Caldecott Hill Estate GCB Area, is a two-storey bungalow with a pool and an outhouse. The buyer is expected to tear down the existing property and redevelop the site.

A bungalow on Peirce Hill could also be changing hands at around $25 million, which would work out to $1,650 psf. The land area is about 15,150 sq ft and the property is part of City Developments' Peirce Villas project, which was completed in 2000. June's GCB transactions include a property at Old Holland Road which was sold for $20.8 million or $959 psf and a White House Park Road bungalow that sold for $24.8 million ($1,649 psf).

The average price of transactions in GCB Areas in first-half 2012 was $1,370 psf, up about 7 per cent from the $1,276 psf average for full-year 2011's transactions.

Analyst predicts 2012 will end with 50-55 deals totalling around $1-1.1 billion - similar to last year's tally of 57 deals adding up to $1.16 billion. The record year was 2010, with 133 transactions totalling $2.4 billion.

GCBs typically have a minimum plot size of 15,069.46 sq ft, but when GCB Areas were gazetted in 1980, they included some smaller existing sites. These are still considered GCBs as they would be bound by other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further subdivided.

Source: Business Times – 27 July 2012

Rentals of luxury apartments fall 0.8%

Monthly rentals of luxury apartments fell 0.8 percent in Q2 this year due to tighter immigration rules.

The consultancy stated that stricter immigration controls affected spill-over leasing demand from foreigners who cancelled or postponed their buying decisions due to the additional buyer’s stamp duty (ABSD).

Although enquiries picked up towards the tail end of Q2 2012, tenants with tightened housing budgets kept a lookout for more affordable housing alternatives in the high-end market segment while expatriate families with comparatively bigger housing budgets diverted their attention to landed properties, in search of a relatively more private and spacious environment.

Consequently, average monthly gross rents of luxury/super-luxury apartments dropped 0.8 percent quarter-on-quarter to S$5.64 psf in Q2.

Source : PropertyGuru – 26 Jul 2012

Residential Market News Extract - 26 July 2012

Sentosa condos sold to Aussie buyer for $57m

SC Global Developments is said to be selling another two units at its luxurious Seven Palms Sentosa Cove condominium project for a total of about $57.2 million.

And the buyer is understood to be a company linked to Australian mining tycoon Gina Rinehart's Hancock Prospecting. Mrs Rinehart, 58, is the world's richest woman with a fortune estimated at about A$30 billion (S$39 billion).

Seven Palms Sentosa Cove - a four-storey project with only 41 residential units - is next to Tanjong Beach and is at an advanced stage of completion. The project is being designed by Kerry Hill Architects, which has designed many of the Aman resorts.

The Hancock Prospecting-linked unit is said to be paying around $23.3 million for a Seven Palms unit on the third floor and close to $33.9 million for a fourth floor unit. Sources could not ascertain the sizes of the two units; information like size of units and floor plans is tightly held and SC Global markets the high-end project in a very exclusive manner.

However, an industry player made an educated guess that the two units are likely to have crossed $4,000 per square foot, setting a new benchmark for Sentosa Cove.

On absolute pricing, the $33.9 million would topple the current record of $33.4 million set in late 2009 by Far East Organization for a duplex penthouse (on the 30th and 31st levels) in its freehold Boulevard Vue development at Cuscaden Walk. That worked out to $4,150 psf based on the unit's size of 8,051 sq ft.

SC Global is developing Seven Palms Sentosa Cove on a 103-year leasehold plot of 113,797 sq ft which it clinched at a tender conducted by Sentosa Cove Pte Ltd and which closed in July 2007. Its winning bid of $268.3 million reflects a unit land price of almost $1,800 psf per plot ratio.

Source: Business Times – 26 July 2012

Roxy-Pacific bags Harbour View Gardens for $33m

Roxy-Pacific Holdings Limited, through its wholly-owned subsidiary RH West Coast Pte Ltd, has acquired the freehold residential development Harbour View Gardens for $33.0 million.

This translates to some $766.7 per square foot per plot ratio (psf ppr), based on the site area of 30,745 sq ft.

Under the 2008 Master Plan, the site is zoned for "residential" use, with a gross plot ratio of 1.4.

The existing three-storey residential development, which is located at 211/A to 223/A Pasir Panjang Road, comprises 14 units - seven maisonettes with an average floor area of 2,411 sq ft each and seven walk-up apartments with an average floor area of 1,195 sq ft each.

Source: Business Times – 26 July 2012

Residential Market News Extract - 25 July 2012

UBS forecasts dip in home prices by 10%-15%

Residential property prices might fall 10 to 15 per cent in the next 12 months, a new report said.

UBS said last week that while the market has remained resilient despite the Government's cooling efforts, it is near a tipping point.

This forecast is, however, considerably more pessimistic than other experts' views, which mostly predict either stable prices or smaller falls of up to 5 per cent.

But it is still less grim than estimates last December when experts said prices could correct by as much as 30 per cent on the back of that month's cooling measures.

While UBS acknowledged that tight residential supply and low interest rates are keeping prices resilient, it said other factors point to a more cautious outlook over the next 12 months.

For instance, Singapore's economic growth, while still recovering, is more uncertain now.

The Government's residential property cooling measures are also likely to continue to discourage foreign buyers and resale market activity.

Meanwhile, the population growth rate has also slowed and is likely to decline further given the recent tightening of immigration policy.

And while the supply of homes is still tight, the expected ramp- up from next year onwards should help to compensate fully for the earlier supply shortage by 2014 or 2015, the report noted.

UBS expects 140,000 to 150,000 homes to be completed from this year to 2015, higher than its estimated cumulative supply shortfall of 90,000 units built up from 2000 to 2011.

This mix of negative factors has turned the bank sour on the property market's prospects, leading to its prediction of a 'moderate' 10 to 15 per cent correction.

'Property developers still have strong balance sheets, which may lower the probability of their having to significantly lower the prices of their residential projects to generate cash flow.

'We currently see a higher risk for mass-market private homes (versus prime ones) as this segment has largely led the current recovery, and (is likely) the bulk of private residential supply over the next few years,' the report said.

Private home prices inched up 0.4 per cent in the second quarter, according to preliminary estimates, reversing a 0.1 per cent dip in the first quarter.

Source: The Straits Times – 25 July 2012

 

Homebuyers likely to opt for shorter term mortgage

Homebuyers in Singapore will likely opt for mortgage loans with shorter repayment periods.

That’s despite the availability of new home loans that offer up to 50-year tenors.

Experts said more are taking into account their retirement age and interest costs when servicing their loans.

Currently Singapore banks are offering home loans with a maximum term of 35 to 40 years with age capped at 70 to 75.

UOB has come up with a first by offering home loans that stretches repayment to 50 years and a maximum age of 80.

UOB said that for the maximum tenor of 50 years, the requirement is to have at least 35 years remaining on the lease for leasehold property and no more than 80 years of age at end of loan tenor.

Still, some market players said such loans may be more suited for investors.

For ordinary home buyers, experts said they should tailor their loan repayment period to the age they want to retire.

DBS Bank’s head of deposits and secured lending, Ms Lui Su Kian, said: “The average loan period we are seeing now for customers is about 30 years. In general, I think, especially in Asia, we do see that our customers are prudent when it comes to managing their mortgage, so most of them do not stretch out to the maximum period.”

While a 50-year tenor may reduce monthly repayments, experts said interest could push the loan’s amount by up by 15 to 20 per cent.

And comments from Channel NewsAsia’s Facebook page show most buyers are averse to half a decade loans, with some saying 25 to 30 years is their threshold.

HousingLoansSG.com, which sees 20 to 30 enquiries a day, said around 70 per cent of its clients opt for 25 to 30-year loans, while 15 per cent go for the 30 to 35 year loans. The rest prefer terms of less than 25 years.

Ms Phang Lah Hwa, Head of Consumer Secured Lending at OCBC Bank said customers generally take up to the maximum loan tenor as they can repay or make capital repayment along the loan tenor.

Mr Harmander Mahal, Head of Customer Value Management at HSBC Singapore, said: “We observe that customers who take up housing loans with longer tenor (30 to 35 years) tend to be younger in the age group of 35 years old and below.

HSBC said its housing loan portfolio has seen double-digit growth over the last five years with an increase in market share.

In its 2011 annual results, residential mortgages have increased 21 per cent in value year-on-year for 2011 compared to 2010.

Source : Channel NewsAsia – 23 Jul 2012

Residential Market News Extract - 24 July 2012

Two sites at Dairy Farm, Punggol up for tender

Two residential sites, expected to yield about 950 units, have been launched by the Urban Redevelopment Authority (URA), and the Housing and Development Board (HDB).

The 99-year leasehold sites, at Dairy Farm Road and Punggol Way/Punggol Walk respectively, are catered to the development of condominiums/flats, and executive condominiums (EC) respectively.

The 188,861.2 square feet (sq ft) site at Dairy Farm Road, has a maximum gross floor area (GFA) of 396,617.4 sq ft, and is expected to yield some 390 homes.

The Dairy Farm Road site is attractive because it is nested within the Dairy Farm neighbourhood and near to the nature reserve. There are amenities nearby such as The Rail Mall and schools. The upcoming downtown line, Hillview MRT station in 2015 will further add to the attractiveness of the site.

Eugene Lim, key executive officer at ERA Realty Network, said he expects strong bidding of about eight to 10 bidders for the plot, noting that the subject site is superior to the land parcel at Petir Road that was sold in November last year.

"The bidding price is expected to be in the range of $560-$600 psf ppr," he added.

Another analyst opined that interest might be moderate (between four to six bidders), with an expected winning bid of between $550-$590 psf ppr.

Interest for this site to be moderate with up to six bidders, given the existing unsold inventory of about 1,070 units from the nearby developments, in the Hillview and Chestnut Avenue areas.

The second site, which is located next to Twin Waterfalls at Punggol Way/Punggol Walk, has a site area of 201,799.4 sq ft, and maximum GFA of 605,398.3 sq ft. It is expected to yield about 560 EC units.

The site is expected to see up to six bidders, with the estimated top bid between $300 and $350 psf ppr, which is comparable to the successful land price of $320 psf ppr for a site at Punggol Central/Edgefield Plains which was sold to Qingjian in April.

The breakeven cost could be between $600-$650 psf, and the estimated selling price between $750-$800 psf, comparable to Twin Waterfalls.

EC launches in the area have seen strong sales, with Prive, Riverparc Residences having sold all of their units, and Twin Waterfalls being 98 per cent sold. That being said, with so many project launches in Punggol, demand might have reached a saturation point, and developers might be cautious with their bids.

Source: Business Times – 24 July 2012

Residential Market News Extract - 23 July 2012

Over 60% of Parc Centros sold; location a strong pull

Parc Centros blazed the trail in private homes sales last week.

More than 370 of the condominium project's 618 units are said to have found buyers. This means that that over 60 per cent of the 99-year leasehold project, released at a $950 psf average price last week, has been taken up.

Word on the ground is that unlike typical mass-market condo launches, it was the project's three- and four-bedders which were the fastest to move - whereas one-bedders have been selling at a slower pace.

The 16-storey condo has one to five-bedroom units in addition to penthouses. Absolute prices start from $550,000 for a one-bedroom apartment. Two bedders are priced from $750,000, while three and four bedders start from $880,000 and $1.22 million respectively.

Market watchers attribute Parc Centros' strong sales to the current popularity of Punggol, especially the project's proximity to the MRT station and future shopping facilities (at the upcoming Waterway Point mall). Most importantly, Parc Centros' $950 psf average price is considered relatively attractive compared with the Watertown condo, which was released in January achieving a median price of $1,169 psf in the initial month, quickly rising to $1,341 psf the following month. As at end-June, 943 of the Watertown's 992 homes had been sold, according to developer sales data released by the Urban Redevelopment Authority.

However, Watertown comprises mostly one and two-bedders, and typically smaller units sell at higher psf prices. Watertown and Waterway Point are being developed by a Far East Organization, Frasers Centrepoint and Sekisui House joint venture. Parc Centros is being developed by construction and property group Wee Hur Holdings.

Meanwhile at Flora Drive in the Upper Changi Road vicinity, Koh Brothers is said to have sold more than 170 units at its Parc Olympia condo project as at early yesterday evening. The project has been on the market for over a week.

Koh Brothers released 234 of the project's 486 units in two stages the previous week - 118 units on July 12 at an average price of $820 psf after a 16 per cent early-bird discount, followed by 116 units released on July 15 with the discount clipped to 15 per cent.

Parc Olympia, which will be developed next to the Japanese School, has six blocks of eight storeys and two seven-storey blocks. Meanwhile, United Industrial Corporation has begun selling its 99-year leasehold V on Shenton condo on the former UIC Building site at Shenton Way since Friday to business associates, ex-tenants and minority owners of the site and VIPs.

As at yesterday evening, 90-plus units are said to have been sold out of about 130 released on 10 levels (anywhere from the 17th to 46th floors of the 54-level project). The average price is around $2,200 psf. UIC has closed the showflat, which is at The Gateway on Beach Road, and is expected to re-open it this weekend.

Source: Business Times – 23 July 2012

 

Modest sales for Reflections condo units

It might be a glittery new condominium dotting the skyline of Keppel Bay, but some buyers of Reflections are not looking at a particularly shiny picture.

Property consultants said the 1,129-unit Reflections at Keppel Bay has turned in a 'modest performance' over the five years since its launch in 2007. Residents started moving into the completed condo early this year.

As of last month, the high-end project by Keppel Land had sold 853 units out of 950 launched, at a median price of $1,828 per sq ft (psf), going by the Urban Redevelopment Authority's data. Another 154 units have been kept by the developer as corporate residences.

A three-bedder of between 1,378 sq ft and 2,271 sq ft costs $2.5 million to $4.5 million.

Prices appear to have softened.

Average prices there in the first half of this year were $1,870 psf, down from $1,937 psf in the same period last year.

Primary sales have also slowed to less than 15 units for the last three quarters.

But the 50 subsales in the last six months reveals ongoing buyer interest in the project, which was completed last year.

Experts say rental yields for both Reflections and Caribbean should hover around 3 per cent. Caribbean is the cheaper choice.

Rents at Reflections are in the $4.50 to $5 psf per month range, while Caribbean is priced below that, possibly boosting the latter's rental demand.

Source: The Straits Times – 21 July 2012

 

Property investment transactions up on low interest rate

Low interest rates helped send investment spending on property rocketing in the second quarter, with the residential and commercial segments thriving.

Investors stumped up $7.4 billion during the three months to June 30, 52.4 per cent over the $4.9 billion laid out in the first quarter, according to Savills Singapore yesterday.

The public sector accounted for $3.1 billion in the second quarter. This includes private developers buying land through the Government Land Sales (GLS) programme. There were 15 sites - 11 residential, three industrial and one hotel - sold through the GLS, reaping about $2.9 billion.

Private sales volume swelled nearly 60 per cent in the second quarter from the first, reaching $4.3 billion.

Investment sales in the private, divided by segments, residential took the lead with $4 billion, or 54 per cent, of overall investment sales.

The participation level in recent GLS tenders show developers have become more selective due to the ample supply of land released by the Government, and sensitive to competition from existing (or in the pipeline) projects in the vicinity.

Commercial investment sales amounted to $2.3 billion, a two-fold increase from the first quarter's $1 billion.

The segment, which includes strata-titled offices and shophouses, is luring investors from the residential sector, which has been hit with cooling measures.

Source: The Straits Times – 21 July 2012

Residential Market News Extract - 20 July 2012

V On Shenton's residential part set for launch

United Industrial Corporation Limited (UIC) will be launching the residential segment of its latest upmarket mixed development, V On Shenton, by the end of the month to cater to city-loving urbanites.

The 99-year-leasehold commercial and residential project located along Shenton Way will feature 510 residential units, comprising a mix of studios (441 sq ft to 474 sq ft), one-bedders (484 sq ft and 506 sq ft), one plus study (689 sq ft to 743 sq ft), two-bedders (883 sq ft to 1,033 sq ft), two plus study (1,055 sq ft to 1,216 sq ft), three-bedders (1,356 sq ft to 1,765 sq ft), and penthouses (3,315 sq ft to 7,255 sq ft) units.

However, only 100 to 200 units will be released during the opening launch at an indicative pricing of $2,200 to $2,300 per square foot (psf), said the developer.

The cheapest unit in the development of slightly under 500 sq ft is priced attractively below the $1 million mark.

The 54-storey skyscraper residential block comes with its fair share of offerings, which include a lap pool, gym, laundromat and even swanky outdoor island kitchens, and many of the higher-floor units will boast unblocked sea and city views.

V On Shenton is within walking distance from the Raffles Place and Tanjong Pagar MRT stations and close to popular venues such as the Marina Bay Financial Centre, Gardens by the Bay, Singapore Flyer and Esplanade Theatres on the Bay.

Those who drive will be happy to know that the development will have around 588 car park lots (which exclude six handicap lots and three power charging lots), with each unit entitled to one lot.

V On Shenton is slated to be completed by late 2017.

Source: Business Times – 20 July 2012

 

Home prices at record high, seen peaking

Private home prices in Singapore have been on an uptrend post-global financial crisis, with the market having risen about 55 per cent since the middle of 2009 to hit a new high. Excess liquidity in Asian markets, a lacklustre United States economy and weakening European markets - as well as local factors such as low mortgage rates, higher immigration numbers, rising affluence and decreasing household sizes - have been driving demand for private residential properties in Singapore.

However, against a backdrop of increasing economic turmoil in the euro zone, slowing growth of Asian economies and increasing Government intervention, it appears that property prices here are beginning to peak.

Moderate rebound in Q2 2012

The Urban Redevelopment Authority's (URA) flash estimate earlier this month of the private residential property price index for Q2 2012 reveals a moderate rebound from the previous quarter, where property prices dipped for the first time since Q2 2009.

The 0.4-per-cent increase from 206.0 in the previous quarter reflected a stabilising of the market. Prices were generally flatter for the third quarter running, recording no more than a 1.1 per cent difference in index points on a quarter-to-quarter basis. Comparatively, the price index was increasing at a sharper rate of about 2 to 10 per cent across all sub-markets before Q4 2010. Nonetheless, property prices have continued to scale new heights - touching a high of 206.8 index points.

In the individual sub-markets, the price index for the Core Central Region (CCR) recovered by 0.6 per cent following a dip of 0.6 per cent in the previous quarter. The price index for the Outside Central Region (OCR), which reflects the suburban mass market segment, increased at a slower pace of 0.4 per cent, compared to 1.1 per cent in the previous quarter, while the prices for the Rest of Central Region (RCR) remained unchanged. This indicates a rather flat trend across all the sub-markets.

Mass market drives demand

The resilient OCR sub-market could probably be attributed to the implementation of the Additional Buyer's Stamp Duties (ABSD) in December. Since its implementation, a sharp reduction in foreign demand for residential properties was observed, particularly that for investment-grade homes in the CCR and to a lesser extent the RCR sub-market.

URA data showed that the number of foreigners and companies that purchased uncompleted private residential units have decreased by about 34.7 per cent since Q4 2011. Moreover, cautious investor sentiment, as a consequence of global economic uncertainties, has dampened demand for such properties. The suburban mass market segment, which caters to the local population, remained largely unaffected. There was also a possibility that foreign demand spilled over to the more affordable OCR sub-market.

In Q1 2012, developers launched a large number of properties to meet this growing demand - a record 6,903 units, compared to 4,105 from the previous quarter. Of these, 6,526 properties were sold, with 80 per cent located within the OCR sub-market.

Prices likely to stay flat

The mid- to long-term outlook for global economies is generally optimistic. The International Monetary Fund forecasts the euro zone economies to recover by next year on the back of increased fiscal stability. Asian markets are anticipated to rebound due to the expansion of developing and emerging economies and the massive rebuilding of disaster-affected areas in Thailand, Japan and New Zealand.

In light of the positive international outlook, investor sentiment is likely to become less cautious and the demand for investment-grade residential properties here is likely to increase.

Population growth in Singapore is anticipated to slow with tougher immigration regulations and decreasing fertility rate. This will result in reduced demand for mass market properties in the mid to long term.

Moreover, a steady supply of residential properties in Singapore is expected in the near to mid-term. Major project launches expected in H2 2012 include Parc Olympia, Riversails and projects in Jalan Lempeng.

On the whole, we expect residential property prices in Singapore to remain largely flat with marginal and gradual growth, barring more Government intervention. The record supply in the pipeline could help alleviate any pent-up demand in the OCR sub-market, thereby preventing spikes in property prices. In the mid to long term, strengthening global economies would also boost investor sentiment, leading to a gradual recovery of CCR and RCR prices.

The authorities have said they will continue to monitor the residential market closely to ensure stability and sustainable growth. As such, based on the URA flash estimates for Q2 2012, we do not expect the imposition of more cooling measures yet.

Source: Today – 20 July 2012

 

Home loan repayment can now stretch to 50 years

United Overseas Bank (UOB) has introduced a home loan that spans half a century - likely the longest-term loan available here.

UOB introduced this longer loan duration as more customers have been requesting for such loans.

However, these loans come with conditions. 'This type of loan is applicable to private residential and HDB loans only,' said Ms Chia Siew Cheng, UOB's head of secured loans and personal financial services. As well, borrowers above a certain age are not eligible, but UOB declined to say what the cut-off age is.

And if the property is leasehold, it needs to have at least 35 years left on the lease at the end of the 50-year loan.

Ms Chia noted that the loan has its pros and cons. Having a longer term 'will result in a smaller monthly loan instalment and will be easier on monthly cashflows. However a longer repayment period also means that more interest will be payable'.

Financial adviser Damian Pang warned that by taking on such a long-term loan, the homeowner will be servicing the loan long into his retirement years.

A quick check with other banks here found that the longest loan term was 40 years.

At OCBC, for example, the maximum loan period for private and HDB homes is 40 years, or up to the age of 75 years, whichever is earlier.

At HSBC, customers with at least $200,000 with the bank can get loans of up to 40 years. Others can receive loans of up to 35 years, at the most.

Source: The Straits Times – 20 July 2012

Residential Market News Extract - 19 July 2012

URA to launch tender for reserve list site at Farrer Road

A 99-year leasehold private housing site at Farrer Road, near Botanic Garden MRT Station, has been triggered for release from the government's reserve list at $28.888 million, or $699 per square foot per plot ratio (psf ppr).

According to the Urban Redevelopment Authority (URA), the 0.27-hectare site can be developed into about 41,323 sq ft of gross floor area, which is sufficient for about 40 new homes.

The lower trigger price is probably influenced by lacklustre sales at some centrally located projects recently, renewed concerns in Europe and the prospect of more sites being released in the second half of the year.

Furthermore, unsold units in the nearby projects meant that the developer who triggered the site for sale have to be competitive in their pricing to win over buyers in this current market.

That said, the relatively lower quantum will allow smaller developers to enter the market, noted Mr Lee, who estimated that there could be up to 10 bidders for the site, with an estimated top bid in the range of $950-$1,000 psf ppr and units are expected to sell in the range of $1,800 to $1,900 psf.

At a URA tender that closed last month, a 99-year private housing site at Farrer Drive near Farrer Road MRT Station drew six bids. The top bid of $1,048.52 psf ppr from a unit of mainboard-listed Singapore Land marked a new high for 99-year private housing land offered at a state tender in recent years.

Source: Business Times – 19 July 2012

 

Strata commercial properties see record sales

Transaction sales of strata commercial properties reached record highs for the first six months of this year and may remain at such levels.

It noted in a report that 669 strata shops and 632 strata offices were transacted in the first half of the year, representing an all-time high since 1995. Such strong sales came from the primary market, which accounted for 66 and 72 per cent of all transactions for strata shops and office respectively.

Strata shop sales exceeded the total of 624 transactions for the whole of last year. Singaporeans remained its main contributors, accounting for 66 per cent of all transactions.

Compared to strata shop supply last year, which was dominated by projects in the suburbs, new sales this year were concentrated at the central region. Accordingly, the average unit price in the primary market in the first half of this year was 24 per cent higher than that last year, at $3,273 per square foot (psf), due to higher rates in the central region.

New strata shops with longer tenures and retail-conducive locations also saw strong buying interest as they are viewed as good long-term investments.

Older resale strata shops, with stable rentals but lower prices compared to those at the primary market, also attracted buyers.

Therefore, the average unit price rose 23 per cent in the first half of this year compared to the last, to reach $2,825 psf in the secondary market despite a dip in sale activity.

Over at the strata office market, primary market sales transactions saw a nineteen-fold increase from last year to $814.9 million and a 56 per cent increase in the average unit price to $2,129 psf, due to an increased number of new strata office projects in the central business district (CBD) and the availability of smaller-sized office units with lower price quantums.

However, weakening office rentals and increasing shadow space in the office sector led to a 24 per cent decrease in sales activity in the strata office secondary market and lower average unit prices of $1,706 psf compared to last year. Companies seeking to lock in favourable prices comprise the bulk of buyers (56 per cent) in the office space market.

While transaction volumes of shophouses fell 25 per cent from last year to 132 units, the overall value of total shophouse sales rose 4 per cent to $674.6 million, with unit prices increasing by 34 per cent to $2,804 psf, another record high since 1995. The report noted that the decrease in transaction volume was due to the steep increase in prices. Nonetheless, strata shophouses are viewed as attractive investment assets, with cash-rich investors purchasing multiple units in single transactions.

Source: Business Times – 19 July 2012

Residential Market News Extract - 18 July 2012

Sophia Mansions sold to Roxy-Pacific for $43.3m

Sophia Mansions, a 19-unit development at Mount Sophia, was sold to Roxy-Pacific Holdings Limited for $43.3 million.

Owners of two-bedroom apartments at the development stand to receive gross sales proceeds of between $1.8 million and $2 million, while those who own three-bedroom homes will receive between $2.5 million and $2.7 million.

Sellers of the 20-year-old freehold site with a land area of about 17,545 square feet had previously indicated that they were willing to part with the development for a price of between $42.5 million and $45 million.

The selling price amounts to $1,175 per square foot per plot ratio based on a gross plot ratio of 2.1.

There is potential to build an additional gross floor area (GFA) of about 1,105 sq ft (or about 3 per cent of the gross floor area) of balconies without incurring any development charge.

The land rate, inclusive of the 3 per cent balcony space, will be about $1,140 psf ppr.

Source: Business Times – 18 July 2012

Good response to Haus@Serangoon Garden

Haus @ Serangoon Garden, an environmentally friendly project by City Developments Ltd (CDL) and Hong Realty, was popular among homebuyers over the weekend, with 28 of the 40 terrace houses on offer at the preview sold.

Prices start from $2.4 million for an intermediate terrace unit with a land area of 1,615 square feet. Corner terraces cost more and start from $2.8 million for a unit with a land area of 2,284 sq ft.

CDL said about 40 per cent of buyers are residents in the neighbourhood.

Haus@Serangoon Garden is the first landed housing estate here to win the Building and Construction Authority's Green Mark Platinum award.

CDL said homeowners "stand to achieve up to 40 per cent" in utility savings for each terrace house.

In all, Haus@Serangoon Garden will have 18 corner units and 79 intermediate terrace homes. All 97 units have two storeys, a basement and an attic. The 99-year leasehold project is expected to be completed by 2016.

Source: Business Times – 18 July 2012

Buyers back out of 105 private home deals

Private home buyers returned 105 units to developers last month - fewer than in May but in line with levels seen in recent months.

The units, which were likely bought in May, came from projects like Sky Habitat, Seahill and executive condominium (EC) Twin Waterfalls.

The returns comprised about 5.2 per cent of the more than 2,000 units sold - including ECs - that month.

There were 150 units returned in May, or 5.7per cent of the more than 2,600 non-landed homes sold in April, ECs included.

Data shows the monthly return rates have generally stayed below 6 per cent since 2009, although there have been aberrations.

One came in January when returns hit 9 per cent, probably because the property cooling measures imposed in December gave some buyers second thoughts.

Buyers returning units could arise after the 'showflat hype' dies down and people take a second, critical look at their purchases.

These days, developers spend a huge amount to create the environment and mood in showflats, so it's not surprising for people to make a decision there and later feel it was too quick and then drop the idea.

Buyers also back out because their financing applications do not get approved.

The EC developments Twin Waterfalls and The Tampines Trilliant were among the top five projects with the most cancelled units last month.

Source: The Straits Times – 18 July 2012

Despite June blip, home sales set blistering pace

The momentum may have slowed in June, but developers have sold many more private homes in the first half of 2012 than they did last year.

June saw 1,371 units being sold, excluding executive condos - a 19.5 per cent drop, month-on-month. But in the first six months of this year, developers have offloaded 12,098 units - a big jump from the 8,039 private homes sold during the same period in 2011.

In fact, sales during the first six months are not very far from the 15,904 units sold for the whole of last year, based on preliminary numbers from the Urban Redevelopment Authority (URA).

Property consultants expect developer sales to hit an all-time high of 18,000-22,000 units this year - surpassing the current record of 16,292 units set in 2010.

URA will release the final Q2 developer sales figures, taking into account returned units, on July 27.

Market watchers expect prices to remain stable in the second half given the ample supply generated from Government Land Sales. URA's flash estimate for its Q2 2012 private home price index was up 0.3 per cent from Q4 last year.

This is likely to contain any price hike.

Analysts also point to competing supply from the resale market as buyers warm to more attractive price points for older completed properties.

About 55 per cent of new private homes that developers sold in June were at below $1,000 per square foot (psf). In May, only 35.2 per cent of homes were sold in that price range.

However, prices are unlikely to crash assuming demand remains resilient, say industry players. Owner-occupiers as well as investors have been drawn to property as an anti-inflation hedge, especially given the current low interest rate environment and affordable lumpsum investment size as developers include small units in their projects.

However, if the Singapore economy tanks and retrenchments come into play, sentiment will dive and hit demand.

URA's developer monthly sales stats show that Outside Central Region (OCR), where mass-market projects are located, continued to drive primary-market sales in June, accounting for 81 per cent of the 1,371 private homes excluding ECs sold last month. However, the number of units sold in OCR shrank 8 per cent month on month.

Sales in Rest of Central region dived 67.1 per cent month-on-month to 119 units in June. However, sales in Core Central Region rose 4.4 per cent to 141 units, helped by the launch of 1919 at Mount Sophia - 74 of the project's 75 units sold at a median price of $2,042 psf.

Islandwide, June's top selling projects include River Isles in Punggol, with 263 units sold at a median price of $835 psf; Sea Esta in Pasir Ris (255 units at $906 psf median price); and a nearby EC project, Watercolours (201 units at $735 psf median price).

Source: Business Times – 17 July 2012

Condo - V on Shenton

 

 

Do contact me at 9090 1288 for more info/ to view showflat.