Residential Market News Extract - 12 July 2012

Potong Pasir site may see hot contest

The latest 99-year leasehold site in the vicinity of Potong Pasir MRT Station to be released by Urban Redevelopment Authority (URA) is expected to be hotly contested, because of the appeal of mixed-development projects, according to most analysts.

Analysts polled by BT yesterday evening predict 7-15 bids with the winning bid forecast in a wide range - $580-750 per square foot per plot ratio (psf ppr).

Yesterday evening, Urban Redevelopment Authority announced that an unnamed party has successfully applied for the site's release from the reserve list with an undertaking to bid at least $154.474 million or $500 psf ppr at the tender for the site.

The 88,267 sq ft plot, along Tai Thong Crescent, is zoned for residential use with commercial space on the first storey.

It is just across the road from a full private housing site along Upper Serangoon Road and Pheng Geck Avenue that was sold recently by URA to Santarli, which is involved in the construction business, for $628.22 psf ppr.

The latest plot, at Tai Thong Crescent, is expected to generate a maximum gross floor area of about 308,945 sq ft and can potentially yield around 267 homes, according to URA's estimate.

The site's attractive location, about five minutes' walk from Potong Pasir MRT Station and adds that its commercial component will help address a shortfall in shopping amenities in the area.

The injection of residential projects like 18 Woodsville, Nin Residence, The Sennett and the recently-sold Pheng Geck Avenue site will increase demand for amenities in the area.

ERA Realty Network key executive officer Eugene Lim reckons the unsuccessful bidders at last month's tender for the next-door Pheng Geck Avenue plot may bid competitively for the latest land parcel on offer.

"Mixed developments are popular with home buyers and investors," he adds.

Analysts say the apartments in the Tai Thong Crescent project could sell at $1,250-1,450 psf.

Source: Business Times – 12 July 2012

 

Koh Brothers to launch mass market project in Pasir Ris at $820 psf

Koh Brothers Group is set to launch its first 99-year leasehold pure residential mass market project Parc Olympia along Flora Drive this weekend.

Response from the public is expected to be warm for the 486-unit Pasir Ris-based project due to its attractive pricing at an average of $820 psf, which is deemed to be at the lower rung of properties recently transacted along the stretch.

The cheapest unit in the development also carries a tempting price of around $440,000, making it fairly affordable to buyers.

The 8-block residential development, which would sprawl across 322,368 sq ft of land, will comprise a wide range of facilities such as a 600 metre synthetic jogging track, a 50 metre lap pool, an air-conditioned badminton court and a putting green for golfers.

In addition, the developer will also furnish the project with its own feeder bus which will ferry residents to and from nearby MRT stations as well as the Singapore Changi Airport to provide greater accessibility to the development.

Parc Olympia is also situated right next to The Japanese School and is a short drive away from popular shopping centres such as Tampines Mall, Tampines One and Downtown East.

The project which is expected to obtain its TOP in late 2015 is expected to be released in a total of four phases, with phase 1 (which would be launched this weekend) comprising a total of 118 units.

Tailored to cater to a wide range of buyers, unit types will comprise a mix of one-bedders (495 sq ft to 646 sq ft), two-bedders (646 sq ft to 1,292 sq ft), three-bedders (969 sq ft to 2,164 sq ft) and four-bedders (1,324 sq ft to 2,702 sq ft).

Source: Business Times – 12 July 2012

 

New homes up to $1m are the hot sellers

New homes that fall within the price bracket of $500,000 to $1 million continue to be the most popular among Singaporean buyers.

In the first half of this year, 3,361 units or 46.3 per cent of all new home transactions made by Singaporeans, fell in that price band as compared with 26.0 per cent and 40.1 per cent in the first halves of 2010 and 2011 respectively, according to data from the Urban Redevelopment Authority (URA).

Consultants say that the demand for such homes continues to see a strong uptake from buyers, such as HDB upgraders who recently sold their flats to tap on the high cash over valuation (COV) recorded in recent months.

Demand for new units priced under $500,000 also continued to gain momentum during the period, up more than three-fold from last year to 384 as at the end of 1H2012.

Likewise, homes in the $1 million to $2 million region also appealed to local home buyers, with a total of 1,910 transactions (or 26.3 per cent of all new home purchases by Singaporeans) recorded in the first six months of this year as compared to 1,760 during the same period last year, making it the second most popular price segment.

However, the 1H2012 figures were a far cry from those posted two years ago. Taking a quick flashback, new homes priced between $1 million and $2 million saw the most favour among Singaporeans in 1H2010, with 2,515 transactions out of 7,431 (33.8 per cent) recorded stemming from this price range.

Buyers have also become more price conscious amid waning global economic indicators, with demand for properties over $2 million in a downtrend.

And this trend is likely to continue, according to industry watchers as Singaporean buyers are likely to continue leaning towards homes priced under the attractive $1 million mark, with a huge flow of smallish projects and suburban developments coming on stream in the months ahead.

Source: Business Times – 12 July 2012

 

HDB message to PR owners: Live in it or sell it

The Republic will cap the amount of time that permanent residents can sublet their Housing and Development Board flats, according to new rules aimed at deterring PRs from buying flats for investment or rental yield.

Analysts say the move could lead to a slight, short- term spike in HDB rental rates, although the overall impact should be muted.

Currently, Singapore citizen and PR flat owners may sublet their flats after meeting the minimum occupancy period, which is five years for most cases and three years for resale flats purchased without the CPF Housing Grant.

The approval to sublet is granted for up to three years per application, and owners can seek to renew the approval at expiry without limit.

Under the new rules, which take immediate effect, PR owners will be allowed to sublet the flats after a minimum occupancy for just one year, instead of three.

After that year, an extension will be granted only if there are extenuating reasons. The total period of subletting during the flat owner's entire duration of ownership is capped at five years.

There will be no change in policy for citizens.

"The revised rule is to reinforce the policy intent of providing HDB flats as homes to SPRs, and to deter those who are buying the flats for rental yield or investment," HDB said in a statement.

"While HDB allows SPR owners who have met the (minimum occupancy period) to sublet their flat, the subletting should be on a temporary basis. If the SPR families no longer need the flats for their own occupation, they should sell the flat instead of subletting them."

ERA key executive officer Eugene Lim noted that the number of subletting approvals has risen rapidly by almost 89 per cent, or almost 7 per cent per quarter, from 2009 to 2012.

"The rapid increase in subletting approvals means less flats are put on the resale market and this could have contributed to the continued increase in HDB resale prices despite the government's efforts of making more BTO (build-to-order) flats available," he said.

The supply of flats available for subletting might diminish in the coming quarters, which would drive up HDB rents in the short term.

"However, as policies on the employment of foreign manpower are also being tightened, the resulting reduction in demand for renting HDB flats may just prevent HDB rents from a runaway increase," Mr Lim said, adding that the rise in HDB rents might just be a temporary phenomenon over the short term.

Source: Business Times – 12 July 2012