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