Residential Market News Extract - 16 August 2012

Sale of private homes jumps 42% in July

Demand for private residential homes, excluding executive condominiums (ECs), rebounded in July, with 1,943 units snapped up last month, 42 per cent more than the 1,371 units sold in June.

Even as mass-market sales continued to monopolise the market, the Core Central Region (CCR) - which includes Districts 9, 10 and 11, Downtown Core (including Marina Bay) and Sentosa - saw the steepest rise in buying activity, with 253 units sold in July, an increase of 79 per cent month on month.

This was propped up by the launch of V on Shenton - 144 of the 190 units at the development sold in July, at a median price of $2,061 per square foot (psf), making up 57 per cent of sales in the region.

Sales in the Outside Central Region (OCR), where mass-market projects are located, also continued to drive primary-market sales, accounting for 77.7 per cent, or 1,509 of the 1,943 private homes (excluding ECs) sold last month. Two of July's top-selling projects, Parc Centros in Punggol and Parc Olympia at Upper Changi, sold 492 units at a median price of $924 psf and 204 units at $874 psf, respectively.

The modest median launch prices of $874 and $924, which are fairly comparable to the neighbouring projects, reflect local buyers' growing resistance to further price increase. Unsold supply or future supply in the vicinity also contributes to the stabilization of prices in the neighbourhood.

Elsewhere in the Rest of Central Region (RCR), developers sold a total of 181 units out of the 281 released. The only new project launched, The Line @ Tanjong Rhu, found 13 buyers for the 62 units released from the 130-unit development. Other previously launched developments such as Eight Riversuites (33 units sold), M66 (28 units sold), Nottinghill Suites (12 units sold) and Idyllic Suites (11 units sold) continued to move units. As a result, sales volume was up 52.1 per cent in the region.

The strong sales in the mid-tier RCR were contributed by the increasing prices of suburban homes.

In July, about two-third of the private housing units sold in the RCR were in the price range of $1,001 to $1,500 psf. Thus, the overlapping of prices of private homes in the OCR and RCR could make the housing units in the RCR more appealing to home buyers.

Interest for ECs is expected to be positive despite the slowdown observed in July, backed by strong housing aspirations and well-designed projects.

However, the five-year minimum occupation period and the requirement to dispose of HDB flat after occupation of EC may discourage some buyers who are looking at long-term investment possibilities and capital appreciation of their HDB flat, especially for those which are in established estates with good property leasing fundamentals.

Looking ahead, primary market activity is expected to slow down in August, due mainly to the seventh lunar month.

Source: Business Times – 16 August 2012

 

Freehold Kovan residential site up for sale

Kovan Lodge - one of the last few older freehold blocks on Kovan Road - was put up for sale by tender yesterday.

Comprising a total land area of 27,090 square feet, the residential-zoned site currently occupied by Kovan Lodge is said to have the potential to be redeveloped into a much bigger residential development, subject to the authorities' approval.

Notably, if approval is granted to purchase an adjoining plot of state land of about 505 sq ft, the site could be built up to 38,633 sq ft based on the present gross plot ratio of 1.4, which translates to around $802 per sq ft per plot ratio (psf ppr) based on the indicative asking price of $31 million.

Location-wise, the property is situated in District 19 and is near popular shopping centres such as nex mall, Heartland Mall and Hougang Mall, providing easy access to amenities.

In addition, the development is just a stone's throw away from the up-and-coming food street@Simon Road, located at Kovan MRT Station.

Source: Business Times – 16 August 2012

 

Luxury home prices, rents to go further south

Prices of Singapore's luxury prime properties continue to lose steam despite a pick-up in the segment's sales volume in the second quarter, and this trend is likely to continue.

The average resale capital value for prime luxury properties fell 2.9 per cent quarter-on-quarter in Q2 to around $2,380 per square foot (psf), marking a second consecutive quarterly fall after a long period of stability.

At the same time, resale capital values of typical prime properties also dipped during the period by 1.5 per cent from the last quarter to about $1,350 psf.

This, despite a pick-up in sales volume in the prime districts, according to preliminary estimates, which showed a 22 per cent increase in units transacted to 528 units in Q2 compared with 434 units in Q1.

The spike was mainly driven by healthy uptake in both new sale and resale segments, which recorded a respective growth in volumes of 38.5 per cent and 22.9 per cent over the previous quarter.

A higher number of prime market developments launched in Q2 also helped to generate interest and buoy transaction volumes. A total of 101 core central region (CCR) units were launched in April and May (close to the 112 launched during Q1), providing new supply to the segment.

Specifically, new boutique developments, such as UP @ Robertson Quay and 1919 on Mount Sophia, proved popular among buyers, selling more than 60 per cent and 90 per cent of their units respectively at the end of the quarter.

An estimated 778 units were completed in Q2, up almost five times from Q1. The largest project, The Trizon, added 289 units to the market, followed by Rochelle at Newton with 129 units and RV Suites with 96 units.

However, the jump in supply dampened overall yields as average prime rental values dipped 1.2 per cent from Q1 to around $49 psf per annum ($4.08 psf per month), while average typical prime rental values fell 2.2 per cent to $38 psf per annum ($3.16 psf per month).

Rents have fallen, especially in older prime properties, large units, and properties facing construction. Lower rents are increasingly being accepted in struggling projects, while housing allowances are being reduced and expatriates are relocating to other countries negatively impacting leasing demand.

Source: Business Times – 16 August 2012

 

Caldecott Hill bungalow of late NKF founder up for sale

A bungalow owned by the late philanthropist Khoo Oon Teik is up for sale.

The good class bungalow (GCB) at 27 Olive Road has a land area of 23,423 sq ft and is being sold via an expression of interest by Knight Frank.

The two-storey bungalow, built over 30 years ago, sits on the site, which nestles within the GCB enclave of Caldecott Hill Estate. It is within walking distance of Caldecott MRT station.

The asking price for the property is between $26 million and $28 million, representing a land rate of about $1,110 to $1,200 per sq ft (psf). Buyers have up to Sept 18 to indicate their interest.

Recent transactions within the estate, such as properties situated along Andrew Road and Olive Road, have hovered around the $1,100 psf to $1,200 psf mark.

A bungalow along Olive Road is believed to have changed hands for about $30 million or $1,185 psf last month. The 25,300 sq ft sale site houses a two-storey detached house, which the buyer is expected to tear down and rebuild.

The GCB market has perked up, with transactions doubling in the second quarter to 18 units compared with the first three months of the year.

GCBs typically have a minimum plot size of 15,069.46 sq ft, but some sites may be smaller as a result of being gazetted under GCB areas in 1980.

They are highly prized because no new GCB areas will be gazetted, which means any fresh supply on the market can come only from carving up a much larger parcel of land into two or more plots, each of which must meet the minimum plot requirement.

Source: The Straits Times – 15 August 2012