Residential Market News Extract - 5 September 2012

Qingjian is top bidder for Punggol site

Chinese developer Qingjian Realty has put in the top bid for yet another Punggol site - a 99-year- leasehold executive condominium (EC) at Punggol Way/Punggol Walk.

It offered $189.87 million, or $313.63 per square foot (psf) of potential gross floor area, beating the next highest bidder by less than one per cent.

The state tender drew just three bids, fewer than what market analysts had expected.

"With only three bidders for the subject site, tender participation is below expectations, especially since the Waterbay site at Punggol Central/Edgefield Plains attracted 10 parties earlier in March.

Should Qingjian Realty be awarded the site, it will have three developments in Punggol. Earlier this year, the Chinese developer was awarded an EC site at the junction of Punggol Central and Edgefield Plains for the top bid of $136.7 million.

It launched River Isles, a 610-unit condominium, on June 2.

The top bid reflects a breakeven cost of between $580 and $630 psf and an estimated selling price of between $700 and $750 psf.

Analysts BT spoke to yesterday are optimistic about the take-up of units at the site given Punggol's growing appeal to young professionals.

Said Eugene Lim, key executive officer, ERA Realty Network: "The development at this site will appeal to buyers who missed out on the good deal at Twin Waterfalls. There will still be demand for ECs as the price point and the lifestyle it portrays is just what the younger generation is looking for and are able to afford."

Source: Business Times – 5 September 2012

 

New rules to limit shoebox homes

The Government has unveiled a new policy to discourage the fast-rising number of tiny "shoebox" homes being built outside the central city area.

It is placing a cap on the number of homes that can be built at each private non-landed development outside this area. The central area is unaffected.

But an even tighter cap, already in place in Telok Kurau, is being extended to Kovan, Joo Chiat and Jalan Eunos.

The new guidelines aimed at curbing the number of shoebox units - typically less than 50 sq m - will take effect on Nov 4.

The Urban Redevelopment Authority (URA) noted yesterday that the stock of completed shoebox units will have surged by four times, from about 2,400 at the end of last year to about 11,000, by the end of 2015.

This trend has raised concerns, especially in suburban areas where larger households and families typically live and where the demand for shoebox units remains untested, the URA said.

Singapore should have some shoebox units to cater to singles, retirees and couples without children, but these homes should not form a disproportionately large share of housing stock, it added.

In recent years, blocks of flats have even been built on the site of a single landed home. Residents have faced traffic congestion and double parking as a result of overcrowding.

The maximum number of units that can be built is obtained by multiplying the development site area by its Master Plan allowable gross plot ratio, and then dividing that by 70 sq m. This works out to an average unit size of 70 sq m. URA said the size is comparable to the average gross floor area of a 3-room HDB flat.

For the affected areas of Kovan and Eunos, the maximum number of units uses the same formula but dividing by 100 sq m.

While many had expected URA to introduce a minimum size for units, National Development Minister Khaw Boon Wan said on his blog yesterday that the URA wanted to restrict the over-development of tiny homes without over-regulating or stifling the creativity of developers.

Instead of a minimum size, "URA chose to limit the maximum number of apartments that developers can propose in a particular development...

"This way, developers are still free to build small apartments if there is demand, but there must be a good mixture of large and small units, in order to meet the URA guidelines," Mr Khaw said.

Source: The Straits Times – 5 September 2012