Residential Market News Extract - 17 October 2012

High bid for site next to Tanah Merah MRT

A 99-year leasehold residential site along New Upper Changi Road has drawn a higher-than-expected top bid, pointing to a still-bullish sentiment among property developers here.

The land parcel sitting next to Tanah Merah MRT received 11 bids in all, the Urban Redevelopment Authority (URA) said. The highest offer came from Keppel Land unit Sherwood Development, which bid $434.6 million or $791.42 per square foot per plot ratio (psf ppr).

This bid was 17 per cent above that for a nearby plot in Tanah Merah Kechil sold to Fragrance Group and World Class Land in August.

KepLand said yesterday it plans to develop about 700 units measuring between 500 sq ft and 1,400 sq ft in one- to four-bedroom configurations when it secures the site.

Augustine Tan, president (Singapore residential) at KepLand, remarked: "Demand for well-located suburban homes here remains resilient, and we're confident that this new development will garner positive interest from genuine home-buyers and upgraders looking for quality properties in the established and popular Tanah Merah precinct."

Demand has been strong for projects in the vicinity: The eCO condominium, a short distance away in Bedok South Avenue 3, was the top-selling private residential site last month, with 402 units sold at a median price of $1,283 psf.

Despite the Government's recent move to cap home-loan tenures, ERA Realty Network's key executive officer Eugene Lim said: "This is a sign developers are still hungry for well-located mass-market plots."

Analysts are projecting a break-even cost of between $1,150 and $1,250 psf based on KepLand's bid, and expect an average selling price above $1,300 psf.

The second highest offer in the tender came from Bayfront Land, a tie-up between Fragrance Group and World Class Land. Its bid was $405.9 million, or $739.15 psf ppr. The lowest bid was from Vantage Properties, which offered $275 million, or $500.84 psf ppr.

Some of the offers were defensive, noted ERA's Mr Lim. The fourth highest bid, for example, came from a joint venture between Far East Organization, Frasers Centrepoint and Sekisui House, the same developers behind eCO.

Source: Business Times – 17 October 2012

 

Punggol development: Phase 2 plan unveiled

The Housing & Development Board (HDB) yesterday unveiled plans for the next phase of Punggol's development, including a new Northshore District that will be carved out for more seafront public housing.

Northshore District will be one of seven distinct waterfront housing areas, of which Waterway East and Waterway West Districts are already under development.

Not only will Northshore District be home to Punggol's tallest residential buildings, at 29 storeys, they will also boast fully underground car parks in a bid to provide a greener and more spacious environment at the ground level.

Both Northshore and Matilda Districts can expect public housing projects to be launched over the next five years.

Based on Punggol's masterplan, the projected number of private and HDB homes in Punggol is 96,000. To date, some 26,400 units of public housing have been completed, with 15,800 units launched or under construction. On the private housing end, 6,400 have been launched or are under construction.

This puts Punggol on track to complete 48,000 units by 2016.

Of the 957 hectares (ha) that is Punggol, some 422 ha have been set aside for residential use, with the remaining 535 ha designated for other uses, including transportation networks, schools, commercial, and religious purposes, added HDB.

National Development Minister Khaw Boon Wan said: "We are now ready to launch the next phase of Punggol's development. Punggol Phase II will cover developments over the next 15 years and beyond."

Other plans to enliven Punggol include the introduction of a waterfront Market Village bordering on the south of the Coney Channel, a Learning Corridor designated to house future education institutions and a Creative Cluster designed to host new commercial activities.

Residents can also look forward to more recreational spaces and commercial amenities such as a new sports complex, a horse riding centre and a hawker centre.

To ensure that Punggol does not lose its green features, more green parks and corridors will be integrated with the waterfront promenades. In addition, the old Punggol Road will be conserved as a heritage trail and transformed as a pedestrianised green corridor for joggers and cyclists.

Mr Khaw was speaking at the HDB Awards 2012, where he presented 21 awards to HDB's consultants and contractors to recognise their achievements and innovative efforts in undertaking public housing developments.

The "Punggol: Discover Possibilities" exhibition will be launched at HDB Hub to recap the progress of Punggol to date, share with the public the short-term plans and invite feedback for the longer-term plans.

The exhibition ends on Oct 28.

Source: Business Times – 17 October 2012

Residential Market News Extract - 16 October 2012

Developer sales surge to 3-year high

Developers' private home sales surged to a three-year high in September, taking the tally for the first nine months past the full-year 2010 record and underscoring the need for the latest cooling measures.

The 2,621 private homes, excluding executive condos (ECs), sold last month were 83.7 per cent more than the 1,427 units in August and the highest since July 2009's 2,772 units. The numbers were released by the Urban Redevelopment Authority yesterday.

This means that in the first nine months of this year alone, developers have found buyers for 17,927 homes - up 12.7 per cent from 15,904 units for the whole of last year and surpassing the full-year 2010 record of 16,292 units by around 10 per cent.

Market watchers generally attribute the surge in September sales to high liquidity/low interest rates and a jump in new launches. Developers launched 2,224 private homes last month, double the 1,118 units in August. Some developers held back releasing projects until after the Ghosts Month ended in mid-September. That also coincided with the announcement of QE3 in the US.

The preliminary Q3 2012 developer sales tally now stands at 5,999 units (the final number will be released on Oct 29). Most property consultants reckon sales will slow this quarter, ending the year at 21,000-22,000 units.

While the restrictions on home loan tenures could take some demand away, property remains an attractive option.

The September sales volume was also up 60.7 per cent year on year.

Home buying continued to be dominated by Outside Central Region (OCR), where suburban condos are located. The 2,062 units in this location that developers sold last month was a 146 per cent jump from 837 units in August as well as a new monthly benchmark sales record for OCR.

Three major projects - Riversails in Upper Serangoon Crescent, Kovan Regency and eCO at Bedok South Avenue 3 - together contributed to sales of 974 units in September - or 37.2 per cent of developers' total sales in the month.

For eCO, 402 units were transacted at a median price of $1,283 psf, making it the top-selling project, followed by Kovan Regency (369 units at $1,275 psf median price), Riversails (203 units), Foresque Residences (104 units) and Bartley Residences (78 units).

Upcoming launches could include Eco Sanctuary at Chestnut Avenue and The Sennett.

URA figures yesterday also show that developers sold 150 ECs (a public-private hybrid housing) last month, up from 118 units in August. This takes the preliminary Q3 tally for ECs to 392 units - and that for the first nine months to 2,818 units, not far off the 2,883 units last year.

September's priciest deal (in per square foot terms) was a unit in The Marq on Paterson Hill which sold for $6,215 psf, followed by a unit at Skyline@Orchard Boulevard which fetched $5,011 psf.

Amid rising home sales, the government yesterday rolled out five residential sites and reiterated that it is ready to act, if and when necessary, to keep a good handle on the property market.

Source: Business Times – 16 October 2012

 

Two sets of Tg Katong shophouses for sale

A pair of freehold four-storey shophouses at Tanjong Katong Road, owned by a family trust, has been launched for sale by public tender. The owner is seeking offers in the region of $10-12 million for the plot of land which measures 3,811 square feet with a total gross floor area of 11,046 sq ft.

Located within the gazetted Tanjong Katong Conservation area, the properties consist of two units of retail shops on the ground floor and six units of apartments on the upper floors.

Tanjong Katong was given conservation status on Dec 1, 2003, and is characterised by the ornate late style and the more geometric art deco style shophouses together with the more streamlined modern style shophouses built after World War II.

The subject site is zoned Residential with Commercial on the first storey and has a gross plot ratio of 3.0.

The properties are currently fully tenanted with estimated total gross monthly rental revenue of $18,350.

The tender for the subject properties closes on Nov 2, 2012 (a Friday), at 2.30pm.

Source: Business Times – 16 October 2012

 

Property cooling measures proving successful: Khaw

Five sites yielding some 2,880 homes have been released for sale, even as the government has pledged that it remains ready to cool the housing market if necessary.

Minister for National Development Khaw Boon Wan, asked by Members of Parliament yesterday what the government is doing to ensure housing remains affordable, said the cooling measures put in place thus far - including the curb on housing loan tenures - have met with some success. He said: "Both the private property and HDB resale market have shown signs of stabilising."

Specifically, the growth in private property prices has moderated significantly, from 18 per cent in 2010 to 6 per cent last year and to 0.9 per cent in the first three quarters of this year.

On the public housing front, the yearly Resale Price Index growth has also come down; it was 14.1 per cent in 2010, 10.7 per cent last year and 3.9 per cent in the first three quarters of this year. Mr Khaw indicated, however, that the market was not yet out of the woods, going by the uptick in RPI in Q3 2012 - a 2.0 per cent growth from Q2 based on flash estimates.

He added that although the supply of Built-to-Order flats has been significantly ramped up, it will take time for the ramped-up supply to catch up with demand. The government will continue to monitor the public housing market, he said.

Of the five 99-year-leasehold sites launched for sale this month under the government's plans to ensure a significant supply of housing - public and private - in the next two years, two are executive condominium (EC) sites.

The first EC site is next to Flo Residence, at the junction of Punggol Field Walk and Punggol East. Sitting on 153,999 sq ft of land, it has maximum gross floor area (GFA) of about 461,997 sq ft and is expected to yield 435 units. The tender for this land parcel closes on Dec 6.

The second site, located next to Sky Habitat in Bishan St 14, sits on a 120,855-sq-ft plot, and has maximum GFA of 592,189 sq ft, enough for 645 units. The land parcel set aside for Sky Habitat was sold to CapitaLand in February last year at $550 million, or $869 psf ppr. The tender for this site closes on Nov 29.

Another EC site at the Sembawang Crescent- Sembawang Drive junction, measuring 233,760 sq ft, will be launched for tender on Oct 30. It has total GFA of 654,527 sq ft and can yield about 650 units.

Two other sites in Tampines Ave 10, Parcels C and D, were made available for application by developers through the reserve list.

Parcel C is approximately 238,860 sq ft, and has maximum GFA of about 668,806 sq ft. It is expected to contain 680 units.

Parcel D is 168,567 sq ft and has maximum GFA of 471,988 sq ft. It is expected to contain about 470 units.

Source: Business Times – 16 October 2012

Residential Market news Extract - 15 October 2012

New green rule could boost building's value

A new valuation guideline on green buildings could potentially boost the values of these properties, as valuers take into consideration the structure's income and cost implications.

The income method, for instance, will take into account the enhancements a building may achieve, whether in the form of increased rental or a reduction in operating expenses, as a result of the incorporation or installation of green features and design.

The direct comparison method requires green buildings to be appraised by comparing them to similar green buildings which have been sold, making relevant adjustments for differences.

Studies carried out in various parts of the world on the impact of green buildings on values corroborate this. Specifically, a recent study conducted in the United States found that rents commanded by Energy Star-labelled and LEED-certified properties enjoy a premium of 7-17 per cent and occupancies improved by 10-18 per cent. Selling premium is estimated at $30 and $130 per square foot for Energy Star-labelled and LEED-certified properties respectively.

These figures were cited by Professor Lim Lan Yuan, president of Valuation & General Practice, Singapore Institute of Surveyors and Valuers (SISV), in his speech at the Breakfast Talk for CEOs, which was jointly organised by the Building and Construction Authority (BCA) and SISV, wherein the valuation guideline was introduced.

This is the first time the SISV is publishing a valuation guideline on green buildings, which will be incorporated in their newly revised edition of "Valuation Standards and Practice Guidelines", expected to be launched next month.

While the guideline will assist professionals by providing a framework to investigate and appreciate the tangible and intangible benefits of green features thus translating them into economic values, challenges remain.

Source: Business Times – 13 October 2012

 

Where are home prices headed?

Home prices are likely to hold their ground despite being pummelled by six rounds of cooling measures, according to most property analysts.

They pointed to low interest rates and a stable employment outlook as factors supporting prices.

They predicted the measures - including last week's new restrictions on loan terms - would take a toll on sales volumes. However, another factor helping to keep prices steady is the strong holding power of developers.

Some contrarian analysts said prices might fall by up to 10 per cent in the next 12 months.

But most agreed that private home prices are likely to continue flatlining instead. They have risen by less than 1 per cent in the first nine months of the year.

The measures announced by the Monetary Authority of Singapore last Friday included caps on loan terms to prevent buyers from over-extending themselves, and lower loan-to-value (LTV) ratios for certain purchases.

They were also meant to curb rising home prices driven by low interest rates and easy credit coming from a fresh round of cash stimulus in the US and Europe.

The experts held varying views over how the high-end segment might be affected. Some said the higher cash upfront required for these pricey homes could further slow the segment. However, others pointed out that these home buyers are typically cash-rich and do not take out large loans.

Source: The Straits Times – 13 October 2012

 

City-fringe home sales chalk up highest price gains

City-fringe homes tend to be overshadowed by those in prime and mass-market areas but property experts call the segment a "quiet achiever".

The segment - also known as the Rest of Central Region (RCR) - outperformed homes in the city and suburbs with the highest gains for new and resale units since the trough in the second quarter of 2009.

Property consultants said that city-fringe homes are sought after partly for their proximity to the city, exclusivity and accessibility. Generally, there are MRT links and lifestyle amenities.

Investors find it easy to get tenants, especially as expats with smaller housing budgets scale down.

For instance, One Dusun Residences in Balestier is selling for about $1,500 psf compared with Suites @ Newton where flats go for about $2,100 psf.

Areas like Balestier and Geylang have done particularly well.

Four sites have been sold under the Government Land Sales programme this year but experts feel more land could be released given the demand.

Last week, the Singapore Real Estate Exchange (SRX) said the RCR segment recorded resale price gains of 7.1 per cent in the third quarter. Prices in the three months to Sept 30 hit $1,199 per sq ft (psf) - the highest since the SRX starting collecting information in 2006 - up from $1,120 psf in the previous quarter.

Source: The Straits Times – 13 October 2012

 

Face of Redhill to change with more condo projects

Think Redhill and a plethora of car showrooms as well as blocks of public housing probably spring to mind.

But a dramatic increase in private housing in this city-fringe neighbourhood is set to modify the area's image.

Until recently, interest focused mainly on the 1,000 or so completed condominium units at four projects there.

But three upcoming projects will more than double that figure by adding more than 1,500 units.

Of the three, only one - the 373-unit Ascentia Sky - has been launched. As of August, it was more than 98 per cent sold, at a median price of $1,398 per sq ft. The other two projects will be built in Alexandra Road and Prince Charles Crescent, on sites sold earlier this year.

Another two sites in the area, which can yield more than 1,000 units, are on the reserve list of the Government Land Sales programme. This means they will be put up for sale only if a developer makes an acceptable minimum bid.

Most condos are close to Redhill MRT station, just a couple of stops from the city centre. Amenities in the area include Crescent Girls' School, a swimming complex and several places of worship.

But there are no major malls. The nearest ones are Tiong Bahru Plaza and Great World City.

Since 2009, when property prices were at a low, prices have jumped at least 37 per cent.

For instance, median resale prices at the 14-year-old Tanglin Regency stood at $1,216 per sq ft in the third quarter, up from $826 psf in the second quarter of 2009.

Next door, prices at the 11-year-old Tanglin View have surged 54 per cent to $1,285 psf in the same period.

Across the road, at The Metropolitan condominium, completed three years ago, median prices are also up more than 50 per cent to $1,317 psf.

And at the nine-year-old freehold Alessandrea, prices have risen by 37 per cent in that period.

In 2010, 134 sales were recorded at the five condos in the area including Ascentia Sky. In the first nine months of this year, there were only 59 sales.

Still, compared to nearby estates like Tiong Bahru and Queenstown, Redhill boasts the lowest median resale prices so far this year, at $1,350 psf.

At Tiong Bahru, with its many amenities, the figure is $1,378 psf while at Queenstown, it is $1,450 psf because of the limited private homes available.

In the second quarter, rents at Tanglin View were $4.46 psf a month - a rise of 8.9 per cent - and $4.39 psf a month at Tanglin Regency, a rise of 20.1 per cent.

Source: The Straits Times – 13 October 2012

 

Bye to big profit from property buys

Some friends recently commented that "invest in property, sure make money". That, unfortunately, is not as true as it once was. It now depends on what you mean when you say "make money".

Potential gains are certainly not on the scale of those achieved for homes bought in the late 1960s and 1970s. At that time, a house could be had for anything from $10,000 to $100,000. Now these terrace homes and bungalows are priced in the millions and even the tens of millions of dollars.

Even as recently as 20 years ago in the early 1990s, condos could be purchased for a few hundred thousand dollars and there were still landed homes available for less than $1 million.

Back then, it didn't take much to have a Midas touch as home owners rode the transformation of Singapore from developing to developed economy and the accompanying jump in home values.

Many people who say that property makes them money are, I believe, referring to this period. These are the older generation of home owners for whom property has, without a doubt, outshone every other investment.

But the case for property being a winning proposition has since become less clear-cut.

For example, there are some property buyers who bought houses close to the previous peak in 1996 and it has taken years before prices returned to those levels.

Oleander Towers in Toa Payoh, for example, was transacting at around $800 psf (per square foot) in 1996, but during the global financial crisis, units could be had for less than $700 psf. This year, there are several units that have changed hands at more than $900 psf.

There are also those who invested in luxury apartments during the latest peak of 2006 and 2007. Many of them could well be sitting on paper losses.

For example, Bukit Sembawang sold 14 units at its Paterson Suites condo earlier this year at around $2,500 psf, about 15 per cent off the peak in 2007.

What has cushioned the impact is that the developers, as well as many of these investors, are cash-rich and have holding power. Developers would have covered their costs from selling sufficient units, even if the project did not sell out. Many investors who have a large property portfolio are able to wait out their paper losses, while renting out their properties in the meantime.

Winners and losers

Equally, just as there are now cases of investors nursing paper losses, there are many who have made a pretty profit.

The most recent upswing came when the global economic crisis hit after 2008, when the property market was in the doldrums. But a flood of cash from the first round of quantitative easing helped prop up the stock market, and before you knew it, property prices were on the rise again.

Investors brave enough to venture into the market then are now the ones laughing all the way to the bank. Take the project at City Square Residences near Little India. In 2009 when the project was still uncompleted, psf prices were around $1,000. Now, nearly three years later, small units are transacting at around $1,600 psf.

But even if there are investors who have made profitable bets, examples of investors making capital gains on such a scale will be thin on the ground from now on.

The reason property investors are no longer going to enjoy a 100 per cent or 200 per cent upside is partly due to the series of cooling measures.

The Government aims to have a stable property market. The days of flipping properties in 2006 or so - where for a downpayment of a few hundred thousand dollars, you could make almost that same sum a few months later by selling your option - are over.

Supply is going to increase substantially on all fronts, from the HDB market, to the executive condominium market, to the condo market. That will keep price rises in check.

The major structural change in the property market - a large jump in the population - which led to a surge in demand for housing has already occurred. Further rises in population numbers will be at a more placid pace.

It may be easy enough for prices to rise by 50 per cent from $1,000 psf to $1,500 psf, but it will take much longer to hit $2,250 psf from the higher base of $1,500 psf.

At the same time, potential buyers who stand ready to pounce once prices plunge should refrain from wishful thinking.

That's because Singapore's fundamentals remain strong. There are people who want to upgrade, to move, and to rent. Singapore is seen as a safe haven and therefore will continue to attract investors - both local and foreign - who think property investments will remain a store of value.

As prices are unlikely to fall much, what should be clear for investors who have missed the boat and are hoping to get into the property market is that handsome gains are probably going to be far and few between.

There is, however, the slow boat, as I would call it - a respectable yearly yield from decent rental rates.

This means that investors aiming to buy property have to focus on what brings them yield. This means buying smaller properties - such as two-bedders because these will be easier to rent out.

Properties should also be close to transport links and amenities to cater to tenants who do not drive.

While property investment may not make big money, if carefully handled, it is not a losing proposition either.

Source: The Straits Times – 13 October 2012

Residential Market News Extract - 12 October 2012

MAS audits banks' home loan practices

Some local and foreign banks are having their home loan lending practices reviewed as part of added scrutiny in the light of the booming property market, sources say.

The audits are being conducted by the Monetary Authority of Singapore (MAS), and will apply at both local and foreign banks.

Experts say the move is likely a way of sending a signal to banks that the Government is keeping a close eye on them, and they should remain prudent in their lending practices.

The review, which is being rolled out even as the sixth round of cooling measures was imposed last week, is part of the central bank's supervisory work.

A MAS spokesman said yesterday that it does not comment on internal operations.

Analysts say MAS regularly conducts audits of banks based on its assessment of risk, with the risk areas evolving over time.

There is no indication that any bank is being singled out for lax lending practices.

The MAS review of mortgages is most likely part of general prudence measures, given the surging property market that has sent prices and sales volumes to record levels.

An industry player who declined to be named said that while general lending guidelines are clear, MAS could be focusing more on the internal lending policies of banks instead.

A range of criteria such as the loan-to-value ratio, the property's value, the applicant's income and credit worthiness, and the acceptability of the collateral are typically assessed when a loan application is considered.

But banks have varying standards on some of these factors, with some possibly more stringent than others. They might differ on defining a borrower's income and choose to exclude - or include - bonuses and commission, for example.

A borrower's debt servicing ratio - his total monthly debt payments divided by net income - could also be of interest to MAS, experts say

Source: The Straits Times – 12 October 2012

Residential Market News Extract - 11 October 2012

Home prices unlikely to fall in next 12 months

While residential prices can be expected to moderate in the fourth quarter (Q4), they are unlikely to dip in the next 12 months.

Prices of resale housing board (HDB) flats could inch up by 0.5 per cent in Q4 and private non-landed home prices are likely to see a marginal 0-0.5 per cent increase.

This is in comparison with the expectation that HDB resale prices would increase by 2-2.5 per cent and private non-landed homes would increase 0.8 per cent quarter-on-quarter, before the latest cooling measures were announced..

That being said, prices are unlikely to fall, given the low interest rate environment and the fact that the market is flush with liquidity.

 The underlying support for the residential market is still the low interest rate environment, which will ensure market activity over the next 12 months.

Despite this, the latest set of measures, which include a 35-year cap implemented on loan tenures alongside tighter loan-to-value (LTV) ratios, may result in moderated sales takeup.

Some buyers may be priced out of the market because of the cap on loan tenures which results in higher monthly instalments.

The bigger impact will come from buyers who postpone their purchasing decisions in the expectation that the market will correct itself.

Another potential impact of the measures is that HDB upgraders who previously may have held on to their flats for investment purposes would now have to let go of their HDB flats

Source: Business Times – 11 October 2012

Residential Market News Extract - 10 October 2012

Woodlands EC site draws top bid of $150.2m

Demand for executive condominium (EC) sites in Woodlands remains strong, with a top bid of $150.18 million, or $302 per square foot per plot ratio (psf ppr), submitted for a 99-year leasehold site there.

That bid came from a joint venture between Fraser Centrepoint's unit Opal Star and Lum Chang's unit Binjai Holdings, which have a 70-30 per cent stake in the venture.

The site is on Woodlands Avenue 6 and Woodlands Drive 16, next to another EC development, La Casa.

The tender, which closed at noon yesterday, attracted five bidders - comparable to a site on Woodlands Avenue 5 sold in May which also pulled in five bidders and was sold at $318 psf ppr.

Opal Star and Binjai Holdings' bid was 1.6 per cent higher than the next highest bid put in by the joint venture between Far East Civil Engineering and China Construction.

That bid was $147.777 million, which translates to $297 psf ppr.

When the tender for the site was launched in August, property consultants polled by BT had predicted that the winning bid would be in the $300-350 psf ppr range, and that 3-7 bids would be submitted. The tender outcome was thus within expectations.

ECs are a hybrid of public and private housing, with initial-buyer eligibility and resale restrictions lifted 10 years after the completion of the project.

A Fraser Centrepoint spokesman said yesterday that plans have been made for 447 units in eight blocks of 12 storeys each, and that the units will mainly be three- and four-bedroom ones.

Other bidders for the site were Mezzo Development ($138 million or $277 psf ppr); Verspring Properties ($134.7 million or $271 psf ppr); and CEL Property ($124.399 million or $250 psf ppr).

Source: Business Times – 10 October 2012

 

Mountbatten condo up for collective sale

A 30-year-old condominium in Mountbatten has been put up for collective sale.

The project, Katong Park Towers, sits on 99-year leasehold land with a site area of about 13,077 sq m. The 118-unit condo is still occupied.

But soon, the site could be sold for between $330 million and $340 million, or $1,145 to $1,178 per sq ft per plot ratio (psf ppr), including 10 per cent of balcony space.

The site can be developed into a 24-storey condo with a maximum gross floor area of about 27,462 sq m.

Assuming an average apartment size of about 753 sq ft, the developer will be able to build about 392 units.

The property is near to amenities such as Parkway Parade, 112 Katong, East Coast Park and the upcoming Sports Hub in Kallang.

Eton International Pre-School, Dunman High School, Canadian International School and Chatsworth International School are also nearby.

The sale period opens today and closes on Nov6.

Source: The Straits Times – 10 October 2012

Residential Market News Extract - 9 October 2012

Bank, property stocks take it on the chin

Bank and property stocks fell yesterday as the market weighed the possibility - following last week's mortgage curbs - that the government was prepared to step in with more measures to check property prices.

Developers were largely sanguine about the potential impact such measures would have on sales but consultants saw more tightening ahead.

"The new cap on the loan tenure announced last Friday is unlikely to have any significant impact on the property market in the long run if there's liquidity and interest rates remain low," said Wong Heang Fine, chief executive at CapitaLand Residential Singapore.

Keppel Land too held the view that "well located properties with good attributes" should continue to see healthy sales given that there is still "genuine demand" for homes.

Said a Hong Leong Group spokesman: "As these measures have just been released, the market will take time to absorb the news and we will assess the situation accordingly."

Hong Leong's Bartley Residences sold a total of 20 units over the weekend, while the previous weekend saw 14 units sold.

Property watchers largely agreed that the latest measures - which saw residential property loans capped at 35 years and loan-to-value (LTV) ratios tightened - are mostly preventive rather than punitive in nature.

UOB economist Alvin Liew stressed that further measures cannot be ruled out until prices achieve greater stability.

Even though supply of both public and private housing has been ramped up, it will take a while for these homes to come onstream. If prices continue to face upside pressure, the risk of more measures being introduced remains, Mr Liew said.

Specifically, the next round of policy measures might be targeted at addressing low interest rates, said Standard Chartered analyst Regina Lim.

"Measures (introduced) could have more bite if they effectively reduce the spread between the average net rental yield and mortgage rate, which has widened to 200 basis points (bps) currently from zero in 2006. We estimate that the average net residential rental yield in Q2 2012 to be 2.5-3.5 per cent, while the average residential mortgage rate has fallen to circa one per cent currently," she said.

Meanwhile, property counters fell in trading yesterday. Luxury developer SC Global lost six cents (or 4.9 per cent) to end the day at $1.175. Wheelock Properties lost 2.5 cents (1.3 per cent) to close at $1.84.

The benchmark Straits Times Index (STI) too saw a drop of 31.22 points to finish at 3,076.65, weighed down by property developers.

CapitaLand was the worst performer on the STI, falling 11 cents (3.3 per cent) to $3.19. City Developments Ltd fell 28 cents (2.3 per cent) to end trading at $11.67.

Bank counters fell too. DBS dropped 21 cents (1.5 per cent) to end trading at $14.25, followed by UOB which fell 26 cents (1.3 per cent) to $19.58. OCBC saw the smallest dip, percentage-wise, falling four cents, or 0.4 per cent, to $9.45.

Assuming that residential sales do weaken, it could lead to slower mortgage growth with a lag effect of two or more years, said DMG & Partners Research banking analyst Leng Seng Choon.

"Banks that recorded stronger housing loan growth over the past two years are in a better position to keep their customers without having to be aggressive in their interest rates. As both OCBC and UOB recorded two-year housing loan CAGR of 19 per cent - more than double DBS's 8 per cent - we see this new ruling to benefit OCBC and UOB more."

Source: Business Times – 9 October 2012

 

Two adjacent freehold plots in GCB area up for sale

Two adjacent sites totalling 45,155 sq ft of sprawling freehold land in the Chee Hoon Avenue Good Class Bungalow Area in the Dunearn/Adam Road location have come on the market.

The indicative price is $1,600-$1,800 per square foot of land area, which works out to around $72.2 million to $81.3 million.

The most recent transaction in the Chee Hoon GCB Area was that of No 28 Chee Hoon Avenue, which changed hands in November last year at $1,660 psf, she noted.

The latest property on the market comprises two land lots of 18,989 sq ft and 26,166 sq ft at Jalan Asuhan, off University Road. The site can be accessed via Dunearn, Bukit Timah and Adam roads.

Potential buyers may choose to buy one or both plots. The property is on one of the highest points in the neighbourhood offering a panoramic view.

Source: Business Times – 9 October 2012

 

Home loan curbs 'will hit older buyers'

Investors in a weak financial position and buyers in their 40s and 50s will feel the effects of the latest property rules most acutely, analysts say.

The changes, unveiled by the Monetary Authority of Singapore last Friday, are similar, in effect, to higher interest rates, they said.

Some older buyers who already have a loan may abandon plans to buy an investment property, the analysts added.

The central bank set a maximum of 35 years on all home loans. For new loans, the loan-to-value ratio has been lowered if the loan exceeds 30 years, or if the loan period extends beyond the retirement age of 65.

Older buyers will be forced to take shorter loans if they do not wish to pay a larger amount upfront. In some cases, the monthly rental received from these properties may not even be sufficient to cover their monthly mortgage.

For instance, a 50-year-old investor will now be able to get a maximum loan term of only 15 years if he wants to avoid the stricter loan-to-valuation limits.

This means that if he buys a three-bedder at Sunville in the Serangoon area for $1.2million, his monthly repayment on a 15-year loan will be $4,367 (assuming he has another loan). Previously, assuming he met the bank's credit assessment criteria, he could have taken a 25-year loan with a monthly mortgage of only $2,773. The rent for such a unit would be about $3,800.

Source: The Straits Times – 9 October 2012

 

Most developers unlikely to give discounts: Experts

At least one property developer here is offering an effective discount on homes in the wake of the latest cooling measures.

But property experts do not expect all developers to follow suit.

Far East Organization's immediate response was to give a 2 per cent furniture voucher for units at its newest launch, eCO, to mitigate the effects of the new home loan rules.

It is now giving a 1.5 per cent sweetener - in the form of furniture vouchers - until Thursday, for eCO at Bedok South Avenue 3.

Far East is also offering furniture vouchers for other projects in response to the measures.

At the weekend, it sold a total of 51 units at various projects. eCO was the top performer.

Qingjian Realty (South Pacific) said it sold 15 units at two projects, River Isles and Riversound Residence in Punggol.

"As our buyers tend to be younger, it does not affect the sales for the two projects. Hence, we did not offer any discounts to mitigate the recent cooling measure," said Mr Li Jun, Qingjian's deputy general manager.

It was a similar story for city centre condominium V on Shenton.

Mr Michael Ng, group general manager of developer UIC, said the measures did not affect sales much. Five units were sold at the weekend.

"Our buyers are mostly upper-end investors who have ready cash," he said.

"(The new rules will affect more) the heartlanders who are looking to buy a second or third property... They will have to think more carefully."

But Allgreen Properties, behind recent launch Riversails, said weekend sales were slightly slower than sales in the previous week. Since last Friday, 80 units have been sold.

"We think there was probably a marginal impact... as with any knee-jerk reaction," said sales director Yong Voon Chen.

"We understand the latest measures imposed and fully agree with the thinking behind them. However, we believe the impact will be minimal in the long run," he added.

Koh Brothers, behind projects such as Parc Olympia in Pasir Ris, also said it was not offering perks or discounts now.

"Based on our experience, buyers in Singapore generally do not take up loans above a 35-year period. Hence, we do not expect the newly implemented cooling measure of a loan limit cap to significantly affect buyer sentiment," the developer said.

A City Developments spokesman said: "As these measures have just been released, the market will take time to absorb the news, and we will assess the situation accordingly."

Source: The Straits Times – 9 October 2012

 

$1m HDB flats 'best value' for money

A growing group of cashed-up home buyers - armed with a budget of $1 million or more - is waiting for premium Housing Board flats.

They are usually private-property downgraders or young couples armed with budgets that would previously take them to condominium showflats only, said real estate agents.

With the growing price differential between private property and HDB flats in prime locations such as Bishan, Queenstown and Clementi, they find that a premium HDB flat which commands a seven-figure sum is actually the best value for their money.

Data from the Singapore Real Estate Exchange showed that in five HDB towns - Clementi, Bukit Merah, Bishan, Toa Payoh and Queenstown - the price per square foot (psf) of flats has increased 15.5 per cent in the past two years.

In contrast, the price psf for non-landed private properties in those areas has increased by 27.7 per cent in the same period - giving rise to a widening price gap.

Nationwide, the gap has also grown but at a slower pace. Over the past two years, the psf price of resale flats grew 16 per cent, while that of private residential units grew 23.4 per cent.

It is also difficult to find condo units above a certain size in these locations, said agents.

The executive flats which have sold for more than $900,000 this year average about 1,600 sq ft.

The $1 million Mei Ling Street executive maisonette, at 1,615 sq ft, cost $620 psf. This is about half of what units in the nearby Queens condominium go for.

Certain flats, like the executive maisonettes in Queenstown and Bishan, cause a feeding frenzy among agents every time one comes up for sale.

Residents report real estate agents' fliers slipped daily under their doors, phone calls every week, and even late-night house visits from agents.

Source: The Straits Times – 9 October 2012

 

Flats near former rail station for rent

Two blocks of flats, which once housed staff of Malaysia's railway operator, will be offered for rental to lower-income households next month.

The 318 units near the now-defunct Tanjong Pagar Railway Station will be leased out under the Housing Board's Public Rental Scheme (PRS) and Interim Rental Housing (IRH) scheme.

The flats have been left vacant for about a year after train services between Malaysia and Singapore were relocated to Woodlands in July last year.

Painting and refurbishment works are being carried out in Blocks 1 and 2 in Spooner Road which comprise one-, two- and three-room flats.

Of the 318 units, 208 are one- and two-room flats which will be offered under PRS. The remaining 110 are three-room flats which will come under the IRH scheme.

The move is part of HDB's drive to increase the supply of public rental flats to 57,000 units by 2015.

Such flats are heavily subsidised and targeted at lower-income households.

Households earning $800 or less pay between $26 and $165 in rent each month.

Those earning between $800 and $1,500 pay $90 to $275.

The flats - with a tenancy period of two years and subject to renewal - will be allocated to applicants on the HDB's waiting list, said a spokesman.

The IRH scheme is targeted at households currently in the queue for public rental flats and which need urgent accommodation.

The scheme is also for households which need some time to work out their finances before they are able to afford open-market rents or to buy smaller flats.

The flats under this scheme will be rented out for one year.

Households will each pay about $300 per month in rent, and two families usually share one unit. Families are matched according to race, religion and family size.

In addition to the two blocks of flats, the Singapore Land Authority is inviting interested parties to bid to rent a bungalow in the area - for uses such as a childcare centre or eldercare facility.

The area around Spooner Road has been earmarked for residential use under the Urban Redevelopment Authority's 2008 Masterplan.

A URA spokesman said it has not yet determined when redevelopment will begin.

Source: The Straits Times – 9 October 2012