Published February 3, 2011


Several showflats to stay open this weekend
Developers change tack as more foreigners are buying private homes in Singapore

By UMA SHANKARI

(Singapore)

A HANDFUL of developers - including Far East Organization and CapitaLand - will open showflats of residential projects they are currently marketing to prospective buyers over the long Chinese New Year weekend.


Traditionally, developers here close their showflats over the Chinese New Year holiday period as sales tend to be extremely slow. But this is now changing as more foreigners are buying private homes in Singapore, market watchers said.

Far East Organization, which is currently marketing more than a dozen residential projects, will close its showflats to walk-in visitors on Thursday and Friday, the first two days of Chinese New Year.

But the developer will host prospective buyers who have made appointments.

'Our sales hotline remains open and manned throughout this Lunar New Year holiday period. For customers interested in visiting our show galleries over the public holidays, we are happy to make appointments to host them,' said Chia Boon Kuah, chief operating officer for property sales at Far East Organization.

BT understands that some of these customers come from overseas markets - such as China - with the intention of buying property in Singapore. Far East has a sales office in China, which allows customers to make appointments to visits showflats here with little fuss. Last year, Far East also hosted overseas visitors over the Chinese New Year period.

In fact, the developer is confident that property buyers will be out in force over the long Chinese New Year weekend; it plans to officially launch its 561-unit Waterfront Isle in the Bedok Reservoir area on Saturday.

Similarly, a spokeswoman for CapitaLand also said that all of the developer's showflats will be open for viewing (but only by appointment) during the long Chinese New Year weekend.

CapitaLand is currently marketing two residential projects with more than 1,000 units each: The Interlace and d'Leedon.

City Developments will also open its showflats to prospective buyers who make appointments, BT understands.

But other developers are sticking to tradition and keeping their showflats shut on all four days of the long Chinese New Year weekend.

UOL Group, for example, said its Spottiswoode Residences showflat will be closed on all four days, from Thursday to Sunday.

One developer BT spoke to said it might make more sense for projects that target foreign buyers to keep showflats open over Chinese New Year.


Source; /www.businesstimes.com.sg

06:05 AM Feb 02, 2011

SINGAPORE - Far East Organization's sold 88 of the 132 units of its Waterfront Isle at a preview yesterday.

The units were sold at an average price of $920 per square foot, the developer said, adding that 80 per cent of the Waterfront Isle buyers were Singaporeans and permanent residents, half of whom live in eastern suburbs like Bedok and Tampines.

The 99-year leasehold project will be officially launched this Saturday, with yet another release of units from its entire stock of 561 units.

Prices will begin from $575,000 for a one-bedroom apartment at the Bedok Reservoir property. Rooms range from one-bedroom units starting from 581 sq ft to penthouse units at a maximum of 2,863 sq ft.

Far East is also offering furniture vouchers worth 5 per cent of the purchase price upon the property obtaining its temporary occupancy permit (TOP) in 2015.

The 15-storey Waterfront Isle is the last edition of the Waterfront Collection - a joint venture development between Frasers Centrepoint and Far East.

The Waterfront Collection comprises four properties fronting Bedok Reservoir.

The three other Waterfront projects met with good response, with Waterfront Waves completely sold out, Waterfront Key selling more than 85 per cent of its units and Waterfront Gold selling more than 75 per cent. - Jo-Ann Huang

Source: www.todayonline.com

Hotel, luxury apartments at Capitol site

by May Wong
05:55 AM Feb 02, 2011

SINGAPORE - By the end of 2014, the landmark Capitol site will be transformed to boast developments including a new hotel and luxury residential apartments, each costing up to $4 million.

The Capitol site comprises the Capitol Theatre, Stamford House, Capitol Centre, and Capitol Building. Work on the 99-year lease, 1.43-hectare site, will begin in the third quarter of this year. The project's investment, including the land cost of $250 million, is estimated to hit $750 million.

The consortium - led by Mr Pua Seck Guan's Perennial Real Estate, together with Mdm Sukmawati Widjaja's Top Global and Mr Kwee Liong Seen's Chesham Properties - won the tender last October. It signed the building agreement with the Urban Redevelopment Authority (URA) yesterday.

The developers have set aside about $30 million to restore and conserve the Capitol Theatre. It will be the largest single- screen cinema-cum-performance theatre with about 800 seats. Built in 1929, the theatre screened its last movie in 1998.

The restored Capitol Theatre will see it hosting local theatre and dance groups for half the season. Cinema operator Golden Village will make use of the theatre for the remaining half to screen blockbuster movies.

Capitol Centre will be transformed into a new 15-storey building. It will house eateries, retail shops and up to 70 residential units. The two- to four-bedroom apartments will cost over $2,500 per sq ft and it could be launched as early as the third quarter of this year.

The apartments, industry watchers say, will have no shortage of buyers. Dr Chua Yang Liang, head of research, South-east Asia, Jones Lang LaSalle, said; "It's probably a good size in terms of market demand there. And being large units, again, they are pretty attractive."

Source: www.todayonline.com

Published January 29, 2011

Q4 new office demand surges to 3-year high
It wraps up the total for 2010 to 1.65m sq ft, a sharp reversal of negative demand of about 236,806 sq ft in 2009

By KALPANA RASHIWALA

NET new office demand surged to 753,473 square feet in the fourth quarter of 2010, the highest quarterly take-up since Q1 2007, according to latest government numbers.

The fourth-quarter take-up was triple the 258,334 sq ft for the preceding quarter and took the total for 2010 to 1.65 million sq ft, a sharp reversal of negative demand of about 236,806 sq ft in 2009.

'This once again demonstrates the fast recovery in the office market and the voracious appetite of office occupiers for expansion space whenever the economy picks up,' said CB Richard Ellis (CBRE) executive director Li Hiaw Ho.

The Urban Redevelopment Authority's islandwide office vacancy rate, which had spiked to 13 per cent at end-Q3 2010 (from 12.3 per cent at end-Q2) eased to 12.1 per cent at the end of last year - as tenants moved into recently completed office projects.

Most of the new project completions last year took place in the first three quarters, such as Marina Bay Financial Centre (MBFC) Tower 1 in Q1, Mapletree Business City in Q2 and MBFC Tower 2 in Q3.

The islandwide stock of office space rose 2.6 per cent to nearly 76 million sq ft at the end of last year, from about 74 million sq ft at end-2009.

URA's office rental index rose 4.7 per cent quarter on quarter in Q4, slowing from the 6 per cent gain in Q3. For the whole of last year, the index appreciated 12.6 per cent, a marked turnaround from a drop of 23.6 per cent in 2009. The latest index, however, is nearly 20.2 per cent below its previous peak in Q2 2008.

According to CBRE's numbers, the average gross monthly rental value for Grade A office space climbed 22.2 per cent last year to $9.90 per square foot (psf) but is still 47.3 per cent shy of the recent high of $18.80 psf in Q3 2008.

Property consultants are generally predicting an increase of around 15 per cent in Grade A office rents this year.

Agnes Tay, Savills Singapore director (commercial leasing), said that over the next two years, there would be considerable secondary office stock being returned to the market as occupiers vacate existing premises to move to newly completed office developments.

'However, the impact of secondary stock is likely to be cushioned by a reduction in supply from demolition or refurbishment of a number of older office blocks. On the demand side too, a healthy 54 per cent of the new office space to be completed in the CBD in 2011-2012 has already been pre-committed.

'Savills has identified an inflection point appearing in late 2011 when the return of secondary stock will impact the market. At this point, we expect to see a greater spread in rents between the international Grade office space and the rest of the market.'

URA's shop rental index recovered 2.9 per cent last year, against a 7.4 per cent drop in 2009.

Amid Singapore's economic recovery, the rental indices for flatted factory and warehouse space appreciated 11.7 per cent and 17.7 per cent - against respective declines of 12.1 per cent and 15.6 per cent in 2009.


Source: www.businesstimes.com.sg

Published January 29, 2011


8,430 new private homes set to be completed in 2011
URA data also shows nearly half of them will be in the core central region

By UMA SHANKARI

CLOSE to half of the estimated 8,430 new private homes that are slated to be completed in 2011 will be in the upmarket core central region, according to fresh data released by the Urban Redevelopment Authority (URA) yesterday.

The government agency has also bumped up its estimate for the projected supply of private homes due to be completed this year by 25 per cent from three months ago. In October 2010, URA estimated that 6,766 new private homes will be completed in 2011.

Sources told BT that URA has been surveying developers more closely over the last few months in a bid to compile more accurate pipeline supply figures. The agency computes the estimated supply of private housing units in the pipeline through a quarterly survey of developers.

In response to a query from BT, URA said it will continue to work closely with developers to ensure that they submit up-to-date estimations of the expected completion dates of their projects.

'URA's survey of the developers' completion (for 2011) is only starting to increase. The increase from Q3 2010's forecast for 2011 completions to Q4 2010's forecast is a significant 25 per cent. Over the next few quarters, we expect to see further upward revisions,' said Ku Swee Yong, chief executive of real estate firm International Property Advisor.

Looking at the latest completion estimates, analysts once again warned that home-buyers need to brace themselves for a very large supply of private residential units due to be completed each year from 2011 to 2015.

URA currently estimates that 8,116 units will be completed in 2012; 17,111 units in 2013; 17,421 units in 2014; and 13,453 units in 2015.

In fact, 2010's number of newly completed private homes, which stands at around 10,400 units, is already higher than the historical average annual increase in housing supply of around 6,400 private units over the last decade, Mr Ku pointed out. For 2011, a total of 3,874 homes will be added to the housing supply in the core central region, which includes the prime districts 9, 10 and 11, Marina Bay and Sentosa Cove. This will make up 46 per cent of the islandwide housing supply of 8,430 new private homes.

Another 2,265 private homes will be completed in the rest of central region, while in the outside central region, 2,291 units will be completed this year.

URA also said that as at the end of Q4 2010, there was a total supply of 65,699 uncompleted units of private housing from projects in the pipeline. Of these, 32,776 units were still unsold.


Source: www.businesstimes.com.sg

Published February 1, 2011


Ang Mo Kio industrial site up for tender
Price could exceed $130 psf ppr, say market watchers

By EMILYN YAP

THE Urban Redevelopment Authority yesterday launched a 60-year leasehold industrial site at Ang Mo Kio Street 62 for sale via public tender.

Market watchers expect to see keen interest in the plot, with its price possibly crossing $120 or $130 per square foot per plot ratio (psf ppr).

The 2.8 hectare site, with a maximum permissible gross plot ratio of 2.5, is on the confirmed list under the H1 2011 government industrial land sales programme.

The land parcel is near Yio Chu Kang MRT station and is zoned for Business 1 development, which makes it suitable for various uses such as light industry, clean industry or telecommunications.

Savills Singapore industrial director Dominic Peters believes that the site could be sold for at least $120 psf ppr, and five or more developers could be interested.

This is the first industrial site to be made available in Ang Mo Kio in a long time, he said. Also, with the government introducing more tightening measures to the residential property sector, 'industrial (properties) would be a target for investors'.

Capital values of industrial property rose last year, driven by strong end-user and investor interest. Developers also bid actively for state industrial sites. In August last year for instance, Oxley Rising paid $158.1 million or $169 psf ppr for a 60-year leasehold plot at Ubi Road 1.

Knight Frank director of business space (industrial) Lim Kien Kim expects the Ang Mo Kio site to fetch at least $130 psf ppr.

He said that the plot has a good location, though its large size might make it more attractive to developers with 'deep pockets'.

Also, cooling measures for the residential sector could have tamed bullish sentiment across the entire property market, he said. While some investors have switched their focus to the commercial sector, the government would also be wary about commercial prices rising too quickly as that would affect Singapore's competitiveness, he pointed out.


Source: www.businesstimes.com.sg

Published February 2, 2011


88 Waterfront Isle units sold at preview

FAR East Organization and Frasers Centrepoint have sold 88 units in their 561-unit Waterfront Isle development in the Bedok Reservoir area over the last few days.

The developers released 132 units in the 99-year leasehold project at a preview which started on Jan 28. Of these units, 88 units (67 per cent) have been sold at an average price of $920 per square foot (psf).

Waterfront Isle will be officially launched on Feb 5, the third day of Chinese New Year.

Far East Organization, which is marketing the project, said prices will start from $575,000 for a one-bedroom apartment - excluding an additional 5 per cent cost which will be returned to buyers in the form of furniture vouchers once the development obtains its temporary occupation permit (TOP) in 2015.

Including the extra cost for the vouchers, prices at the project will start from $605,000.

Far East said that the furniture vouchers were being given to 'build a stronger base of long-term buyers'.

Waterfront Isle is the last project in the Waterfront Collection, a master-planned joint venture development between Far East and Frasers Centrepoint. The entire collection comprises four developments fronting Bedok Reservoir.

Units in the first three projects in this master-planned development are mostly sold. Waterfront Waves is 100 per cent sold, Waterfront Key is more than 85 per cent sold and Waterfront Gold is more than 75 per cent sold.

Singaporeans and permanent residents make up 80 per cent of the buyers of Waterfront Isle. About half of the buyers are residents now living in the east in estates such as Bedok and Tampines, Far East said.


Source: www.businesstimes.com.sg

Published February 2, 2011

PM Lee pledges to keep housing affordable
Government to do more to stabilise the market should it become necessary

By JOYCE HOOI

(SINGAPORE) The government will do more to stabilise the property market should the occasion call for it, Prime Minister Lee Hsien Loong said in his Chinese New Year address this year.

'The government has acted to curb speculation and cool the property market. We will do more to stabilise the market if and when this becomes necessary,' he said yesterday.

'We will keep housing affordable to Singaporeans, especially public housing. At the same time, in a prospering economy, home owners should see their properties appreciating in value over the long term.'

The government had recently announced new rules that would raise the seller's stamp duty on properties to as much as 16 per cent of the sale price if the home is sold within a year, and lower the limit that banks can lend to home buyers for a second property to 60 per cent of the property's value.

On the immigration front, while the prime minister acknowledged the 'sense of dislocation and unfamiliarity' felt by some Singaporeans, he stressed the need to keep up with the world or face stagnation and decline.

'We need immigrants to reinforce our ranks, but we must maintain a clear majority of local-born Singaporeans who set the tone of our society, and uphold our core values and ethos.

'We are managing the inflow of foreigners who want to live and work here. Many want to become permanent residents and new citizens, but we will only select those who can add value to Singapore.'

He pointed out that last year, the nation's total fertility rate fell to an all-time low of 1.16. The Chinese fared worse than the national average, at 1.02, but the decrease in the fertility rate was observed across the board.

'It could have been because of the Year of the Tiger, or perhaps the economic uncertainties the year before, in 2009. Whatever the reasons, I hope more couples will start or add to their families in the Year of the Rabbit,' said the prime minister.

'Chinese New Year is the time for families to come together in celebration, and more babies can only mean more joy in the years to come.'

As part of the effort to ensure the longevity of values and culture, the nation's mother tongues needs to be kept alive, he said.

'We regularly update and improve the teaching of mother tongue languages in our schools, to keep it current and effective.

'Hence, the recent measures announced by the Ministry of Education, which will help a new generation to use their mother tongue languages freely in a changing language environment.'


Source: www.businesstimes.com.sg

Top Print Edition Stories
Published February 2, 2011

Developer shoots for moon on Capitol site but braces for chill

By KALPANA RASHIWALA

(SINGAPORE) The $750 million mixed development project that will come up on the Capitol site will include some 60-70 luxury apartments which are expected to be launched in the third or fourth quarter of this year.

The consortium developing the project has secured debt financing from OCBC. Market watchers reckon the project's gearing ratio could be about 70 per cent.

Internal rates of return will be 'very fantastic... more than the teens', Pua Seck Guan, CEO of Perennial Real Estate Pte Ltd, told reporters yesterday. He and his co-investors hold a 40 per cent stake in the consortium developing the retail/theatre, hotel and residential project that will be developed on the Capitol site.

The historic Capitol Theatre, Capitol Building and Stamford House will be conserved and restored for adaptive re-use while a new 15-storey structure will be built on the existing Capitol Centre site.

The other members of the consortium - Chesham Properties (controlled by members of the Kwee family who own Pontiac Land Group) and Sukmawati Widjaja's Top Global - each hold a 30 per cent stake.

Mr Pua said the consortium is in 'a very comfortable position' with regard to its breakeven costs for all components of the project, given the competitive price it paid for the site - $250 million or nearly $461 per square foot per plot ratio.

'We can make very good money from this project, but it's not just about making money. We must do justice to this project,' he said.

The final pricing for the apartments, which are slated for launch later this year, will depend on market conditions prevailing at the time. For now, the pricing expectation has been clipped to about $2,500-3,000 per square foot from an initial range of $3,000-3,500 psf following the introduction of the Jan 13 property cooling measures, according to Hano Maeleo, CEO of Top Global.

The apartments will range from 1,200 sq ft to over 2,000 sq ft and likely comprise two- to four-bedroom units. They will be housed on the third to 15th levels of the building that will be built on the current location of Capitol Centre.

Levels one and two, and basements one and two, of the same building will house retail space. The existing street between Capitol Theatre and Stamford House/Capitol Building will be transformed into a glass-covered pedestrianised galleria lined with eateries.

There will also be an underground mall link to City Hall MRT Station, and retail space on the ground floors of Capitol Building and Stamford House.

The development will have at least eight flagship retail and 30 F&B stores, and at least 40 per cent of total retail space in the project will be dedicated to new-to-market brands, revealed Mr Kwee Liong Seen, director of Chesham Properties.

Said Mr Pua: 'We will be different because this site is unique and deserves a lot of our careful attention and effort to make it different. So if you are just another Bugis Junction, I think we will fail and we will not have done this site justice.'

The $750 million total development cost includes the land price of $250 million, construction costs (inclusive of at least $30 million to restore Capitol Theatre) and the cost of fitting out a luxury hotel with about 200 rooms on the second to fourth levels of the four-storey Capitol Building and Stamford House.

A building agreement was signed yesterday between the consortium members and the Singapore government, which sold the Capitol site to the consortium in 99-year leasehold tenure.

Capitol Theatre will be restored and upgraded into a single-screen cinema with about 800 seats and alternate as a performance theatre. Ground level access will enable the hosting of a wide range of activities from first-run screenings to red carpet movie premieres, to in-house theatre and dance productions.

The project is slated for completion by end-2014.

Richard Meier, managing partner of the eponymous US firm that is the design and concept architect, said: 'The new structure will complement the existing historical architecture, creating a new civic centre that will look to the future while it is respectful of the past.'

The consortium's bid was selected following a dual-envelope tender last year, which drew 14 bids. The winning consortium offered the highest land price among the three bidders that were shortlisted based on their concept proposals.



Source: /www.businesstimes.com.sg

Published February 1, 2011


UE sells UE Print Media Hub for $51m

By UMA SHANKARI

PROPERTY and construction group United Engineers (UE) has sold one of its industrial properties, UE Print Media Hub, for $51 million.

The project was bought by Singapore-based Crescendas Group, which is involved in a diversified range of businesses including real estate, manufacturing, and hospitality.

Crescendas said that it acquired UE Print Media Hub for long-term investment. The property is currently 100 per cent occupied.

For UE, the divestment is fully in line with the group's ongoing strategy to streamline its businesses, it said yesterday.

This is the second industrial property UE has sold in the last five years. In December 2006, the group sold off UE Tech Park, a warehouse complex at Pandan Crescent, for $115 million.

UE Print Media Hub, located at Tai Seng Avenue, is a five-storey industrial building developed and constructed by UE.

It received its temporary occupation permit in June 2007 and has a net lettable area of about 254,752 sq ft on a site area of 131,577 sq ft.

The development was architecturally designed and spatially structured to house the supply chain of the print-and-media industry so that industrial linkages and business efficiency can be maximised, UE said.

The company added that the sale of UE Print Media Hub will further help to consolidate the group's portfolio of commercial property assets.

The portfolio includes the group's flagship building UE Square in Clemenceau Avenue; UE BizHub Central in Ang Mo Kio; and upcoming developments such as UE BizHub East in Changi Business Park and a mixed development comprising of a hotel and a shopping mall in the one- north research hub.

UE shares lost five cents to close at $2.50 yesterday.


Source: www.businesstimes.com.sg

SINGAPORE - Boutique development Robin Star has been sold to high-end property developer Sing Holdings for $47 million, according to Credo Real Estate which brokered the deal.

Located at Robin Road, off Bukit Timah Road, the 10-unit property was sold by private treaty, said Ms Yong Choon Fah, executive director of Credo Real Estate.

Robin Star which has a land area of about 24,360 sq ft has been zoned for residential development of up to a gross plot ratio of 1.4 and has an allowable height of up to five storeys.

The total gross floor area (GFA) is about 37,515 sq ft based on a gross plot ratio of 1.4 with an additional 10 per cent for balconies.

The site may yield about 36 apartment units with an average size of 1,000 sq ft each, depending on the layout, configuration and development charge (DC).

The DCs payable are estimated at $5.28 million for the development of the site, said Ms Yong. "This translates to a land rate of approximately $1,393 per sq ft (psf) on potential GFA after factoring DC," she said, adding that the rate is similar to Serene House's $1,388 psf per plot ratio.

With the purchase of Robin Star, Sing Holdings can lower the average cost of the new development by incorporating the adjoining Robin Court and 1 Robin Drive, said Credo Real Estate.

Sing Holdings bought Robin Court and 1 Robin Drive for $77.33 million in a hotly contested en-bloc exercise back in September last year. The sale of both properties was also handled by Credo Real Estate.

Located in the prestigious District 10, Robin Star is walking distance away from renowned schools such as The Singapore Chinese Girl's School, Anglo-Chinese School (Barker) and the Chinese International School.

The Stevens Road MRT Station, which is expected to be fully operational in 2015, is less than 250m away from the site, said Credo Real Estate. Jo-Ann Huang



by Jo-Ann Huang Limin
05:55 AM Jan 31, 2011

Source: www.todayonline.com

Published January 29, 2011

HDB resale prices up 2.5% in Q4 2010
Up to 22,000 new flats may be offered under the build-to-order system

By UMA SHANKARI

HDB resale prices rose by 2.5 per cent in the fourth quarter of 2010 - a tad higher than the 2.4 per cent climb estimated earlier this month - even as the number of deals and the cash-over-valuation (COV) amounts commanded by flats fell.

Data from the Housing & Development Board (HDB) released yesterday showed that the official resale price index climbed to yet another new high in Q4 2010. For the whole of 2010, HDB resale prices rose by 14.1 per cent.

Prices rose even as the median COV amount among all resale transactions fell by $7,000 (or 23 per cent) from $30,000 in Q3 2010 to $23,000 in Q4 2010.

But prices still rose as valuations of most types of HDB flats climbed in Q4, analysts said.

The number of resale transactions fell by about 21 per cent, from 8,205 in Q3 2010 to 6,454 in Q4 2010. The total number of resale transactions in 2010 fell to 32,257, a decline of 13 per cent over 2009's volume.

Analysts said that HDB flat valuations still increased in Q4 2010, in spite of a number of cooling measures introduced in August 2010, as there is usually a lag time of about six to eight weeks before price corrections would align with the actual sentiment in the market.

But resale prices could soon plateau, PropNex chief executive Mohamed Ismail said.

HDB's Q4 2010 data shows that median resale prices of 3-room, 4-room, 5-room and executive flats stood at $300,000, $385,000, $460,000 and $548,000 respectively, he said.

But PropNex's in-house data for deals done in January shows median resale prices of $298,000, $393,000, $466,000 and $538,000 respectively - a 1.8 per cent drop to 2.1 per cent increase from Q4 2010.

'It must also be highlighted that some of our data reflects transactions that took place before the additional cooling measures announced on Jan 13, 2011,' added Mr Mohd Ismail. 'Feedback from the ground has indicated that there is less movement among the current HDB dwellers due to the (new) 60 per cent loan-to-value (LTV) cap. Therefore, it is possible to see a further dip, though not drastic one, for median COVs and sales volume in Q1 2011.'

HDB plans to offer up to 22,000 new flats under the build-to-order (BTO) system if demand is sustained.

The BTO supply will also be supplemented by the upcoming supply of flats under the design, build & sell scheme (DBSS) and the executive condominium (EC) housing scheme. Four more EC developments in Punggol, Pasir Ris, Bukit Panjang and Tampines will be launched for sale in the coming months by private developers.


Source: www.businesstimes.com.sg

Published January 29, 2011

The charge of the bungalows brigade
URA's sub-index for detached homes soars 37.6%, boosting overall index's gain to 17.6%

By KALPANA RASHIWALA

IN a year fuelled by strong liquidity and economic growth, bungalows were the stars that led the surge in the Singapore property market in 2010. Latest data from the Urban Redevelopment Authority shows that its price index for landed homes climbed 30.8 per cent last year. The sub-index for detached houses, or bungalows, soared 37.6 per cent against a 5.6 per cent rise in 2009.

The index for non-landed private homes rose 14 per cent last year, following a 0.5 per cent gain in 2009. The biggest price hike in 2010 in this segment was for completed non-landed homes in Core Central Region, which climbed 19.5 per cent last year, although prices of uncompleted units in the same region rose at a much slower rate of 10.6 per cent in 2010.

URA's overall price index for private homes swelled 17.6 per cent last year, after posting a 1.8 per cent rise in 2009. It rose 2.7 per cent quarter on quarter in Q4 2010.

Knight Frank chairman Tan Tiong Cheng observed that the index has appreciated by about 65 per cent over the past five years, translating to an average annual increase of 13 per cent. 'This is a very significant increase considering that we had the biggest financial crisis during this period,' he added. Developers sold a record 16,292 private homes (excluding executive condos) last year, up 10.9 per cent from 2009 and busting the previous high of 14,811 units in 2007.

The other sectors of the property market also saw sharp turnarounds last year, according to the latest URA numbers. For instance, the office price index rose 18.9 per cent in 2010, against a 16.4 per cent drop in 2009. Flatted factory and warehouse prices, too, shot up 23.7 per cent last year, compared with respective declines of 14.2 per cent and 16 per cent in 2009.

Looking ahead, market watchers expect some wind to be taken out of the residential sector following the latest property cooling measures. Investors are channelling their money to the commercial and industrial property segments, which were not the target of the cooling measures announced on Jan 13.

DTZ's SE Asia research head Chua Chor Hoon is predicting a minus 5 per cent to 0 per cent change in URA's overall private home price index this year. Others are more sanguine. Colliers International director of research and advisory Tay Huey Ying forecasts a 5-8 per cent rise with the increase led by mid and high-end properties.

Prices of mass market homes are expected to stay relatively unchanged or ease by up to 2 per cent given the ample new supply in this segment, she said.

As for the landed segment, RealStar Premier Property managing director William Wong, who had earlier predicted an average 10 per cent rise this year in Good Class Bungalow (GCB) prices - the creme de la creme of landed homes on mainland Singapore, now expects prices to hold in 2011.

'Transaction volumes are expected to fall 20-30 per cent over the next 3-6 months. Owners are not prepared to adjust prices downwards while buyers are waiting for prices to go down. This may not happen.'

Another bungalow specialist, KH Tan, managing director of Newsman Realty, said that some sellers have started to withdraw GCBs from the market following the latest cooling measures as they would face longer holding periods on any replacement bungalows they may purchase because of the hikes in seller's stamp duties.

Nevertheless, he predicts an increase of about 10 per cent in GCB prices this year, following last year's appreciation of about 35 per cent, because of the limited stock of GCBs, wealth effect from new ultra high net worth citizens and low interest rates. On Sentosa Cove, where foreigners may buy landed homes, the price gain this year could be higher, about 15 per cent, as 'there are still a lot of rich Chinese foreigners coming in'. Bungalow prices on Sentosa climbed 30 per cent last year on average, he estimated.

On URA's numbers, CB Richard Ellis executive director Li Hiaw Ho observed that while the price index for uncompleted non-landed homes in Outside Central Region (where mass-market condos are located) has surpassed the peak in Q2 2008 by 19.1 per cent, the equivalent index for Core Central Region (which covers the traditional prime districts, financial district and Sentosa Cove) is still 7.1 per cent below its Q1 2008 high.

Meanwhile, the National University of Singapore's Singapore Residential Price Index (SRPI) flash estimate shows that prices of completed non-landed private homes in Singapore's Central region (postal districts 1-4 and 9-11) appreciated 7.8 per cent last year, while the sub-index for the Non-Central region rose 15 per cent. As a result, the overall SRPI increased 11.9 per cent in 2010. In 2009, the three indices posted respective gains of 27.3 per cent, 19.5 per cent and 22.2 per cent.

URA's data showed that 10,399 private homes were completed last year - close to the 10,488 units in 2009 and 10,122 units in 2008. The overall private residential rental index rose 17.9 per cent last year, a sharp reversal from the 14.6 per cent slide in 2009.

Savills Singapore director for residential leasing Patrick Lai said that overall residential rents may increase a further 5 per cent in 2011. 'We believe that the rental rates for super high-end condominiums and GCBs will remain robust and are likely to increase by 6-10 per cent as more top executives relocate to Singapore.

'For example, we have just leased out a 2,852 square foot unit at The Orchard Residences for $20,000 per month. We also recently handled the leasing of a GCB in the Peirce Villas/Swettenham Road neighbourhood for $40,000-45,000 per month.'


Source: www.businesstimes.com.sg

By UMA SHANKARI

THE Housing and Development Board (HDB) has launched a site at Clementi Avenue 4 for sale under its design, build and sell scheme (DBSS).

An estimated 770 flats can be built on the plot, which has a site area of 235,800 square feet and a maximum allowable gross floor area of 825,300 sq ft. The site carries a lease term of 103 years (including a four-year construction period).

Analysts expect a top bid in the range of $200-$250 per square foot per plot ratio (psf ppr) for the plot. This translates to an overall land cost of $165 million to $206 million.

'This is one of the more attractive sites offered under the DBSS scheme,' said Nicholas Mak, head of research at SLP International. 'It is close to Clementi MRT station. Clementi New Town is also becoming more vibrant, with new projects such as The Clementi Mall.'

While buying sentiment has significantly moderated in both the public and private housing sectors, participation from developers for this site is likely to be motivated by the project's physical strengths and opportunities, said Ong Kah Seng, Cushman & Wakefield senior manager of Asia-Pacific research.

'This site is likely to see moderate interest from developers, who are still interested in providing homes for this specific segment although generally, home-buying sentiments are expected to remain cautious in the months ahead,' Mr Ong said.

The last site offered for sale under the DBSS scheme, at Yuan Ching Road in Jurong, drew a top bid of $192 psf ppr. Six bids were submitted for the site.

The tender for this site will close at noon on March 8, 2011.

Last year, HDB sold five land parcels for DBSS development in Yishun, Bedok, Tampines, Hougang and Jurong West. These five land parcels will yield about 3,000 DBSS flats, and this pipeline supply will come on-stream progressively in 2011.

Another DBSS site at Pasir Ris Central, with an estimated yield of 460 units, will be launched for tender in March. More sites for DBSS development will be made available if there is sustained demand, HDB added.

Flats sold under DBSS are offered to buyers under HDB's eligibility conditions. But the developers who buy such sites have some flexibility in designing, pricing and selling the flats.


Source; www.businesstimes.com.sg

January 28, 2011, 12.41 pm (Singapore time)

URA private home price index up 2.7% in Q4, 17.6% full year

By KALPANA RASHIWALA

The Urban Redevelopment Authority's overall price index for private homes rose 2.7 per cent in the fourth quarter of 2010 over the preceding quarter. Full year 2010, the index was up 17.6 per cent compared with 2009.

URA's sub-index for the price of landed homes increased by 5.5 per cent quarter on quarter in Q4 2010 and by 30.8 per cent for the whole of last year. Its sub-index for non-landed private homes was up 1.8 per cent quarter on quarter in Q4 last year and 14 per cent for the full year.


Source; www.businesstimes.com.sg

A study has found that prices (in psf) increases by 3% for every 1km closer to the CBD

By KLAUS SPREMANN AND WEINI ZHANG

WHEN property owners or investors make their decisions to buy or to sell, they usually form expectations of how prices of property are changing in general over time. These changes are driven by common perception of the scarcity of land, the number of developments in the pipeline and estates under construction; by shifts in the rate of interest or inflation; and by political measures.

Such factors put property as an asset class in bright sunshine, or at times, in dim light. But concluding whether a particular real estate object is to be considered cheap or expensive requires a second line of reasoning.

In Singapore, like in all other countries, property is a heterogeneous asset class. Although condos can have up to a thousand units, the units differ in size, view, and other characteristics. Among the many estates in Singapore, their heterogeneity refers to the location, to the age, the reputation of the developer and other features of the condominium. Such particularities are mirrored in relative prices.

Relative prices, for example, consider the multiple of the per square foot (psf) of a condo in the central business district to the psf in suburban areas. Likewise, relative prices reflect the relation between the psf of a freehold condo to one having a 99-year lease or the typical relation of the price of a condo in walking distance to a MRT station, to the psf of a condo that is further away from public transport facilities.

Thus, a prospective owner or investor should also take note of whether the condo under consideration looks cheap or expensive with respect to the typical relative prices. Relative prices appear to remain stable over a longer period of time, although they might be different in Hong Kong or London from Singapore.

Relative prices can be determined with hedonic models, which were developed by American economists 30 years ago. Although hedonic models are regularly used to explore particularities of the real estate markets in America, England, Hong Kong and other markets, we can present a few new insights by adopting the model to Singapore.

Our model considers structural attributes such as the age, project characteristics such as tenure and facilities, the type of sale (at launch or subsale), and characteristics of accessibility and neighbourhood such as the distance to the Central Business District (CBD), to schools and shopping centres.

All 9,029 transactions (2009) of 470 different condominium projects, reported by the Real Estate Information System (Realis), have been used as inputs to the hedonic model.

The study confirmed that distance to the CBD is among all other factors the most important characteristic in influencing the price of a condominium. Based on the results, the price of a condominium (in psf) increases by 3 per cent for every 1km closer to the CBD.

In addition, prestige of the neighbourhood, age and tenure of a condominium are found to be major determinants in explaining condominium prices. An interesting finding is that for every 10 per cent increase in percentage of private properties in the neighbourhood, the price of a condominium increases by about 4 per cent.

In other words, buyers are willing to pay 4 per cent more for a condominium if the percentage of private properties in the neighbourhood increases by 10 per cent.Buyers might perceive a neighbourhood with high concentration of private properties as a form of prestige or they take this as a signal of more lifestyle facilities being nearby.

Launch discount As expected, the price of a condominium decreases by about 1.5 per cent per year on average as it ages. This could be due to depreciation of the condominium such as its design and electrical systems, thus incurring higher maintenance, renovation and repair fees. The difference between freehold or 99-year leases accounts for 8 per cent.

Our study also revealed the magnitude of the price discount associated with buying at launch. In Singapore, it amounts to 7 per cent.

A person who is buying later in a subsale has the advantage of selecting condos with successful launches. Thus, the price discount of 7 per cent compensates the early bird for the uncertainty of how a development will be accepted during the several launches.

Our research also looked at proximity to premier primary schools. The price of a condominium located within 1km radius of at least one primary school is on average 3.9 per cent higher than one without close proximity to a top primary school.

A subject of many discussions in Singapore is low-rise versus high-rise. The model shows that the ground floor condominium is subjected to a price discount, meaning that home buyers on average are less willing to pay for a ground floor condominium compared to other floors. Furthermore, home buyers are willing to pay more for high-floor units (16th floor and above), compared to middle floor units (7th to 15th floor). We also confirmed that superstition for unlucky floor units is capitalised into the price of condominiums.

The number four is commonly known as an unlucky number among the Chinese. The price discount could also be explained by the fact that home buyers avoid staying on an unlucky floor as they are worried that it may harm the future resale price of the unit.

There is only weak empirical confirmation of the hypothesis though, that selling a unit on the eighth floor yields a hefty extra premium in a subsale. If you are not superstitious and plan to sell in a subsale, don't pay a fee for the eighth floor when you visit a launch event.

Published January 28, 2011

The writers are, respectively a professor at the University of St Gallen and an analyst at Goldman Sachs

Source; www.businesstimes.com.sg

BARTLEY Terrace, the residential area at 16 Gambir Walk, has been sold for $40 million through a private treaty that was sealed on Jan 17. The deal was brokered by Urban Front Real Estate.

The property, which is situated near Bartley MRT and Maris Stella High School, was sold to Meadows Investment, which is owned by Neo Tiam Boon, executive director of property and construction firm Tiong Aik Group. With a land area of about 40,482 square feet (sq ft) and a plot ratio of 1.4, the gross floor area works out to 56,674.8 sq ft.

The price for the site amounts to about $760 per square foot per plot ratio, taking into account an estimated $3 million development charge with 10 per cent balcony that the developer may have to pay.

Talks for the collective sale started in the middle of last year for the District 19 freehold site, and bids for the tender closed at the end of last year. Thereafter, the deal went into private negotiation. The owners of each of the 32 units at Bartley Terrace will stand to receive sales proceeds that range from $1.14 million to $1.8 million. The majority owners are applying to the Strata Titles Board for a sale order

Published January 28, 2011

Source; www.businesstimes.com.sg

PRIVATE home prices in 2011 could fall by up to 5 per cent but will be largely stable, says a new report by DTZ Research.

The firm expects recent government cooling measures to reduce sales volume, but not cause a significant fall in prices.

Sales volume is expected to fall as short-term speculators will be weeded out by the hefty seller's stamp duty (SSD) of up to 16 per cent within the first year of purchase. However, not all investors will withdraw from the market as some may find the 4 per cent SSD by the fourth year of sale to be surmountable. They could shift their focus to buying uncompleted units with completion dates three to four years later, said DTZ.

The property consultancy expects prices this year to be underpinned by economic growth, low interest rates, strong holding power of developers, the appreciation of the Singapore dollar and inflow of foreign purchasers due to the property market clampdown in mainland China and Hong Kong.

In particular, landed homes, small apartments and high-end apartments will be be less affected by the measures, said DTZ's executive director for residential, Margaret Thean.

'Small units with their low price quantum will continue to attract investors with spare cash or singles wanting their own units. The four-year seller's stamp duty will have little impact on landed homes as most purchase them for long-term owner-occupation. And high-end apartments will continue to see foreign interest,' Ms Thean said.

But DTZ does not rule out the possibility of more government measures should demand remain at a high level after a period of cooling off.

The report also noted other challenges in the form of a spike in the number of completed units in a few years' time as the government is releasing a record high number of homes through the public housing and government land sales programmes. There is also uncertainty over the strength of recovery of the major western economies. If they recover well, interest rates will increase and reduce the affordability of mortgage payments. On the other hand, if they continue to languish, sentiment in Singapore's property market could eventually be hit.

Published January 28, 2011

By UMA SHANKARI

Source: www.businesstimes.com.sg

THE Urban Redevelopment Authority (URA) yesterday launched a commercial land parcel in Paya Lebar Central for sale by public tender - the first site offered for sale in that area.

The 99-year leasehold site, which is at the junction of Paya Lebar Road and Eunos Road 8, has a site area of 159,870 square feet and a maximum gross floor area (GFA) of 671,450 sq ft.

In line with the plan for Paya Lebar Central to be a major commercial centre, the upcoming development on the site will have to set aside at least 80 per cent of the total GFA for office use. The remaining GFA can be allocated for additional office use or other uses permitted under the commercial zoning.

'The site is envisaged to be developed into a good-quality office development that would appeal to businesses that do not need to be located within the city centre, as it is a mere 10-minute drive from the central business district,' said URA.

The government's vision is for Paya Lebar Central to become a bustling commercial centre, with a mix of office, retail, hotel and public spaces. The precinct has about 12 hectares of land available for development and a potential commercial floor space of more than five million sq ft in total.

Analysts expect a top bid in the range of $500-600 per square foot per plot ratio (psf ppr) for the plot. The site is expected to draw good interest from developers as it offers a choice alternative for tenants who do not need to be in the central business district but find Tampines and the business park in Changi to be too far.

'This site is anticipated to receive warm interest from developers due to its strategic location and the promising outlook for the office property market, which is poised for an overall sustained gradual rental recovery supported by broad-based incremental business expansion plans,' said Ong Kah Seng, Cushman & Wakefield senior manager for Asia-Pacific research.

Observed DTZ South-east Asia research head Chua Chor Hoon: 'With the office market on the rise, the successful tenderer stands to benefit from higher rents when the development is completed in a few years' time.'

This land parcel is next to Paya Lebar MRT station, which serves the Circle and East-West MRT lines. The tender for the site closes at noon on April 21, 2011.

Published January 28, 2011
By UMA SHANKARI

Source: www.businesstimes.com.sg

Published January 28, 2011

CapitaLand buys Marine Point

By EMILYN YAP


CAPITALAND has signed a sale and purchase agreement to buy Marine Point en bloc and redevelop it into a 150-unit condominium.


It will pay $100.68 million for the freehold site, and an estimated development charge of $12.8 million. The total acquisition cost works out to $1,056 per square foot per plot ratio.

The deal is subject to the Strata Titles Board's approval and is expected to be completed in the third quarter of this year.

Marine Point, located along Marine Parade Road, sits on a 51,185 sq ft site and has a maximum gross floor area of 107,488 sq ft.

It was put up for collective sale in October last year with a $110 million price tag.

CapitaLand plans to redevelop the site into a condominium with one-bedroom plus study and two-bedroom apartments. The project should be ready for launch in the first half of next year.

'For the new development, we will be maximising its height to approximately 19 storeys. This will give the majority of the apartments a good view of the surrounding skyline and the sea,' said CapitaLand Residential Singapore CEO Wong Heang Fine.

'We are confident that we will see strong buyer support from young families as well as professionals who have grown up in the area.'

Marine Point is opposite Parkway Parade shopping mall and is within walking distance of East Coast Park. It is also near schools such as Tao Nan School and CHIJ (Katong) Primary School.

Next to the estate is Parc Seabreeze, where units changed hands at $1,256-$1,430 psf between October and November last year, based on caveats lodged.

The purchase of Marine Point will bring CapitaLand's pipeline of homes in Singapore to over 2,600 units.

CapitaLand lost four cents yesterday to end trading at $3.65.


Source; www.businesstimes.com.sg

Non-PRs beat PRs in home-buying spurt
Trend reflects Singapore's place as globalised city and investment centre: analysts

By KALPANA RASHIWALA

(SINGAPORE) As more condos and apartments are being bought by foreigners, analysis shows that the increase in the number of homes being bought by non-permanent residents is outpacing that of their PR compatriots.

In a trend led by Chinese and Indian nationals, the number of non-landed private homes picked up by foreigners who were not PRs jumped 37.1 per cent last year to 3,988 units - compared with the 12.1 per cent rise to 4,317 of such homes bought by PRs, shows an analysis of URA Realis caveats data by Knight Frank.

Market watchers say this reflects Singapore's ongoing transformation into a more globalised city and investment market.

The study shows a 90.4 per cent jump in the number of apartments/con- dos bought by Chinese nationals who were not PRs to 817 last year - against a 31.5 per cent increase in the number of such homes picked up by Chinese citizens who were Singapore PRs last year to 794 units.

It was a similar trend among Indian citizens who acquired non-landed homes in Singapore in 2010. Those who were not PRs posted an almost 50 per cent upsurge in the number of units bought last year to 238 - compared with a 16 per cent rise in the number of such units bought here last year by Indians who were PRs to 788.

'China and India are clearly the economic powerhouses of the world and Singapore has always been seen as an attractive country to invest in, due to transparency of law, absence of capital gains taxes and no entry barrier for apart- ment/condo purchases,' said Knight Frank chairman Tan Tiong Cheng.

The trend of bigger increases in non-PR foreign buying of non-landed private homes in Singapore is expected to continue, predicts Ong Choon Fah, head of consulting & research (SE Asia) at DTZ. 'As Singapore becomes a more international, vibrant place with more entertainment and other attractions, it is being seen as a more desirable place to live in, and for a second home,' she adds.

Knight Frank's analysis also showed substantial percentage increases in the number of condos/apart- ments here bought last year by UK citizens - both PRs and non-PRs.

The number of units picked up by UK citizens who were not PRs increased around 58 per cent to 185 units, while the number of units bought by Brits who were PRs here rose 48.5 per cent to 153.

Mr Tan suggests that some British expats may be moving to Singapore from Hong Kong, which is becoming too expensive and suffers from air pollution. 'Some Brits may also have decided to move out of the UK to Singapore, where the weather is warmer, the cost of living and taxes lower, and more opportunities abound.'

Combining PR and non-PR foreigners, Chinese citizens overtook Indonesians to emerge as the second biggest group of foreign buyers of apartments and condos in Singapore last year. They lodged a total of 1,611 caveats last year, ahead of the 1,555 caveats by Indonesian buyers. However, Malaysians held on to their pole position, with 1,858 caveats. Indian and UK citizens maintained their fourth and fifth positions with 1,026 and 338 caveats lodged respectively.

Knight Frank also uncovered a divergence in buying preferences for non-landed homes between PRs and non-PRs within some nationalities last year.

For instance, Malaysians who are PRs here preferred suburban locations like Districts 14 (which includes Eunos and Geylang), 18 , 19 and 23 . On the other hand, their compatriots who are not Singapore PRs here tended to zoom in on 'investment-grade' locations - like Districts 4 (which includes Sentosa Cove), 9, 10, 11 (Singapore's traditional prime districts) and 15 (which includes the Meyer Road and Katong vicinity).

'Perhaps Malaysian buyers who are Singapore PRs and working here have smaller budgets or may want to settle down here. So they're looking for a home in the suburbs, while the Malaysians who don't live here are more likely to buy a Singapore residential property for investment,' Mr Tan suggests.

There was also some evidence that Singaporeans had a higher propensity to buy small-format apartments than foreign buyers. In District 15, where many shoebox developments are being built, about 46 per cent of Singaporean buyers last year picked up units priced between $500,000 and $1 million.

In contrast, only about 29 per cent of PR buyers and 21 per cent of non-PR foreign buyers purchased units in this price range

Published January 28, 2011

Source: www.businesstimes.com.sg

10:20 PM Jan 28, 2011

SINGAPORE - Private home prices rose by less than 1 per cent last month from the previous month, according to the latest National University of Singapore (NUS) Singapore Residential Price Index.

The Singapore Residential Price Index (SRPI) for all properties grew 0.9 per cent month-on-month to 155.5 points. Suburban home prices grew the most, with month-on-month growth coming in at 2.2 per cent to reach 154.8. However, homes prices in the central region fell 0.8 per cent month-on-month.

Still, for the whole year, prices of completed homes increased by 11.9 per cent.

The SRPI is a transactions-based index that tracks the month-on-month price movements of private non-landed residential properties in Singapore. Compiled by the NUS Institute of Real Estate Studies, the index covers only completed non-landed properties in the central region and non-central regions.

Analysts say demand in the secondary residential market remains buoyant. They say a healthy resale market is evidence of strong owner-occupier demand, considered by experts to be a barometer of genuine buying interest. Dr Chua Yang Liang, Head Of Research South-east Asia, Jones Lang Lasalle said: "It reflects the mood of the real market and the real economy, the secondary market, in other words. Less speculative, unlike new launches." Jo-Ann Huang

Source: www.todayonline.com

05:55 AM Jan 28, 2011

SINGAPORE - CapitaLand has agreed to buy Marine Point for $100.68 million through a collective sale, the developer said yesterday.

Inclusive of an estimated development charge of $12.8 million, the total acquisition cost works out to $1,056 per sq ft per plot ratio.

CapitaLand plans to redevelop the site into a condominium with 150 units, comprising one-bedroom plus study and two-bedroom apartments, bringing its pipeline of homes in Singapore to a total of over 2,600 units.

Located along Marine Parade Road, Marine Point sits on a 51,185 sq ft freehold site with a maximum gross floor area of 107,488 sq ft. There are 32 apartments in the existing development. The completion of the transaction, expected to take place in the third quarter of the year, is subject to the approval of the Strata Titles Board.

CapitaLand Residential Singapore chief executive Wong Heang Fine said: "For the new development, we will be maximising its height to approximately 19 storeys. This will give the majority of the apartments a good view of the surrounding skyline and the sea. We plan to have the new development ready for launch in the first half of 2012."

Source: www.todayonline.com

SINGAPORE - The recent Government measures to cool Singapore's property market will bring down sales volumes but may not cause a significant fall in prices, according to real estate consultant DTZ Research.

In a report issued yesterday, DTZ said it expected prices to be largely stable this year, with a possible decline of not more than 5 per cent for the whole year.

DTZ said the hefty seller's stamp duty of up to 16 per cent for sales on properties sold within the first year of purchase will weed out short-term speculators and cause sales volumes to fall.

But not all investors will withdraw from the market, DTZ said, as some may find the 4-per-cent stamp duty on properties sold in the fourth year after purchase to be surmountable. Buyers may also shift their focus to purchasing uncompleted units that are set for completion in three to four years.

"Landed homes, small apartments and high-end apartments are envisaged to be less affected by the measures," said Ms Margaret Thean, DTZ's South-east Asia executive director for residential properties. She added that "small units with their low price quantum will continue to attract investors with spare cash, or singles wanting their own units".

She said that the four-year seller's stamp duty will also have little impact on landed homes, as most of them are purchased by long-term owner-occupiers. The same goes for high-end apartments, which will continue to garner interest from foreign buyers.

Ms Chua Chor Hoon, head of South-east Asia Research at DTZ, said price stability would be underpinned by economic growth, low interest rates, strong holding power of developers and the appreciation of the Singapore dollar.

Property clampdowns in China and Hong Kong could also prompt more mainland Chinese to set their sights on overseas markets such as Singapore. The number of these Chinese property buyers grew to 19 per cent last year, from 7 per cent in 2007.

Among foreign buyers, the Chinese were on par with Indonesian and Malaysian buyers during the fourth quarter of last year, DTZ said.

The property consultancy said it did not rule out the possibility of another set of Government measures to cool the property market in Singapore should demand rebound after levelling off.

But DTZ added that with a healthy supply pipeline, prices and rentals could come under pressure.

As a record number of units are offered through public housing and Government land sales programmes, DTZ estimates close to 33,000 units to be completed every year over the next four years, assuming that all sites are released. This is almost double the average for the last 10 years.

DTZ said Singapore's property market would also face challenges due to continued uncertainty of recovery in major Western economies. If they recover well, interest rates will move up and reduce the affordability of mortgage payments. On the other hand, if they continue to languish, this will eventually have an impact on the Singapore economy and optimism in the property market.

As the residential market faces numerous challenges, DTZ said investors would likely identify opportunities in other segments of the property market. Some attractive options include commercial and industrial properties where rental rates are recovering.

by Jonathan Peeris

05:55 AM Jan 28, 2011

Source: www.todayonline.com

SINGAPORE - SDB Asia's latest property offering is the freehold OKIO Residences in the city fringe region of Balestier.

On a land size of about 22,285 sq ft, the single 18-storey block comprises one-bedroom, two-bedroom and penthouse units.

Sizes of the 104 units range from 420 sq ft to 1,098 sq ft. There are eight one- and two-bedroom units with private enclosed space, 48 one-bedroom units, 44 two-bedroom units and four penthouses altogether.

Facilities include a swimming pool, a hydrotherapy pool, a barbecue pit, a pool deck and a poolside gym.

OKIO Residences faces Balestier Road and is a five-minute drive away from the Central Expressway. The Novena MRT and Boon Keng MRT stations are about a 10-minute-walk away. Nearby schools include ITE College West, Balestier Hill Primary School and Queen Margaret University Asia Campus.

The property is expected to get its temporary occupancy permit at the end of 2014. Jo-ann Huang

by Jo-ann Huang
05:55 AM Jan 28, 2011

Source: www.todayonline.com

Some wonder if they should wait and see if the recent cooling measures push down prices significantly

by Ong Teck Hui

05:55 AM Jan 28, 2011

The Government's latest round of measures to cool the residential property market was clearly targeted at short-term investors and speculators.

Effective since Jan 14, they include the highly punitive stamp duties which apply to the resale of residential properties within four years of purchase, the reduced loan limit of 60 per cent for buyers with one or more outstanding mortgages, as well as the 50-per-cent loan limit for buyers who are non-individuals, for example companies and trusts.

It would appear that the measures have been applied to slow down the market to avoid the growth of a property bubble, as well as to allow genuine buyers the opportunity to purchase their dream homes without runaway prices.

Genuine home buyers do form a significant demand pool, and many have planned to make their purchases in the near term. The introduction of the fresh measures has led them to wonder whether prices would soften and whether it might be worth their while to wait. Some are hoping for a substantial price correction, "maybe 20 per cent or more", before deciding to buy.



SEEING PRICE DECLINES IN PERSPECTIVE

But would the residential property market correct by that magnitude - 20 per cent or more - due to the measures alone? It would be useful for us to analyse past declines in prices to arrive at an informed conclusion on the price outlook.

The most recent price correction in the residential property market was due to the economic recession arising from the global financial crisis. From the peak in mid-2008 to trough in mid-2009, prices softened by 25 per cent, according to the Urban Redevelopment Authority's residential property price index. The impact of the new measures will certainly be nowhere as catastrophic as that of the global financial crisis.

Another benchmark is the decline in prices following the announcement of the anti-speculation measures in May 1996. The very harsh measures, which included a 20-per-cent upfront downpayment in cash for all property purchases and taxes on gains from properties sold within three years of purchase, affected the entire residential market, bringing transaction volumes down by 75 per cent. Prices eased by 8.9 per cent over a one-year period before being dragged down by a further 40 per cent by the Asian financial crisis.

In contrast, the current measures have been calibrated to discourage shorter-term investors and speculators, leaving genuine home buyers relatively unaffected.

Barring external shocks or economic downturns, the measures by themselves are unlikely to drag prices down significantly, if at all. Under the present positive market conditions, sellers are on a stable footing and under no pressure to slash prices.



BUYERS' IMPATIENCE

After the set of measures announced on Aug 30 last year, potential buyers retreated to the sidelines to watch how the residential market would pan out.

Last August, developers launched 1,165 units and sold 1,259. What potential buyers saw was a slightly slower market in September, with 1,058 units launched and 911 sold. Activity in October picked up, with 1,070 units launched and 1,066 sold, but that was the month when two new executive condominiums (ECs) were launched, generating much hype and interest. Including ECs, 2,049 units were launched in October and 1,596 sold.

The market also watched developers' response to the sale of residential sites. Tenders for mediocre residential and EC sites were met with fair response and cautious bids, while the more attractive sites saw strong competitive bidding.

The URA's property price index for 3Q2010 showed that residential property prices rose 2.9 per cent, although it would have captured primarily pre-measures pricing. Market behaviour and evidence would have led most potential buyers to conclude that the residential market was holding up well against the measures, transactional activity was resuming and prices were unlikely to soften.

By November, the residential property market picked up with a vengeance with several major launches and good take-up. Including ECs, 2,331 units were launched and 2,092 sold, making November almost the busiest month last year. The December figures for homes launched and sold (including ECs) were lower at 1,859 and 1,699, respectively, but this was expected as it was the typical year-end holiday period.

When the 4Q2010 price index was released, it showed residential property prices continuing to climb by 2.7 per cent, notwithstanding the effect of the measures. It only served to confirm potential buyers' fear that prices would continue to rise.




TO WAIT OR NOT TO WAIT?

Potential buyers' behaviour over the next few months would determine the direction of the residential property market for the rest of this year. If buying sentiment recovers in the short term, transactional activity would pick up, leading to firm prices with, perhaps, some upside. However, if the market slows without an improvement in sentiment, prices could eventually soften.

The dilemma that many genuine home buyers face is whether to continue with their intended purchases or to hold off in the hope that prices will correct significantly.

It would be worthwhile waiting if prices do eventually decline substantially, but delaying also runs two main risks: Higher interest rates and stronger measures imposed by the Government that may affect even genuine home buyers. On the other hand, higher interest rates and stronger Government measures could result in price softening, but that would mean postponing one's purchase even longer.

Historical experience may show that prices are unlikely to correct significantly due to measures such as those recently introduced. But it is what potential home buyers believe or perceive that will drive their behaviour, which will, in turn, influence the market.

The residential property market may have been jolted by the Jan 14 measures, but market fundamentals remain favourable. Together with inflation concerns, the current low interest rates and expectations of long-term capital appreciation, it appears that buyers would likely be drawn back to the residential property market after an expected period of hesitation.



Ong Teck Hui is executive director of research and consultancy at Credo Real Estate.


Source: www.todayonline.com

Bartley Terrace sold en bloc for $40 million

05:55 AM Jan 28, 2011

SINGAPORE - Owners at Bartley Terrace (picture) are set to receive $1.14 million to $1.8 million each after the collective sale of the 32-unit property closed on Jan 17.

Meadows Investment is paying $40 million for the site near the Bartley MRT Station, said Urban Front Real Estate, which brokered the deal.

It said the price translates to about $760 per square foot per plot ratio, after factoring in the development charge with 10-per-cent balcony space that the developer might have to pay for.

Bartley Terrace has a land area of about 40,482 sq ft and is designated for residential use with a plot ratio of 1.4.

Majority owners are applying to the Strata Titles Board for a sale order, Urban Front said.

Source: Todayonline.com

Last year was a bright year for Singapore's private residential market. Indeed, it was a year of records, particularly for developer sales activity and prices of suburban private homes. However, with the announcement of the latest Government cooling measures effective on Jan 14, such exceptional performance will cease to be relevant for extrapolating future private residential market performance.

In the latest Government cooling measures, sellers' stamp duty was hiked and the loan-to-value ratio for second and subsequent homes was reduced, reflecting its persistence to minimise speculation and investment in private homes.



CONVENTIONAL PERCEPTIONS

The common belief is that the first hit by these measures will be speculators - the main culprits behind the price escalations, particularly those of suburban condominiums.

Indeed, with the revision in sellers' stamp duty, buyers are less likely to have the intention to re-sell and profit in the short run, unless property prices can grow well in excess of 16 per cent over a year or 12 per cent in two years, considering other costs and financing.

Speculators aside, investments are discouraged, particularly with the lowering of the loan-to-value ratio for subsequent homes.

Genuine buyers and high-end residential property buyers may be less impacted but with the demand pool shrinking, it is widely anticipated that property prices will fall.

Notwithstanding the pessimism, there is hope for the private residential market, underpinned by a sustained economic recovery and lit by ample liquidity.

While the tough measures can dampen sentiment, this may be viewed as moderating home buying interest until the sentiment eventually reaches a steady state - as buyers remain cautious while adjusting to the new environment.

Also, a reduction in home sales this year may not necessarily mean a significant price correction - for it leads to a more sustainable base in home buying that is not fuelled by speculation and excessive financing.

Some speculation is necessary to drive market momentum but excessive flipping that leads to asset bubbles can cripple home prices.

The new round of measures is harsh to many, for it eliminates speculators and, most importantly, it deters investors.

It must be recognised that investments in private residential properties are not detrimental for the market. But in times of overwhelming housing demand, the priority of genuine owner occupiers should prevail, to assist every aspiring eligible buyer to have an opportunity in private home ownership.

Additionally, many investors and speculators would have already profited from previous housing booms and may be seen to have a weaker case to compete with the rest, such as younger entrants, who have yet to enjoy the benefits of a private residential property.




SELF-FULFILLING PROPHECY

The common question asked about the impact of the cooling measures is: How much are prices expected to fall in the year?

While there are various well-supported forecasts, it should be appreciated that price falls are often sticky in economic viable times.

Price falls can be a result of a self-fulfilling prophecy as well - where prices can indeed correct as home buyers persistently believe in an imminent decline and refuse to enter the market. In such a context, buyers have also been consistently advised prices may suffer drastic falls.

If a short-term price correction is almost a certainty given the severity of the cooling measures, the more crucial question would be how long this may last - and thereafter, what are the chances of a revival? If the economic recovery can be sustained this year, with ample liquidity, a 5- to 7 per-cent-price-correction for suburban condominiums in H1 '11 can be potentially stabilised or gradually revived in H1 '11, bringing prices at the end of this year to be comparable or slightly lower than the beginning of the year.

Moreover, experience has shown that when assets are attractively repriced, it can potentially encourage sidelined buyers to enter the market if overall economic fundamentals are in place.

Although the current cooling measures may be very restrictive, a potential buyer may still purchase after much deliberation if prices ultimately become affordable. Suitable property repricing can release latent demand from prospective owner occupiers, providing support to overall demand base.

And if prices see continual correction throughout the year, there would be significant opportunities for a turnaround after the year as the new demand base may emerge stronger, if economic fundamentals stay firm.


STRUCTURAL CHANGE IN BUYING PREFERENCES?

It is a challenge to cater to competing concerns of all stakeholders and further so to achieve market equilibrium.

To achieve the steady state, fine-tuning policies may even be necessary, such as the withdrawing or mitigating of some of the cooling measures along the way.

But before the equilibrium is reached, the pain from the calibration process can be relieved with nimble adjustments from market participants.

For one, developers are likely to hold phased launches of selected projects in H1 '11 to test overall home buying interest, pricing and observe structural changes in buying preferences.

A structural change can develop as forthcoming home buyers would likely be mainly owner-occupiers instead of investors and speculators.

A different product mix may have implications for a project's breakeven cost and land tender prices.

The recent home buying euphoria had created unnecessary anxiety among many potential buyers.

Prior to the cooling measures, there were many who bought with a view that not buying a property will mean losing the opportunity ahead. While they are not speculators, they may have created undue stress for themselves and everyone - aggravated by some who stretched affordability even if they are genuine buyers.

The material justification for a genuine home buyer should be his confidence in financing his home and not simply his intention to own a piece of property for occupation.

The slowdown in home buying can provide many stakeholders time to compare aspirations with the reality, where home buying is after all a major decision involving huge capital.

If the calibration is successful, it may ultimately sculpt an environment where genuine homebuyers are completely confident in the buying decision, including considering financial contingencies.


by Ong Kah Seng

05:55 AM Jan 28, 2011

Ong Kah Seng is senior manager, Research - Asia Pacific at Cushman & Wakefield.





Source: www.todayonline.com

SINGAPORE - The Monetary Authority of Singapore's (MAS) proposed new regulations to tighten mortgage equity withdrawal loans (MWL) should have little impact on the property market if they are eventually introduced.

Market players, who include mortgage loans brokers, said this is because most buyers who aim to cash out on the value of their homes are not the average home owners or property investors.

Instead, they - usually high-net-worth individuals -account for a small portion of all property buyers. They are also said to be financially savvy and typically use the extra liquidity to re-invest in other instruments, market experts said.

Loans brokers MediaCorp spoke to said financial institutions are also unlikely to dispense MWL for a second or subsequent property, in an effort to discourage speculating on the property market.

While the Government has further reduced loan-to-value (LTV) ratios for mortgage loans to cool the property market, the MAS proposed that the LTV ratios of mortgage equity withdrawal loans be reduced as well.

MAS' consultation paper, which was put out on Jan 13, proposes that MWL be reduced to an LTV of 80 percent for individuals with no outstanding mortgages and 60 per cent for individuals with more than one outstanding mortgage.

For non-individuals like corporations, they are subject to 50 per cent LTV if they have more than one outstanding mortgage.

The consultation paper is currently open for feedback until Feb 14.

MWL allows homeowners to take out loans using their property as collateral. The amount of MWL taken out depends on the current valuation of the property.

For example, a property owner has a house worth $1 million and he has an outstanding loan of $200,000. This means the maximum amount he can receive from an MWL is $400,000.

This adds up to $600,000 in total loans, which translates to 60 percent of the $1 million valuation.

And in a property upswing, homeowners can cash out more from a higher property valuation. But such practices are not widespread and hence should not have a serious impact on the property market.

"What will really dampen sentiment are the new cooling measures on conventional housing loans, which are used largely by home buyers, instead of mortgage equity financing loans," said Mr Dennis Ng, founder of www.HousingLoanSG.com.

"MAS wants to ensure that all measures are in line for both types of loans to curb speculation," he said.

Such loans have been around before the property measures kicked in, said Mr Ku Swee Yong, chief executive of International Property Advisor.

"Financial institutions may tend to benefit from such loans because it is backed by an asset, hence it is lower risk. The home buyer who has paid off the property entirely has also demonstrated to the bank that he is unlikely to default on his payments." he added.

But loan brokerage firms may see less business if this proposed scheme is introduced, said market players.

"With interest rates looking flat and with the current curbs, business will be still for some time," said Mr Bryan Ong, founder of property loans brokerage BC Group.

by Jo-Ann Huang Limin
05:55 AM Jan 31, 2011

Source: www.yodayonline.com

Booklet of Mah Bow Tan's thoughts on housing

By UMA SHANKARI

THE Ministry of National Development (MND) is publishing a booklet containing the musings of its minister, Mah Bow Tan, in a bid to reach out to more Singaporeans and explain housing policies.

In response to a query from BT, Mr Mah said that the booklet will contain nine commentaries that encapsulate his thoughts on Singapore's public housing programme over the past five decades.

This should give readers an insight into the thinking behind the policies that shape the system Singapore has today.

Said Mr Mah: 'Today, eight in 10 Singaporeans stay in HDB flats, and nine in 10 of them own the flats they live in. This is the highest home-ownership rate in the world. No other country comes close.

'But, public housing is not just about putting roofs over people's heads. It is also about building inclusive homes and communities.

'This has not been an easy effort. There is a finite budget to work with, and policy trade-offs to be made.

'With this booklet, I hope to reach out to more Singaporeans, to tell them about our ongoing housing story, and to enhance their understanding of the policy considerations behind this success story,' he added.

The booklet will be released in either February or March this year.

MND plans to distribute the booklets to relevant entities such as HDB branch offices, town councils, public libraries, and academic institutions.

In addition, the booklet could be sold in selected bookstores.

It might also be available in a Mandarin version, sources said.

Source: www.businesstimes.com.sg

by Tan Kok Keong
05:55 AM Jan 28, 2011

The Government's move to introduce a new set of property market cooling measures two weeks ago was widely anticipated but the harshness of the measures surprised many.

The initial reaction from buyers was mixed. On the weekend immediately after the Jan 14 measures, buyers at Spottiswoode 18 snapped up 170 out of the 251 units launched, surprising many observers. The nonchalant reaction could be because the cooling measures were already a known market risk. These buyers had already overcome their reservations during the pre-launch marketing period and were primed and ready to buy.

This was somewhat similar to the good response to the launch of NV Residences after the earlier round of cooling measures on Aug 30 last year.

In contrast, over the same weekend after the Jan 14 measures, sales cooled in Austville Residences - an executive condominium project - despite earlier reports of potential buyers queueing overnight.

Beyond these anecdotal examples, we collaborated with the research team at leading real estate portal PropertyGuru.com to get a clearer picture of pre-transaction activities.

The number of visitor sessions to the website fell 10.7 per cent in the week after the measures compared with the week before. Comparatively, visitor sessions only fell by 3.5 per cent following the Aug 30, 2010 measures. Visitors searching for resale HDB flats saw the sharpest decline (Chart 1A and 1B). In addition, the number of new listings fell by 6 per cent, while the number of listings rose 2 per cent following the Aug 30 measures.

While there are many other factors that affect the visitor numbers, the comparison gives us a clearer picture of market activity following the measures.

The statistics above reinforce the consensus view that overall marketing activity has fallen. If this persists, transaction volumes will decline. Based on historical analysis, a drop in total sales volume over four quarters tends to lead to a fall in the overall Urban Redevelopment Authority's private residential price index thereafter. This happened at two most recent turning points for prices - in Q2 '00 and Q2 '08. The question remains as to whether the current market cooling measures would lead to a persistent fall in volume and thus prices.

To answer this, an analysis of events after the May 1996 market cooling measures could be a good gauge, as that was the last time when a similarly harsh set of measures was introduced.

Within a year from May 1996, overall private home prices fell 8.9 per cent. While there can be no doubt that market cooling measures played an important role, a closer look suggests that other factors could have contributed to the plunge in prices.

Firstly, the rental market weakened over the same period. Overall occupancy rate fell from 93.8 per cent in Q2 '96 to 91.7 per cent in Q2 '97 due to an increase in the number of units completed. As a result, rents also fell by 9.9 per cent over the same period. In addition, interbank three-month Sibor rose slightly to 5.94 per cent from 5.75 per cent over that period. Buying property for investment became less appealing.

Secondly, the stock market also began to decline over the same period. The benchmark Straits Times Index fell 13.4 per cent within a year from June 1996. To add to the woes, the Asian Financial Crisis started in mid-1997. The loss in wealth in the stock market probably motivated investors to sell assets, which could be another important factor that precipitated the continued fall in property prices.

The above analysis shows that for the current set of market cooling measures to cause another prolonged period of price decline, other conditions need to fall in place. This could come in the form of a decline in the stock market or the business environment, higher unemployment and a deterioration of property market basics. The lack of "wealth destructive" factors was the key reason for the ineffectiveness of the last two rounds of market cooling measures, in my opinion.

Going into the new year, the wealth creation effect appears to be largely on track. According to various equity strategists, the Singapore stock market is expected to perform well this year, on the basis that forward price-to-earnings ratios are still undemanding compared with previous peaks. Business prospects look more promising and employers are planning to expand hiring and increase wages and bonuses.

For the property market, the occupancy rate looks like it could remain above historical average of 92 per cent as completions in 2011 are expected to reach only 6,722 units - below the historical average, according to Urban Redevelopment Authority numbers.

Meanwhile, the prospect for a sharp increase in interest rate appears to be muted. Taken together, this suggests that the slowdown in transaction activity and price growth might again turn out to be temporary. Ironically, if that is the case, we should expect more market cooling measures, which will remain as a market risk in 2011. But by themselves, the measures may not be enough to turn sentiment.

In conclusion, while I expect the market to face immediate downward pressure on volume and prices, the year-on-year price fall in 2011 could be marginal. In the meantime, people interested in properties should keep watch for any of the "wealth destruction" catalysts, which in some instances can fall into place very fast.

Buyers should also note the potential for a weaker rental market from next year due to the large number of housing units to be completed from then onwards. Buyers who are stretching their last dollar to buy their dream home might want to dream less and work their numbers based on more prudent assumptions and exit strategies.



Tan Kok Keong is Head of Research and Consultancy at Orange Tee.


Source: www.todayonline.com