Published January 19, 2011

Plot near Bartley MRT triggered for release
99-year leasehold site can be used for condo project

By KALPANA RASHIWALA

IT'S only January and a second 99-year leasehold private housing site has been triggered from the government's reserve list for the first half of this year - a plot next to Bartley MRT Station which can be developed into a new condo project with about 620 units.


This follows the successful application for the site's release by an unnamed developer that has agreed to bid at least $191.78 million or about $288 per square foot per plot ratio (psf ppr) for the site.

Earlier this month, the government announced that a reserve list plot near Bishan MRT Station was triggered for release with the successful applicant committing to pay at least $189.8 million or $300 psf ppr.

Analysts note that while the government has ample sites on the confirmed list - where sites are released according to a prestated schedule regardless of demand - for the current half, most of them are far from the city in locations like Choa Chu Kang, Tampines, Upper Changi, Sembawang and Punggol.

So they were probably drawn to the Bishan and Bartley plots which are closer to the city and near MRT stations. 'The Bartley plot is just one MRT stop away from Nex mall,' observed Knight Frank's head of consultancy and research Png Poh Soon.

While the successful applicants for the Bishan and Bartley reserve list plots would have submitted their applications before last week's property cooling measures were announced, some analysts say they would not be too surprised if developers continue to trigger a few more sites from the reserve list. 'It could be an opportunity to replenish their landbanks with new sites bought at less aggressive prices compared with before the latest cooling measures,' suggests Credo Real Estate executive director Ong Teck Hui.

Market watchers pointed to at least two remaining sites in the reserve list - two adjoining plots at Stirling Road near Queenstown MRT Station which can be developed into condominiums - that could be on developers' trigger watchlist.

Projects on sites in or closer to the city are more likely to enjoy investment demand from buyers thinking of leasing out the units. And usually developers can carve out smaller units from such projects and thus achieve higher psf prices.

Urban Redevelopment Authority also launched yesterday a confirmed list plot facing Bedok Reservoir that can be be developed into a five-storey project with about 640 units. Allowable developments include condominium/flats and serviced apartments.

Knight Frank's Mr Png expects top bids for the plot to be in the $450-500 psf ppr range and selling prices to be about $1,000 to $1,050 psf given the site's choice location near the future Bedok Town Park MRT Station under the Downtown Line.

Credo's Mr Ong has a lower land price expectation of about $280-320 psf ppr, with the top end of that range reflecting a breakeven cost of about $700 psf - to factor in a safety margin in case of price softening following the recent cooling measures.

BT understands that nearby, Frasers Centrepoint and Far East Organization are currently selling units at Waterfront Key and Waterfront Gold at average prices just shy of $1,000 psf.

On the other side of the reservoir, Sim Lian has been selling units at its Waterview condo at about $838 psf on average. It is developing the condo on a 99-year leasehold plot bought last year for $421 psf ppr.

As for the Bartley plot, Mr Ong predicts top bids could be in the $320-360 psf ppr range - with the upper end of the range translating to a breakeven cost of about $750 psf, again to leave a 'safety margin' for potential price declines.

He estimates a new condo project on the site could today sell for an average price of about $900 psf.

'Bidders would be cautious and factor in some cushion in case of a softening in private home prices. This will result in land bids being lower than those before the cooling measures were introduced,' said Mr Ong.


Source: www.businesstimes.com.sg

Sept saw fall in private homes sold by developers and more units being returned

Published October 16, 2010
By KALPANA RASHIWALA


THE cooling measures are leaving their mark on the property market - and the latest developer sales data for the month of September seems to underline that.

After the cooling measures were announced on Aug 30, the number of private homes sold by developers fell 27.6 per cent month on month to 911 units in September. BT's analysis also showed that at least 60 units were returned to developers in September, compared with nearly 30 units in August.

Figures released by Urban Redevelopment Authority (URA) also show that the number of private homes launched by developers slid 9.2 per cent month on month to 1,058 in September.

Property consultants readily attributed the slowdown in last month's sales to the cooling measures. Credo Real Estate executive director Ong Teck Hui says: 'I think we can expect sales to slow down further for the rest of the year due to a seasonal year-end slowdown combined with the effect of the cooling package.'

Property consultants are predicting that between 1,000 and 2,000 private homes (excluding executive condos) could be sold in the current quarter. That could still take the full-year tally to over 14,000 units.

Knight Frank managing director (residential services) Peter Ow suggests that those who returned units to developers last month were more likely to have been short-term investors worried that the market would collapse. 'At that point (when the measures were introduced on Aug 30), the downside risks were a lot higher than any price upside. What's walking away and forfeiting 1.25 per cent of the purchase price compared with being caught by a turn in the market?' he said.

'But now some of these people may go back to the market again. Sentiment has improved slightly this month,' he added.

BT's analysis showed that 13 units were returned to the developer for The Scala at Serangoon Avenue 3 last month, which had been fully sold by the end of August. Of these, 12 units were again sold by the developer, leaving only one unit available at end-September in the 468-unit condo.

Other projects with units surrendered last month include The Greenwich in the Seletar/Yio Chu Kang area (seven units), Cyan at Bukit Timah/Keng Chin roads (five units), Jardin along Dunearn Road (five units) and Waterfront Gold along Bedok Reservoir (six units). The Cascadia, Stevens Suites and Tivoli Grande were among the projects which had a unit returned each.

Analysts point out that the actual number of units given back to developers may have been higher, with the number offset by some of these units being again sold by the developer during the month.

A market watcher acknowledged that 'there was a spike in units returned in September but we're seeing a levelling-off in returns'.

Developers' top-selling project in September was the 99-year-leasehold NV Residences in Pasir Ris, with 347 units sold at a median price of $859 per square foot (psf). This was followed by the freehold Vacanza @ East in the Kembangan area with 89 units transacted at $1,107 psf median price.

CB Richard Ellis executive director Li Hiaw Ho noted that projects with small-format apartments continued to do well in September, thanks to their location and affordable absolute price quantum - such as Jupiter 18, Dorsett Residences and ISuites @ Marshall.

In terms of per square foot pricing, the most expensive unit sold by a developer last month was an apartment at The Orchard Residences which was sold at $4,258 psf. Another three units were also sold at Tomlinson Heights (the former Beverly Mai site) at $3,060 psf (median price).

While the number of homes sold in the Core Central Region and the Rest of Central Region fell about 49 per cent and 59 per cent respectively month on month in September to 84 units and 226 units, sales in the Outside Central Region rose nearly 10 per cent to 601.

'This is contrary to market expectation that the cooling measures would have greater impact on sales of mass-market homes,' says Colliers International director Tay Huey Ying.

Developers have sold 3,723 units in Q3 2010, taking the tally for the first nine months of this year to 12,136 units. This compares with 12,828 units in the same period last year and 14,688 units in the whole of last year.

URA will release the final developer sales figure for Q3 2010 on Oct 22, which may be slightly different as it will take into account, among other things, options which are not exercised.

Market watchers point out that the 911 units sold last month still represented a decent showing, coming in above the 847 units for June (when sales slowed down due to eurozone woes and the World Cup season).

Jones Lang LaSalle's SE Asia research head Chua Yang Liang went so far as to say that the latest set of cooling measures on Aug 30 this year fell short of the first set unveiled in September last year in terms of moderating developers' sales volume.

Based on his analysis of the weighted sales volume 30 days before and after the date of intervention, the latest measures led to a 24 per cent drop in sales volume compared with a 33 per cent decline when the first set of measures was announced in September 2009.

'The numbers suggest that the initial shock of government policies is over as the market adjusts to a stricter regulatory environment each time,' he adds.

DTZ's SE Asia research head Chua Chor Hoon suggests that while the measures are cooling sales volumes, they're unlikely to make a significant dent in prices as interest rates remain low and the economy is still growing.

Knight Frank's Mr Ow expects developers to proceed to launch mass and mid-market projects 'as there's still good demand. It's a matter of whether pricing is reasonable.'

'For the high-end and luxury markets, I believe they'll be more careful about releasing new projects just yet as the buyers have not yet returned, especially foreign purchasers,' he adds.

Source: http://www.businesstimes.com.sg