by Jo-ann Huang
05:55 AM Oct 22, 2010
SINGAPORE - Investment sales for residential property in Singapore have fallen 30.8 per cent in a single quarter, with analysts attributing the dive to the slew of cooling measures introduced by the Government in August.
According to a report issued yesterday by property consultancy Colliers International, the third quarter saw a total value of $3.74 billion in residential investment sales, well below the $5.4 billion recorded in the previous quarter.
This was mainly due to lower prices submitted by developers in tenders for state residential land sites, analysts said. Compared to the second quarter's $1.85 billion, third-quarter figures for state land sales came in at $897.08 million or a 51.5-per-cent drop, according to the report.
The policy measures, coupled with the ample land supply through the Government Land Sales (GLS) programme, have "resulted in developers' cautiously optimistic stance in state land tenders that closed in September", observed Ms Tay Huey Ying, director of research and advisory at Colliers International and author of the report.
Ms Tay noted that only four to nine parties typically bid for any land site in the third quarter, compared to between 10 and 18 in the second quarter.
Mr Eugene Lim, associate director of ERA Asia Pacific, believes the focus on public housing and mass market housing had contributed to the fall in residential investment sales.
"The types of land that are being launched are not for high-end residential properties. More land sites for executive condominiums (ECs) and mass market housing have gone on sale in the quarter," he said.
"The value of tenders is also not that high because the land sites are not in prime locations," he noted.
Among the measures announced in August was the reduction of the loan-to-value ratio from 80 to 70 per cent for buyers with one or more outstanding mortgage loans at the time of their new purchase. The measures seem to have taken effect, as the number of homes sold last month numbered only 911 units. This is a drop from 1,259 units in August and the peak of 1,553 units in July.
Market watchers foresee property prices dipping 3 to 5 per cent by year-end and they expect this trend to continue into next year.
And they forecast more property launches by the end of this year as developers try to offload inventory before the downtrend deepens.
"Developers who have bought land from GLS in the last few months will want to rush out their launches in the last quarter. However, monthly sales will be slow and my estimate is around 500 to 600 units," said KPC Properties managing director Koh Poh Chew.
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Residential investment sales plunged in Q3
A caution over property 'signals'
Published September 29, 2010
(SINGAPORE) The cooling measures announced by government on Aug 30 to curb speculation in the property market could send out misleading signals, said a property veteran.
Wheelock Properties (Singapore) CEO David Lawrence yesterday urged the authorities to be careful about sending out a message in which some might equate investing in property with speculation. The public could interpret that as a signal that government wants them to invest in shares and bonds instead, which could be dangerous, he said.
Mr Lawrence made the case for investing in property as being a safe long-term investment and hedge against inflation, as long as one does not overgear. 'Various people in government keep saying: 'Oh we want to stop property speculation.' Now that's wrong. You should not really differentiate between investment in different asset classes. That's up to individuals to make their own decision where they are going to invest.
'If you differentiate against different asset classes, it's quite dangerous. If you're going to say: 'Oh we don't want you speculating in properties,'.'
'Let's say you buy Sing Tel shares today and sell them tomorrow, is that investment? No it's speculation. The same with bonds. If people start thinking the government wants them to buy shares or bonds because it's investment, that's very dangerous.'
'I think this use of the word 'speculation' for property and 'investment' for everything else is not correct,' Mr Lawrence, a Singapore citizen, said in a telephone interview.
'I am 64 years old now. If I look back, (I can tell you) if you invest in property, never mind the crashes, and ups and downs, in the long term you make money, as long as you're not stupid enough to overgear. You invest in property and property will always be there, particularly prime property. I can't tell you how many people I know have lost all their money investing in bonds - and currently there is a bond bubble - and by investing in shares as well.'
Source: http://www.businesstimes.com.sg
Two GCBs sold for $26.6m at Colliers auction
They boost tally of properties auctioned so far this quarter to about $54.1m
Published September 28, 2010
By KALPANA RASHIWALA
With another three auctions to go before the month ends, the final figure for Q3 this year could be higher. The figure so far has already surpassed the $45.3 million and $41.7 million of auction sales done in Q1 and Q2 respectively, although the action - in terms of volume of transactions at auctions - has been less buoyant.
From July 1 until yesterday, 11 properties changed hands at auction, compared with 23 each for Q1 and Q2, according to Colliers International Research. And although in terms of value the $54.1 million of properties is close to the $57 million done in Q3 last year, that came from a broader spread of 42 deals.
'There were more apartments and residential properties in general being sold at auctions this time last year,' recalls Colliers International deputy managing director Grace Ng.
A stalemate arising from owners' high price expectations had started to slow auction sales, particularly for apartments and condo units, even before the government announced measures to cool the property market on Aug 30, according to Ms Ng.
The measures, particularly a lowering of the maximum loan-to-valuation (LTV) ratio from 80 per cent previously to 70 per cent when buying a new home for those with one or more existing mortgages, seem to have further slowed sales enquiries for apartments/condos, though interest in landed properties has not been hit, she added.
'Most buyers of landed property would have some equity from the sale of their first property and would not need an 80 per cent LTV; they would take 50-70 per cent LTV,' explains Ms Ng.
Year to date, 57 properties have been sold on the auction block for $141.1 million, compared with 118 properties transacted at $168.4 million for the whole of 2009. In terms of value, the record was set in 1999, at $409.5 million.
Among the properties that went under the hammer recently were the two GCBs that Colliers auctioned last week.
The single-storey freehold bungalows - at 4 Margoliouth Road and 53 Sixth Avenue - were sold by the same party, a trustee of an estate. They were picked up by different parties, Singaporeans who acquired them through companies.
There was greater interest for the Margoliouth Road property, which is located off Stevens Road and is within the White House Park Good Class Bungalow Area. Bidding started at $10.5 million and the property received a total of 14 bids. It was sold for $13.6 million or $1,304 per square foot (psf) based on its land area of 10,433 square feet.
Bidding for the Sixth Avenue bungalow opened at $11.5 million and it was sold at the next bid, at $12 million or $1,145 psf on a land area 10,476 sq ft.
The two properties are understood to be about 20-30 years old, although their interiors have been renovated.
Market watchers note that it is not common to achieve sales of GCBs at auction these days as most such properties are put up for sale by owners, who typically have high price expectations.
Ms Ng, who conducted the auction for the two bungalows last week, says: 'Because these are trustee sales, the seller's price expectation would be pegged to market prices, which are a reflection of current valuations - unlike owner sales where it's common to have asking prices of about 20 per cent above valuation.'
BT Weekend reported last week that GCB prices have been on the rise. A CB Richard Ellis analysis of URA Realis caveats data downloaded on Sept 23 showed that the average price for GCBs transacted so far is $1,050 psf, about 26 per cent higher than the $831 psf for GCB deals for the whole of last year.
A house at Cluny Hill was sold this quarter for $28 million or $1,841 psf based on its land area of 15,210 sq ft.
On a psf basis, this is believed to be the second highest price ever achieved in the GCB market, surpassed only by the $1,899 psf recorded in 2007 for 32H Nassim Road.
The Cluny Hill property is understood to have been bought by Mike Scott, director at oil/commodity trader Trafigura Pte Ltd. He is a Singapore citizen.
The sale is understood to have been brokered by RealStar and Orange Tee.
Source: http://www.businesstimes.com.sg
