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

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

Published January 18, 2011

Share of landed homes in Singapore falls
2,900 landed units or 2.9% of all new private homes were launched in the first 9 months of 2010

By EMILYN YAP

(SINGAPORE) Clipped lawns and personal car porches look set to become even rarer as the share of landed homes in Singapore declines.


Nevertheless, interested buyers may do well to wait a while longer before making a purchase. Measures introduced last week to cool the property market have raised the spectre of price falls in the sector.

According to Savills Singapore, some 2,900 new landed housing units were launched in the first three quarters of last year, accounting for 2.9 per cent of all the 99,200 new private homes rolled out in that period.

This proportion has dropped from 8.2 per cent in 2000. Of the 52,700 new private homes launched that year, 4,300 were landed.

'The drop in landed home launches could be due to less landed land supply from the government in recent years,' said Savills executive director for investment and prestige homes Steven Ming.

Just three sites slated for landed residential developments have been put on the confirmed and reserve lists since the start of last year, he pointed out.

Savills' data add to evidence about the shrinking proportion of landed homes in Singapore.

Credo Real Estate said recently that landed homes accounted for just 27.2 per cent of all private housing units in the third quarter last year - an 8.1 percentage point drop from 35.3 per cent in the first quarter of 2000.

In absolute terms, the number of landed homes has increased over the same period, but at a slow pace.

While the stock of landed homes rose by over 4,000 units in the last 10 years, the stock of non-landed homes jumped by more than 60,000 units.

Landed home prices surged 24 per cent in the first three quarters of 2010, and the limited supply of such homes was said to be a cause for the rise.

'In the growth of any city, you have more and more intensive land use . . . The government is also encouraging higher land productivity. This trend will only continue,' said DTZ executive director (consulting) Ong Choon Fah.

There is also the demand factor. When home seekers look at the high per-square-foot (psf) prices for new non-landed apartments nowadays, landed homes seem to offer better value, Mrs Ong said.

For instance, a condominium unit at Terrene at Bukit Timah went for $1,298 psf in October last year, but a semi-detached house at Burgundy Hill in nearby Bukit Batok changed hands at $612 psf of land area.

Consultants had expected landed home prices to continue climbing this year until the latest property market curbs came along.

The measures include an increase in the seller's stamp duty for private homes to as much as 16 per cent, and a cut in the loan-to-value (LTV) limit on housing loans to 60 per cent for individuals with one or more outstanding housing loans.

There will be 'uncertainty and hesitation in the general market' and the landed property sector is likely to be affected as well, said Credo executive director Ong Teck Hui.

'If buying sentiments recover, it may be possible to see a mild price upside in 2011. However, if sentiments do not improve, a slight price downside is possible.'

Mr Ming expects the cooling measures to remove some demand - landed home buyers are likely to be servicing another residential mortgage loan and few of them will have idle cash for a 40 per cent down payment.

'Volumes are expected to come off. As for prices, when that of the wider residential market corrects, the same can be expected of the landed segment, although probably of a smaller magnitude,' he said.

Nevertheless, Mr Ong believes that fundamentals underpinning demand for landed homes are still favourable.

For instance, the job market remains strong, interest rates are low, and there are genuine buyers looking to upgrade, he said

Source: www.businesstimes.com.sg

Whitley Heights, rezoned for landed housing, will see hot bidding: Analyst

by Jo-Ann Huang Limin

05:55 AM Jan 06, 2011

SINGAPORE - After a strong run last year, it looks like the en bloc market is ushering in the New Year with a bang.

Apartment complex Whitley Heights is up for collective sale - the first property to be offered this year. Rezoned for landed housing, the site should attract substantial interest, analysts say.

Experts say sites like the Whitley Heights apartment complex are a rare find. Located off Whitley Road, it consists of three blocks of three storeys each with a total of 45 units. Apartment sizes range from 1,600 sq ft to 2,100 sq ft.

"There are very few residential redevelopment sites available in the market place for them to get their hands on to build landed properties or mixed landed," said Mr Karamjit Singh, managing director of Credo Real Estate, the appointed marketing agents for Whitley Heights.

He said the rezoning to mixed landed housing would allow developers to build a whole variety of terraces, semi-detached or detached houses.

Whitley Heights is the largest freehold plot in Districts 9 to 11; sized at 130,165 sq ft, it is the largest site up for collective sale in more than three years, said Mr Singh.

Now that demand for landed property is rising due to supply constraints, analysts expect Whitley Heights to attract bids from mid-tier as well as major developers.

Prices for landed housing increased 20 per cent last year, outpacing the non-landed residential market, which saw a 10- to 12-per-cent rise.

Mr Ku Swee Yong, chief executive officer of International Property Advisors, said the supply of landed housing is very limited. "Total stock in Singapore is just under 70,000 units. What's coming up in the next five years could be about 3,000 to 4,000 units of new landed housing. That isn't enough to meet the demand," he said.

Analysts said Whitley Heights is expected to attract bids ranging from $185 million to $210 million. This translates to $1,421 to $1,613 per sq ft over the land area and means that every owner gets to pocket a cool $4 million if the sale goes through.

Credo Real Estate said Whitley Heights could be developed into as many as 80 strata terrace houses, or about 60 strata semi-detached houses, subject to approval.

Analysts are bullish on the future of the landed housing market. They forecast that prices of landed housing would rise by 8 to 10 per cent this year.

Mr Ku noted that other private properties, which have the potential to follow in Whitley Heights' footsteps, are Kiam Hock Gardens, Kew Lodge, Orchid Apartments and Charming Gardens.

Source:www.todayonline.com

SINGAPORE - Prices of private residential properties hit new highs in the fourth quarter of last year, capping a year of spectacular surge in private home prices.

According to flash estimates from the Urban Redevelopment Authority (URA) yesterday, the price index for private residential property jumped 17.6 per cent last year - a 10-fold spike in the rate of increase compared to the recession-hit 2009, when overall prices of private properties rose by 1.7 per cent.

The spot of good news for private home hunters is that the increase in prices appears to be moderating: Prices rose 2.7 per cent between October and December, compared to a 2.9 per cent increase in the third quarter.

With private home prices already surging past their 1996 peaks, property analysts believe there is little room for further increase; and as prices stabilise, they noted that the Government may not need to introduce new measures to curb overheating any time soon.

Cushman & Wakefield vice- chairman of property brokerage Donald Han said: "If you look into the price increases we saw both for HDB and private property, the price increases were in the comfortable range, between 2 per cent and 3 per cent quarterly ... Alarm bells will ring if you see a quarter-to-quarter increase of between 5 and 6 per cent, or even in excess of that."

For the whole of 2010, private home prices surged 14.3 per cent, 17.5 per cent and 14.5 per cent in the central, city-fringe and suburban regions, respectively.

Property analysts said increases of similar magnitude are unlikely to be seen this year as economic growth moderates.

Singapore's economy is expected to expand between 4 and 6 per cent this year, compared to an estimated 14.7 per cent growth last year.

Prices of non-landed residential properties in the core-central region increased 2.3 per cent in the fourth quarter, more than any other region. The city-fringe area recorded a 1.7-per-cent rise, while the suburban areas witnessed a price increase of 1.6 per cent in the same period.

Analysts expect private home prices to rise between 8 and 12 per cent this year, with high-end homes - which are yet to reach their 2008 peak - leading the price increases. They noted that foreigners will continue to favour mid-tier housing.

Said Ms Tay Huey Ying, director of research and consultancy at Colliers International: "In view of uncertainties still lurking in the larger global economies, by and large, foreign demand would continue to look to contain their risk exposure in the property sector by focusing their purchases in the more affordable range in the mass market and the mid-tier."

She added: "When these homes are eventually completed and there is a lack of rental demand, this may not bode well for the market."

Ms Tay said that developers may be keeping "aggressive pricing strategies at bay", following the Government's cooling measures in August and its ramping up of land supply.

But Mr Han, for one, was not ruling out further Government intervention should prices increase "beyond economic fundamentals". Mr Han added that should the Government be forced to act, it could tweak the loan-to-value ratio for homeowners' second and subsequent properties which stands at 70 per cent currently.

by Jo-Ann Huang Limin
05:55 AM Jan 04, 2011

Source: www.todayonline.com

by Ong Kah Seng
05:55 AM Dec 31, 2010

2010 has been an impressive year for the landed housing segment, with prices rising 23 per cent in the first three quarters, including a 7.7-per-cent increase in the third quarter from the second.

Amid the outstanding overall results, the superlative in the landed housing segment - good-class bungalows (GCBs) - continued to shine. GCBs are essentially detached homes sitting on at least 1,400 sq m of land, in 39 designated areas such as Swettenham Road, White House Park, Nassim Road and Chatsworth Park.

Although the number of transactions of GCBs in the first 11 months of the year was similar to the corresponding period last year, the value transacted climbed to a new record high of $1.69 billion.

This is 18 per cent above the value of GCBs transacted in the whole of last year, the previous historic high.

The most striking achievement is that on a psf of land basis, the $1,052 average price of GCBs transacted this year reflected a 28 per cent increase in the first 11 months of the year.

This price rise was above a corresponding 25 per cent average annual increase for all landed residential properties.

Some GCBs have been sold repeatedly over the years, reflecting sustainable capital appreciation in this premium segment.

For example, a GCB in Nassim Road changed hands five times in the past six years - beginning from a transaction at $405 psf of land in Feb 2005 to a fifth in April this year at $1,800 psf of land.



DWINDLING SUPPLY, RISING DEMAND

GCB values, fundamentally underpinned by limited supply, have been given a further boost on the demand side from buyers who are increasingly discerning and contesting for homes with special selling points for future appreciation.

Moreover, with prices already at record highs, the cost of a home for a purchaser is becoming a secondary concern compared to the potential for capital appreciation.

GCBs, which are at the highest rung of private homes and which are unlikely to see a major rise in new completions, will be among the safest buys for a purchaser who is not burdened by affordability concerns.

A GCB, exclusive and rare in supply, is thus felt to offer more room for capital gains.

Singapore has embraced vertical city living over the past decade due to land scarcity. Developers' offerings are predominantly non-landed residential properties and choice landed homes, including some at off-the-beaten locations, are becoming more and more attractive.

Notwithstanding developers' efforts to brand condominiums with innovative concepts, such homes are fairly homogenous and the exclusivity is at most "development specific", i.e. there will be at least several similar units in a development with similar designs.

In contrast, buyers of GCBs will be able to customise their homes to be materially different from another.

Although many landed homes are not in a central location, i.e. close to major transport nodes, they will still be prized by those who value privacy and an exclusive environment, away from major activity areas and town centres.

Landed homes in off-the-beaten places may continue to receive buying interest predominantly for owner occupation, from those who wish to have differentiation between work and leisure.

The merit of GCBs is that many of such homes are centrally located, further enhancing their appeal to potential buyers of landed housing.

Some buyers are also interested in the redevelopment potential of the land on which the GCB sits.

GCB owners are often property connoisseurs who will only part with their home if prices significantly exceed personal value.

But while the limited supply will support price increases, buyers will not be hasty as a GCB purchase is a major decision.



MORE UPSIDE BUT AT A SLOWER PACE

Landed homes are also not likely to be significantly affected by the Government's efforts to cool the overall housing market.

This segment of the market is different from the non-landed residential sector as it appeals to buyers who are not burdened by affordability concerns and the case for Government intervention to ensure prices are affordable is weaker.

And if prices are suppressed, these properties will become even more attractive and the buying interest for such special value buys may further increase, notwithstanding new restrictions.

Going into 2011, the price increase for GCBs is expected to continue, backed by the sustained economic recovery and rising awareness of GCBs as special value buys.

But the rate of capital appreciation is set to slow to an expected 3 per cent per quarter increase next year, as higher prices face increasing resistance even as the product offerings are unique.



The writer is Senior Manager, Research - Asia Pacific at Cushman & Wakefield.


Source: www.todayonline.com

05:55 AM Dec 23, 2010

SINGAPORE - The record $36 million deal for a bungalow at Paradise Island on Sentosa Cove has reportedly been called off.

According to Lianhe Zaobao, the buyer - identified in earlier media reports as Mr Shen Bin, a 31-year-old Chinese national who is a Singapore Permanent Resident - has backed out of the deal and lost about $500,000 in deposit, agent fees, legal fees and procedural fees.

The newspaper said the buyer called off the deal after he realised he paid over the market rate, after reading media reports surrounding the sale. The deal - touted as the priciest in the upscale waterfront housing district - came to light in June, based on caveat records captured by the Urban Redevelopment Authority and was said to have been signed on May 3.

Currently the chief financial officer, Mr Shen Bin is slated to take over his father, Mr Shen Wen Rong's company, Chinese firm Sha Steel.

Source: www.todayonline.com

Published December 22, 2010

Landed homes' capital values rise faster than apartments, condos
Average cap value of prime resale freehold landed homes up 5.1% in Q4

By KALPANA RASHIWALA


AVERAGE cap values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the fourth quarter as well as the whole of this year, show latest figures from DTZ.

DTZ's analysis referred only to resale landed and non-landed homes, that is, properties that had already obtained Certificate of Statutory Completion.

'The limited stock of landed homes has made them prized assets, especially those in the prime districts. Landed homes currently account for about 26 per cent of Singapore's total private housing stock (including executive condos), with very limited supply in the pipeline. In contrast, the supply of non-landed private homes is injected at a faster pace via the Government Land Sales programme and collective sales,' says DTZ's Southeast Asia research head Chua Chor Hoon.

The average capital value of prime resale freehold landed homes stood at $1,693 per square foot (psf) on land area in Q4 2010, up 5.1 per cent from the previous quarter, taking the full-year increase to 17 per cent. For suburban freehold landed houses, the average capital value increased 4.3 per cent quarter on quarter to $993 psf in Q4, resulting in a full-year appreciation of 15.5 per cent.

In the non-landed segment, the average cap value for 99-year suburban condos remained unchanged at $660 psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8 per cent. The average price of prime freehold condos increased 0.4 per cent quarter on quarter to $1,520 psf in Q4, also reflecting an 8 per cent full-year price gain.


DTZ said prices in these two segments are hitting resistance, having risen by about 18 per cent and 36 per cent since their respective Q1 2009 troughs following the global financial crisis. The latest cap values are also above the respective Q4 2007 peak levels, it noted.

'Greater prudence is also being exercised on buyers' part following the latest property cooling measures introduced on Aug 30. Buyers are more selective and prefer projects with good location attributes such as proximity to MRT stations, schools or the central business district,' DTZ said.

On the other hand, the Q4 2010 average cap value of freehold luxury condos (above 2,500 sq ft) in the prime districts was $2,630 psf, about 6 per cent shy of the Q4 2007 peak of $2,800 psf. The latest Q4 figure was unchanged from the preceding three months while the full-year 2010 increase was 9.6 per cent.

'With a limited pool of buyers being able to afford these luxurious units which require a large quantum sum, this segment has seen more subdued purchasing activity,' DTZ said.

The firm's executive director (residential) Margaret Thean said: 'Although there's less activity in the high-end segment, we're still seeing strong interest from Chinese and Indian nationals, and increasingly from institutional investors such as funds. They have confidence in future price growth due to Singapore's strong economic fundamentals. As for individual foreigners buying for owner occupation, completed developments near renowned schools particularly interest them.'

Ms Chua predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 5 per cent if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

She expects prices of landed homes to continue to outperform those of apartments and condos due to their relative scarcity appeal.

Source: www.businesstimes.com.sg

by Tang Hsu Jing
05:54 AM Dec 17, 2010

The landed residential sector has been a consistent star performer over the last year or so. It is a sector that has powered on even after the Government exercised round after round of property market cooling measures. The optimism was also evident in the keen interest from developers in the recent government-released landed housing plots for Phase 3 of Sembawang Greenvale.

Within this premium landed segment, there is significant difference in the price performance between freehold and leasehold properties. This article focuses on two districts, 10 and 16, where there are good and comparable freehold and leasehold landed residential properties. It is based on the analysis of caveats lodged in the Urban Redevelopment Authority's Realis system since 2000 for terrace, semi-detached and detached houses comparable in size and age.

For the purposes of this article, freehold and 999-year leasehold properties have been combined under the same category. The practical definition adopted for freehold properties is one where the owners have the right to own the properties in perpetuity: The tenure is of an indeterminate duration. Leasehold properties of 999-year tenure effectively function like freehold properties, although from a legal perspective, they are still leasehold properties. Lastly, leasehold residential properties are those whose land reverts back to the State at the end of the tenure, typically a 99-year term.

The premium of freehold landed properties over 99-year leasehold landed properties is typically about 15 to 20 per cent. However, this can widen during a hot market, when there is added interest in freehold landed housing. This trend was observed in the districts analysed. During the mid-2000s, the rate of capital appreciation for freehold properties began to increase faster than that of its leasehold counterparts, thus widening the premium for freehold landed properties. This can be rationalised by the inverse relationship between the age of leasehold landed properties and remaining years in the tenure, which slows down the rate of capital appreciation after some time. Thus, as one would expect, freehold properties have a better rate of capital appreciation in the long term.

Despite the better long-term rate of capital appreciation, freehold properties are more volatile in terms of prices and the annual rate of capital appreciation. This can be explained by the popularity and scarcity of freehold landed properties, especially during an upmarket.

Although tenure is an important factor, the immediate surrounding of the property is also important. If a freehold landed property is located in a less-superior location, the price performance of this property could be equivalent to a leasehold landed property. Factors such as noise caused by proximity to major roads/expressways, industrial properties or lack of accessibility contribute to price performance as well.

Although freehold landed properties generally exhibit better price performance than leasehold ones, due to the limited supply of landed homes in Singapore, leasehold landed properties are still valuable and much sought after.

Leasehold landed properties may also be a better option if you are looking to lease the property out for rental income, as the tenure of the property does not matter to the tenant. You may also consider the purchase of a leasehold landed property to enjoy specific attributes of the property, for example, individual character, design of the house, immediate environment, local amenities and so forth.

However, one should be aware that, when the tenure of a leasehold property dips below 30 years, it may be difficult to sell the property, as prospective buyers are not able to secure a bank loan. According to the Central Provident Fund Board, buyers are not allowed to withdraw from their CPF when the tenure is less than 30 years.

In a perfect world, everybody would prefer to buy a freehold property for the better price performance, perpetual ownership and the better wealth preservation factors. But in the real world, we are faced with other factors or challenges, such as budget constraints, the availability or supply, individual needs, investment objectives, and so forth, so that a leasehold landed property may be a more suitable purchase.



The writer is consultancy and research analyst at Knight Frank.

Source: www.todayonline.com

Published December 17, 2010

Good-class bungalows join the party as auctions raise cheer

By KALPANA RASHIWALA

(SINGAPORE) Property auctions went more upmarket this year, with several good class bungalows going under the hammer and a changing breed of buyers bidding to snap up real estate.


In all, the value of properties sold at auctions rose 33 per cent to $223.9 million this year, buoyed by rising property prices and more big ticket sales.

The residential sector accounted for more than half, or 51.3 per cent of the total value of properties sold at auctions this year, according Colliers International. Most sellers were owners themselves as the value of mortgagee sales fell.

The $114.8 million worth of homes that changed hands at auctions in 2010 reflect an increase of 30 per cent from last year. Just 12 landed homes accounted for $79 million, or 70 per cent, of this number.

These included four bungalows in Good Class Bungalow (GCB) Areas - 4 Margoliouth Road, 6 Coronation Road West, 53 Sixth Avenue and 5 Chestnut Close - sold for a total $57.4 million. Last year, 18 landed homes were sold for $37.7 million, none of them in a GCB area, said Colliers.

In the non-landed residential segment, 24 properties were transacted at auctions for $35.88 million, of which nine (totalling $21.7 million) were in prime districts.

The most expensive non-landed residential unit sold at auction this year was a unit at D'Grove Villas in the Orange Grove area which fetched $5.42 million, followed by a unit in Makeway View in the Kampong Java Road location ($3.88 million) and a unit in Oceanfront, Sentosa Cove ($3.15 million).

On the whole, while the value of properties sold at auctions rose 33 per cent this year, the number of properties transacted fell nearly 40 per cent to 71 this year. This year's $223.9 million auction sales was still 45 per cent shy of the decade's high of $407.4 million in 2007.

Colliers said that while the value of properties sold at auction arising from owner sales jumped from $90.8 million last year to $178.6 million in 2010, the value of mortgagee sale properties sold at auction declined from $77.6 million to $45.3 million.

The number of properties put up for auction by mortagees declined from 195 in 2009 to 103 this year, the lowest level in 13 years. Owners put 688 properties on the auction block this year, also down from 732 last year.

Knight Frank executive director Mary Sai said that while auctions were becoming more popular among owners looking to sell, mortgagee sales had lost share as the robust economy meant fewer non-performing loans.

'Also, the appreciation in real estate values reduces the risk of borrowers defaulting on loans,' she said.

Colliers deputy managing director Grace Ng said that the profile of buyers has changed from a crowd seeking distressed assets to one that regards auctions as an avenue to acquire prime properties.

'Increasingly, we see permanent residents and foreign bidders from neighbouring countries - including Malaysia, Indonesia, Hong Kong, India and even China - attending auctions,' she added.

Ms Sai reckons residential properties will continue to hog the limelight at auctions next year as 'their stock is more readily available for auction than non-residential properties'.

In fact, non-residential properties on the auction block were generally muted this year. Owners of shop units, shophouses, office and industrial units enjoyed attractive net rental yields of about 4-5 per cent on them. 'Hence, they're less forthcoming in parting with these cash-cows,' said Ms Sai.

Ms Ng highlighted that there were 11 high-value properties (each over $5 million) sold at auction this year, against just two last year. This year's high-value deals included a shophouse hotel at Desker Road which fetched $10.3 million, five strata office units at The Central ($9.98 million) and a petrol station at Jalan Ahmad Ibrahim ($30.2 million).

The value of office units sold at auctions rose from just $3 million last year to $18.2 million this year as optimism returned to the sector amid rapid recovery in office demand and rents.

Auction sales of retail properties fell from $43.4 million in 2009 to $27.1 million this year, while the figure for industrial properties halved to $10.3 million.

Ms Ng reckons the value of auction sales next year is likely to exceed $200 million. Mortgagee sales are expected to continue their downward trend.


Source: www.businesstimes.com.sg

Published December 9, 2010


Good Class Bungalow deals hit record $1.85b
At least another $100m of GCB deals could be finalised by year-end

THE value of Good Class Bungalow (GCB) transactions so far this year has reached nearly $1.85 billion, a new record and up 7.3 per cent from the $1.72 billion worth of deals done for the whole of 2009, based on CB Richard Ellis's analysis of URA Realis caveats information as at Dec 8.

However, based on information gathered by BT, there could be at least another $100 million of GCB deals where options have yet to be exercised and which could be finalised by year's end.

Among the deals already closed but for which caveats have yet to be lodged is said to be the Japanese government's sale of 18 Astrid Hill for about $28.4 million or about $1,500 per square foot on the land area of 18,939 sq ft.

BT understands the buyer is Hersing Corporation chairman Harry Chua, who is expected to tear down and redevelop the freehold property. The current two-storey bungalow on the site was the former home of the Japanese ambassador in Singapore. The property was sold through a tender conducted by Knight Frank on behalf of the Japanese government.

Interestingly, a neighbouring property in Astrid Hill was sold in November for $25 million or $1,169 psf based on the land area of 21,377 sq ft. Its seller reaped a handsome profit of $6.4 million or about 34 per cent from a holding period of under a year; the property was previously transacted in February this year for $18.6 million.

Another recent profitable GCB transaction was a property at Cluny Hill, which sold last month for $30 million or $1,533 psf, a 63 per cent return measured against the seller's purchase price of $18.38 million in April last year.

A profitable exit was also achieved on a bungalow at Belmont Road that traded in October at $35.76 million or $1,220 psf on land area of 29,310 sq ft; it previously changed hands in October last year for $27.35 million. The latest buyer is said to be Jardine Cycle & Carriage.

The $1.85 billion of GCB deals YTD 2010 involved 101 transactions - slightly shy of the 109 deals in 2009 and 119 deals in 2006. The average price of GCBs sold has doubled from $501 psf on land area in 2006 to $1,056 psf for YTD 2010. The latest figure is also 27.1 per cent higher than the $831 psf average price for last year.

As well, the average GCB transaction size has also grown from $10.3 million in 2006 to $18.3 million so far this year. The latest figure is up 15.8 per cent from last year.

CB Richard Ellis's director, luxury homes, Douglas Wong credits the increase in GCB prices to Singapore's economic growth, its ability to attract ultra high net worth permanent residents and citizens in recent years, the opening of the integrated resorts, and the limited stock of GCBs, numbering about 2,400.

'GCBs have also appealed to ultra high networths seeking a hedge against inflation, especially given Singapore's political stability,' he added.

CBRE forecasts about 100 GCB deals next year at about $2 billion with average price appreciation of about 8-10 per cent.

'The GCB market is set to remain firm based on the interplay of demand and supply factors. Like an evergreen product, GCBs will continue to attract well-heeled local businessmen, bankers, doctors and lawyers as well as permanent residents,' he added.

RealStar Premier Property managing director William Wong too is optimistic about the GCB market next year. 'We'll be seeing more PRs turning to Singapore citizens next year and this will allow them to buy bigger-plot GCBs or more than one GCB. I believe there will be shortage of big-plot GCBs to meet the demand of some of these ultra-rich new citizens. Prices of GCBs in prime locations such as Tanglin will likely hit above $2,000 psf next year from about $1,800 psf currently,' he said.

Typically, one has to be a Singapore citizen before one can own a GCB. However, PRs who have made sufficient economic contribution are known to have been given permission by the Land Dealings (Approval) Unit on a case-by-case basis to buy a small GCB with land area up to 15,000 sq ft for owner occupation.

Some foreign companies, depending on their economic footprint here, have also been given LDAU's nod to buy a GCB, typically for use as their chief executive's residence.

Typically the minimum land area of a GCB is 15,069 sq ft. However, when GCB Areas were gazetted in 1980, there were some existing sites smaller than that in these locations. They are still considered GCBs and bound by the other planning rules.

Source: www.businesstimes.com.sg

Landed property fever?

Judging from present trends, the landed segment appears to be headed for new highs

by Ong TeckHui
05:55 AM Nov 19, 2010

Six weeks ago, this paper featured my article, Quest for landed property picks up. In it, I touched on the growing scarcity of landed properties in Singapore and its impact on demand and prices.

We observed how landed property prices outperformed non-landed prices during this market upturn. Landed home prices rose 43.2 per cent, compared to 37 per cent for non-landed ones between the middle of last year and the middle of this year, according to the Urban Redevelopment Authority's (URA) residential property price index. Since that article was published, several events have occurred that make it worthwhile to pursue the landed story further.



Landed homes outperform by an even wider margin

When the URA released the third-quarter real estate statistics on Oct 22, all eyes were on the residential price index to see how the market might have been affected by the Aug 30 cooling measures.

As expected, overall prices of private residential properties increased at a slower pace of 2.9 per cent in 3Q2010, compared to 5.3 per cent in the previous quarter.

Closer scrutiny revealed a divergence in the price increases between non-landed and landed homes.

While the rate of price increase for non-landed homes slowed to 1.6 per cent in 3Q2010 from 5 per cent in 2Q2010, that for landed homes bucked the trend by picking up. Landed prices rose 6.2 per cent in 2Q2010 but surged 7.7 per cent in the third quarter. Five quarters of a rising market have pushed landed prices up by 54 per cent but only 39 per cent for non-landed.

The table above compares price changes between landed and non-landed homes, as well as between the different types of landed homes and in different regions from 2Q2009 to 3Q2010.

While all types of landed property have surpassed non-landed in price performance, it is the detached category that impressed with an overall price increase of 58.3 per cent.

Even more surprising is the 63.9-per-cent price increase for detached houses in the north-east region. Although non-landed prices lagged with a 39.1-per-cent increase for the five quarters, those in the rest of central region enjoyed a creditable increase of 49.8 per cent.

On Oct 28, the URA conducted an auction to sell 14 land parcels for landed property development in Sembawang Greenvale Phase 3. These parcels would generate 115 landed units, the majority of which will be terrace houses.

What surprised many was the bullish bidding at the auction.

At the close of the auction, the URA raked in $134.55 million for a total site area of 246,327 sq ft, working out to $546 psf on average.

By contrast, phases 1 and 2 were sold in Oct 2007 and April 2008 at significantly lower average land prices of $285 psf and $223 psf, respectively. What drove demand for these 99-year leasehold land parcels?



Landed Sandwich Class?

For some upgraders to landed property, the price gap between their existing homes and freehold landed homes may be too much of a stretch financially. The more affordable 99-year leasehold landed home bridges the gap, as prices for such properties are about 20 to 25 per cent lower than freehold ones.

Over the years, a critical mass of 99-year landed homes has grown into an established market. In the first three quarters of this year, 17 per cent of all landed property transactions were for 99-year leasehold homes.

Compared to freehold property, the values of 99-year landed homes appreciate slower but their affordability continues to attract buyers.



New benchmarks raise price expectations

Under the present market conditions, 99-year terrace and semi-detached houses on the secondary market in suburban locations generally command $600 to $800 psf, while the $1,000 psf threshold is crossed mainly in the prime districts.

For example, a 3,000-sq-ft semi-detached house in Kingsville (102 years lease from 1996) sold for $3.9 million, or $1,300 psf, while a 3,423-sq-ft terrace house at The Greenwood (103 years from 2008) sold for $3.44 million, or $1,005 psf.

However, Sembawang Greenvale, an outlying location in the north, has also seen new 99-year leasehold houses selling for more than $1,000 psf.

A 1,668-sq-ft terrace house (99 years from 2008) transacted at close to $1.8 million, or $1,070 psf , while another with 1,808 sq ft fetched $1.82 million, or $1,006 psf. Numerous other similar properties in that area have commanded above $900 psf.

Such bullish pricing has contributed to enthusiastic bidding for the Sembawang Greenvale land parcels and the market can expect new units to be just as optimistically priced when they are launched.

At land prices of between $443psf to $640psf in Sembawang Greenvale, the target sale price for a typical 99-year terrace house would be around $2 million, or $1,200 psf, which would be a new benchmark for this market segment.

Judging from present trends, it appears that the landed segment of the property market is headed for new highs.



The writer is executive director, Research and Consultancy at Credo Real Estate.


source: www.todayonline.com/Business

Residential collective sales gaining momentum, set to continue next year

by Stella Hoh
05:55 AM Nov 05, 2010

Collective sale transactions have totalled $975.6 million so far this year and over 90 per cent of this total is made up of residential transactions. Renewed confidence in the Singapore home market and an increasing number of residential transactions over the past months lead us to believe that the "en bloc" trend will continue to gain momentum moving into next year.

Since the phenomenon of collective sales began in the mid-1990s, more than 400 buildings have been sold en bloc. Historically, the focus has always been on the residential sector rather than mixed-use developments as the latter often face challenges that arise when apportioning the sales proceeds to satisfy the owners.

This is further complicated by the allotment of share value, which vests more shares per square metre for shops in comparison to offices or residential units and the location or frontage of the units.

Despite these challenges and among a handful of total mixed-use collective sales, Jones Lang LaSalle successfully brokered most of such sales, including Katong Mall, Kim Seng Plaza and Eng Cheong Tower. It is currently marketing Paramount Hotel and Shopping Centre, the tender of which closes on Nov 23.

The rise in the popularity of collective sales this year could be attributed to improving fundamentals of the Singapore property market and the widening gap between new sale and resale prices for homes.

Median prices for new sales average 48 per cent above those of resale transactions during the first three quarters of this year. These factors seem to have encouraged owners of older properties to band together and attempt a collective sale of their estates.

The collective sale process begins with the formation of a sales committee. The committee appoints solicitors and a real estate consultant to act on its behalf, for the owners' consideration. The appointment of the sales committee, real estate consultants and solicitors, and the terms and conditions of the collective sale agreement, are finalised through extraordinary general meetings.

Most importantly, a reserve price and a method of apportioning the sale proceeds have to be approved by the owners. Following this, the collective sale development has a maximum period of 12 months to secure the mandate from at least 80 per cent of the owners by both share value and strata floor area if the estate is older than 10 years.

Upon achieving this 80 per cent mark and before the next 12 months are up, the site is launched for sale by tender. Upon the award of tender or the final negotiation of the sales and purchase agreement, the owners will apply to the Strata Title Board (STB) for an order for sale. If there is 100 per cent consensus to sell from the owners, the STB application process is not required.

Mediation and the STB order for sale follow. However, if the STB order is not obtained, application to the High Court is required and the time required to obtain the sale order will be subjected to the proceedings of the High Court. Minority owners may contest the sale of the property - often this occurs when there is a difference over the apportionment method. In this case, the STB will be the mediator.

Completion of the sale typically takes three months and is then followed by a four-to-six month period of vacant possession. Generally speaking, the end-to-end collective sale process takes between 18 and 36 months and requires matching a developer or investor to the site for sale.

Apartment owners in a building opting for a collective sale are usually seeking a potential price gap or "premium" from selling their apartment by collective sale as opposed to an individual sale. In the case of owner-occupiers, the cost of a replacement property is a major consideration.

Developers or investors are often seeking potential gains from the pricing gap between new sale and resale transactions, as mentioned earlier. When the forward cycle remains on the uptrend, potential gains will be maintained if not widened.

Developers or investors are also seeking gains from land intensification - or the gap between baseline and maximum permissible gross floor area (GFA) for redevelopment purposes.

The property measures announced in August may have some impact on the prices of new residential launches, especially in the upgraders market. However, developers, especially the small to medium-sized ones, will look to replenish their land supply in a strong and improving economic situation.

In the current market for collective sales, investor interest seems to be focused on the Central, City fringe and East Coast. However, successful collective sales have been recorded mainly in upgraders' locations, including Balestier and Toa Payoh (District 12), Geylang and Eunos (District 14) and Serangoon, and Hougang (District 19).

In particular, District 19 has stood out this year in terms of transactional value. Jones Lang LaSalle recently closed the collective sale of Glenville at Lim Tua Tow Road off Upper Serangoon Road for $39.5 million and set a benchmark price in excess of $700 per square foot per plot ratio (psf ppr) for the Serangoon area.

In line with the increase in the popularity of residential collective sales, we are seeing a bounce back in terms of transactional values. The largest collective sale transacted so far this year was the sale of Meng Garden in the River Valley area, which sold for $137 million or $1,380 psf ppr. This is a significant quantum and still competitive when compared with the latest collective sales in the vicinity that were transacted in 3Q07.

Considering that Jones Lang LaSalle's prime capital values have returned to the 3Q07 level, land values have yet to catch up when compared to Grange Court, which sold for $72.8 million or S$1,710 psf ppr, and Char Yong Garden for $420 million or $1,800 psf ppr. Incidentally, Char Yong Garden was successfully sold by Jones Lang LaSalle.

As long as economic conditions continue to improve, we expect collective sales prices will continue to trend up. Collective sale volumes will be maintained next year, in line with moderate growth in capital values expected off the back of recent government measures, as the price gap between new sale and resale prices remains large.

The writer is Head of Investments at Jones Lang LaSalle.

Source: www.todayonline.com

URA also launches another 99-year leasehold plot at Seletar Road


By KALPANA RASHIWALA


A HOUSE in Punggol built in 1902 by the father of the late legal eagle Howard Cashin has been put up for sale as part of a 99-year leasehold private residential site launched for tender by the Urban Redevelopment Authority yesterday.

The single-storey house will have to be conserved and restored for use as a clubhouse or private residential use within the new proposed development on the site. Matilda House was acquired by the government under the Land Acquisition Act in the mid-1980s and gazetted as a conservation building on Feb 21, 2000.

The house was built in 1902 by Alexander Cashin, the father of Howard Cashin and son of Joseph Cashin, who arrived in Singapore in the 1840s. Starting out as a lawyer's clerk, Joseph Cashin made his fortune investing in legal opium farms in the 1880s and later, in real estate. Cashin Street, next to Bras Basah Complex, was named after him.

The Cashin family was one of the oldest Irish families to have settled in Singapore and owned several other houses as well as about 400 shophouses here.

Matilda House is named after Mr Joseph Cashin's wife. Mr Alexander Cashin built it as a present for his wife, according to an article in October 2002 in The New Paper. The Punggol seaside bungalow served as a weekend retreat for the family. Sited on the Punggol seafront, it was surrounded by orchards on all sides. The Cashin family also owned about 350 hectares of land in the area on which there were also rubber and coconut plantations.

The house today is in pretty rundown condition sparking some talk about it being spooked.

URA said that Matilda House is an example of an early-style tropical bungalow. Its distinctive features include entrances on both sides of the main building, raised floors, timber lattice and louvred windows and transoms to allow cross-ventilation. It is the only remaining historic bungalow in Punggol Town.

The single-storey Matilda House has an existing gross floor area of about 4,488 sq ft. In addition to this, the successful bidder of the 2.7 hectare site (which includes Matilda House) can develop a total 888,904 sq ft gross floor area of new buildings. This can generate a condominium with about 810 units.

Credo Real Estate executive director Ong Teck Hui describes the plot as a 'plum suburban site with many things in its favour - proximity to Punggol MRT Station, the bus interchange and the proposed town centre, with Matilda House thrown in for uniqueness'.

Based on current sentiment, the site could draw six to 10 bidders with top bids of around $400 to $450 psf per plot ratio (psf ppr), or $355-400 million in absolute quantum.

SLP International Property Consultants executive director Nicholas Mak predicts bids of about $380-420 psf ppr, with five to nine bids expected.

The tender for this site closes on Dec 7.

URA yesterday also launched for tender another 99-year leasehold plot at Seletar Road, slated for development into condominium/flats (up to five storeys) or landed housing/strata landed housing (up to two storeys). If developed into a condo, the 1.7 hectare plot can generate about 270 units.

The site is next to a plot awarded to Far East Organization at a state tender that closed in September last year at $376 psf ppr. Far East is developing Greenwich V (comprising 35 shop units) and The Greenwich, a 319-unit condo, on the site. It released the condo in early August and to date has sold 233 units.

Credo's Mr Ong notes that caveats for The Greenwich have been lodged at about $1,300-1,400 psf for smallish units and $1,000-1,100 psf for more normal-sized apartments.

Mr Ong observed that while the latest site also enjoys a good location in the Seletar Hills area, which is in good demand and which will benefit further from the aerospace hub, 'it is in a way 'landlocked', sandwiched by landed estates, the Greenwich development and a SingTel telephone exchange'.

He predicts four to eight bidders going by current sentiments, with top bids in the $550-600 psf ppr range (or about $145-158 million).

Mr Mak says the site may attract four to seven bids with top bids coming in at $320-360 psf ppr. 'Some of the bidders could be medium-size developers as the absolute land cost is not excessive,' he added.

The tender for this site closes on Dec 14.

Published October 27, 2010

http://www.businesstimes.com.sg

Published October 21, 2010

Subsales of private homes in Sept down 52%, resales slide 42%, prelim figures show

By KALPANA RASHIWALA

(SINGAPORE) Secondary market transactions of private homes slowed down considerably in September over the preceding month following the property cooling measures announced on August 30.

The number of subsales fell about 52 per cent month on month in September, while resales of private homes eased 42 per cent over the same period, an analysis of URA Realis caveats data as of Oct 19 shows.

The sales volumes are expected to increase over the next few weeks as more caveats are lodged for September's transactions. Nevertheless, market watchers reckon the preliminary numbers shown in the analysis by Credo Real Estate is an indication of the slowdown of activity in the secondary market for private homes following the government measures.

Subsales and resales are secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales refer to developments with CSC.

Last Friday, Urban Redevelopment Authority (URA) unveiled data showing that the number of private homes sold by developers fell about 28 per cent month on month to 911 units in September. However, analysts cautioned against comparing this rate of slowdown with declines for secondary market deals.

This is because URA primary market sales numbers are sourced from monthly surveys of developers, whereas data on the number of subsales and resales are collated from caveats lodged, and there's typically a lag of about 2-3 weeks or even more, between an option being granted and a caveat being lodged (the latter usually takes place upon exercise of option).

However, at least one seasoned property consultant was willing to say that the data is a 'good reflection' of what's happening in the market. DTZ executive director Ong Choon Fah said: 'Chances of successful sales in the secondary market these days are lower as people do not have that much control. It's not as organised, whereas in the primary market, a developer will first test the market to ensure there's a reasonable chance of good response before launching the project. It's a more managed process.'

Mrs Ong said another reason secondary market sellers were less successful than developers last month is that 'by and large, owners are trying to hold on to their prices, which is why we're seeing a standoff in the secondary market'.

'Whereas developers, if they want to launch, have to ensure there'll be sales activity. In recent weeks, we've seen them releasing new projects at the lower end of their original price expectations.'

Credo's caveats analysis showed that the number of caveats lodged for subsales of private homes slipped from 311 in August to 150 in September. The volume of resale caveats eased from 1,927 in August to 1,113 in September.

The last time the subsale figure was this low was in February 2009 (127 units) while the latest resale figure is close to the 1,009 transactions seen in April 2009, in the aftermath of the global financial crash.

Credo's executive director Ong Teck Hui also highlights that the 150-unit subsale volume for September is about half the 304-unit average for January to August this year, while the September resale figure of 1,113 units is down 37 per cent from the 1,767-unit average for Jan-Aug 2010.

The most expensive subsale of a landed home in September (in both absolute quantum and per square foot pricing) was a bungalow at Kasara - The Lake collection at Sentosa Cove, which sold at $16.75 million or $1,853 psf of land area of 9,042 sq ft. It was previously transacted for $14.428 million in December 2009, reflecting a profit of about 16 per cent.

In the non-landed housing segment, the priciest subsale in September based on psf of strata area was a 46th level unit at Marina Bay Residences which sold for about $7.4 million or $3,790 psf, after being previously purchased for about $5 million in January 2007. That works out to a 48 per cent gain over a period of three years and eight months.

In absolute price quantum, the most expensive non-landed subsale last month was a 3,251 sq ft unit at Parkview Eclat at Grange Road which fetched $9.95 million ($3,061 psf of strata area). This was 15 per cent below the $11.7 million at which the unit was previously transacted in August 2007.

Among resale deals, the priciest condo last month in absolute price was $14.24 million, for a 6,060 sq ft unit at St Regis Residences. In psf terms, the most expensive condo was a 2,885-sq ft apartment on the 23rd floor of Ardmore Park, which fetched $3,467 psf.

For landed homes, the most expensive resale deal in September was a good class bungalow at Jervois Road, which sold for nearly $27.2 million ($1,293 psf of land area). On a psf basis, the priciest resale was a bungalow at Lakeshore View at Sentosa Cove which fetched $1,899 psf (or $14 million in total).

Property consultants expect private home sales to remain slow for the rest of the year in both primary and secondary markets, due to the seasonal year-end slowdown. 'The market will take time to consolidate and adjust to the new policies,' says CB Richard Ellis executive director Li Hiaw Ho.

DTZ's Mrs Ong says: 'There has to be a marked and prolonged slowdown in activity before sellers reprice their units. Prices are always more sticky going down.'


http://www.businesstimes.com.sg

Published October 19, 2010

Amendment Bill also raises penalties for foreign buyers who flout rules


By UMA SHANKARI


(SINGAPORE) The law which governs foreign ownership of landed residential property in Singapore, will be amended to make it costlier for foreign developers to speculate in land here.

The Bill to amend the Residential Property Act (RPA), introduced in parliament yesterday, also aims to increase the penalties imposed on foreigners who flout the rules.

The RPA, which was first introduced in 1973, mandates that 'foreign' housing developers - that is, developers with overseas shareholders and/or foreign directors - must obtain approval to buy private residential land. They are also required to develop and sell units in a 'timely' manner.

The Act also states that permanent residents need approval to buy restricted properties - that is, landed properties and vacant residential land.

They can each buy only one restricted property for owner-occupation and are not allowed to rent out the property. They are also not allowed to sell the property within the initial years.

Right now, foreigners and permanent residents own just over 3 per cent of Singapore's total landed residential stock of close to 70,000 units.

The RPA was last amended in 2006. The new amendment Bill introduced yesterday refines safeguards to prevent developers from speculating. In addition, the penalty framework will also be enhanced to ensure that it continues to be effective and relevant.

Many penalties have not been revised since 1974, despite significant increases in the standard of living and residential property prices in Singapore.

Currently, the RPA mandates that foreign housing developers must complete residential developments within five years (the specified project completion period). They must also sell all units within two years from the time the project receives its temporary occupation permit.

The developers also cannot sell undeveloped residential land.

With the new amendment Bill, the Law Ministry is now proposing that developers who fail to complete and sell their developments within the stipulated period will be subject to a new extension charge framework.

They will pay for the extension of time beyond the original completion timeframe - similar to what they face under the extension premium scheme for sites sold under the government's land sales programme.

Other amendments ensure that foreign purchasers who flout the rules of ownership under the RPA will also face increased penalties.

For example, those who break the rules while buying or selling a restricted property will now face a non-compliance fine of up to $200,000 and/or a three-year jail term, as well as a fine of $2,000 a day for continuing offences. Right now, they face a fine of up to just $5,000 and/or a three-year jail term.

In addition, foreign beneficiaries of restricted properties will have to sell their properties within five years, down from 10 years now. And former Singapore citizens and ex-permanent residents will also have to dispose of their restricted properties within two years after giving up citizenship or permanent resident status.

The amendments are expected to take effect by the end of the year.

http://www.businesstimes.com.sg