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

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

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

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

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 - 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

Published January 25, 2011

JTC launches tender for Ubi site


(SINGAPORE) JTC yesterday launched a 60-year leasehold industrial site at Ubi Road 1/Ubi Avenue 4 for sale by public tender.


According to its announcement last month, a developer has committed to a bid price of not less than $29.38 million, or $88 per square foot per plot ratio (psf ppr) for the site.

The 1.24 hectare site on the reserve list under the Government Land Sales Programme has a maximum permissible gross plot ratio of 2.5. It is zoned for Business 1 development, which means light and clean industry and warehouse uses are allowed.

According to Colliers International industrial director Tan Boon Leong, the site is 'an attractive plot', due to its size and proximity to MRT stations. 'This site is much smaller in hectares, therefore it is more bite-sized. It is also between two MRT stations - Tai Seng and MacPherson.'

In addition, the site is close to the 3.5 ha industrial site won last August by Oxley Rising, which offered a bid of $158.1 million, or $169 psf ppr.

The Oxley Rising site, which has a 2.5 plot ratio and is also zoned for Business 1 development, had 11 bidders, including companies like Qingdao Construction (Singapore) and Sim Lian Holdings.

Mr Tan said the Oxley Rising site has a better frontage, but the size of the Ubi Road 1/Ubi Avenue 4 plot will make it popular. He expects competition for this site to be 'hot', as 'current sentiment is good for doing industrial work'.

The tender for this site will close at 11am on March 7.


Source: www.businesstimes.com.sg

When the latest property measures were unveiled on Jan 13, it took most market watchers by surprise, mainly because we had been reassured several times that the previous rounds of measures announced on Aug 10 had been effective.

Reaction from the local market has been negative but not too severe, as shown in a survey by property blog propwise.sg (see Page B13).

Were these new measures necessary? Definitely.

At the macro level, Singapore's real estate is far from being overleveraged. According to data from the Monetary Authority of Singapore (MAS), as at the end of October last year, total housing loans amounted to $109 billion and the total number of completed private housing units stood at 256,513 units.

This included private residences, from good-class bungalows down to shoebox apartments. Assuming an average value of each unit at $1.1 million, the total value of completed private homes is $282 billion; that is, the loan-to-value ratio is a relatively low 39 per cent islandwide.

However, at the micro-level, pockets of risks exist. Table 1 shows a sampling of the record high prices achieved last year.

The Vision was launched in the first quarter of last year and its "higher-than-the-neighbourhood's" transacted psf prices helped to lift the general valuations in the West Coast. The highest price achieved of the 199 units that were transacted in Q2 last year was $1,266 per sq ft (psf). The average price for The Vision in Q2 2010 was $1,019 psf versus the neighbouring developments Blue Horizon (sharing a common boundary wall with The Vision) at $856 psf and Westcove Condo across the road at $689 psf. The highest price achieved in The Vision is almost double the average price achieved in Westcove Condo that quarter.

The same story unfolded itself across the outskirts throughout 2010: Serangoon, Pasir Panjang, Bukit Panjang, Pasir Ris, Yio Chu Kang, Ang Mo Kio, Yishun and more.

A most recent example is The Lakefront Residences in Jurong West launched in Q4 2010. Of the 167 units transacted, based on the latest Realis data, the highest price achieved was $1,362 psf and the average was $1,074 psf. Just 100m away, the older condominium Lakeholmz, at $681 psf on average, is half of the peak price at The Lakefront Residences (without considering the sizes of apartments, just comparing psf values for the street block). Even if we topped up the 10-year expired lease tenure for Lakeholmz to 99 years and added a generous construction cost of $250 psf, it would be difficult to place a value for a new apartment in that street at above $1,000 psf.

So it would seem Singaporeans value "newness" with a very high premium? Wrong. When we compare the prices of the still-under-construction Caspian (which shares a boundary wall with The Lakefront Residences), at an average of $793 psf in Q4 2010, we see that the newness value is not sufficient to explain the prices achieved at The Lakefront Residences.

Within two to four years, both projects will be delivered to buyers brand new. So why did The Lakefront Residences achieve an average price that is 35-per-cent higher than Caspian's? I am obliged to add two other factors to justify the premium: The "showflat wow" factor and the "showflat peer pressure" factor.



Pushing up the PPI

With premium prices achieved during property launches at 20- to 50-per-cent higher than neighbouring average psf prices and multiplied by the number of transacted units, it is no wonder that the Private Property Index (PPI) kept rising though 2010.

The PPI rose in Q4 2010 despite August's cooling measures. It's a good thing the URA's overall PPI is weighted so that transactions in a few launch projects do not overly distort the PPI. Otherwise, the rise of the Q4 2010 PPI would not have been a mere 2.7 per cent.

And that led us to the latest round of measures.

Apart from the overall islandwide PPI published by URA, investors can refer to URA's website for transactions in specific projects and compare prices so as to make better decisions. However, of late, most investors do not seem to be doing their homework and have purchased in large numbers at record high prices in the suburbs across Singapore.



Who might be the next target?

Investors make up one of several constituents in a property transaction. The past few rounds of measures have already hit investors hard enough. In the next set of measures, if any, the other parties who may be targeted are the developers, the sales agents, the mortgage lenders and valuers.

Many investors and analysts have pointed their fingers at foreign investors and their "hot money" causing Singapore's real estate to overheat.

Yet the new launches that set record-high prices in the suburbs do not attract foreigners as much as they attract Singaporeans. Table 2 shows why we should not blame hot foreign money for bringing on the latest round of measures.

On average, about 25 per cent of residential units are purchased by foreigners. These projects listed in the table are clearly well below the national average. Perhaps Singaporeans are the ones pouring hot money into property.

I would rule out targeting developers unless there are issues of misrepresentation. Otherwise, developers do what they do - acquire land, build showflats, and sell homes.

The sales agents have come under the new Council of Estate Agents and are already facing tighter operating parameters. Again, unless there is bad practice or misrepresentation, I do not think they will be the next target.

As for the mortgage lenders, when I made enquiries about loans for investors buying at these record high prices, the answer invariably was: "Oh, valuers matched developer's selling prices." Of course, as long as there are valuers who can sign off on a certain value for a property, banks are eager to lend.

How might valuers agree to value a new launch that is priced at 20- to 50-per-cent higher than other transactions in the neighbourhood? One counterargument regularly given to me is: As long as there are transactions in this new launch at this price, the valuers can support valuations at the new highs.

In the example of Caspian above, buyers today would find it difficult to obtain a loan based on $1,000psf valuation. Sellers are also unable to ask for prices above $1,000 psf when prospective buyers are unable to secure loans at that value. However, the same buyer can purchase a smaller unit at the same investment quantum at Lakefront Residences at $1,150 psf with a bank loan attached. I wonder why the discrepancy given that the two properties are side-by-side and both are not completed.

By not taking reference from other similar transactions in the neighbourhood, this means that valuations are justified solely on transacted prices within the new launch itself. Without taking into account the lower values of neighbouring condominiums and the intrinsic land value in the vicinity, this valuation method is a self-fulfilling upward spiral.

Having excluded the foreigners, the developers and the sales agents, we are left with two targets for the next set of cooling measures, if any.

Perhaps one approach would be to require valuers to disclose their assumptions and methods to the MAS and valuations for new launches to take into account values of other properties in the neighbourhood. Banks may be instructed to lend for new launches based on this more comprehensive and inclusive method of valuation.

Furthermore, seeing the strong response to the attractive investment package at Spottiswoode18 this week, I believe tougher measures to restore sanity to the market may not be far away.



Ku Swee Yong is the founder of real estate agency International Property Advisor (IPA), which provides services to high-net-worth individuals.

by Ku Swee Yong
05:55 AM Jan 21, 2011

Source: www.todayonline.com

Published January 21, 2011

Govt launches tenders for 3 housing sites
All three plots are near MRT stations in Choa Chu Kang, Sengkang and Bishan

By KALPANA RASHIWALA

THE government yesterday launched tenders for three 99-year leasehold housing sites near Choa Chu Kang, Sengkang and Bishan MRT stations.


This includes two plots on the confirmed list - an executive condo (EC) plot in Choa Chu Kang next to Mi Casa condo, and a private condo site near Sengkang MRT Station.

The third parcel, near Bishan MRT Station, was triggered from the reserve list as announced on Jan 7.

The EC plot at Choa Chu Kang Drive, which is near Choa Chu Kang MRT Station and Lot 1, can generate about 490 housing units. Cushman & Wakefield senior manager of Asia Pacific research Ong Kah Seng estimates top bids for the site at about $260-280 per square foot per plot ratio (psf ppr), translating to a breakeven cost of about $550-580 psf and average selling price in the $600-630 psf range.

Credo Real Estate executive director Ong Teck Hui expects three to five bids with the highest in the $220-240 psf ppr band, reflecting average selling price expectations of about $610-620 psf.

ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years.

The Sengkang plot can be built into a private condo with about 530 units. Both consultants predict the top bid could come in at $350-380 psf ppr and a resulting breakeven cost of about $700-740 psf and average selling price in the $800 psf region.

The calculation factors in the possibility of price softening; one MRT stop away, at Buangkok, units in The Quartz are selling at about $900 psf.

The Sengkang plot launched yesterday is a stone's throw from the bustling Sengkang Town Centre, bus interchange, MRT/LRT stations and Compass Point mall.

On January 7, the government announced that the Bishan plot had been triggered from the reserve list, following a successful application from an unnamed developer that had agreed to bid at least $189.83 million or $300 psf ppr.

Credo's Mr Ong predicts six to 10 bids for the land parcel, with the highest offer around $550-580 psf ppr; this would result in a breakeven cost of about $950 psf and an average selling price of around $1,100 psf.

Cushman's Mr Ong forecasts five to seven bids, with the top in the $450-480 psf ppr range and reflecting an average selling price expectation of about $920-950 psf.

Market watchers expect developer interest for Government Land Sale sites to be cautious following the Jan 13 cooling measures, although overall economic fundamentals remain good.

The tender for the Bishan site closes on Feb 24, followed by the Sengkang plot on March 15, and the Choa Chu Kang EC plot on March 22.


Source: www.businesstimes.com.sg

January 13, 2011, 7.17 pm (Singapore time)

Oxley's Loft@Holland sold out within 2 hrs of launch

By ANGELA TAN


Oxley Holdings Limited said that its Loft@Holland, has met with strong response with all 41 apartment units taken up within two hours of the soft launch on Thursday.


Oxley said the demand was strong enough to require balloting to be conducted for all but two units.

On average, there were about three interested buyers per unit.

The units were booked at prices up from $1,630 psf to $2,166 psf and the buyers were mainly Singaporeans.

Located at 151 Holland Road, the five-storey development comprises 37 one-bedroom units, ranging from 323 - 484 sq ft, and four two-bedroom penthouses with private jacuzzis, ranging from 980 - 1,141 sq ft.

Late Thursday, the Singapore government unveiled a slew of additional measures to cool the property market.

Among the measures, property buyers who are individuals with one or more outstanding housing loans at the time of the new home, the loan-to-value (LTV) limit on housing loans granted by financial institutions regulated by MAS will be lowered from 70 per cent to 60 per cent.


Source: www.businesstimes.com.sg

January 17, 2011, 12.56 pm (Singapore time)


Developers sell 1,332 private homes in Dec

By KALPANA RASHIWALA

Developers sold 1,332 private homes (excluding executive condos or ECs) in December 2010, taking total sales for the whole of last year to 16,364 units.

This figure is 11.4 per cent higher than the 14,688 private homes (excluding ECs) developers sold in 2009.

The latest full-year tally also surpasses the record 14,811 private homes (excluding ECs) developers sold in 2007.

In November 2010, developers disposed of 1,915 private homes excluding ECs.

Including ECs, which are a hybrid between private and public housing, developers sold a total 1,699 units last month, show figures released on Monday by Urban Redevelopment Authority.

The figures, based on monthly sales figures by developers to URA, also show that developers launched 1,179 private homes excluding ECs in December, about half the 2,331 units they launched in November

SOurce: www.businesstimes.com.sg

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.

Published January 19, 2011

Source: www.businesstimes.com.sg

Published January 19, 2011

Small units a big hit at Spottiswoode 18

By UMA SHANKARI

(SINGAPORE) Around 170 units in Roxy-Pacific Holdings' 251-unit Spottiswoode 18 were snapped up at the project's launch yesterday at an average price of $1,900 per square foot (psf) - catching many market watchers by surprise.

The project's mostly small units proved to be popular with investors. Most apartments on offer at Spottiswoode 18 - 150 out of the 251 units - are just 387 sq ft. Apartments at the project go up to 1,324 sq ft in size.

There was also balloting for a handful of units as more than one buyer was keen on them.

The group initially wanted to sell only around 100 units but released all choice units due to the strong response, said Roxy-Pacific chief executive Teo Hong Lim. But he added that last week's government measures to cool the market have had some impact on sentiment as not many units were contested for.

Roxy-Pacific's news comes a day after Oxley Holdings said it has sold 22 out of the 36 residential units at its newly-launched Vibes@Kovan over the weekend.

Apartments at Vibes@Kovan are also small - the 22 apartments range in size from 377 square feet to 1,001 sq ft. They were sold for an average selling price of $1,255 psf.

The deals surprised industry players. Said one industry veteran: 'The thinking now is that small units are mostly sought after by speculators, which is the segment that the government targeted with its measures. So it's surprising that these projects are still selling so quickly.'

But United Engineers reported that sales of its 540-unit executive condominium project Austville Residences were slower as a result of the latest curbs. The developer has sold about 20 per cent of units since its first sales day on Jan 13 - the same day the government unveiled new measures.

'Our sales are affected by the government's announcement on the new set of cooling measures. We are observing a dip in buying interest as most home buyers are still trying to digest the changes introduced to the property market,' said a spokesman for the group.

The morning of the first day of sales saw a high number of visitors and brisk transactions, but the enthusiastic demand was subsequently quelled by the government's announcement later in the day, the spokesman added. But the group is still positive that sales will pick up soon. Units at the project are selling at an average price of $680 psf and the deferred payment scheme is being offered to buyers.

Austville Residences implemented a 'first-come, first-served' system to allocate its 540 units. It was initially well received by the market, with more than 100 successful applicants forming an overnight queue outside its showflat a day before the first sales day.


Source:www.businesstimes.com.sg

by Jo-Ann Huang Limin

05:55 AM Jan 18, 2011

SINGAPORE - Sales of new private homes totalled 1,332 units last month, down 583 units from November, the Urban Redevelopment Authority (URA) said yesterday.

Inclusive of executive condominiums, or ECs, the total number of units sold amounted to 1,699 units. This is a sharp fall compared to November, when new private home sales including ECs numbered 2,092 units. But experts said the fall was seasonal in nature, given that the year-end is usually a lull period for the property market.

"December is a month where you got parents rushing around for their PSLE results and you've got people going off on their holidays. Developers at the same time also launch fewer units and will have advertised less in the month of December," said Mr Ku Swee Yong, chief executive officer of International Property Advisor.

Together with units sold in November and October, a total of 4,313 new homes were sold in the fourth quarter of 2010. Assuming none of the units sold at the end of last monthwere returned to developers following the fourth round of property cooling measures effective from Jan 14, it will bring sales volume for the whole of 2010 to a record of 16,364 units, said Mr Li Hiaw Ho, executive director at property consultant CBRE. This would be 11.4-per-cent higher than the 14,688 new homes sold in 2009 and higher than the 14,811 new homes sold during the market peak of 2007, he noted.

The priciest unit sold last month was at the Ritz Carlton Residences in Cairnhill at $4,307 per sq ft, while Punggol EC Prive sold the most number of units at 326.

Analysts said the latest round of cooling measures should stamp out speculation, especially in the mass market segment. The measures included seller stamp duties imposed at 16, 12, 8 and 4 per cent, respectively, for homes sold in the first, second, third and fourth year from purchase, as well as the lowering of the loan-to-value ratio to 60 per cent for individuals with outstanding mortgages.

Experts projected that new home sales volume for this month should fall by about 10 per cent as a result.

"We will probably see a knee jerk reaction so I expect that January numbers and probably February numbers to be nowhere as strong as what we have seen for December," said Mr Ku.

Source; www.todayonline.com

by Millet Enriquez

05:55 AM Jan 18, 2011

SINGAPORE - The turnout of buyers for today's soft launch of Roxy Pacific Holdings' Spottiswoode 18 is likely to be good despite the cooling measures announced by the Government last week, analysts said.

"I think the response would be fairly warm. Of course, it would've been very hot if the project had been introduced prior to the cooling measures," said Mr Donald Han, Cushman & Wakefield's vice-chairman of property brokerage.

The 36-storey freehold residential development near Outram Park comprises 251 units, with sizes ranging from 387 to 1,324 sq feet. Huttons Asia is the sole marketing agent.

Roxy Pacific said yesterday that the price list was still being finalised and disputed a news report that said the cheapest unit would be selling for $600,000.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, also expected a good level of buyer interest, given that the development offers some shoebox units.

"The announcement of measures caught many by surprise and most developers have already committed costs to showflats. So these launches cannot be postponed and have to go ahead," he said.

Whether or not there would be more launches would depend on the market's response, Mr Tan said.

Mr Han said the latest round of cooling measures will definitely "knock some wind out of the market". But he added it was still too early to say if developers would reduce their prices, saying it might take a couple of months before prices soften.

Source: www.todayonline.com