Singapore property

The Shin Min Daily newspaper reported that despite the recent boom in the property sector, some older condominiums – more than 10 years old in most cases – are priced about 20 per cent cheaper than newly built ones. Many of these were built and purchased around 1996 when property prices were at their height, and some are now on sale at below their 1996 price tags.

Property agents told the newspaper that for about 20 per cent of the houses that were built in that period, the resale price is still lower than what the owners paid in 1996/7 – even for those in good locations and close to transport links and local amenities.

One of these under-valued condominiums, the newspaper highlighted, is Bishan 8. Attracting long queues of interested buyers when it debuted in 1997, units were priced at around S$1,100 (US$800) per sq ft. In June, one of the units was sold for S$912 (S$663) per sq ft. For an average sized unit the owner would be realising a loss of about S$220,000 (US$160,000)

PropNex Chief Executive Officer Mohd Ismail told the newspaper that with new developments being pushed out all the time, home buyers have more than enough choice and many prefer the new apartments, while Ngee Ann Polytechnic real estate lecturer Nicholas Mak felt that buyers may find the older condominium’s design and facilities outdated.

SOURCE: Property-Report.com

Property market slowing down?

SINGAPORE : There’s been more signs of a slowdown in the private property market here in the second quarter.

Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380.

In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter.

If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter.

Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish.

Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase.

In addition, the number of HDB upgraders buying private homes slipped.

About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That’s lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter.

CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter.

Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year.

The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang.

CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter. – CNA /ls

Figures from the Singapore Institute of Surveyors and Valuers (SISV) show that there were only 899 caveats lodged for condominiums in the first three weeks of May compared with 3,060 in April.

And although new condominium projects are still doing well, property agents said homes sales in the secondary or resale market have dropped by up to 20% recently.

According to the Dennis Wee Group buyers are becoming more cautious. ‘Instead of seeing a 30% increase in transactions as in the month before, I only saw a marginal 3.5% increase,’ said Chris Koh, director at Dennis Wee Properties.

‘A lot of buyers are pulling their handbrakes. What they feel today is that the seller is asking for too high a price and they are adopting a sit and wait attitude,’ he added.

Figures from SISV showed sales falling across various districts as of the middle of last month. The prime districts of 9, 10 and 11 saw a massive 76% drop, while the downtown city area saw the sharpest decline of 88%.

It is also taking longer to close a transaction, according to ECG Property. A deal that used to take about 45 days is now up to 80 days.

Analysts expect the market correction to last between three and six months and some said home prices could fall by an average of 3 to 5%. Some banks may simply not lend at current asking prices, according to Eric Cheng, chief executive officer of ECG Property.

‘That also shows that these prices could be a speculation price instead of a true reflection price. I think the market is going through a slight correction,’ he said.

Analysts said prices may also be capped by more land supply due to be released by the Government. Other risk factors include volatile stock markets and the European debt crisis.

After the launch of its first residential project in 2007 called Jia, a 22-unit seven-storey apartment block, SDB is moving forward with its second property development, Gilstead Two at Gilstead Road near Newton MRT station.

The project, with a gross development value (GDV) of S$200mil (RM470.95mil), comprises 110 units in a 34-storey tower.

Unlike Jia, which offers larger unit sizes (two and three-bedroom units of between 1,200 sq ft to 1,600 sq ft), Gilstead Two offers much smaller units (Type A is 904 sq ft while Type B is 775 sq ft).

It is believed that Gilstead Two has received positive response; 33 of the 40 units released for private viewing recently were snapped up at prices ranging from S$1,900 per sq ft to S$2,300 per sq ft. The project is expected to be completed by 2014.

SDB managing director Teh Lip Kim tells StarBizWeek that the property market in Singapore is buoyant, like other financial hubs throughout the globe.

“Property prices there went down in 2008 by as much as 30% in certain areas but has picked up again to pre-crisis levels since the start of the second quarter of 2010,” she says.

SDB also has a parcel of land in Singapore, located in Ballestier Road that it plans to develop and launch by the end of the financial year (March 31, 2011).

“We are currently coming up with the concept for this development,” she says. SDB has picked Singapore as a sweet spot for its developments due to several reasons.

“It is close by, so it’s easy to keep track on the progress of the developments. Singapore is the financial hub of this region and the market is open and competitive. It is relatively easy to do business there, approvals are easily obtained once all the conditions are met,” says Teh. In fact, she says submissions for approvals are made on-line and approvals are also obtained on-line, making it a very efficient process.

On the contribution of the group’s projects in Singapore to its earnings, Teh says it is not significant at the moment but should pick-up due to the Gilstead Two development.

Gilstead Two

The group also has several projects in the pipeline in Malaysia to be launched soon. This includes 20Trees West, a low density bungalow development in Melawati which comprises 48 units of three-storey bungalows with swimming pools. The size of the homes range from 6,200 sq ft upward.

Teh says SDB also has a new condominium project located in a quiet enclave along Jalan Ampang, close to the British High Commission.

The development is called Dedaun and it comprises 38 units of spacious homes in a 10-storey building. “These homes measure about 3,200 sq ft, and have been designed with the sublime feel of homes in the 1970s,” says Teh.

On the outlook of Malaysia’s property market this year, Teh says it has definitely improved.

“Our launch of the second phase of Five Stones (a high-end condominium in Petaling Jaya) was very well received. The GDV for Five Stones is RM420mil and we have achieved 97% of the GDV. So things are definitely moving in the right direction,” she says.

On the company’s market focus, Teh says all its developments have been high-end projects.

“This ties in with our development concepts which focus on smaller scale, more private developments. For the moment, we will continue to focus on this type of products,” she says.

“We would like to focus on developing here (Malaysia) and in Singapore for now. However, we will look into other countries if the opportunity arises and when the time is right,” says Teh.

SDB began way back in 1962 when it was incorporated as Selangor Dredging Ltd. In 1964, the company changed its name to Selangor Dredging Bhd upon listing on the main board of the Kuala Lumpur Stock Exchange.

For over two decades, the company’s sole business was tin mining, operating two dredges in Dengkil.

In the early 1980s, SDB began to put in motion a plan for diversification. This led to the company’s involvement in various activities including hardware manufacturing and retail manufacturing of tyre rims for national car Proton and Perodua.

In 1985, Wisma Selangor Dredging, the company’s first property was completed and in 1997, SDB’s hotel property was completed. After a period of consolidation, which was completed in 2004, SDB is now fully a property company, principally involved in hotel, property management and leasing and property development.

Property Market Correction?

Tell-tale signs include a plateau in home prices and a drop in transaction volumes.

The Singapore Institute of Surveyors and Valuers said there were 899 caveats lodged for condominiums in the first three weeks of May.

This compares with 3,060 for the whole of April.

New condominium projects are still doing well. But property agents said home sales in the secondary or resale market have dropped by up to 20 per cent recently.

Dennis Wee Group said buyers are becoming more cautious, going by sales figures in May.

Chris Koh, director, Dennis Wee Properties, said: “Instead of seeing a 30 per cent increase in transactions as the month before, I only saw a marginal 3.5 per cent increase. A lot of buyers are pulling their handbrake, what they feel today is that the seller is asking for too high a price, and if I am not in a hurry, why not sit and wait.”

Industry data from the Singapore Institute of Surveyors and Valuers showed sales falling across various districts as of mid-May.

The prime districts of 9, 10 and 11 recorded a 76 per cent drop, while the downtown city area saw the sharpest decline of 88 per cent.

Analysts also expect transaction volumes to fall by 5 to 10 per cent due to the upcoming World Cup season, which begins on June 11.

Meanwhile, ECG Property said it now takes longer to close a transaction. It was about 45 days before, but it takes up to 80 days now.

Industry players expect the market correction to last between three and six months, and some said home prices could trend down by 3 to 5 per cent on average during this period.

Eric Cheng, CEO, ECG Property, said: “Some of these prices are over book keeping value, whereby some banks may not even match some of the asking price today. That also shows that these prices could be a speculation price instead of a true reflection price. I think the market is going through a slight correction.”

Analysts said prices may also be capped by more land supply due to be released by the government.

Other risk factors include volatile stock markets and the European debt crisis. – CNA/ms

The 43-storey, four-tower development in Thomson Lane made news in January 2007 when all its 273 units were sold within 30 hours of the soft launch.

“It is a testament to SPH’s growing versatility, dynamism and willingness to seek out opportunities to create shareholder value,” Dr Tan said at the completion ceremony last night.

At the time of the soft launch, Sky@eleven units achieved an average price of $975 per square foot (psf), with the priciest unit going at $1,200 psf.

According to transactions recorded in April, the average price has since appreciated to $1,330 psf, while the highest price now stands at $1,400 psf.

The properties include units that range in size from 1,851 sq ft for a three bedroom-plus study unit, to 2,820 sq ft for a four-bedroom unit. There are also eight duplex penthouses that range from 3,757 sq ft to 5,597 sq ft in size.

Sky@eleven is SPH’s maiden condo project. Developed by Times Development, a subsidiary fully owned by SPH, it is designed by DP Architects and received its temporary occupation permit last month.

Apart from Sky@eleven, SPH’s other property developments have also performed well, Dr Tan said.

“Paragon, our prime retail-and-office complex in the heart of Orchard Road, completed its $82-million renovation and facelift recently, and boasts a new facade now. It is currently enjoying a 100 per cent tenancy rate,” he said.

The recently acquired Clementi Mall, to open early next year, has also been added to SPH’s property portfolio.

The five-storey mall, located next to Clementi MRT station in Clementi Avenue 3, is a joint venture between SPH, NTUC Income and FairPrice.

SPH, which owns national broadsheets The Straits Times and Lianhe Zaobao, is now in its 26th year. It has a diversified portfolio that includes magazines, web portals, broadcasting stations, events management and outdoor advertising.

Mr Seow Choke Meng, executive director of Times Development, described residential property development as a “third leg” for SPH, after its media products and mall-management business.

“Property development is part of our core portfolio now,” he said. “We’re constantly looking out for residential sites that can deliver promising returns.”

Responding to the strong demand for private housing and land for private residential developments, the Ministry of National Development last week released its “highest potential supply quantum” per half year since 2001.

Comments from the industry suggest they expect the impact of this strong signal to be immediate, in terms of cooling home sales and dampening land bids.

Well, the experts have been swiftly proven wrong.

The first tender to close thereafter saw a record price for Executive Condominium (EC) land. The level of interest has also not waned. The number of bids – seven – was about on par with recent tender exercises for EC and Design, Build and Sell Scheme sites.

Just how large is the newly-announced housing land supply? Assuming developers do not trigger any sites from the reserve list for the second half of the year, the estimated 8,135 private homes from the confirmed list sites for the second half is only 30 per cent more than the actual first-half supply (including triggered sites).

Given that demand from developers has been enthusiastic, a 30-per-cent growth rate for the next six months may not be too unreasonable.

At the same time, it might be necessary to close the tenders for the next few sites at the same time, to thwart further rises in land prices.

If it is not a big problem for developers to absorb the increased supply, what about the demand side? Will there be enough buyers?

Yes, if the results of a recent property survey are to be believed. The survey with a sample size of more than 2,200 people found that three out of four potential home-buyers feel that the prices of private homes and resale Housing and Development Board (HDB) flats in Singapore are too high.

I think most of us know that already, but wait for this: Out of a sub-set of 657 active property seekers, 75 per cent still hope to buy a home within the next two years. They constitute 22 per cent of the total sample size. And this after saying in the same survey that they expect HDB resale prices and private property prices to rise between 6 and 10 per cent over the coming year. The survey was conducted last month and this month – after two sets of cooling measures were already introduced.

Last year, we had about 1.1 million households in Singapore. If we apply the 22-per-cent finding, this means there would be 242,000 households actively seeking to buy a property within the next two years. That is a lot of buying potential. Even if we were to take just one-fifth of this to allow for a very high margin of error, that is still 48,400 households.

This is the conundrum facing the Singapore housing market – the liquidity problem. Potential buyers know that housing prices are high but are still intent on buying. Developers sense this even if they cannot quantify it.

The trick is to turn things around fast, from land award to securing a sales licence before any correction can take place. The only crucial factor is whether the downpayment is affordable: If this cannot be done, throw in branded furnishings. Which tenant can resist such fine living?

As one property consultant noted: The bullish demand is largely driven by sentiment rather than a supply shortage. Quite right, as most buyers are investment driven, not need-driven.

Will it all come to grief eventually? You do the math. The capacity to occupy the homes is only 8,700 units per annum (average for past decade). The land supply for this year will be at least 14,400 units. The remaining owners will have to find other better uses for their homes when completed.

Colin Tan is Head, Research and Consultancy, Chesterton Suntec International.

The Sail @ Marina Bay by City Developments came out tops in the Residential (High Rise) category

The Sail @ Marina Bay by City Developments came out tops in the Residential (High Rise) category. Far East Organization (FEO) won two accolades: a top award for Central at Clarke Quay in the Office category and a runner-up prize for its Square 2/Novena Medical Centre in the Specialised Project category.

UOL Group also clinched two awards. Its Pan Pacific Suzhou was tops in the Hotel category, while its one-north Residences was a runner-up in the Residential (High Rise) category.

Rounding off the list was Keppel Land, which bagged a runner-up prize in the Residential (Low Rise) category for its Jakarta Garden City project.

Indonesian Vice-President Boediono handed out the awards in Bali on Thursday night. Fiabci is the French acronym for the International Real Estate Federation, which organises the annual Prix d’Excellence to recognise excellence in property development. Entries are judged on five criteria: global concept, architecture and design, development and construction, community benefit and environmental impact, and financials and marketing.

There were 54 entries this year, with 12 winners and 12 runner-ups. Other winners included Hungary’s Chemical Research Building and Malaysia’s Adiva Parkhomes, Courtyard Terraces & Apartments. On the projects by Singapore developers, Mr Yeow Thit Sang, president of the awards, said: ‘They are of high standards and world-class quality.’

SOURCE: Straits Times

In its latest bi-annual survey on industrial real estate costs across Asia Pacific, the firm says the stabilisation was on the back of a turnaround in the US and Euro-zone.

In particular, export-oriented cities, like those in Singapore and China, posted strong double-digit year-on-year gains in manufacturing output in the first quarter this year.

This, Colliers says, contributed to a healthy demand for industrial properties across the region.

The firm’s director of research and advisory, Tay Huey Ying, notes that the average monthly gross rents of single-user factories in central Singapore has edged up.

From October to March, the rent was up by an average of 3.8 per cent to about S$1.35 per square foot.

Colliers also says institutional investors are returning to the industrial investment market here.

For example, Singapore saw the sale of six logistics facilities worth some S$713.2 million to Cache Logistics Trust for its listing in April 2010.

Going forward, Ms Tay says Singapore’s exceptionally-strong growth seen so far this year for the manufacturing sector, has raised confidence for the industrial property market.

As a result, rents, land and capital values of industrial properties are expected to see a steady increase in the next 12 months.

SOURCE: Channel NewsAsia

Based on caveats lodged for the full 12 months of last year, 2009 logged a total transaction value of S$16.22 billion.

That’s lower than the total value of new home sales for the whole of 2007, which came in at S$23.52 billion.

CBRE says the lower transaction values are due to the popularity of mass market homes and the proliferation of small-format homes of less than 500 square feet.

Such homes have relatively lower prices.

In contrast, much of the demand in 2007 came from the luxury segment where the overall prices were high.

But CBRE says the total transaction volume for 2009 was similar to that of 2007.

For this year, it expects the transaction value to be between S$16 billion and S$22 billion.

The first quarter this year accounted for some S$4.2 billion in transaction value or 26 per cent of last year’s total transaction value.

SOURCE: Channel NewsAsia