 Several developers are reimbursing the hefty additional buyer's stamp duty (ABSD) in a bid to move sales in selected projects. And the practice, which has created concerns about the possible distortion of property and loan values, has drawn the attention of regulators and raised the possibility of intervention should it get out of hand. These "discounts" could distort property prices as they are given only after a buyer has completed the transaction. This means sales caveats may not reflect the actual purchase price of the property, unlike upfront discounts which are worked into the reported transacted price. Said one property consultant, who declined to be named: "The ABSD reimbursement is being made in this way so that it does not affect the pricing. If they give a discount on the price, then their pricing is affected, and the developers don't want that because it may upset their earlier buyers who did not get to enjoy the discount." Developers which have been reimbursing the ABSD include Cheung Kong (Holdings) Ltd, Far East Organization, Allgreen Properties and Aspial Corporation's World Class Land. Some offer to reimburse fully the additional stamp duty charges, while others cover a part of it. Aside from price transparency, the practice of reimbursing the ABSD has raised the concern that it could distort loan values. When contacted, MAS said: "When taking up a housing loan, the consumer is required to disclose to the bank whether he has received any rebates or discounts from the seller or any other party, and if so, the amount of the rebate or discount. The bank will deduct any discount, rebate or any other benefit offered from the purchase price before calculating the loan amount." Source: Business Times – 30 April 2012 THE Housing Board may be relooking its policy of releasing official cash-over-valuation (COV) figures of resale HDB flats, according to top executives of some property companies. They say the board has signalled through its actions and in private conversations its intention to stop publishing these figures altogether, a move that would put the final nail in the coffin of a measure that is criticised for pushing up prices in the resale market. With COVs stable, realtors like Mr Eugene Lim believe it is 'the best time' to hold back this last measure. Mr Lim, who is key executive officer at ERA Realty, explained that in a bull market with COVs soaring, not having an official figure to refer to will intensify the escalation of cash premiums, as figures will be tossed around willy-nilly by agents. COVs have now dropped one-third from their 2011 peak to average around $25,000 to $30,000, said realtors. The fall is due largely to an aggressive set of measures to cool the property market, and rules being tweaked to let more people buy new flats from HDB. In fact, calls have grown from realtors over the past few months for the HDB to get rid of its COV figures. These figures put agents under pressure in a softening market, because sellers tend to take them as a base for the cash premium they desire regardless of the individual peculiarities of their property. Buyers and sellers will still seek the information from their agents, as this would leave property agency’s data as the only source of COV information. Source: The Straits Times – 27 April 2012 Source: Channel NewsAsia. 24 April 2012 By Wong Siew Ying. SINGAPORE: Leasing demand for residential properties in Singapore remained robust in the first two months of this year as transactions hovered above 3,000 each month, according to Savills Research.
Its data showed that there were 3,446 leasing transactions in February 2012, down 5 percent on-month. But Savills said February's transactions were still higher than the 2,767 transactions recorded a year ago.
Based on deals closed by Savills, the average rent for studio apartments and one-bedroom units was S$6.21 per square foot per month in Q1 2012.
Savills said selected small-format units were seen fetching attractive rents, particularly for the centrally-located properties.
These included a 600-square-foot unit at The Suites at Central along Devonshire Road, which was rented for S$5,000 per month.
It was followed by two 592-square-foot units at Martin Place Residences along Martin Road, which were let at S$4,200 per month.
By square footage, the highest rent was for a 458-square-foot studio apartment at Iluminaire on Devonshire which was rented at S$8.73 per square foot per month.
Savills said rents were equally attractive among the smallest units.
Three 334-square-foot units at Prestige Heights along Balestier Road were let for between S$2,200 and S$2,450 per month or between S$6.40 and S$7.34 per square foot per month.
Based on data released by the Urban Redevelopment Authority, island-wide median rents of all non-landed properties, excluding executive condominiums, continued to rise to S$3.53 per square foot per month in February, increasing 1 percent on-month and 8 percent on-year.
Savills said the leasing transaction value for the first two months has reached S$35 million, 15 percent higher than the previous year.
The average monthly rent of high-end non-landed residential properties tracked by Savills was S$5.17 per square foot per month in Q1 2012, dipping 2 percent on-quarter.
On a year-on-year basis, prime rents fell 5 percent from S$5.45 per square foot per month in Q1 2011.
Savills added that with a continual relocation of expatriates from troubled economies in the West, leasing demand continues to strengthen in Singapore, putting greater upward pressure on rents. A LUXURY condominium here is fitting some units with high-fashion brands Kenzo and Fendi, in a bid to attract more buyers as it relaunches this weekend. The Lumos, a 53-unit completed condo at Leonie Hill, first came on the market here in 2007. Since then, 18 units have been sold. But the developer halted sales in recent years to wait for the property market to pick up and review marketing strategies. Now, the project is back on the market at what the developers deem more 'attractive' prices. In a collaboration between the developers - Koh Brothers Development and Heeton Land - and the brands, one unit at The Lumos will be furnished with Fendi casa furniture and another unit with Kenzo maison trimmings. They will feature imported items such as sofas, beds, tables and rugs. The Lumos, when first launched, was the first condo to have bathroom windows made of liquid crystal glass, allowing users to change the glass from frosted to clear using a switch, among other things. In addition, both brands contributed interior design ideas for the two units, which will be ready in July. Mr Danny Low, chief operating officer of Heeton Holdings, estimated that prices of the two exclusive units could be between $5 million and $7 million. Although the developers declined to say if they had cut prices, it is likely that the figure will be more attractive than previously, given that the units now come with the furnishings. Mr Koh said market sentiment in the mass market will remain resilient but the high-end sector will be slow, in part due to tough cooling measures which affect foreign investors more acutely. It is not the first time condo units have been sold fully decked out with luxury trimmings. Last year, luxury homes developer SC Global said it was collaborating with French brand Hermes to do up a five-bedroom unit at The Marq on Paterson Hill. Other condos are also stepping up their sales pitch. Paterson Suites, for instance, offered a 5 per cent guaranteed rental yield a year at its relaunch last week. Source: The Straits Times – 25 April 2012 INFLATION shot up an unexpectedly high 5.2 per cent last month as vehicle prices and housing rentals continued to escalate while rising wages added to health-care and education costs. The sharp increase in the consumer price index (CPI), which caught out economists, reverses the trend of moderating inflation seen in the first two months of the year. Prices rose 4.8 per cent in January and 4.6 per cent in February. The March figure raises the spectre of a further period of painful price rises. The latest inflation figure also raises the possibility of further moves by the Monetary Authority of Singapore (MAS), which announced last week it would let the Singdollar appreciate at a faster pace. The MAS may need to allow the currency to rise further, which helps to combat imported inflation, said Citigroup economist Kit Wei Zheng. But OCBC economist Selena Ling said allowing the currency to appreciate may not help bring inflation down as domestic inflation may continue to rise. While the usual suspects, car prices and housing costs, were again the main inflation drivers, health-care and other domestic services saw higher than normal price increases, the Department of Statistics report showed. The cost of private transport leapt 9.6 per cent year-on-year last month compared with 4.3 per cent in February. Accommodation cost increases eased from 10.2 per cent in February to 9.8 per cent last month but still remained the single largest contributor to inflation. Even when housing rents, which form a large part of accommodation costs, were taken out of the CPI gauge, March inflation still posted a 4.1 per cent increase. Consumers were also feeling the impact of a tight labour market and rising wages. Bank of America Merrill Lynch economist Chua Hak Bin, noted that about 60 per cent of inflation is imported. Health-care inflation hit 3.9 per cent last month, largely due to the cost of medical treatment, which was up 5.2 per cent from March last year. Noting that the health-care sector employed many foreign workers, DBS economist Irvin Seah said the cost increases were due to measures to tighten the inflow of foreign workers. This will raise foreign labour costs, which will get passed on to consumers, he said. The MAS and Trade and Industry Ministry said in a joint statement yesterday that inflation could average about 5 per cent year-on-year in the first half of this year before 'easing gradually' in the second half. Economists said the easing would be due more to the fact that car price and rental increases probably will not go much higher. Source: The Straits Times – 24 April 2012BUYERS of 107 new private homes had a change of heart last month and returned their units to developers. The numbers, contained in a report from Goldman Sachs, show that even in a hot market, some people get cold feet. The same report also stated that 100 homes were returned the month before. That means these buyers have paid an option fee but have chosen not to exercise the option and go ahead to complete the purchase. If the buyer chooses to back out, he forfeits a quarter of the option fee, or 1.25 per cent of the purchase price. The 107 units returned in March could have been bought in either January or February. Analysts were not surprised by the high number of options lapsing, as the number of options lapsing tends to be correlated to the number of sales made. Buyers bought 4,289 units in the first two months of the year. In March, most of the returned units came from the mass market, but this could be because more projects were launched within the sector. The Straits Times looked at a sample of 15 upcoming projects and found, for instance, 11 units were returned at the 689-unit Parc Rosewood in Woodlands. Watertown, a 992-unit mixed-use development in Punggol, had 17 units returned. Bartley Residences and The Hillier, both had nine units returned. Since no new cooling measures have been introduced in the market since last December, which means many buyers could be pulling out because of personal reasons. Some may have bought in haste while other buyers might have been attracted to better choices elsewhere. Source: The Straits Times – 23 April 2012 HOME purchases by foreigners plummeted 78 per cent in the first quarter as the effects of the 10 per cent additional buyer's stamp duty hit hard. Most foreigners have retreated hastily from the market, buying just 293 homes in the first three months of the year. This is 78 per cent down from the 1,358 homes bought by foreigners in the fourth quarter. Permanent residents (PRs) are not included as foreigners in these figures. Among PRs, home purchases dipped just 7.5 per cent to 790 units, while Singaporean purchases fell 12 per cent. Experts say the implementation of ABSD has caused foreigners to pull out of the market in a knee-jerk reaction as they reevaluate their options. They say some foreigners might still see long-term potential in Singapore's property market and are attracted by rebates offered by some developers to cushion the impact of the tax, but others are simply watching and waiting. Uncertainty in global markets might have also taken its toll on foreign purchases. Source: The Straits Times – 20 April 2012 The days of "artificially" enlarged showflats decked up with made- to-measure furnishings are numbered, following changes to the Housing Developers Rules (HDR) yesterday. Developers will now need to provide drawn- to-scale location plans and a breakdown of a unit's floor area by its various components - comprising bedrooms, balconies and bay windows - to help buyers better visualise the amount of usable space. In addition, developers will also need to obtain a buyer's consent for any alterations to the layout of a property (such as changes in the location of facilities) and offer more information on the project before the option-to-purchase is issued. Shoebox units have become increasingly popular and there are concerns about whether buyers - who predominantly hold HDB addresses - truly understand how small these units really are. It is widely known that many of such showflats do not demarcate the living space, planter and balcony area clearly, giving an inaccurate impression of a unit's actual size. Developers are also unlikely to build showflats for all the different unit types in a development as it would not be practical. Hence, much is left to the imagination of buyers. Still, most consultants do not expect demand for shoebox units to take a big hit following these measures. Smaller units remain sought after as they are affordable - being priced around the $1 million mark - amid a low-interest-rate environment. A huge number of them will be rolled out over the next few years. Other changes that will take effect come mid-May include the need for developers to offer buyers details on their past projects in Singapore, prior to the issuance of the option-to-purchase. The amendments to the HDR will apply to sales of all private residential properties with effect from May 18, regardless of the launch date of the project. URA noted that some of the changes proposed previously, such as directions on setting up showflats, will require amendments to the Housing Developers (Control & Licensing) Act and will be implemented only in the later half of this year. Source: Business Times – 19 April 2012 FREEHOLD residential development, Harbour View Gardens, is being put up for collective sale, with an indicative price of between $36 million and $38 million. This translates to between $836 and $883 per square foot per plot ratio, based on the site area of 30,745 sq ft. Under the 2008 Master Plan, the site is zoned for "residential" use, with a gross plot ratio of 1.4. The three-storey residential development, which is located at 211/A to 223/A Pasir Panjang Road, comprises 14 units - seven maisonettes with an average floor area of 2,411 sq ft each and seven walk-up apartments with an average floor area of 1,195 sq ft each. Upon success of the collective sale, each owner could receive between $1.6 million and $3.6 million. The successful buyer could re-develop the site to accommodate a five-storey residential development comprising some 50 units of 775 sq ft each, subject to relevant authorities' approval. Source: Business Times – 18 April 2012 Urban Redevelopment Authority (URA) reported a total of 2,393 private homes - excluding executive condominiums (ECs) - being sold in the month of March, a mere 1 per cent fall from February. Still, this number was 73 per cent higher than in the same period a year ago, reflecting strong underlying demand for new private homes. This brings the total number of private homes (excluding ECs) sold to 6,682 in the first three months of 2012 - a record for quarterly sales since 1Q 1996 when quarterly data was first compiled and around 41 per cent of the total volume sold in 2011. New launches have been driving demand, observers say. An eye-popping 2,582 units (excluding ECs) were launched in March. Sales of ECs also remained at high levels, with 639 units sold in March, slightly lower than the 725 units in the month before, but still more than four times the volume transacted in the same period last year. Including ECs, the total number of new private homes in March reached 3,032 units. Units were snapped up in both new launches and projects launched earlier. Among the new kids on the block, top-sellers included Ripple Bay (326 units sold at a median price of $883 psf), Palm Isles (102 units sold at a median price of $860 psf), Seletar Park Residence (98 units sold at a median price of $1,162 psf) and East Village (83 units sold at a median price of $1,309 psf). Among projects launched earlier, The Minton (118 units sold), Riversound Residence (115 units sold), Archipelago (93 units sold) and Bartley Residences (86 units sold) saw strong demand. Though no new ECs were launched in March, buyers - especially upgraders - continued to buy, with The Tampines Trilliant and Twin Waterfalls transacting 369 units and 153 units respectively. The bulk of properties sold in March remained in the $1,000 to $1,500 psf range, similar to the month before. The mass-market outside central region (OCR) continued to dominate demand, with a total of 1,825 OCR units (excluding ECs) sold, just seven units less than the 1,832 homes transacted in February. Source: Business Times – 17 April 2012 Source: Straits Times. Sat Apr 14 THERE is confusion in property circles about how the new stamp duty will be applied to certain types of real estate. The biggest grey area centres on whether commercial units such as shops or offices built within residential developments on residential-zoned land will be subject to the additional buyer's stamp duty (ABSD) and seller's stamp duty (SSD). Industry players say it is unclear what defines a 'residential property' that would incur the duties: Is it the approved use of the units or the zoning of the land under the Urban Redevelopment Authority's (URA) masterplan? They add that queries to the Inland Revenue Authority of Singapore (Iras) have generated varying replies, especially regarding units in mixed-use land zoning.There also seems to be difficulty pinning down exactly how the ABSD will be applied because the latest e-tax guide is unclear on this area. An Iras spokesman said that 'in general, properties approved for commercial use on residential land should not be subject to the ABSD or SSD'. But there are exceptions. This would include property given only temporary approval for commercial use by the URA such as a residential shophouse being granted temporary approval as an office or shop space. In such cases, the seller's stamp duty of up to 16 per cent applies. But commercial units in condominiums - minimarts, for example, or salons - on the ground floor of certain blocks that have obtained long-term approval for such use are unlikely to be slapped with either of the stamp duties. The Iras spokesman added: 'When the use of the property is not residential on a land zoned residential, we will need to examine the facts of the case to determine if the property is residential property within the scope of ABSD and SSD.' The taxman did not elaborate on what exactly these criteria are. While there are probably few commercial units that will be subject to the extra stamp duties, experts say the lack of clarity only throws up more questions within the industry as to what exactly the ABSD applies to. Mr Lee Liat Yeang, a partner at Rodyk & Davidson's Real Estate Practice Group, said Iras should devise a clearer definition of 'residential property' for the application of ABSD. The ABSD should be applied based on the approved use given by URA rather than the zoning of the land under the URA masterplan, he said. 'According to the e-tax guide, Iras seems to look at the masterplan zoning in order to determine whether the approved use is residential in whole or in part. 'But the masterplan shows only the general parameters of possible uses for the land upon which URA will then approve specific use for properties,' he added. Mr Lee cited the fact that there are full commercial-zoned land sites such as Eon@Shenton that have attained URA approval for residential, office and retail uses. There are also approved commercial units built on land zoned fully or partially residential under the masterplan. 'Iras should quickly address this definition issue of residential property so that members of the public and lawyers are able to discern whether ABSD is payable in the purchase of specific property which has approved use different from the zoning,' he added. The gap in prices between private homes in the mass market and the core central region is narrowing. Market watchers said the gap is down substantially to just above 60 per cent in the first quarter of this year. That’s compared to 108 per cent in the second quarter of 2011. This is because prices of homes in the mass market have been picking up at a much faster pace. Analysts expect more than 6,000 new private homes to be sold in the first quarter of this year, mostly in the mass market segment. In the second quarter of 2011, the median price of homes in the city was about S$1,850 per square foot, while mass market homes went for some S$895 per square foot. But now, mass market home prices have climbed to about S$1,000 per square foot, with those in the city falling to about S$1,660 per square foot. Long-term sustainable level is about 50-60 per cent gap in the two markets, the price will have to slow down as buyers moved out from the mass market into the high end. Analysts said the strength of home prices in the mass market segment is largely supported by the healthy growth in resale prices of public housing flats. HDB resale prices have risen by over 80 per cent in the last few years, but analysts expect them to soften in the next two to three quarters. Source : Channel NewsAsia – 11 Apr 2012 Freehold District 9 site, Cavenagh Gardens has been put up for tender with an indicative price range of $460 million to $480 million, which translates to about $1,708 to $1,782 per square foot per plot ratio (psf ppr) - excluding balcony allowance - based on a gross plot ratio of 2.1 times or $1,553 to $1,620 psf ppr should the balcony allowance be factored in. If the collective sale is successful, this would put an estimated $2.35 million to $2.96 million into the pocket of each unit owner. The zoned residential site has an approximate land area of 128,256 square feet, which can yield a potential gross floor area of 269,338 sq ft based on the existing plot ratio. However, with the possibilities of alienating adjoining parcels of state land, the total plot can be expanded to around 150,000 sq ft, yielding a gross floor area of 308,920 sq ft or more (if the development is granted the Green Mark GFA incentive or bonus balcony gross floor area). If approved, the expected market price for the en bloc sale would translate to around $1,533 to $1,598 psf ppr (excluding balcony allowance) or $1,394 to $1,453 psf ppr (with balcony allowance) or lower if other incentives (such as the Green Mark GFA incentive) are approved. Factoring in the impact of joining the existing parcel to surrounding state land, the estimated break-even costs for the development come in the range of $1,784 to $1,848 psf, with new units expected to hit the market at around $2,308 to $2,400 psf. Without the state land, the estimated brepak-even costs would be higher at around $1,962 to $2,040 psf, with asking prices of new units expected to stay the same. Source: Business Times – 10 April 2012
RESIDENTIAL projects to be launched in Bishan and Paya Lebar this month will test the market's appetite for ever rising prices. UOL Group's mixed-use Katong Regency in Tanjong Katong Road will be pushed out by the end of this month while buyers will be able to snap up units at CapitaLand's 509-unit Sky Habitat in Bishan Street 14 from April 14. Both projects are in suburban or city fringe areas but experts said their benchmark prices, which are on a par with some city centre developments', are due to their good locations near MRT interchanges and the nature of the product. Both developers also touched on the state of the market, and noted that with global sentiment improving with more clarity in Europe's situation and with interest rates remaining low, the market is likely to remain 'sustainable'. UOL's Mr Liam said he does not think further cooling measures are needed despite the strong sales of new homes. While volumes are up, the measures have had their intended effect with prices showing signs of slowing, he added. He expects suburban prices to be stable while high-end home values might dip by 5 per cent to 10 per cent this year. Source: The Straits Times – 6 April 2012 Source: The Straits Times: Tue, Apr 03
PRIVATE home prices have fallen for the first time in almost three years, according to estimates out yesterday. Overall prices fell 0.1 per cent in the three months to March 31 - the first decline since the global financial crisis in the second quarter of 2009 and a reversal from the 0.2 per cent rise in the fourth quarter last year. The decline had been tipped for a while, given the slowing pace of price increases over the past two years as the Government introduced five rounds of cooling measures. Prices have risen about 55per cent from the middle of 2009 to now. Experts say weaker economic conditions and cooling measures have subdued demand, hitting sales activity and resale prices. One clear sign of the slowing market is that resale transactions were down by half across all segments in the first quarter over the previous three months.
The numbers from the Urban Redevelopment Authority (URA) also point to a tale of two diverging sectors, with the higher-end city centre and fringe homes slumping, while mass-market homes powered ahead. City centre home prices dipped 0.9 per cent, and prices fell 0.7 per cent in city fringe areas. Foreign demand has been fizzling out since a 10 per cent additional buyer's stamp duty was introduced in December. But suburban prices rose 1.2 per cent - double the 0.6 per cent gain in the previous quarter - thanks largely to a string of popular mixed-development suburban projects and small apartments launched in the period.
While acknowledging the strains on the sector, experts noted the strength of the mass-market homes segment, which has accounted for more than 80 per cent of new home sales so far this year. ERA Realty key executive officer Eugene Lim said the 50 per cent decrease in resale transaction volumes had taken its toll on private residential prices. Ms Chia Siew Chuin, Colliers International's director of research and advisory, noted: 'The sustained price increase (for suburban homes) is underpinned by robust demand for new mass-market projects that is fuelled by low interest rates and the continued availability of project launches. 'Creative promotions and sweeteners dangled by developers to cushion the impact of the additional buyer's stamp duty have also enticed home buyers to commit.' For instance, suburban mixed-use projects such as The Hillier and Watertown, priced at between $1,200 and $1,300 per sq ft, helped drive up values in the first quarter.
Experts are divided on the likelihood of further cooling measures in the light of yesterday's figures. Jones Lang LaSalle head of research for South-east Asia Chua Yang Liang noted that it is 'challenging' for the Government to deal with a market moving in two different directions. The chance of more measures is higher, given stronger-than-expected growth in suburban home prices, together with record new home sales of more than 3,100 units in February. 'This divergent market is likely to continue into the second quarter of this year, unless there are further government interventions,' Dr Chua said. 'In my opinion, the state could discourage excessive purchases by raising eventual holding costs, such as a temporary increase in residential property tax rate for investment purposes.' Credo Real Estate executive director Ong Teck Hui added: 'Had the indices for the city centre, city fringe and suburban segments all declined, the risk of intervention might have been less. 'But now we have a situation where the suburban segment is bucking the trend, leaving the market with the lingering uncertainty of further cooling measures.' Colliers' Ms Chia thinks further cooling measures are unlikely in the short term. A host of factors working to take the heat off record-high home prices, such as the slow resale market, the languishing high-end sector, the bumper supply of state land released, and home buyers' resistance towards ever-increasing prices are already in play this year, she said. She expects overall prices to fall 5per cent this year, while PropNex chief executive Mohamed Ismail expects city centre and city fringe home prices to fall 5 per cent but suburban prices to rise 3 to 5 per cent. URA's flash estimates are based on transactions in the first 10 weeks of the quarter. They will be updated in four weeks.Wealthy foreigners who want their PR application expedited will now have to apply under a different scheme for well-heeled entrepreneurs from abroad who invest in businesses here. The Monetary Authority of Singapore (MAS) will be scrapping the Financial Investment Scheme (FIS) by the end of this month. The FIS allows wealthy foreigners with net personal assets of $20 million - and at least $10 million of assets held in Singapore for five years - to get onto a fast track and apply for PR status through private banks or other financial institutions via MAS. Now that this scheme is being axed, wealthy foreigners can still apply for PR status under the Global Investor Programme (GIP) - a scheme that allows entrepreneurs from abroad to obtain PR. Unlike FIS, where assets held in Singapore are the main criterion, GIP is aimed at entrepreneurs who have a track record in corporate circles, and is a scheme that can boost employment locally. To obtain PR status under the current terms of GIP - which was tweaked as recently as 2010 - foreigners must have $2.5 million invested in a new business entity or expansion of an existing business operation. Their company should have an annual turnover of at least $30 million. And these businessmen, from 2010, have also not been allowed to include the cost of buying a private home as part of their required investment. Source: Business Times – 4 April 2012MCL Land yesterday drew crowds at its Ripple Bay condo showflat in Pasir Ris, selling 270 units in the 679-unit project by about 8pm. The developer had not crunched its numbers by press time but its CEO Koh Teck Chuan estimates that the average price when sales began in the morning was around $855 psf. As sales progressed, MCL upped prices to around $870 psf on average. 'But we have not done a final tally on our average price,' he said. A good spread of units - one, two and three bedders - have been sold. Buyers are mostly Singaporeans. Ripple Bay, which is within walking distance of Pasir Ris Beach, is in front of Far East Organization's 473-unit Seastrand, where units are being offered for about $905 psf on average. Far East released the project in June last year and close to 100 units are still available. At Flora Drive in the Upper Changi area, Frasers Centrepoint has so far found buyers for 58 of the 120 units released at the 429-unit Palm Isles condo. Sales began on Wednesday evening. The average price is $830 psf, lower than $870 psf at which the nearby Hedges Park Condominium is going for. The 501-unit project, which went on the market in April last year, still has over 100 units available for sale. All four projects are on 99-year leasehold sites. When contacted, a spokesman for Tripartite Developers, the developer of Hedges Park, said: 'We currently have no change in plans with respect to pricing and additional incentives at Hedges Park. But we will continue to monitor market trends there.' Similarly, Far East Organization, developer of Seastrand in Pasir Ris, said: 'There's no plan to lower the price and there isn't any special promotion for Seastrand. However, buyers receive a reimbursement for the standard 3 per cent buyer's stamp duty and a furniture voucher equivalent to 2 per cent of the sale price, as is the case for other Far East projects as well.' Market watchers note that established developers such as Far East and Hong Leong would be loath to cut prices and risk upsetting earlier buyers of the project. However, as a seasoned property market watcher argues: 'If common sense prevails, for a developer that has sufficient profit margin on its project, it may be time to clear the project at a slightly lower price because subsequent Government Land Sales, if they reflect lower prices, will obviously pose competition. The writing is on the wall.' For example, next to the Ripple Bay project, a Hoi Hup-led consortium bagged a condo plot in October last year for $361 per square foot per plot ratio (psf ppr) - or about 10 per cent lower than the $402 psf ppr which MCL paid for the Ripple Bay site in May 2011. Far East clinched the Seastrand site for $335 psf ppr in September 2010. Hoi Hup is planning to launch a 376-unit condo, Sea Esta, on its site around June. Because Hoi Hup paid a lower land price, and will probably do its own construction, it will be able to achieve a lower breakeven cost than MCL's Ripple Bay and hence be in a position to price its project lower. Another point to note is that there are two nearby sites on the confirmed list of the GLS programme for first-half 2012. In all, there are 20 private condo projects which have yet to be launched on 99-year sites sold under the GLS programme since last year. No doubt, developers launching projects on these sites will have to size up existing and potential competition in the area. Projects launched previously have units yet to be sold. And more projects will be released in the market. That creates the impetus for realistic pricing to remain competitive and be able to sell well. Even so, pricing strategies among developers are by no means uniform. While the two launches this week point to some players at least being more nimble, BT has learnt of a reverse trend at some other developers - of holding or even marginally increasing price by raising the list price and then packaging in various tiers of discounts to appeal to buyer psychology. The net price, however, could be slightly higher than before. Talk in the market is that one major player started this practice to draw buyers following the introduction of the additional buyer's stamp duty in early December. Its competitors have begun to follow suit. Really, there are mixed signals in the market. Some developers may want to price more competitively to sell quickly and move on rather than risk being stuck. Others, especially with well-located projects near MRT stations or if they can differentiate themselves with unique concepts, lifestyle or product positioning, are confident of achieving their price while selling at a steady rate. Meanwhile, all eyes are on the Urban Redevelopment Authority's flash estimate private home price index for the first quarter. The index has moderated for nine consecutive quarters up till Q4 2011. It rose 0.2 per cent in Q4 over the preceding quarter. 'If the price softening which has set in the secondary market spreads to the primary market, that is, developer launches, you will see impact on the index,' said a seasoned market watcher.
A SIGNIFICANT number of recently built new homes, many of them luxury units, are languishing unsold, as wealthy potential buyers watch nervously as global economic confidence ebbs and flows. Ever pragmatic, developers have turned to a logical solution to keep the cash coming in: They are leasing out unsold apartments at projects that have been completed. This way, the developers earn some income until buying confidence returns to this elite part of the market. About 25 projects have at least 10 units unsold, and a large number are upscale projects in the prime districts of 9, 10 and 11, which include the Orchard, River Valley, Bukit Timah and Tanglin areas. The figures were released by property consultancy Savills Singapore, and were based on an analysis of the Urban Redevelopment Authority's fourth-quarter data. Projects with units remaining unsold include Reflections at Keppel Bay, with 290 units unsold; Hilltops in Cairnhill Circle, with 208 units; Scotts Square in Scotts Road, with 74 units; and The Clift in McCallum Street, with 63 units available as at the end of last month. While upmarket homes were very popular with buyers with the means to buy them during the boom of 2007, the segment has been quiet in recent years, with prices languishing below their peaks and sales slowing to a trickle. City Developments Limited (CDL) is one developer that has chosen the leasing option. It said that last year it stopped active marketing for its 228-unit The Residences at W Singapore Sentosa Cove and diverted its efforts towards leasing instead. The project has 207 unsold units. A spokesman said CDL is awaiting the completion of the 240-room W Singapore Sentosa Cove Hotel and the retail component of the Quayside Isle Promenade in August before ramping up its publicity campaigns for The Residences at W. 'When completed, the Quayside Isle will be home to trendy cafes, fine dining restaurants, speciality shops and entertainment spots and bars,' he added. Keppel Land also said last week that 154 unsold units at Reflections will be set aside as corporate residences while the remaining 136 will be open to buyers. The average rent for these fully furnished units is about $9,500 a month. But Keppel said that the decision to set aside units for corporate leasing at Reflections followed a similar move at its previous project, the 969-unit Caribbean at Keppel Bay completed in 2004, where about 170 units were earmarked for lease. More than 200 units were still unsold when the project was completed. These units were sold many years after completion at a higher price, as the market moved up, benefiting the company. However, not all developers are jumping on the leasing bandwagon. KOP Properties chief executive Leny Suparman said the company has no plans to lease out the remaining units at its 58-unit The Ritz-Carlton Residences in Cairnhill Road, with 39 units unsold. 'The project has been completed for less than six months, and we are continuing to receive much interest from buyers. Therefore, we are not considering leasing at this point,' she added. Experts add that some developers prefer to keep their unsold apartments empty, as some wealthy buyers prefer purchasing brand-new units. The leasing out of unsold units is 'feasible', especially in a weakened market where the rental income can partially defray holding costs or delays in developer sales proceeds. This is typically an option if the developer expects market sentiment for the segment to remain cool for more than six to nine months. A lease of less than one year can then be considered. If a developer had already recovered its costs but saw further sales to be challenging, it may consider leasing instead to maintain a good cash flow. Developers are unable to cut prices, because that would be shooting themselves in the foot, and other developers and their previous buyers will not be pleased. So leasing becomes the next best alternative. Source: The Straits Times – 28 March 2012 EVEN as more is done to create more housing options for households, steps are also being taken to discourage buyers who book flats but subsequently cancel their bookings. To further discourage such buyers, applicants who cancel their bookings - not due to exceptional circumstances beyond their control - will not be allowed to apply for, or be included as an essential occupier for a new HDB flat, DBSS (Design, Build, and Sell Scheme) flat, executive condominium (EC) unit, or resale flat with housing grants, within one year from the date of cancellation. This is on top of existing regulations, in which buyers pay a non-refundable booking fee when they select a unit, and a 10 per cent down payment when they sign the agreement. Separately, the Housing Board said that the income ceiling for two-room flats in mature towns will be raised from $2,000 to $5,000 per month. The income ceiling for similar flats in non-mature estates will remain at $2,000 to safeguard these units for low-income families. The HDB also said it will be offering 4,640 BTO flats for sale in Choa Chu Kang, Kallang Whampoa, Punggol and Sengkang during the next BTO launch in May. To meet housing needs, HDB has ramped up flat supply substantially, to the tune of 50,000 units in two years. Some 8,000 flats were launched for sale under the joint build-to-order (BTO) and Sale of Balance Flats (SBF) exercises yesterday. A total of 4,153 new flats were released in eight BTO projects; 3,825 were SBF units, scattered over 15 mature and 11 non-mature estates. Of these, 1,739 of the BTO flats in mature estates and 3,609 SBF units will render top priority for first-timers. The Housing Board said 95 per cent of these flats will be reserved for first-timers. Second-timers on the other hand will have their chance of securing a flat tripled, from 5 per cent to 15 per cent, for the 2,094 BTO flats in non-mature estates. 'Correspondingly, the proportion of these flats reserved for first-timers will be reduced to 85 per cent. Our projection suggests that the chances of first-timers will not be too greatly affected, after successive massive BTO launches in the past one year,' said the Housing Board. In this launch, 3,174 of the flats will be in mature estates, including 397 studio apartments and 366 units of two-room flats. Married children and parents hoping to live with or near each other will also be helped via the Multi-Generation Priority Scheme (MGPS) and Married Child Priority Scheme (MCPS). MGPS, which gives priority allocation to married children and their parents who jointly apply to live near each other, will be launched at Ping Yi Greens in Bedok. Under the scheme, married children can apply for two-room to four-room flats, while their parents can buy a two-room flat in the same project. The enhanced MCPS will allow a married child who applies to live with his parents to receive six ballot chances if he is a first-timer, and three ballot chances if he is a second-timer. Source: Business Times – 29 March 2012 A string of projects is coming on the market this week, and some of them could be priced slightly below nearby projects as developers who fret about further cooling measures by the government try to boost sales following February's record developer home sales. The projects expected to be rolled out this week include MCL's Ripple Bay condo, within walking distance to Pasir Ris Beach, and Frasers Centrepoint's Palm Isles condo at Flora Drive. At Hillview Terrace, a consortium that includes Roxy-Pacific Holdings and Macly Group is getting ready to begin selling its Natura project. Property giant Far East Organization could also release the 416-unit Hillsta project at Choa Chu Kang Road - which will have condo units, Soho-style apartments and strata townhouses - any day now, pending securing the necessary regulatory approvals. All these projects are 99-year-leasehold, except Natura, which is freehold. Meanwhile, Tuan Sing has sold 90 units at Seletar Park Residence which it released last week. The average price of the five-storey, 99-year-leasehold condo is about $1,100 per square foot (psf). Excluding ground-floor units with private enclosed space and penthouses with roof terraces, the average price would be around $1,200 psf. Buyers are mostly Singaporeans. The project's 276 units range from one to four bedders. Ground-floor units have higher-than-normal floor-to-floor height of 4.5 metres, making them much sought-after. Absolute prices start from $634,000 for a 528-sq-ft one-bedder on the third floor (reflecting $1,201 psf). Three penthouses have been sold; a typical penthouse of around 2,240 sq ft costs $1.9 million or $840 psf. Over at the East Village, a freehold mixed development in the Bedok/Upper Changi Road locale, World Class Land is said to have found buyers for nearly all of the 90 apartments and 96 of the 108 shop units. The apartments are priced at about $1,400 psf on average. Shop units are said to have fetched around $5,000 psf or more. Investors seeking freehold properties can also consider Natura, a 10-storey freehold residential project at Hillview Terrace said to be priced at about $1,250 psf on average. The project, which will comprise one, two and three-bedroom units and penthouses, has been in the limelight for its smaller-than-usual three bedroom units, which start at 635 sq ft. Those looking for a dream apartment near the beach may want to check out MCL Land's preview on Thursday of the Ripple Bay, a short walk from Pasir Ris Beach. The average selling price is tipped to be slightly above $850 psf after early-bird discounts, lower than Seastrand behind it. The latter project, which is further away from the beach, was released in June last year, with units sold in that month achieving a median price of $879 psf, according to government statistics based on developers' monthly sales declarations. The following month, the median price rose to $935 psf and the project continues to trade at above $900 psf on average currently. MCL's Ripple Bay comprises 679 units in four blocks of 12 storeys and three blocks of 13 storeys. One-bedders will make up 18 per cent of units and two-bedders 42 per cent. Facilities will include a tennis court and 50-metre lap pool. Absolute prices start from $415,130 for a 484-sq-ft one-bedder (which works out to $858 psf). Three-bedders begin from $795,500 for a 990-sq-ft unit ($805 psf). Over at Flora Drive, Frasers Centrepoint is expected to price its Palm Isles project at $850-$880 psf on average. Hedges Park nearby was released in April last year, achieving an $889 psf median price that month. Developer Tripartite last month disposed of eight units at $873 psf median price. Palm Isles' 429 residences will include a low-rise block with 28 'garden homes' each with its own private carpark lots and garden. Developers are launching projects as soon as possible as some worry that the authorities may come up with fresh cooling measures following the record number of private homes sold in the primary market last month. To ensure a good take-up rate, developers are likely to price new mass market condo launches say about $10-15 psf below existing nearby projects. There is no necessity for the government to come up with further cooling measures currently as the speculation has been taken care of by the seller's stamp duty, and foreign buying has also come off significantly following the introduction of the 10 per cent additional buyer's stamp duty. There's also plenty of supply. There will be buyers for new residential project launches on the back of ample liquidity, low interest rates and continued inflation fears. Demand will be stronger for small units as there are many investors with sizeable bank balances looking to park their money in property. At Robinson Road, the freehold Oxley Tower, offering strata office and shop units, could go on the market as early as this week, while the 99-year EON Shenton is slated for release next month, offering apartments, strata shops and offices. Source: Business Times – 27 March 2012 | |
