Property News!

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Jan 21, 2011
4 in 10 home buyers took out more than one loan
Investors made up big proportion of private home buyers last year
By Aaron Low
NEW figures out yesterday underline the significant proportion of private property buyers last year who were investors.

Data from the Credit Bureau of Singapore (CBS) shows that 41 per cent of people who took out private property loans were getting a second loan or in some cases, a third or even higher number of loans.

Still, despite government measures unveiled earlier this month aimed at curbing speculative investing, property analysts do not expect a big drop-off in investors this year. The market-cooling moves followed a 17.6 per cent jump in private home prices last year and record sales.

They mean that anyone with an existing loan may now borrow only up to 60 per cent of the property's value, down from 70 per cent.

Other measures impose significantly higher stamp duty on sellers, of up to 16 per cent, and over a longer period after purchase of four years, up from three.

However, analysts suggest this 41 per cent of the private home-buying market will not evaporate overnight, as many cashed-up buyers do not necessarily need large loans.

PropNex chief executive Mohamed Ismail estimated that about 20 per cent of the market will be affected by the higher downpayment rule.

'But it is unlikely that all of the investor group will be maxing out their loans; some may be taking small loans and therefore may not even need the full 60 per cent loan,' he said.

The CBS figures, covering the period ended November last year, showed the other 59 per cent were those with no outstanding private property mortgages. CBS collects data from all major banks.

In 2009, the percentage of people with at least one mortgage taking up a loan was a slightly lower 39 per cent, while those without outstanding loans formed 61 per cent, the new figures show.

In total, 66,221 people took out property loans from January to November last year, up from 63,435 people in all of 2009.

Still, CBS said the number of borrowers may be overstated as it includes joint applicants for a loan - two or three people such as family members may be applying for one loan.

Analysts said this was the first time they have seen such data and it provides a deeper insight into the property market.

Property consultancy Cushman & Wakefield's senior manager for research Ong Kah Seng said the figures point to an increase in the number of 'investors, specu-vestors or even speculators'.

In fact, he believes the CBS numbers, may be under-estimating the number of investors in the market.

This is because the database does not keep track of whether borrowers have taken on HDB loans. Those who have would be recorded as having no outstanding loans, said analysts.

Colliers International director of research and advisory Tay Huey Ying said it is the heftier stamp duty that will chill the market. 'The stamp duty will put off new property purchases and cream off the marginal buyers,' she said. 'As such, I think the measures will likely lead to a steep fall in both volumes and prices.'

CBS data also show 87 per cent of the loans taken out last year were less than $1 million, supporting the view that much of the property market was driven by the mass property sector, said analysts.

Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, said that many in this group were probably HDB upgraders, either looking for a new apartment to live in or buying a second property as an investment.

 

[cybercom8]

does the new hefty stamp duty affect those who bought their properties earlier before the latest 16% duty implemented? as in if you bought last year and sell now, do you have to pay 16% duty?

 

[jq75]

Jan 24, 2011
Don't rely on indicative valuations
VALUATION is indeed based on detailed research and analysis and not on sentiments (Ms Yvonne Lee-Lek Siew Ling, 'Same bank, same property but... Valuations differed by $200,000.'; last Tuesday).

Indicative valuations provided via agents or banks (if obtained from valuers) are rough estimates as they are given without field inspections, in-depth analysis and data.

They should not be relied upon when making decisions on property investment or divestment.

We caution against relying on such indications, and urge buyers or sellers to obtain proper valuation reports from licensed appraisers if they need to ascertain the market values of their properties.

They will thus avoid getting a wide $200,000 difference in estimate of the same property given by agents or banks.

Desktop valuations are not a subscribed practice and should not be treated as proper valuations.

Ms Lee cited her experience about receiving assurances from agents and bank officers that they could offer valuations to match the asking price.

We seek Ms Lee's assistance to provide us with more details to help us address the problem.

Evelyn Chang (Ms)
Executive Director
Singapore Institute of Surveyors and Valuers

 

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Jan 29, 2011
Analysts expect sober year for private property market
By Esther Teo, Property Reporter

PROPERTY PRICE INDEX

PRIVATE home prices may have moved up 17.6 per cent last year, eclipsing historical peaks and setting new highs across various segments in the process, but this year is expected to be far less exciting.

Analysts say price growth is expected to slow, and the volume of sales is set for a significant fall.

There was more evidence of this in new data released by the Urban Redevelopment Authority (URA) yesterday, which saw prices moderating across most segments as the property market continued to take a breather four months into the Government's Aug 30 property market cooling measures.

Fourth-quarter home prices gained 2.7 per cent, slightly down from the 2.9 per cent in the previous quarter and unchanged from flash estimates released earlier this month, the URA said.

However, certain segments - in particular, condominiums and detached homes - showed signs of defying gravity even after three rounds of cooling measures.

This may have contributed to the Government's decision to introduce another round of tougher-than-expected cooling measures two weeks ago, experts said.

Prices of detached homes continued their upward march with an 8.5 per cent jump in the fourth quarter - just eclipsing the already impressive 8.4 per cent gain in the quarter before. Detached home owners saw the value of their properties rise by a hefty 37.6 per cent last year alone - the most out of any segment.

Prices of landed homes in general, however, moderated to a 5.5 per cent rise, from 7.7 per cent in the third quarter.

This was owing to slower price gains in the semi-detached and terrace segments, with a 3.1 per cent and 3.7 per cent rise in prices respectively. This follows a buoyant 7.5 per cent and 7.2 per cent price growth in the quarter before.

An uptick was also noted in the non-landed home segment, which recorded a price rise of 1.8 per cent, up from a gain of 1.6 per cent in the quarter before.

URA data shows that price growth in this segment has been falling since the second quarter of last year.

Other indexes also suggested that non-landed home prices were creeping up again as buying interest returned to the market in the later months of last year, after buyers initially retreated when the Aug 30 measures were first introduced.

The National University of Singapore's Singapore Residential Price Index, which tracks only the prices of completed non-landed projects, posted a 0.9 per cent month-on-month rise last month - the first increase after two months.

Homes in non-central areas recorded an even larger gain of 2.2 per cent.

Ms Tay Huey Ying, Colliers International's director of research and advisory, noted that price gains of suburban homes also strengthened to 2.1 per cent, up from the initial estimate of 1.6 per cent.

'This indicates the continued uptrend in prices for transactions that have taken place in the last two weeks of the quarter, which probably is one of the triggers for the introduction of further cooling measures in January,' she added.

Robust sales were seen in suburban projects such as The Lakefront Residences in the Jurong Lake district, Waterview in Tampines Avenue 10 and The Tennery in Bukit Panjang in the fourth quarter.

Experts said, however, that despite impressive gains last year, this year will be a more sobering one for the market in the light of this month's measures, which caught many by surprise.

CBRE Research executive director Li Hiaw Ho said: 'Prices are likely to remain unchanged in view of this stand-off, but sales volume could fall in the short term. Selectively, new projects that are well-located and with good access will still see a good response.'

 

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Feb 8, 2011
Condos still see sales over CNY
New projects draw buyers but market price-sensitive now
By Cheryl Lim
BUYERS continued to pick up units at new condominiums in recent weeks despite the twin distractions of Chinese New Year and the property cooling measures.

Almost half of the 320 units at Canberra Residences, an MCC Land project, have been sold since its soft launch on Jan 22.

The Straits Times understands that almost all of the one- and four-bedroom units at the 99-year leasehold development in Sembawang have been sold.

The project, which is going for around $830 per square foot (psf), has apartments ranging from one- to four-bedders with the smallest at 614 sq ft. Prices start from around $528,000.

Values in the area seem to have headed north in recent weeks. A 1,184 sq ft unit at nearby project The Sensoria sold for $766 psf in December, significantly less than the average prices offered at Canberra Residences.

OrangeTee research and consultancy head Tan Kok Keong said that despite the higher prices, Canberra Residences' success was not surprising given that the launch follows a dearth of new condos in Sembawang.

But analysts say this could be a one-off occurrence.

Cushman and Wakefield vice-chairman Donald Han said: 'There is still confidence in the residential market but the market is very price-sensitive now.

'People are not waiting for prices to crash but they won't buy if units are priced above what is expected of the area.'

The showroom for Canberra Residences will be closed until Saturday but viewings are available by appointment.

Suites@East Coast, being developed by the Fragrance Group, is also attracting interest with apparently 30 to 40 buyers registering for Friday's preview launch.

The freehold project at the junction of Upper East Coast Road and Bedok South Avenue 1 will have 116 units across three blocks, including studios, one-, two- and three-bedroom units and penthouses. The smallest unit is at 355 sq ft with prices starting from $530,000.

Elsewhere, some 166 units of the 284 flats released at Waterfront Isle have been sold. Prices averaged $922 psf at last weekend's public launch of the joint venture between Far East Organization and Frasers Centrepoint.

The 99-year leasehold project has 561 units. Prices start at $575,000 for a one-bedroom unit of 592 sq ft, while two-bedders from 915 sq ft are priced from $820,000. The three-bedders, at 1,163 sq ft, start from $996,000.

 

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Feb 8, 2011
Emery Point defects: CDL and others sued
Condo residents seek $600k compensation for problems in 17 areas
By Selina Lum

A key defect is located in Emery Point's basement carpark, which has been 'leaking since the very beginning', said a lawyer representing the condo owners. -- ST PHOTO: ALPHONSUS CHERN

THE residents of Emery Point condominium have sued listed developer City Developments Limited (CDL), the main contractor, five subcontractors and the architect over numerous building defects.

The condo's management corporation, representing the owners, is claiming about $600,000 in compensation to rectify defects in 17 areas.

These include a leaking basement carpark, which is located below a swimming pool, cracks in walls, and lift lobbies with ceilings damaged by rainwater.

The case opened in the High Court yesterday, and is fixed for a 10-day hearing.

Emery Point, an 18-storey block of 51 units at Ipoh Lane in the Tanjong Katong area, is a freehold development completed in 2003, but not fully sold until 2007.

In his opening statement, lawyer Leo Cheng Suan, representing the condo owners, said that CDL was fully aware of the defects. 'The plaintiffs are extremely disappointed that CDL, being a public-listed company, did not live up to its social responsibility to build quality homes.'

He said many of the defects were caused by the long period in which the unsold units were closed up, and exposed to high heat and humidity.

Some defects were discovered in September 2003, when the Building and Construction Authority issued a certificate of statutory completion (CSC) for the development. Others were discovered after the management corporation assumed responsibility for the condo's common property from CDL in July 2005.

Around July 2007, the owners hired building surveyors to conduct an audit, which found extensive defects and shortcomings in 17 areas.

Highlighting the key defects, Mr Leo said the most glaring one was in the basement carpark, which had been 'leaking since the very beginning'.

Despite numerous repairs, the carpark, located below the swimming pool, is an 'unwanted water feature', said Mr Leo.

He also noted that a building surveyor hired by CDL and main contractor Hytech Builders had conceded that there were a 'staggering' 280 points of water leakage in the carpark.

The low fencing of the children's playground also poses a 'death trap' for children if they were to climb over it and fall right into the basement carpark, said Mr Leo.

Other defects include leaky windows and cracks in the tennis court surface.

Mr Leo said the defendants were prepared to do only cosmetic patch repairs at the lowest possible cost, such as 'applying silicone to try to stop the leaks for a few months'. The lawyer described these as 'delay tactics' to 'wear out' the owners until the warranties expire.

CDL, represented by Mr Ling Tien Wah, conceded that there were defects due to the contractors' 'poor workmanship', but contended that 'there is no such thing as a perfect building'.

The developer argued that it was liable only for defects for the two units sold before the CSC date. As for the rest of the owners, who had bought their units after that, CDL was not liable for any defects found in these units.

The key defence raised by the other defendants was that the problems were not defects, but were caused by wear and tear.

 

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Feb 11, 2011
Developers: Too soon to assess property curbs
By Esther Teo, Property Reporter

Minister for National Development Mah Bow Tan with Redas president Wong Heang Fine at Redas' annual Spring Festival lunch yesterday. -- PHOTO: LIANHE ZAOBAO

DEVELOPERS say that although sales volumes might have fallen, it is still too early to assess the impact of the cooling measures.

Industry players at the annual Spring Festival lunch of the Real Estate Developers' Association of Singapore (Redas) yesterday noted that the Jan 13 intervention was soon followed by Chinese New Year, so buyers will need more time to take stock before deciding whether to buy.

Mr Lim Ee Seng, Redas' first vice-president and Frasers Centrepoint chief executive, said that although the number of transactions has fallen, this was expected due to buyers' initial hesitation and the uncertainty in the market after the measures were introduced.

He noted that projects launched after Jan 13 still had 'very decent take-up', demonstrating that there is still a pool of people genuinely in need of homes. 'As long as the location is good and the price is deemed to be not unduly unreasonable, they will buy,' added Mr Lim.

Developers also said the cooling steps are just one more factor to take on board when assessing investment decisions and sales campaigns.

Redas president Wong Heang Fine said that today's vibrant and dynamic market means developers are constantly reviewing their launches and marketing, irrespective of the Government's measures.

Mr Chia Ngiang Hong, Redas' second vice-president and City Developments group general manager, added that developers will have to monitor the market and plan accordingly, even as buyers re-evaluate their positions.

'It is an ongoing process that is always happening at all times, nothing is static,' Mr Chia added.

Mr Wong, who is also CapitaLand Residential chief executive, noted in his opening address that while the Government has rolled out long-term policies that have helped the industry, developers are not keen on any more measures.

'With the property market stabilising after the latest round of cooling measures by the Government, I hope that any further measures...would be made only after considering all options,' said Mr Wong.

If sales do slip, developers could introduce sweeteners to attract home buyers, but Mr Lim said market-wide incentives such as those seen in the recession have not been introduced yet.

When the property boom ended in 2008, developers started absorbing stamp duty for selected projects and rolled out gimmicks such as renovation allowances and vouchers for electrical appliances to encourage sales.

Developers are also looking forward to Budget policies that will further support economic growth, as the property sector will be able to ride on that growth, Mr Wong added. The challenge this year will be to grow on a sustainable basis and to innovate and upgrade to produce better quality homes that can continue to attract global investors.

'I think the Singapore market is now quite transformed, if you look at the tourism figures...We are very exposed to world markets now,' said Mr Wong.

He also announced that Redas will hold regular dialogues with various government agencies and industry associations this year as well as introduce specific focus groups. Mr Wong championed tapping into Generations X and Y - future leaders and home buyers - to form a youth focus group to gather the energy and ideas of younger members.

Developers also welcomed suggestions that the Government might introduce new rules to ensure that showflats accurately represent their completed products, especially with more builders entering the market.

Mr Chia said: 'If the objective is to ensure that (the showflat) is correctly represented, then it is good for the market.'

Separately, MCC Land's 320-unit Canberra Residences in Sembawang has sold 160 of the 200 preview units. The average prices of typical units range from $830 to $860 per sq ft with sizes varying between 614 sq ft and 2,250 sq ft. The project will be officially launched tomorrow.

 

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Minister Mah speaks on property cooling measures
By Millet Enriquez | Posted: 14 February 2011 1354 hrs


SINGAPORE : The government has said it will take further steps, if necessary, to promote a stable and sustainable property market.

This is according to National Development Minister Mah Bow Tan, who was responding to a question by MP Er Lee Bee Wah in Parliament on Monday.

The latest round of property cooling measures in January aimed to rein in speculators and pre-empt a bubble. Discouraging genuine homebuyers or causing prices to crash was not the intention.

Overall, the Ministry of National Development expects Singapore's property market to remain buoyant amid strong economic growth, low interest rates and excess liquidity.

Mr Mah said: "We do not wish to see prices shooting up so fast as to be unsupportable by the fundamentals of the market. At the same time, we also do not want to see a lot of short-term speculations in the market.

"So our measures in January were pre-emptive in nature because we wanted to act before a bubble forms. It was calibrated so as to cool the market and not to price the market. It was very targeted at the short-term speculators and not at genuine homebuyers. So if we meet these objectives, then I think the measures would have done their job."

With the government signalling its intention to act again if necessary, some analysts said it will look at both prices and transaction volumes to decide if further cooling measures are required.

Colin Tan, Head of Research and Consultancy at Chesterton Suntec International, said: "They will look into both prices as well as buying volume. If those two are capped under what they perceive as reasonable limits, probably we won't see anymore measures.

"But if buying were to continue at maybe close to 2,000 per month or if prices were shooting up more than 5 per cent, probably yes, it will start to seriously consider again to see whether it needs another set of cooling measures."

But some analysts believe the new measures have already made a dent, with fewer prospective buyers now visiting show flats.

Donald Han, vice chairman at Cushman & Wakefield, said: "I think if you look at the current market scenario, it will yield the kind of desired results, meaning I think we are going to see a cooler market.

"I think the response is good numbers. In terms of demand, it is going to slow down certainly and by virtue of having lower demand, by virtue of having speculators out of the market, I think it is hard to see rapid price increases like what we saw last year, where prices moved up as much as 70 per cent. So this is going to be a flattish, a flatline kind of market."

With the latest round of cooling measures making an impact, analysts said investors may defer buying houses and instead look at commercial or industrial property for returns.

And in some cases, some may opt to invest in other property markets in Asia, Australia and the UK.

Mr Mah said that despite the large supply of housing in the pipeline, market sentiment had remained bullish with signs of renewed exuberance in the market towards the end of last year. Last year, the government sold land that could potentially yield about 13,300 units and launched sites that can yield another 14,300 units under the Government Land Sales programme for the first quarter of this year.

He said the government was particularly concerned that low interest rates, plus excessive liquidity in the financial system, both in Singapore and globally, could further drive up demand for private housing. This could in turn cause prices to overshoot economic fundamentals.

Mr Mah said interest rates would also not continue to stay low. And buyers who over-extended themselves financially may be caught when interest rates eventually rise, and they may be forced to sell their properties at an inopportune time.

He also said it is not the intention of the latest measures to crash the market.

But should the measures not work, the government said it is prepared take further action.

 

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Feb 15, 2011
Private property sales hit 3-month low in Jan
By Esther Teo

Crowd of buyers at Spottiswoode 18 showflat last month. A total of 1,189 private homes were sold in January. -- ST PHOTO: NEO XIAOBIN

HOT off the heels of the government's latest measures to stem the rise in property prices, private homes sales have fallen to a three-month low in January, data released by the Urban Redevelopment Authroity showed onTuesday.

On Jan 13, the government announced stringent measures to curb speculative activity, including a 16 per cent sellers stamp duty for sales in the first year.

A total of 1,189 private homes were sold in January, with almost 50 per cent sold in the city fringe region.

Including executive condominiums, the number was higher at 1534.

Top selling projects include Spottiswoode 18 which found buyers for 204 units at a median of $1,992 per sq ft (psf) and Canberra Residences which sold 155 units at a median of $831 psf.

 

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Feb 15, 2011
Property rental, S'pore is world's 5th most expensive
Related Link
WORLD'S 20 MOST EXPENSIVE LOCATIONS

This ranking came about as a result of a 15 per cent increase in monthly rent to US$2,810 (S$3,600) last year for an unfurnished two bedroom property, according to a report by ECA International, a knowledge and solutions provider for international human resources professionals. -- ST PHOTO : ALPHONSUS CHERN

SINGAPORE is now the 5th and the 3rd most expensive country in the world and Asia respectively for two-bedroom rental property.

This ranking came about as a result of a 15 per cent increase in monthly rent to US$2,810 (S$3,600) last year for an unfurnished two bedroom property, according to a report by ECA International, a knowledge and solutions provider for international human resources professionals.

'The rebound in Singapore has been driven by a general recovery in house prices along with increased demand,' says Lee Quane, Regional Director, ECA Asia.

'Assignee numbers are up again in Singapore following falls during the economic downturn. This has placed pressure on rental accommodation, particularly in areas popular with expatriates.'

In addition, exchange rate fluctuations play an important role when making direct comparisons of residential property for rent. 'The strengthening of the Singapore dollar against its American counterpart has contributed to the relative increase in accommodation costs - when Singapore rents are quoted in local currency they have increased at the lower, albeit significant, rate of 9 per cent year-on-year,' says Mr Quane.

Tokyo is the most expensive location globally for two-bedroom rental property.

 

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Feb 25, 2011
19 bids for Bishan site, top offer $550m
CapitaLand's top bid for site near MRT station beats market expectations
By Cheryl Lim
http://www.straitstimes.com/STI/STIMEDIA/pdf/20110224/ST_IMAGES_CLBISHAN3-LL6.pdf

A PRIME slice of government land near Bishan MRT station sparked a bidding war that involved 19 bids and delivered a top offer that was nearly double the market expectations.

The remarkable turnout - the largest since 32 bids squared off over a Jurong West site in 2009 - shows the level of confidence in the property market despite last month's cooling measures.

Analysts had expected a price of $303 million for the residential site, but CapitaLand easily trumped that with an offer of $550 million, or $869 per sq ft per plot ratio (psf ppr). The property giant wants to build a high-rise condo of at least 36 storeys with 600 units.

CapitaLand was up against a who's who of local and regional developers, including Keppel Land, Far East Organization and Beijing-based MCC Land (Singapore), as well as mid-sized and boutique players such as Teneriffe Development.

Its bid for the 129,136 sq ft plot was about 27 per cent higher than second-placed Keppel Land's, while the lowest bid came in at $213 million.

There is some irony in CapitaLand's stratospheric bid, given chief executive Liew Mun Leong's remarks in a newspaper report last month: 'We are amazed at the prices that come out (in government land tenders),' he said then. 'Not that we are jealous... but when we look at the numbers, we know that we can't do it... So in a way, we agree that there is some speculative chasing for land.'

The site was the second major tender that closed after the Jan 13 cooling measures.

Last week, a 30ha mixed-use site in Punggol was sold for a record price of $1.02 billion, or $753 psf ppr.

The results of both tenders indicate that developers are still confident there is demand from buyers and long-term investors, said market watchers.

Prime sites in mature estates are hard to come by, said Cushman & Wakefield vice-chairman Donald Han, and this could explain why developers were willing to pay a premium for this property.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, agreed: 'Properties in good locations, like the Bishan site, tend to be able to weather economic conditions and price corrections better as compared with other plots. Developers are prepared to pay more for a choice location that will sell well easily.'

Mr Han said CapitaLand could 'create synergy' with Junction 8 Mall, which is owned and operated by its unit CapitaMall Trust. He pointed out that the developer has experience in similar projects.

Mr Liew earlier said he would be keeping an eye on residential sites in the Government Land Sales Programme this year.

Earlier this week, CapitaLand had also said it was prepared to sink up to $6 billion into new investments.

Knight Frank's head of consultancy and research Png Poh Soon estimates the project could sell for up to $1,700 psf.

Last month's sales at nearby condo Clover By the Park was at an average of $967 psf, while Centro Residences in Ang Mo Kio sold for an average of $1,412 psf.

However, Mr Han does not believe it will cause prices of nearby HDB flats and private homes to go up. 'The impact will be quite minimal. While the location is important, other factors like the project's design, facilities, apartment layout and target audience may affect the average price a project will eventually sell for,' he said.

 

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Feb 25, 2011
Guthrie expands from retail to residential

Managing director Michael Leong said Guthrie Properties is considering residential units and mixed developments to ensure a balance. Its latest project and first public housing development is DBSS project Adora Green in Yishun, which will be launched today. -- ST PHOTO: KEVIN LIM

THE cash generator for Guthrie Properties has long been its building and running of malls but the developer is now looking at mixed-use sites in Singapore and China as it diversifies its business.

The firm owns Jurong Point mall and manages Nex mall in Serangoon, which provides it with a steady income stream, but the firm wants more irons in the fire.

Its managing director, Mr Michael Leong, told The Straits Times: 'We can't just depend on the revenue stream which we get from shopping malls, as we've done for so many years.

'We want to have a balance so we're moving into some residential units and mixed developments, so it could be from DBSS (design, build and sell scheme) right up to mid-market.'

The shift in focus has not been easy as escalating land prices have made it harder for smaller builders to secure sites.

'We're very keen - in fact we think we're very good at mixed developments but unfortunately the numbers are too large and our pocket is not so deep. We don't have that kind of war chest,' he said.

Mr Leong added that the firm had considered trying for a mixed-use Punggol site but soon realised it was 'not in that league'. The top offer for the site was $1 billion.

The firm is also looking at mixed-use projects in China, although finding a good partner has been a challenge.

Its latest project - and first public housing development - is Adora Green in Yishun, a DBSS project that will be launched today. The 806-unit development, a joint venture between Guthrie and SK Land, will be priced at about $480 per sq ft (psf).

Mr Leong said 1,700 people have expressed interest in the project. He is confident that its location - within walking distance of Yishun MRT station - would appeal to many home buyers with household incomes under the $10,000 income ceiling. The project could even get a share of the Housing Board's build-to-order (BTO) and executive condominium market, he added.

Last month's cooling measures would not affect the HDB market as much, as many in that sector are first-time buyers. The stable demand there has made it a 'fairly safe market', said Mr Leong.

The DBSS project's pricing is also a draw, he said. While it costs about 20 per cent more than BTO launches, it is priced similarly to resale transactions in similar locations, he noted.

He added that the firm is willing to consider projects priced under $2,000 psf. While it will stay 'very focused' on shopping malls, it will be open to residential or mixed-development opportunities.

But this is harder now with an increasing number of big players entering the property market - some content with lower yields.

Mr Leong said: 'We like mixed developments but the opportunities are not many. They come by and if the development cost is too high, then we're not in it, we're constrained.'

He added that the location of a site is ultimately key to developers' bids. A well-located site in Bishan can expect 'very bullish bids' in spite of the cooling measures, he said.

He is also not fazed by the measures: 'Although volumes have come off, which is not unexpected, prices have held steady... Developers nowadays are strong financially.'

Guthrie Properties is a subsidiary of mainboard-listed Guthrie GTS. The group was founded in 1821 by Scotsman Alexander Guthrie.

In 2007, the Salim Group - one of Asia's largest conglomerates - and Indonesian businessman Putra Masagung jointly bought a majority stake in the company.

ESTHER TEO

 

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Feb 25, 2011
CDL expects up to 5% fall in home prices
Prices not down yet but drop in transactions seen as a precursor
By Esther Teo, Property Reporter


HOME prices could fall by up to 5 per cent this year if sales volumes keep dropping, according to City Developments (CDL) executive chairman Kwek Leng Beng yesterday.

Mr Kwek said at CDL's full-year results briefing at Orchard Hotel that transaction numbers have already started to fall, but prices will not plunge.

'Prices are not down yet but usually it's the volume that is the precursor to the rise and fall (of prices), and I believe that unless we have a lot of people coming from overseas to buy... prices will go down a maximum of 5 per cent.'

He added that developers had a very strong balance sheet and were not in dire need to sell homes.

CapitaLand chief executive Liew Mun Leong made a similar prediction last month, saying he expected sales volume and home prices to fall in all segments except at the top end.

Mr Kwek said the property cooling measures last month would not prompt CDL to drop launch prices, which depend more on the project's location and product offering. 'I think in certain places we will keep them steady and in others we will... see what is transacted in the surroundings and be in line with that,' he said. 'But if we have some special features or special location, I don't see why we should reduce prices.'

He noted that prices at the recently launched NV Residences in Pasir Ris were raised slightly only once and have held steady since despite the measures, yet buyers were still picking up units.

CDL plans to launch up to seven projects this year. In the first half of the year, it plans to launch 580 units in projects including H2O Residences in Sengkang and a Segar Road executive condominium.

CDL group general manager Chia Ngiang Hong said interest from genuine buyers was still quite strong as seen from recent launches.

But Mr Kwek said if Singapore's market and economic output continue to grow at the rate expected, the firm has 'no choice but to bid higher' for land.

He added that CDL does not plan to launch any more units at The Residences at W Singapore in Sentosa Cove. It has sold only 21 of the 56 units released so far in the 228-unit project.

CDL said construction on the South Beach project between Raffles Hotel and Suntec City will start next month. It was scheduled to be finished by next year at a total cost of about $2.5 billion, but the global financial crisis forced the firm to put off construction. It is now expected to be completed in 2015.

CDL also confirmed media reports that it has exercised its rights to acquire Dubai World's one-third stake in the project for $155 million. This will double its holding to two-thirds with the remaining third held by El-Ad Group. A further announcement will be made once the deal has been completed.

CDL's fourth-quarter net profit rose 41 per cent to $249 million while revenue for the three months ended Dec 31 was $691 million. Full-year profit increased 26 per cent to a record $749 million from a year earlier but revenue dipped 4 per cent to $3.1 billion.

Quarterly earnings per share were 26.7 cents, up from 18.7 cents in 2009. Net asset value per share was $7.03 as of Dec 31, up from $6.57 a year earlier.

A dividend of 18 cents a share, inclusive of a special dividend of 10 cents a share, was proposed, up from eight cents a share in the previous year. CDL shares rose 22 cents to $10.92 yesterday.

 

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Feb 28, 2011
URA launches site at Hillview Avenue for sale

The Urban Redevelopment Authority (URA) has launched the commercial & residential site at Hillview Avenue for sale by public tender today. -- PHOTO: URBAN REDEVELOPMENT AUTHORITY

THE Urban Redevelopment Authority (URA) has launched the commercial & residential site at Hillview Avenue for sale by public tender today.

The land parcel is launched for sale under the Confirmed List of the 1st half 2011 Government Land Sales (GLS) Programme.

With an area of about 1.4 ha, the land parcel will have a maximum permissible gross floor area (GFA) of 40,025 sqm, which can yield about 370 housing units. Up to 6,000sqm will be allowed for commercial uses, to provide retail amenities to serve residents in the area.

The site is located near the future Cashew and Hillview Stations, which are part of the planned Downtown Line 2 Mass Rapid Transit (MRT) system. The DTL2 is slated for completion in 2015.

The tender for the commercial & residential site at Hillview Avenue will close at 12pm on Apr 28 2011. Selection of the successful tenderer will be based on the tendered land price only.

 

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MND revises rates for development charges
By Travis Teo | Posted: 28 February 2011 1826 hrs


SINGAPORE: The Ministry of National Development (MND) has revised the rates for development charges (DC) for the period between March 1 and August 31 this year.

DC is the tax payable by the developer when a property site is developed into a more valuable project.

The rates for commercial development have increased by an average of 13 per cent, with the largest increase of 29 per cent in Sector 9.

That sector includes Peck Seah Street, Maxwell Road and the Anson Road area.

Meanwhile, the rates for landed residential have on average increased by 18 per cent, with the largest increase of 25 per cent in Sector 108.

That falls along Holland Road, Sixth Avenue, Eng Neo Avenue, Adam Road and Farrer Road area.

Some analysts like Ms Callie Liew, COO of the HSR Property Group said that this increase will lead to a corresponding increase in land costs and expects developers to be "more measured" in their bids going forward.

Developers contacted by Channel NewsAsia declined to comment.

However, other market watchers said the increase in DC rates is unlikely to have a major impact on collective sales.

Dr Chua Yang Liang, Head of Research (South-east Asia) at Jones Lang LaSalle, said: "DC, as a component of overall development charges, is actually quite a small component...and DC charges are only imposed on those development that has potential to be over and above what the site has been approved for."

Analysts estimate that about 50 to 60 per cent of en-bloc projects have no development charge component.

Analysts added that only projects with a higher development charge component of 5 per cent or more of total land value, such as land sites re-zoned for a different use, will likely feel a significant pinch from the latest increase.

Meanwhile, DC rates for non-landed residential properties have also increased, by an average of 11 per cent. The largest increase is 17 per cent in Sector 100, along Upper Serangoon Road and the Punggol Area.

Analysts said that before the DC rates are revised, the Chief Valuer takes into consideration how the market has behaved over the previous six months.

"It depends very much on where the market is heading, whether there are transactions recorded over the next six months. If there are values that rise, then chances are DC rates may rise accordingly," said Dr Chua.

The rates for hotels and hospitals have gone up by an average of 27 per cent, while that for industrial and warehousing use are up 8 per cent on average.

The MND said the rates for the rest, which include places of worship, open space, agriculture, drain and roads have not changed.

It added that if there is any disagreement over the development charges payable, developers and owners can opt for a case-by-case valuation by its Chief Valuer.

 

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Mar 8, 2011
Pine Grove up for sale at record reserve price of $1.7b
By Cheryl Lim

Pine Grove's reserve price of $1.7 billion is the highest so far for a collective sale. The owners of the 660 units stand to reap between $2.1 million and $2.75 million per unit. -- ST PHOTO: NURIA LING

THEY failed twice before but owners at the sprawling Pine Grove condominium in Ulu Pandan believe their next bid for a collective sale will work - even with an unheard-of reserve price of $1.7 billion.

If they do pull it off at that level, the estate will beat the record of $1.34 billion paid for Farrer Court in 2007.

The owners of the 660 units will also reap between $2.1 million and $2.75 million for each of the units, which range in size from 1,163 to 1,938 sq ft.

It remains a big if, however, with experts saying the huge price may be too ambitious given that developers are starting to hang back following Government moves to cool the property market.

But Pine Grove residents The Straits Times spoke to said the reserve price was fair, given the size of the property in the Holland Road area.

'I think it's a good, big piece of land, not just because of its location but also because it offers developers a lot of flexibility in terms of design,' said Mr Sing Tien Foo, who owns a unit at Pine Grove.

At least the owners of the sprawling 8.3ha site have a product back on the market. The first attempt at an en bloc sale in 2007 saw residents reject an offer that would have reaped an average payout of about $2 million per unit.

Pine Grove's second attempt was thwarted by changes to en-bloc sale rules, forcing owners to restart the process from scratch.

Marketing agent Jones Lang LaSalle (JLL) laid out the new offer yesterday after months of discussions with owners at the 99-year leasehold estate in Ulu Pandan Road.

The $1.7 billion reserve price works out to $1,150 per sq ft per plot ratio (psf ppr) and includes $460 million to cover the development charge and lease top-up.

JLL said the estate is a one of the last few big plots left in the Holland area.

The site's gross plot ratio of 2.1 means it could be re-developed into a project of up to 24 storeys with around 1,500 flats of about 1,200 sq ft.

Despite its selling points, market observers say the huge reserve price may be too optimistic given cooling measures that have made it a more challenging market for en-bloc sales.

Mr Jeremy Lake, ** Richard Ellis' executive director for investment properties, said developers have adopted a wait-and-see attitude.

Mr Ku Swee Yong, chief executive of International Property Advisor (IPA), agreed and said: 'Developers nowadays have a lower appetite for risk and may not be keen to borrow so much from the banks as they used to before.

'Similarly, banks are also more cautious about the amount they are willing to lend. This land as a single asset carries a rather large risk to swallow.'

Other analysts also highlighted how many developers seem keener on government sites as such sites have a shorter processing time than land bought in a collective sale.

The sheer size of the Pine Grove site will filter out smaller players anyway and likely see joint ventures between several groups, said Mr Ku.

Ms Tay Huey Ying, Colliers International director of research and advisory, added: 'It's pretty challenging for single developers but forming a consortium could see them sharing out the risk, making the deal slightly more stable.'

She said although the site is pretty well located, the threat of global economic instability, rising oil prices and the possibility of more cooling measures could result in 'not more than three bids'.

Other large en-bloc sites launched in recent months have yet to seal any deals.

Tenders for Tulip Garden - it has a reserve price of $650 million - closed in mid-January, while Whitley Heights with an asking price of between $185 million and $210 million closed its tender last week.

Credo Real Estate, the marketing agent for both projects, said the deals remain under discussion.

Meanwhile, ** Richard Ellis, marketing agent for Hawaii Tower, said four parties had expressed interest in the property - three local, one foreign - but none had met the reserve price target of $700 million.

 

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Mar 8, 2011
Property launches still seeing strong demand
Home buyers seem unfazed by property cooling measures
By Esther Teo, Property Reporter

H2O Residences in Sengkang sold 150 units out of 200 put on the market over the weekend, at an average price of $920 per sq ft, with Singaporeans making up 85 per cent of the buyers. -- PHOTO: CDL

NEW property launches have continued to attract healthy interest from home buyers, who seem unfazed by January's market cooling measures.

City Developments' (CDL) 521-unit H2O Residences in Sengkang led the pack over the weekend, with 150 units out of 200 on offer sold, at an average price of $920 per sq ft (psf).

Only 120 units were released for Phase One of the private preview on Friday, but more units were released progressively to cater to strong demand, CDL said.

Singaporeans comprised 85 per cent of the buyers, with permanent residents and foreigners from places such as China, Vietnam, Malaysia, Hong Kong, India and Indonesia making up the rest.

In its first residential launch of the year, CDL said that units sold were mainly the two-bedroom, two plus study, three- and four-bedroom types.

CDL group general manager Chia Ngiang Hong said he was pleased with the good take-up rate from buyers who found potential in Sengkang's rapid development.

'H2O also presents an exciting investment opportunity for savvy investors who can leverage on the development's proximity to the future Seletar Aerospace Park for rental and capital value appreciation potential,' he added.

Over in the east, buyers were also quick to pick up units at Fragrance Properties' 116-unit Suites@East Coast in Upper East Coast Road.

More than 80 units were sold during the official launch over the weekend and the preview three weeks ago, with prices starting from $1,100 psf.

HSR chief operating officer Callie Liew, the marketing agent for the freehold project, said most of the studio apartments and smaller units were sold first, mainly to investors attracted by their affordability.

Far East Organization said it sold 17 units at 561-unit Waterfront Isle in Bedok Reservoir Road over the last week, bringing total sales to 370 units, at an average price of $947 psf. This is slightly up from the average of $940 psf two weeks earlier.

CapitaLand also said it has sold 66 per cent of 470 units released at d'Leedon on the former Farrer Court site, with the average price holding firm at $1,680 psf since its preview launch in November.

The Interlace in Alexandra Road has sold 72 per cent of 900 units released at an average price range of $850 to $1,300 psf, CapitaLand said.

At Chip Eng Seng's 301-unit My Manhattan, next to Simei MRT station, there had been no more sales from a week earlier, when the total stood at 75 units at an average price range of $1,100 to $1,200 psf.

 

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Mar 12, 2011
En bloc fever catching on again
Agents for mega-sites that tried and failed are more hopeful this time
By Cheryl Lim

Laguna Park in East Coast has secured nearly 72 per cent of residents' votes. Its last bid to sell in 2009 failed even after the reserve price was lowered to $967 million, but it is hoping to strike success this time round. -- ST PHOTO: LIM SIN THAI

EN BLOC fever is slowly creeping back, with several mega-sites gearing up to enter the collective sale market.

Veterans on the scene, like Pearl Bank Apartments and Laguna Park, which have tried and failed before, are hoping to strike success this time round.

Marketing agents for the pair told The Straits Times that both developments are 'in the final laps' of the sales process.

Before a property can be offered for collective sale, consent must be obtained from at least 80 per cent of owners if the condominium is older than 10 years, and at least 90 per cent of owners if it is under 10 years old.

Pearl Bank apartments, located in Outram, has a maximum gross floor area of 613,000 sq ft and contains 280 apartments and eight commercial units.

Despite resistance from several residents and conservationists who have campaigned to preserve the site as a local design landmark, the project has garnered almost 75 per cent approval so far.

In 2007, an attempted $750 million sale of the 99-year leasehold property failed after attracting no bids. Another deal launched in 2008 also fell through.

Similarly, Laguna Park - with a land area of 677,463 sq ft - has secured nearly 72 per cent of residents' votes. The last bid to sell the former HUDC estate in 2009 failed even after the reserve price was lowered from $1.2 billion to $967 million.

Another project, Tampines Court, recently called an extraordinary general meeting to elect a sales committee, ahead of another attempt at a collective sale.

The Strata Titles Board dismissed a $405 million deal for the 702,162 sq ft project in 2008, after it found the sale had not been conducted in good faith.

Another condo on a large site, Pandan Valley, is gunning for a new price record with its latest attempt at the collective sale process. This comes just days after its neighbour Pine Grove announced its $1.7 billion collective sale.

Subject to the approval of residents, Pandan Valley's sale would be the largest one to date, said Knight Frank, the condo's marketing agent.

Although Knight Frank declined to disclose exact figures, it said the deal would be a significant increase over Pine Grove's $1.7 billion reserve price.

Pandan Valley covers an area of 871,877 sq ft and contains 623 units. This is closest in both size and location to the 660-unit Pine Grove which measures 893,178 sq ft.

Pandan Valley has been seeking the backing of owners. But it will be a long uphill task, with only about 20 per cent of owners' signatures received to date.

The condo's previous collective sale attempt failed to garner the required level of support from residents.

Analysts predict the outcome of Pine Grove's sale could ultimately influence the value of any collective sale which may be reached at Pandan Valley.

Mr Nicholas Mak, executive director for research and consultancy at SLP International, said: 'If Pine Grove succeeds at achieving its asking price, or even higher, then it will give some encouragement to those who are pushing for en bloc sales in the area.'

Mr Jeffrey Goh, HSR head of investment sales, said he is working on 11 collective sale deals at the moment, worth an estimated $3 billion. 'Developers are more hesitant about entering into joint ventures for large sites,' he said.

Mr Goh has avoided taking on deals valued above $650 million, saying smaller sale sites have a better chance of success.

 

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Mar 15, 2011
3rd collective sale bid by Pearl Bank
280-unit site believed to be priced at $750m
By Cheryl Lim

The 38-storey Pearl Bank Apartments in Chinatown, hailed as one of Singapore's architectural landmarks, has 65 years left on its lease. -- ST PHOTO: TED CHEN

OWNERS of units at the distinctive Pearl Bank Apartments near Chinatown are making their third attempt to pull off a collective sale.

The Straits Times understands that the 280-unit development has an estimated price of $750 million.

That was the price the owners rejected as too low when they tried to sell en bloc in 2007. Another deal launched in 2008 also fell through.

If the $750 million sale is achieved this time, owners of each 1,324 sq ft two-bedroom apartment would reap about $1.81 million - or $1,367 per sq ft (psf) - for their units, while the 3,993 sq ft penthouses would fetch up to $4.8 million each. That is a price of about $1,202 psf.

Market rates are much lower. A 2,185 sq ft apartment in the 38-storey estate sold for $2.1 million, or $952 psf, in January, while a 463 sq ft flat in nearby People's Park sold recently for $488,000, or $1,054 psf.

The ageing 99-year leasehold project has 65 years of its lease left. It has a built-up plot ratio of 7.4, with a maximum gross floor area of 613,000 sq ft. This plot ratio could yield more than 500 apartments of 1,200 sq ft.

PropNex chief executive Mohamed Ismail said the property's central location will ensure keen interest from developers, but added that the current market sentiment is subdued.

'Interest in the property might be dampened by the revised development charges. Potential buyers will also be looking out for how much the differential premium for topping up the lease will cost them,' he said.

The building has been hailed as one of Singapore's architectural landmarks, and the Urban Redevelopment Authority (URA) said members of the public have asked for the horseshoe-shaped building to be conserved.

Mr Ashvinkumar Kantilal, president of the Singapore Institute of Architects, said Pearl Bank's redevelopment would be a great loss to the architectural community.

'It is unlikely that developers will take into account any sentimental value when deciding how to redevelop the building,' he said.

A Pearl Bank resident and the chairman of its management committee, who gave his name as Dr S.T. Lee, said although he would like to see the building preserved, maintaining it could cost millions of dollars.

'It's difficult to get a loan to buy a unit in such a mature development. Holding on to Pearl Bank means the owners will not be able to realise the value of their homes,' he said.

'If the URA can give some help with the topping up of the lease, preserving the building might be an option I would consider.'

Although collective sale properties are not subject to any demolition requirements after a sale, the URA said the buyer could choose to redevelop the site.

It added that it can evaluate buildings for conservation if an application is submitted.

Two other big deals involving properties being sold en bloc are also in the works, with Pine Grove launching its bid for a $1.7 billion sale last week. Owners of units at Tulip Garden are also on the hunt.

cherlim@sph.com.sg

TOUGH TO HOLD ON

'It's difficult to get a loan to buy a unit in such a mature development. Holding on to Pearl Bank means the owners will not be able to realise the value of their homes. If the URA can give some help with the topping up of the lease, maybe preserving the building might be an option I would consider.'

Dr S.T. Lee, a Pearl Bank resident and the chairman of its management committee

 

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URA proposes property regulatory changes
By Ryan Huang | Posted: 16 March 2011 1405 hrs

SINGAPORE: Seven key regulatory changes to the property sector have been proposed by the Urban Redevelopment Authority (URA) to make the industry more transparent and raise protection for property buyers.

This follows last week's announcement in Parliament by Minister for National Development Mah Bow Tan, that moves would be taken to enhance the Housing Developers (Control & Licensing) Act (HDCLA) and the Housing Developers Rules (HDR).

This was to give property buyers better access to accurate and timely information about the market and units that they plan to buy.

The new changes being proposed include the need for showflats to depict actual units accurately.

This means the floor area of the showflat must be the same as the actual unit, and all external and structural walls must be erected.

Also, among the proposals is the requirement for developers to provide more mandatory information.

This includes the estimated land area for a property, a drawn-to-scale location plan, and specifications such as the type of finishing.

The URA said this would help property buyers make more informed decisions.

Developers will also be required to make available the price list of units at least two days before a project is launched for sale.

Other information that will be necessary for developers to provide is their track record, with details on at least one completed project.

New developers who have not completed any project will have to indicate their lack of track record.

These changes were worked out in consultation with the Real Estate Developers Association of Singapore (REDAS).

Mr Wong Heang Fine, president of REDAS, said: "REDAS supports the government's efforts to take steps to help purchasers make more informed decisions.

"As a body representative of a large community of property developers, REDAS is committed to continually promote good practices and professionalism among developers to deliver better and higher quality homes for all".

The proposals are open for public feedback from Thursday until April 18, 2011 on the URA website.


The final changes to the HDCLA and HDR will take effect by the third quarter of this year.