A tale of New versus Resale

You may have already seen these reports in the ST today.

There seem to be no let up in momentum for recent property launches, especially for new developments with "smallish" units. However, it will be interesting to see what the rental situation be like once all these "shoe-box" apartments come onto the market in the next 2 - 3years.


The resale market, on the other hand, seemed to have lost steam somewhat.


Given a choice, the wife and I will prefer Resale versus New anytime. This is especially so with the still "crazy" prices for new launches these days. With Resale (especially older, completed developments), you stand a much better chance of getting:

• Larger units at "saner" asking prices.
• Better layouts with spacious living/dining area and much bigger bedrooms.
• Generally no bay windows/planter boxes/PES that eat into your living space.
• And more importantly, you do not have base your buying decision solely on the showflat or worse, just a floor-plan, which can go horribly wrong sometimes.

But that's just us talking...

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Well, we tried...

Our attempt to restart our showflat visit failed miserably this morning.

The wife and I had 2 hours to spare before our Boxing Day lunch. So we decided to try the sales gallery of d'Leedon but it was closed (Come to think of it, is the showflat opened to the public yet? That's a ginormous sales gallery, by the way!).


We then drove down Bukit Timah to The Glyndebourne, and that was closed too. Our search along Newton and Balestier proved futile as well, so we ended up visiting a development of a somewhat different sort... (little/no en-bloc potential here, as the owners are unlikely to sell out)


Looks like the next review will have to wait till next week.

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Just in case your thinking about the $2.4 million Pine Grove unit...

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If you have been reading the Straits Times' Classified over the past few weeks, you might have come across several adverts on units for sale at Pine Grove. These are probably owners who are trying to cash out after the en-bloc announcement.

For those who have been following the local property market news (or our blog), you will know that Pine Grove is going en-bloc with a reserve price of $1.7 billion. This could work out to between $2.1 million and $2.75 million per unit, depending on the size of the apartment and the development charge.

The wife and I are particularly amused by this advert:

Assuming owner of a 1700+sqft unit (which we understand is the larger unit type in the development) will eventually get $2.7 million when en-bloc happens, you are asking someone to splash out about $2.4 million now in the hope of getting $2.7 million later. And if the en-bloc fails (again), the unit will probably revert back to the current market price of $1.5+ million (or lower, depending on market condition then). So we are looking at a possible upside of $300K versus a massive downside of $900K.

Good investment?! We'll let you consider the maths...

Granted that a seller is entited to quote whatever price he desires. But then again, one should not assume that the rest of the world is... well... intelligently-challenged.

Smiley Face

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Season greetings!

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Capital values for landed homes rising faster than apartments/condos

The BT today reported that the average capital values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the 4th quarter as well as the whole of this year. This is according to latest figures from DTZ.

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


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

In the non-landed segment, the average capital value for 99-year suburban condos remained unchanged at $660psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8%.

The average price of prime freehold condos increased 0.4% quarter on quarter to $1,520psf in Q4, also reflecting an 8% full-year price gain.

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

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

Ms Chua Chor Hoon, DTZ’s Southeast Asia research head, predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 55 if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

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

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Private Residential Units Sold (Nov 2010)

The following data is courtesy of Urban Redevelopment Authorities (URA).

The list includes projects that the wife and I have reviewed to date.

URA (Nov 2010)

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Live Connected @The Tennery

This from an email flyer that the wife and I received from Far East Organization on the impending launch of their new project - The Tennery :

A new trans-urban development is coming up at The Tennery, breathing new life and a refreshing cosmopolitan chic into the locale. At the junction where Upper Bukit Timah Road meets Woodlands Road, this new 16-storey project offers hip urban living, amenities and connectivity within a single address.


The Tennery has 338 stylish SOHO apartments above a three storey retail podium Junction 10, which houses the Ten Mile Junction LRT station. These city-style SOHO apartments ranging in size from 619 - 950sqft come with high ceilings allowing owners to creatively transform their living spaces to suit multiple uses. Full recreational facilities are located on the roof of the retail podium, giving residents prominent views of the surroundings.

Across the road, the Bukit Panjang MRT and LRT stations, together with the future integrated Bukit Panjang bus interchange with commercial facilities, will be seamlessly connected by 2015. By then, the Downtown Line 2 will be operational and it will allow speedy transfer and enhanced connectivity to the rest of the island. Prominent interchanges on this line include Little India MRT station (north-east line), Newton MRT station (north-south line), Bugis MRT station (east-west line) and Botanic Gardens MRT station (circle line).

For residents of The Tennery, travelling to the Jurong Lake District is also just a few LRT and MRT stations away. Under the 2008 Master Plan, the Jurong Lake District is earmarked as the biggest lakeside destination for business and leisure in the West. The planned growth of this area will generate demand for housing and this will auger well for the leasing potential of The Tennery.

Given this fantastic connectivity, residents at The Tennery will enjoy a luxurious lifestyle of unparalleled convenience.


So, another one of those "smallish units" project to look forward to... *yawn*

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En Bloc News: Serene House sold for $99 million

According to a CNA report today, the tender for Serene House has been awarded to luxury-home developer Shelford Properties for $99 million.

A total of seven bids were received for the residential freehold site.

Marketing agent Colliers International said there were major and mid-tier property players who bid for the site.

The winning bid of $99 million translates to $1,400 per square foot per plot ratio.

Serene House is a four-storey walk-up residence located at Jalan Serene, with a land area of 40,000 square feet and a gross plot ratio of 1.4.

It has 24 units and is near the landed housing enclave in Bukit Timah.

The owners of the units at Serene House will each receive about $4.1 million from the sale.

The wife and I did a quick check and found that the last caveat lodged for Serene House was in June 2010 - a 1,550sqft unit sold for $537,500. Talk about missing the boat!

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Private home sales up in November

Private home sales in November rebounded about 80 percent on-month to hit 1,909 units - the second highest in 11 months. This is according to a CNA report today.

That brings the total number of homes sold so far this year, to 15,025, surpassing the 2007 sales record of 14,811 units.

The surge in November sales comes just three months after the government introduced its latest round of measures to cool the property market.

Lakefront Residences in Jurong was the most popular property selling over 437 units at $1,075 per square foot last month.

Coming in second was Waterview in Tampines, which sold 376 units at $903 per square foot, while Spottiswoode Residences followed with 258 units sold at $1,853 per square foot.

This buying fever in November caught many analysts by surprise.

Tay Huey Ying, Director (Research and Advisory), Colliers International, said: "It just goes to show or prove that a lot of investors are still viewing property as a safe place to park their wealth in spite of the high exposure to policy risks.

And I think another driving factor for November's high sales volume could also be foreign purchases, diverted from the HDB resale market, as well as from Hong Kong and China, in light of their recent property curbs.

With high sales volume, with feverish buying fever, there is bound to be some upward pressure on prices although the ramped up government land sales programme could put a check on the rate of price growth.

If what is driving the November sales happens to be foreign purchases, who may not be too bothered about potential launches, potential supply, then I think it does warrant certain further measures to cool the buying fever."

Industry watchers say the government may end up introducing another harsher set of cooling measures, such as a tax on profits from property sales in the next few months.

Colin Tan, Head (Research and Consultancy), Chesterton Suntec International, said: "What's going to happen if the buying doesn't stop and while we may not feel the impact now, but the consequences may come maybe a year or two later and it can be pretty adverse.

We'll have a lot of units up for rental, then the rentals could collapse especially when there's a lot vested buying.

The worse is of course when rentals come down, and holding cost go up as well, so that will reduce the yield and when yield is miserable, some investors may opt to sell or are forced to sell and that may start a domino effect."

Analysts say the latest figures also show that properties with strong branding and good locations remain the most attractive.

Although the November statistics came as a surprise, many believe the number for December will come back down as developers launch fewer properties over Christmas and New Year.

For the month of December, property watchers expect between 800 and 1,300 units to be sold.
 
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It's that time of the year... to pay your property tax!

Most of you should have received a copy of below with your property tax returns.

However, just in case you chucked it as trash without realizing and would like the info.


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Spottiswoode 18

The BT today reported that some agents are gathering interest for Spottiswoode 18, which will come up on the site of the former Dragon Mansion near Tanjong Pagar.

Roxy-Pacific Holdings had bought Dragon Mansion en bloc late last year. There are plans to build a 36-storey residential tower on the site, with 251 apartments measuring 387sqft to 1,324sqft. Prices are said to be above $2,000sqft.

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Record deals for Good Class Bungalow

The BT today reported that the value of Good Class Bungalow (GCB) transactions so far this year has reached nearly $1.85 billion, a new record and up 7.3% from the $1.72 billion worth of deals done for the whole of 2009. This is based on CB Richard Ellis’s analysis of URA Realis caveats information as at Dec 8.

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


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

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

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

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

Some foreign companies, depending on their economic footprint here, have also been given LDAU’s nod to buy a GCB.

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

“Good to know” information – yes. For all practical purpose – no… not to the wife and I anyway. We can never afford a GCB (even the smallest one), at least not in THIS lifetime...

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We are ONE!

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Time does fly, especially when your having fun.

It felt only like yesterday that the wife and I did our very first blog posting – at about 11pm on December 7, 2009 - We were waiting at the airport lounge in KLIA for our flight to Shanghai, and frantically typing away at the computer to complete our review for Adria, which we had visited over that weekend. That was the official birth of our modest little blog that is SG PropTalk.

The whole idea of SG PropTalk originated from some “over the dinner table, after a few bottles of wine later” talks we had with certain close friends. They were aware of our favourite past-time (i.e. visiting new launches and the showflats) and the conversation went along the lines of “hey, why don’t you guys start a blog about your showflat visits? Consider it public service and you may even end up with fans!” And the wife and I thought to ourselves… why not?!

Fast forward to a year, 285 posts and over 66,000 page views later (we must admit that some of the page views were from the 2 of us), we are both delighted and amazed by the fact that SG PropTalk is still alive and kickin’. We are also pleasantly surprised (and humbled) by the fact that SG PropTalk actually have some - ok, probably just the odd few - regular followers.

While we strived to update our blogs regularly, there have been challenging times – when we were overseas (especially China, where access to Blogger is banned), when our regular day jobs got in the way of our blogging, or when we just could not afford the time off our schedules to visit new launches and write about them at certain period of the year (e.g. the last couple of weeks and probably the rest of the month). For this, we seek your continual patience and understanding.

We will continue to blog for as long as we can afford the time, have the energy and find it fun to do so. We will also try to be as impartial as we can on our reviews and comments (TRY being the operative word), and continue to welcome any suggestions/comments/constructive criticisms that our readers may have about SG PropTalk.

Last but not least… the wife and I thank you for supporting SG PropTalk during the past year. It is really heartening to see the daily ‘hit rate’ gone from about 20 when we first started to the current 400 on average – not quite the same league as Xia Xue or Dawn Yang (yet), but we hope that SG PropTalk will eventually become the first place you go to for information concerning the Singapore private residential market scene. Well, one can always dream…

And with any luck (* fingers crossed *), SG PropTalk may still be around this time next year! :-)



Yours Sincerely,
The Folks @SG PropTalk

P/S: Have HELP us be better! Drop us a note and tell us what you like about SG Proptalk and what needs improvement.



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Sales status: Robinson Suites & d'Leedon

According to a BT report today, several new residential projects sold well last week.

Robinson Suites
All but the 5 penthouses at the 167-unit freehold Robinson Suites are said to have been sold over a three day period last week beginning on Thursday. Three shop units on the ground floor of the 42-storey project have also found takers.

A total of 132 residential units and the three shops were released on Thursday. Of these, everything was sold by Saturday, except for the five penthouses.

The remaining 35 apartments on the lower floors are believed to have been sold to a fund.

All the apartments in the development are either one-bedroom-plus-study or two-bedders. Unit sizes start at 484sqft.

The apartments are said to have sold at prices ranging from $2,600psf to $3,300psf. In lumpsum quantum, prices began at $1.2 million for a one-bedroom-plus-study and $1.5 million for a two-bedder.

In addition to this relatively affordable lumpsum investment size, buyers were drawn to the pitch for the project as the first freehold apartments at Robinson Road. The units face the low-rise Lau Pa Sat and will enjoy a relatively unblocked view.

Robinson Suites will rise on the former VTB Building site; the project is being developed by a consortium whose shareholders include Cheong Sim Lam (whose family developed International Plaza), Fission Holdings, Tan Koo Chuan and Saw Pik Kee.


d’Leedon
CapitaLand and its partners sold a further 153 units last week at d’Leedon on the former Farrer Court site. This takes total sales to 205 apartments, inclusive of the 52 units sold the previous weekend (Nov 27-28) when sales were open to former owners of Farrer Court.

Singaporeans have picked up 80% of the units sold so far.

The developers have released 250 of the 1,703 apartments in the 36-storey, 99-year leasehold project. They have yet to release the six pairs of strata semi-detached houses in the development.

The 250 apartments released have been priced at $1,680psf on average. A typical one-bedroom-plus-study apartment of 635sqft costs about $1.1 million. A typical two-bedder of 1,055sqft is priced at about $1.5 million.

The condo also has three- and four-bedroom apartments as well as penthouses.

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En bloc news: Tulip Garden up for collective sale!

According to a Channel News Asia report today, Tulip Garden has been put up for collective sale. Credo Real Estate, which is handling the sale said the owners of the 164-unit development, are asking for a minimum of S$650 million.



That works out to about S$3.14 million to S$5.45 million for the apartment's owners.

This tender launch is the first large scale freehold en bloc sale offering, valued above S$500 million, in 3 years.

Credo said if sold, Tulip Garden stands to be the third largest successful en bloc sale by deal value in Singapore's history, after Farrer Court and Leedon Heights.

The other two developments were both sold in 2007 for S$1.3 billion and S$835 million.

Tulip Garden has a land area of some 317,000 square feet and is zoned for residential development under the 2008 Master Plan.

It has a gross plot ratio of up to 1.6 and can be built up to 12 storeys.

At the minimum price of S$650 million, Credo said the per square foot per plot ratio works out to S$1,250.

"We would not be surprised that the highest bidder crosses $700 million," said Karamjit Singh, MD of Credo Real Estate.

Tulip Garden is located at the corner of Holland Road and Farrer Road in the prime district 10 area

The tender will close at 2.30 pm on January 20, 2011.

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Private Residential Units Sold (Oct 2010)

The following data is courtesy of Urban Redevelopment Authorities (URA).

The list includes projects that the wife and I have reviewed to date.

URA (Oct 2010)

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En bloc news: Hawaii Tower

The BT today reported that one of the biggest collective sale sites in dollar terms so far this year is expected to be launched for sale next week.

Hawaii Tower, on Meyer Road, has a reserve price of $700 million. This works out to about $1,401psf ppr inclusive of a development charge (DC) of about $55 million. The all-in investment for the successful developer of the 192,340sqft freehold site is expected to be around $1 billion.


Based on the unit land price of $1,401psf ppr, the breakeven cost for a new luxury condo project on the site could be about $1,950 - $2,100psf. A 25th floor unit at the nearby Aalto was transacted at $2,373psf this month. Over at Seafront @Meyer, units on the 17-20th floors have traded at $1,875-$2,501psf in the past few months.

The Hawaii Tower site is zoned for residential use with a 2.8 plot ratio (ratio of maximum gross floor area to land area) and height of up to 36 storeys. The plot may potentially be developed into a new condo project with about 345 units of an average size of $1,500sqft or 430 units averaging 1,200sqft.

A new development on the site will boast unobstructed views towards the sea, Marina Bay Sands and the city skyline as well as the Mountbatten landed housing estate. The regular-shaped plot has frontage of 130 metres along both Meyer Road and the East Coast Parkway.

CB Richard Ellis is marketing Hawaii Tower’s collective sale through a tender which will close on Jan 26.

Owners controlling slightly over 80% of share values and strata floor area have signed the collective sale agreement. They stand to receive about $5 million-plus per apartment and $8.8 million-plus per penthouse. Hawaii Tower comprises three blocks holding 129 apartments of about 2,200sqft each and six penthouses of about $4,300sqft each.

For Hawaii Tower, this would be the third attempt at an en bloc sale. The two previous attempts were in 2007. The initial effort began in the first half of that year, starting at $700 million and rising to $800 million; about 70-odd % consent level from owners were secured before the deadline for obtaining the minimum consent passed.

Another attempt was launched in late 2007 at $800 million but this soon petered out as market sentiment began to weaken and developers lost their appetite for land.

 
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