High Q1 home sales volume not sustainable...

The high sales volume of new private homes seen in the first quarter of 2012 is not likely to be sustainable, according to real estate consultancy CBRE.

In the first three months of 2012, CBRE expects 5,200 units of new private homes to change hands, the second highest since the 5,578 units sold in Q3 2009.

The strong demand is primarily driven by a large supply of new units in the market, high liquidity as well as low interest rates.

Li Hiaw Ho, Executive Director at CBRE Research said, "This increase in sales is due in large part to the slew of projects featuring compact apartments that have flooded the market in recent years."

CBRE says the smaller quantum of each unit makes compact apartments - or what's commonly know as "shoebox apartments" - very affordable.

And they also provide a safe haven for investors who are keen to park their savings.

CBRE says the few projects that were fully sold in Q1 were Guillemard Edge (275 units at a median price of $1,215 psf), Casa Cambio (198 units at a median price of $1,390 psf), Millage (70 units at a median price of $1,350 psf) and Tree Scape (30 units at a median price of $1,400 psf).

As at end-February, the three top-sellers were Watertown in Punggol Central with 924 units sold, The Hillier in Hillview Avenue with 457 units sold and Parc Rosewood in Woodlands with 577 units sold.

In tandem with the increased sales activity in Q1, CBRE says the high-end segment which has been fairly quiet also showed a pick-up in activity.

The Scotts Tower reported 13 units sold between $3,311 psf and $3,680 psf; two units in Scotts Square were sold at $4,661 psf and $4,533 psf, and a unit in Skyline@ Orchard Boulevard was sold at $4,140 psf.

Despite the thin transaction volume, CBRE says high-end prices were still holding out.

The real estate consultancy also observed strong sales volume for Executive Condominiums (EC) after the government tweaked policy to raise the proportion of ECs allocated to second-time home buyers from 5% to 30%.

In the weekend following the announcement, CBRE says 82 units in Twin Waterfalls were sold to second-timers and around half of this number was sold to the same group at Tampines Trilliant.

Looking at the sale of recent EC projects, CBRE notes that some 60% of the buyers were second-timers, a reversal from the period before 2005 when some 80% of the buyers were first-timers.

Going on to Q2, CBRE expects developers to continue to focus on marketing mass-market projects as buying interest in this segment is expected to remain healthy.

And it says developers should be able to sell around 1,000 units per month.

Source: Channel News Asia

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Bishan more expensive than Grange Road..?!

Not many would have imagined the day when a condo in Bishan actually costs more per psf than one (albeit older) in Grange Road or River Valley?

But for the wife and I, we will take Grange Road/River Valley anytime!


Reference: "Will Bishan's Sky Habitat shatter price ceiling?" - The Straits Times, 29th Mar 2012

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So how did the resale market do in Feb 2012?

Prices of resale private homes are 0.8% cheaper in February than in the previous month.
This is according to the NUS Singapore Residential Price Index (SRPI ).

Still, analysts expect overall prices to rise by between 0.5 and 3% in the first quarter.

Since January, the market for new private homes have been abuzz, with eight in 10 buyers being locals.

In December last year, the government introduced cooling measures like the Additional Buyer's Stamp Duty (ABSD).

Back then, many had predicted property prices to go down by as much as 15%.

ERA key executive officer Eugene Lim said: "The measures are working in the sense that foreigners... [during the] pre-ABSD days make up almost 20% of the market. Today, they account for less than 7%of transactions, as far as new home sales are concerned."

Excluding executive condominiums, nearly 2,413 new private homes were sold in February, more than a third from January's.

But in the secondary market, where it includes the resale market and the more speculative resale of uncompleted private units, it is a quieter affair.

While private new home sales have spiked up in the last two months, experts noted the resale and sub-sale markets have been slow, and that should stablise the property price index in the first quarter of this year.

Jones Lang LaSalle research head Chua Yang Liang said: "In the first, second quarter, we are going to continue to see that kind of disparate, two-market behaviour, top and new sales and resale.

"New sale markets tend to... do better because of the conditions in there -- the financing and progressive payments".

"You don't really need to make immediate payment, except according to the construction phase. Interest rates remain fairly low for now, and that is going to be more helpful for both markets".

OrangeTee research director Tan Kok Keong said: "We are likely to see more launches, as well as strong sales, unless there are instances of sharp economic shocks externally.

"In terms of pricing, I do think that developers are pricing it at lower end of market expectations, so I do think that prices will continue to climb, but on a moderate level, meaning you are looking at one to two per cent price increases, going forward, in the primary market."

With more Government Land Sales sites being taken up by developers, the supply of new private homes should meet demand. And that is a major price stabiliser for many analysts.

Source: Channel News Asia

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All about the subsale market....

The Business Times today reported that a record 98.1% of 2011's subsales were still profitable even after counting the seller's stamp duty (SSD) where applicable as the overwhelming majority of the 2,337 units subsold last year had been purchased prior to the punitive SSD regime taking effect for units bought on or after Jan 14, 2011.

The average gain per unit for 2011 subsales was at a three-year high, according to a caveat analysis by Savills Singapore. Subsales refer to secondary market transactions in projects that have yet to receive a Certificate of Statutory Completion. Such deals are often seen as a guage of the level of speculative activity in the property market.

 

And for those wondering how shoebox units fared in the subsale market in 2011, the article below will throw some light on the subject.


Reference: "Shoebox units feature in last year's subsales"- The Business Times

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Secondary market continued to soften in 1Q2012

Non-landed home prices in the secondary property market in Singapore continued to soften in the first quarter of 2012, with those in the prime districts 9, 10 and 11 faring worst.

According to a report by DTZ Research, resale prices of luxury condominiums and freehold condominiums in the prime districts fell by 0.8% and 0.7% respectively.

Resale prices of leasehold condominiums in the suburban areas registered a slight quarter-on-quarter increase of 0.3%, a moderation from the 1.0% growth in Q4 2011.

Transaction of non-landed homes also slowed to about 470 units per month over January and February. This was also lower than the monthly average of about 1,400 units in 2011.

DTZ Research attributed the lower prices and transactions to property cooling measures such as the Additional Buyer's Stamp Duty measures implemented in December last year.

Competition from uncompleted projects is another factor that has impacted resale property sales, the DTZ report added.

The report highlighted that a high monthly average of 2,200 new units, excluding executive condominiums, were launched in January and February, compared to a monthly average of 1,510 units launched in 2011.

Resale prices of landed homes, however, rebounded in Q1 2012 after moderating growth for two consecutive quarters.

Freehold landed homes in suburban areas and prime districts 9, 10 and 11 respectively registered stronger price increases of 1.6% and 1% on-quarter, compared to 0.7% and 0.8% over the last quarter of 2011.

DTZ said that primary sales, excluding executive condominiums, averaged 2,143 units per month in the first two months of 2012, higher than the 2011 monthly average of 1,364 units.

Chua Chor Hoon, Head of Asia Pacific Research at DTZ said: "Projects that were launched previously are being re-launched to ride on the current buying momentum. If purchase demand continues to remain strong at above 1,500 units a month, we do not preclude the possibility of further government cooling measures."

Source: Channel News Asia

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Enbloc News: Westvale Condominium

Westvale Condominium at Pasir Panjang Road has been put up for collective sale with an indicative price tag of $85.5 million.

The 62,710-square-foot freehold site has a potential gross floor area of 96,574sqft, inclusive of 10% balcony space, and an allowable building height of up to five storeys.

The indicative price works out to be about $892psf ppr. There is also a development charge on the property of $625,000.

Currently, the condo has a total of 32 strata walk-up apartments and over 80% of the owners have consented to the sale.

Westvale Condominum's marketing agent Jones Lang LaSalle said 115 residential units, with an average size of 800sqft each, could potentially be built on the site.

The site is adjacent to the National University of Singapore Campus, the National University Hospital and the Singapore Science Parks.

Mr Nicholas Ng, Associate Director of Investments at Jones Lang LaSalle said, "The site is strategically located along Singapore's 'Technology Corridor' and NUS. It is also a stone's throw away from the newly completed Haw Par Villa MRT Station.

"Given the limited freehold land supply in this mature residential estate, we are expecting a healthy response from developers."

The tender will close at 3pm on April 19.

Source: Channel News Asia

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500,000 unique pageviews later...

The Good News:    The wife and I are absolutely thrilled that we have crossed the “half-million unique pageviews” mark.

The No-So-Good News:    Due to increasing demands from our day jobs and family committments, we are no longer able to update our blog on a daily basis. We also need to shelve any further plans for SG PropConsult.

The wife and I really appreciate the support and encouragements received from you (our readers) since we started SG PropTalk about 2 years ago.  We will continue to post on our blog as often as we can, and maybe include a property review (or two) when we can find time to visit showflats.

Meantime, happy property hunting!

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The Real Deals (15-03-2012): Seletar & Oxley Holdings

The latest issue of "The Real Deals" is all about the Seletar Garden en bloc and developments around the Seletar area.

It also provides some insights into Oxley Holdings, who is the successful bidder of Seletar Garden and has made a name for being a market leader in (smaller) mixed-developments.

The Real Deals (15-03-2012)

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February private homes sales up 29%!

Demand for new private homes in Singapore continued to increase in February, after rising sharply in January.

The Urban Redevelopment Authority said excluding executive condominiums, 2,413 new private homes were sold in February, up by about 29% from the previous month.

In January, 1,872 new units changed hands, almost three times more than December's sales.

For February, the best selling projects were mostly located in the suburban areas.

The top seller was Parc Rosewood with 380 units sold.

Guillemard Edge, which is located in the city fringe, also performed well with sales of 275 units.

Meanwhile, home buyers also snapped up executive condominium (EC) units.

257 units of ECs have been sold at Twin Waterfalls, 187 units at The Tampines Trilliant and 186 units at The Rainforest.

Including ECs, a total of 3,138 units were sold last month, up 51% compared to January.

Source: Channel News Asia

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Wanna know why developers are so interested in Punggol?

A new study shows that about 30% of HDB households in Punggol have a monthly income of $9,000 or more.

This is four percentage points higher than the national average compared with other HDB estates.

And property developers believe this shows Punggol has potential for private residential development.

Pasir Ris has the highest number with 35% of HDB households with monthly incomes above $9,000.

But as Punggol is a relatively new estate and the proportion of those with university education is the highest, property developers are setting their sights there.

They believe Punggol residents can afford private property with their stronger earning power.

In addition, 97% of HDB residents there live in four-room or bigger flats.

And analysts said those looking to upgrade to private property usually come from this group.

So even though the government is pushing out 5,400 private property units in Punggol, analysts believe there is demand.

SLP International research & consultancy executive director Nicholas Mak said: "Bearing in mind that private homebuyers of condominiums in Punggol are not just from Punggol but also from Sengkang and Hougang, and there is a finite number of such buyers in the area, I think the present pace of government land sale is just right. If the government were to accelerate the land sale in Punggol, this could actually increase or enhance a risk of oversupply in the area."

Source: Channel News Asia

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The Real Deals (08-03-2012)

The latest issue of Kim Eng Research's "The Real Deals" focused on the Hillview Avenue area.

Looks like owners of older developments in the neighbourhood should really thank Far East and Kingsford development for helping to propel the values of their homes upward...
The Real Deals (08-03-2012)

So where are condo prices heading, rajuguide asked?

rajuguide has asked on our chat box if prices for condos will fall this year.

Rather than gazing into our rather murky crystal ball, this report in The Straits Times today may provide you with some indications of where the market is heading...


Reference: "Developers'bids signal likely dip in home prices" - The Straits Times, 13th Mar 2012

 

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Enbloc News: Seletar Garden sold!

This one is a tad "old" but for those who might have missed it...


Reference: "Seletar Garden sold en bloc for $96.2m"- The Straits Times

 

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Heading to the land of No Blogger Access...

We will return next Monday so check back with us then!

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$243 million top bid for Hillview Avenue site

The tender for a residential site at Hillview Avenue closed Tuesday with a top bid of $243.2 million, said the Urban Redevelopment Authority (URA).

Of the seven bidders, Kingsford Development handed in the highest bid for the 99-year lease site, which was launched for tender on January 19.

The second highest bid of $205.1 million came from Flamegold (a unit of UOL Group), followed by MCL Land which made a bid of $190.5 million.

The lowest bid was $147.98 million by Capital Development.

The site at Hillview Avenue measures 12,648.5sqm with maximum permissible gross floor area of 35,416sqm.

URA said it will evaluate the bids and the tender award will be announced at a later date.

Nicholas Mak, executive director, Research & Consultancy Department at SLP International Property Consultants said the site received "bullish" bids with the top bid 18.6% higher than the second highest bid.

"This is the highest difference between the top and second highest bid since February 2011, when the GLS tender for the condominium site at Bishan Street 14 concluded," he added.

Mr Mak also noted that the 99-year development - The Hillier - an uncompleted project launched in January 2012 achieved an average price of $1,296psf to date.

"The top bid for this Hillview site could result in a breakeven price of $1,010 to $1,060psf. To yield a decent profit, the developer would have to sell the units in the development at prices above $1,200 psf," he said.

Li Hiaw Ho, executive director, CBRE Research noted that URA reported that the soho-styled apartments at The Hillier sold about 450 units to date. "The success of The Hiller could be the reason for the optimistic top bid for the site," he added.

Source: Channel News Asia

The Hilier II, perhaps...?
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Projects Spotlight: Ardmore Park, St. Regis Residences & Four Seasons Park

The luxury segment of the market started to see some activity in February and, based on a few of the transactions, it looks like some owners are willing to sell below purchase price.

At the 11-year-old, 330-unit Ardmore Park, for example, the apartment that hit a record price two years ago has changed hands again, albeit at a slightly reduced price. In early 2010, the 2,884sqft, four-bedroom apartment on the 27th level of one of the three towers was sold for $10.64 million, or $3,688psf, an all-time high for Ardmore Park. The unit recently changed hands again at $10.5 million ($3,640psf), which is still the second-highest unit price achieved at Ardmore Park condominium.

"That unit has the best view," says Samuel Eyo, director of Savills Prestige Homes. "The draw of Ardmore Park is that it sits on one of the largest freehold plots in a prestigious address in the prime district, and it's the only condominium that boasts two tennis courts and an Olympic-sized swimming pool. In addition, the condo's design is classic."

Prior to the transaction in February, there were two others last November. They were those of two lower-floor units in another tower, which are said to overlook a construction site, according to agents familiar with the location. As such, the units changed hands for $8 million ($2,773psf) and $8.3 million ($2,877psf) respectively.

At the 173-unit St Regis Residences on Tanglin Road, a 5,543sqft unit on the 20th level was transacted at $11.7 million ($2,111psf), or 24% lower than the seller's purchase price of $15.4 million ($2,781psf) in 2006. According to property agents familiar with the deal, the owner was willing to let go of the unit at a lower price because the apartment was in need of renovation. "This is likely to be a one-off deal," say an agent who declined to be named.

Whether this is likely to be a trend in the luxury segment is difficult to say as yet, concedes Savills' Eyo. "It really depends on the individual owner's holding power, and his or her perception of the market. Some owners may be willing to lower their price to facilitate a sale because they have spotted another investment opportunity or want to upgrade to a bigger place, and are therefore more prepared to cash out now," he says.

At the 202-unit, freehold Four Seasons Park on Cuscaden Walk, a 2,260sqft unit on the 12th level of one of the three towers fetched $5.7 million ($2,522psf) in the resale market recently. There is no prior caveat lodged for this unit. In January, however, a 2,874sqft apartment on the sixth floor of another tower was sold for $7.1 million ($2,470psf). The price achieved is 9.3% higher than the previous transaction in 2009, when the same unit changed hands for $6.5 million ($2,262psf). Prior to that, the unit had changed hands in 1998 for $4.28 million ($1,489psf).

Since the government's announcement of the additional buyer's stamp duty (ABSD) on Dec 8, 2011, Eyo has seen a drop in demand from foreigners for condominiums in the prime districts. The fall has been offset to a certain extent by Singaporeans on the lookout for bargains.

"There is a lot of uncertainty in the market, so some sellers may want to cut losses and exit now because they are afraid that the bank interest rate may increase later on," says an agent who declined to be named. "On the other hand, there are also buyers who want to enter at this point in the hope of seeing future capital upside."

Source: THEEDGE SINGAPORE

When an apartment changes hands at a slightly reduced price a few years later, one will usually hear the seller's lament about the "loss" he/she has incurred in the sale. Singaporeans are so used to the notion of "recouping all costs + making a profit" on their properties that they tend to conveniently forget about the rental that they will have to fork out if they do not own the property that they stay in, or the rental income that they have already enjoyed over the past years of leasing out the apartment.

So unless the apartment concerned had been left vacant all those years, one should really re-look at the concept of "loss" when selling below purchase price...
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EC: Easier now for second-time buyer!

Sales of executive condominiums (ECs) look set to climb higher.

This comes after the government tweaked its housing policy to allow more second-time buyers to own ECs.

Analysts said the move, however, may impact the resale prices of private condominiums.

Home buyers purchasing their second flat from the Housing and Development Board (HDB) will now have more opportunities to own an EC.

This comes after the Minister for National Development Khaw Boon Wan announced in Parliament that the percentage of ECs allocated to second-timers will rise six-fold from the current 5% to 30%.

The allocation will apply during the first month of public sales launch for EC projects.

Analysts said that out of the 5,000 ECs to be released in 2012, some 1,500 of them will now be allocated for second timers.

They added that this will also raise the interest of the "sandwich class" to own an EC.

And second-timers can also save on the resale levy when they purchase the new EC projects.

This is a fee paid by the buyer to the HDB when purchasing a second subsidised flat, and can range between $15,000 and $50,000, depending on the flat type.

Nicholas Mak, executive director of Research and Consultancy at SLP International, said: "Today's announcement will be welcomed by the second-timers because previously in the initial launch, only 5% of units are allocated to second-timers, but now 30% will be available for their selection, which means that now they do not have to be dependent on the leftover units that the first timers do not want, but they will have at least more choices at the initial start of the launch."

Analysts said the new rules may have an impact on demand for private condominiums.

As prices for ECs are about 20% cheaper than mass market private condominiums, experts said some buyers may drop plans to buy a private condo and opt for an EC instead.

However, they do not expect prices of ECs to jump higher.

Analysts expect the government to release more land for EC development and the increased supply may put a cap on prices.

Colin Tan, head of research consultancy at Chesterton Suntec International, said: "If there is any increases, it will be marginal, because I think the whole market for EC is still price sensitive; while developers can push prices up a little, they have to be mindful of the fact that this is a price-sensitive market."

Meanwhile, the move to revise the income ceiling of buyers from $10,000 to $12,000 in September last year for all EC projects has boosted sales.

Experts estimate that prices of ECs have increased between 2 and 4% since the revision.

Source: Channel News Asia

So expect more GLS and more EC launches...

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