Enbloc News: 1H2012 transaction value down 80%..!

Statistics from the Urban Redevelopment Authority (URA) show that the total transaction value of residential en-bloc properties for the first half of this year has plunged by 80% compared to the same period last year.

And there were fewer en-bloc property transactions.

Real estate analysts believe that this is due to the global economic slowdown, and the government cooling measures introduced late 2011.

In the first half of last year, 28 en-bloc residential properties were successfully transacted.

But this fell to just eight in the same period this year.

Among them was Nam Peng Centre in Upper Serangoon Road.

Between January and June this year, the total transaction value of residential en-bloc properties fell to about $250 million, from almost $1.6 billion in the same period last year.

Analysts said the additional buyer's stamp duty introduced by the government in December last year has curbed speculative demand for properties.

In addition, developers who buy en-bloc projects are now required to build and sell all units on the residential site within five years of acquiring the land.

Otherwise, they have to pay an additional 10% in stamp duty.

So developers have been extra cautious before they enter the market.

Director of Ascendant Assets Pte Ltd, Getty Goh, said: "In the past, developers can buy certain pieces of land and sit on it almost indefinitely. These days with all these additional constraints, it would definitely make a developer think twice before proceeding with an en-bloc transaction."

And with more land sites released through the Government Land Sales programme (GLS), this gives developers more choice, which in turn, pushed down the transaction price of en-bloc projects.

Goh said: "About 14 land parcels have been awarded via the GLS programme. However, the highest that has been transacted at was about $400 million. Naturally, this puts a price pressure on the en-bloc market."

The value of en-bloc deals for the first half of this year is merely 9% of the total transaction value for the whole of last year.

Analysts feel that while the market may pick up in the second half of this year, it is unlikely to top last year's numbers.

But, if the price for en-bloc projects in mature estates is not too high, developers would still be keen on them.

Source: Channel News Asia

Looks like our "enbloc dream" will have to be put on hold for awhile yet...

.

Investment home in London, anyone?

In the spirit of the Olympics that is happening in the UK right now,  the wife and I deem it fitting to talk about private property purchase in the land of our former colonial masters.

Given the number of new restrictions imposed on property buyers in Singapore, we have recently turned our attention to properties further ashore. One city that caught our eye is London.

Investing in London property is nothing new to many Singaporean -  it has been one of the more popular location for buying foreign homes in the past years. However, there seemed to be more aggressive marketing of UK homes in our local newspapers these days (just flip through The Straits/Sunday Times this weekend to see what we mean) and many more property exhibitions in Singapore that the wife and I can ever recall.

We attended one such exhibition and these are some noteworthy facts that we picked up:

·       Prices of apartment especially within and around central London have increased substantially - you can expect to pay about 900 pounds per sq foot, going up to  1,300 - 1,400 pounds per sq foot for more "sought after" projects. (* Caveat - this is based on information we got, which we cannot claim 100% accuracy. So do correct us if you know better *)

·       Many more of these new projects are 999-year leasehold.

·       You do not have to worry about ABSD or SSD and there is no withholding tax on sale of your property if you are not a UK resident.

·       Most new projects only require a 10% down-payment, with the balance 90% payable only upon completion.

·       Unlike Singapore whereby stamp duty is payable whenever an apartment changes hands, you only pay stamp duty upon project completion - this means you save on paying money to the UK Government should you decide to do a sub-sale.

·       Some of these new projects offer nett rental returns of 6% and up to 3 years of rental guarantee - not bad compared to the measly 3 to 4% that you struggle to get for rental income in Singapore

·       There are no PES, bay-window or planter box in most of these apartments and even if they exist, these do not constitute as part of your overall living area. And to add icing to the cake, the balcony space does not form part of your living area either!

·       Most of the new projects are unlike the mega ones you find in Singapore (i.e. in excess of 400 units). Here you typically find developments with less than 100 units. As such, certain unit type in these projects are rather exclusive as they are limited in number within the development. For example, there are only two 2-bedder units at Regent Canalside located in Camden Town (refer to enclosed brochure for details of this project) whereby the living room and all bedrooms get a view of the Camden Canal.

Click on link below to view brochure of Regent Canalside:
http://www.scribd.com/doc/101408024/Regent-Canalside-Brochure#fullscreen

Incidentally, The Sunday Times today has featured an article about rejuvenation of the Olympic Park area in East London. And according to analysts, demand for properties in London has been and will continue to stay strong.

So check out one of them UK property exhibition if you have some free time today and have a great week ahead!

.

Q2 home prices rose 0.4%

Prices of private residential properties in Singapore rose by 0.4% in the second quarter of this year, rebounding from a 0.1% fall in the first quarter.

Real estate statistics released on Friday by the Urban Redevelopment Authority (URA) showed prices of non-landed private homes in the core central region increased by 0.6%, while those in the rest of the central region climbed 0.4% in the April to June quarter.

These compared with a 0.6% drop in prices for both regions in the January to March quarter.

For outside central region, prices rose at a slower pace of 0.5% in the second quarter, compared to a 1.1% increase in the first quarter.

Rentals of private homes were up 0.3% in the second quarter, similar to the rate of increase in the last quarter.

URA said the volume of resale transactions jumped from 2,206 units in the first quarter to 3,487 units in the second quarter. Resale transactions accounted for 37% of all sales in the second quarter, compared to 24% in the first quarter.

The number of uncompleted private home units from projects in the pipeline climbed from 78,572 units in the first quarter to 83,251 units as at the end of the second quarter.

URA said the pipeline supply of 83,251 units was the highest ever recorded since such data were first made available in 1999.

Of the supply in the pipeline, 38,175 units remained unsold at the second quarter. 12,124 units (32%) were located in the core central region, while 8,618 units (22%) were in the city fringes. The balance of 17,433 units (46%) were located outside of central region.

Source: Channel News Asia

.

Credo is now part of JLL!

Jones Lang LaSalle (JLL) is acquiring homegrown property firm Credo Real Estate for an undisclosed sum.

However, some analysts have estimated the deal to be worth between S$20 million and S$40 million.

The New York-listed JLL said the acquisition will reinforce its position to be the top in commercial capital markets and collective sales in Singapore.

Credo Real Estate was established in 2002 and has 50 Singapore-based employees specialising in collective residential sales, valuations, auctions, research and consultancy.

In 2011, Credo Real Estate transacted close to S$930 million in collective sales, making it the market leader in that segment.

Together with Jones Lang LaSalle's S$200 million of collective sales that year, both firms will comprise 35 per cent of the market share at around S$1.13 billion.

Chris Fossick, managing director of Jones Lang LaSalle Singapore and South East Asia, said: "The key driver behind this deal was the culture and values that we share with Credo; we are a people business and our success is based around skills and relationships."

He added "bringing Credo into JLL meets our strategic goal of being the leader in investment sales in Singapore and strengthens our residential project sales and annuity valuation business."

Co-founder and managing director of Credo Real Estate, Karamjit Singh, said in a statement that "this move increases our reach and market share in Singapore but also connects us with JLL's platform regionally in Asia Pacific and worldwide, which we will be able to leverage for our clients."

When completed, the acquisition will double the size of JLL's Singapore residential project sales team.

It added a new specialist service and mortgage valuations will also be added.

Mr Karamjit will take on the role of head of the combined Singapore Capital Markets and Collective Sales teams. He will also have oversight and responsibility for JLL's Singapore residential sales business.

The integration of the business lines and teams and full rebranding of all business activities will start with effect from 1 September.

Source: Channel News Asia

.

Singapore Homebuyers: Shorter term mortgage preferred!

Homebuyers in Singapore will likely opt for mortgage loans with shorter repayment periods.

That's despite the availability of new home loans that offer up to 50-year tenors.

Experts said more are taking into account their retirement age and interest costs when servicing their loans.

Serene Loong and her husband took a $760,000 home loan when they upgraded to a two-storey, three-room private apartment at Upper Serangoon in 2005.

With a 35-year home loan they got from DBS Bank, the couple was paying $2,000 in monthly repayments.

That loan has since been refinanced to 28 years with another bank, and monthly payments have come down to $1,800 at a lower interest rate of 1.88%.

"I definitely was taking into account the affordability, as well as when I would retire," said Loong, who is the founder of website www.reallifetheory.com.

She added: "I wouldn't want to be servicing a home loan after retirement because I think there will be other expenses that I might have to take care of like medical expenses, etc."

So far, Singapore banks are offering home loans with a maximum term of 35 to 40 years with age capped at 70 to 75.

UOB has come up with a first by offering home loans that stretches repayment to 50 years and a maximum age of 80.

UOB said that for the maximum tenor of 50 years, the requirement is to have at least 35 years remaining on the lease for leasehold property and no more than 80 years of age at end of loan tenor.

Still, some market players said such loans may be more suited for investors.

Dennis Ng, who is the founder of mortgage consulting firm HousingLoansSG.com, said: "A longer loan repayment period may make sense for investors because the investor is always looking for return on investment. So the less capital they put into the property, the higher their return."

For ordinary home buyers, experts said they should tailor their loan repayment period to the age they want to retire.

DBS Bank's head of deposits and secured lending, Ms Lui Su Kian, said: "The average loan period we are seeing now for customers is about 30 years. In general, I think, especially in Asia, we do see that our customers are prudent when it comes to managing their mortgage, so most of them do not stretch out to the maximum period."

While a 50-year tenor may reduce monthly repayments, experts said interest could push the loan's amount by up by 15 to 20%.

For example, a $1 million loan at 50 year tenor will total to $1.45 million by the end of its term - much higher compared to the 1.3 million principal and interest if the loan was taken up at a 35-year tenor, according to DBS.

And comments from Channel NewsAsia's Facebook page show most buyers are averse to half a decade loans, with some saying 25 to 30 years is their threshold.

HousingLoansSG.com, which sees 20 to 30 enquiries a day, said around 70% of its clients opt for 25 to 30-year loans, while 15% go for the 30 to 35 year loans. The rest prefer terms of less than 25 years.

"If you have problems paying the installment right now when you are much younger and your income is much higher, I think you will have a bigger problem as you age," said Mr Ng.

Ms Lui said: "In this current interest rate environment, where interest rate is relatively low, we actually encourage our customers to try to shorten the loan period based on their affordability. Because rates are low, you can actually pay down as much as you can."

Ms Phang Lah Hwa, Head of Consumer Secured Lending at OCBC Bank said customers generally take up to the maximum loan tenor as they can repay or make capital repayment along the loan tenor.

"Shorter loan tenors are typically taken up due to the age of borrowers or by those who have the funds to service a higher monthly commitment," she added.

Mr Harmander Mahal, Head of Customer Value Management at HSBC Singapore, said: "We observe that customers who take up housing loans with longer tenor (30 to 35 years) tend to be younger in the age group of 35 years old and below.

"They are usually financing the purchase of their first homes and therefore, prefer to stretch their repayments over a longer period so that they can pay lower and more affordable monthly instalments."

HSBC said its housing loan portfolio has seen double-digit growth over the last five years with an increase in market share.

In its 2011 annual results, residential mortgages have increased 21% in value year-on-year for 2011 compared to 2010.

Source: Channel News Asia

Coincidentally the wife and I have just made a partial repayment on our home loan. And we have chosen to reduce the loan tenure instead of the monthly repayment amount. So the cat's ouuta bag... we do not belong to the age group of 35 years and below!

.

Thomson Grand Clubhouse: Faberge no more..?

The wife and I received a rather interesting email from Luxury Green Development Pte Ltd last Friday. For those who are unaware, Luxury Green Development is a member of The Cheung Kong Group, who is the developer of Thomson Grand.

The email served to inform us that the clubhouse of Thomson Grand has ceased to be called Faberge. As such, we are to cease all references to Faberge in relation to their clubhouse and remove such reference in any or all of our advertisement, commercial materials, and/or our websites, if applicable.

So, is this a case of not wanting to be associated with an egg (albeit a famous one) anymore, or the developer has finally come to the realisation (2 years after the project was launched) that they might have gone OB on the copyright marker? Hmm....

ANYWAY, if the good folks at Luxury Green Development are reading this, we have strikeout the word "Faberge" from our blog postings about Thomson Grand. And yes, we did receive your email.

Click on link below to read our previous review of Thomson Grand (minus Faberge):
http://sgproptalk.blogspot.sg/2011/10/thomsand-grand-review.html

.

The Real Deals (19-07-2012)

The latest issue by Maybank Kim Eng Research focuses on strata-titled industrial properties - a market segment that the wife and I have little knowledge and interest about.

However, we have decided to share this especially with those who are avid followers of "The Real Deals".

Click on link below to access the report:
http://www.scribd.com/doc/100587357/The-Real-Deals-19-07-2012#fullscreen

Here's wishing everyone a superb weekend!
.

Resale market coming alive again!

More homebuyers are returning to the private residential resale market as it is seen to offer better value compared to new projects launched by developers.

In fact, the gap in median prices of new and resale transactions has also narrowed.

That's according to real estate agency Dennis Wee Group (DWG).

In a report, DWG said the caveats lodged in the secondary market climbed about 33% in the second quarter in 2012, against the previous quarter.

In particular, the central region saw the largest increase in resale transactions at 37.4%, followed by the North Region at 32.7% and the West Region at 30.9%.

Citing examples, DWG said the record selling prices for new 99-year leasehold projects in Bishan and West Coast are comparable to freehold non-landed residential developments in the resale market, such as Twin Regency and The Regency in Tiong Bahru.

The real estate agency said the revival in interest in the resale market has boosted prices of private homes in the second quarter.

DWG's report showed that the gap in median prices of new and resale transactions has narrowed from 17% in 1Q 2012 to 13% in 2Q 2012.

The median prices of private residential units in the resale market rose 4.6% to $1,026psf in 2Q 2012 from $981psf in 1Q 2012.

Meanwhile, the median prices of new projects on an islandwide basis were flat in 2Q 2012 at $1,160psf.

DWG also notes that the median size of units sold in the new sale market rose to 947sqft in 2Q 2012 from 807sqft in 1Q 2012 as a result of lower sales of small units.

It said this is probably due to recent comments by the government that they are monitoring the shoebox apartment segment which could have put off buyers from purchasing small format homes.

DWG said the number of transactions by foreigners rose in 2Q 2012 as the buyers have accepted the Additional Buyer's Stamp Duty as a tax and are selectively picking up properties in Singapore.

445 private residential units were sold to foreigners in 2Q, up 26.8% on-quarter.

Moving forward, DWG said developers are likely to launch more projects before the lunar seventh month which runs from August 17 to September 15.

Source: Channel News Asia

Some may say that we're "马后炮", but the wife and I have always felt that there are untapped potential in the secondary market and have advised the same to whoever that's willing to listen. And despite the supposed narrowing gap between prices in the primary (new) and secondary markets, we still believe that there are hidden "gems" in the later if one bothers to look hard enough...

For those who wish to know the origin of the Chinese phrase "马后炮" and what it means:
http://blog.csoftintl.com/ma-hou-pao/

.

Breaking News: 80% of Parc Olympia sold!

The first pharse of launch that is...

This is according to the 6.30pm Mediacorp news report.

As the wife and I were saying before, let's see if this will test the developer's resolve to keep prices below $900psf.

.

New Project Info: Parc Olympia

The $800+psf price tag looks to be a draw, since new projects that's below $1,000psf seem more the exception than norm these days.


But if the reception to Parc Olympia is as good as predicted, the wife and I wonder how long the developer will continue to pass savings back to their buyers by keeping prices below $900psf.


Anyway, the other developers of recently launched projects along Flora Drive must be cursing now...

.

Check this out: Square Foot Research

*** THIS IS NOT A PAID ADVERTISEMENT! ***

Square Foor Research is a newly created website started by an ex-researcher acquaintance of ours who had spent his past life writing property-related reports for one of them big research houses in Singapore. So the wife and I are pretty convinced that he knows his stuff when comes to the ins and outs of the Singapore property market.

Square Foot Research provides comprehensive research on all sectors of the property market in Singapore. Not only do you get updated market reports and property-related articles, but the wife and I are particularly impressed with their "Trend and Analysis" section - this is especially helpful for those who are eyeing a specific project (both new and old). Some of the stuff you get (e.g. caveats info, developer's sales data, rental yields and buyer profile etc) are information that you will be more than willing to pay to obtain, which you can now access free of charge on this website.

Below is an extract of what you can expect for a named private residential project:

So check out Square Foot Research at http://www.squarefoot.com.sg/ today. Having said that, don't forget about our blog while you are at it!

.

Q2 private home prices stage rebound!

Prices of private homes in Singapore swung higher in the second quarter from the previous three months, government data showed on Monday, reversing a short-lived decline in the last quarter.

Preliminary data released by the Urban Redevelopment Authority (URA) showed private-residential prices rising 0.4% in the April-June quarter from the previous quarter. Home prices had eased 0.1% in the first quarter in the first decline since the second quarter of 2009.

URA said prices of non-landed private residential properties increased by 0.6 per cent in the core central region in Q2 this year, compared to a decrease of 0.6 per cent in the previous quarter.

There was no change in the prices for private homes in the rest of central region.

Prices of private homes outside the central region increased at a slower pace of 0.4 per cent in Q2, compared to an increase of 1.1 per cent in the previous quarter.

The flash estimates are based on figures from the first ten weeks of the quarter. Full results will be released in a month's time.

Source: Channel News Asia

The Q2 figures bring to mind the chorus of a certain "See Saw Song" written by Duncan Wells:

See saw
teeter-totter tilt
some folks smile some other folks frown
see saw
teeter-totter tilt
one goes up
the other goes down

.