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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