Friday, December 16, 2011
Wednesday, December 14, 2011
Home sales trickle in despite curbs
Although property buying may have slowed after the implementation of heavier stamp duties last week, sales are still trickling in.
As of Sunday, developer SingXpress Land had sold 17 of the 21 units at the cluster housing development Charlton Residences, located near Kovan MRT station.
According to Chan Tung Moe, Executive Director of SingXpress, none of the buyers, who were all Singaporeans, backed out of the purchases.
Foreigners are most affected by the government’s latest cooling measures, as they will have to pay an additional stamp duty of 10 percent on top of the current buyer's stamp duty of around three percent.
As of Sunday, developer SingXpress Land had sold 17 of the 21 units at the cluster housing development Charlton Residences, located near Kovan MRT station.
According to Chan Tung Moe, Executive Director of SingXpress, none of the buyers, who were all Singaporeans, backed out of the purchases.
Foreigners are most affected by the government’s latest cooling measures, as they will have to pay an additional stamp duty of 10 percent on top of the current buyer's stamp duty of around three percent.
Tuesday, December 13, 2011
Singapore Property Investment Sales Up 42%
Property investment sales have reached S$6.8 billion so far this quarter, up 42 percent from S$4.8 billion in the previous quarter, according to the latest figures from Savills Singapore.
Savills added that about S$28.5 billion of such transactions have been closed since the start of 2011.
The property consultancy firm estimates some S$29 billion of property investment sales by the end of the year, a slight decline from last year’s S$31.4 billion.
“The investment sales market is expected to moderate in the next few quarters, taking into account softening macroeconomic conditions,” said Steven Ming, Savills Executive Director (Investment Sales).
“However, there’s still ample liquidity and demand in the market. At the same time, investors/funds may favour Asian real estate due to better economic performances compared with Europe and the US. Singapore is well positioned to attract such investors.”
Jeremy Lake, Executive Director (Investment Properties) at CBRE, expects the figure for 2012 to hover between S$20 billion and S$25 billion.
Developers in the residential segment are expected to remain active in buying Government Land Sales (GLS) mass-market private housing sites, despite the potential decline in land bids, as developers work in the cost of absorbing the additional buyer's stamp duty (ABSD) and providing other soft discounts.
Following the initial knee-jerk reaction of holding off purchases for a few weeks, Lake predicts that prospective buyers upgrading from public to private housing will return to the market.
“As buyers in this segment are predominantly Singaporeans and more likely to purchase for owner occupation, they may not even be affected by the ABSD; even if they are, the ABSD rate for them is only three percent.”
Savills added that about S$28.5 billion of such transactions have been closed since the start of 2011.
The property consultancy firm estimates some S$29 billion of property investment sales by the end of the year, a slight decline from last year’s S$31.4 billion.
“The investment sales market is expected to moderate in the next few quarters, taking into account softening macroeconomic conditions,” said Steven Ming, Savills Executive Director (Investment Sales).
“However, there’s still ample liquidity and demand in the market. At the same time, investors/funds may favour Asian real estate due to better economic performances compared with Europe and the US. Singapore is well positioned to attract such investors.”
Jeremy Lake, Executive Director (Investment Properties) at CBRE, expects the figure for 2012 to hover between S$20 billion and S$25 billion.
Developers in the residential segment are expected to remain active in buying Government Land Sales (GLS) mass-market private housing sites, despite the potential decline in land bids, as developers work in the cost of absorbing the additional buyer's stamp duty (ABSD) and providing other soft discounts.
Following the initial knee-jerk reaction of holding off purchases for a few weeks, Lake predicts that prospective buyers upgrading from public to private housing will return to the market.
“As buyers in this segment are predominantly Singaporeans and more likely to purchase for owner occupation, they may not even be affected by the ABSD; even if they are, the ABSD rate for them is only three percent.”
Monday, December 12, 2011
Why Still Invest In Singapore Properties?
With the new measure that kicks in recently including an extra 10% stamp duty on a home bought by a foreigner. Local and foreign investors with a short term outlook will have more of an appetite for properties outside of Singapore now. But rest assure the pool of buyers in Singapore will not dry up.
These include buyers from, Indonesia, Malaysia, India and China.
Companies are still investing in Singapore and the country is still considered an attractive place to work, live and play.
Singapore's property market still remains open and transparent compared to those in regional neighbouring country like Australia, which restrict foreign buyers to only first hand property.
These include buyers from, Indonesia, Malaysia, India and China.
Companies are still investing in Singapore and the country is still considered an attractive place to work, live and play.
Singapore's property market still remains open and transparent compared to those in regional neighbouring country like Australia, which restrict foreign buyers to only first hand property.
Monday, November 28, 2011
Bleak outlook for Singapore property
Singapore’s property sector may soon face difficult times, as Standard Chartered Bank’s latest report has stated a bearish outlook for the market.
According to the bank’s analysts, prices and rents of residential properties in Singapore will drop by 30 percent over the next three years.
This will be quite a setback, given that prices rose 18 percent in 2010, as Singapore recovered strongly from the global financial crisis. Prices soared a further six percent in the first three quarters of this year.
In addition, the bank expects some problems ahead, such as the unprecedented supply of completed homes coming on-stream and slower population growth due to stricter immigration policies.
“We expect lower population growth and high completions to induce a 20-30 percent decline in home prices in 2012-2014,” said the StanChart analysts. “When residential prices went into a four-year downcycle from 2001, residential developers traded at 0.6-0.8 times price-to-book ratio.”
The gloomy outlook came after property developers reported subdued results for the third quarter this year, attributed to lower contributions from their development units.
According to the bank’s analysts, prices and rents of residential properties in Singapore will drop by 30 percent over the next three years.
This will be quite a setback, given that prices rose 18 percent in 2010, as Singapore recovered strongly from the global financial crisis. Prices soared a further six percent in the first three quarters of this year.
In addition, the bank expects some problems ahead, such as the unprecedented supply of completed homes coming on-stream and slower population growth due to stricter immigration policies.
“We expect lower population growth and high completions to induce a 20-30 percent decline in home prices in 2012-2014,” said the StanChart analysts. “When residential prices went into a four-year downcycle from 2001, residential developers traded at 0.6-0.8 times price-to-book ratio.”
The gloomy outlook came after property developers reported subdued results for the third quarter this year, attributed to lower contributions from their development units.
Friday, November 11, 2011
Freehold homes still the preferred choice
Prices of freehold homes have proven more resilient in the past few months compared to those of 99-year leasehold properties, according to a new report.
Credo Real Estate found that price gains for freehold terraced homes and condominiums have exceeded those for similar homes with 99-year leases since Q3 2010.
While prices of leasehold condos rose by less than one percent each quarter in the 15 months to 30 September 2011, freehold condos’ average quarterly price increases stood at 2.2 percent.
Credo added that while leasehold condos have recorded a price appreciation of 48 percent in the past 10 years, freehold condo prices have shot up by 62 percent.
For landed homes, prices of leasehold terraced properties fell 0.1 percent for the three months to 30 September 2011, while prices of freehold terraced homes grew 4.9 percent.
In the past 10 years, prices of freehold terraced homes have increased 97 percent, compared to only 52 percent for leasehold terraces.
“Freehold or 999-year leasehold are the preferred tenure for many property buyers as many are concerned that the value of 99-year leasehold properties may not appreciate well when the duration of the leasehold reduces,” the report said.
Meanwhile, Ong Teck Hui, Head of Research and Consultancy at Credo noted that leaseholds “still have a price advantage over freehold equivalents and many 99-year leasehold projects are located near amenities and transportation nodes.”
“These are crucial factors, especially for upgraders, for whom affordability and convenience rank high on their priorities. Such attributes can be found in sites in or near HDB estates which the government puts out for tender on a regular basis under its land sales programme.”
Credo Real Estate found that price gains for freehold terraced homes and condominiums have exceeded those for similar homes with 99-year leases since Q3 2010.
While prices of leasehold condos rose by less than one percent each quarter in the 15 months to 30 September 2011, freehold condos’ average quarterly price increases stood at 2.2 percent.
Credo added that while leasehold condos have recorded a price appreciation of 48 percent in the past 10 years, freehold condo prices have shot up by 62 percent.
For landed homes, prices of leasehold terraced properties fell 0.1 percent for the three months to 30 September 2011, while prices of freehold terraced homes grew 4.9 percent.
In the past 10 years, prices of freehold terraced homes have increased 97 percent, compared to only 52 percent for leasehold terraces.
“Freehold or 999-year leasehold are the preferred tenure for many property buyers as many are concerned that the value of 99-year leasehold properties may not appreciate well when the duration of the leasehold reduces,” the report said.
Meanwhile, Ong Teck Hui, Head of Research and Consultancy at Credo noted that leaseholds “still have a price advantage over freehold equivalents and many 99-year leasehold projects are located near amenities and transportation nodes.”
“These are crucial factors, especially for upgraders, for whom affordability and convenience rank high on their priorities. Such attributes can be found in sites in or near HDB estates which the government puts out for tender on a regular basis under its land sales programme.”
Govt identifies new SERS site in East Coast
The government has identified three blocks at East Coast Road — Blocks 1, 2 and 3 — to be redeveloped under the Selective En bloc Redevelopment Scheme (SERS).
Comprising 82 sold flats that are about 48 years old; the site is the 75th site to benefit from SERS.
The Housing and Development Board (HDB) will develop new replacement flats comprising two-, three-, four- and five-room units at Chai Chee Road to re-house the affected homeowners.
According to the HDB, the replacement site is conveniently located near Bedok MRT station, Bus Interchange and Town Centre.
The new site will offer residents various recreational facilities, including a children’s playground, precinct pavilion, fitness stations, community garden and outdoor amphitheatre.
The HDB added that the residents can move into their new homes in 2015.
Eligible SERS flat owners will be invited to register for their replacement flats in Q3 2012.
The HDB said around 34,000 households across 74 sites have benefitted since SERS was established in 1995.
SERS provides residents the unique opportunity to move into a brand new flat with a 99-year lease, improved design and more modern facilities.
Comprising 82 sold flats that are about 48 years old; the site is the 75th site to benefit from SERS.
The Housing and Development Board (HDB) will develop new replacement flats comprising two-, three-, four- and five-room units at Chai Chee Road to re-house the affected homeowners.
According to the HDB, the replacement site is conveniently located near Bedok MRT station, Bus Interchange and Town Centre.
The new site will offer residents various recreational facilities, including a children’s playground, precinct pavilion, fitness stations, community garden and outdoor amphitheatre.
The HDB added that the residents can move into their new homes in 2015.
Eligible SERS flat owners will be invited to register for their replacement flats in Q3 2012.
The HDB said around 34,000 households across 74 sites have benefitted since SERS was established in 1995.
SERS provides residents the unique opportunity to move into a brand new flat with a 99-year lease, improved design and more modern facilities.
Monday, November 7, 2011
Punggol condo site attracts 5 bids
The tender for a 99-year leasehold residential site at Punggol Central / Edgedale Plains was officially closed yesterday, with a total of five bids received.
Qingjian Realty (South Pacific) Group Pte Ltd submitted the highest bid of S$215.87 million.
“The top bid of S$215.87 million or S$330 psf/plot ratio translates to a breakeven cost of around S$700 psf. This is just marginally higher than the S$323 psf/plot ratio paid for a similar condominium site a street away, in September 2011,” said Li Hiaw Ho, Executive Director of CBRE Research.
Soilbuild Group Holdings Ltd offered the second highest bid at S$203.89 million, while Opal Star Pte Ltd’s and Lum Chang Building Contractors Pte Ltd’s joint submission was the lowest at S$189.89 million.
Other groups which participated in the tender are Sunmaster Holdings Pte Ltd (S$203.20 million) and CEL Development Pte Ltd (S$201.47 million).
“The spread of the five bids from S$290 psf/plot ratio to S$330 psf/plot ratio shows that developers were more measured in bidding for this site knowing that there is an upcoming supply of around 1,500 private apartments and 700 executive condominiums in Punggol New Town. Moreover, demand for mass market homes may slow down in view of uncertainties in the economy,” added Li.
Launched for tender on 15 September 2011, the land parcel has a total area of 20,256.1 sq m and a maximum GFA of 60,768.30 sq m. It is proposed for condominium development that could potentially yield some 610 dwelling units.
The HDB said the decision on the tender award will be made after all the bids have been evaluated.
Qingjian Realty (South Pacific) Group Pte Ltd submitted the highest bid of S$215.87 million.
“The top bid of S$215.87 million or S$330 psf/plot ratio translates to a breakeven cost of around S$700 psf. This is just marginally higher than the S$323 psf/plot ratio paid for a similar condominium site a street away, in September 2011,” said Li Hiaw Ho, Executive Director of CBRE Research.
Soilbuild Group Holdings Ltd offered the second highest bid at S$203.89 million, while Opal Star Pte Ltd’s and Lum Chang Building Contractors Pte Ltd’s joint submission was the lowest at S$189.89 million.
Other groups which participated in the tender are Sunmaster Holdings Pte Ltd (S$203.20 million) and CEL Development Pte Ltd (S$201.47 million).
“The spread of the five bids from S$290 psf/plot ratio to S$330 psf/plot ratio shows that developers were more measured in bidding for this site knowing that there is an upcoming supply of around 1,500 private apartments and 700 executive condominiums in Punggol New Town. Moreover, demand for mass market homes may slow down in view of uncertainties in the economy,” added Li.
Launched for tender on 15 September 2011, the land parcel has a total area of 20,256.1 sq m and a maximum GFA of 60,768.30 sq m. It is proposed for condominium development that could potentially yield some 610 dwelling units.
The HDB said the decision on the tender award will be made after all the bids have been evaluated.
Tuesday, October 25, 2011
Govt pledges to improve older estates
Prime Minister Lee Hsien Loong yesterday reiterated the government’s commitment to improve the conditions and amenities in older housing estates like East Coast and Yishun.
Speaking at the opening of My Waterway@Punggol, PM Lee said that the government will coordinate with the community and residents to improve old neighbourhoods.
Dubbed the “Venice of Punggol”, the waterway was built on a S$225 million budget. The project comes as Punggol is set to house approximately 23,000 families by the end of this year.
“Each estate will not just be a set of block of flats or precincts, but a home for Singaporeans, a community of residents, a place where friendships are made and memories are formed,” he said.
Earlier this year, the government pledged to set aside S$10 billion over the next decade for upgrading projects.
Speaking at the opening of My Waterway@Punggol, PM Lee said that the government will coordinate with the community and residents to improve old neighbourhoods.
Dubbed the “Venice of Punggol”, the waterway was built on a S$225 million budget. The project comes as Punggol is set to house approximately 23,000 families by the end of this year.
“Each estate will not just be a set of block of flats or precincts, but a home for Singaporeans, a community of residents, a place where friendships are made and memories are formed,” he said.
Earlier this year, the government pledged to set aside S$10 billion over the next decade for upgrading projects.
Tuesday, October 18, 2011
MPs call for review of housing policies
Singapore’s housing policies were a hot topic during the parliamentary debate on the President's speech yesterday, with several Members of Parliament (MPs) urging a review of the pricing formula for HDB flats.
“CPF grants are helpful but it seems like we are just taking money from one pocket to return it to another. We must seriously consider the pricing formula for HDB flats and seek to make it a transparent one as much as possible,” urged Zainudin Nordin, Chairman of GPC for Manpower.
“This way, we can assure residents that the government is not out to make profits from sales of housing. And by pricing flats more reasonably, we can also relieve the debt service burden of our residents.”
He also urged the Housing and Development Board (HDB) to expand its rental scheme and work out “meaningful subsidies” in order for families to live together safely.
Mr Zainudin pointed out that some people have been settling on interim housing since 2009, and sometimes two families are squeezed into a two-room flat.
“I cannot imagine how school-going children can study, and how parents can keep their young safe while living with strangers. I'm disappointed that we're slow at resolving this issue,” he said.
Meanwhile, another MP, Hri Kumar Nair (Bishan-Toa Payoh GRC) also urged the HDB to allow elderly Singaporeans living in public flats to sell five- or 10-year portions of their HDB leases back to the public housing agency and be paid a lump sum upfront.
This would enable elderly Singaporeans to have more money instead of being “asset-rich but cash-poor”.
Currently, HDB has a Lease Buyback Scheme (LBS) where elderly flat owners living in smaller flats can retain just a 30-year lease on their flats and sell the remaining back to the HDB. In return, they would receive S$5,000 in upfront payment and monthly annuity payments for life.
However, Mr Nair said the monthly payments are too low.
“We should be careful not to build our housing at all cost,” commented Liang Eng Hwa (Holland-Bukit Timah GRC). She emphasised the particular social costs, “which are almost impossible to quantify in dollars and cents.”
“CPF grants are helpful but it seems like we are just taking money from one pocket to return it to another. We must seriously consider the pricing formula for HDB flats and seek to make it a transparent one as much as possible,” urged Zainudin Nordin, Chairman of GPC for Manpower.
“This way, we can assure residents that the government is not out to make profits from sales of housing. And by pricing flats more reasonably, we can also relieve the debt service burden of our residents.”
He also urged the Housing and Development Board (HDB) to expand its rental scheme and work out “meaningful subsidies” in order for families to live together safely.
Mr Zainudin pointed out that some people have been settling on interim housing since 2009, and sometimes two families are squeezed into a two-room flat.
“I cannot imagine how school-going children can study, and how parents can keep their young safe while living with strangers. I'm disappointed that we're slow at resolving this issue,” he said.
Meanwhile, another MP, Hri Kumar Nair (Bishan-Toa Payoh GRC) also urged the HDB to allow elderly Singaporeans living in public flats to sell five- or 10-year portions of their HDB leases back to the public housing agency and be paid a lump sum upfront.
This would enable elderly Singaporeans to have more money instead of being “asset-rich but cash-poor”.
Currently, HDB has a Lease Buyback Scheme (LBS) where elderly flat owners living in smaller flats can retain just a 30-year lease on their flats and sell the remaining back to the HDB. In return, they would receive S$5,000 in upfront payment and monthly annuity payments for life.
However, Mr Nair said the monthly payments are too low.
“We should be careful not to build our housing at all cost,” commented Liang Eng Hwa (Holland-Bukit Timah GRC). She emphasised the particular social costs, “which are almost impossible to quantify in dollars and cents.”
Wednesday, October 12, 2011
2 sites relaunched for collective sale
Colliers International will be re-launching collective sales for two freehold residential sites, St Patrick’s Garden at St Patrick’s Road and Crystal Tower at Ewe Boon Road.
Colliers has yet to release an indicative price for either property. “We have decided to let the market tell us how much it is willing to pay. We will then go to the owners with the bids,” said Tang Wei Leng, Executive Director of Investment Services.
Colliers has yet to release an indicative price for either property. “We have decided to let the market tell us how much it is willing to pay. We will then go to the owners with the bids,” said Tang Wei Leng, Executive Director of Investment Services.
Located at 70 - 120 St Patrick’s Road, St Patrick’s Garden comprises 98 apartments and sits on a 137,559 sq ft freehold land parcel with dual road frontages. It is a part-three / part-four walk-up residential development zoned for residential use with an allowable gross plot ratio of 1.4.
Colliers said no development charge (DC) is payable for a plot ratio of up to 1.54, which takes into consideration an additional 10 percent for balcony space. It noted that the site can be redeveloped into a five-storey residence comprising 176 1,200 sq ft units.
Meanwhile, Crystal Tower is an 11-storey, 28-unit residential development located on an elevated 60,482 sq ft freehold site.
Under the 2008 Master Plan, the property is zoned for residential use, with an allowable gross plot ratio of 1.6. Colliers said a DC of about S$5.2 million is payable for a plot ratio of up to 1.76, which accounts for an additional 10 percent for balcony space.
The site can be redeveloped into a 12-storey residential project comprising 81 1,200 sq ft units, subject to approval from the relevant authorities.
“Freehold sites that are in strategic locations — especially if they are realistically priced – are still highly sought after by developers,” said Tang.
“We remain optimistic of the sale for the two subject sites — given that St Patrick’s Garden is the last remaining sizeable freehold plot of land nestled in a quiet residential enclave located off East Coast Road, while Crystal Tower is a freehold site strategically perched on a hill and located off Bukit Timah Road, a vicinity which has always been a prominent residential location in Singapore.”
The tender for St Patrick’s Garden begins today and will close on 1 November 2011, while the tender for Crystal Tower will start on 18 October and close on 14 November.
Colliers said no development charge (DC) is payable for a plot ratio of up to 1.54, which takes into consideration an additional 10 percent for balcony space. It noted that the site can be redeveloped into a five-storey residence comprising 176 1,200 sq ft units.
Meanwhile, Crystal Tower is an 11-storey, 28-unit residential development located on an elevated 60,482 sq ft freehold site.
Under the 2008 Master Plan, the property is zoned for residential use, with an allowable gross plot ratio of 1.6. Colliers said a DC of about S$5.2 million is payable for a plot ratio of up to 1.76, which accounts for an additional 10 percent for balcony space.
The site can be redeveloped into a 12-storey residential project comprising 81 1,200 sq ft units, subject to approval from the relevant authorities.
“Freehold sites that are in strategic locations — especially if they are realistically priced – are still highly sought after by developers,” said Tang.
“We remain optimistic of the sale for the two subject sites — given that St Patrick’s Garden is the last remaining sizeable freehold plot of land nestled in a quiet residential enclave located off East Coast Road, while Crystal Tower is a freehold site strategically perched on a hill and located off Bukit Timah Road, a vicinity which has always been a prominent residential location in Singapore.”
The tender for St Patrick’s Garden begins today and will close on 1 November 2011, while the tender for Crystal Tower will start on 18 October and close on 14 November.
Friday, October 7, 2011
HDB prices near new Circle Line MRT stations up 10%
Property agents have revealed that prices of HDB flats near 12 Circle Line stations, which are due to open on 9 October, have increased, according to a Channel NewsAsia report.
The report highlighted that prices of three-room flats close to Holland Village station climbed around 10 percent compared to last year, reflecting an increase of as much as S$440,000.
Meanwhile, a five-room high-floor flat in Telok Blangah was recently sold at S$810,000. A comparable unit further away was said to be priced at around S$110,000 less.
Similarly, rental rates also rose by 10 to 20 percent. Thus, a four-room flat could have a monthly rent of between S$2,500 and $S2,800.
Cash-Over-Valuation (COV) for resale transactions have also increased by 10 to 20 percent in locations close to the stations.
The report highlighted that prices of three-room flats close to Holland Village station climbed around 10 percent compared to last year, reflecting an increase of as much as S$440,000.
Meanwhile, a five-room high-floor flat in Telok Blangah was recently sold at S$810,000. A comparable unit further away was said to be priced at around S$110,000 less.
Similarly, rental rates also rose by 10 to 20 percent. Thus, a four-room flat could have a monthly rent of between S$2,500 and $S2,800.
Cash-Over-Valuation (COV) for resale transactions have also increased by 10 to 20 percent in locations close to the stations.
Saturday, September 3, 2011
Punggol Field condo site attracts 8 bids
The Housing & Development Board (HDB) closed the tender for a residential land parcel at Punggol Field Walk yesterday, after receiving a total of eight bids. The top offer was jointly submitted by Capital Development Pte Ltd and ZACD Investments Pte Ltd at S$169.56 million.
“The top bid of S$169.56 million or S$323 psf/plot ratio reflects a breakeven cost of about S$700 psf,” said Li Hiaw Ho, Executive Director of CB Richard Ellis.
“For comparison, the site of a condominium project at Punggol Way/Punggol Central was sold at S$406 psf/ plot ratio in February 2011.”
FCL Topaz Pte Ltd, Far East Civil Engineering Pte Limited and Sekisui House, Ltd jointly offered the second highest bid at S$163 million, while Wee Hur Development Pte Ltd was the lowest bidder at S$126 million.
Other groups that participated in the public tender include Leng Hoe Development Pte Ltd (S$161.80 million), Allgreen Properties Limited (S$160.08 million), EL Development Pte Ltd (S$142 million), Heeton Capital Pte Ltd (S$140.80 million) and Intrepid Investments Pte Ltd (S$120.74 million).
Zoned for condominium housing, the 99-year leasehold site has a total area of 14,344.0 sq m and a maximum gross floor area (GFA) of 48,769.6 sq m. It has a maximum building height of 64m above mean sea level and can yield about 550 housing units.
HDB will announce the winning bidder at a later date.
“The top bid of S$169.56 million or S$323 psf/plot ratio reflects a breakeven cost of about S$700 psf,” said Li Hiaw Ho, Executive Director of CB Richard Ellis.
“For comparison, the site of a condominium project at Punggol Way/Punggol Central was sold at S$406 psf/ plot ratio in February 2011.”
FCL Topaz Pte Ltd, Far East Civil Engineering Pte Limited and Sekisui House, Ltd jointly offered the second highest bid at S$163 million, while Wee Hur Development Pte Ltd was the lowest bidder at S$126 million.
Other groups that participated in the public tender include Leng Hoe Development Pte Ltd (S$161.80 million), Allgreen Properties Limited (S$160.08 million), EL Development Pte Ltd (S$142 million), Heeton Capital Pte Ltd (S$140.80 million) and Intrepid Investments Pte Ltd (S$120.74 million).
Zoned for condominium housing, the 99-year leasehold site has a total area of 14,344.0 sq m and a maximum gross floor area (GFA) of 48,769.6 sq m. It has a maximum building height of 64m above mean sea level and can yield about 550 housing units.
HDB will announce the winning bidder at a later date.
Thursday, August 18, 2011
Roxy Homes - one of Singapore's 50 fastest growing companies
Roxy Homes Pte Ltd (Roxy Homes), a wholly-owned subsidiary of Roxy-Pacific Holdings Ltd, has been included on the Fastest Growing 50 (FG-50) list, receiving its certification at this year’s FG-50 award ceremony.
“We are honoured to be ranked for a second consecutive year in the prestigious FG-50 list,” said Teo Hong Lim, Executive Chairman and CEO of Roxy-Pacific.
“To us, it represents a recognition of Roxy Homes’ competitive edge in Property Development, where we focus on developments with unique design features mainly for HDB flat upgraders as well as middle to upper income families, in which underlying demand remains good.”
Delivering continuous and sustained corporate growth, Roxy-Homes has achieved a three-year turnover Compound Annual Growth Rate (“CAGR”) of more than 90 percent since 2006. It is also one of eight companies to have been recognised on the FG-50 list for the second consecutive year.
Organised and compiled by DP Information Group, a veteran information and credit bureau in Singapore, the FG-50 certification recognises Singapore's 50 most dynamic and fastest growing companies that have achieved outstanding corporate growth, as appraised through the three-year CAGR measurement.
“We are honoured to be ranked for a second consecutive year in the prestigious FG-50 list,” said Teo Hong Lim, Executive Chairman and CEO of Roxy-Pacific.
“To us, it represents a recognition of Roxy Homes’ competitive edge in Property Development, where we focus on developments with unique design features mainly for HDB flat upgraders as well as middle to upper income families, in which underlying demand remains good.”
Delivering continuous and sustained corporate growth, Roxy-Homes has achieved a three-year turnover Compound Annual Growth Rate (“CAGR”) of more than 90 percent since 2006. It is also one of eight companies to have been recognised on the FG-50 list for the second consecutive year.
Organised and compiled by DP Information Group, a veteran information and credit bureau in Singapore, the FG-50 certification recognises Singapore's 50 most dynamic and fastest growing companies that have achieved outstanding corporate growth, as appraised through the three-year CAGR measurement.
Saturday, July 9, 2011
New benchmark prices set at Thomson Grand
Buyers have set new benchmark prices at the preview of Thomson Grand in Upper Thomson, with apartments topping $1,600 per sq ft (psf). All 50 units released at the 99-year leasehold project were snapped up at prices between $1,100 and $1,600 psf for the two- to four-bedroom apartments, with average values at $1,400 psf. That priced the most expensive apartment sold at about $3.6 million. The units sold included 11 strata terrace units, with one going for $4.1 million, the highest transacted quantum price, said Hong Kong-based developer Cheung Kong. It is hard to compare benchmark prices as there have been no new high-rise projects in the area for more than a decade. But Thomson Grand's pricing is significantly above the highest price of $1,273 psf achieved in 2009 for a freehold unit at Meadows@Peirce - which is about 2km away - according to caveats lodged with the Urban Redevelopment Authority (URA). Cheung Kong said 30 per cent of the buyers were investors from Singapore, Malaysia, China, Indonesia and Taiwan while the rest were local upgraders. A further 20 units will be released this weekend on a first-come-first-served basis, it added. The project has 339 apartments and 22 strata-titled terrace units. Apartment sizes range from 904 sq ft for two-bedders to 2,314 sq ft for four-bedroom units in nine blocks of 20-storey residential towers. The landed terraces are up to 6,566 sq ft. Almost 70 per cent of the 361 units are three-bedders or larger. Cheung Kong has spared no expense in its marketing, with the 15,000 sq ft sales office built at a cost of more than $8 million, which includes the use of more than 100,000 Swarovski crystals.
- The Straits Time, B21
- The Straits Time, B21
Wednesday, July 6, 2011
10,000 new private homes in pipeline, says Savills
MORE than 10,000 new private homes are expected to hit the market over the remainder of the year, according to a new report.
Property consultancy Savills said these projects will mainly come from the Government Land Sales (GLS) programme with most of the upcoming homes catering to the mass market segment.
Based on the 8,000 units, including executive condominiums, put up for sale in the first five months this year, Savills estimates the total this year will surpass the 18,000 - including executive condominiums - launched for sale last year.
The Urban Redevelopment Authority (URA) has said the expected supply of new homes poised to hit the market over the next few years could be as high as 53,000.
Mr Alan Cheong, Savills' head of research, said it could take around four to five years for the market to fully absorb these unsold homes. His calculations are based on the average annual take-up over the past five years of about 12,000 new homes.
Data compiled by Savills shows that about 70 per cent of the homes will be in neighbourhoods along the city fringe such as Thomson and Bendemeer while 17 per cent will be in suburban areas, including Tampines, Bishan and Upper Serangoon. These are mainly GLS sites.
The remaining 12 per cent will be in city centre areas like Newton, Holland and Orchard Road. These mainly come from private land sales.
The large number of homes to be put up for sale later this year suggests that developers may be keen to launch their projects soon due to uncertainty about the global economy and the outlook for the property sector.
Another factor is that many of the sites are from the GLS programme.
Mr Lim Yew Soon, managing director of EL Development, said developers who have bought GLS sites are less likely to hold back from launching their projects.
He said: 'The Government is still releasing a lot of land so it doesn't make sense to hold on to the site and wait.
'GLS sites also come with a condition that the land must be developed within five years of its sale, so developers can delay their launches for up to two years but anything longer than that is not possible.'
Analysts are still cautiously optimistic that the buying momentum experienced so far this year will continue for the rest of the year.
Ms Wendy Tang, Knight Frank's executive director of residential services, said that while the market is cautious because of the uncertainty about future housing policies, she expects demand for new homes to remain healthy.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said global issues such as the euro zone debt crisis that have been impacting the stock market have also influenced buying sentiment.
'The recent (euro zone debt) crisis... has now passed. The economic fundamentals present in the first half of this year are still present so I don't see why the buying shouldn't continue,' he said.
Source: The Straits Times
Tuesday, July 5, 2011
Private home prices continue to rise
The private residential property price index climbed 1.9 percent to 202.8 points in the second quarter, compared to a 2.2 percent increase in the previous quarter, according to the Urban Redevelopment Authority’s (URA) flash estimates.
In addition, prices of non-landed private residential properties grew 1.6 percent in the Core Central Region and Outside Central Region and 1.2 percent in Rest of Central Region.
“Price increases in Q2 were marginally below expectations. However, for the Core Central Region and Outside Central Region, the flash numbers were within expectations,” said Alan Cheong, Associate Director at Savills Research & Consultancy.
“We may expect further moderation in general prices in Q3 and Q4. Should Q3 numbers come in above expectations, it may signify that the market has re-invigorated itself during the quarter.”
However, “if Q3 numbers come in below expectations, it will probably signify that the private residential market is taking a breather from its strong momentum built over the past two quarters,” he said.
The flash estimates are determined based on transaction prices given in caveats lodged during the first 10 weeks of the quarter and supported by information on the number of new units sold.
Meanwhile, Joseph Tan, Executive Director of Residential at CB Richard Ellis (CBRE), believes that although the private residential price index for Q2 2011 increased, “this does not necessarily mean that home prices have fallen.”
“Prices have in fact remained stable although it has slowed down from a rise of 2.2 percent in the previous quarter and 2.7 percent rise in the fourth quarter of 2010.”
“New launches that sold well in the reference quarter will make a strong impact on price trends.”
In addition, prices of non-landed private residential properties grew 1.6 percent in the Core Central Region and Outside Central Region and 1.2 percent in Rest of Central Region.
“Price increases in Q2 were marginally below expectations. However, for the Core Central Region and Outside Central Region, the flash numbers were within expectations,” said Alan Cheong, Associate Director at Savills Research & Consultancy.
“We may expect further moderation in general prices in Q3 and Q4. Should Q3 numbers come in above expectations, it may signify that the market has re-invigorated itself during the quarter.”
However, “if Q3 numbers come in below expectations, it will probably signify that the private residential market is taking a breather from its strong momentum built over the past two quarters,” he said.
The flash estimates are determined based on transaction prices given in caveats lodged during the first 10 weeks of the quarter and supported by information on the number of new units sold.
Meanwhile, Joseph Tan, Executive Director of Residential at CB Richard Ellis (CBRE), believes that although the private residential price index for Q2 2011 increased, “this does not necessarily mean that home prices have fallen.”
“Prices have in fact remained stable although it has slowed down from a rise of 2.2 percent in the previous quarter and 2.7 percent rise in the fourth quarter of 2010.”
“New launches that sold well in the reference quarter will make a strong impact on price trends.”
Sunday, July 3, 2011
Small homes a hit with singles and expats
Living in a tiny apartment might be a claustrophobic nightmare for some, but the prospect of a home, however small, that is affordable and centrally located is a hard combination to beat. The smallest types, the so-called shoebox apartments - they are less than 500 sq ft - have certainly proved popular, particularly with young singles and expatriate professionals. Consultants say they offer healthy yields of 3 to 4% depending on the project, while residential yields in general hover around 3%. Earlier this year, a 474 sq ft unit at Robertson Edge went for $858,000. Assuming a monthly rental of $3,000, the yield works out to 4%. While there were inconveniences, including clearly the lack of storage space, the ease of upkeep was a big plus. Tenants agreed the city-fringe location of most newly built shoebox developments - but without the sky-high rents - appealed most. Developers use measures such as higher ceilings, more windows and a more squarish layout to make the space seem larger. Experts say shoebox units are fetching healthy rents now as there are not many of such completed projects. Some of the smallest ones, such as Suites@Guillemard with units under 300 sq ft, are not ready yet. But ERA Realty key executive Eugene Lim said the test will be to see if rents hold even when thousands of completed shoebox units enter the market over the next few years.
- The Straits Times, B16
Wednesday, June 29, 2011
River Valley Rd apartment sold for S$70.5m
Credo Real Estate, which brokered the deal, said the apartment block at 402 to 414 River Valley Road has been sold to Alliance Land Ltd for S$1,139 psf ppr (around S$70.5 million).
The property has a total land area of 22,107 sq ft and a total gross floor area (GFA) of 68,089 sq ft, including the 10 percent GFA for balcony space. Under the 2008 Master Plan, the site is zoned for residential development, with a plot ratio of 2.8.
Credo said the existing development, which was built in the 1960s, was one of the country’s first generation of flats in the post-colonial era.
Considering the high development baseline, Credo said that a proposed new development with a gross plot ratio of 3.08 (including balconies) will have no development charge (DC).
Each of the owners will have gross sale proceeds of between S$1.75 million and S$1.77 million.
Yong Choon Fah, Executive Director at Credo Real Estate, said the site is “located within close proximity to Great World City and the Orchard Road shopping belt. It is suitable for a boutique development with small apartment units”.
According to The Business Times, the collective sales market is nowhere near its 2007 peak, when 87 sites worth a total S$11.4 billion were sold.
The successful deals over the past 18 months have been “relatively small, with low absolute values and the buyers are mainly small to medium- sized developers who are unable to bid for the larger government residential sites,” said Karamjit Singh, Managing Director of Credo Real Estate.
Saturday, June 25, 2011
Home sales volume to hit 4000 in Q2
According to property services company CB Richard Ellis (CBRE), preliminary numbers submitted for developer sales in the April-May period totalled 3,380 units, which means that the entire second quarter will see new home sales of approximately 4,000 units.
It noted that the top five projects which have contributed to the primary sales volume so far are Eight Courtyards, Hedges Park, Foresque Residences, Terrasse and Foresta @ Mount Faber. Except for Foresta, the projects were priced between S$790 psf and S$1,200 psf, catering mostly to first-time buyers and upgraders.
Based on caveat data to date from the Urban Redevelopment Authority (URA), new homes sold in Q1 had a median price of around S$1.0 million, down from S$1.2 million over the same period last year.
“The threshold for buyers seems to be S$1.0 million for new projects. One reason could be the awareness of rising costs and increased home prices, which may be prompting home buyers to look to smaller sized units,” said Joseph Tan, Executive Director for Residential at CBRE.
The average size of units sold during the Q1-Q2 period this year was below 900 sq ft, compared with 1,200 sq ft in the Q1-Q2 2010 period.
“This translates to a median price of just around S$1.0 million for the units sold in 1H 2011 while those in 1H 2010 recorded a median price of about S$1.2 million,” said CBRE.
Another possible reason is the 60 percent loan-to-value (LTV) ratio for home buyers with existing loans. It is probable that the majority of them are able to service their debt comfortably for a residential property of up to S$1.0 million.
Meanwhile, in the executive condominium (EC) market, the 315-unit Belysa development at Elias Road was launched in April at a median price of S$670 psf.
“This translates to a 21.0 percent price gap between Belysa and NV Residences, the private condominium beside it. The price gap accounts for the eligibility conditions and minimum occupation period tied to ECs. More than 160 units of Belysa were sold by end-May,” it said.
Some of the new launches expected to hit the market include Thomson Grand, Leedon Residence, an EC project at Segar Road and two mass-market projects at Sengkang Square and Serangoon.
Friday, June 24, 2011
West Coast site gets $176m bid
THE top bid for a residential site opposite West Coast Park came in at $175.78 million or $461 psf ppr yesterday, falling below market expectations.
When the government launched the tender for the 99-year leasehold site at West Coast Link/West Coast Crescent in early May, consultants predicted a top bid of $495-530 or even $560-580 psf ppr. While the tender did not stir things up on the price front, it did garner considerable interest with 12 developers gunning for the site. And there was a close fight among the top few bidders.
Far East Organization submitted the highest bid - just 1.1 per cent above Centurion RE's offer of $456 psf ppr. A tie-up between Hong Leong Holdings and City Developments followed with a bid of $450 psf ppr. Other participants included MCL Land, Allgreen Properties and Tuan Sing Holdings. Savills Singapore research and consultancy associate director Alan Cheong has a different take. Far East's bid would reap a profit margin of about 27 per cent if units can be sold at current prices, he said. 'This means that the developer needs to sell only about 73 per cent of the net saleable area to break even.'
Far East owns and operates a service apartment project nearby which has seen consistently high demand, he said. 'We see a need for a service residence in this area to serve the expatriates and transient business visitors working on Jurong Island, in Jurong Port as well as in the science and technology corridor in one-north, Singapore Science Park and renowned tertiary institutions in the vicinity.'
- The Business Times, P12
- Also quoted in The Straits Times, P27
When the government launched the tender for the 99-year leasehold site at West Coast Link/West Coast Crescent in early May, consultants predicted a top bid of $495-530 or even $560-580 psf ppr. While the tender did not stir things up on the price front, it did garner considerable interest with 12 developers gunning for the site. And there was a close fight among the top few bidders.
Far East Organization submitted the highest bid - just 1.1 per cent above Centurion RE's offer of $456 psf ppr. A tie-up between Hong Leong Holdings and City Developments followed with a bid of $450 psf ppr. Other participants included MCL Land, Allgreen Properties and Tuan Sing Holdings. Savills Singapore research and consultancy associate director Alan Cheong has a different take. Far East's bid would reap a profit margin of about 27 per cent if units can be sold at current prices, he said. 'This means that the developer needs to sell only about 73 per cent of the net saleable area to break even.'
Far East owns and operates a service apartment project nearby which has seen consistently high demand, he said. 'We see a need for a service residence in this area to serve the expatriates and transient business visitors working on Jurong Island, in Jurong Port as well as in the science and technology corridor in one-north, Singapore Science Park and renowned tertiary institutions in the vicinity.'
- The Business Times, P12
- Also quoted in The Straits Times, P27
Thursday, June 23, 2011
Home prices may slide when interest rates rise
However, the red-hot housing market in Singapore, as well as in China and Hong Kong, are unlikely to see a collapse.
Home prices in these three countries have climbed this year, due to low interest rates and strong economic growth. But this has resulted in growing concern over a property bubble and forced the governments to implement cooling measures to curb prices.
“In Singapore, because the government has always been paying attention to the housing market, I would say the fluctuations would be much smaller, in the single-digit range," said Justin Chiu, Executive Director at Cheung Kong. “Even if it were to come down, it will probably be five, six percent maximum.”
Chiu saw slowing activity in the overall housing market, with fewer transactions taking place in Singapore.
Sales of new private homes in the country dropped 13 percent in May from the previous month, said the Urban Redevelopment Authority (URA), signalling greater caution among buyers, amid efforts by the government to curb the housing market.
Although property market bubbles in Singapore, China and Hong Kong have raised concerns of a collapse, Chiu does not see this happening, as non-speculative demand for houses has remained firm, buoyed by robust economic growth.
However, the residential market in Hong Kong is more speculative than Singapore’s, as it has more international buyers. Hence, Chiu said it could expect bigger fluctuations than Singapore.
“Hong Kong, Singapore (and) China won't see a collapse but there'll be some minor fluctuations, adjustments, correction as a result of government actions and buyer sentiment, but this won't lead to a major collapse.”
Hong Kong, which is home to the most expensive residential and office properties in the world, has experienced home price increases of 12.5 percent this year. Like its Asian neighbours, it has imposed policies to cool down speculative demand, such as lowering loan-to-value ratios and slapping stamp duties on short-term transactions.
Monday, June 20, 2011
New flat buyers are older, earn more
A CLEARER picture emerged yesterday about the people in the queue to buy new Housing Board (HDB) flats.
Couples who are engaged or already married and applying to buy for the first time are now older, and many hope to live near their parents.
Fresh information from HDB on the profile of buyers spurred National Development Minister Khaw Boon Wan to give the strongest hint yet that the income ceiling for those buying new flats - which has been unchanged for the last 17 years - will be raised.
Writing in his blog yesterday, he said there was a strong case for raising the income ceiling, given that today's first-time applicants are older than before and likely to be earning more too.
At present, a couple's combined monthly income must be below $8,000 to qualify for a new HDB flat.
Mr Khaw's predecessor, Mr Mah Bow Tan, had indicated earlier this year that the next time the income cap is raised, it could be to $10,000.
Mr Khaw also noted that two in five first-time applicants wanted to live near their parents, and this underscored the need to build as many homes as possible within mature HDB estates.
In his post, entitled 'Know Our Customers', he said: 'The first rule of good customer service is to know our customers. Who are they? What are their needs?'
To this end, he had asked for the figures from HDB after overseeing his first launch of Build-to-Order (BTO) flats last month - 3,957 homes in Tampines, Pasir Ris, Punggol and Woodlands.
BTO projects, HDB's main conduit for new flats, are typically built when a certain demand level is reached. Last month's launch of nearly 4,000 units pulled in almost 14,000 applications - making the homes 31/2 times oversubscribed.
It was a reflection of the sustained demand for public housing, which emerged as a hot topic in the recent general election.
The unhappiness among home buyers came from either being priced out of the HDB market, or from repeated failure in balloting for a flat.
Currently, 95 per cent of flats in BTO launches are reserved for first-timers.
The numbers yesterday showed that two-thirds or 65 per cent of all applicants were first-timers; the remaining 35 per cent were buying homes for the second time.
The Ministry of National Development told The Straits Times that these proportions were similar to BTOs launched in recent months.
Mr Khaw noted that among all first-timers, more than half had applied under HDB's Fiance-Fiancee Scheme. The median age for this group was 27. The median age of the remaining applicants - those already married - was even higher, at 34.
'There is therefore justification to revise the HDB income ceiling, given the rising age of applicants,' he said.
Turning to those who have been unsuccessful in balloting for a flat, Mr Khaw noted that the situation has improved somewhat, although 'we have much work to do still'.
In the May launch, 45 per cent of the applicants had been unsuccessful in previous attempts. In the previous quarter, the figure was 60 per cent.
Reacting to the figures, PropNex chief executive Mohamed Ismail said: 'Home buyers who failed to get their flats will be able to see that there are many others facing a similar plight. It makes the process more transparent.'
Dennis Wee Group director Chris Koh said the information confirmed his agency's observation that young couples are busting the income ceiling as salaries have gone up.
If the ceiling were raised, it would make sense to also consider raising that for higher-end flats, such as executive condominiums and HDB's Design, Build and Sell Scheme.
Key executive officer of C&H Properties Albert Lu said application numbers were likely to stay high, especially if HDB starts offering flats in mature estates.
This will certainly temper the prices of resale flats, he said.
Mr Khaw said yesterday that HDB is processing the applications and that he will analyse the profiles of successful applicants when that is complete.
'I am sure the analysis will provide further insight,' he said.
Friday, June 17, 2011
New home sales down last month
Sales of new private homes eased 13% from Apr as buyers turned cautious and developers held back on big launches. But the May figure of 1,575 units is still the third-highest in a year. There were 1,575 units sold last month, down from April's blistering 1,805.
If EC sales are included, last month's number swells to 1,825 units. The fall in sales from Apr has reduced the possibility of another round of cooling measures, experts added, although there are signs in the latest figures that demand is holding up quite well. Sales in projects launched before last month were still strong. 8 Courtyards in Yishun and Hedges Park Condo in Upper Changi found buyers for about 210 units in total in May.
But the no.of launches fell across the board last month as developers held back releasing new properties while a large amount of stock remained unsold. SLP International's Nicholas Mak noted that the no.of launched but unsold units has been creeping up but mentioned that this is not a cause for alarm as yet, adding that if sales keep up the pace seen so far this year, the supply can be absorbed.
In fact, previously launched units in suburban areas are being mopped up. Sales at The Waterline and The Lakefront Residences last month have recorded a take-up rate of more than 100%. Suburban home sales have also supported the market, commanding 60% of new home sales. However in the city centre, there have been 'significant falls' in both sales and launches.
The 94 launched units in the city centre are the lowest (monthly) number since Mar 2009 and highlight the existing supply pressure in this market as previously launched units remain unsold. Yet a unit at The Marq set a price record of $5,842 psf while 10 apartments in projects such as Tomlinson Heights and The Laurels were sold for more than $3,000 psf. Experts expect this month's sales are likely to stay above 1,000 but are unlikely to surpass last month's level. CBRE's Li Hiaw Ho added that up to 8,000 new homes may be sold in the first half of the year. Last month's top-selling projects included Terrasse in Hougang, with 184 units moved at a median price of $994 psf, and Foresque Residences off Upper Bukit Timah, which found buyers for 141 units at a median of $1,108 psf.
- The Straits Times, P6
- Also quoted in The Business Times, P1. "Buyers vote to wait, new home sales slow after GE"
Owners cut price for Whitley estate
If EC sales are included, last month's number swells to 1,825 units. The fall in sales from Apr has reduced the possibility of another round of cooling measures, experts added, although there are signs in the latest figures that demand is holding up quite well. Sales in projects launched before last month were still strong. 8 Courtyards in Yishun and Hedges Park Condo in Upper Changi found buyers for about 210 units in total in May.
But the no.of launches fell across the board last month as developers held back releasing new properties while a large amount of stock remained unsold. SLP International's Nicholas Mak noted that the no.of launched but unsold units has been creeping up but mentioned that this is not a cause for alarm as yet, adding that if sales keep up the pace seen so far this year, the supply can be absorbed.
In fact, previously launched units in suburban areas are being mopped up. Sales at The Waterline and The Lakefront Residences last month have recorded a take-up rate of more than 100%. Suburban home sales have also supported the market, commanding 60% of new home sales. However in the city centre, there have been 'significant falls' in both sales and launches.
The 94 launched units in the city centre are the lowest (monthly) number since Mar 2009 and highlight the existing supply pressure in this market as previously launched units remain unsold. Yet a unit at The Marq set a price record of $5,842 psf while 10 apartments in projects such as Tomlinson Heights and The Laurels were sold for more than $3,000 psf. Experts expect this month's sales are likely to stay above 1,000 but are unlikely to surpass last month's level. CBRE's Li Hiaw Ho added that up to 8,000 new homes may be sold in the first half of the year. Last month's top-selling projects included Terrasse in Hougang, with 184 units moved at a median price of $994 psf, and Foresque Residences off Upper Bukit Timah, which found buyers for 141 units at a median of $1,108 psf.
- The Straits Times, P6
- Also quoted in The Business Times, P1. "Buyers vote to wait, new home sales slow after GE"
Owners cut price for Whitley estate
Tuesday, June 14, 2011
Building boom doom? or builders'
THE building boom is looking less cheery for contractors who face soaring material costs, labour shortages and squeezed margins, as ever-increasing numbers of firms compete for a share of the spoils.
There is also a fear in the industry that the sudden sharp rise in demand could fall just as suddenly, leaving firms saddled with more staff and other resources than they need.
Builders are already constructing private homes with more to come, given the bumper supply of state land that has been released. But now they have a new source of additional demand to contend with, in the form of a huge ramp-up in Housing Board projects.
The National Development Ministry announced last month that an additional 3,000 Build-to-Order (BTO) flats will be launched this year, bringing the total to a record 25,000 units this year.
Compare that with 2009, when only about 9,000 BTO flats were launched, while there were 16,100 last year.
A Kim Eng report estimates these additional BTO units this year will be worth about $380 million in construction revenue.
National Development Minister Khaw Boon Wan also committed to keeping up the pace next year, implying that an unprecedented 50,000 HDB flats could be launched in just two years.
At first glance, this spells a golden era for developers, with a wealth of new contracts in the offing.
But concerns are surfacing among industry players that this demand spike, together with a tight labour supply and limited resources, could send costs soaring.
Factor in the larger pool of developers - many came here for the integrated resorts contracts and have stayed on - and you have a recipe for tighter margins.
Mr Pek Lian Guan, executive director and chief executive of property and construction group Tiong Seng Holdings, noted that tender prices have 'dived' this year due to competitive bidding.
Yet at the same time, raw materials costs have shot up and foreign worker levies have increased.
Mr Pek cautioned that ramping up BTO flat construction to clear the backlog of demand will also increase costs, but if construction demand drops in two years, the industry might be hit.
'For us in construction, we prefer a more steady market because if you increase your demand suddenly, the industry has to respond by building its capacity,' he said.
'When a contractor builds his capacity, of course, it's more costly, so prices will go up. If two years later you shrink your programme after they've built their capacity, then what are they going to do?'
EL Development managing director Lim Yew Soon said building costs have risen by at least 10 per cent from a year ago, but many firms have absorbed the higher charges in a bid to secure contracts in a more competitive landscape.
'Especially with this push for productivity, we need to invest more in machinery as well. Yet we're not sure if construction demand might be as strong down the road, so this is a concern for all builders,' added Mr Lim.
Singapore Contractors Association president Ho Nyok Yong noted that while some of the cost increases can be passed on to developers of new projects, builders will have to bear the pain with projects secured earlier.
When there are plenty of contracts up for grabs, firms employ more people and invest in new technologies, but if the industry then slows suddenly, it will be a 'big problem', he added.
'There's always a risk in expanding the construction business too quickly, and we've constantly reminded our members to do so in a more careful manner with proper planning.
'A gradual growth of the industry is best for contractors so we can continue to retain skilled workers, engineers and professionals in the industry. We don't want a roller-coaster scenario, which will make the industry unsustainable.'
A Building and Construction Authority spokesman said the HDB ramp-up of supply is likely to have some impact on overall construction demand in the next three years.
But the most significant impact will be felt more in the public housing segment itself, with short-term pressures on the pool of regular contractors bidding for HDB jobs.
It said the HDB will seek to expand the pool of contractors tendering for its projects.
Source: The Straits Times © Singapore
There is also a fear in the industry that the sudden sharp rise in demand could fall just as suddenly, leaving firms saddled with more staff and other resources than they need.
Builders are already constructing private homes with more to come, given the bumper supply of state land that has been released. But now they have a new source of additional demand to contend with, in the form of a huge ramp-up in Housing Board projects.
The National Development Ministry announced last month that an additional 3,000 Build-to-Order (BTO) flats will be launched this year, bringing the total to a record 25,000 units this year.
Compare that with 2009, when only about 9,000 BTO flats were launched, while there were 16,100 last year.
A Kim Eng report estimates these additional BTO units this year will be worth about $380 million in construction revenue.
National Development Minister Khaw Boon Wan also committed to keeping up the pace next year, implying that an unprecedented 50,000 HDB flats could be launched in just two years.
At first glance, this spells a golden era for developers, with a wealth of new contracts in the offing.
But concerns are surfacing among industry players that this demand spike, together with a tight labour supply and limited resources, could send costs soaring.
Factor in the larger pool of developers - many came here for the integrated resorts contracts and have stayed on - and you have a recipe for tighter margins.
Mr Pek Lian Guan, executive director and chief executive of property and construction group Tiong Seng Holdings, noted that tender prices have 'dived' this year due to competitive bidding.
Yet at the same time, raw materials costs have shot up and foreign worker levies have increased.
Mr Pek cautioned that ramping up BTO flat construction to clear the backlog of demand will also increase costs, but if construction demand drops in two years, the industry might be hit.
'For us in construction, we prefer a more steady market because if you increase your demand suddenly, the industry has to respond by building its capacity,' he said.
'When a contractor builds his capacity, of course, it's more costly, so prices will go up. If two years later you shrink your programme after they've built their capacity, then what are they going to do?'
EL Development managing director Lim Yew Soon said building costs have risen by at least 10 per cent from a year ago, but many firms have absorbed the higher charges in a bid to secure contracts in a more competitive landscape.
'Especially with this push for productivity, we need to invest more in machinery as well. Yet we're not sure if construction demand might be as strong down the road, so this is a concern for all builders,' added Mr Lim.
Singapore Contractors Association president Ho Nyok Yong noted that while some of the cost increases can be passed on to developers of new projects, builders will have to bear the pain with projects secured earlier.
When there are plenty of contracts up for grabs, firms employ more people and invest in new technologies, but if the industry then slows suddenly, it will be a 'big problem', he added.
'There's always a risk in expanding the construction business too quickly, and we've constantly reminded our members to do so in a more careful manner with proper planning.
'A gradual growth of the industry is best for contractors so we can continue to retain skilled workers, engineers and professionals in the industry. We don't want a roller-coaster scenario, which will make the industry unsustainable.'
A Building and Construction Authority spokesman said the HDB ramp-up of supply is likely to have some impact on overall construction demand in the next three years.
But the most significant impact will be felt more in the public housing segment itself, with short-term pressures on the pool of regular contractors bidding for HDB jobs.
It said the HDB will seek to expand the pool of contractors tendering for its projects.
Source: The Straits Times © Singapore
Property stocks shaken by China chill
(SINGAPORE) Singapore-listed property stocks with significant exposure to the Chinese market fell yesterday as data from China raised concerns that a slowdown in the world's second-largest economy could lead to easing demand for homes.
China's lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that its economy is cooling.
CapitaLand, Singapore's largest property group by market capitalisation, lost five cents or 1.7 per cent to close at $2.91 - slipping below the key $3 support level for the second trading day in a row.
City Developments, the second-biggest developer by market cap, also shed 22 cents or 2.1 per cent to end at $10.44. Keppel Land lost 16 cents or 4.2 per cent to close at $3.68.
These three stocks are now at their lowest points in at least the last one year.
Other developer stocks fared even worse. China-based Yanlord Land Group lost three cents or 2.3 per cent to close at $1.25 yesterday. Its share price is now at the lowest point since September 2006.
CapitaLand retail unit CapitaMalls Asia, which was spun off and listed in November 2009, lost five cents or 3.2 per cent to close at $1.50 - marking an all-time low. The stock's initial public offering price was $2.12.
Analysts attributed the fall in property stocks mainly to rising concerns about China.
CIMB analyst Donald Chua noted that most of the developers hit yesterday have significant exposures to the Chinese market.
'Data that came in today (Monday) showed larger-than-expected declines in loans disbursed in China,' said Mr Chua. 'Asset inflation and property prices are watched very closely by policymakers regionally.'
China released data late last Friday showing a smaller-than-expected trade surplus of US$13.1 billion in May because of soaring imports and weaker growth of global demand.
And figures released yesterday showed that Chinese banks extended fewer new loans than expected in May.
'This provides another data point highlighting the growth risk,' Tao Dong, a Hong Kong-based economist for Credit Suisse, told Bloomberg. 'I think the economy is heading to a soft landing in the second half of 2011, but the risk of a hard landing seems to be on the rise.'
Reacting to the news, Hong Kong imposed new measures last Friday in its fourth attempt since October 2009 to dampen property prices, increasing the supply of land available to build homes and tightening mortgage restrictions.
Hong Kong-listed industry bellwethers Cheung Kong (Holdings) and Sun Hung Kai Properties fell yesterday morning on the news.
But for Singapore-listed property stocks, sentiment was already hit last Thursday after the government announced that it will release another bumper supply of land for private homes in the second half of this year. It also warned home buyers to be mindful of the potential supply.
This led to speculation that another round of demand-side measures to cool the property market could be on the way. CIMB is 'underweight' on the property sector, partly due to policy risk.
'Future physical completions (both private homes and HDB flats), tightening policies (we do not see the government loosening its grip anytime soon), interest rate risk (likely a mid to longer-term threat) are issues the market will need to grapple with for a while longer,' Mr Chua said.
Said Morgan Stanley: 'We maintain our cautious industry view as we continue to see risk of oversupply in terms of physical completion and units available for sale, and we see residential prices falling 7 per cent over the next two years.'
The slide in property stock prices came as the benchmark Straits Times Index fell again yesterday. The index shed 0.63 per cent, or 19.31 points, to close at 3,059.04 - its lowest levels in over two months.
Analysts said that coupled with worries about China, the investors are also plagued by concerns over the European sovereign debt issue and the US economy.
Source: Business Times
China's lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that its economy is cooling.
CapitaLand, Singapore's largest property group by market capitalisation, lost five cents or 1.7 per cent to close at $2.91 - slipping below the key $3 support level for the second trading day in a row.
City Developments, the second-biggest developer by market cap, also shed 22 cents or 2.1 per cent to end at $10.44. Keppel Land lost 16 cents or 4.2 per cent to close at $3.68.
These three stocks are now at their lowest points in at least the last one year.
Other developer stocks fared even worse. China-based Yanlord Land Group lost three cents or 2.3 per cent to close at $1.25 yesterday. Its share price is now at the lowest point since September 2006.
CapitaLand retail unit CapitaMalls Asia, which was spun off and listed in November 2009, lost five cents or 3.2 per cent to close at $1.50 - marking an all-time low. The stock's initial public offering price was $2.12.
Analysts attributed the fall in property stocks mainly to rising concerns about China.
CIMB analyst Donald Chua noted that most of the developers hit yesterday have significant exposures to the Chinese market.
'Data that came in today (Monday) showed larger-than-expected declines in loans disbursed in China,' said Mr Chua. 'Asset inflation and property prices are watched very closely by policymakers regionally.'
China released data late last Friday showing a smaller-than-expected trade surplus of US$13.1 billion in May because of soaring imports and weaker growth of global demand.
And figures released yesterday showed that Chinese banks extended fewer new loans than expected in May.
'This provides another data point highlighting the growth risk,' Tao Dong, a Hong Kong-based economist for Credit Suisse, told Bloomberg. 'I think the economy is heading to a soft landing in the second half of 2011, but the risk of a hard landing seems to be on the rise.'
Reacting to the news, Hong Kong imposed new measures last Friday in its fourth attempt since October 2009 to dampen property prices, increasing the supply of land available to build homes and tightening mortgage restrictions.
Hong Kong-listed industry bellwethers Cheung Kong (Holdings) and Sun Hung Kai Properties fell yesterday morning on the news.
But for Singapore-listed property stocks, sentiment was already hit last Thursday after the government announced that it will release another bumper supply of land for private homes in the second half of this year. It also warned home buyers to be mindful of the potential supply.
This led to speculation that another round of demand-side measures to cool the property market could be on the way. CIMB is 'underweight' on the property sector, partly due to policy risk.
'Future physical completions (both private homes and HDB flats), tightening policies (we do not see the government loosening its grip anytime soon), interest rate risk (likely a mid to longer-term threat) are issues the market will need to grapple with for a while longer,' Mr Chua said.
Said Morgan Stanley: 'We maintain our cautious industry view as we continue to see risk of oversupply in terms of physical completion and units available for sale, and we see residential prices falling 7 per cent over the next two years.'
The slide in property stock prices came as the benchmark Straits Times Index fell again yesterday. The index shed 0.63 per cent, or 19.31 points, to close at 3,059.04 - its lowest levels in over two months.
Analysts said that coupled with worries about China, the investors are also plagued by concerns over the European sovereign debt issue and the US economy.
Source: Business Times
Saturday, June 11, 2011
Private-HDB home price gap hits record
THE price gap between mass market private homes and HDB flats has widened to a new record - making it harder than ever for aspiring HDB upgraders to buy a private home.
This is according to a new report by Goldman Sachs, which said that the price difference between 99-year leasehold homes in the suburban areas and five-room HDB flats grew to about $490 per sq ft (psf) in the first quarter of the year.
Translated into overall prices, this means a 1,200 sq ft five-room flat would cost almost $600,000 less than a mass market leasehold flat.
The last time the price gap hit near this level was during the spectacular property boom in late 2007, according to the report released on Thursday.
After that, the gap narrowed to about $300 psf in early 2009, before rising steadily again. In the 10 years before 2007, the price difference largely hovered between $100 and $300 psf.
The growing price chasm between HDB flats and private homes is turning into an 'insurmountable hurdle to upgrading aspirations', said the report's authors, Goldman analysts Paul Lian and June Zhu.
It also suggests the Government has 'little choice but to ensure more affordable housing for all through the HDB and also moderate prices of private mass-end homes'.
Mr Lian and Ms Zhu suggested that new cooling measures could include lower loans for home buyers with existing mortgages. Such buyers can now borrow 60 per cent of a home's price, but this might be cut to 50 per cent.
Foreigners, who are now purchasing across all housing segments, may also face restrictions on the number of mortgages they can take, they added.
Other analysts agreed that more cooling measures are possible, although they expect these only after the property price index for the second quarter is released next month.
The Government also needs time to assess the impact of its most recent release of new land sites on Thursday, said Mr Tan Kok Keong, property firm OrangeTee's head of research and consultancy. He believes any possible new measures are at least three months away, as the Government observes the market's response.
Already, the Government has hinted that the monthly income ceiling to buy new HDB flats may be lifted from the longstanding $8,000 to $10,000, making these cheaper properties accessible to more buyers.
But OCBC Investment Research property analyst Eli Lee said this move is likely to have a limited and delayed effect on the private property market.
'We believe the Government would likely have to implement more cooling measures (in the private market), especially if there is continued strength in mass segment prices,' he said.
Some, however, say more measures are unlikely.
Property consultancy Cushman & Wakefield Singapore vice-chairman Donald Han said early signs suggest developers' demand for land is moderating, with fewer bids in recent tenders. He said a 1 per cent to 2 per cent rise in quarterly prices is acceptable, given the healthy economy.
The Urban Redevelopment Authority is monitoring the situation, its group director of land sales and administration Marc Boey said on Thursday.
Commenting on the likelihood of further curbs to demand, Mr Boey said that while there was a slight slowdown in demand for new homes after the January measures, demand has picked up again.
'But monthly developers sales figures do have a bit of volatility due to seasonality... and depending on what developers launch, so we have to observe the trend a little closer. But in terms of price, it has continued to moderate in terms of pace of growth.'
April's private home sales rose 29 per cent from March to a five-month high of 1,788 units. First quarter prices are up 2.2 per cent, the sixth straight quarter in which the rate of increase has eased.
National Development Minister Khaw Boon Wan has also fanned fears of more cooling measures by saying on his blog that 'sharp property price increases cannot go on forever'.
Source: The Straits Times
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