River Valley Rd apartment sold for S$70.5m

A 40-unit freehold walk-up apartment at River Valley Road has been sold for S$70.5 million, resulting in a total of 32 transactions worth S$1.73 billion on the collective sales market so far this year.

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.

Home sales volume to hit 4000 in Q2

Singapore’s real estate market will likely see a robust second quarter, with the number of new home sales expected to hit 4,000 units, up 11.3 percent from the 3,595 new units sold last quarter.

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.

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

Home prices may slide when interest rates rise

Prices of residential properties in Singapore may decline by up to six percent when interest rates start rising, said a senior executive from Cheung Kong (Holdings) in a report by Reuters.

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.

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.

Source: The Straits Times © Singapore 

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

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

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

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

Owners' loft plans for units derailed

A GROUP of 12 home owners of One North Residences in Buona Vista have banded together to seek compensation from the property developer.

The dispute, over whether they are allowed to build another level within their units, has thrown the spotlight on a grey area of what constitutes a 'loft'.

All 12 bought one-bedroom simplexes - single-level units with high ceilings - when the project was launched in 2007 by Vista Development, a joint venture between property-related companies UOL Group, Low Keng Huat and Kheng Leong.

Collectively, they own 13 of the 27 simplex units in the 405-unit development.

The owners claim that sales agents had told them during the marketing phase that they could build a mezzanine floor in their simplex unit but that they were later denied permission to do so when the project was completed.
They also say that the floor-to-ceiling height of their completed units is only 4.7m, a shade lower than the 5m they were promised when they bought their units. One of the owners said marketing materials used by sales agents stated the height as 5m, although these materials were not distributed to buyers.

The dispute has now reached a stalemate, with Vista Development denying all claims. But it throws the spotlight on an area of ambiguity - lofts - where home buyers are unsure what exactly is permissible under the law.

In an interview with The Straits Times, three of the simplex owners said the project's showflat had featured a loft-styled duplex unit and not a simplex unit when the project was launched in March 2007.

However, they claim the sales agents told them that if they bought a simplex unit, they could similarly build a mezzanine floor after the unit was completed to have it look like the duplex.

This would increase the unit's size by at least 50 per cent and was a much cheaper alternative as it meant that the unit per sq ft (psf) price would be brought down.

For example, one of the owners, who declined to be named, had paid $598,000 - or $1,157 psf - for a 517 sq ft simplex unit. He said that he was told by an agent that a mezzanine floor could be built for about $40,000, enlarging the apartment size to about 800 sq ft and bringing down the unit price to about $798 psf.
This was lower than the $800 to $900 psf being charged for the other units and seemed like a good deal at the time.

However, when the owners collected their keys in mid-2009 and tried to obtain approval from the management office to commence construction, they were told that the developer had already built to the maximum gross floor area (GFA) and that it would be illegal for them to build a mezzanine level.

While a second mezzanine level is not possible, it appears that a smaller platform-like structure is allowed as long as it can be dismantled. This is because it is seen as part of the interior design of the unit. However, the owners are not keen on this alternative.

Some of the simplex unit owners contacted one another and lodged a complaint to Vista in January last year. They found that similar promises had been made to all of them.

They claim that Vista said the simplexes' dearer prices were due to their higher ceiling height, which made the apartment more spacious, and the better views.

The 12 owners decided to band together to seek legal advice.

In July last year, all 12 owners put their names down on a notice listing their grievances and sent it to Vista through their lawyers.

Vista replied a month later denying all claims.

The group recently filed a complaint with the Council for Estate Agencies (CEA) and the Urban Redevelopment Authority (URA). They also approached the Consumers Association of Singapore (Case) but were told that Case was not an appropriate avenue to turn to for such a big issue.

'There's no clear line of authority or government body for buyers like us to take our grievances to,' one of the owners added. They are now undecided whether to proceed with legal action due to the costs that might be incurred.

When contacted by The Straits Times, Vista said that it had conducted detailed investigations with its marketing agents, Knight Frank and Savills, who said that they did not make the representations as alleged by the owners.

'We have no reason to believe that the sales agents would have represented that a mezzanine floor can be constructed in a simplex unit, as such construction would involve an increase of gross floor area, and requires prior planning permission from the URA,' the consortium said.

'Any developer would have planned to maximise the GFA of the development and planning permission would have been obtained from the URA prior to marketing the development. We are no exception.'

Vista added: 'As part of our efforts to reach out to customers, we had also actively engaged these few buyers on the issue but have not received a response from them since August last year.'

On the issue of ceiling height, it said that the units were constructed according to the building plans approved by the authorities and that the units were sold according to specifications shown in the sales brochure.
On its part, the URA said that it evaluates proposals to build lofts in apartments on a case-by- case basis.
The URA confirmed that it had received a complaint but declined to comment further as investigations were ongoing.
Owners, developers and architects have to provide details of the proposed loft structures for URA's evaluation to determine whether planning permission is required.

'As a principle, large loft structures that form part of the structural element of the building, such as mezzanine floors, are considered part of the GFA of the development and will require planning permission from the URA,' it said.

If the site has already fully maximised its allowable gross plot ratio (GPR) as stipulated in the 2008 masterplan, however, the additional loft structure will not be allowed.

On the other hand, furniture or fixtures - they do not form part of the structural element of the building - which are about the size of a normal bed will not constitute GFA nor require planning permission, URA said.
Any such structure, however, will also have to comply with the requirements of other relevant technical agencies.

Vista is 50 per cent owned by Kheng Leong, which marketed the project. UOL holds 30 per cent and the remainder is owned by Low Keng Huat.

Far East buys conservation bungalow site for S$103.8m

The 113-year-old conservation bungalow on Marine Parade Road has been acquired by property giant Far East Organization (FEO) for a whopping S$103.8 million.

This works out to around S$1,195 psf of potential gross floor area (GFA), inclusive of a development charge (DC) of S$18.8 million, said Credo Real Estate, which brokered the deal.

“This sale sets a new benchmark for the area,” said Karamjit Singh, Managing Director of Credo Real Estate. The purchase price reflects a land rate in the region of S$1,195 psf ppr, based on an allowable GPR of 2.166, including the bonus GFA from the conservation house.

He added that aside from its historical background, “it is in a convenient location with a shopping centre across the street.”

Built in 1898, the single-story bungalow was owned by the family of the late Choa Kim Keat, a prominent businessman in the 1880s. Several attempts have been made to redevelop the property but none were successful.

However, the bungalow was finally put up for sale last month, along with the adjacent property, covering 47,400 sq ft of land area.

Credo brokered the sale through a public tender exercise that closed on 6 June and FEO outmatched four other bidders, all listed companies.

When the property launched last month, Credo said that the historic bungalow can be used as a clubhouse in the project or sold as a strata unit.

Mr. Singh also noted that the site can potentially accommodate 100 condo units averaging 1,000 sq ft, depending on their configuration and layout.

Holland Hill site up for collective sale

The freehold Olina Lodge at Holland Hill has been put up for collective sale with an indicative price of $225 million or $1,666 psf ppr. Analysts expect good demand for the site at the junction of Fernvale Link and Sengkang West Avenue. They expect a top bid in the range of $200-$230 psf ppr. The site, a few minutes' drive to the Singapore Botanic Gardens, is zoned for residential use with a 1.6 plot ratio (ratio of maximum gross floor area to land area) and 12-storey maximum height under Master Plan 2008. No development charge (DC) is payable if the 84,288 sq ft site is redeveloped up to 1.6 plot ratio, said DTZ, which is marketing Olina Lodge. However, a development baseline enquiry has been submitted to Urban Redevelopment Authority and DTZ will advise interested parties accordingly, it added. If Olina Lodge's successful bidder taps the balcony allowance of 10 per cent additional gross floor area, an $8.33 million DC is payable; based on this, the $225 million indicative price would reflect a unit land price of $1,575 psf ppr. Analysts note that in the secondary market, units at The Lush on Holland Hill and Parvis nearby have changed hands in the $1,500 psf region on average in the past few months. Assuming the $225 million price is achieved, owners stand to receive $3 million to $4.9 million per unit - about 65 per cent more than what they would stand to receive if they sold their units individually.

- The Business Times,  P10

Lukewarm interest in condo site

A residential site for private homes in Woodlands has fetched a top bid of $152 million in a subdued three-cornered contest among developers. This came as the Housing Board kept up its drive to boost flat offerings this year by releasing a new site for design, build and sell scheme (DBSS) flats yesterday. Experts say a move to lift the number of build-to-order HDB flats launched this year to 25,000 would have weighed on developers' minds as it could siphon demand away from the private market. The lukewarm interest from developers, however, was due more to the site's 'average' attributes, they added. A joint venture between Fragrance Group and Aspial Corp put in the top bid for the site at the junction of Woodlands Avenue2 and Rosewood Drive. The bid worked out to $367 per sq ft (psf) per plot ratio (ppr). Second-placed Far East Organization and Sekisui House were just 1 per cent behind with a bid of $150 million - or $363 psf ppr. EL Development was third with a $120 million bid, or $291 psf ppr. The 99-year leasehold land parcel has a maximum gross floor area of 38,333 sq m and can accommodate a five-storey condo with about 390 units. Ms Chia Siew Chuin, director of research and advisory at Colliers International, said competition from existing and upcoming projects in the vicinity could have contributed to the tepid response. These include the newly completed Rosewood Suites as well as Far East Organization's new project Woodhaven at the junction of Woodlands Avenue 1 and Rosewood Drive. Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, noted that the site's top bid is still 10 per cent higher than that for Far East's site - which was tendered with a winning bid of $333 psf ppr in November last year - suggesting firm suburban residential land prices.

- The Straits Times,  P24

Asia luxury home prices up 5.5% in Q1

Capital values of luxury homes in Asia rose 5.5 % over the quarter to Q1, exceeding the 0.9 % gain seen in Q4 last year, said property consultancy CB Richard Ellis (CBRE) yesterday.  While prices have climbed faster, much of the increase happened in Hong Kong. Luxury residential prices there jumped 14 % Qon Qas buyers shook off the impact of a special stamp duty introduced in November last year on properties resold within 24 months. Guangzhou's luxury home market was also buoyant, with prices rising 5.1% as developers launched several projects in prime locations at above-market prices. But in other regions such as Beijing, Shanghai and Singapore, activity was muted. In Singapore, property cooling measures announced in January worked their way through the market. Prices of luxury homes in the core central region inched up by 0.9% Q on Q while sales volume fell by 20.4 %.  Rents were largely unchanged but CBRE noted that they showed signs of softening towards the end of the Qas expatriate leasing demand slowed. 'In the absence of similar government initiatives in 2011, we can expect minimal growth in both the inflow of foreign investors and home prices,' Mr Tan said. 'As such, the volume of luxury transactions in 2011 is likely to be around 150-200 units with prices averaging at $3,000 psf and $3,500 psf for resale and new projects respectively (equating to a 5 %-10 % increase).' Based on CBRE research, eight luxury projects with a total of 664 units have prerequisites for launch. Another eight projects with 789 units are in the pipeline.

- The Business Times, P29

Cluster-landed homes launching

Boutique developer Clydesbuilt Group will launch Eleven@Holland, a cluster-landed housing project off Old Holland Road in District 10, this weekend. Prices at the project, which comprises 82 strata- titled semi-detached units, will start from $1,050 psf. Units at Eleven@Holland comprise solely of four- and five-bedroom houses ranging from 3,681 sq ft to 4,348 sq ft in size. Knight Frank, which is marketing the project, said that Eleven@Holland is modelled after a luxurious resort villa.  In keeping with the resort theme, the project will be filled with lush landscaping and water features. And unlike with traditional landed homes, residents in Eleven@Holland can look forward to extensive condominium facilities such as a clubhouse with gymnasium at the basement, as well as entertainment areas such as lounge corner, a barbeque corner and a 30 metre lap pool. Added Knight Frank: 'Another lesser-known attraction for cluster-housing projects is the higher rental yield compared to conventional landed homes or condominium. This is because expatriate families, especially those with young children, like the fact that they are living in a spacious house, yet at the same time, enjoy the condo-like facilities. Most importantly, there is security and proper management of the estate.' Eleven@Holland is expected to obtain its temporary occupation permit by the end of 2014.

- The Business Times, P29

Property investors go for the slow flip

(SINGAPORE) It pays not to flip properties too frequently, according to a study of subsale transactions by Savills Singapore.

The average holding period of subsales in the first three months of 2011 increased to its longest in at least three years, while the average gain from profitable subsale deals in the quarter was also at its highest since Q3 2008.

Savills' study, which traced caveat matches to work out holding periods and gains or losses from subsales since Q1 2008, revealed that the average holding period for subsale transactions in Q1 2011 was 2.31 years.

This was longer than the 2.07 to 2.23 years average holding period for subsales in various quarters of last year and the longest since Q1 2008, when the average holding period for subsale deals was 1.64 years.

Some 97.4 per cent of matched subsales in Q1 2011 were profitable and, of these, the average gain per profitable subsale deal climbed to $315,043, surpassing the $283,498 to $289,004 for Q1-Q4 last year and the highest figure for any quarter since Q3 2008.

Steven Ming, executive director of investment sales at Savills Singapore, said: 'The bigger average gain from profitable subsale deals is in sync with the upbeat market sentiment, which has seen prices of non-landed private homes rebounding strongly from the trough in 2009 and even surpassing its previous peak in 2008.'

'The longer holding period for subsales transacted in Q1 2011 indicates that short-term speculation was stifled by the government's various cooling measures announced since February 2010, particularly the stringent seller's stamp duty introduced on Jan 13, 2011,' he added.

Indeed, there were no instances of units bought in Q1 this year and flipped within the same period.

'These results support (the view) that real estate should be a mid- to long-term investment rather than short-term speculation,' concludes Mr Ming.

The most profitable subsale in Q1 2011 yielded a profit of $3.44 million; it involved a ground-floor unit at Nassim Park Residences that was previously bought for around $12.1 million from the developer in June 2008 and sold in March 2011 for $15.56 million. The biggest subsale loss, of $723,200, was for an apartment at The Orchard Residences.

Subsales, often used as a proxy of speculative activity, refer to secondary-market deals in projects that have yet to receive a Certificate of Statutory Completion and where property titles for units sold have yet to be transferred to buyers.

'Transaction volume in the subsale market is expected to moderate over the next 24 months and the average holding period (lengthen), following the imposition of steep seller's stamp duty (SSD), which compels any real estate investor to think mid- to longer-term to ride out the four-year SSD period to reduce costs,' said Mr Ming.

Savills' analysis showed that the average subsale gain for profitable deals was highest at $445,313 in Q1 2008 - during the heyday of the previous property boom when anecdotal evidence of people flipping properties within a short period for handsome returns was not uncommon. Back then, 98.2 per cent of all subsales made money and the average holding period for subsale deals was just 1.64 years.

Then came Lehman's collapse and during the low point of the property market in Q1 2009, only 67.5 per cent of subsales were in the black while their average gain sank to $105,663. From that point, the proportion of profitable subsales quickly began to recover, reaching 90.7 per cent in Q3 2009, 97.5 per cent in Q4 2010 and 97.4 per cent in Q1 2011.

Savills examined URA Realis caveats data for subsale deals and tried to find previous caveat records for the same units; where it found matches, it worked out the holding period for the subsales and the profit or loss. The latter was calculated as the difference between sale and purchase prices, without taking into account agent fees, stamp duties and other expenses.

For instance, of the total 584 caveats for subsales of private condos or apartments in Q1 2011, Savills found previous caveat records for 506 units, of which 493 (or 97.4 per cent) made gains and 13 made losses.

The projects with the most subsale caveat matches in Q1 2011 were Livia in Pasir Ris and Double Bay Residences in Simei - with 24 and 22 deals respectively, all profitable.

Savills said subsale interest in these two projects was probably fuelled by recent launches in the respective locations such as NV Residences and My Manhattan, given that the average price in the subsale market is relatively lower than that for new launches.

As for 2010, the projects with most subsale matches were The Parc Condominium in West Coast (150 units), One Amber (132), Caspian in the Jurong Lake area (93), Marina Bay Residences (75) andSky@Eleven (63).

Some of these projects were completed last year, and it is often around this time that a flurry of subsale activity occurs as projects then have added appeal to buyers seeking properties that they can move into or rent out soon.

But Savills noted that even projects which are slated for completion around 2013 such as Caspian and Kovan Residences were active in the subsale market last year.

'Matched results showed that most units in these mass-market projects made gains through subsales, riding on the strong price growth in the mass-market segment,' Savills observed.

Source: Business Times © Singapore 

Kellock Lodge up for collective sale at S$84 million

Kellock Lodge on River Valley Road is up for a collective sale, with an asking price of more than S$84 million or S$1,383 psf ppr, says its sole marketing agent CKS Property Consultants. The redevelopment site has a land area of 21,784 sq ft and it will yield a maximum gross floor area of 60,995 sq ft. This is based on a plot ratio of 2.8 for the redevelopment of the site, with a development charge of S$380,000. Residents of the 48 units at Kellock Lodge will receive about S$1.5 million to S$2.76 million each. This is the first time Kellock Lodge is going up for a collective sale. The 48 units have sizes ranging from 882 sq ft to 1,786 sq ft. Based on the plot ratio of 2.8, the site can yield about 100 apartments at about 600 sq ft each or 60 apartments at 1,000 sq ft each. It is within walking distance from Great World City, Zion Riverside Food Centre, and other eateries and amenities, said CKS Property Consultants. It is located in District 10, within minutes' drive from the Orchard Road shopping belt and the CBD. Mr Derrick Tan, head of investment sales at CKS Property Consultants, said Kellock Lodge's medium-sized freehold land plot is in demand, particularly since it is in a city fringe area like River Valley. The tender will close on July 8 at 3pm.

-TODAYonline, Business

Not all estates can have BTO projects, says Khaw

National Development Minister Khaw Boon Wan said on his blog that while he has ordered the Housing and Development Board (HDB) to launch more new flats in mature estates next year, it will not be possible to accommodate build-to-order (BTO) projects in every mature estate.

Mr. Khaw noted that Tanjong Pagar is “fully built-up,” while others, such as Tampines and Kallang / Whampoa, still have room for new flats.

The minister also said that not many mature estates will witness the launch of BTO projects — “certainly not in the short term” — because most are largely built-up and there is inadequate supply of land for public housing.

“Tanjong Pagar is fully built up and a BTO there is unlikely. I hope the young couple would seriously consider other options, especially those in the non-mature estates,” wrote Mr. Khaw.

“HDB is still studying the details, but preliminarily, they told me that a couple of mature estates such as Kallang / Whampoa and Tampines could benefit from BTO launches next year.”

Asia Pacific property transaction volumes up

Asia Pacific property transaction volumes have been climbing since early 2009, although volumes slipped 23 percent quarter-on-quarter to US$21.4 billion in the first quarter this year, according to a report released by the Asia Pacific Real Estate Association (APREA) and Real Capital Analytics (RCA).

“All major markets in Asia experienced this fall in transaction volumes in the last quarter, with the exception of Japan where the volume actually increased by 122 percent. The majority of the transactions are coming from Japan, China, Hong Kong and Singapore,” said Peter Mitchell, CEO of APREA.

“However, the overall clear trend over the last two years is the substantial increase in transaction volumes in Asia and the increasing activity amongst domestic players and the correspondingly diminishing level of cross-border activity.”

Global transaction volumes declined by 31 percent in the first quarter. However, the total transaction volume was the second highest since Q3 2008. Asia Pacific comprised 22.4 percent of the total global transaction volumes, an increase from 15 percent in Q4 2010.

All regional sectors saw a drop in transaction volumes, except for residential apartment sales, which experienced an increase of 10 percent.

The report said that the movements in Asia Pacific ceiling rates were mixed over the quarter with office, retail and apartment ceiling rates indicating signs of moderation. Industrial and mainly hotel ceiling rates revealed signs of tightening.

The first quarter of this year also saw a marked decline in cross-border acquisition transactions, both intra-Asia Pacific and from outside the region.

Cross-border transaction activity has reduced significantly since Q3 2008 and the previous quarter’s level was the lowest since RCA started recording Asia Pacific transaction data over the past four years. Domestic players continue to lead, as buyers (91 percent) and sellers (73 percent).

The report also noted several major transactions that took place early this year, including Capital Square in Singapore, The Centre in Shanghai, The Fifth Square in Beijing and Otemachi PAL in Japan.