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.
Monday, November 28, 2011
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.
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