CNA: Rental rates in the private property market are poised to rise with the expected influx of some 80,000 foreign workers this year. Analysts said this is because of the shortage of private housing. And the supply situation may not improve this year as only 5,000 private housing units are expected for completion by year's end.
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By KALPANA RASHIWALA
An analysis of developers' monthly sales information released yesterday by the government showed that 80.4 per cent of the 1,248 private homes sold in August were priced above $1,000 per square foot (psf).
This is the second month running that the share of this price band has surpassed 80 per cent. In July, 84.7 per cent of the 1,549 homes sold by developers were above $1,000 psf, according to an analysis by Colliers International. Market watchers suggest this pattern is being caused by the popularity of small-format apartments as well as more transactions in the high-end segment.
Information released by the Urban Redevelopment Authority (URA) yesterday showed that developers sold a higher-than-expected 1,248 private homes (excluding executive condos) in August as buyers brushed aside taboos about the Hungry Ghosts Month in the face of strong market sentiment at the time.
The figure, however, was 19.4 per cent below the previous month's and takes developers' sales in the first eight months of this year to 11,190 units, following last year's strong sales of 14,688 units.
Most analysts expect sales to slow for the September-to-December period, on the back of the property market-cooling measures announced on Aug 30. However, with the strong sales already chalked up between January and August, the full-year tally could still come in at around 14,000 units, they say.
Colliers director for research and advisory Tay Huey Ying pointed to signs of confidence returning to the higher-end market, with the number of new units sold above $1,500 psf increasing 81 per cent month on month from 175 units in July to 317 in August.
The most expensive transaction last month was $3,434 psf for a unit at the Orchard View development at Angullia Park, followed by $3,159 psf at The Laurels on Cairnhill Road, and $3,133 psf at Tomlinson Heights, being developed by Hotel Properties Ltd on the former Beverly Mai site.
CBRE Research noted that a whole suite of projects with shoebox units was launched in August - including Centra Suites (62 units sold), Suites @ Topaz (41 units), Dorsett Residences (35 sales), Studios @ Tembeling (22 units) and Opal Suites (19 units), all with a median price of between $1,200 psf and $1,750 psf. In addition, the top two selling projects for August - The Greenwich in the Seletar Hills area (207 units sold at a median price of $1,095 psf) and Viva Vista on South Buona Road (139 units at a $1,509 psf median price) - have a substantial number of smallish units and set benchmark prices for their respective locations.
URA's statistics also revealed that 35 units in Dorsett Residences above Outram MRT Station were transacted in August at a median price of $1,749 psf - contrary to the project's marketing agent Knight Frank's earlier news release that all 68 apartments in the project were sold out at its preview on Sept 1. The firm yesterday clarified that it brokered the sale of 34 units for which options were issued on Aug 31, inclusive of 30 units sold to a Singapore-registered company. The balance of units in the project were sold on Sept 1.
Property consultants expect developer sales to be clipped in September following the cooling measures. PropNex predicts 700 to 850 units could be sold this month, followed by perhaps 500 to 800 units per month for the fourth quarter. Colliers is predicting average monthly sales of about 800 units per month for the last four months of this year. Most consultants reckon full-year sales are likely to be of the order of about 14,000 units.
The jury is still out on the extent of impact of the latest cooling measures on prices. Says DTZ SE Asia head of research Chua Chor Hoon: 'Whether developers are unsure, pessimistic or optimistic about the impact of the measures, if they choose to proceed with launches, they're unlikely to push for new benchmark pricing levels. They will either price the same as before or slightly lower to entice buyers.'
The Core Central Region accounted for only 12.4 per cent or 155 units of the 1,248 units sold in August with the Rest of Central Region and Outside Central Region each having roughly equal split at 546 and 547 units respectively.
Developers launched a total of 1,326 units in August, a tad lower than the 1,336 units for July. Market watchers note that the ratio of units sold to units launched eased from 1.16 in July to 0.94 in August.
SINGAPORE - The Singapore housing market was well and alive during the Hungry Ghost Month as demand for new private homes continued to be strong in the month of August, with sales staying above the 1,000 level.
Latest figures from the Urban Redevelopment Authority revealed 1,248 units were sold last month, a 19-per-cent dip from the 1,549 sold in July.
In total, 1,326 units were launched in August with buyers snapping up 94 per cent of the new units launched.
Traditionally, demand for homes are more sluggish during the Hungry Ghost Month. The Government's package of anti-speculation measures, however, had come on the second-last day of August, meaning market watchers would have to wait another month before confirming its impact on market sentiment.
The strong sale was well beyond analyst expectations of 500 to 800 units and brought the number of new homes sold in the first eight months of this year to 11,381 units.
"There is a lot of liquidity out there and a lack of financial investment alternatives with the low interest rates," said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.
She added many still see property as a safe haven, citing its potential for capital appreciation and rental yield of 3 to 3.5 per cent - higher than savings and housing loan rates.
The hottest development last month was The Greenwich at Yio Chu Kang and Seletar Road, which sold 207 units for a median price of $1,095 per square foot (psf). The units ranged from 616 square feet (sq ft) to 738 sq ft.
Viva Vista at South Buona Vista Road came in second as it sold 139 units of between 334 sq ft and 485 sq ft. at the median price of $1,509 psf.
"Their attraction lies in the affordable price quantum as well as proximity to major transport nodes," said Mr Li Hiaw Ho, executive director, CBRE Research.
Property consultancy Jones Lang LaSalle said the Core Central Region remained the quietest despite the 406 units launched by developers to stir up the market. Only 155 units from Core Central Region were sold there. This is much lower than the 1,093 units sold in both the Rest of Central Region and Outside Central Region.
Market experts said the latest URA figures showed escalating prices, where 88.2 per cent of units sold had a median per square foot price of over $1,000.
However, looking ahead, observers expect the recent cooling measures by the government to impact buying sentiments. Jones Lang LaSalle estimates September private home sales to contract 30 to 35 per cent on-month as the policy takes effect.
"Although the full quarter numbers have not been released, we estimate resale volume (for all residential properties excluding executive condominium) in the third quarter could decline by 20 to 25 per cent quarter-on-quarter or 25 to 35 per cent year-on-year," said Dr Chua Yang Liang, Head of Research South-east Asia at Jones Lang LaSalle.
Bulk deals involving high-end apartments are gathering pace again. Some property funds which invested in Singapore's upmarket residential sector are taking advantage of a price recovery in this segment to exit their investments.
In the Draycott Park area, a German core fund managed by Morgan Stanley is understood to have recently sold 23 apartments it owned in the Draycott Eight condo for slightly over $157 million or about $2,300 per square foot (psf) of strata area.
The buyer is understood to be a fund managed by Alpha Investment Partners, which is part of Keppel Land group.
The German fund incurred a small loss on its late-2007 purchase price of $2,600 psf. Market watchers say the $2,300 psf sale reflects a discount of perhaps 10-15 per cent to what the units could have fetched if they had been sold on an individual basis. But the divestment reflects the fund's ongoing plan to monetise assets globally.
Savills Singapore is understood to have brokered the deal, but it declined to comment.
The 23 apartments transacted, most of which are currently leased, are in the same block. Another Morgan Stanley-managed German core fund owns the remaining 23 units in the block, which were purchased at the same time in 2007 at the same $2,600 psf price. For now, the plan is to hold these units, BT understands.
Draycott Eight comprises three 24-storey blocks with a total 136 units. The project, developed by Wing Tai, was completed in 2005 and its site has a balance lease term of about 86 years.
In the Balmoral Road area, Real Estate Capital Asia Partners (Recap), a Singapore-based investment fund, is said to have recently sold 20 apartments at the Sui Generis freehold condo for around $95 million or $1,935 psf. The buyer is understood to be a Singaporean investor.
Recap earlier sold one unit, a 2,594-sq-ft ground floor unit, in June for $4.9 million or $1,889 psf.
The sales represent a nice profit for Recap, which bought 21 units in the project for about $1,260 psf or $65 million in August last year from the project's developers, United Engineers and Kajima. Sui Generis received temporary occupation permit (TOP) recently.
Recap is headed by Suchad Chiaranussati, who is married to a niece of City Developments executive chairman Kwek Leng Beng.
Meanwhile, Hasetrale Holdings - the controlling shareholder of Napier Properties, developer of the 8 Napier project opposite the US Embassy - has acquired back the 19 freehold units that Napier Properties had sold to an MGPA fund three years ago. This was done in July through Napier Properties director Mark Wee and Hasetrale buying Botanic Investments, the company through which MGPA bought the 19 units in late 2007 at an average price of $3,550 psf.
Botanic had paid a 20 per cent deposit and was due to pay the rest of the purchase price when the project received TOP in June this year. Napier Properties still has some units to sell in the 46-unit project and rather than risk MGPA attempting a subsale below its purchase price, Hasetrale struck a deal to buy MGPA's stake in the 19 units via Botanic Investments, BT understands.
In another bulk purchase, Arch Capital, linked to the Ayala Group of the Philippines, recently bought all 34 units in Royal Oak at Anderson - formerly known as Anderson Green - for about $200 million or an average price of $2,337 psf.
Some investors who bought apartments in bulk are seeking to sell the units individually to secure higher prices than if they were to divest en bloc.
The ARA Asia Dragon Fund, which purchased 53 units at the Grange Infinite condo in early 2008, has begun to sell the units at an average price of about $3,200 psf, on individual unit basis. The fund's average purchase price was earlier reported to be in the $2,600-$2,700 psf range.
Above Outram MRT Station, a local investor entity is said to have picked up 30 units earlier this month at Dorsett Residences at an average price of slightly above $1,700 psf during the project's launch. The units have since been advertised for sale. Most of the units have apparently already been flipped and asking prices for the remaining units are said to be slightly over $2,000 psf.
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| The show suite for the former Farrer Court at Leedon Heights Road off Farrer Road |
