BT: Stage set for up market property launches

BT: Stage set for up market property launches
By UMA SHANKARI

Developers here plan to launch another 34 residential developments with more than 8,800 units by June 2011, data compiled by Knight Frank shows.

Most of the new projects rolled out will be mid-tier and high-end developments. Knight Frank's list shows that 21 out of the 34 possible launches are located in the up market districts of 1, 2, 4, 9, 10 and 11.

Developers BT spoke to trust that the latest round of government measures to dampen demand for private homes and HDB flats announced on Aug 30 will impact mostly mass market home buyers.

They are hopeful that new launches, which are mostly for homes in the mid-tier, high-end and luxury segments, will see healthy take-ups.

'I believe that the hardest hit projects will be the mass market ones,' said EL Development managing director Lim Yew Soon. 'For the mid to high-end projects, the impact will be somewhat lesser.'

The large number of upcoming mid-tier and high-end developments is not a reaction to the latest round of property measures, developers and analysts said. Rather, having pushed out numerous projects targeted at upgraders, many property groups are left with pending mid-tier and high-end project launches. 

CB Richard Ellis executive director Joseph Tan said that many developers who bought mass market sites launched them within nine-12 months, with some even pushing out their projects in six-seven months to ride on the exuberant upgrader market.

'The fourth quarter will see more of the mid to high-end launches,' Mr Tan said.

Added one developer: 'Most developers rushed to launch mass market projects last year when that segment of the market was very hot, so there are mostly mid-tier and high-end projects that are waiting to be launched now anyway.'

But, many developers did not want to commit to a firm launch date - even though in some cases, show flats are ready and brochures have been printed.

CapitaLand recently said that it will go ahead with the launch of its new 1,715-unit condominium on the former Farrer Court site in Farrer Road by the end of this year.

The chief executive of the group's Singapore residential arm, Wong Heang Fine, said that while the new government measures have created some 'flux' in the market, things should 'settle in a couple of months'.

The launch of the Farrer Road project will be closely watched as it is the largest single residential development likely to be offered to home buyers in the near future.

CapitaLand is likely to hedge its bets by rolling out the development in phases, similar to what City Developments and the Hong Leong Group did with their 642-unit NV Residences in Pasir Ris.

EL Development's Mr Lim also said that he intends to launch his 115-unit freehold project on the site of the former Diamond Tower in Jalan Rajah, in the Balestier area, in Q1 2011. But, despite the more bullish outlook for the mid-tier and high-end segments, several large suburban projects will be launched soon.

Esparina Residences, a 573-unit executive condominium (EC) project at Sengkang by Frasers Centrepoint and Lum Chang Building Contractors, will be launched next month.

Major private suburban launches in Q4 2010 include Hoi Hup Sunway Property's 473-unit Vacanza @ East at Lengkong Tujoh; Far East Organization's 214-unit The Lanai at Hillview Avenue; and Keppel Land's yet-unnamed residential development at Lakeside Drive, which will have more than 600 units.

On Aug 30, the government said that it will now disallow concurrent ownership of HDB flats and private residential properties within the specified minimum occupation period.

Other measures were aimed at potential buyers of second homes. Those with an existing mortgage can now borrow only up to 70 per cent of a property's value for a second home, down from 80 per cent previously. They must also pay 10 per cent in cash, up from 5 per cent.

Developers and analysts said then that the measures will hit prices and sales of private homes, but mostly in the mass market segment.

TODAY: August NODX up 31%

August NODX up 31%
by Ephraim Seow Siew Lee | Sep 18

SINGAPORE - Singapore's non-oil domestic exports (NODX) surged last month by the most in nearly five years, driven by shipments of pharmaceuticals and electronics.

International Enterprise (IE) Singapore, said NODX grew 31.2 per cent last month compared to August last year, up from the revised 18.3 per cent increase in July. The stellar performance was the best since Dec 2005. On a month-on-month seasonally adjusted basis, August NODX rose 10 per cent, reversing the negative trend of the past three months. In July, NODX fell 3.9 per cent from the previous month.

To read the complete article, please visit http://www.todayonline.com

TODAY: Property expert says prices may collapse by up to 50 per cent in the next year or two

30, 40, 50% drop?! That sounds a little preposterous and plucked from the sky...but who am I to argue with an expert.
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Property expert says prices may collapse by up to 50 per cent in the next year or two

by Ephraim Seow Siew Lee | Sep 17

The dizzying rise in property prices here is not sustainable and the market may be heading for a hard landing in one to two years' time.

When that happens, property values may fall by as much as 50 per cent, according to an expert at a real estate forum yesterday.

Property experts speaking at the National University of Singapore's Institute of Real Estate Studies Forum said that excess liquidity in the market is the main factor that has been driving up property prices recently.

This liquidity may originate from prudent savings during the financial crisis, gains from the stock market run-up last year and foreign funds flowing here in search of better returns in Asian and emerging markets.

Mr Beat Lenherr, global chief strategist of LGT Capital Management, said: "I think that the money is finding a way around specific pointed measures and the money is just going to all the segments, micro-markets or micro-sectors."

Mr Lenherr also reckoned that the recent rally is not well supported and has been too fast, paving for a harder fall.

"If you look at the developments over the last four years, you clearly see elements of exaggerations where it doesn't make sense to buy in terms of rental yields or expected capital gains," Mr Lenherr added.

As such, he said property prices may "collapse by 30, 40 or 50 per cent" in the next one to two years.

Other speakers at the forum also said that the Singapore Government is still holding back on several other drastic measures such as the capital gains tax, which could dampen the property market abruptly if introduced.

They said the Government has so far been successful in building good neighbourhoods and community in its housing policies beyond controlling prices.

"I think the local market has been kept quite steady. I think the Government can indeed take pride in being able to making available affordable housing to more than 70 or 85 per cent of the masses," said Professor Bernard Yeung, Dean of NUS Business School.

TODAY: Improved economy, one of the factors for property prices?

So, we can expect higher psf, smaller units and smaller quantum going forward...

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Improved economy, one of the factors for property prices?

by Rachel Adrienne Kelly | Sep 17

SINGAPORE - The recent property-cooling measures are not likely to have a significant long-term impact on the overall real estate market in Singapore, with global economic issues playing a larger role, property experts speaking at an industry seminar said yesterday.

"Generally, the property price is affected by external factors or the growth of the Singapore property prices is because of the improved economy. People's incomes increase, people's wealth increase, that's why they are buying," said Mr Alfred Chia, chief executive of SingCapital, at a forum organized by Propertyguru.com.

However, the Aug 30 property cooling measures are expected to reduce the cash-over-valuation (COV) of HDB resale flats and they will put a damper on demand for the rest of the year.

Market-watchers at the event expect COVs to decline by 10-per-cent this year from current levels, with a further 10 per cent drop next year.

Meanwhile, smaller properties are expected to be at a relative advantage.

"For people with a housing loan and on a tighter budget, they will have to lower their budget to buy another property," said Ms Chua Chor Hoon, head of Research, South East Asia at DTZ.

"That means if originally they were looking at a $1 million house, now they will have to look at something between $500,000 and $750,000 so you will see a shift in demand to smaller units," she added.

While the market adjusts to the new measures, the volume of mass market property sold is expected to decline by 10 per cent from now until the end of the year, according to some analysts' estimates.

No impact is expected in the high-end property market.

SIBOR drops to record 0.51%

This means cheap mortgage for home buyers, greater return for landlords, but dismal returns for cash holders.

My view is that it is as good as it gets...the rates can't really go much lower from here. The important question is how long this will last? Every Asian governments knows that we have a liquidity bubble going on here which is fueling asset price (specifically real estate, since other assets seem to be under performing).

Measures to dampen the property market have so far only a muted effect on prices but this could be the soft landing we are all hoping for.

CNA: Rental rates set to rise with 80,000 foreigners

Totally agree, rental units are being snapped up very quickly and at close to asking rent.
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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.

Read more at http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1081453/1/.html

BT: 80.4% of Aug developer sales still over $1,000 psf

BT: 80.4% of Aug developer sales still over $1,000 psf

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.