Analysis: Sale of Balance Flats Oct 2009

We are reaching the deadline of 15 Oct. Will be interesting to see the responses so far. Let's look at how much these flats are oversubscribed, which is an indicator of the pent-up demand and how the lack of COV plays a part.

Taking the top spot is the 5-room flats at Bukit Panjang with a whooping 8533% oversubscribed with only 3 units available! Next is Choa Chu Kang.. Surprisingly, the top few spots are estates in the far-flung locations. The most oversubscribed estate nearest to Central is Toa Payoh with 69 applications for 3 units of 5-room and these units have a quantum of >$500k (a seemingly resistance quantum).

Scanning from the bottom, it's also notable that Kallang and Bukit Merah are languishing there. Aren't these the estates with high COVs in the resale market yet they are merely 200-400% oversubscribed. Perhaps these are locations worth an application.

That said, perhaps these applicants are the genuine owners who typically prefer to stay near parents and resistant to high quantum.

Caribbean at Keppel Bay: Analysis of Qtr3

In June, I was seriously considering Caribbean at $1000-$1100psf. In case, you didn't the analysis, read it now!. Fast forward 3 mere months, let's look at its price movements.

1. You can see the slow and steady psf increases. Average went from $1191psf -> $1287psf ->$1341psf. That is a 12.5% increase in 3 months. If you had bought a 3 bedder of 1313sqft at say $1200psf and sold it for $1320psf in Sept, that would have given you a profit of $157,560. That equals to 50% return if you had placed a 20% deposit of $315,120 in 3 months.
2. So is there any good buy during these crazy months? Yes, I think so if you look very very very hard and act equally fast! In Sept, there are caveats for $1150psf for 1119sqft.
3. In terms of volume, it is obvious Aug is the busiest. We should see more caveats in Sept but unlikely to top Aug sales. So is prices reaching a resistance?
4. Keppel has also decided to cash in and sell few units they had used as service apartments. Some units have tenancy and furniture. If you are a bull, you would think "what the heck? Just buy one. Quick!:" If you are a bear, you would think "Wait a minute, even developers are cashing out. Why they selling now after holding it through the 2007 peak? Something is wrong. Don't buy now!". If you are in the middle, you would still be thinking and thinking....

No takers for en-bloc tenders yet

As what I had highlighted in the July post and wondered in FB, this article confirmed there is a lack of real "biters" at the unrealistic prices, albeit the Meyer Road one is with a "bite-sized" price tag.

Most developers unlikely to meet owners’ high asking prices, say experts

There is a bit of action in the en-bloc sale market as individual owners scramble to get a foot into the fast-rising private home market, which has left many developers hungry for land.

The strong response shown by developers at recent tender exercises is a clear motivating factor.

But for those who are banking on an en-bloc jackpot, it is best not to count on a sure-win yet.

Unless property prices pick up quickly, a speedy success may elude these owners for now. This is because most developers are unlikely to rush for the available collective sale sites at the prices the owners want, said experts.

So far this year, five residential sites have been put up for sale en bloc, and more are expected in the next few months.

A few tenders have closed, but no sale has been concluded.

‘The en-bloc sale market won’t move very fast because owners are asking high prices,’ said property consultant Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.

Collective sale prices tend to be on the high side as owners look to a premium above the value of their individual units. But those days of large profits made in quick sales have yet to return.

This year, the small stream of collective sale sites started with the launch in July of the freehold Dragon Mansion in Spottiswoode Park, near Outram and Tanjong Pagar.

The asking price was $120 million, or $1,020 per sq ft (psf) per plot ratio, a level significantly above the transacted collective sale prices in the area during the previous boom.

The tender closed on Aug 11 with no firm bids. Talks are still ongoing, said its marketing agent, CKS Property Consultants.

Then came Laguna Park, a 528-unit former HUDC estate in Marine Parade. Owners there are asking for $1.2 billion, or $844 psf per plot ratio, the same price that was decided back in late 2007 when prices were still strong. This tender closes on Oct 13.

At the freehold Changi Garden Condominium at Jalan Mariam, owners have a reserve price of $98 million, or about $361 psf per plot ratio. The tender closed on Sept 10 with no firm offers, although there were expressions of interest below the reserve price.

Time is not on the owners’ side though: Their collective sale agreement will soon lapse as it was completed nearly a year ago.

There is also the freehold Marine Point, near the bustling Parkway Parade mall in Marine Parade. Owners of the 32 units there are asking for $120 million, or around $1,116 psf per plot ratio. The tender closed on Sept 7 with no firm offers, but four expressions of interest.

And last week, The Meyer Place off Meyer Road was put up for sale at an asking price of $1,150 psf per plot ratio.

At that price, the redeveloped freehold project will have to sell for $1,700 to $1,800 psf, said experts.

‘Many owners who want to sell collectively are still holding on to the peak prices set in 2007 and early 2008,’ said Colliers International executive director (investment sales) Ho Eng Joo.

The problem is that the reserve prices for the sites on offer were mostly locked in some time back when prices were still high, said experts.

The signature-gathering process for The Meyer Place had started early last year, for instance. It waited about six months for the market to recover before coming to market.

Also, owners are expecting high prices because they are afraid they cannot get a similar replacement unit, said experts.

‘Their chances of success now, besides other factors, depend on which segment of the residential market has the most favourable outlook,’ said Credo Real Estate managing director Karamjit Singh. ‘The current flavour is mass market.’

While the land-scarce situation may just produce a developer hungry enough to match owners’ asking price, interest in collective sale sites will generally not be very strong at the moment, said Mr Ho.

This will be so until the market continues to move up or returns to previous peak levels, he added.

Right now, small- and medium-sized developers do not landbank for long and are thus less inclined to go to the collective sale market unless there is already 100 per cent approval so they can launch their projects quickly, said DTZ senior director Shaun Poh.

Also, the Government has said it will bring back the confirmed list, whose sites are pushed out for sale regardless of developers’ interest.

It may also replenish the reserve list, another sale method whereby sites are put up for sale only after a developer agrees to bid at a minimum price acceptable to the Government.

‘If the Government comes out with a large number of sites, this will distract developers from the en-bloc market,’ said Mr Mak.

All this does not even take into account the first hurdle owners have – getting sufficient approval to sell collectively under stricter rules in place since late 2007.

Source : Sunday Times – 27 Sep 2009

Silversea pulling prices up in Amber Road.

This is a classic example of higher-priced new launches impacting its neighbouring projects in a positive way. This is exactly according to my analysis for the Balmoral Road area. Have you read it yet?

However, I am not very bullish in Amber Road area for investment. Why? Almost all en-blocs have been launched and as the article pointed out, this area will have 2500 new units excluding existing. Over supply could be an issue. As you might have observed, traffic in Amber roundabout and Parkway Parade is quite horrendous. So what we are seeing now is likely the stabilising phase. What other initiaitives are coming to this area? Maybe maybe the Kallang Riverside initiative and Sports Hub may pull the prices up.

One of Singapore’s leading property developers, Far East Organization, announced the launch of Silversea, its 383-unit mid-upper range condominium on Amber Road (on the former Amberville HUDC apartment site) at prices starting from $1,300 psf, with sea-facing units at $1,600 psf. The launch of Silversea is likely to bring the spotlight back on the Amber Road and Marine Parade neighbourhood, and stir renewed interest and activity among potential home owners and investors. The neighbourhood has undergone tremendous renewal in recent years through a series of en bloc acquisitions by developers.

Three new massive freehold condominiums with a total of 1,500 units have already sprung up in the area — The Sea View, with 546-units, is developed by Wheelock Properties and completed early last year; the 400- unit The Esta, developed by MCL Land, obtained Temporary Occupation Permit (TOP) late last year; and up next is the 562-unit One Amber at Amber Gardens, which is expected to achieve TOP in 1Q2010. One Amber is jointly developed by UIC, UOL Group and Singapore Land.

If the units at Silversea, as well as the neighbouring 612-unit Cote d’Azur, a 99- year leasehold condominium (completed in 2005), were to be included, the stretch of Marine Parade and Amber Road/Amber Gardens alone has a total of 2,500 new condominium units.

The figure doesn’t even include the smallish new condominium projects by niche developers, like Voda Land’s 114-unit Amber Residences , where the first phase of over 70 units was sold at an average price of $1,650 psf at a private preview in December 2007. As at May, over 92 units had been sold. The most recent transaction was for a 1,163 sq ft apartment on the ninth floor that changed hands in a sub-sale at $1.36 million or $1,170 psf last month. The other boutique development is Ho Bee Group’s 42-unit Vertis, which is fully sold and will be completed this year.

Based on caveats lodged in the week of June 12 to 19, prices achieved in the secondary market for units at One Amber appear to be back to levels seen last year. Of all the new developments in the Amber Road neighbourhood, One Amber was the most active last month, with half a dozen units changing hands in the sub-sale market at prices ranging from $850 to $1,038 psf.

For instance, an apartment on the 13th floor of one of the four 23-storey tower blocks has changed hands twice. The 958 sq ft apartment was sold in a sub-sale at $1,038 psf in June. Before that, the property changed hands for $958,000 or $1,000 psf in July last year. The original owner purchased the property for $760,000 or $793 psf when it was launched in 2006.

Meanwhile, an 11th floor apartment with a floor area of 1,313 sq ft in the same block was sold for $1.25 million or $950 psf. The last time the unit changed hands in a sub-sale was in May 2007, when it was sold for $1.18 million or $899 psf.

Next door to One Amber is The Esta, where the most recent transaction was for a 3,477 sq ft unit on the 21st floor — it was sold in a sub-sale for $960 psf or $3.34 million, according to a caveat with a contract date of June 15. The previous owner bought the unit for $638 psf or $2.22 million in 2006.

Across the street from The Sea View, and next door to Silversea is Cote D’Azur. A 1,152 sq ft unit on the 17th floor in the latter changed hands in the resale market for $1.07 million or $930 psf, according to the latest caveat lodged with a contract dated June 12. The unit last changed hands in the resale market in June 2007 at $901 psf or $1.04 million.

Source : The Edge – 13 Jul 2009

What can I buy with $1m?

I think many potential owner-occupiers are in a fix. Facing some fear of job insecurity, stagnant salary, rising asking prices unmatched by bank valuations, this group who want to buy a unit closer to city is not having too much luck. Should they wait and wait? Some waited since 2007 and still waiting...

Analysing the caveats <= $1million lodged from April to June 2009 for private apt/ condo in district 1, 9, 10, 11 and 15, there are 620 transactions. Out of these caveats:

• the lowest PSF is $253 for an unknown project at East Coast Road. The size was 2329sqft and was sold for $590,000.
• the highest PSF is $1724psf for ILLUMINAIRE ON DEVONSHIRE at Devonshire Road. It was for a tiny 463sqft unit and was sold for $798,000. This is a newly launched project. The highest PSF for a TOPed project is at Nomu on Handy Road. The size was 601sqft and was sold for $980,000.

But I am looking for a place to stay now, you may say. Let's use 850-1100sqft which are typically the size of a 2 or 3 bedder as a baseline and see what these projects are. The data is now reduced to just 142 caveats.

• the lowest PSF is $559 for an unknown project at Joo Chiat Lane. The size was 1001sqft and was sold for $560,000.
• the highest PSF is $1100 for Valley Park at RIVER VALLEY ROAD. The size was 861sqft and was sold for $947,000.
• the most popular project is VERSILIA ON HAIG. Also there is no project in D01. You will also notice that these caveats are very distributed across most projects, thus re-emphasising the reality that it is very difficult for buyers in this category to find the project they prefer.
• So where WERE (not ARE) the gems as the asking prices are very likely to have risen now? I like One Amber (FH, D15), Tanglin Regency (99, D10), AMARYLLIS VILLE (99, D11), MEYER RESIDENCE (99, D15 and just TOP) and Spring Grove (99, D09).
  

The invest guide to the current property run

This was published in the recent Sunday Times. One should read section 5 with caution as these statistics are aggregated and is not a true reflection of the price movements in projects. Some projects moved a lot (10% a month since Mar which might be a liklier sign of speculation), some sideways, some have barely any unit for sale (which is a good sign that the landlords are stayers or long-term investors who can hold and waiting for better prices).

Recession? What recession? The residential property market is on a roll with owner-occupiers, speculators and investors rushing in to buy during what they see as the bottom of the market. Demand has shot through the roof and prices are rising. But is it a boom or just a blip? Property Correspondent Joyce Teo considers key aspects of this most unlikely boom to see if there is an answer to the puzzle.

1 Suburban boom

Unlike the 2007 boom, which was in high-end and prime homes, this buying rush began with the pick-up in demand for mass-market homes.

HDB upgraders are leading the way. They may have missed out on the previous bull run and now want in.

It all started with the Caspian, a large 99-year leasehold project in Jurong West that attracted hordes of visitors. The ‘Caspian effect’, as one industry source calls it.

The 712-unit project sold 300 units at between $340,000 and $990,000 – an average of $580 per sq ft (psf) – over three days in early February.

New mass-market projects such as Double Bay Residences in Simei and Mi Casa in Choa Chu Kang followed.

Developers also re-launched older projects at lower prices, such as The Quartz in Buangkok.

Jones Lang LaSalle’s head of South-east Asia research Chua Yang Liang said people are significantly better off than in 2000 and since mass-market property prices have moved down from the peak, the units remain very attractive.

After the flurry of mass-market launches in the first quarter, buying spilled over into the mid-tier and upper end segments, said property consultants DTZ.

New private home sales are estimated at up to 6,900 units in the first half of the year, surpassing the 4,268 sold in the whole of last year, it said.

But with HDB upgrader demand still going strong, developers continue to target this group.

New releases of mass-market projects include Oasis @ Elias in Pasir Ris and The Gale in Flora Road, where units were offered for preview sale at $600 to $700 psf on Friday.

2 Interest absorption

Just how buyers pay for their new homes has changed since the last big buying rush.

The era of the deferred payment scheme may be over, but not the concept.

The interest absorption scheme (IAS) offers a similar arresting proposition – pay 20 per cent of the property upfront and become an owner.

The rest of the payments will be deferred until the project’s temporary occupation permit period.

Unlike the deferred payment scheme, IAS requires you to take up a bank loan at the time of purchase but the developer absorbs the interest payments until the project has been finished.

Dr Chua said stable HDB prices and the availability of credit in the form of IAS have helped spur demand.

IAS became very popular earlier this year and helped drive sales at mass- to mid-market developments, particularly if the scheme was offered at no additional cost.

Some have argued that the popularity of the IAS shows that this boom has plenty of staying power as buyers using the scheme would have met the banks’ credit assessment criteria.

But some cash-rich buyers may opt out of the scheme if it is offered at an additional cost of 2 per cent to 5 per cent above the property price, experts said.

Experts warn euphoria may not last long

At The Wharf Residence, IAS take-up was very low as the scheme was offered at a 5 per cent premium.

Although the deferred payment scheme is now defunct, developers who obtained approval before it was halted in late 2007 can still offer it.

The 152-unit One Devonshire in Devonshire Road is one such project. It offered IAS at a 2 per cent price premium and deferred payment at a 3 per cent premium.

While some did go for either of the two schemes, many opted for the normal progress payment, even though they had to pay for 30 per cent of the project upfront as construction has started.

3 Small is beautiful

When demand nearly evaporated last year, some developers went back to the drawing board to reconfigure projects to offer smaller, more affordable units.

The freehold 293-unit Alexis @ Alexandra, near Queenstown MRT station, was an instant hit, selling out after its February launch.

Most of the flats were small – it has 114 one-bedroom units of just 366 sq ft to 527 sq ft and costing around $450,000 each – and 77 one-plus-one bedroom units at around $550,000 each.

Alexis was ample proof that size matters little as affordability is key. Small is beautiful, in other words.

Launches of more projects with small units followed.

Once termed ‘Mickey Mouse’ units as they seemed rather unreal, tiny apartments of 400 sq ft to 500 sq ft have become common enough to be simply referred to as the typical studio units or one-bedders.

Because they are unlikely to appeal to owner-occupiers with families, buyers tend to be speculators or investors looking to flip or rent them out to singles or couples.

4 VIP previews

The VIP preview is clearly for very important persons but at some developments these days, you become truly important the minute you show keen interest. Entry to a special preview is instant when you call to register interest.

The advantage of attending a condo preview is getting the first bite of the cherry.

You are among the first to buy and can take your pick and often, preview prices are lower than launch ones.

That said, different developers have different strategies. Some may launch just the low floors or the less appealing units at attractive levels during the preview.

‘Soft launches are one of the ways to test the market. If the market is good, they will probably push up the prices at the official launch,’ said Credo Real Estate executive director Tan Hong Boon.

Projects holding previews at the moment include the 34-unit Ferrell Residences in Bukit Timah Road. It is going for $1,550 psf to $2,000 psf, or from $3 million.

5 Where are prices now?

Early estimates of the official property index show that the fall in private home prices has slowed. But experts said caveats lodged indicate that prices have actually risen recently on strong demand.

DTZ said price recovery has been happening across the board since May.

CB Richard Ellis analysed caveats lodged in the top five districts. It found that the median prices of new 99-year leasehold apartments rose to $655 psf in the second quarter, up 7 per cent from the first quarter.

In the resale and sub-sale market, prices climbed from $600 psf to $628 psf.

In the freehold and 999-year leasehold segment, median prices of new homes have dropped nearly 13 per cent to $951 psf.

But resale and sub-sale prices have climbed by 12.7 per cent in the same period to $850 psf.

The euphoria may continue for just a few more months, experts said.

‘People are getting ahead of themselves a little bit,’ said IP Global managing director and founder Tim Murphy, who is keen on Singapore over a five- to 10-year period.

‘There seems to be a lot of activity and we are not sure how much of that is underpinned by fundamentals.

‘Some of these properties have gone up 10 per cent to 15 per cent in the last quarter. We think it’s a little bit frothy for us.’

Jones Lang LaSalle’s Dr Chua said a pullback in the market is ‘not unimaginable’ should the larger economy not show any positive growth.

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Small sells

Once termed ‘Mickey Mouse’ units as they seemed rather unreal, tiny apartments of 400 sq ft to 500 sq ft have become common enough to be simply referred to as the typical studio units or one-bedders.

Things looking up?

Early estimates of the official property index shows that the fall in private home prices has slowed. But experts said caveats lodged indicate that prices have actually risen recently on strong demand.

Source : Sunday Times – 12 Jul 2009

1st en bloc sale: Greed or realistic?

I wonder any developer will be out of their mind? Otherwise, this upturn is likely to last longer than expected..

$120m target for first en bloc site this year

PROPERTY market observers are probably rubbing their eyes in disbelief but it is true: an en bloc sale is under way at asking prices akin to boom times.

It is the first tender in about nine months and reflects improved buyer sentiment although the sale launched yesterday will certainly test that sentiment, given the price levels it is shooting for.

The freehold Dragon Mansion at 18 Spottiswoode Park Road, near Outram and Tanjong Pagar, has an asking price of about $120 million or $1,020 per sq ft per plot ratio. This is significantly higher than the transacted enbloc sale prices in the area during the 2007 boom. If this price is achieved, the estate’s owners will get around $1.7 million for each of the 72 units.

The estate has a land area of 41,874 sq ft and can be redeveloped into about 120 apartments of 1,000 sq ft in size.

Dragon Mansion owners had wanted to sell collectively at the height of the boom in mid-2007 but their attempt was delayed when collective sale rules were tightened later that year. They had to restart the process at the beginning of last year but they also revised up their price.

In the Spottiswoode Park area, developer UOL bought the 92-unit Spottiswoode Apartment en bloc for $79.5 million or $732 per sq ft per plot ratio in April 2007 – a price that was above earlier indicative sale levels. It later bought Oakswood Heights for $132 million or $740 psf per plot ratio.

Property experts said the Dragon Mansion price target of some $1,020 per sq ft is more suitable to the boom times.

Mr Nicholas Mak said the market is not ready to support such prices as the buyer will have to sell the redeveloped units at more than $1,800 psf.

‘There is still a disparity between today’s land levels and the price in 2007 when most of the en bloc sales were priced,’ said Credo Real Estate managing director Karamjit Singh.

‘Owners will need to adjust their price expectations. The market is looking up but it’s still a question mark whether land prices will go back to boom time levels,’ he said.

Owners at Laguna Park in the east have high expectations as well and Credo Real Estate might launch the estate for collective sale next month.

The asking price is at $1.2 billion. The development obtained the 80 per cent approval from owners late last year but the price they are hoping for was decided back in late 2007.

Credo will launch other en bloc sites this year if the estates can obtain the 80 per cent approval soon, Mr Singh said.

En bloc deals shot through the roof in 2007 when 111 transactions worth a record $12.4 billion were sealed but sales fell through the floor last year with only seven sales worth $371 million done, according to CB Richard Ellis.

Ms Chia Mein Mein, manager for investment at CKS Property Consultants, said Dragon Mansion obtained the required 80 per cent approval to sell early this year but it waited for a good time.

‘It’s because of the run-up in property prices recently. Recent launches are doing very well. Some developers have sold off their existing stock and are looking to land bank at this point,’ she said.

‘We think there’s a window of opportunity now as we really don’t know how long this rally is going to last.’

Meanwhile, new unit sales remain robust. There has been a flurry of project releases and demand has been strong. The 272-unit Sophia Residence in the Mount Sophia enclave sold nearly 85 per cent of 88 units released at a weekend preview at $1,500 psf on average.

Singaporeans accounted for 60 per cent of the buyers, with the rest being permanent residents and foreigners.

These buyers included the previous owners of Sophia Court, who sold the site en bloc to developer GuocoLand.

Source : Straits Times – 15 Jul 2009

High-end segment is moving!

The signs are growing stronger that this recovery is perhaps the real one. Perhaps it's time to change the mindset and expectations that the property trend might continue, prices to stabilise and fire sales deals to be a thing of the past. If the super-rich now are biting at prices at 20-30% below the peak and the mass market launches from 600-1300psf have done exceptionally well since Jan, then how much further can the prices drop? The question probably should be how much can the prices increase? The IRs are 1 of the main factors to trigger the previous run together with the stock market. Now the stock market is very resilient despite a slight decline recently, the IRs are nearer, feel-good sentiments is almost everywhere, we might even see prices going back to the 2007 peak and beyond.

High-end residential transactions continue to stream in steadily, in both the primary and secondary markets. Two units were sold recently at Nassim Park Residences by its developer at above $3,000 per square foot (psf), one of them at $3,813 psf.

Buyers returning: Two units were sold recently at Nassim Park Residences at above $3,000 psf, one of them at $3,813 psf

In the sub-sale market, a caveat has surfaced for a 37th floor unit at The Orchard Residences at about $3,550 psf last month.

Caveats have also been lodged for transactions of three units at The Ardmore Park at $2,375-$2,513 psf, and for a sub-sale deal at Marina Bay Residences at $2,200 psf in June.

Also in the sub-sale market, a three-bedroom unit on the 13th floor of Tate Residences at Claymore Road has been sold for $2,400 psf or about $5.25 million.

The seller and buyer were both Indonesians, says Jerry Tan, managing director of JTResi, which brokered the sale. The option was exercised about 10 days back. Two months ago, JTResi had also handled the sale of a 17th-floor unit in the development, facing the same way, at a lower price of $2,150 psf.

The 36-storey freehold project is slated for completion in a few months. ‘Prices at Tate Residences have trended up from the lows of $1,850-1,950 psf seen in March-April. Those were some of the scariest months in the property market,’ Mr Tan adds.

In the primary market, at the freehold Nassim Park Residences near Botanic Gardens, an option was exercised last week for a second-storey unit at $3,813 psf or $13.25 million. The unit is in the premium block, on an elevated part of the project, with a pool view and with the back facing Nassim Hill.

The 3,477 sq ft unit has four bedrooms and a study. The buyer is Indonesian, said CB Richard Ellis (CBRE) executive director Joseph Tan, whose firm is the joint-marketing agent for Nassim Park Residences.

The project’s developer is also said to have issued last weekend an option for the sale of a fourth-level unit at $3,081 psf. The five-storey condo is being developed by UOL Group, Kheng Leong and Orix Corporation.

‘Of late, we have been seeing an increase in transactions in the market above $2,000 psf. However, what this covers may be the top 5 per cent of buyers, who remain selective and are project specific. We’re seeing an equal mix of foreigners and Singaporeans buying. Current prices – which are about 20-25 per cent off the 2007 peak levels – are pretty attractive,’ CBRE’s Mr Tan added.

CBRE also brokered the sale of a fifth floor unit at Ho Bee development The Orange Grove last week for $2,200 psf, or $4.7 million, to a Singaporean buyer. According to government data, five units in the project were sold by Ho Bee in May at between $2,255 psf and $2,380 psf. These levels are roughly 20 per cent lower than the $2,800 psf average price for the project early last year.

Orchard Turn Developments has sold 10 units at The Orchard Residences since May at $2,700 psf to $3,300 psf. The buyers comprise a mix of Singaporeans, permanent residents (PRs) and foreigners.

Despite a return of transactions in the higher-price segments, DTZ executive director Margaret Thean notes that ‘buyers are more cautious with their offers’.

JTResi’s Mr Tan observes that the pick-up in transactions of higher-priced units has led some developers, who had earlier planned to launch or relaunch projects, to hold back. ‘They basically don’t want to under-price their projects,’ he added.

Ho Bee executive director Ong Chong Hua said: ‘Sales are beginning to filter to the higher end, but not in a big way yet – because the overall quantums involved are usually quite large. Banks are also more cautious about granting home loans for this segment, whereas for the mass and mid-market projects, banks have relaxed on lending and valuations are no longer an issue.’

Hong Leong Holdings said yesterday that 215 units have been sold at The Gale, a freehold condo in the Upper Changi area, since last Friday. The average price is said to be about $650-660 psf.

At Alexandra Road, Wing Tai sold over 70 units at the 99-year leasehold Ascentia Sky during last weekend’s preview. The average price is $1,250 psf.

Over the weekend, MCL Land sold 55 units at The Peak @ Balmeg, a freehold condo at Pasir Panjang, bringing total sales to 100 units. The average price is $1,000 psf.

Interest absorption schemes are available for all three projects at price premiums.

Remarks Mr Ong: ‘What we’re seeing is a bottom-up recovery, which is more sustainable – unlike the last recovery from 2005 to 2007, which was top down.’

Source : Business Times – 14 Jul 2009

Singaporean's amazing appetite caught the eyes of foreign developers

Singaporean's amazing appetite during the worst recession ever have caught the eyes of these foreign developers and coming here to sell. I don't have any insight into London property market, so no comments..

The large pool of expatriates and a well-travelled population make S'pore a good location for launches, say agents

DEVELOPERS are marketing London homes in Singapore. And by most accounts, they are not finding it difficult to find buyers.

POTENTIAL SALES - (Left) Highbury Square one-bedroom apartments start from £275,000 while two-bedrooms start from £375,000

A few weeks ago, Colliers launched a selected number of units in two London residential properties here, and all were snapped up. There were 23 Union Point units and 23 Dalston Square units, and they were bought at average prices of £250,000 (S$592,794) and £210,000 respectively.

And in May this year, Jones Lang Lasalle (JLL) launched Napier at West 3, its first development in London this year. Singapore was picked as the first stop for the launch of 86 units, and saw 18 sales.

To capitalise on the interest in London properties, more London residential properties will be launched in Singapore this weekend.

Savills will start marketing two projects in Singapore - Chevalier House in Knightsbridge, and Highbury Square in north London. Prices at Chevalier House start from £1.15 million for a one-bedroom apartment and go up to £5.75 million for a three-bedroom penthouse overlooking Harrods and Harvey Nichols. Homes at Highbury Square are relatively cheaper - one-bedroom apartments start from £275,000 while two-bedroom apartments will start from £375,000.

Chevalier House prices start from £1.15m for a one-bedroom and go up to £5.75m for a three-bedroom penthouse overlooking Harrods

Colliers will also market two London developments this weekend. It will release 15 units in Draper's Yard, where homes cost an average of £235,000 each. In addition, it will launch 32 units in 1010 Rochester, where prices start from £800,000 for a two-bedroom apartment.

Berkeley Homes (Urban Living) is also giving Singaporean purchasers the first worldwide opportunity to reserve a property at Ultima - the final phase of the popular Chelsea Bridge Wharf development - this weekend. The project will be marketed at a property showcase by agents King Sturge and DST International. Prices start from £345,000.

And JLL has also said that it has more London launches in the pipeline.

Marketing agents say that Singapore is a good location for international property launches because of the large pool of expatriates here and a well-travelled population.

Sellers report that both Singaporeans and foreigners buy their properties. At Union Point, for example, marketing agent Colliers said that half of the buyers were Malaysians who travelled to Singapore, while the other 50 per cent were made up of Singaporeans and expats based here. At Dalston Square, on the other hand, most of the buyers were Singaporeans investing in UK property for the first time.

Buyers at exhibitions have mostly been younger professionals buying UK property for the first time, said Ed Lewis, head of London new homes at Savills. But outside exhibition settings, the buyers appear more discerning and are targeting higher quality products in the prime areas.

'Many buyers are motivated by the weakness in the London market, which is now improving. The weaker currency is also drawing buyers - particularly the trophy buyers,' he said. 'Others are buying with children in mind and for attractive yields.'

And Singapore is not alone - London properties are selling well in Hong Kong and Kuala Lumpur as well, analysts said. Mr Lewis said that it was difficult to provide actual numbers but his firm estimates that between the successful exhibitions and individual sales, there have been about 250 deals since the Easter weekend in mid-April. Most of these deals - some 60 per cent - were done in Hong Kong. Singapore accounted for another 35 per cent, while the remaining homes were sold in Kuala Lumpur.

Mr Lewis is currently on a tour of South-east Asia, advising investors on where they should - or shouldn't - spend their money.

'There have been huge price corrections in the London market which can give the impression that everything is a bargain,' he said. 'This is not always the case. While there are some bargains out there, there are also opportunities for wasting money, and the canny investor must differentiate between the two. Just because a property is cheap now, it does not mean it will be expensive in 25 years' time. Chances are, in many non-established locations, it will still be cheap in 25 years' time.'
Source : The Business Times, July 11, 2009

Summary of the property tax rule

TODAY newspaper published a good summary and hope this will clarify all the doubts.

Proposed change under spotlight:
Individuals who sell a property on or after Jan 1, 2010 will automatically not be subject to income tax, if he has not sold other properties in the previous four years. Even if he has, Iras will determine if a tax on income should be levied, just like existing practice.


What the situation is now:
When an individual sells a property for a profit, Iras decides if the gain is income in nature based on the facts of the sale. Factors include circumstances leading to sale, how long the individual held the property, how frequently he was selling properties in the past.


Intent of proposed change:
To provide certainty of non-income-taxation to individuals who sell a property.


Unintended effect:
Perceived to be an anti-speculation measure by some dampened market sentiment.
Source : TODAY, Jul 10, 2009

The Sail is not for sale

nicely written article on the hype about The Sail

When the media is quoting various real estate analysts saying that real estate markets are up by 10% or so from the beginning of this year, buyers and agents, who are involved in The Sail resale market don’t even have time to stop and read such nonsense. They are too busy trying to get more units on the market as demand by far outstrips supply. As one agent told me, there are many buyers but never enough serious sellers. It also means that selling a unit there is just a matter of price and the deal can be done very fast – it’s almost like commodity dealing, and that makes the ownership in The Sail more exciting as there is lots of liquidity, compared to other real estate projects.

Just about three months ago some Marina Bay front view units were offered as low as 1,450-1,500psf. Some even sold at just above 1,000psf around the beginning of the year. Now some high floor choice units were sold at 2,550psf around early June, and the price is pushing higher by day. Don’t even try to calculate the percentage increase. it will leave you breathless.

While the mass media was reporting around late March – early April that real estate is in the doldrums, I was asked by my friend, a serious investor from Taiwan, to take him to look at what The Sail is about. After seeing just one unit with the full Marina View, he paused for a minute, then asked me why I didn’t push him much earlier to buy into such a postcard view. He and his fellow business partner from Cambodia, apparently one of the richest men there, both in the luxury and branded perfumes and cosmetics business, are avid real-estate investors, especially looking for choice units with spectacular views, be it a Hong Kong Harbour view or a Shanghai Pudong view.

In Singapore only the Marina Bay view can match such world class vistas and for now its only the Tower 1 in The Sail that got such units. My friend and his business partner, giving instructions over the phone, tried to buy some 6 units on the spot but most of their cheques were rejected at around just under 1,900psf.

In the lobby I met my acquaintance agent. She, like a few others, is specialising in nothing but The Sail. She told me that she is accompanying a small group of Indonesian buyers, who have a combined budget to buy 10-15 units and are hunting for mostly Marina Bay view units. She added that there is another group of Indonesian investors as well, searching for units with the total budget of $15mil, and looking for units only with full Bay view. That was only one weekend that I went there and saw it with my own eyes over just an hour or so on the site. There were barely a few choice units on the market and these were all snatched up in no time at around 1,850-1,950psf and now some of these are back on the market at 25-40% higher in a matter of months.

The Sail, with its 1,111 units is the biggest condo in Singapore and probably in the region. The project comprises 2 towers with some 30 different units configurations. The 70 story Tower 1 is facing the Marina Bay. The front facing units are only stacks 1 to 6. The stack 1’s (most northern side) view is not bad, but partially obstructed by the NTUC building so the choice units will be above the 40th floor. Stack 6 together with stack 1 are the bigger units. Both have got some back facing rooms and pillars. The best stack out of these 30 is a two-bedroom stack 4, right in the middle of the building, as it got a total net space without any pillars. Note that only some 10-15% of the total number of units in The Sail are actually facing the Marina Bay. The shorter Tower 2 is facing the ’pool view’, the upcoming MBFC and the One Raffles office building. Its not a bad investment at all and its stack 18 is the only one that has got a decent Marina Bay view, but the prime choice units will be in Tower 1, hence the stratospheric prices achieved.

The relatively few choice units with penthouses are owned by tycoons such as Dr. Modi, the Chairman of Spice Corp, Sam Goi the local popiah king and Thai Beverage tycoon billionaire Charoen Sirivadhanabhakdi.

The major selling point of The Sail is its, rare for Singapore, unobstructed views of Marina Bay and the surroundings. In most of the flatland Singapore there are basically no spectacular views. Therefore most of the people here are not aware of the major attraction and investment power that a spectacular view can deliver. Every taxi driver in HK knows that the higher you go on The Victoria Peak, the price is climbing higher and the units facing the harbor can command as much as 30-50% premium. But this concept is still relatively new for Singapore.

Mark my words, in 2-3 years the epicenter of life, fun and shopping will shift significantly to the Marina Bay and the surrounding area and the location will become a regional icon.
Source: http://www.property-report.com/singapore-property-magazine.php?con_id=885&date=072009

I can't gamble at IR this year

THOSE hoping to visit the Marina Bay integrated resort at the end of the year will be disappointed. The casino-resort will only be ready in January or February next year.

The announcement on the delayed opening came from none other than Mr Sheldon Adelson, chief executive officer and chairman of parent company Las Vegas Sands. He had announced that the entire project will be completed and open by 2009 on the day the company won the bid in 2007.

Three years on, at the topping out ceremony for its three hotel blocks on Wednesday morning, Mr Adelson told the media, government officials and guests that Marina Bay Sands will have its soft opening next January or February.

His reason: 'We can't control the flow of sand to make concrete, the availability of steel or the availability of labour.'

Marina Bay Sand's delayed opening will put it in direct competition with the other IR project on Sentosa, Resorts World on Sentosa, which is also targeting to open in the first quarter of next year. Both are gunning now to be ready before Chinese New Year, which falls in the mid-February, to welcome the festive crowds.

Still, Las Vegas Sands chief operation officer and president Michael Leven said he is not worried about going head to head with his competition as the Marina IR appeals to very different segments of the market.

He promised that 50 per cent of the resort will be ready for the soft opening, with the rest to follow two to three months later. The group remains confident that the Singapore project will be successful when it opens.

On Wednesday, the IR celebrated a major construction milestone - the completion of three 55-storey hotel towers. Work will start on the next challenge, which is to hoist the sky park onto the hotel towers, some 200 metres above the ground.

Wednesday's ceremony was attended by government officials from various agencies, ranging from Singapore Tourism Board, the Singapore Workforce Development Agency, the Casino Regulatory Authority, and some 120 regional and local media.

The Singapore integrated resort was one of the few projects Las Vegas Sands continued to work on after the company was hit by a massive cash crunch last year. It was forced to suspend work on a Macau project late last year and lay off 11,000 workers.

However, Mr Adelson said on Wednesday he expects work to commence on the stalled Macau project by end of the year. He said the company is looking at re-financing the project, and considering five options, including an initial public offering (IPO) on the Hong Kong market for the Macau assets to raise funds. Mr Adelson said the company expects to finalise plans for Macau by September.

Source: Straits Times, July 8, 2009

Flippers to be taxed soon!

But how fair will this law be? What if this is a genuine person who happens to move more than once within 4 years due to valid reasons such as proximity to parents or children's primary school, job etc?

A PROPOSED change to income tax laws will make clearer to property sellers when they will be taxed on their profits.

Anyone who sells only one property in any four-year period will not be taxed on his profit, according to a proposed amendment to the Income Tax Act.

But if he sells another property within four years of the first sale, the profit from the second sale may be taxable.

If the proposal becomes law, it will provide certainty for owners who now cannot be sure if the taxman will come calling after they sell.

Under existing rules, an individual does not pay tax on gains made from selling a property unless the taxman decides that he is trader - someone who buys and sells multiple properties within a short time span. And there is no way for the seller to know in advance if he might be deemed a trader.

The new way of taxing property profits is one of many changes listed in a draft Income Tax (Amendment) Bill 2009 put up for public feedback last month by the Finance Ministry.

If implemented, the change will take effect from January.

A ministry spokesman told The Straits Times yesterday that the proposed change aims to provide certainty of non-taxation to individuals who own property.

Once it takes effect, the individual who sells a property for a profit can be sure that his gains will not be taxed - provided he had not sold any other property in the previous four years.

If he sold other properties within that period, the spokesman said, the Inland Revenue Authority of Singapore (Iras) will decide whether he should be taxed, ‘based on the facts and circumstances, no different from the present tax treatment’.

Although Singapore does not have a capital gains tax, profits from selling property can be taxed at the appropriate individual income tax rates if Iras deems the seller to be a trader.

Tax and property market experts contacted by The Straits Times welcomed the move to clear the air over taxes on property sales.

Mr Tan Tiong Cheng, chairman of property consultant Knight Frank, said: ‘Since the Government has clarified that the treatment on capital gains would remain the same, it will be business as usual. Genuine investors will not be deterred from buying properties.’

A stockbroking director said that the Government’s assurance will calm any jitters investors might have experienced when they first learnt of the proposed tax change.

‘There were initial misgivings that this provision might be a roundabout way to introduce a capital gains tax on properties. The misconception has been cleared,’ he noted.

But others felt that by raising the issue of taxing property sales gains, the Government is also sending a signal to speculators that they can expect to be taxed if they buy properties to ‘flip’ for quick money.

During the property boom of 2007, some speculators could have bought and sold as many as half a dozen properties in the space of a year.

With the change, a property owner juggling several properties cannot sell more than one within a four-year period if he wants to be sure of avoiding a tax bill on his gains.

Since February, sales of new private homes have exceeded 1,000 units a month compared to a monthly average of 330 units last year. Worries are surfacing that speculators might be ramping up sales and driving up prices, as the economy recovers.

Businessman James Chen, 40, said the proposed change may make the short-term investor think harder before buying.

‘He will have to consider whether he wants to take such a risk and give up a part of the gains as taxes.’

The draft Bill can be read at the Finance Ministry website www.mof.gov.sg and the public has up to next Tuesday to give feedback.

The Bill is expected to go before Parliament later in the year.

TARGET OF CHANGES
‘HE WILL have to consider whether he wants to take such a risk and give up a part of the gains as taxes.’

Businessman James Chen, 40, on how the proposed change may make the short-term investor think harder before buying. A property owner juggling several properties cannot sell more than one within a four-year period if he wants to be sure of avoiding a tax bill on his gains.

Source : Straits Times - 08 July 2009

Which direction is property trending towards?

Read this
Analysts say a sustained increase in the price index that develops into a full-blown rally by the end of the year is unlikely.

A more probable scenario is a plateau: prices and sales stabilising at their current levels for the next few months, with occasional moderate dips or increases, until there is more certainty about the economic outlook next year.

Would-be buyers hoping for another crash in the market are likely to be disappointed unless a major shock takes place, such as a delayed economic recovery, a stock market collapse, or the H1N1 virus turning more deadly, analysts say.

In fact, many dire predictions trumpeted by bears have failed to materialise. Fewer expatriates have left the country than expected. Unemployment is below the all-time high in 2003.

A YEAR after it started, the recession to end all recessions has yet to hit bottom officially.

But private home buyers in Singapore don't seem to care. Since February, they have been snapping up almost as many homes each month as during the frenzy of 2007.

The strong demand has caught even property veterans by surprise, and set off furious discussions among property-obsessed Singaporeans.

Their million-dollar question: is this rally for real?

Opinion is divided. For every analyst proclaiming a sunny recovery, there is another warning of a false dawn.

To recap: after a hiatus of several months following the credit crunch last year, the property sector came back to life in February with unexpectedly healthy sales of new condominiums.

Even the stock market collapse in March didn't deter buyers of new homes, who picked up more than 1,000 units that month for the second time in a row - 10 times what was sold at the low point in October last year. The buying momentum has held steady since then, despite more doomsayers predicting anew each month that the numbers are unsustainable.

Interest in new homes has spilled over to resale homes in the secondary market - which clocked a 70 per cent increase in sales in the second quarter over the first - as well as the harder-hit luxury home segment, where sellers are starting to turn a profit again.

As confidence in the property market builds up, boom times seem to have returned to the showflats. At the recent launch of One Devonshire in Somerset, the two-bedders were so much in demand that buyers had to ballot for them.

Agents for the upcoming Ascentia Sky project in Redhill have begun to take orders - and cheques - even before the showflat opens in the coming weeks.

There is certainly no denying that the property market is faring much better than expected, given that in the first quarter of this year, the economy contracted a record 10.1 per cent and shed the most number of jobs since Sars in 2003.

But some industry veterans, such as Knight Frank managing director Danny Yeo, are reluctant to call the increased buying activity a true rally. Even though sales are up, prices generally are not.

Between April and June, even as buyers returned to the market, the price index for private homes dropped 6 per cent, according to estimates released by the Urban Redevelopment Authority on Wednesday. Prices have now fallen for four straight quarters and are about 25 per cent off their peak last year.

Experts say that demand for private homes is returning precisely because prices have nosedived. They plunged a precipitous 14.1 per cent in the first quarter, the biggest drop in history.

This is a far cry from 2007's property boom, when some developers raised prices for their projects multiple times in a single weekend.

Some consultants believe the price index is lagging and will show a slight increase when all the second-quarter sales are taken into account at the end of the month. Wednesday's estimates are mostly based on deals done in April and May.

But even if this happens, the index isn't expected to keep rising. Analysts say a sustained increase in the price index that develops into a full-blown rally by the end of the year is unlikely.

A more probable scenario is a plateau: prices and sales stabilising at their current levels for the next few months, with occasional moderate dips or increases, until there is more certainty about the economic outlook next year.

Would-be buyers hoping for another crash in the market are likely to be disappointed unless a major shock takes place, such as a delayed economic recovery, a stock market collapse, or the H1N1 virus turning more deadly, analysts say.

In fact, many dire predictions trumpeted by bears have failed to materialise. Fewer expatriates have left the country than expected. Unemployment is below the all-time high in 2003.

Home-owners and buyers are still able to afford their properties, especially as they have lowered their debt levels and increased their savings. The surprisingly low level of mortgagee sales so far this year - half of that during the Asian Financial Crisis - seems to bear this out.

Concern about oversupply of new homes crashing prices have abated in the light of the robust take-up of recent launches. Instead, low interest rates are encouraging buyers to take up mortgages.

The gravity-defying rise in HDB resale flat prices, which hit an all-time high in the second quarter, provides a firm floor for prices of mass market condos and helps support all the other price levels.

On the other hand, sellers who hope to hold out for a marked improvement in prices, could end up waiting a long time.

For one thing, the stock market resurgence appears to be tapering off, as sentiment gives way to the sobering fundamentals of an uncertain economic recovery, underscored by still-rising unemployment in the United States.

Anecdotally, buyers are also still price-sensitive, a further sign of the fragility of their confidence, although more seem willing to jump on the buying bandwagon for fear of rising prices in future.

Demand may also be limited. Most buyers now are owner-occupiers who were shut out of the 2007 market surge and are unleashing their pent-up demand. When this runs out, sellers and developers will be relying on investors and foreigners to pick up the slack, which may not happen as rentals are expected to continue falling with more homes being completed.

Then there is the deferred payment scheme. Properties sold via the scheme reach completion this year and next, and analysts fear some buyers will dump their units when full payments are due.

In the near term - say, six months - the market should be stable, given that supply and demand factors seem more or less balanced at this point.

But Singapore's sentiment-driven property market has seldom been rational and hardly predictable, as the last six months have shown.

So it ultimately comes down to which typical Singaporean home-buyer behaviour wins out: the panic of being left out of a property boom, or the fear of buying now and being left high and dry if there is a slump.
Source : The Straits Times, July 04, 2009

Developers catching the buying trends before it ends

More condo launches are due this month but market-watchers say price recovery will not last

The stream of new property projects being launched continues to be strong. Another mass-market development, Oasis@Elias, has officially hit the market, after a quiet round of sales.

The Gale, located in Flora Road, is one of the many condominium projects that are slated to be launched this month. -- PHOTO: HONG LEONG HOLDINGS

The 388-unit condominium near Pasir Ris beach was launched yesterday after it sold 71 units - or half of the units previewed - at $670 per sq ft on average at last week's preview.

CB Richard Ellis, which is marketing the condo, said units with a sea view were popular. Some 80 per cent of the buyers were HDB upgraders. The units are fairly large, ranging in size from 947 sq ft to 2,659 sq ft.

Generally, developers are rushing new launches to capitalise on the strong buying wave, particularly for affordably priced mass-market developments.

Releases in the past three weeks include Vista Residences in Jalan Datoh, Residences @ Killiney and the already sold-out 8@ Woodleigh.

Developments that are available for sale this month include Ascentia Sky, next to Metropolitan condominium in Alexandra Road, Silversea in Amber Road, The Gale in Loyang and Sophia Residence on the former Sophia Court site near Selegie Road. An 85-unit development in Balmoral Road is also coming to market soon.

The 373-unit, 99-year leasehold Ascentia Sky is expected to hold a public preview in the middle of the month, said a Wing Tai spokesman. The indicative price before the preview discount is $1,300 psf to $1,500 psf, he said.

Wing Tai and Greatearth Developments had bought the Ascentia Sky site for a bullish $639 per sq ft per plot ratio in late 2007. Property analysts had said then that the land price would translate into an estimated breakeven price of $1,000 psf to $1,100 psf for the future condo, and the units there should sell for at least $1,100 psf to $1,200 psf.

Projects such as Ascentia Sky, Silversea and Sophia Residence have been lined up for launch for some time now.

In late 2007, developer GuocoLand had said it hoped to push out the 272-unit Sophia Residence in the third quarter of last year. But that did not happen.

As for the 383-unit Silversea, there was already talk as early as late 2007 that it would be launched soon. It did go out to market for a while last September, selling several units at a median price of $1,400 psf and three at a median level of $1,242 psf in October. Because of the poor market conditions, sales were then stopped.

Developers are a bit more upbeat now that buyers, including speculators, have been coming out in droves, though they remain fairly cautious and price-sensitive.

Still, buyers should exercise prudence in the light of market uncertainty, advised property experts. Ms Chua Chor Hoon, head of DTZ South-east Asia research, said in a report last Thursday that the rise in prices in the second quarter is likely a 'temporary blip' as it is largely due to the fear among buyers of missing out on the bottom, pent-up demand and low interest rates.

Average resale prices have fallen by only 10 per cent to 35 per cent from the fourth quarter of 2007 to the first quarter of this year, compared with a larger fall of 35 per cent to 45 per cent during the Asian financial crisis, she said.

'Without a clear recovery in sight for the United States and Singapore economies, the price recovery in the second quarter is not sustainable and sales volume would be affected if prices continue to rise,' said Ms Chua.


COMING UP

# Ascentia Sky
Where: Alexandra Road next to Metropolitan condominium
How big: 373 units
How much: Indicative pricing, before a preview discount, is from $1,300 psf to $1,500 psf.

# Sophia Residence
Where: Adis Road near Parklane Shopping Mall
How big: 272 units
How much: Indicative pricing said to be $1,500 psf to $2,000 psf.

# Silversea
Where: Amber Road on the former Amberville site
How big: 383 units
How much: Preview prices said to start from $1,300 psf

# The Gale
Where: Flora Road
How big: 329 units
How much: Indicative pricing said to be $650 psf to $700 psf
Source : The Sunday Times, July 5, 2009