Analysis: Balmoral area

Ok, here's another analysis of the Balmoral area. I personally like this area due to its location in prime district 10, close proximity to schools and Orchard area and exclusivity. Let's see what has happened and happening in Balmoral.

What has happened

1. 

1. en-bloc fever hit this area with few plots taken up. My last count was 6 plots but I couldnt find the deal size for Garden Hotel.
2. Sui Generis sitting on the old Balmoral View site was launched in 2007. Units were sold from $1991 to a whopping $2717 psf!
3. The Aspine holds the record eb-bloc in this area at $1870 psf!! Envy, envy, envy...

What is happening

1. CDL is launching Volari at the old Garden Hotel site at approximately $2000 psf for the 2 bedder. CDL launched The Solitaire in 2007 and deals were done from $1570 to $2342 psf. The smaller units of 1238 sqft were done in the range of $1800 upwards, thus my believe that developers will not price their nearby projects at lower prices even though we are in recession now. Another of my developer-wont-screw-their-own-projects theory.
   
2. The Oliv by TG Development beside Belmond Green has been fenced up for some time and the condo has been demolished. Perhaps they might be launching soon.
   

What do you think? Can buy a unit in this Balmoral area? The newer projects are Belmond Green, Ventuno Balmoral and Balmoral Heights. Their latest caveats were from 900+ to 1200+ since Q1 2009. All these en-bloc projects when launch in the future should trigger further upside. Another opportunity in nearby projects?

Private Home Prices Fall 5.9% In Q2

How is this possible when prices have increased? Does anyone know how URA compute the PPI?

PRIVATE home prices slowed their downward slide in the second quarter, with suburban homes helping to hold up the market.

The Urban Redevelopment Authority (URA) announced yesterday that its initial estimates showed a 5.9 per cent fall in private home prices from April to last month, following a record 14.1 per cent slide in the first quarter.

Some property experts yesterday expressed surprise at the larger-than-expected drop. And with the recent strong demand, they are expecting to see a much smaller fall in four weeks' time, when final second-quarter figures are released.

A few are even expecting to see a small price rise by then because of last month's buying craze, which saw project launches attracting rising numbers of investors and speculators.

But given that the current frenzy is being whipped up against a still-weak economic backdrop, more analysts are turning cautious, saying it is unsustainable.

Yesterday, the URA reported prices of non-landed homes in the suburban areas falling just 2.6 per cent in the second quarter, compared with a bigger 6.6 per cent slide in city-centre prices and a 6.3 per cent decline in city-fringe prices.

The smaller mass-market price fall reflected the strong buying support from upgraders in the HDB market, where resale prices reversed a marginal fall to rise by 1.2 per cent in the second quarter.

The stock market rally, coupled with strong liquidity, has resulted in a surge in second-quarter new home sales. CBRE Research estimated that 4,000 new homes were sold - more than 50 per cent above the 2,596 units sold in the first quarter.

The volume lent support to home prices and, in some cases, allowed developers to raise their prices when supply was tight, it said.

The second quarter also saw more new launches at higher price levels because they were located either on the city fringe or in prime districts, CBRE Research added. These include Martin Place Residences, The Wharf Residence, One Devonshire and the sold-out 8@Woodleigh.

CBRE Research executive director Li Hiaw Ho said the 5.9 per cent decline in private home prices is 'contrary to the present market perception' as actual price levels in the second quarter are known to have risen more than 10 per cent from the first quarter.

DTZ head of South-east Asia research Chua Chor Hoon described the fall as 'surprising' because prices picked up around last month - especially in the prime districts of 9, 10 and 11.

Average home prices were still relatively flat in April and May - some developments saw price increases, while others saw price falls - she said. But last month, resale home prices rose from 3 per cent in the mass-market segment to as much as 11 per cent in prime areas, she added.

'Going forward, developers are likely to test the market with gradual price increases. Should the current momentum hold, we can expect private property prices to increase by 5 per cent to 8 per cent in the second half of the year,' said ERA Asia-Pacific associate director Eugene Lim.

While local buyers are now supporting the market, more foreign investors may come when the integrated resorts open, he added.

Colliers International director for research and advisory Tay Huey Ying thinks the strength of pent-up demand should not be underestimated as new home sales had sunk to a low of 4,264 units last year - half of the annual average of about 8,500 new units since 2000.

Home sales could remain robust in the second half of this year, possibly reaching 12,000 units or more. This will hinge on price rises not exceeding 5 per cent for mass-market homes and 10 per cent for higher-tier homes, as buyers remain price sensitive in view of the absence of economic expansion and growth in employment and personal income, she said.

If the positive buying mood continues, the third-quarter price index may show a rise, said OrangeTee's executive director (residential), Mr Steven Tan.

Others, like Ms Chua, think the final second-quarter index may already show some increase when more June caveats are included in the computation of the index. But she thinks this could be a 'temporary blip' with resistance setting in at some levels and prices possibly stagnant or falling from as early as the the third quarter onwards.
Source : The Straits Times, July 2, 2009

Job losses lower than feared

Do you remember the report by Credit Suisse that forecasts a whooping 200000 people by 2010 leaving SGP resulting in 15000 vacant homes by 2011? Well, they are revising their analysis now...

Summary

Back in Jan 2009

• forecasts a whooping 200000 people by 2010 leaving SGP resulting in 15000 vacant homes by 2011
• private home prices to fall by as much as 60 per cent from the peak to 2005 levels

Now in June 2009

• 3,000 private homes will be vacant from 2009 to 2011
• prices could dip 25 per cent in 2009 before recovering 10-15 per cent in 2010.
• Net employment fell by only 6,200 in Q1 2009

I love being an analyst. You get to say 1 thing, then say another thing, put in all the disclaimers in the world and still get a big fat pay cheque. Haha...

Credit Suisse, which predicted in January that an astonishing 200,000 foreigners and permanent residents (PRs) might leave Singapore in 2009 and 2010 on the back of job losses, now thinks that the exodus may not be as bad as it had expected.

The evidence for this can be gleaned from the bank’s forecasts for the property market.

Based on its economists’ expectations of historically high job losses (up to 240,000) and an exodus of foreigners (up to 200,000) by the end of 2010, the firm’s property analyst Tricia Song had previously assumed that 15,000 homes could be vacated by 2011.

But in a report dated June 19, she says she now believes that just 3,000 private homes will be vacant from 2009 to 2011 as foreigners leave the country.

‘Anecdotally, we expect that the number of foreigners leaving Singapore will not be as high as we had expected,’ said Ms Song in the report.

This also means that private home prices will not be as badly hit as the firm predicted just six months ago. Credit Suisse had expected private home prices to fall by as much as 60 per cent from the peak to 2005 levels, partly because of the projected 200,000-foreigner exodus.

However, in part due to the smaller-than-expected job losses and foreigner exodus, Ms Song now says home prices could dip 25 per cent in 2009 before recovering 10-15 per cent in 2010.

The main cause for the change of view is a recent update by economist Cem Karacadag, who was part of the team that in January predicted that some 200,000 foreigners and PRs might leave Singapore in 2009 and 2010.

Credit Suisse said then that the potential drop in employment and population would have far-reaching implications for the economy.

But in a recent report, Mr Karacadag said job losses have not been as large as he had feared.

‘Singapore’s labour market has held up remarkably well in this recession and much better than we had anticipated,’ he said in a June 19 economics note.

Among various things, employers appear to have adjusted labour costs through salary cuts rather than cuts in headcount, he said.

Job losses so far this year have been surprisingly low against unprecedented job gains in 2007 and 2008, the note said. Net employment fell by only 6,200 in Q1 2009, although Singapore’s real GDP was 10 per cent lower in Q1 2009 compared to Q1 2008.

Mr Karacadag also upgraded his forecast for Singapore’s 2010 GDP growth to 4.4 per cent, from 3.9 per cent.

Source : Business Times – 29 Jun 2009

Analysis: Caribbean at Keppel Bay

I was thinking of a project to analyse. Scanning through the districts, analysing the masterplan and developments on the island, Caribbean and the Keppel area came up.

Project Info
Address: 4 - 46 KEPPEL BAY DRIVE
Type: APARTMENT / CONDO
District: 04
Year Completed: 2004
Tenure: 99 Years Leasehold wef 16 Aug 1999
Total Units: 969
Developer: KEPPEL BAY PTE LTD

Site plan

Floor plan

Specs

• Living room: Marble
• Bed room: Timber skirting
• Kitchen: Ceramic Tiles
• External wall: Spray textured coating finish and/or emulsion paint
  Audio/video intercom via webpad, Web camera, WAP enabled, WLAN, Proximity locking system, Safe, Kitchen cabinet, Wardrobe, Aircon
• Total Units: 969 in 22 blocks
• 2 Rooms (208 units): 78 to 86 sq.m. (840 to 926 sq.ft.)
• 2 Rooms +PES (28 units): 100 to 118 sq.m. (1076 to 1270 sq.ft.)
• 2 Rooms +PES+Study (19 units): 136 to 146 sq.m. (1464 to 1572 sq.ft.)
• 3 Rooms (302 units): 112 to 122 sq.m. (1206 to 1313 sq.ft.)
• 3 Rooms +Open Terrace (13 units): 116 to 126 sq.m. (1249 to 1356 sq.ft.)
• 3 Rooms +PES (43 units): 124 to 170 sq.m. (1335 to 1830 sq.ft.)
• 3 Rooms +Study (197 units): 123 to 157 sq.m. (1324 to 1690 sq.ft.)
• 3 Rooms +PES+Study (8 units): 141 to 212 sq.m. (1518 to 2282 sq.ft.)

My Analysis:

• waterfront living, with yacht berths. How many are there in SGP? Keppel Bay area and Sentosa only. Don't tell me about East Coast as they are NOT waterfront. Tanjong Rhu area comes close and its part of the Kallang Riverside initiative.
• Caribbean, Reflections and the 2 99LH plots owned by Keppel beside Caribbean and Keppel Island, including the Keppel club. Keppel has not launched plot 3,4 and 6 which should have 307, 234 and 94 units,while they will launch 382 units at Reflections but dont know when. These statistics are from http://www.kepcorp.com/kcl_eAR/2006/features/keppelbay.asp

• Do you think Keppel will screw themselves up and launch these new plots to disadvantage Caribbean and Reflections? Reflections already sold from range of 13xx to >2000 psf.
  
• nearest development to Sentosa IR that's outside Sentosa
  
• Only luxurious development till 2012 when Reflections TOP
  
• beside Vivo City
• near MRT
• huge project. Typically, huge projects are popular and maintenance fees are lower. Though 969 is a tad too large for me.
• good rental yield during recession. Q1 2009 rental data from URA shows that the 25th, Median and 75th Percentile are 4.98, 5.44, 6.03 respectively. On a conservative front, the 25th percentile was only lower than the top projects of THE PIER AT ROBERTSON and ICON.
• But I dont like this. Its 99 tenure starts from 1999!!

Ok, here's the most interesting part. Price trends... I use 2007 Q1 as reference as that's the last quarter where it's PPI of 136.5 is similar to 139.9 in 2009 Q1.

1. Latest transactions in 2009: from 900-1000 in Q1 and 1100-1300 in Q2!

1. Peak (all): 1757 for a 2077 sqft in June 2008
   
2. Low (all): 600 during launch
   
3. Median (all): 850-860
   
4. 2007 Q1 (all): 800-1300
   

1. 2/3 bedder peak: 1607
   
2. 2/3 bedder low: 600
   
3. 2/3 bedder median: 850
   
4. 2007 Q1 (2/3 bedder): 900-1100

1. 2 bedder peak: 1607
   
2. 2 bedder low: 750
   
3. 2 bedder median: 870
   
4. 2007 Q1 (2 bedder): 890-1100

Why 2/3 bedder? Because these are likely the most popular sizes.

Exciting, exciting, exciting!! Or is it?