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29 Feb

What do strong home sales reflect?

Do home buyers have cash to spare and thus are snapping up units across the island? Or is the concentration mainly on mass-market suburban homes. How about the resale and high-end market?

Home sales over the past week stayed strong, with few signs of the expected declines brought about by December’s property measures. Parc Rosewood at Woodlands has moved 55 more units since Monday last week, bringing total sales at the 689-unit project to 565. Prices have averaged $1,000 psf. Macly Group’s Guillemard Edge in Geylang has nearly sold out. Last week, the developer reported sales of more than 230 units. Since then, about 40 units have sold with prices ranging between $1,180psf and $1,250 psf.

Units at the Guillemard Edge apartment in Geylang have almost all been sold.

The Straits Times also understands that the UOL Group’s Archipelago estate in Bedok Reservoir sold 15 units over the weekend, with prices hovering around $1,000 psf. Noting that buyers are now more selective, property analysts caution developers that not all new project launches will necessarily enjoy similar levels of success. Mr Mohamed Ismail, chief executive of PropNex Realty, said a property’s location and pricing may not be the only deciding factors for buyers. ‘The theme of a development now matters as well. We’ve seen some properties that are integrated with a shopping mall, or that have SoHo and loft concepts sell well, so it indicates that people are also looking for a unique piece of property that stands out from the rest,’ he said.

Parc Rosewood condominium in Woodlands.

Mr Lee Sze Teck, senior manager at DWG Research and Consultancy, said the abundance of cash in the economy is helping support the sale of new homes. ‘There’s still a fair bit of liquidity in the market, and people are still looking to put their money in property… This could see February’s new home sales cross the 1,000 mark,’ said Mr Lee. He pointed out that people want value for their money, which could explain why some buyers are drawn to the discounts developers are dishing out. Far East Organization, which has been offering discounts at selected projects, sold 66 units across its various projects last week.

But Mr Ismail pointed out that the recent robust sales of new homes comes after the Chinese New Year period, with developers and agents aggressively marketing a slew of new projects. ‘While demand for new homes seems healthy, the market has not seen a similar reaction for resale properties and high-end homes in the core central region,’ he said, noting that the response for luxury homes is lukewarm and the number of successful mass market resale deals is lower than before the December measures came into effect.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Current statistics seem to point towards a preference for smaller units outside of prime districts, and the number of new properties available are moving buyers away from resale units. How long more will this trend last? What will happen when all the new units are sold?

28 Feb

More Residential Property projects to be launched

Watertown, Parc Rosewood, Bartley Residences. New property launches have been selling exceedingly well in the first two months of the year. The wave of new residential projects does not seem to be subsiding, especially with a host of new properties to be launched soon – such as Greenwood Mews, Hillsta and Palm Isles.

Even as Hong Leong Group is understood to have sold about 160 units at Bartley Residences last week, other developers are getting ready to roll out their projects in the next few months. These include Tuan Sing’s Seletar Park Residence; Far East Organization’s Greenwood Mews (a 62-unit cluster housing development in the Bukit Timah area) and 416-unit Hillsta condo in Choa Chu Kang; and Frasers Centrepoint’s Palm Isles condo at Flora Drive in the Upper Changi area. Those looking for strata office units can also check out Far East’s PS100 next month, which will comprise 100 units of 402 sq ft to 507 sq ft spread across five levels (7-11) of a 27-storey tower at Peck Seah Street near Tanjong Pagar MRT Station. The tower will also include the 314-room Oasia Downtown Hotel. The strata offices will have a floor-to-floor height of about five metres – higher than the 3-3.5 metres for typical offices. PS100 is slated for completion next year.

Palm Isles condominium in Flora Drive.

Over in Seletar, Tuan Sing is expected to preview around mid-March its 99-year leasehold condo, Seletar Park Residence. Pricing for the 276-unit, five-storey development is expected to take after The Greenwich next door, where transactions have ranged from $1,244 psf to $1,512 psf over the past four months based on caveats data. However, as an analyst points out, half of The Greenwich‘s 319 units are one bedders, allowing higher per square foot pricing to be extracted. As for Seletar Park Residence, 93 or a third of the project’s units are one-bedders. The project has 113 two-bedders, 46 three-bedders and 24 four-bedroom apartments. The project is being designed by award-winning SCDA Architects. Tuan Sing is developing Seletar Park Residence on a site that it clinched at a state tender in December 2010 for $468 per square foot per plot ratio (psf ppr).  ‘We are preserving a row of raintrees on the site and will design a board walk and tree house around them, as part of our ‘green’ and sustainability efforts. We will also include a golf driving simulator room in our project,’ said Tuan Sing chief financial officer Chong Chou Yuen. The group also has another 99-year leasehold condo plot, next to Potong Pasir MRT Station, on which it is planning a project of about 312 units, including townhouses. A launch is likely around end-June, said Mr Chong. The project is being designed by MKPL Architects.

Seletar Park Residence will soon be launched.

Tuan Sing has a third residential project, at the freehold Serene House site in the Cluny Park Road area opposite Botanic Gardens MRT Station. The 63-unit low rise project is likely to be released towards end-September, Mr Chong estimated. For the whole of last week (Feb 20-26), Far East sold 66 units including joint venture projects. The three top-selling projects were Watertown in Punggol (17 units), The Hillier in the Hillview area (14 units) and euHabitat at Jalan Eunos (four units sold). To date, 917 of Watertown’s 992 units have been taken up since sales began in January. As for The Hillier, 446 of its 528 units have found takers, while the 748-unit euHabitat has seen 651 units being snapped up. Hong Leong meanwhile is said to have sold some 160 units at Bartley Residences since Tuesday last week. The average price after discounts is $1,240 psf.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
How will these new properties be priced and how many units will be sold? Keep an eye on the latest property news and property launches to keep a running lead.

28 Feb

Increased HDB income limits have helped home buyers

With the HDB income ceiling raised to $5000 for 3-room flats in mature estates and $10,000 for four-room units and above, has this helped home buyers put a permanent roof over their heads?

The tweaks to income ceilings have benefited more than 5,000 households, which have qualified to apply for various build-to-order (BTO) flats under the new criteria. This figure was revealed yesterday for the first time by the Housing Board (HDB), which made the changes last year. Last March, it raised the monthly household income ceiling to $5,000 from $3,000 for applicants of three-room units in non-mature estates. It said then that the move would give low- to middle-income first-timer households more choices of affordable flats. Last August, it raised the monthly household income ceiling to $10,000 from $8,000 – a quantum which had stood for 17 years – for applicants of four-room or larger units, as well as three-room units in mature estates.

Singaporeans seem positive about the future of public housing.

In his National Day Rally speech last year, Prime Minister Lee Hsien Loong said this was done to ‘bring more people into the HDB net’, as income levels were rising. The HDB said the bulk of the 5,100 applications – about 3,500 – came from households earning more than $8,000, but less than $10,000, a month. Another 1,600 households earning more than $3,000, but less than $5,000, a month had applied for three-room units in non-mature estates. The success rate of these 5,100 applications is not known yet as the HDB is still determining if the applicants are eligible.

Dennis Wee Realty spokesman Lee Sze Teck said the numbers showed that many preferred new HDB units over other options. ‘In particular, there are many people who want to enjoy the cheaper HDB flats, but because of their higher income, are forced into the resale market, or even private property,’ he said. He said the larger BTO flats cost from $250 per sq ft (psf) to $350 psf, versus executive condominiums’ $700 psf to $750 psf. Resale flats’ psf range is $380 to $550, said Mr Nicholas Mak, head of research and consultancy at SLP International. ‘This shows that the raising of the income ceiling was a move long overdue as the low ceiling meant people would look to the resale market. Given the increasing income levels of many Singaporeans, the ceiling should perhaps be reviewed every two years or so,’ he said.

Waterway Sunbeam BTO flats in Punggol were part of January's launch. There will be another BTO launch in March this year. Photo by HDB.

However, he added that it was unlikely the revised income limits would lead to a big spike in demand for BTO flats. He said: ‘In the past year, many of those who would have opted for public housing would have already applied, while the rest are probably waiting for property prices to come down before going in.’ Indeed, demand seems to be going down, even as the HDB ramps up its supply of BTO flats. It rolled out a record 28,000 units last year, and will put out another 25,000 this year.

At the start of the year, National Development Minister Khaw Boon Wan said the application rates for first-timers seemed to be stabilising, and promised more help for second-timers. One couple benefiting from the income amendments is accounts assistant Suah Wei Ling and her boyfriend. They had initially applied for a four-room unit in Bukit Panjang in February last year, but changed their minds when news of the rule change for three-room flats in non-mature estates broke a month later. Said Ms Suah, 24: ‘We were very lucky to have applied at the right time and qualified for a smaller unit as we did not need such a big flat anyway.’

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Though income ceilings have been raised, has this made owning a flat any easier? What about the continued rise of prices for resale HDB flats?

27 Feb

Far East Organization top developer for Home Sales

Local property developer, Far East Organization, has emerged on top as figures reveal that they sold 2,718 new homes in 2011. The race has begun for 2012. Who will shine this year?

Developer Far East Organization led the way in sales last year, selling 2,718 new homes on the back of a robust property market and low mortgage costs. The privately owned firm captured about 17 per cent of the market, with unit sales almost double those of City Developments (CDL) and its parent Hong Leong Group, which sold a total of 1,434 units. Sim Lian Group, Frasers Centrepoint and CapitaLand rounded off the top five, according to data complied by consultancy DTZ Research.

euHabitat was Far East Organization's hottest property last year.

DTZ Asia Pacific research head Chua Chor Hoon noted that local developers finished the year occupying eight places in the top 10. The exceptions were Hongkong Land – mainly through its subsidiary MCL Land – and Chinese developer MCC Land. MCL Land’s projects include Terrasse, where it moved 335 units last year, and the fully sold 120-unit Este Villa. MCC Land sold 372 units, including sales at projects like Canberra Residences and The Nautical. Experts say most of the sales were in suburban areas, so developers that built mainly for the mass-market segment benefited. This could explain why developers such as Wing Tai and SC Global – which focus largely on prime and high-end homes – did not feature in the top 10 last year.

More than 80 per cent of Far East’s sales were in suburban areas, while top-selling projects by CDL and Hong Leong were mass-market developments such as The Palette in Pasir Ris and H2O Residences in Sengkang. ‘(This is because) Far East has been active in bidding for government land sale sites since the ramp-up in the programme (from) the second half of 2010. The top-selling project for Far East last year was euHabitat (in Jalan Eunos), where 645 units were sold,’ DTZ’s Ms Chua said.

Part of a series of future launches by Far East Organization is Greenwood Mews in the Bukit Timah district. Image by Far East Organization.

The bumper release of suburban land by the Government in recent years has allowed smaller players to get a foothold in the market, experts said. Ms Chua said that while Far East plus CDL and Hong Leong are typically among the top-selling developers as they have built up larger landbanks over the years, some small to mid-sized developers managed to muscle their way into the top 10 list last year. Sim Lian Group clinched third spot, largely due to two suburban projects – A Treasure Trove in Punggol, with sales of 798 units, and Parc Vera in Hougang, where 226 units found buyers.

Similarly, Fragrance Properties made it to the top 10 based on the sales of various small projects. Its bestseller was 116-unit Suites@East Coast, where 99 units were sold. Mr Colin Tan, research head at Chesterton Suntec International, said more developers also formed joint ventures last year compared with the number the year before, due to rising prices that have led firms to spread the risk through joint ventures. The most notable was the tie-up between Frasers and Far East. The trend is likely to continue as developers ride on each other’s strength to develop the increasing number of mixed-use sites the Government is pushing out, added Mr Tan.

One of Far East Organization's latest launches - The Seawind.

Experts say that more activity from foreign developers can also be expected in the coming years. ‘Existing foreign players are likely to continue their business here as they grow in confidence, and this might attract more foreign developers to enter the market,’ Mr Tan said. Chinese developers such as MCC Land and Qingjian Realty, and Malaysia’s SP Setia and IOI Properties landed government land sites last year.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Keeping an eye on property types and areas where these new properties are coming up may be a good way of keeping track of current trends in the property market. Suburban homes have taken over high-end and luxury properties for now, but will the tables be turned soon?

27 Feb

Private homes boom in 2012

In January 2012 alone, there has already been 2,199 new private homes released. Developers are pushing out massive marketing efforts for these new properties and the buying public are eagerly looking forward to a good many more new launches in the upcoming months.

Property buyers have been spoilt for choice this year with a wide array of new homes launched, and there is plenty more to come in the months ahead. There were 2,199 homes released last month – this excludes executive condominiums – and while this month will not be as robust, experts expect the numbers will still be high. That means the total number of new homes released in the first two months of this year could exceed the 2,956 launched in the same period last year. There is talk that developers are keen to launch projects to cash in while prices are still buoyant and not too badly affected by sentiment over December’s new stamp duty, which has hit foreign buyers hard.

Seletar Park Residence

Agents are keenly marketing several projects which could contribute thousands of new homes in coming months. These include The Hillsta at Choa Chu Kang, Seletar Park Residence at Seletar, and The Seahill at West Coast. Experts say the large number of new homes on the market this year can be attributed in part to the Government’s effort to push out more land for residential property development. ‘The process of buying a site and getting the future project launch-ready can take a few months and so the number of new projects that are springing up is a delayed reflection of the supply of state land that was released for sale last year,’ said Mr Tan Kok Kiong, head of research at OrangeTee. Last year, enough state land was put on sale to build 17,510 new homes, well up from the then record of 13,945 new homes in 2010. These figures are based on government estimates, and analysts note that the trend for smaller flats means the overall number of homes developed on this land could be higher than anticipated. Confidence in the global economy has also contributed to the release of new homes.

Last month’s numbers were lifted by the release of several large projects, said Mr Ku Swee Yong, chief executive of International Property Advisor. Developments such as Watertown in Punggol released all of its 992 units last month, while Parc Rosewood at Woodlands contributed 236 apartments. This month has featured plenty of launches, but they have tended to be smaller projects such as Guillemard Edge, so overall sales are likely to be down on last month.

The Seahill in West Coast

The additional buyer’s stamp duty is one potential speed bump for the market. Mr Alan Cheong, associate director of research and consultancy at Savills Singapore, said the duty has deterred foreign buyers and affected overall buyer demand significantly. ‘That leaves the rather limited pool of Singaporeans and permanent residents who are in the race to buy,’ he said. Other issues, national and global, could also affect the local market, noted Mr Ku. ‘Demand may wane, even if prices hold steady, especially if issues like unemployment, further global uncertainty or a raise in mortgage rates come about,’ he noted.

Some experts have cautioned against reading too much into the number of new homes launched. They said that some developers may only report on their launched units after they have tabulated the number sold, allowing them to create a more positive impression of a project’s launch.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
For now, there are new properties galore and units are going equally fast. Question is, when will interest and demand wane? Will other government policies also affect the property market?

24 Feb

The iProperty Group and The Asian Property Market

Over the last few months, there have been numerous reports flooding the main stream and online media with predictions of the property market in Asia. Given the slowing demand from key trading partners, the United States and Europe, the Asian economy was set to take a downturn.

As we serve an ever-growing number of consumers, agents and developers, we leveraged on our market leading websites in Malaysia, Hong Kong, Indonesia and Singapore as a bellwether to gauge the opinions of thousands of consumers in the region on the property market.

Conducted from November 2011 to January 2012 and gathering a total of 8,499 respondents, the first cross market online property survey of its kind revealed that despite the worldwide economic uncertainty, a majority of these survey respondents had optimistic views on the property market in Asia.

Across the four countries surveyed, the survey respondents had somewhat more in common than they had differences. The key similarities include:

  • Majority of people answering the survey in each country had occupied their current premises for less than five years
  • Economic and political concerns were not high on the list of concerns for most survey respondents
  • Location and price were the two most important factors taken into account in purchasing property, while political/economic climate and recommendations from family and friends were the least important.

During the launch of the survey, I was asked, “What is the most important factor to consider before investing in property?” To which I responded three factors – LOCATION, LOCATION and LOCATION!

Why? Because location is the most important factor that property investors look into as it ultimately will help determine how much yield you get, and how much capital growth. So before deciding on purchasing or investing in any property, do your research. Study the amenities, accessibility to public transportation, schools and etc.

So it wasn’t a surprise that location was one of two key factors that respondents considered important.

A key difference across the region was in the type of property these respondents preferred. The survey findings showed that landed property was the most popular type of property that respondents in Malaysia and Hong Kong favoured. In Singapore, private condominiums were the most popular type of property, while houses were the most popular in Indonesia.

It was also interesting to note that most of the survey respondents in each country had only been in their current premises for five years or less. Another key distinction was that when it came to ownership of properties, over 40% of Malaysian’s surveyed reported owning two or more properties, a higher proportion than in any other country. Hong Kong survey participants had the fewest property owners.

On the overseas property front, Singaporeans showed a higher interest than respondents from Malaysia, Indonesia and Hong Kong, with a majority choosing Malaysia and Australia as their most preferred overseas locations.
Malaysians on the other hand preferred Australia, Singapore and United Kingdom as their preferred overseas destination of investment, with many citing migration or retirement plans as the main reason of purchase.

To learn more about these findings, you can download a full copy of this report by clicking here -
http://edm.iproperty.com/sg/Asia-Property-Report-2012-Singapore/

The survey report has offered us valuable insights of the property market and I trust that you too will find this report highly beneficial as it offers an unbiased view on the Asian property market.

Enjoy the weekend!

23 Feb

More than half of released Bartley Residences units sold

With discounts of up to 20 per cent, its no wonder more than half the Bartley Residences units released yesterday were snapped up by eager home buyers. Prices range from $610,000 for a one-bedroom unit to slightly more than $2 million for  a dual-key unit.

Hong Leong Group yesterday sold 65 units at Bartley Residences at an average price of $1,240 per square foot after a discount of up to 20 per cent. During yesterday’s preview, it released 120 units in the 702-unit, 99-year leasehold private condo next to Bartley MRT Station. According to Hong Leong, 90 per cent of the buyers at yesterday’s preview were Singaporeans and permanent residents. The absolute price of a one-bedroom unit ranges from approximately $610,000 to $670,000; a two-bedroom unit ranges from $970,000 to $1.1 million; a three-bedroom unit is between $1.2 million and $1.4 million; a four-bedroom ranges from approximately $1.65 million to $1.9 million; and a dual-key unit ranges from around $1.8 million to $2.1 million. The average price psf of $1,240 is after absorption of 18 per cent (including the standard 3 per cent buyer’s stamp duty discount, and 3 per cent early bird discount), and an additional 2 per cent district discount.

Bartley Residences near Bartley MRT Station.

Said HSR Property Group’s special adviser, Donald Han: ‘The figures are encouraging because the launch is in the middle of the week. I sense this development will gather pace towards the end of the week, and that might give a truer reflection … The developers may have launched it (on Tuesday) more to get a sense of ground sentiment.’ Added Lee Sze Teck, senior manager at DWG Research and Consultancy: ‘At $1,240, the developer is aware of market conditions and is clearly pricing the project at the right level.’

The project – developed by Bartley Development, a joint venture between Hong Leong Holdings, City Developments, and TID Residential – is located next to Bartley MRT Station, and offers a range of unit types, from one-bedroom units (463 sq ft) to four-bedroom units (1,345-1,377 sq ft), and dual key units (1,603 sq ft). In January, the consortium won a 99-year leasehold private condominium housing plot at Mount Vernon Road. Their bid came in at $388.1 million, or $495 per square foot per plot ratio. ‘They’re certainly in a good position to (capitalise) that segment of the market … (There are) not many new residential projects being launched in the area, so I would expect pent-up demand coming in from potential upgraders from the vicinity,’ said HSR’s Mr Han.

How will sales at Bartley Residences compare to recent launches such as Parc Rosewood and Watertown.

Last month, the 992-unit, mixed-use development, Watertown, which is located in Punggol Central, saw more than 160 of the 250 units released during its preview snapped up. The 689-unit, 99-year condominium Parc Rosewood, in Woodlands sold 165 of the 236 units up for grabs during its preview launch.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
Properties near MRT stations are still calling the shots in Singapore’s property market. Private condominium, executive condominium or resale HDB flat, it’s no doubt transport concerns will be one of the top priorities for home buyers here.

22 Feb

Singapore’s Apartment rental prices third highest in Asia

Following hot on the heels of Hong Kong and Tokyo in terms of apartment rental prices, is Singapore. With these numbers in place,  its no wonder property investors are snapping up new properties, especially one and two-bedroom apartments, in large numbers.

Being labelled a ‘city of costs’ is no misnomer for Singapore, which ranks third in Asia’s most expensive locations to rent a three-bedroom apartment – with typical rents estimated to set one back by about US$5,570 per month, according to ECA International. However, Singapore’s rental growth in domestic dollar terms has remained conservative in the past year, with average rents for an unfurnished three-bedroom apartment rising 3 per cent, placing it among the lowest in the region and a stark contrast to the previous year when rents rallied by over 10 per cent.

Rooms available for rent at the prestigious Reflections at Keppel Bay.

Said Lee Quane, regional director of ECA International, Asia: ‘Singapore’s strong economic recovery following the downturn in 2008 has seen expatriate numbers increase significantly over the last two years. However, a number of new property developments in the market has led to pressure on rental property availability easing over the last year. This has resulted in only modest rent rises.’

But when the effect of a stronger Singapore dollar is thrown into the picture, the whole ballgame changes. For instance, US companies that send their employees on international assignments to Singapore may face a greater cost impact if currency movements go against their favour. ‘In Singapore, rents have risen by just 3 per cent in local currency, but the strength of the Singapore dollar means that when we convert these prices into US dollars for comparison, the increase stands at 15 per cent,’ explained Mr Quane.

Further away from the Central Business District, TreVista condominium in Toa Payoh has a number of units for rent as well.

At a regional level, rents for three-bedroom apartments in Asia have risen by 5 per cent in local-currency terms over the last 12 months and 10 per cent in US-dollar terms. This translates to average rents of about US$3,680 a month in Asia, almost 20 per cent higher than the global average of US$3,080.

Hong Kong remains at the top of the list for Asia and the world with an average rent for an unfurnished three-bedder unit coming in at around US$11,813 per month. ‘This is a 15 per cent increase over the past year in local-currency terms and double the amount it costs to rent a similar property in Singapore,’ said ECA. Mainland China locations have seen the sharpest increases in Asia as the influx of international assignees continue to spur demand for rental properties there.

Just a little off the city centre is Jia@Wilkie. Jia is the mandarin character for "Home".

In addition, with home prices continuing to dig for a bottom in China, many locals have chosen to ride with the rental option for now. Tokyo has registered the greatest dip in rents on the back of lower international assignee numbers following the 2008 global financial crisis and more recently, the tsunami and nuclear disaster.  ‘This means there is less demand for rental property in expatriate areas, and rents in those areas have steadily fallen since then, dropping almost 5 per cent in yen terms,’ said Mr Quane.

The Straits Times © Singapore Press Holdings Ltd. Reprinted with permission.

Editor’s Commentary:
What does this all mean for the property market? Will property prices remain sky high as more are looking into buying for renting purposes? Will further property curbs be put in place within this year?

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