2017 to welcome more bulk sales?

As Qualifying Certificate (QC) deadlines close in on more residential projects, bulk sales could the difference between having to pay hefty penalties and escaping by the skin of their teeth. The Qualifying Certificate which developers are issued with once they purchase a private residential land plot binds them in a contract to finish building the project within 5 years of acquiring the land and to sell all units within 2 years of obtaining a temporary occupation permit (TOP). Should there be remaining units after this time, the developers will be required to pay extension charges.

nassimhillcapitalandPhoto credit: CapitaLand

The Qualifying Certificate which developers are issued with once they purchase a private residential land plot binds them in a contract to finish building the project within 5 years of acquiring the land and to sell all units within 2 years of obtaining a temporary occupation permit (TOP). Should there be remaining units after this time, the developers will be required to pay extension charges.

iLiv@GrangeThe most recent bulk sale of the 45 remaining units at The Nassim has helped developer CapitaLand avoid having to possibly pay up to millions of dollars worth of penalties as their QC deadline is in August this year. Mr Wee Cho Yaw, chairman emeritus of United Overseas Bank has paid $411.6 million for the 45 units with a strata area of 16,466 sq m at an approximate 18 per cent discount on the current sale price of individual units. The development consists of 55 units housed in eight 5-storey blocks, and the other 10 units have been sold to individual buyers.

Other recent bulk sales include the 156 units sold at a 16 per cent discount at Nouvel 18 and 30 units sold at a 23 per cent discount at iLiv@Grange. Though this enbloc exit of units may relief the unsold inventory of some pressure, more completed units are entering the market this year and may we could be looking at more bulk sales in the year ahead.

 

More condo developments offering deferred payment plans

As the number of completed private home units in the market rise without the same exponential reaction from buyers, developers are finding it increasingly difficult to move remaining units.

peak-cairnhillMore developers have been seen to offer incentives such as a deferred payment scheme in order to entice buyers. One of the latest to hop on the bandwagon is TG Development‘s The Peak @ Cairnhill II. Following good response to their previously-launched deferred payment scheme, CapitaLand has added Sky Habitat to their other 2 properties, d’Leedon and The Interlace, offering the same incentive. Their stay-then-pay option allows Singaporean buyers to make a 10 per cent down payment (15 per cent for foreign buyers) within 8 weeks to exercise the option to purchase and the other 90 per cent within a year from that even while living in the unit.

Some other properties such as One Balmoral are offering sweeteners such as direct discounts. The freehold 91-unit condominium in prime district 10 has offered a 13 per cent discount on all their units with prices averaging at $2,150 to $2,200 psf. Over at the waterfront-style Corals at Keppel Bay, the developer is offering $50,000 off selected units with average prices working out to be around $1,850 psf.

threebalmoral the increasing number of unsold units in the market, industry experts are not yet concerned about new launches coming up this year. New blood will likely inject active browsing and buying sentiments into a stabilising market, and with prices holding steady buyers are likely to take the bait, and the effect may very well trickle down to the secondary and other sectors.

Scope for property investment opportunities in Vietnam widen

As Singapore-based property developers deepen their foray into emerging Southeast Asian markets, the opportunities for investment are increasing. Not only are residential projects viable investment options, but commercial and industrial spaces are also added to the mix.

d1mensionPhoto credit: CapitaLand

CapitaLand for example, is investing US$500 million (S$713 million) into commercial property in Vietnam come 2017. They will also be looking into acquiring more residential development sites to add on to the 9 which they have already launched since they established their presence in Vietnam in 1994. Major wealth management funds are indicating interest in investing in Asian real estate and many of these emerging markets are untapped pools of potential.

d1mension2Photo credit: d1mension.co

One of the most recent developments is a residential project in Ho Chi Minh city named the D1mension, suitably so as it stands on prime district 1 land. The project will consist of a 102-unit residential block as well as a 200-unit serviced apartment block which will be operated under the Somerset brand. More than half of the 30 units launched in the residential tower have already been sold and more will be launched next month. Private residential properties in Vietnam have been selling well as the middle class grows and rapidly. CapitaLand has already sold more than a third of the 1,700 units they have in stock with total sales accumulating to $114 million. The rising suburban class and increased foreign business investment will mean a higher demand for housing.

Rents down but sales of some projects up

Home rental prices have been slipping with a 0.4 per cent and 0.5 per cent fall in the private non-landed apartments and HDB flats markets respectively.

Cairnhill Nine CapitaLandPhoto credit: CapitaLand

But perhaps the decline in rent has increased rental volume. There was a 8.2 per cent increase across the board in rental volume with 3,686 units leased this October as compared to 3,408 from the same month last year. On the same year-on-year comparison, rental prices were however down by 4.5 per cent.

The increase in rental volume may also be reflected in the sales volume this quarter as stronger home sales may have lifted earnings for some developers. CapitaLand for example saw a 28.4 per cent rise in net profit in Q3. Locally, their private residential projects, The Nassim and Cairnhill Nine, have boosted sales, together with their new projects in China – namely Riverfront in Hangzhou, New Horizon in Shanghai and Vermont Hills in Beijing.

nassimhillcapitalandPhoto credit: CapitaLand

In Singapore, they have sold 206 units in the second quarter, and a total of $1.24 billion in total sales value in the first 3 quarters of the year. With the happy increase in number of launches within the last quarter, sales volume may hit a positive note and ring in the festive year-end cheer come end December.

Singapore developer plans for 302-unit condo in Ho Chi Minh

One of Singapore’s property giants, CapitaLand, has just bought up a prime piece of land in Ho Chi Minh city and intends to develop a luxury private residential and serviced residence project which will yield 302 units across 0.5 ha in the city’s Cau Kho ward of District One.

seasonsavenuevietnam

Photo credit: CapitaLand Vietnam 

CapitaLand has previously launched 3 residential projects in Vietnam, including The Vista, Vista Verde and Seasons Avenue. All 3 had sales launches in Singapore and response has been positive ever since Vietnam relaxed their rules on foreign ownership of local real estate. The fact that this recent US$51.9 million (S$70 million) purchase is the developer’s third acquisition in less than a year and a half makes them a formidable foreign presence in the Vietnamese real estate sector. This launch will bring CapitaLand’s residential real estate portfolio in Vietnam to 9,100.

thevistavietnamPhoto credit: CapitaLand Vietnam 

As The Ascott‘s largest market in South-east Asia, CapitaLand will be managing the 200-serviced apartments in this new project under Somerset brand. The 17-storey residential block is targeted for a year-end launch, and will house 102-units made up of two- to four-bedroom apartments and penthouses. Akin to Cairnhill Nine, also developed by CapitaLand, in Singapore, plans are for the residential tower to also offer concierge services from the neighbouring serviced apartment block. This is apparently a first in Vietnam.

Private home prices dip for 10 consecutive quarters

The delicate balance between population growth, economy growth and housing provision is not an easy one to strike. And Singapore as a young nation, will have to learn quickly as land is limited but the number of completed units to enter the market in the next couple of years is set to reach 23,000.

Cairnhill Nine CapitaLand

Photo credit: Cairnhill Nine by CapitaLand

Private property prices have been dipping for 10 consecutive quarters now, and the market will be under even greater pressure in the months ahead as supply continues to increase while demand remains stagnant. Rental prices are expected to fall even faster than sale prices and the global economic situation does not seem to be helping. Prices have fallen 9.1 per cent since Q3 of 2013 and non-landed suburban properties in the OCR (outside of central region) fell the hardest.

Part of the reason for the falling figures could be the cutback on land sales by the government and the consequent lack of new launches. Only 953 units were launched in Q1, but property players are expecting the momentum to pick up as the year moves on.

It the first quarter’s numbers were anything to go by, with sales rising 7.2 per cent to 2,847 units, volume may have increased across both the new and resale private home markets.

 

Integrated properties bring buyers in

The weekend brought good cheer to the developers of a couple of new residential properties Cairnhill Nine in the heart of Orchard Road and The Wisteria in Yishun.

CairnhillNine

Photo credit: CapitaLand

In the prime Orchard road district, half of the 268-unit Cairnhill Nine has been sold. 200 units ranging from 591 to 3,864 sq ft were launched over the weekend. The project has a good variety of units with one-bedders and two-bedders which included guest rooms, and also four-bedroom units and penthouses. The area is near the major shopping belt, with amenities such as the library@orchard and Mount Elizabeth hospital and the Novena medical area just a stone’s throw away. With MRT stations and bus stops situated nearby, and its integration with serviced residence Ascott Orchard Singapore, Cairnhill Nine looks set to be a worthy addition to the many other private apartments in the area. Nearby is the luxury Hilltops condominium, Cairnhill Residences, Helios Residences and The Peak @ Cairnhill.

WIsteria YishunPhoto: The Wisteria in Yishun

Close to 85% of the 138 units at Wisteria, a mixed-use project developed by Northern Resi which includes a 2-storey mall, have been snapped up last weekend. There has been a number of promising new properties popping in Yishun in the past year and this just adds to the pie.

Both the Wisteria and Cairnhill Nine are 99-year leasehold properties.

Regional Real Estate Gem – Vietnam

The real estate market in Vietnam is growing by leaps and bounds, fuelled mostly by the burgeoning middle class and boosted by the fast-paced infrastructural and economic growth. Going against the grain, its economy is the bright spark amidst a gloomy regional economic outlook, posting a 6.7 per cent growth last year.

The-EstellaPhoto: The Estella condominium in Ho Chi Minh City. (Photo credit: KeppeLand)

Some Singapore developers have already found their footing in this rapidly blossoming South-east Asian country, including Keppel Land and CapitaLand. The former has launched the Estella Heights and The Estella condominium in Ho Chi Minh City to positive response and the latter’s Vista Verde and The Vista condominiums are reeling in the bucks.

vv1Photo: Vista Verde and The Vista condominium (Photo credit: CapitaLand)

In Ho Chi Minh City alone, 36,160 condominium units were sold last year, at an astounding 98 per cent increase from 2014. In the country’s capitol, Hanoi, 21,100 units were sold at a 90 per cent leap from the year before. Some of the change could be attributed to the finance sector opening up, to allow more young couples to take out home loans, and simply from the fact that more housing units are now made available. Despite the boom, property prices are still affordable, a 15 to 20 per cent lower than the 2008 peak. As a rough estimate, a 70 sq metre apartment in the city fringes of Ho Chi Minh CBD will cost $2,200 per sq metre – that comes up to approximately $154,000 for a new 2-bedroom apartment.

There is no doubt long-term potential for real estate market growth in Vietnam, and despite some calculate risks, the time to invest could be now.