$1-billion bid for Stirling road land plot breaks record

A $1 billion bid for a piece of land at Queenstown made history as the first time a residential site under the Government Land Sales (GLS) programme scored such a high offer, almost $300 million more than the previous record.

queenspeakcondoChina-based developers Logan Property and Nanshan Group put the bid of $1.003 billion in for the 21,109 square metre plot in Stirling Road. The site had been on the GLS reserve list since 2010 and consists of a 2 adjoining land plots. It was triggered for sale only last month after a bid of at least $685.25 million was put in for the site.

But the billion-dollar bid certainly takes things to a whole new level. The previous highest ever bid was $925.7 million from MCL Land and for a pure residential site, the record stood at $682.8 million for the site where Costa Del Sol condominium now stands. At 20.6 per cent higher than the winning bid for the nearby Queens Peak condominium, the latest $1billion bid may set a new record for the Queenstown area in terms of cost per square foot. With a maximum permissible gross floor area of 954,328 sq ft, the bid will translate to $1,050 psf per plot ratio.

Commonwealth TowersThe Stirling Road site is close to Buona Vista, and placed strategically between the Central Business District and Jurong East regional business hub which makes it the prime spot for rental properties. Despite the existence of many other private properties in the area, developers do not seem intimidated, possibly as most investors of units in the area would have sold them by the time this new development is ready and will in fact be looking for new investment opportunities. There could also be a rebound of foreign investment interest following Bandar Malaysia‘s recent collapse.

Resale non-landed residential property prices hold steady in April

After 5 consecutive months of climbing figures, resale condominium prices have steadied themselves in April. Resale transactions fell by 21 per cent as a number of new launches drew the attention of buyers and investors in the past couple of months.

Thomson Impressions2Though the numbers are still shy of that during the peak of 2010 and 2013, things have been looking up for the private property market this year. Year on year, private resale prices and transaction volume were 1.8 and 48 per cent higher than in April last year. In comparison with March 2017, April’s resale private property market numbers dipped slightly. Prime district property prices fell 1.2 per cent last month while prices of units in the city fringes and suburbs rose 1.2 per cent.

In the 5 months prior, private resale prices have risen 0.6, 0.3, 0.9, 1 and 0.8 per cent from last November to March this year. The improving market sentiments seem to be reflected in the overall above-market-values which rose to $5,000 from $0 in just a month. Districts which posted the highest median above-market-values at $37,000, and had more than 10 resale transactions, were District 16 and 21. Despite higher resale activity in the city fringes, District 11 which consists of Newton and Novena, posted the highest negative median above-market-value of -$40,000.

the-crestThe year is almost at its mid-point and the latest new launches have boosted numbers in the new private home sales market, but how will the resale private property sector fare in H2?

High-risk mortgages prompt Hong Kong authorities to rethink cooling measures

Singapore authorities rolled out property cooling measures just 4 years ago and while it was not necessarily a welcomed move, it was certainly a prudent one. With restrictions placed on the loan-to-value and the debt servicing ratios, home prices were kept from escalating. Now Hong Kong could also be considering doing the same as their real estate market skyrockets. The worry is that property prices could become unsustainable and a property bubble could grow and subsequently burst with disastrous consequences.

hongkongpropertyThe rapidly increasing number of high loan-to-value mortgages taken out on properties have had the de facto central bank of Hong Kong concerned. Property developers and individual buyers alike, these high-value loans are creating a growing list of high-risk financial profiles. Some developers have even taken out mortgages worth 120 per cent of the project’s value. Developers such as Sun Hung Kai Properties and Cheung Kong Property have been offering incentives such as tax rebates and loan offers in attempts to attract buyers.

Despite the Hong Kong government implementing higher taxes on properties last November, property prices have continued to climb and increased home buyers’ borrowing costs. Many buyers have not only been putting all their assets into property purchases, but also their parents’ monies and all that will be at risk should the bubble burst. Some buyers have even been leveraging on their parents’ properties in order to fulfil residential deposits. The Hong Kong Monetary Authority (HKMA) is keeping a close eye on the situation and may move to enforce new regulations on banks should there be any undue changes.

 

Another HUDC estate tries for collective sale – Rio Casa

HUDCs certainly seem to making the news this year as yet another HUDC estate tries for an en bloc sale. Earlier last month, Braddell View became the last HUDC to be privatised and Shunfuville successfully completed their en bloc journey in May last year.

RioCasaHUDC HougangThis time, Rio Casa, formerly called Hougang N3 is trying their hand at the collective sale game. The process was surprisingly easy as 80 per cent approval was achieved within 3 weeks. Bidding is expected to hover around $450.3 million for the 286-unit site. If successful, each unit owner will receive $1.5 million which is approximately $586 psf. The property has about 73-years left to its lease and the new owner will have to fork out $57.5 million for a new 99-year lease. In addition, $141.5 million will be required for site-intensification.

Kingsford WaterbayThe site should be quite desirable as it features 200m of riverfront and greenery views with schools such as Holy Innocents’ Primary and High Schools and CHIJ Our Lady of the Nativity nearby. With the recent uptick in buying sentiments and the competitiveness in the Government Land Sales segment, developers may pay for the site despite its slightly pricier tag. There are considerations however, as the site is not near any MRT station and the nearby Kingsford WaterBay has unsold units remaining. It is still however early days and the Hougang area has a deep potential for redevelopment which may very well happen in the decade ahead. The tender for the site closes on May 23.

Outlook hopeful despite fall in private home prices

After 14 consecutive quarters of declining private home prices, slivers of light are shining through – the suburban condominium market has seen a tad more activity with prices rising slightly; and for most part, the rate of decline has slowed.

SantoriniThe fall in prices of private homes stood at 0.5 per cent last quarter, similar to that in the last quarter of 2016. Suburban non-landed property prices have in fact posted a growth of 0.1 per cent after 13 straight quarters of decline. The positive figures in the suburbs could be due to the many new projects in areas outside of the central region which launched to much success in the earlier part of the year. These included developments such as The Clement Canopy in Clementi and Grandeur Park Residences in Tanah Merah. Previously-launched projects such as Parc Riviera and The Santorini also re-marketed their units resulting in favourable response from buyers.

Property analysts also contributed some of the uptick in buying sentiment to recent changes in the property cooling measures. Though the impact may not be obvious and immediate, it has nevertheless helped to inject some optimism in the market. Though the expectation is for property prices to fall 1 to 3 per cent in H1, the second half of the year should see prices stabilising and 2017 may just end on a happier note.

Resale private home prices up for 4th consecutive month

3 months into the new year and things seem to be looking up for the resale non-landed private home sector. Prices have been on the rise for the fourth consecutive month with a 0.9 per cent climb last month, following a 0.6, 0.3 and 1 per cent rise respectively in the months counting up from December last year.

ParkInfiniaRecent industry figures have shown a slight recovery in both prices and sales volume in the resale market, mostly due to an overall more upbeat atmosphere boosted by a series of successful new launches within the first 3 months of the year. Approximately 694 private non-landed residential units were resold in February albeit it being the shortest month of the year. That is 31.2 per cent higher than the 529 units which exchanged hands in January though that could have been because of the Chinese New Year holidays.

Comparing year-on-year, resale prices in February this year clocked at 1.8 per cent higher that the last and resale volume was 77.9 per cent higher than the 390 units sold the same month last year. Compared to the price peak in 2014, resale private non-landed home prices is still lagging by 6 per cent, but considering the lull which took over the real estate sector for the past 2 to 3 years, price increases across the island in this segment is a step in the right direction. Prices in the prime districts rose 1 per cent while inching up 0.8 per cent in the city fringes and 0.9 per cent in the outside central regions.

 

Grand opening launch for Grandeur Park Residences

The latest property development in Tanah Merah has sold more than half of its units over a weekend. Grandeur Park Residences reported strong sales with at least 58 per cent of its 720 units sold during its launch.

GrandeurParkResidencesSmaller apartments seem to be popular once again as the project sold most of the 96 one-bedroom units made available during the launch. Selling prices averaged $1,350 psf. The location, in close proximity to the Tanah Merah MRT station, could be one of the main factors pushing buyers to seriously consider the long-term and rental potential of the property. The condominium project which is also close to the Changi Business Park also has two- to five-bedders with prices starting from $550,000 for a one-bedder and $700,000 for a two-bedroom unit. Though the rental market is weak at the moment, buyers are counting on the property market rebounding by the time the project is ready for occupancy.

GrandeurPark2
Following the first private condominium launch this year of The Clement Canopy, response at the Grandeur Park Residences launch may be an expression of pent-up demand which could release keen albeit selective buyers back into the fold. However, the eagerness to snap up smaller units mean a lower overall quantum which may keep market figures low or at best level.

January’s private home sales plateau

After a slight rise of 0.1 per cent in December, January’s completed private home prices remained flat. There were some rise and fall in the different districts but overall, non-landed residential property prices evened out on a plateau.

CreekBukitTimahThat may not necessary be a negative as signs of stabilisation are generally expected of the year. Property analysts say that some of the zero per cent month-on-month change could also be due to the availability of smaller units with a higher psf pricing schedule. Besides shoebox apartments, studios and one-bedders, family-size units in new developments are also now smaller in size than before.

Small apartments aside, prices of completed condominium units in the central region did rise 0.7 per cent after a 0.3 per cent dip in December. In the non-central regions however, prices went the other direction with a 0.6 fall following a 0.5 per cent increase the month before.

26NewtonThe private real estate market could however be looking at more resale properties entering the pen soon as most buyers who have purchased investment properties in 2013 will have completed their 4-year holding period this year. This means they are no longer tied down by the cooling measure which requires them to pay a seller’s stamp duty should they sell their property within 4 years following the purchase. Whether the sector is ready for this influx of properties while pulling themselves sluggishly out of the lull remains to be seen.