NATIONAL Development Minister Khaw Boon Wan has urged investors and upgraders to think hard before buying a new private home.

In his latest blog post, he said two key factors – a potentially large supply of private homes and a fragile global economy – need to be considered before purchasing private property.

He said there is a current pipeline of 45,000 units yet to be built and sold. Sites made available through the second half of this year’s Government Land Sale programme could inject another 8,000 new homes.

He said this could result in a total of almost 53,000 new homes hitting the market in the next few years.

At the same time, global events like the European sovereign debt crisis and Arab world unrest could have a direct and immediate impact on Asia and Singapore.

‘In the event of any external shock, both foreign demand and rental demand can fall quite quickly,’ wrote Mr Khaw, adding that the impact could be serious if the fall in demand coincides with a substantial increase in private home supply.

He also noted that the cost of borrowing and repayments must go up, and households will have to factor this into their purchasing decisions.

He wrote that those who borrow to buy property, thinking prices will continue to rise, risk being thrown into financial hardship should prices drop. ‘Some property investors seem either blissfully ignorant of the massive supply that will hit the market from 2013, or under the belief that the impact will affect others and not themselves,’ he said, paraphrasing an analyst.

He added that policies often cannot deliver instant results. But he promised that he would have an eye on the medium term for possible pitfalls, while addressing the problem of the sharply rising property market.

On the flip side, Mr Khaw said that if Singapore’s economy continues to grow, property owners will enjoy good returns when their units are completed.

‘A market correction or any crash is not a given… But no one is immune to mishaps,’ he said.

Source: Straits Times, 10th Jun 2011

113-year-old Marine Parade property and adjoining site could fetch up to $110m

The single-storey home (above) is the only ‘seaside’ bungalow left in the street. There are two parts to the land parcel (below): the bungalow plot and another housing a three-storey block of six flats and and servants’ quarters. — PHOTOS: CREDO REAL ESTATE

A MARINE Parade bungalow occupied by Japanese officers during World War II and an adjoining site, both owned by the family of businessman Choa Kim Keat, are up for sale with an expected price of up to $110 million.

The 113-year-old single-storey home – the only ‘seaside’ bungalow left in the street – has been earmarked for conservation and must be preserved. The house was built by the sea before reclamation in the area.

The entire plot has been zoned residential and can be built up to 24 storeys, allowing about 100 units of 1,000 sq ft each.

There are two parts to the land parcel: one is the bungalow plot itself, which fronts Marine Parade Road; the other fronts East Coast Road and houses a three-storey block of six flats and servants’ quarters.

The district 15 property measures 47,400 sq ft, about half the size of a football field.

Marketing agent Credo Real Estate hopes to get offers of between

$100 million and $110 million, which translates to a land rate of between $1,125 and $1,216 per sq ft (psf).

‘The conservation bungalow would lend a unique charm to the new development, differentiating it from the many other new condominiums,’ said Credo managing director Karamjit Singh.

‘The developer could also explore the option of converting the house into a strata-bungalow, for which, given its historical background, we believe the demand would be hot.’

The freehold condominium Grand Duchess at St Patrick’s in Katong is an example of how conservation buildings can be weaved into a project’s overall design. The 121-unit condo has two historic buildings: one has been turned into a clubhouse while the other contains two apartments.

Tenders for the Marine Parade property close on June 6.

Recent significant collective sales in district 15 include Paramount Hotel and Paramount Shopping Centre nearby, which sold for $214 million, or $1,178 psf per plot ratio (ppr). Marine Point condo down the road fetched $100.7 million, or $1,056 psf ppr.

The late Choa Kim Keat is best remembered as an influential tin salesman employed by the Straits Trading Company in the 1880s, and for his role in several other businesses. Kim Keat Road in Balestier is named after him.

Aside from the Marine Parade bungalow, he also owned homes in Neil Road and Pasir Panjang.

After the war, his family moved back into the bungalow, which was known then as Sea Breeze Lodge.

His great-grandson, Mr Victor Choa, 69, told The Straits Times that he has fond memories of the bungalow he grew up in.

‘After the war, we moved into this house to live. I remember all these grand bungalows lined up by the seaside, but this was all before Marine Parade was redeveloped,’ he said.

‘Each house would have a small enclosure in front of it, leading out to the sea, allowing the residents to swim safely in the waters.’

The family has been approached to redevelop the bungalow many times, but had rejected the offers due to the desire of Mr Eric Choa – Choa Kim Keat’s grandson – to live in his home until his death. He died in 2009 at the age of 93. His wife Hoo Yan Meng died the following year, also at the age of 93.

Mr Victor Choa, Eric’s son, said: ‘My father was very proud that we had the only (bungalow) left… I don’t have the energy to redevelop it, but I think it can be done up beautifully and it would make a wonderful piece of history for Singapore.’

Source: Straits Times, 10th May 2011

Mass-market private home demand may fall if HDB income ceiling is raised

PROPERTY stocks fell yesterday on fears that a possible raising of the household income ceiling for HDB build-to-order flats could cool demand for mass market private properties.

The Government had indicated that the $8,000 income ceiling for families buying a flat from HDB could be raised to $10,000 after the General Election.

Shares of listed property developers dipped yesterday amid concerns among investors that this would shift demand away from private projects.

City Developments, which started trading without its latest dividend on Tuesday, fell 40 cents to $11.04. Keppel Land shed six cents to $4.07, while CapitaLand slid five cents to $3.27. Wing Tai fell three cents to $1.54, UOL shed eight cents to $4.73 and Fraser & Neave, with a big property arm, fell five cents to $6.23.

‘As Polling Day in Singapore on May 7 approaches, property stocks are being sold down over concerns that there could be more policy changes affecting both the public and private property markets,’ said a note by Kim Eng Securities.

‘For instance, the Government will now review the possibility of raising the household income ceiling for buying new HDB build-to-order flats from the current $8,000 to $10,000. If implemented, the demand for mass market private properties may be diluted, possibly leading to a price correction in that segment.’

OCBC Investment Research said the possible higher income ceiling could suggest an unchanged hawkish stance on property prices post-General Election.

‘This runs contrary to the views of some that the government curbs so far are mostly pre-election moves and that the General Election could be a positive price catalyst.

‘We think the upside in private residential prices remains limited due to continued policy overhang in 2011, coupled with expected increases in interest rates and physical supply in 2012 to 2013.’

OCBC remains neutral on the residential property sector, and has a ‘hold’ rating on City Developments with a fair value of $10.72.

But JP Morgan said it had a ‘positive stance’ on the Singapore property sector, adding that developers that have reported results have come out with better numbers in general despite the distortion from some new accounting rules.

JP Morgan said developers here are trading at a discount to net asset value estimates, a level it feels is ‘an attractive entry level from a valuation perspective’.

Some developers are also continuing to get the thumbs up. Citi Investment Research kept its ‘buy’ call on Wing Tai but dropped its target price from $2.53 to $2.05. Citi said Wing Tai has ‘attractive valuations’, but will face slower-than-expected sales at some of its projects such as Belle Vue, as well as higher-than-expected tax. It also highlighted increased risks of Wing Tai suffering from policy changes.

Source: Straits Times, 5th May 2011

THE price gap between uncompleted and completed private properties narrowed in the first quarter of this year, according to newly-released data.

The figures from property consultancy SLP International’s first quarter residential market report show that high-end and mid-tier properties have been the most affected by this change.

Uncompleted homes usually command higher prices. A narrowing of this gap, caused by a drop in uncompleted home prices could reflect market shock at January’s cooling measures, said SLP’s head of research, Mr Nicholas Mak.

The difference in median prices of uncompleted and completed high-end homes dropped from $166 per sq ft (psf) to $92 psf in the first quarter.

Similarly, the gap between median prices for uncompleted and completed mid-tier properties dipped from $558 psf to $455 psf in the first quarter.

Typically, the two sets of prices move in tandem, said Mr Mak.

‘Sometimes the prices move in different directions. This could be due to price growth, strong demand. I think it can also be taken as a sign that the market has gone into a bit of shock in the first quarter after the introduction of more cooling measures,’ he said.

According to SLP, the fall in price of uncompleted homes was partly due to discounts given to developers.

Mr Mak said the popularity of shoebox homes – units under 500 sq ft – could be lifting price gains of uncompleted homes.

Mass market homes also proved popular. The report said median prices of uncompleted properties in the mass market segment rose 6 per cent in the first quarter of this year to $988 psf.

This is due to a healthy demand for suburban condominiums, said Mr Mak. The figures show that mass market units accounted for more than half of all apartments sold by developers in the first three months of this year.

Mr Mak said more buying opportunities might emerge, especially with owners of suburban resale properties more willing to cut prices amid concerns that cooling measures may soften demand.

‘The lack of availability of completed projects is stopping buyers from buying more of such properties over uncompleted homes, which are usually released in bulk during property launches,’ he said.

An oversupply of completed properties is expected to hit the market next year, which could slow down price growth in the completed homes market, he said.

Source: Straits Times, 4th May 2011

The number of units put up for sale has risen since January at the Nuovo condo, located beside the planned North-South Expressway. — ST PHOTO: RAJ NADARAJAN

MORE people living in the Nuovo condominium sited beside the planned North-South Expressway (NSE) want to take the exit route and sell their homes – but not at fire-sale prices.

They could be concerned about the noise and dust from the construction and eventual traffic, said real-estate agents.

They noted that the number of Nuovo units put up for sale has gone up since the Land Transport Authority announced the northern alignment of the NSE in January. About 60 per cent of the 297 units in the 99-year leasehold development will face the expressway, which will run as a semi-tunnel beneath Ang Mo Kio Avenue 6.

Mr Bob Sim, a real estate agent with Orange Tee, estimated a 5 per cent increase in units listed for sale at Nuovo after the NSE announcement.

But he said: ‘There isn’t a fire sale.’

Mr Sim said there are about 25 units for sale now, compared with a monthly average of 15 before the announcement.

Property prices for Nuovo have dipped slightly after the NSE news, from an average of $718 per sq ft (psf) in February to $688 psf last month.

Construction of the NSE is expected to start in 2013. The project, costing $7 billion to $8 billion, will link northern Singapore to the city and is expected to be ready by 2020. Its 15.9km northern section from Admiralty Road West to Toa Payoh Rise was announced on Jan 19.

The project could have prompted some Nuovo residents – who had intended to sell their homes – to bring their plans forward, said Mr Sim.

Mr Darren Lim, 38, an accountant, is among those residents who want out. He moved into Nuovo about 16 months ago and had planned to buy another home only several years later.

‘There wasn’t any urgency to sell. I like the estate, I have good neighbours. And I’m an HDB upgrader so I don’t have that much money,’ he said.

While the NSE was not the sole factor prompting him to move out, the prospect of living close to the expressway did not appeal to him, he admitted.

The Seletaris condominium in Sembawang Road has also seen a rise in the number of units put up for sale. The NSE will swing past Seletaris in the form of a viaduct.

A real-estate agent who markets units at Seletaris noted that ‘the situation here is worse than in other condos because of the elevated expressway, which will bring more noise and dust’.

Property prices at Seletaris have dipped from a high of $698 psf in January to $624 psf in March.

But property agents have not noticed a similar trend in Castle Green and Bullion Park, two condos in Lentor Avenue and Ang Mo Kio Avenue 6 that are also situated by the NSE.

They attributed this to fewer units being directly affected by the NSE in these two condos.

Source: Straits Times, 2nd May 2011

The land, along with another site released earlier, will boost supply of residential units

HUNDREDS of new homes are in the offing after three residential sites were released for sale yesterday.

The plots on the Government’s confirmed list – at Flora Drive and Woodlands Avenue 2/Rosewood Drive – will go straight to tender.

A reserve list site at Hillview Avenue in the Bukit Batok planning area will go to tender if a developer submits a bid that meets a minimum threshold acceptable to the Government.

Together with a private residential site released earlier this month at Sengkang Square – also from the reserve list – the four sites could yield about 1,885 homes, the Urban Redevelopment Authority said yesterday.

The land at Flora Drive – it is within a Pasir Ris residential estate – is expected to yield about 380 units on a gross floor area of 37,545 sq m.

The Woodlands Avenue 2/Rosewood Drive site, with a gross floor area of 38,333 sq m, could produce 390 units. It is near Republic Polytechnic and Singapore Sports School.

About 405 units could be built on the Hillview Avenue site, near the Cashew and Hillview MRT stations on the Downtown Line 2, which is slated for completion in 2015. The site has a gross floor area of 35,416 sq m.

Property experts expect the Flora Drive site to fetch the highest bidding price as projects in the area have garnered keen interest.

Although estimates differ, bids are expected to range from $360 per sq ft per plot ratio (psf ppr) to $450 psf ppr for the site, implying a total price of between $147 million and $182 million for the land.

Hedges Park Condominium, launched recently, is near the site. About 65 per cent of the units have been sold, said Mr Png Poh Soon, Knight Frank’s head of consultancy and research.

Despite its attractive location, the Hillview site may not be triggered for tender this year ‘as there is an ample supply of residential Government Land Sales programme sites for sale’, said SLP International’s research head, Mr Nicholas Mak.

If it is launched for sale by tender, Far East Organisation may bid aggressively for the site as it is already developing some properties in the vicinity, said Mr Mak. He expects the price of the site to hover between $360 and $400 psf ppr, making an overall price of between $137 million and $153 million.

Source: Straits Times, 27th April 2011

THE residents of Mayfair Park estate tucked inside Rifle Range Road have been anxious of late.

Already, the owners of 114 bungalows and semi-detached houses and two condominiums in this corner of Bukit Timah, who have only 44 years left on the 99-year leases on their homes, are staring down property values that are headed south because of the dwindling lease.

Their prospect of selling does not look good either, because most banks are not keen to give loans for such properties; the Central Provident Fund Board also bars CPF savings from being used to buy properties with under 60 years left on their leases.

But Mr Liang Eng Hwa, who was a Member of Parliament for Holland-Bukit Timah GRC until Parliament was dissolved last week, said he will make working on the land lease in Mayfair Park estate his top priority if he is re-elected.

He said he will speak to residents to find out where they stand on the matter.

‘I haven’t really heard from them yet – whether they want to go for a renewal. I would have to find out more,’ he said, but added that in the house visits he has done, many residents have asked him what the terms would be if they were to go for a renewal of their leases.

‘What I will do, if elected, is to really put this as top priority and work on this,’ he said.

Mr Liang was speaking to The Straits Times at the Family Carnival@Mayfair (Zhenghua) yesterday. Also at the event was the leader of the People’s Action Party team expected to contest Holland-Bukit Timah GRC, Dr Vivian Balakrishnan.

Source: Straits Times, 25th April 2011

Infrastructure already there, not many such sites left, say analysts

HOME buyers are likely to react enthusiastically to the Government’s plan to inject thousands of new homes into mature estates, industry analysts say.

Under the plan, more than 10,000 new private and public homes will be built in Commonwealth, Queenstown and Bishan in the next 10 to 15 years.

The Government aims to use high-rise housing to help increase the population density in these areas.

These mature estates, said analysts, usually feature established networks of recreational and educational facilities and they are often well-connected to transport links.

‘The infrastructure is already there and you won’t have to wait for things to be built, like when Punggol was first established,’ said Mr Eugene Lim, ERA Realty key executive officer.

Mr Ong Kah Seng, senior manager for Asia-Pacific research at Cushman and Wakefield pointed out that most mature housing estates tend to be fairly densely built.

He added that there may not be many sites left for residential development that lie within close proximity of a town centre or MRT station.

Mr Lim agreed, adding: ‘The only way to acquire them would be through an en bloc sale or in the case of public housing, through the Selective En bloc Redevelopment Scheme, in which case, a good proportion of old flats might be targeted.’

Some undeveloped sites in the Bishan and Queenstown estates have been made available through the first half of this year’s Government Land Sales (GLS) programme.

Two prime plots in Stirling Road have been set aside under the reserve list.

But this could also mean prices for private homes in those areas could be significantly higher with developers bidding competitively for a slice of the action.

In February, a plum site next to Bishan MRT station attracted 19 bids. The was acquired by CapitaLand for $550.1 million, or $869 per sq ft per plot ratio.

Data from the Housing Board shows that median prices for a three-bedroom flat in Queenstown and Bishan estates rose between 19.5 per cent and 21.9 per cent in the fourth quarter of last year, as compared with the same period a year earlier.

Mr Ong said prices of non-landed private residential properties have increased by up to 18 per cent over the previous four quarters.

Source: Straits Times, 23rd April 2011

Prices hold steady as developers play it safe, buyers stream back

Out of those who bought units at Eight Courtyards in Yishun, 63 per cent were HDB upgraders. Singaporeans made up 67 per cent. PHOTO: FRASERS CENTREPOINT HOMES

STRONG buying interest returned to the property market over the weekend and yesterday, with more than 430 homes snapped up on the back of a series of large property launches.

HDB upgraders came out in full force as suburban homes notched up brisk sales in areas such as Yishun and Upper Changi Road.

Market experts say project launches are a key factor in the strong sales. They expect sales this month to stay robust – likely to beat last month’s 1,386 units – with more launches expected in the coming weeks.

Leading the pack was Frasers Centrepoint Homes and Far East Organization’s 656-unit Eight Courtyards in Yishun where 202 units found buyers over its weekend preview sale.

The 99-year leasehold homes were priced at an average of $795 per sq ft (psf), which some experts say is noticeably lower than recent new mass market launch prices, and therefore attractive to buyers.

A one-bedroom unit costs $423,000 to $564,000, a two-bedder is between $637,000 and $751,000, while a three-bedder would set a buyer back by $703,000 to $1.03 million.

Nearby Canberra Residences, for example, launched for about $830 psf in January, while NV Residences in Pasir Ris was launched at about that average price in September last year.

However, experts say this is not an early sign of falling prices. Some point to slow sales of executive condo The Canopy, also in Yishun, as a factor that might have led the developers to adopt more cautious pricing in this instance.

Frasers said all its 30 one-bedroom apartments have been sold. Popular unit types also include two-, three- and four-bedroom apartments. HDB upgraders accounted for 63 per cent of buyers.

Singaporeans made up 67 per cent of buyers, permanent residents, 25 per cent while the rest were foreigners.

Hong Leong Holdings’ 501-unit Hedges Park in Flora Drive in the Changi area moved 130 units at its preview at an average price of $850 psf.

The 99-year leasehold apartments sold included one- to four-bedroom units of 484 sq ft to 1,798 sq ft, and range in price from $466,000 for a one-bedder to $1.06 million for a four-bedder.

EL Development’s 115-unit Skysuites 17 also sold nine units over the weekend, to bring its total sales to 99 units.

All 90 units at freehold project Centra Heights in Sims Avenue were also snapped up during its preview yesterday. Mr Melvin Ho, managing director of developer Fission Group, said the average price was about $1,250 psf – a level he said was ‘realistic’.

‘If not for the January measures, we would have priced the project about 5 to 10 per cent higher than we have. Our expectations have been tempered. We’re not trying for a record or benchmark price,’ he added.

A CDL spokesman said 35 units at H2O Residences have been sold this month, bringing the total sold to 290 of the 350 units launched so far.

Experts say strong buying interest means developers are likely to continue to hold prices steady. However, this month’s sales are likely to surpass last month’s as developers push out their launches to ride on the current wave of buying interest.

Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, added that with the economy doing well and with collective sales gaining momentum again, more buyers are entering the market.

He expects new private home sales this month to surpass the 1,500 units mark.

Dennis Wee Group director Chris Koh said buyers are streaming back again after a lull as the cooling measures were digested. But many of the buyers are owner-occupiers, he added.

‘Developers watch one another and we are likely to see more projects pushed out as recently launched projects have done quite well. While volumes have increased, however, prices have held steady.’

Source: Straits Times, 19th April 2011

Surprisingly robust figures for last month buck falling sales trend

Sales of city centre units last month, such as those at Skysuites@Anson in Tanjong Pagar, jumped 85 per cent from February, according to Colliers International’s analysis of the Urban Redevelopment Authority data. — PHOTO: SKYSUITES@ANSON

INVESTORS and HDB upgraders were out in force last month to drive sales of new private homes up 25 per cent to a surprisingly high 1,386 units.

Add in executive condominium (EC) sales, and the total is 1,543 units.

The March figures are the highest this year and buck the trend after three consecutive months of falling sales – but they are still below the level of five months of last year.

There were 3,701 new homes sold in the first three months of this year, 13 per cent down from the 4,241 shifted in the fourth quarter of last year.

It is also the poorest quarter for new home sales since the fourth quarter of 2009, said Dr Chua Yang Liang, the head of research at Jones Lang LaSalle South-east Asia.

The decline is possibly due to the weeding out of speculators as the cooling measures take effect, experts say.

Suburban homes were the most popular, comprising 46 per cent of the total sales last month, indicating sustained demand from HDB upgraders.

‘The high (March) figures are surprising… Usually, months with greater sales are the result of many larger projects launching and selling high numbers of units,’ PropNex corporate communications manager Adam Tan noted.

Experts add that last month’s stronger showing is partly due to the rebound after the usual Chinese New Year slowdown in February.

But it also suggests that home buyers might have shaken off the Jan 13 cooling measures and are showing renewed interest in mid- and high-end markets.

Colliers International’s analysis of the Urban Redevelopment Authority data found that city centre unit sales jumped 85 per cent, while sales on the fringe rocketed 120 per cent over February. But suburban homes sales fell 15 per cent.

Sales numbers have also been boosted by investors snapping up shoebox units – those of less than 500 sq ft.

New projects such as Devonshire Residences and SkySuites 17 have a significant number of such homes and they have seen healthy sales, said Mr Ong Teck Hui, Credo Real Estate’s head of research and consultancy.

Buying interest is also broad-based across the island, with only two projects – H2O Residences and Questa@Dunman – managing sales of 100 units or more.

Last month’s robust numbers have again raised the prospect of possibly more cooling measures, but most experts say that it is still too early to tell.

SLP International research head Nicholas Mak said that with prices moving up only marginally, another round of measures would not be justifiable at this time. Flash estimates showed that prices rose 2.1 per cent in the first quarter and that price rises were moderating.

He added that although HDB upgraders still make up a significant proportion of new sales, the measures have helped dampen demand. The proportion of new suburban homes sold fell from 67 per cent in February to 46 per cent last month.

Experts expect sales this month to hold steady, supported by the launch of more projects and an unexpectedly strong economic growth of 8.5 per cent in the first quarter.

Ms Tay Huey Ying, a research and advisory consultant at Colliers, added that Singapore’s enlarged population and attractiveness as an investment destination could mean that monthly sales of 1,000 to 1,200 new units have become the norm.

But Mr Joseph Tan, CB Richard Ellis executive director of residential, noted that the healthy residential market in the first quarter could have fuelled developers’ appetite for sites, with some land near MRT stations fetching high prices.

‘With the growth forecast of 4 to 6 per cent for the economy remaining on track, we expect the take-up of new homes in the second quarter to be around 3,000 to 3,500 units and home prices to remain stable,’ he said.

Source: Straits Times, 16th April 2011