URA data also shows nearly half of them will be in the core central region

CLOSE to half of the estimated 8,430 new private homes that are slated to be completed in 2011 will be in the upmarket core central region, according to fresh data released by the Urban Redevelopment Authority (URA) yesterday.

The government agency has also bumped up its estimate for the projected supply of private homes due to be completed this year by 25 per cent from three months ago. In October 2010, URA estimated that 6,766 new private homes will be completed in 2011.

Sources told BT that URA has been surveying developers more closely over the last few months in a bid to compile more accurate pipeline supply figures. The agency computes the estimated supply of private housing units in the pipeline through a quarterly survey of developers.

In response to a query from BT, URA said it will continue to work closely with developers to ensure that they submit up-to-date estimations of the expected completion dates of their projects.

‘URA’s survey of the developers’ completion (for 2011) is only starting to increase. The increase from Q3 2010′s forecast for 2011 completions to Q4 2010′s forecast is a significant 25 per cent. Over the next few quarters, we expect to see further upward revisions,’ said Ku Swee Yong, chief executive of real estate firm International Property Advisor.

Looking at the latest completion estimates, analysts once again warned that home-buyers need to brace themselves for a very large supply of private residential units due to be completed each year from 2011 to 2015.

URA currently estimates that 8,116 units will be completed in 2012; 17,111 units in 2013; 17,421 units in 2014; and 13,453 units in 2015.

In fact, 2010′s number of newly completed private homes, which stands at around 10,400 units, is already higher than the historical average annual increase in housing supply of around 6,400 private units over the last decade, Mr Ku pointed out. For 2011, a total of 3,874 homes will be added to the housing supply in the core central region, which includes the prime districts 9, 10 and 11, Marina Bay and Sentosa Cove. This will make up 46 per cent of the islandwide housing supply of 8,430 new private homes.

Another 2,265 private homes will be completed in the rest of central region, while in the outside central region, 2,291 units will be completed this year.

URA also said that as at the end of Q4 2010, there was a total supply of 65,699 uncompleted units of private housing from projects in the pipeline. Of these, 32,776 units were still unsold.

Source: Business Times, 29 Jan 2011

Demand is still there, at least for smaller units, say experts
THE impact of the latest property cooling measures could soon be tested as developers and marketing agents muster interest for three new property launches.

Far East Organization has been marketing The Cape, its 76-unit development at Amber Road, as ‘the pairing of cosmopolitan sensibilities with idyllic sensitivities’.

At the District 15 freehold property – right next to the firm’s Silversea project – a one-bedroom unit of 600 sq ft to 650 sq ft is going for about $1.2 million, based on indications from some property agents. This would work out to about $2,000 per sq ft (psf).

A two-bedroom unit would set a buyer back by about $1.7 million. The prices will probably be subject to change until the project goes on sale – the timing is expected to be around Chinese New Year.

Far East is offering some early-bird buyers a 5 per cent cash rebate, which will be paid out only when the project is completed. The Straits Times understands this move is in line with the company’s aim of building a stronger base of long-term buyers.

Also coming up is La Fleur, a ‘shoebox’ development in Geylang, which is expected to hold a preview today. All the 58 units are one-bedders, with sizes ranging from 409 sq ft to 646 sq ft. Prices start at an estimated $490,000 – or roughly $1,200 psf – based on marketing material obtained by The Straits Times.

The District 14 project, which consists of two eight-storey blocks, is being developed by Teambuild Properties.

Over at Balestier, Okio Residences by SDB Asia – a subsidiary of Malaysia-listed Selangor Dredging – will be previewed on Thursday.

Half of the 104 units in the 18-storey freehold project are shoebox apartments of less than 500 sq ft. It also has two-bedroom units, with sizes ranging from 570 sq ft to 667 sq ft, and four penthouses that go up to 1,098 sq ft.

Agents said a 420 sq ft apartment would cost an estimated $650,000.

Separately, at d’Leedon, CapitaLand’s 1,715-unit project at Farrer Road, the showroom was reopened to the public over the weekend after the company sold 232 of the 250 units released during the initial launch last month.

Experts said projects with smaller units were still being launched because the purchase price of such units remained manageable for buyers.

Mr Colin Tan, a research and consultancy director at Chesterton Suntec International, said that even though buying sentiment had been affected by the cooling measures, there was still demand from home buyers.

‘Developers can’t push sales and prices at the same time – something has got to give. But demand is still there, so it’s up to the developers to be creative in enticing buyers,’ he noted.

Source: Straits Times, 24 Jan 2011

THE Christmas buying spree has rubbed off on home hunters who have been snapping up units at Singapore’s latest property launch.

Some 181 of the 217 units put up for sale at The Tennery since Monday last week have already been snapped up – and this in the usually slow month of December.

Coupled with other strong launches, an estimated 600 new private homes have been bought so far this month. This means that the total number of homes sold for the year is well on track to reach the 16,000 predicted by real estate firm CB Richard Ellis.

At The Tennery, prices for the one- and two-bedroom units start at $720,000 and range from $950 to $1,300 per sq ft, according to developer Far East Organization.

It said Singaporeans and permanent residents made up 80 per cent of the buyers at the 99-year leasehold site at the junction of Choa Chu Kang Road and Woodlands Road.

PropNex chief executive Mohamed Ismail said the affordability of the small units – as well as the accessibility of the site – made the 16-storey residential development an attractive proposition for buyers.

‘Most of the buyers are probably medium-term investors who have a view to renting them out,’ he added.

He noted that the site, which will eventually boast 338 units, is near the Ten Mile Junction LRT and the soon-to-be completed Bukit Panjang MRT.

The successful Tennery launch coincides with solid performances at other new launches this month.

Some 232 units of the 250 units offered for sale by CapitaLand at its D’Leedon project on Farrer Road have been bought.

And buyers have purchased almost all of the 167 units at Robinson Suites, which are priced from $2,300 to $3,300 psf.

According to data released by the Government, some 15,025 new private homes were sold during the first 11 months of the year, already an all-time record.

With analysts predicting that full-year sales could hit 16,000 units, this would exceed the 2007 record of 14,811 units by some 8 per cent.

Orange Tee head of research and consultancy Tan Kok Keong predicts that the momentum of sales from November, when 1,909 homes were sold, is likely to continue into the new year.

‘The feel-good factor is back, with a more positive economic outlook and the Government reporting good job growth,’ he said.

Source: STraits Times, 29 Dec 2010

 FAR East Organization has sold 181 Soho-style (small office, home office) apartments in its 338-unit The Tennery.

The developer said yesterday that it released 217 units of its newest residential project, at Bukit Panjang, in a preview. A total of 181 units were sold at prices ranging from $950 per sq ft (psf) to $1,300 psf.

The 99-year leasehold The Tennery is part of an integrated residential and retail development Far East is building on the Ten Mile Junction site it won in a government tender in February.

Far East paid $164 million or $437 psf per plot ratio for the site at the junction of Choa Chu Kang and Woodlands roads.

In addition to The Tennery, the site will also house a 121,000 sq ft retail development called Junction 10.

Some 80 per cent of The Tennery’s buyers are Singaporeans and permanent residents, Far East said. It added that most of the buyers are professionals living in the Bukit Panjang, Choa Chu Kang, Bukit Batok and Hillview areas, who are familiar with the neighbourhood.

Far East Organization’s executive director and chief operating officer Chia Boon Kuah said that an increasing number of people are looking for versatile living spaces that allow them to work from home.

This development, he said, is flexible, expandable and designed for maximum functionality.

The Tennery’s one-bedroom apartments range from 619 sq ft to 640 sq ft in size, while two-bedders range from 860 sq ft to 950 sq ft in size. Far East will release more units during the project’s official launch on Jan 1, 2011.

In 2010, including The Tennery, Far East has launched nine residential projects in Singapore. Other launches included Altez in the Tanjong Pagar area, The Greenwich at Seletar Hills and Skyline@Orchard Boulevard.

Source: Business Times, 29 Dec 2010

HOME buyers looking at the resale market rather than at the buoyant new launch segment could benefit from a break in rising prices, according to new data released yesterday.

For the second consecutive month, the National University of Singapore’s Singapore Residential Price Index, which tracks only the prices of completed projects, fell.

Flash estimates suggest it was 0.2 per cent lower last month than in October. And revised estimates indicate that prices in October were 0.6 per cent down on the previous month’s, after having climbed 1.1 per cent per month in both August and September.

Prior to October, the last time the overall index fell was in July when it dipped 0.1 per cent.

Comparing central and non-central areas, home prices in central locations remained flat last month after falling 1.3 per cent in October. In non-central areas, home prices slid 0.3 per cent following their staying flat the previous month.

Experts said the index shows that prices are stabilising – particularly in non-prime areas where buyers are more resistant to higher prices and likely to be affected by the Government’s August cooling measures to a greater extent.

Some believe the index has highlighted the emergence of a two-tier market, with newer condominiums continuing to fetch benchmark prices while older completed projects stabilise or even decrease marginally in price.

Ms Tay Huey Ying, director of research and consultancy at Colliers International, said the second consecutive month-on-month slide was an indication of softening interest for older properties as buyers with a preference for everything new flock to new completions and launches. This is especially so since developers stepped up their launch activity last month, when their combined launch volume reached a 16-month high of 2,329 units, she added.

Mr Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield, said that the two-tier pricing market is likely to persist with buyers continuing to be enticed by new properties’ more exciting offerings.

Still, he expects an increasing number of home buyers to purchase resale properties, given that they represent ‘a cheaper alternative to suburban condominiums, offer almost immediate occupation and allow the direct benefit of owning a private property’.

Mr Ong added that although the cooling measures had done little to reduce home buying interest, they had served to minimise price increases, particularly for suburban condominiums.

DTZ’s head of South-east Asia research Chua Chor Hoon said that the measures, which have hit the Housing Board market harder than other segments, appear to have filtered down to the private sector.

The price index, which tracks the price movement of non-landed homes completed between October 1998 and September last year, does not capture the price movement of newly completed or soon-to-be- completed projects. The index also does not track the transacted prices of homes sold in the primary market.

Source: STraits Times, 29 Dec 2010

ONLY 40 per cent of the posh Ritz-Carlton Residences in Cairnhill Road has been sold since its launch in 2007 but developer KOP Properties is confident the luxury property segment will recover soon.

The project, which had its topping-out ceremony yesterday, is priced at around 20 per cent below the market peak of 2007.

KOP Properties believes that factor means there is scope for prices to head higher than the range of $3,300 to $5,190 per square foot (psf) achieved so far.

A penthouse was sold this month at a price of $4,500 psf.

Chief executive Leny Suparman said yesterday that the project has seen a ‘good mix’ of buyers, with foreigners making up about 50 per cent.

The freehold 36-storey development is touted as Asia’s first full strata-titled luxury residential project.

It comprises 56 apartments and two penthouses. Sizes range from 2,831 sq ft for a three-bedroom unit to 3,057 sq ft for a four-bedroom unit.

The development will house three sky terraces with facilities like a lap pool, cafe, library, wine cellar and an open kitchen and entertainment area.

The project is expected to be ready for occupation late next year.

Another KOP project, Hamilton Scotts Residences in Scotts Road, is also about 40 per cent sold.

The development comprises 52 units and four penthouses complete with ensuite elevated car porches.

It is priced between $2,800 psf and $5,000 psf and is expected to be ready for occupancy by the end of next year.

In other property moves, Spottiswoode Residences near Tanjong Pagar MRT station has sold 285 units, more than 80 per cent of its 351 flats in total.

The freehold condo has a starting price of $1,720 psf.

A CapitaLand spokesman said the d’Leedon condo in King’s Road has sold about 93 per cent of the 250 units released so far.

Keppel Land’s Lakefront Residences has sold 466 of the 500 units launched. The condo is near Lakeside MRT station and the Jurong Lake District, an upcoming regional centre.

Source: Straits Times, 21 Dec 2010

Many will need to replenish landbanks after bumper year

RECORD property sales this year have left developers scraping the bottom of the barrel with many facing a paucity of unsold units and undeveloped home sites.

A record-breaking 15,025 homes were sold in the first 11 months, which probably caught many developers by surprise coming so soon after the recession.

That means numerous developers could well be on the lookout to buy land in the year ahead, including collective sale sites.

A report by research firm Kim Eng found that nine out of the 13 Singapore Exchange listed developers which it tracks had fewer than 1,000 residential units available for sale as of Thursday.

Demand for homes is still strong despite recent government cooling moves and a major release of new state land.

Only three developers had more than 2,000 units. City Developments tops the table with an estimated 5,381 units in its stash, more than double that of second- placed CapitaLand.

At the other end of the spectrum, UOL Group had fewer than 100 units.

Spottiswoode Residences, launched last month on the city fringe, was its last residential project here before exhausting its landbank. The project was already 74 per cent sold at the end of last month.

The majority of unsold units were in suburban areas, while another 5,522 homes in the city centre were still on offer. On the popular city fringe, just 1,843 units were still on the market.

Experts said developers such as UOL and Wheelock Properties, which are running low on land, are likely to have land acquisition on their agenda next year.

Keppel Land is left with fewer than 200 suburban units in its portfolio after a healthy take-up of 629-unit The Lakefront Residences near Lakeside MRT station. The project sold 437 units last month.

Unused land and unsold units are key indicators that developers will monitor.

Experts said developers without new land would obviously have trouble notching up profits. Another key factor was the profit margin on projects, which was partly determined by prices paid for land.

Kim Eng property analyst Ooi Yi Tung said: ‘A developer can be sitting on many plots of land but if it acquired those sites with very aggressive bids, the firm still won’t make money.’

Mr Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield, said the definition of ‘a healthy landbank’ varied according to the size of the developer in question.

‘Having two to three sites which are launch-ready in the financial year will add confidence for the developers and company investors but are not expected to radically affect the profitability of the company if it can be sustained by other real estate activities,’ he added.

Boutique property group EL Development’s managing director, Mr Lim Yew Soon, said his firm is looking to replenish its landbank. It is looking at all price segments, collective sale sites and government land sales.

‘Besides the former Diamond Tower in Balestier expected to launch in the first quarter, most of our sites are fully sold… As the cost of borrowing is low, this is also a good time for developers to get land,’ he added.

Developers’ leaner landbanks, however, are good news for home-owners gunning for collective sales. Former HUDC estate Pine Grove, Tulip Garden and Hawaii Towers are just some of the mega collective sales of more than $600 million that have or are expected to enter the market.

Developers are often keen on such sites as they provide an opportunity to purchase land in prime locations, unlike those from the government land sales, which are on 99-year leases.

Mr Png Poh Soon, associate director and head of research and consultancy at Knight Frank, said that more collective sites in the city fringe region can be expected to be put up for sale as the economy picks up and that developers are likely to take this chance to replenish their landbank.

Source: Straits Times, 18 Dec 2010

Low interest rates, stability help make Singapore attractive

FOREIGNERS were out in force in the property market last month, snapping up almost one in three new private homes in Singapore.

Market analysis from DMG & Partners Research shows that just under 30per cent of new private residential units were sold in November to foreigners or permanent residents (PRs).

This marks an 8-percentage point gain on the 22per cent seen in October.

The growth appears to come from Chinese buyers, who are increasingly making their presence felt.

DMG & Partners property research analyst Brandon Lee told The Straits Times: ‘They really started coming in during the fourth quarter of 2007. Previously their numbers were single digit, but now we have seen their group hitting sometimes up to 20per cent.’

Indonesians and Malaysians continue to form the bulk of foreign buyers, Mr Lee added, with Malaysians making up 25-30per cent of the group and Indonesians up to 25per cent.

Mr Kenny Tay, an agent with Huttons Real Estate, said he has seen the number of his Indonesian clients grow by around 20per cent compared to two years ago.

One reason for the rise in foreign purchases last month could be the recent property cooling measures rolled out in other Asian cities, say analysts.

Ms Tay Huey Ying, research director at Colliers International, said the increased sliding scale of stamp duties and restraints on mortgage lending in Hong Kong had tempered interest in the Hong Kong and China markets.

‘These buyers may not even be residing in Hong Kong or China. They could be foreign buyers who previously wanted to invest in those areas but have now diverted their attention to Singapore.’

Another factor could be that foreign buyers planning on buying HDB resale flats may have been deterred by the recent Government cooling measures. One new rule is that they cannot hold foreign property overseas at the time they buy an HDB flat.

DMG & Partners’ Mr Lee suggests that some foreign buyers ‘could be looking at mass market condos’.

Last month’s figures also show that one-fifth of all buyers at Lakefront Residences near Lakeside MRT station were foreigners and PRs. The same proportion was seen at NV Residences in Pasir Ris.

Mr Lee said the Government’s policy towards the Singapore dollar has also encouraged more foreign investors to invest here in the expectation that their property’s value will rise in tandem with the Singdollar.

Unless there is another round of property cooling measures, the number of foreign buyers will continue to rise, predicts OrangeTee executive director of residential Steven Tan.

‘(Foreign buyers) have confidence in Singapore’s overall economy, low interest rate climate and political stability.’

Mr Tan added that some foreigners may turn towards high- end property projects like the bungalows on Sentosa or areas like Marina Bay.

He attributed this to the fact that prices for this segment have not recovered to the peaks seen in 2007.

Source: Straits Times, 17 Dec 2010

This despite higher buying interest for high-end homes in October, November

DEVELOPERS continued to hold back on launching new luxury projects in the fourth quarter even as buyer interest in such projects grew slightly in October and November.

No new luxury projects were launched in the fourth quarter, noted CB Richard Ellis (CBRE) in a report yesterday.

This was even though there was increased buying interest for high-end homes – that is, units that sell for more than $2,000 per square foot (psf) – in both October and November.

Around 230 units were sold in this segment in October and another 160 units last month. By comparison, the number of new homes that cost more than $2,000 psf did not cross the 100-mark from June to September 2010.

And for units priced at above $3,000 psf, the number sold doubled to 12 units last month compared to October. Analysts also noted that older launches such as Paterson Suites, The Trizon and The Laurels also saw renewed buying interest in November.

But despite this, most of the launch activity was centred in the mass market segment as developers capitalised on the strong demand from upgraders for cheaper private homes.

‘Contrary to expectations that developers would look to unload previously accumulated land for high-end properties to ride on the building up of buying momentum for such properties, developers have only launched 9 per cent more of high-end homes in November,’ noted Colliers International’s director of research and advisory Tay Huey Ying. ‘Instead, developers have surprised many by launching primarily mass-market homes in November.’

The 1,638 units of new mass-market homes released by developers last month was more than triple the 513 units launched in October and accounted for 70 per cent of all new homes released in November.

Buyers responded well, picking up 1,229 mass market units last month – 64 per cent of the 1,909 private homes sold in the month. The strong demand took total sales volume for this year to 15,025 units – even higher than the record 14,811 new private homes sold in 2007.

‘Projects located close to MRT stations remain popular among homebuyers,’ said Joseph Tan, CBRE’s executive director for residential. ‘Besides location, other selling points include government plans for future development and new transport network, amenities, tenure and product attributes.’

The trend was true for the first 11 months of the year as well. Data compiled by CBRE shows that out of the 10 best-selling projects, eight were in the outside central region (OCR), which is a proxy for mass market locations.

The three projects that drew the most buyer interest were: UOL Group’s 616-unit Waterbank at Dakota (all but one unit sold as of end-November); MCL Land’s 608-unit The Estuary (fully sold); and Kheng Leong’s The Minton (482 units out of 1,145 sold).

The lack of activity in the high-end segment has also kept prices of such homes dampened despite gains in other categories.

The official URA private residential price index, which already went up 14.4 per cent in the first three quarters of this year, is expected to register another marginal climb in the final quarter, translating to a total rise of 15 per cent to 16 per cent for the whole year.

But most of the growth has been led by mass market homes, analysts noted.

‘Overall, prices for prime, mid-tier and mass-market homes have more or less caught up with the peak levels in end-2007. However, prices of new luxury properties were still lagging behind by around 15 per cent,’ said Mr Tan.

Equity analysts are getting increasingly wary of residential stocks with large exposures to the mass market segment on concerns that the government could announce more policy measures to cool the market.

‘With sales activity largely centred on mass market condos, we believe this will lead to more demand-side and supply-side tightening measures ahead,’ said DMG & Partners Research analyst Brandon Lee. ‘As such, we are maintaining our preference towards high-end developers, which are less susceptible to policy concerns.’

He reiterated his ‘buy’ calls on Wing Tai Holdings and SC Global Developments.

DBS Group Research, on the other hand, said in a fresh report that it prefers companies with greater office exposure and laggards such as Keppel Land, UOL Group and Singapore Land, which have the largest office content in their revised net asset values.

Source: Business Tmes, 17 Dec 2010

Analysts predict that more cooling measures could be introduced

THE private property market showed signs of defying gravity last month with an unexpectedly large number of new homes sold.

Top-selling projects such as The Lakefront Residences near the Lakeside MRT, Waterview in Tampines and Spottiswoode Residences helped raise the total to 1,909 units sold.

The November tally brings the total number of new homes sold so far this year to 15,025, surpassing the previous record of 14,811 in 2007.

The numbers show that sales of mid- to mass-market suburban homes made up the bulk of the transactions. If executive condominiums such as The Canopy and Esparina Residences were included, last month’s figure moves even higher to 2,084 units.

Experts said last month’s figures highlight an unusual buzz in a traditionally quiet month and are surprising coming within three months of the Government’s Aug 30 cooling measures.

These included reducing the amount banks could lend for second mortgages from 80 per cent to 70 per cent of the valuation.

Jones Lang LaSalle (JLL) head of South-east Asia research Chua Yang Liang suggested that projects in good locations could be a factor attracting buyers.

For example, The Lakefront Residences is near an MRT station as well as the Jurong Lake District, which is being developed into a major regional centre.

Another factor could be the current low interest rates, which leave investors looking for alternatives in which to park their cash.

However, Dr Chua reckoned that the strong sales numbers increased the risk of further cooling measures from the Government. He even predicted that the Government could act as early as within a month.

Ms Tay Huey Ying, Colliers International research and advisory director, echoed his sentiments, though she expected stiffer measures within the next two to three months.

She said the November sales showed the recent cooling measures to be ‘less than effective in taming the buying frenzy’.

‘If left unchecked, there is a potential that the current buying fever could put upward pressure on home prices again,’ she said.

Among government leaders who have said that they are watching the market closely was Prime Minister Lee Hsien Loong. He said last month that the Government was watchful of a bubble forming.

National Development Minister Mah Bow Tan last month flagged a number of concerns, such as low interest rates and an abundance of investor liquidity elsewhere, which could push up real estate prices.

Anti-speculation measures in Hong Kong, Taiwan, mainland China and South Korea could also result in more funds heading here.

He said the Government would introduce more measures to curb property prices if there was a need to do so.

But given that the Aug 30 measures had only just been implemented, the Government would monitor the market for now and was ‘watching it like a hawk’, he said.

Home prices for the July-September quarter saw some moderation with a 2.9 per cent increase, down from 5.3 per cent the quarter previously, suggesting that the measures had an impact in September.

Analysts expect that new cooling measures, if introduced, might include reducing the loan-to-value ratio and having a higher stamp duty for those who make more than one property purchase within a year.

Meanwhile, the strong sales numbers may spur developers to launch their projects as soon as possible in order to avoid being caught by a possible new round of cooling measures, said Mr Ong Kah Seng, senior manager of Asia-Pacific research at Cushman & Wakefield.

Still, the strong demand, however, might be an indication that there are many genuine buyers with deep pockets, said Ms Christine Sun, senior manager at Savills Research & Consultancy.

Also, while the volumes are strong, they do not tell the entire story.

According to CB Richard Ellis, the total value of homes sold up to last month was $16.98 billion. This is still some 30 per cent lower than the $24.11 billion notched up in 2007.

One factor is probably due to the shoebox-sized units sold in many of the new launches.

Source: Straits Times, 16 Dec 2010