But healthiest quarterly sales in more than a year may not signal sustained recovery

(SINGAPORE) A ray of hope dispelled some gloom in the private home market yesterday when new data showed developers selling 1,220 new units in March. This brings the number sold in Q1 2009 to 2,660 – the best quarterly performance since Q3 2007.

But could this be a false dawn? Citing weak economic fundamentals, several industry watchers believe that it is still too early to say if a nascent recovery has begun.

According to Urban Redevelopment Authority (URA) figures from developer submissions, private home sales held up in March and dipped just 8 per cent below the 1,332 units sold in February.
Both months’ showings were markedly better than in January, when buyers took up just 108 units.
In fact, the number of units sold in Q1 2009 has already reached around 60 per cent of that for the whole of 2008.

‘Most of the demand in the first three months of the year was from Singaporeans and permanent residents, a significant proportion of whom comprised HDB upgraders,’ said CBRE Research executive director Li Hiaw Ho.

Indeed, new launches in mass-market to mid-tier projects contributed to the bulk of sales in March. The most popular was Double Bay Residences in Simei – developers UOL Group and Kheng Leong sold 264 units at a median price of $659 psf.

Far East Organization also sold 101 units at its Mi Casa condominium in Choa Chu Kang at a median price of $617 psf, while 90 units at City Developments’ The Arte fetched a median price of $874 psf.

There is ‘strong demand for lower-range properties in the outer areas that are priced below $1,000 psf,’ observed PropNex CEO Mohamed Ismail.

The mass-market and mid-tier sectors also dominated recent launches. DTZ senior director of research Chua Chor Hoon noted that 95 per cent of all launches in Q1 09 were outside the prime districts 9, 10 and 11. Developers brought out 832 new units in March, down 22 per cent from the 1,072 in February.

In contrast, activity in the Core Central Region continued to lag behind in March. Reception to The Mercury at Shanghai Road was the strongest, with buyers taking up 62 units at a median price of $1,148 psf.

The retreat of foreigners from the luxury property market could be one reason for the weak performance, said Knight Frank’s director of research and consultancy Nicholas Mak. ‘Preliminary figures suggest that the percentage of foreign transactions stood at 16.8 per cent in Q1 2009, settling at levels observed in Q2 2003 when the Sars outbreak badly affected the market.’

On the whole, most observers BT spoke to believe that the property market still faces downside risks – the coming months may see prices stay flat or fall and the number of units sold may decrease.

‘Historically, economic recovery precedes property market recovery,’ said DTZ’s Ms Chua. ‘Right now, there is no economic fundamental to support a bottoming of the property market.’

Just on Tuesday, the government cut its 2009 economic growth forecast again to a range of minus 6 to minus 9 per cent.

Already, there are signs of developers lowering prices to push sales. For instance, 6 units in Kovan Residences went for $782-$865 psf in February, achieving a median price of $809 psf. By March, 56 units were sold at a median price of $705 psf, with overall prices ranging from $597-$823 psf.

In fact, price cuts and the relatively affordable costs of smaller units could have spurred demand in the last few months, said DMG & Partners Securities analyst Brandon Lee. CIMB analyst Donald Chua also expects more price adjustments to happen at projects that have not been fully taken up.

In terms of new units that can be sold in the next nine months, few market watchers were confident of seeing the 1,000-a-month mark being crossed often. Some estimate that the transaction volume this year may range from 6,000-8,000 units in total. This would still be an improvement on 2008, when 4,264 units were sold.

Still, it’s not smooth sailing. Even some popular projects are taking back units. URA data indicates that buyers returned 20 units at the Caspian and 10 units at the Alexis between February and March.

URA will release more concrete data on home sales on April 24. Among other factors, its real estate statistics for Q1 2009 will take into account options on units sold that subsequently lapsed later.

Source: Business Times, 16 April 2009

Fewer than 1,000 homes at Sentosa Cove are likely to be completed by end of 2009; several developers are delaying their projects further

SOME home hunters have been packing showflats in the Balestier area and buying units, even as the general property market remains weak.

City Developments (CDL) said yesterday it has sold ‘about 60 per cent’ of the 100 units at The Arte@Thomson at an average price of $880 per sq ft since a hush-hush preview started last Friday.

The Arte has 336 fairly large units in two 36-storey blocks in Jalan Datoh, off Balestier Road.

The 60 or so units were transacted at $852,800 to $2.46 million, said a CDL spokesman.

Most of those sold were two- and three-bedroom units. The two-bedroom units are 1,055sqft, while nearly half of the project comprises three-bedroom units ranging from 1,399 sq ft to 1,625sqft.

CDL said it had extended the interest absorption scheme (IAS) to buyers during the preview at no extra cost, but could not yet say how many buyers had taken advantage of it.

‘Buyers are given some time to decide if they wish to take up the IAS,’ said the spokesman.
The scheme allows buyers to defer the bulk of the purchase price until completion on condition that they take up a loan at the point of sale.

The CDL spokesman said the $880 per sq ft price was being offered for a limited number of units only. ‘We will be reviewing the price and adjusting it upwards progressively,’ he said.

The encouraging sales at The Arte came amid a still-slow market as some other launches see relatively weak interest. Demand for high-end homes, in particular, remains poor.

New home sales in February were lifted to a relatively high level, but that was largely due to the strong sales at three mass to mid-end projects. Many buyers went for small units as their absolute prices were low, and hence affordable.

Just last week, Keppel Land deferred the construction of two yet-to-be-launched projects – Marina Bay Suites in Marina Bay and Madison Residences in Bukit Timah – because of the slumping market.

In the Balestier area, the new showflats benefited from spillover crowds from the various launches, said Savills Residential director Phylicia Ang, who is marketing the 104-unit Domus in the area.

Released for sale two weeks ago, Domus, in Irrawaddy Road, welcomed visitors who had initially attended The Arte preview.

So far, 33 units – out of the 59 launched at Domus – have been sold at an average of $900 per sq ft, or from $480,000 to $1.2 million, said Ms Ang.

The sales included 20 one-bedroom units of 474sqft.

Novelty Group’s I-Residences, a 70-unit project in Irrawaddy Road, is about 50 per cent sold since its private preview late last year.

Nearby, on the former Ruby Plaza site, Soilbuild had a preview for The Mezzo, which offers a 6 per cent rental guarantee for two years. It did not comment on sales.

Source: Straits Times, 27 Mar 2009

Demand for smaller space leads developers to downsize units to as tiny as 300-plus sq ft
What do you call a space which can fit four hawker stalls?

In the case of a new property development called Kembangan Suites, the space is called a one-bedroom apartment.@ Alexandra sold all its 293 units, including 114 one-bedders (366 sq ft to 527 sq ft), with prices from $450,000.

Other new launches like Mount Sophia Suites in Sophia Road, Nova 88 in Bhamo Road and Zenith in Zion Road are offering studio apartments or one-bedders from 366 sq ft to 484 sq ft.

Crowds flocked to a preview on Friday of new condominium Domus in Irrawaddy Road. The smallest units there – one-bedders at 474 sq ft each – were going for more than $400,000.

Its developer, Lakeview Investments, said those were the most popular and all units released in the first phase had been sold.

‘It’s the size of a hotel room,’ veteran designer Jay Ang said of the new 300-something sq ft homes.
‘You have space only to sleep and eat. There’s definitely no place to entertain,’ noted the specialist in space planning and storage space customising.

But while there are no rules on how small apartments can go, designers and architects have to make concessions for standard dimensions, like how wide a door is, how long a bed is or how deep a wardrobe is.

Developers have quickly cottoned on to this demand for small spaces. Several have rejigged or are considering tweaking their designs and making space for smaller units.

Sing Holdings’ project The Laurels in Cairnhill Road will go from its original 150 units of mostly three- and four-bedders to 290 units that include more one- and two-bedroom units.

UOL Group may also resize the units of its Green Meadows project in Upper Thomson to attract more cost-conscious buyers.

Alexis’ developer, ECPrime, had done the same before the project’s launch.

City Developments said studio apartments in centrally located projects had always been popular because of the lure of city-living.

Studio apartments comprised almost 40 per cent of the offerings at its downtown project, The Sail @ Marina Bay, which was completed last year.

Carving up space for more units is one way a developer can achieve higher dollar per square foot value, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘Developers manage to sell such small units because they make it affordable in absolute terms,’ he said.

But, property pundits said, when apartments continue to shrink and prices per square feet remain high, home-seekers may go back to buying HDB flats and those looking to rent may decide to go for HDB rooms instead.

The size of private one-bedroom units has halved from 10 years ago.

HDB flats have downsized too, from about 1,130 sq ft for a four-room in 1987 to 970 sq ft now.

Still, Singapore homes have not shrunk to the proportions of those in Hong Kong and Tokyo, where
apartments can be as tiny as 140 sq ft.

That is not to say that all buyers are happy with the slimming effect.

Finance executive Audrey Yap, 35, who is shopping for a bachelorette pad, said: ‘I can’t afford the bigger apartments but the studio apartments are ridiculously small and claustrophobic. I think I may have to settle for a resale HDB flat.’

Source: Straits Times, 15 Mar 2009

It is all of 344 sq ft.

But small is now big.

On just the first day of a preview last week, the developer sold out 60 units of mostly one- and two-bedders ranging in size from 344 sq ft to 581 sq ft.

The smallest units were going for about $300,000.

Industry sources said demand is coming from local and foreign singles, young couples as well as cost-conscious buyers and investors.

Before that, Alexis

SINGAPORE: Singapore homebuyers can expect more private residential properties to be launched in the coming months and at lower prices.

Analysts said that’s because developers are now torn between accepting either weaker profits or high costs of holding on to land.

Brisk sales seen in recent property launches like the Caspian can be credited to lower prices being offered by developers. Units there were sold at about S$600 per square foot, or S$50 per square foot less than earlier planned.

Analysts said developers have little choice but to cut prices to move sales as the the cost of holding onto a piece of land can be expensive as well.

A typical plot of land for mass market homes could chalk up more than S$500,000 of interest annually, including other costs. Interest on land cost is typically about four to six per cent.

Developers normally take a 60 per cent loan on land.

This means a mid to mass market plot of land bought for S$20 million will accrue more than S$500,000 of interest in a year.

There are other costs too. Cheang Kok Kheong, COO, Development & Property, Frasers Centrepoint, said: “It’s very good price for the present economic situation and it really meets the kind of needs and budgets our customers have right now.

“We have committed our construction costs. We have gone ahead and developed it and we are looking at our cashflow to ensure that we can build the project on time with little financial difficulties.”

Frasers also wants cash for possible land acquisitions in the near term.

Other developers which have turned to cutting prices include City Developments. It recently launched a new phase of its Livia project in Pasir Ris at about S$620 per square foot, down from S$650 per square foot.

Meanwhile, GuocoLand relaunched its development near Buangkok MRT – the Quartz – at an average price of S$595 per square foot, more than eight per cent lower than the initial launch in 2007.

Another developer, MCL Land, recently made provisions to value its land near current market prices.

Analysts said this is normally a prelude to a relaunch at lower prices.

But they noted that developers will not keep prices low for too long.

Donald Han, managing director, Cushman & Wakefield, said: “Some obvious strategy would be to go out there, launch as much as you can, depending on where the quota is. “Then once you hit a certain sales quota, you stop and then you relaunch it when the project can be launched at a better market sentiment and hopefully at a higher price as well.”

Most analysts believe the market will start to pick up in mid-2010.

Source: Channel News Asia, 2 Mar 2009

Success of two new launches encourages a few developers to release their projects

Thanks to the mini-buzz created by two new successful launches – Caspian in Jurong and Alexis @ Alexandra – a few developers have decided to release their projects for sale.

It is an improvement, even if it is just a slight one, from the very sombre mood a month ago, when market watchers were expecting the lull in the market to continue.

Over the weekend, TG Development launched 30 units of the freehold, 102-unit St Patrick’s Residences in St Patrick’s Road in the East.

On average, prices start at around $675 per sq ft (psf) for a two-bedroom unit and rise to about $900 psf for a four-bedroom penthouse.

Unit sizes range from 1,152 sq ft for the two-bedroom units to 3,423sqft for the four-bedroom penthouses. Some three-bedroom units can cost just under $1 million.

The interest absorption scheme, which allows buyers – if they take a loan from the start – to defer making any payments beyond the initial down payment until the project is completed, is offered at a 3 per cent premium.

Marketing agent Savills said the condominium offers quality furnishings and fittings usually associated with prime projects, and that a few units have been sold since the preview a week ago.

Near Upper Bukit Timah, Hiap Hoe has launched The Beverly, its 118-unit condo in Toh Tuck Road.

Each unit is served by a private lift. Prices start at $648 psf; the average price is $750 psf. This means that the total price per unit should start from just below $1 million.

Unit sizes range from 1,120 sq ft for the two-bedders to 4,187 sq ft for the four-bedders. There are also double-storey penthouses from 2,099 sq ft to 3,757 sq ft. Hiap Hoe is not offering the interest absorption scheme.

Other projects expected this month include Double Bay Residences in Simei, The Arte in Thomson, Domus in Irrawaddy Road and an 18-storey project in River Valley.

These are in the mass- to mid-market categories that, unlike the high-end segment, are still attracting buyers.

New home sales in January had plunged to a new low as developers and buyers kept to the sidelines.

The two new projects that sold very well about two to three weeks ago – Caspian and Alexis – helped revive the market mood to a certain extent.

The Caspian showflat was packed during the preview, when 300 out of 712 units were sold at average prices starting from $580 psf. So far, more than 500 units have been sold.

The 293 Alexis units were all sold at $950 psf to $1,250 psf, but the absolute prices were reasonable, given that most units are small.

At a results briefing last Thursday, City Developments’ Kwek Leng Joo cited the good take-up at the two projects as proof that there is still demand.

‘The good response to recent launches is true,’ he said.

Still, the stock market and buying sentiment remain weak.

Ms Phylicia Ang, director of Savills Residential, said: ‘The affordability threshold is key at this point.
In the current market, it is important to price projects at an attractive level to attract buyers.’

The UOL group should start selling the 646-unit Double Bay Residences near the Simei MRT station soon. It declined to give pricing details of the 99-year leasehold condo until the launch, but there is talk that prices will be around $650 psf to $680 psf.

The one-bedders start at 538 sq ft, the two-bedroom units from 915sq ft, while the big units can go up to 3,703 sq ft.

Along Thomson Road, The Arte is expected to be released for preview sale by the middle of the month.

Property agents have advertised the preview of the 336-unit, freehold condo at prices starting at more than $950 psf.

About half of the project, or 164 units, are three-bedroom units from 1,399 sq ft to 1,625 sq ft. Another 100 units are 1,873 sq ft four-bedders.

There are also advertisements for the preview of the 18-storey, 67-unit project in River Valley, which offers the interest absorption scheme. It has mostly small units – 32 are 635 sq ft apartments and 30 are 1,044 sq ft units.

A Chinese developer, Lakeview Developments, may also push out its 104-unit Domus this month.

High-end launches will likely be few and far between this year, as current demand is coming only from owner-occupiers or very small investors, according to a developer.

There should be more mass- to mid-market projects coming up in the next few months. These could include projects like the 99-year leasehold Ascentia Sky next to the Redhill MRT station. It offers two- to four-bedroom units from approximately 1,000 sq ft to 1,800 sq ft.

Source: Straits Times, 1 Mar 2009

Developers cutting prices and offering discounts; some small projects on the way

The property market is off to a quiet start this year, with some developers even closing their show-flats temporarily in response to dwindling crowds.

But as home prices continue to fall, house hunters tempted back into the market do have some places to go shopping.

Several small developments are coming on the market, while other projects that have been launched earlier are giving discounts or other buying incentives.

In the Balestier area, developer Roxy Homes is soft-launching two freehold boutique projects this weekend – Nova 48 in Prome Road and Nova 88 in Bhamo Road, both off Balestier Road.

Nova 48 has 48 units while Nova 88 has 88. Both are priced at about $1,000 per sq ft (psf), with a one-bedroom unit of 506 sq ft in size starting at about $500,000.

Another upcoming launch is that of Alexis in Alexandra Road. The freehold development has about 300 units and is less than 10 minutes’ walk to Queenstown MRT Station, according to property agents.

Indicative prices are about $900 to $1,000 psf, according to agents. The developer is offering a payment scheme similar to deferred payment, where buyers can pay 20 per cent upfront and then nothing until completion.

Closer to town, the Heritage Group is holding private previews for Vivace, a new 999-year leasehold project to be built at the former Tong Watt Mansion near Robertson Quay. The 85-unit development has mostly small units, ranging from one-bedroom apartments of 388 sq ft in size to penthouses of 990 sq ft. Prices are understood to start at about $580,000, or about $1,500 psf.

There are also a number of developers that have cut prices or are offering carrots to buyers.
Novelty Group, for instance, has lowered the price of its Lucida project along Thomson Road. The 62-unit development was launched at close to $1,600 psf early last year, but is now selling at about $1,200 psf.

The one-bedroom units are 624 sq ft in size, while two-bedroom apartments are 1,066 sq ft.

In the East Coast, the asking price for Mountbatten Suites has fallen from $1,100 psf at its launch to over $900 psf now. The developer is reportedly offering deferred payment and absorbing stamp and legal fees.

Frasers Centrepoint is also giving renovation vouchers to buyers of its Woodsville 28 project in Potong Pasir. Two-bedroom units come with a $20,000 voucher, while buyers of a three-bedroom unit get $30,000. Prices remain at $850 psf on average for the freehold development.

For the rest of the year, interested buyers can look out for three offerings from City Developments, which is planning to launch Phase 2 of Livia in Pasir Ris, The Arte in Thomson Road, and the Quayside Isle in Sentosa Cove.

While the prices for the last two projects have yet to be finalised, prices start at $797,000 for a three-bedroom apartment at Livia.

Far East Organization is also understood to be planning to launch the latest phase of cluster houses in its Greenwood landed housing development, as well as a new 99-year leasehold project in Choa Chu Kang.

Source : Sunday Times – 4 Jan 2009