As prices of new homes rise, investors are turning to auctions and the resale marketINVESTORS who are put off by the exuberant prices of late for newer properties are turning to auctions to pick up older properties that have not quite appreciated in the same way.

Two apartments at Four Seasons Park near Orchard Road and an apartment at The Waterside in Tanjong Rhu have changed hands at auctions this week.

Colliers International sold the pair of neighbouring three-bedroom apartments at Four Seasons Park, on the fifth floor of the development’s Autumn block, for more than $2,100 per square foot each.

The apartments, each of 2,260 square feet, were put up for sale by a mortgagee bank on vacant possession basis. Unit #05-01 was sold for $4.8 million or $2,124 psf, while the next door #05-02 fetched $4.84 million ($2,142 psf).

The two units were bought separately by Singaporeans.

BT understands that the same mortgagor had owned the two properties. According to caveat records, the units were purchased at $3.25 million each, one in August 2001 and the other in January 2002.

In June this year, a 3,821 sq ft unit on the 20th level of Four Seasons Park changed hands at $2,146 psf. In April, a 19th floor unit sold for $1,637 psf.

Jones Lang LaSalle at its auction yesterday sold a 14th floor unit at The Waterside condo in Tanjong Rhu for $2.55 million or $1,190 psf. It was also a mortgagee sale.

At another auction this week, conducted by DTZ, a three-bedroom apartment on the 22nd floor of Spottiswoode Park was sold for $630,000 or $496 psf. The development is on a site with a remaining lease of 66 years.

‘Buyers are turning to the resale market, whether through private treaty or auction, to pick up properties that are more than 10 years old as their prices have not escalated as much as prices for newer properties,’ says Knight Frank executive director and auctioneer Mary Sai.

Landed homes have also been in good demand at recent auctions. A strata bungalow, 261 Northshore, in Ponggol Seventeenth Avenue sold for $1.87 million at Knight Frank’s auction on Aug 20. The freehold property’s built-up area is about 5,500-5,600 sq ft. The property was sold by its owner, who is also in the midst of negotiating the sale of the next door bungalow at 263 Northshore after it was withdrawn at the same auction.

Colliers deputy managing director and auctioneer Grace Ng said: ‘The frustration being faced by those shopping for landed homes is that when they make an offer, sellers often increase their asking prices, which thus becomes a moving target. In contrast, at an auction, once the seller’s target price has been reached, there is certainty the property will be sold to the highest bidder.’

At its auction on Wednesday this week, Colliers sold a freehold semi-detached house at 102 Sunbird Circle, off Upper Changi Road, in District 16 for $1.98 million or $565 psf based on the land area of 3,506 sq ft. The two-storey house has five bedrooms.

At its auction yesterday, JLL sold a third level shop at Sim Lim Square for $2.95 million or $4,282 psf. The 689 sq ft shop (comprising two units – front and back) is near a lift. Sim Lim Square has about 73 years remaining lease.

Also transacted at the same auction were 16 and 18 Tanjong Pagar Road, at $2.48 million. The ground floors of the two-storey conservation shophouses are currently leased to a pub/karaoke lounge while offices occupy the upper level.

The shophouses, which have a single title, have a land area of 1,976 sq ft and have about 90 years remaining lease.

Source: Business Times, 29 Aug 2009

Q1 sees rise in resale and subsale deals as prices get more attractive

(SINGAPORE) The pick-up in private home sales by developers has spilled over to the secondary market. Falling prices are greasing the flow.

Caveats have been lodged for 1,063 private homes in the resale market in the first three months of this year, up 11.7 per cent from the preceding quarter. In the subsale market, 384 caveats were lodged in Q1 2009, reflecting a 44.4 per cent increase from the Q4 2008 figure, according to Savills’s analysis of caveats captured by the Urban Redevelopment Authority’s Realis system.

Resales and subsales refer to secondary market transactions. Subsales involve projects that have yet to obtain Certificate of Statutory Completion while resales relate to projects that have received CSC. CSC is typically obtained anywhere from three to 12 months after the project receives Temporary Occupation Permit (TOP).@ Marina Bay, The Cosmopolitan and Rivergate have received TOP in 2008/2009, while One Amber and The Centris will get TOP soon, Savills said.

Market watchers said that this could be because many specuvestors who bought on deferred payment schemes (DPS) may be inclined to offload their units as the TOP date approaches, when they have to pay up the bulk of the purchase price to developers.

However, CB Richard Ellis executive director Joseph Tan pointed out that regardless of whether buyers opted for DPS, private housing projects are typically a hive of activity around the time they receive TOP, drawing buyers who want to move in themselves or to rent out immediately.

He also attributed the increase in subsale and resale transactions in Q1 to ‘prices being at fairly reasonable levels now’, with the stock market rally improving sentiment.

Mr Tan said that whether the buzz in the secondary market continues will depend on the stockmarket. ‘So long as the Straits Times Index remains fairly stable, it will give comfort to investors that the property market is close to bottoming out, given the price correction in the past 12-15 months,’ he added.

According to DTZ’s figures, which are based on resale prices, the average freehold luxury condo and apartment price of $1,880 psf in Q1 this year marks about a one-third drop from the peak of $2,800 psf in late 2007/early 2008.

The most expensive subsale deal (in terms of psf price) in Q1 this year was a 29th floor unit at Orchard Residences that changed hands for $2,579 psf. In absolute dollar quantum, the most expensive subsale deal was an 11th floor apartment at The Tate Residences at Claymore Road, which sold for $5.93 million ($1,850 psf).

As for resale transactions, the top grossers were a 10th floor apartment at Richmond Park at Bideford Road which sold for $2,199 psf and a 25th floor unit at Four Seasons Park at Cuscaden Walk that fetched $6.5 million ($1,701 psf)

The average prices of resale and subsale transactions at the most popular projects in Q1 2009 were generally lower than in the preceding quarter as well as the same period last year.

City Square Residences, the most popular subsale project in the first three months of this year with 41 units, saw an average price of $804 psf, down 5 per cent from the $845 average subsale price in Q4 2008 and 15 per cent below the $947 psf average subsale price seen in Q1 2008.

Average prices for 11 of the 12 most popular subsale projects in Q1 this year fell between one and 14 per cent from the preceding quarter. The exception was Clementiwoods Condo, where eight subsale deals were done at an average of $664 psf in Q1, some 5 per cent higher than in the previous quarter but down 7 per cent from the same period a year ago.

Compared with Q1 last year, average prices for all 12 top-selling subsale projects in Q1 2009 fell between 4 per cent (Centris) and 36 per cent (The Cosmopolitan).

As for resale transactions, the 11 hottest developments saw quarter-on-quarter price declines ranging from 4 per cent (for The Lakeshore) to 19 per cent (Bayshore Park) in Q1. The Lakeshore was the most popular resale project in the first quarter, with 27 units changing hands, followed by Costa del Sol, with 11 units.

Savills Singapore head of research Priya Sengupta noted that the 11 most popular resale projects in Q1 were all in the mass and mid-tier sectors. ‘Amid the economic uncertainties, affordability remains a key consideration for home buyers/investors; 100 of the 113 deals in the 11 most popular resale projects in Q1 were at below $1 million,’ she said.

Resale activity for high-end projects was limited. ‘This could be attributed to the price disparity between sellers and buyers as the latter expect further downward price adjustment in the near future, as well as the stricter home loan criteria in terms of loan-to-value ratio, especially for investors,’ Ms Sengupta said.

Mass and mid-tier projects also saw more subsale transactions than high-end projects. Much of the subsales activity in Q1 surrounded projects that have either received TOP recently or are close to receiving it. For instance, City Square Residences, The Esta, The Sail

Source: Business Times, 24 April 2009