With 1,423 private homes sold in H1, it is far ahead of all other developers

Developers sold year-high 1,668 units in May amid discounts and improved sentiment

Developer sales for the month hit 1,668 units – a record for the year and 37 per cent more than the 1,214 in April. More transactions also occurred in the high-end sector at prices above $2,000 per square foot (psf).

Some developers have raised prices as a result

DEVELOPERS continued to report encouraging private home sales last week, and some have upped prices on firmer demand.

BelleRive on Keng Chin Road and Martin Place Residences on Kim Yam Road are among the projects where prices have been raised. BelleRive’s average price is now 13 per cent higher than when it was previewed in mid-April.

Frasers Centrepoint sold 60 more units last week at Martin Place Residences; new units were released over the weekend at prices that were about 5-7 per cent higher.

Chia Boon Kuah, Far East Organization chief operating officer, property sales, told BT that ‘in recent weeks, we’re seeing growing broad-based demand for our products across our portfolio in every price bracket, from upgrader market to the upper-middle segments to high-end luxury projects’.

Last week, the property giant sold more than 40 units, up from the 30 a week earlier. Far East’s home sales for the May 18-24 week include two units at Vida on Peck Hay Road which fetched an average price of $2,030 psf; the buyers did not take up the rental guarantee offered by Far East for the recently completed condo. The developer also sold nine units at Floridian in Bukit Timah at an average price of $1,220 psf.

In the upgrader housing segment, it sold seven units at Mi Casa in Choa Chu Kang, nine units each at Lakeshore near Jurong Lake and Waterfront Waves near Bedok Reservoir. Waterfront Waves is a joint development with Frasers Centrepoint.

Frasers Centrepoint also sold four units each at its Caspian condo in the Jurong Lake location and Woodsville 28 last week.

At Martin Place Residences, the developer released fresh units below the 14th floor sky terrace in the second and final block in the 33-storey condo.

Prices of the freshly released units start from $1,350 psf, higher than the $1,260 psf starting price in the earlier block during the preceding weekend’s marketing campaign.

However, the latest pricing is still below the $1,700 psf starting price for the 33-storey freehold project when it was previewed last year. Inclusive of the units sold last week, 168 units in the 302-unit condo are now sold.

Frasers Centrepoint is offering an interest absorption scheme (IAS) for all its four projects on the market – in exchange for a 3 per cent price premium for Caspian and a 2 per cent premium for the rest.

Over in Bukit Timah, a Sing Holdings subsidiary is understood to have sold five units last weekend at BelleRive, taking total sales to 39 units in the 51-unit freehold project. BelleRive was initially priced at $1,350 psf average when it was previewed in mid-April; this was raised to $1,430 psf last week and upped further to $1,530 psf this week. This translates to a 13 per cent price hike in about six weeks.

The average pricing is for the apartments in the 15-storey project, and excludes the two penthouses. About 75 per cent of BelleRive buyers have taken up the IAS offered by the developer at no extra cost.

The units were picked up predominantly by Singaporeans. BelleRive’s draws include its proximity to Anglo-Chinese School (Primary) on Barker Road and Singapore Chinese Girls’ School along Dunearn Road.

In the Balestier area, Soilbuild is understood to have sold another 25 units at Mezzo over the weekend. The project is priced at about $850-900 psf on average; the cost is 2 per cent more for IAS.

Property giant City Developments also sold 14 units last week for The Arte at Thomson condo. The average price in the project is now $900-930 psf, compared with $880 psf when previews began in March. The 336-unit condo is 84 per cent sold.

Near Botanic Gardens, Straits Trading has upped the price of the remaining few units at Gallop Gables to $1,400 psf, from the $1,188 psf average achieved for units sold in the past six weeks. The price increase comes after the developer achieved the sale of its 40th unit in the completed freehold condo.

In the secondary market, some 50-plus units are said to have been sold last week at RiverGate condo near the Singapore River. These are out of 88 units listed in a sales campaign last week. The average price is about $1,400 to $1,500 psf.

The 88 units were from an original pool of 100 units purchased in 2005 by a fund managed by Ferrell Asset Management.

Source: Business Times, 26 May 2009

(SINGAPORE) Is the interest absorption scheme (IAS) helping to grease home sales?

Private home sales in Singapore dipped slightly in April, but remained above the 1,000-unit mark for the third straight month.

Latest figures from the Urban Redevelopment Authority (URA) showed that 1,207 units changed hands, about one per cent shy of the number of sales transactions in March (1,220 units).

Demand for new private residential properties picked up recently because of lower home prices and expectations that the economy is recovering.

The recent rally in the stock markets has also helped. Some market watchers say a few investors may have taken profit and parked their funds in more stable investment options like real estate.
But some say the sales momentum may not last.

Chua Yang Liang, Head of Research and Consultancy, Jones Lang LaSalle, said: “(I’m) looking at somewhere between 2,000 and 2,400 units that were pent up collectively over in the month of October, November, December and January.

“Unless there’s a fundamental growth in the real economy, this pent up demand, the residual effect may not sustain the property market in the long haul.”

Suburban areas continued to shine, with Mi Casa in Choa Chu Kang, Double Bay in Simei, Kovan Residences accounting for 298 units of total sales. The Arte at Thomson, which is located on the city’s fringe, was also popular, with 110 deals sealed.

In April, developers placed 1,083 new units for sale, up from the 832 launched the previous month.

Industry players say the momentum is starting to filter from the mass market segment to the mid-tier one, which comprises properties costing between S$900 and S$1,300 per square foot. They also expect to see more activity in the luxury home segment in the next few months.

High-end property launches jumped nearly four-fold on-month in April to 339, making up a third of all units offered. Sales in the prime areas soared to a 19-month high of 322 units.

Donald Han, Managing Director, Cushman and Wakefield Singapore, said: “We are going to see more launches potentially in the core central area, in district 9, 10 and part of 11, particularly for some of the collective enbloc sales which have been bought by developers.

“Some of them are pretty much ready to be launched – they’ve got their showflats ready. So there will be more launches in these prime areas, as part of strategies for developers to test waters for the mid- and upper-end residential market.”

Looking ahead, analysts say developers may not raise prices but rather reduce the discounts offered.

On the whole, prices of private homes are expected to fall by a single digit percentage point range for the next few quarters.

Market watchers project that some 6,000 units will be sold this year if the economic conditions stabilise.

Source : Channel News Asia, 15 May 2009

Developers test waters at some projects by cutting back on discounts

(SINGAPORE) Some developers have quietly started raising prices a notch as they test waters after strong sales volumes seen in the first quarter.

Price adjustments are often made by reducing discount levels. On a project average basis, the effective prices for some developments may have gone up between 2 and 5 per cent compared with levels earlier this year, according to developers and property consultants.

‘Developers aren’t raising prices overnight. Prices are being adjusted only after clear buying momentum has set in for a project. If you look at the first and last units sold in the project, the price difference could be, say, 10 per cent; but if you look on a project average basis, the price increase would be less than 5 per cent,’ says Knight Frank chairman Tan Tiong Cheng.

The recent stock market rally has generated its share of positive sentiment. Even so, property agents say that prices of only the better-selling units have been raised in some projects, while the others have seen more widespread rises. ‘Developers are careful; if they push up prices too fast, potential buyers may start looking at other projects,’ one agent said.

The recent price adjustments have to be viewed against the significant price declines before that, seasoned players point out. For instance, Q1 2009 prices of mass-market condos were about 10 per cent off the peak levels in late 2007/early 2008, while for luxury condos, the price decline was steeper, at around 30-40 per cent.

DTZ executive director Ong Choon Fah says that developers started to inch up prices in April and May from Q1 levels. ‘In the secondary market, sellers have been more aggressive; some are asking about 5 to 10 per cent more than in Q1,’ she added.

Property giant Far East Organization’s residential projects such as the Mi Casa condo in Choa Chu Kang, The Lakeshore in Jurong, Hillview Regency in Bukit Batok, Floridian at Bukit Timah Road (non-premium units), and Vida at Peck Hay Road are among those that have seen slight price gains lately.

Rival City Developments is also said to have incrementally raised prices for The Arte at Thomson as sales progressed briskly. The developer has sold more than 250 units since it previewed the mid-end project in March.

BT understands that prices of the remaining 80-plus units have been adjusted upwards slightly this week. The average price is now about $900 psf and the freehold project includes a mix of two-, three- and four-bedroom units.

Bukit Sembawang is also said to have introduced a single-digit per cent price hike for later units (apartments) at The Verdure at Holland Road after the initial batch of units were sold.

UOL Group and Kheng Leong are also understood to have upped prices selectively – for better-selling units – at Double Bay Residences in Simei.

A major developer said: ‘Demand is better now. People are prepared to come to the negotiating table and not baulk at prices, compared with last year when it was very difficult to even get buyers to sit down. I think there’s a sense that the worst is over.’

He says that the quantum of price appreciation that a developer can achieve in the current market will hinge on a project’s location, the nature of the development and the profile of its buyers. ‘For instance, for a prime district project with a lot of small units costing $1-2 million each, you can adjust prices a bit more, especially if you have a fair number of foreign buyers,’ according to the developer. ‘Mainland Chinese buyers are more optimistic, and can accept price hikes better as they have seen an upturn in their own property market,’ he added.

Mr Tan says that there’s currently a ‘sweet spot’ in the Singapore market for projects priced below $1,000 psf and on a lump-sum basis costing $1 million to $1.2 million per unit (for three-bedroom units) and $800,000 and below (for two-bedroom units). Their prices can take a sub-10 per cent increase without affordability being seriously dented.

Mr Tan argues that a small price increase will not generally price buyers out of the market or send them to the sidelines again – ‘especially if they think the worst is over and don’t want to miss the boat’.

‘Even if the view is that we’re not at the bottom yet, there seems to be a greater sense of price stability now. The thinking now is that if prices drop a further 5 or 10 per cent, can I live with it?
Three months ago, there seemed to be no bottom,’ Mr Tan recalls.

Agreeing, CB Richard Ellis executive director (residential) Joseph Tan says: ‘Once people are more confident, they can accept the fact that price may be higher, but in an improving situation. If I believe the market has bottomed, the closer I buy to the bottom, the better it is for me. That sort of thinking is also being fuelled by the stock market rally; traditionally the residential property market lags the stock market by three to six months.’

Source: Business Times, 13 May 2009

Condo-style flats popular; private homes see encouraging sales

THOUSANDS of people flocked to check out some of the new housing developments on sale over the weekend, scenes more reminiscent of a boom, not a recession.

As one industry watcher told The Straits Times: ‘The mass market is still moving. If you price it correctly and reasonably, people will still buy.’

The hottest ticket in town was clearly the Parc Lumiere project, which drew an astonishing 6,500 visitors over the weekend.

Buyers had begun queueing last Friday before its viewing period started on Saturday, with 829 people eventually in the line for flats in the estate, which is being developed under the Design, Build and Sell Scheme (DBSS).

There was no balloting for the project: Just turn up and book.

Developer Sim Lian Group said it has already sold 306 units out of a total of 360. All the four-room flats, priced between $378,000 and $425,000, have been sold.

Only the low-floor five-room flats are left. The five-roomers are priced from $462,000 to $575,000.
‘After going through Premiere @ Tampines, we thought we would try another way of selling. When you do it by ballot, a lot of people just try for fun. A lot who were keen didn’t get the chance to book,’ said Sim Lian executive director Diana Kuik.

But some potential buyers felt the walk-in selection sale method, essentially a first-come, first-served sale, was inconvenient. One said the sale came at too short a notice for him to take leave to queue. A parent said her son had been waiting for the project but was travelling in Europe.

Sim Lian said it has had feedback from happy buyers, including a pair of siblings happy to get a unit next to each other.

The second DBSS project, The Peak @ Toa Payoh, also had a busy weekend with 1,711 applications lodged as of 6pm yesterday for the 1,203 units.

This project by developer Hoi Hup Sunway is being sold by ballot, with applications open until next Tuesday.

About 22,500 people had visited the showflat from last Wednesday until it closed yesterday, said Ms Kellie Liew, executive director of projects at HSR Property Group, the marketing agent for The Peak. More than half of the applicants are interested in the five-room flats, with about 30 per cent looking at the four-roomers, she said.

In the private home market, the freehold The Arte in Jalan Datoh attracted about 1,000 people over the weekend, said developer City Developments (CDL).

The average price at the 336-unit project – which boasts relatively large flats – is $880 psf, with most units going for under $2 million each.

CDL said it sold another 20 units over the weekend for $30 million, bringing total sales to 170.
‘The sales volume indicates that buyers have greater confidence in the property market and in the future of their investment,’ said CDL group general manager Chia Ngiang Hong.

‘This reinforces CDL’s view that the current market is now attracting savvy but cautious investors.’
A large number of buyers have private home addresses, he said, with many saying they want to invest in another property or to move into a ‘new and upscale residence’. CDL said it has extended the interest absorption scheme to these buyers.

Two other large projects that were launched last month also saw encouraging sales.

A further 22 apartments were sold at the 457-unit Mi Casa condominium in Choa Chu Kang in the past week, bringing total sales to 202 units. Prices hovered around $635 psf.

More than half of the 646 units at Double Bay Residences in Simei have been sold. This was the best-selling project last month, with 264 units being bought.

About 60 per cent of the 68-unit Verdure in Holland Roadhas also been sold since its preview more than a week ago.

Source: Straits Times, 21 April 2009

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

THE bumper private property sales recorded in February were no fluke.

For a second straight month, home hunters defied the weakening economy to buy more than 1,000 units last month.

Property consultants say buyers are attracted to what they regard as good buys in the moderately priced mass market.

Still, they warn that these strong buying levels are probably not sustainable.

Last month, property developers sold 1,220 new private homes, just shy of the 1,332 units sold in February.

It was the first time in over a year that the market has seen two consecutive months with more than 1,000 units sold. Sales for both months were a stunning contrast to the dismal 108 in January.

Another striking figure: First-quarter new private home sales hit 2,660 units, representing 62 per cent of all new homes sold during the whole of last year.

February sales – boosted mainly by two new launches Alexis and Caspian – were the highest since August 2007.

Figures compiled by the Urban Redevelopment Authority also showed 832 new housing units were launched last month, compared with 1,072 units in February and just 204 units in January.
Most units sold last month were in the mass market, along with a few city-fringe small-format apartments at condominiums such as Domus and The Mercury.

HDB upgraders were the hottest group of buyers. CBRE Research said that last month alone, they bought 550 to 600 units at mass market projects such as Caspian, Double Bay Residences, Kovan Residences, Livia, Mi Casa and The Quartz at median prices of $610 per sq ft (psf) to $740 psf.

A survey of first-quarter caveats lodged for this market segment indicated an average price of $695,000, said CBRE Research executive director Li Hiaw Ho. ‘This is probably a good time for HDB home owners to upgrade to private property as the price gap between private properties and HDB resale flats has narrowed.’

Said Colliers International director for research and advisory Tay Huey Ying: ‘Developers have lowered their price expectations for new launches and generally cut prices of unsold units. Buyers are biting as there is pent-up demand.’

The top three sellers in March were Double Bay Residences, Mi Casa and The Arte. About 85 per cent of units sold last month were priced below $1,000 psf, said PropNex chief executive Mohd Ismail.

The high-end showed some life with 70 units launched and some sales, including one Orchard Scotts unit at $2,220 psf.

But overall, only 100 prime units were launched in the first quarter, or just 4.7 per cent of all units launched, well down from the 39.4 per cent of all units launched in the fourth quarter last year.

Knight Frank director of research and consultancy Nicholas Mak said this was partly due to the retreat of foreigners from the luxury market.

Preliminary data suggests foreign deals stood at 16.8 per cent in the first quarter – a level last seen when Sars badly hit the market in 2003, he said.

Market analysts say it is a good start to the year, but they do not expect the strong buying to continue long-term.

‘In the short term, this rate of buying can continue provided developers lower or maintain their prices,’ Chesterton Suntec International’s research and consultancy head Colin Tan said of March sales.

But in the long term, it is not sustainable, he said. ‘The last time the market sold so many new units (14,811 units) was in 2007. That was when the deferred payment scheme was available. And it has since caused indigestion in the top end of the market.’

Unless the Singapore economy and employment market improve significantly this year, only 6,000 to 7,000 new private homes are expected to be sold, said Mr Mak.

He said healthy demand for mass market homes is likely to continue only as long as average HDB resale prices do not fall by more than 7 per cent year on year.

‘Many in the mass market segment are buying now and banking on their future earnings to service their loans as they are afraid of missing the boat,’ said Mr Mak.

Source: Straits Times, 16 April 2009