Posts tagged: The Centris

Aug 30 2009

Sub-sales triple in second quarter

Mass-market and mid-tier projects are hot, but it is taking longer to sell investment properties

The upbeat sentiment in the new private home market has lured out the sellers in the sub-sale market.

Sub-sales – the sale of uncompleted homes by their buyers – of non-landed private properties tripled to 1,200 units in the second quarter, according to a DTZ quarterly report.

This time, though, it is mainly the mass-market and mid-tier projects that are popular sub-sales. In 2007, it was the higher-end projects that found favour with buyers.

Also, the sellers are taking longer to sell their investment properties.

The DTZ study found that a few mass-market projects made their way to the Top 10 list of projects with the most sub-sales. These included Casa Merah, located near the Tanah Merah MRT Station, The Centris in Jurong West and The Quartz in Compassvale.

For instance, there were 54 sub-sales in Casa Merah in the second quarter, and the median sub-sale price rose from $658 psf in the first quarter to $734 psf in July and August.

The most popular sub-sale project in the second quarter was Rivergate, located at Robertson Quay.

The median price of its sub-sale units rose from $1,200 psf to $1,400 psf, and 105 of its 545 units changed hands in the second quarter alone. Prices have since risen further – deals done in July and August ranged from $1,400 to $1,880 psf, according to caveats lodged.

Two perennial favourites are The Sail @ Marina Bay and Icon, prime projects in the central locations of Marina Bay and Tanjong Pagar respectively.

Despite being launched between 2003 and 2005, they still remain popular in the sub-sale market. Their median prices rose 27 per cent and 17 per cent respectively from the last quarter.
Sub-sale buyers tend to be true investors, said HSR Property Group executive director Eric Cheng.

Upgraders, he said, prefer not to buy sub-sales as they do not wish to pay a premium. Those who do, however, find mass- to mid-tier market projects more affordable.

Analysts say that the higher number of sub-sales could be due to the many units that were completed this year.

Ms Chua Chor Hoon, DTZ’s head of South-east Asia research, says there is normally a high level of sub-sales for a project when it is nearing, or just after, completion.

‘In 2006, 6,250 units were completed. This year, 11,367 units are expected to be completed,’ she said.

Mr Cheng pointed out that projects sell out very quickly in today’s market, and some buyers who missed out on the chance of buying a unit do not mind paying a small premium to get a unit if the price is not too far away from the launch price.

These buyers often have compelling reasons, said Mr Cheng. They might have family living nearby, or even on the same unit level.

Despite the higher number of sub-sales now, the number of properties bought and sold within a short span of time is not as high as during 1996 or 2007, said Ms Chua.

‘The number and percentage of units bought and sold within a six-month period in the first half of the year is a lot less than those in 2007 and 1996,’ she said.

Citing data from Realis, she said 88 units were ‘flipped’ in the first half of this year, compared to 517 in 1996 and 835 in 2007.

Flipping occurs when someone buys a property and resells it quickly for a profit.

‘Buyers now tend not to buy another unit so quickly because they often have a choice of other surrounding units that are being sold as well,’ said Mr Cheng.

‘There are a lot of short-term investors who would like to resell for a profit, but might not be able to because they ask for too much. There are also a lot of launches coming up.

‘Market fundamentals are not that strong even though market sentiment is, and we might see a pull-back effect,’ he said.

Source: Sunday Times, 30 Aug 2009

Apr 24 2009

Secondary market buzzes as prices fall

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

Mar 15 2009

TOP chance to pick up condo bargains

Buyers now have more choices as launches return to the market. There is also no lack of supply in the secondary market, where more projects – including several big ones – will obtain temporary occupation permits (TOPs) by the end of this year.

The sellers of projects yet to obtain TOP are often short-term investors, and in this present climate some may offer real bargains if they have an urgent need to offload their properties, experts said.
A project’s TOP date is when those who had bought on deferred payment will have to pay for the bulk of the purchase price.
The deferred payment scheme was seen as encouraging speculation as buyers could profit by reselling their homes before the TOP date without much capital outlay. It was scrapped in late 2007.

‘Most times, those who bought on deferred payment are usually the investors,’ said Mr Colin Tan, Chesterton Suntec International’s head of research and consultancy.
Although not many bargains have surfaced, more could come, experts said. The 104 caveats lodged in the first two months of this year – for projects that have yet to obtain TOP – showed prices are coming down, but only gradually, said Mr Tan, citing Urban Redevelopment Authority data.

Of the 104 deals, 24 were for City Square Residences at $664 per sq ft (psf) to $911 psf, compared with its starting price of $560 psf in 2005. Another 20 deals were done at The Centris at between $427 psf and $639 psf, compared with its 2006 launch price of $550 psf.
Singapore bankers are reluctant to repossess properties when property prices have not fallen steeply, Mr Tan said. ‘As Singapore is still not in ‘deep recession’ – although we are moving towards it – these investors are able to rent out their properties and collect rent,’ he said. ‘So long as banks are receiving some kind of payment, they are not willing to force the issue.’

Mr Tan said he foresees a gradual decline in property prices for the next three to four months. The shrinking rental market may have a greater impact on the market thereafter, he added. ‘For those waiting for ‘bargains’, you’ll have to be patient and wait a little longer,’ he advised. ‘At the moment, while the rental market is declining, it is still some 15 to 20 per cent higher than before the run-up in the market.’
A property expert, who declined to be named, said: ‘Buyers may want to look at projects where there is a great deal of speculative element, such as Marina Bay Residences and The Sail, where many people went in blindly. Some of them may now want to let go of their units.’

So far this year, two high-floor Marina Bay Residences units were sold in January at $1,528 psf and $1,638 psf, while two units at The Coast at Sentosa Cove were sold last month at $1,250 psf and $1,500 psf.
Back in late 2006, Marina Bay Residences was sold out in three days at an average apartment price of $1,850 psf or up to more than $2,700 psf, while The Coast initially sold for $1,500 psf on average.

This year, the bigger projects that are expected to obtain TOP include The Centris in Jurong West and Casa Merah in Tanah Merah.
In the Amber Road area where many new developments were launched in the past few years, One Amber will obtain TOP by year end. It will join two recently completed big condos, The Esta and The Sea View, and a few others under construction.

In Balestier, UOL Group said it expects the 180-unit Pavilion 11 in Minbu Road to obtain TOP in the second half of the year.
The 53-unit The Centrio in Irrawaddy Road – launched in May 2007 at $1,025 psf – is also expected to do so by the end of the year.
A nearby project, the 151-unit Montebleu, launched in March 2007 at $980 psf, will obtain TOP early next year. At the same time, there are new launches in Balestier, including The Mezzo and Domus.

In the prime area, Hiap Hoe expects to obtain TOP for its 46-unit Cuscaden Royale by the end of the year or early next year.
‘TOP projects are much sought after by owner-occupiers because buyers can move in immediately into a brand-new property,’ said Ms Kellie Liew, executive director of projects at HSR property group.
Prices in quite a few of these projects, such as Southbank, have dropped a fair bit, she said.
Southbank in North Bridge Road will obtain TOP next year. So will The Riverine by the Park nearby.
Savills Residential director Phylicia Ang said the secondary market will have bargains but they may not be easy to spot. Those with little time to spare may find new launches a better bet, she said.
Source: Straits Times, 15 Mar 2009
Mar 09 2009

Sale of private homes to foreigners slips to 24%

Singaporeans’ share of the purchases rises to 73%

(SINGAPORE) As foreigners retreated from the Singapore property market in the face of the global financial meltdown, their share of private home purchases eased to 24 per cent last year from the high of 26 per cent in 2007, according to DTZ’s latest analysis of caveats.

Conversely, Singaporeans’ share of the private home buying pie rose from 67 per cent in 2007 to 73 per cent in 2008, with companies making up the rest of the buying pool.

Giving a breakdown of the foreign buying pool, which includes permanent residents (PRs), DTZ said that non-PR foreigners accounted for 11 per cent of total caveats lodged for private homes last year, down from a 13 per cent share in 2007.

Singapore PRs’ share held steady at 13 per cent, supported by the increase in the number of PRs in recent years.

Projects that drew the most Singapore PR buyers last year were chiefly in the mass-market segment such as Melville Park in Simei, Livia in Pasir Ris, The Lakeshore in Jurong Lake District and Clover by the Park in Bishan.

The most popular projects among non-PR foreigners were The Lakeshore, Citylights, Icon and Costa Del Sol.

Districts 9, 10, 15 and 16 were the most sought-after haunts of foreigners (including PRs) who bought private residential properties in Singapore last year. Districts 15 and 16 cover the East Coast area.

Source: Business Times, 9 Mar 2009

Malaysians pipped Indonesians to account for the lion’s share, or 20 per cent of foreign buyers of private homes in 2008, followed by Indonesians (19 per cent), Indians (12 per cent) and mainland Chinese (11 per cent).

DTZ noted that in the fourth quarter of 2008, homes priced above $1 million accounted for 72 per cent of purchases by Indonesians, higher than a 41 per cent share of purchases by Malaysians.

The property consultancy firm’s senior director (research) Chua Chor Hoon reckons that the
proportion of foreign buying will stay low in the next 12 months as Singapore property loses some of its relative shine.

‘Steeper currency declines in markets like Australia and UK have made property prices there look more attractive in comparison with Singapore. And investors will become more cautious as the global financial crisis deepens,’ she said.

DTZ’s analysis of caveats captured by the Urban Redevelopment Authority’s Realis system also showed that the number of private home buyers who had HDB addresses fell in Q4 and the whole of 2008.

However the pace of decline was even faster among those with private addresses. As a result, HDB upgraders’ contribution to private home purchases increased from 22 per cent in 2007 to 36 per cent in 2008 – the highest level in four years.

‘In 2008, few investors and speculators, in particular those with private addresses, entered the market and launches of high-end projects were held back.

‘On the other hand, there was a wider spread of projects in the suburbs launched at $1 million or below per unit, which are more affordable for HDB upgraders,’ said Ms Chua.

In general, private homes in districts 15, 18 and 19 were most popular among HDB upgraders.

Projects with the highest number of developer sales to HDB upgraders in 2008 included Livia and Clover by the Park, while in the secondary market, the top-sellers to HDB upgraders were The Centris in Jurong West, Melville Park and Citylights.

Ms Chua reckons that HDB upgraders will continue to feature prominently in the private home buying pie going ahead. ‘The focus this year will be on buying for own occupation rather than for investment or speculation; most HDB dwellers would fit the bill,’ she said.

Jan 14 2009

Help for Centris condo buyers

Developer offers to help secure bank financing, in bid to avoid defaults

DEVELOPERS of a Jurong condominium project have offered to help buyers secure bank financing for their units in a bid to head off any defaults or fire sales.

Those who bought at the launch of The Centris in 2006 but have yet to secure financing can meet loan officers from the three local banks at a roadshow organised by the developer this weekend.

Prime Point Realty Development is taking a proactive approach because the 610-unit project was offered under the deferred payment scheme and well before the market weakened.

With deferred payment, buyers secure a unit with a small amount paid up front – 10 to 20 per cent of the purchase price. The rest is due once the building gets its temporary occupation permit (TOP).

That will be around June, but the rapid deterioration in the economy, falling home prices and tightening of credit markets may have left some buyers at risk of not meeting their full payment.

The added danger is that this could result in fire sales or eventual defaults.

It has prompted Prime Point Realty to write to buyers asking if they want loan advice. About 250 buyers who have yet to obtain loans or who are keen on switching to a better loan rate have responded.

The roadshow with United Overseas Bank, DBS and OCBC will be held this weekend at Jurong Point, which is linked to The Centris.

‘(It will) make it very convenient for our purchasers to discuss their end-financing arrangements if they have yet to do so. We believe that this is the prudent thing to do,’ said Mr Michael Leong, executive director of Guthrie Properties, one of the partners in the Prime Point Realty joint venture.

The others are Lee Kim Tah Holdings and TMW PCCW, a German investment fund managed by Pramerica Real Estate Investors (Asia).

Representatives from property firm ERA, which marketed The Centris launch, will also attend the roadshow. ERA can help sell the units of buyers who cannot get sufficient financing.

The roadshow initiative has baffled one property consultant, who said The Centris was launched at a low price. He said the developer’s risk of being hit by defaults or being stuck with returned units is small compared with projects launched at the height of the market.

It is also a mass-market condo that would have attracted mostly owner-occupiers, added the consultant.

Prime Point Realty’s risks are limited to the original buyers as the developer does not offer the deferred payment scheme for sub-sales.

The 99-year leasehold condo sits on top of the new extension of Jurong Point mall and is near the Boon Lay MRT station and bus interchange.

It was first sold at an average of just below $500 per sq ft (psf). Its launch came before home prices peaked in 2007 and current price levels are still hovering above launch prices.

Sales registered last month show prices of between $557 psf and $610 psf. One of them, a $561 psf deal, netted the seller a profit of about $130,000 as he had bought cheap during the preview.

‘If any of the buyers have problems financing their units and want to sell at (the launch price), there will be a ready pool of buyers out there,’ said a property agent, who declined to be named.

Property values in Jurong are expected to be supported by government plans to transform the area into a bustling lakeside hub for business and leisure, he said.

Source : Straits Times – 14 Jan 2009

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