About Singapore Property » The Mezzo

High-end market hots up

aboutsingaporeproperty — Tue, 16 Jun 2009 15:41:00 +0000

SALES of private residential properties surged to their highest level in nearly two years in May.

According to the latest data by the Urban Redevelopment Authority released yesterday, overall home sales totalled 1,668 units last month, the highest monthly figure since the all-time record of 1,723 units was set in August 2007.

Purchases of private homes in the prime districts, which include Holland Road, River Valley and Newton, nearly doubled in May with 617 units sold, compared with 322 in April.

Market watchers said the spike in transaction volumes was due to the recent stock market rally, coupled with optimistic consumer confidence and liquidity.

Said Mr Donald Han, managing director of Cushman and Wakefield: “Back in late March and April, the regional stock markets went up by about one-third. This fuelled a lot of the liquidity that is coming back into the (property) market.”

CBRE Research’s executive director, Mr Li Hiaw Ho, said there was a significant amount of interest in high-end properties last month. “Five units of The Orange Grove were sold at the median price of $2,320 per square foot (psf), while one unit each of Boulevard Vue and St Regis Residences was sold at $2,602 psf and $2,200 psf respectively,” said Mr Li.

Mrs Ong Choon Fah, head of consulting at DTZ Debenham Tie Leung, said the May figures suggest that the bullish sentiment in the mass market projects has started to filter up to the luxury segment. “The momentum has certainly picked up. A few projects have seen very brisk sales,” she said.

According to URA data, the most popular developments were Martin Place Residences, The Wharf Residence, The Arte and The Mezzo. These four projects, located in the prime districts of 9, 10 and 11, as well as the city fringe areas, made up more than 30 per cent of the sales. The median prices of units there ranged from $903 to $1,423 psf.

Mr Desmond Sim, associate director of Research at Jones Lang LaSalle, said discounts given by the property developers and strong latent demand helped to boost sales.

Looking ahead, DTZ’s Mrs Ong said prices in the prime districts are likely to go up when more investors comes back into the market, prompting developers to launch the high-end properties in their inventories.

But analysts also warned that the current rebound in the property market may not be sustained.

“Activity remains confined within the residential market. This, in our view, is largely fuelled by softer prices and strong latent demand which alone will not be sufficient to sustain an overall recovery in the market,” said Mr Sim.

“Unless there are improvements in the overall economy, it may still take quite some time before we see the return of ‘super-luxury launches’ which may fetch an average $5,000 psf as affordability still remains the main factor to entice buyers.”

Source: Today, 16 June 2009

Private home sales keep defying caution

aboutsingaporeproperty — Tue, 16 Jun 2009 11:25:00 +0000

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

(SINGAPORE) The buds of recovery sprouting in the private home market since February seem to have blossomed in May.

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).

However, some industry watchers continue to warn that the blooms may not last unless the economy improves decisively. They also remain concerned about weak rental demand and more residential supply coming on stream.

According to data from the Urban Redevelopment Authority (URA) yesterday, developer sales in May put on their strongest showing not just since January, but also since the sub-prime crisis began to rear its head. The 1,668 units sold last month were just 3 per cent shy of the last high of 1,723 units in August 2007.

‘The stockmarket rally which began in mid-March has resulted in positive sentiment that has driven private residential home sales,’ said CBRE Research executive director Li Hiaw Ho. Other consultants noted that lower home prices and immense liquidity searching for higher returns also kept home sales up.

In another sign that sentiment had improved, buying activity continued to return to the high-end core central region (CCR) in May. The launch of 32 units at Rochelle at Newton, for instance, was fully taken up.

Of the 1,668 units sold in May, 617 units or 37 per cent were from CCR. Colliers International pointed out that this proportion far exceeded the much lower 8 per cent seen in February.

Jones Lang LaSalle attributed the higher CCR sales to ‘discounted pricing from developers’, as seen in several projects such as Martin Place Residences, The Wharf Residence and Parc Centennial. At Martin Place Residences, for instance, units were first sold at a median price of $1,746 psf in January 2008. Last month, buyers took up 186 units at a median $1,423 psf.

Not only have sales increased in the high-end property market, more deals struck above $2,000 psf have emerged. According to Colliers, 14 units in May changed hands above that price level, compared with just one in February.

Notably, two apartments at The Orchard Residences went for $2,787 psf and $3,299 psf each last month. Other properties which saw median transaction prices of over $2,000 psf include Boulevard Vue, The Orange Grove, St Regis Residences and Vida.

The mid-market property sector also registered encouraging sales. Colliers noted that some 37 per cent, or 609 units of the 1,668 sold in May came from the rest of central region (RCR); the corresponding proportion in February was 29 per cent.

RCR saw the launch of the 26-unit Spring @ Langsat last month, of which nine units were taken up. Projects such as The Arte and The Mezzo continued to sell well.

Rosy sales aside, some buyers have returned units between April and May. URA data indicates, for instance, a return of 11 units at Mi Casa, three units at Verdure and three units at The Arte.

There are also industry watchers who remain guarded about the recent surge in home sales. This is ‘largely fuelled by softer prices and strong latent demand, which alone will not be sufficient to sustain an overall recovery in the market’, said Jones Lang LaSalle associate director of research Desmond Sim.

‘Unless there are improvements in the overall economy, it may still take quite some time before we see the return of ‘super-luxury launches’ . . . Affordability still remains the main factor to entice buyers.’

Citi and Nomura Singapore also said in research reports last week that the property upswing may not be sustainable. Nomura, in particular, expects to see a W-shaped recovery in asset prices because downside risks such as rising unemployment, falling rents and rising supply still exist.

Colliers deputy managing director Grace Ng noted that the Singapore market is ‘a bit peculiar’ because buying is largely spurred by sentiment; many people ‘actually come into the market because they see other people buying . . . rather than calculating yields’.

Even then, rental yields today are likely to be higher than what bank deposits can offer, she added.

Source: Business Times, 16 June 2009

Firm demand boosts sales of private homes

aboutsingaporeproperty — Tue, 26 May 2009 14:24:00 +0000

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

Developers dangle rent guarantees

aboutsingaporeproperty — Tue, 26 May 2009 12:03:00 +0000

Buyers respond well to scheme introduced at some projects

(SINGAPORE) Some developers here are turning to rental guarantees to lure buyers in the current down-market.

Under such schemes – which are offered only for certain units within selected projects – developers help buyers secure tenants, and also ensure that the owner gets a minimum pre-determined yield.

Far East Organization, for example, offers rental guarantees for selected units in selected projects such as Orchard Scotts, Vida, River Place, Tanglin View and Icon.

‘Through our marketing efforts over the years, we found that investors do not have the time to lease out or manage the tenancy of their apartments that they have bought from us,’ said Chia Boon Kuah, chief operating officer for property sales at Far East Organization.

‘Therefore, in 2006, we rolled out the rental guarantee scheme to assist our investment buyers in leasing out their properties. With our own in-house leasing and estate management teams, we are able to provide a seamless one-stop service to our buyers.’

For Vida, which is located in Cairnhill Rise, Far East is now offering a guaranteed rental yield of 5 per cent a year. This, according to Far East, can potentially work out to a return on invested equity of about 10-13 per cent a year.

‘Vida is a superior investment as we are offering a yield or return on invested equity of around 10-13 per cent per annum,’ said Far East in a recent letter to potential buyers.

Several other developers are offering schemes along the same vein.

At Belle Vue Residences, Wing Tai Holdings is offering a guaranteed return of 20 per cent on the downpayment a buyer makes if he picks up a unit using the deferred payment scheme. (DPS).
Under the scheme, the buyer will have to pay 20 per cent of the property’s price as the
downpayment. For a property worth $4 million, for example, this works out to $800,000.

But under Wing Tai’s scheme, he will get some of that money back.

Buyers who use the DPS to buy units in Belle Vue will get a guaranteed income of 10 per cent a year for two years on their downpayments. The guarantee will kick in once Belle Vue receives its temporary occupation permit (TOP) at the end of 2010. Using the same example as earlier, the buyer will get some $160,000 two years after TOP.

Market watchers said yield guarantee schemes are generally well-received in a down-market.
Investors, for example, snapped up units at high-end residential development Gallop Gables after The Straits Trading Company offered a two-year guaranteed rental yield of 7 per cent on 10 units there in April. All 10 units at the freehold Farrer Road estate sold in three days.

Elsewhere, at its preview for The Mezzo, Soilbuild Group Holdings offered a 6 per cent annual rental guarantee for two years, apart from the interest absorption scheme. The rental guarantee kicks in right after the TOP date. Soilbuild said recently that the launch of the first phase of The Mezzo was ‘met with an encouraging response’.

Market sources told BT that at least a few more new upcoming projects will offer variations of such schemes. Developers have historically offered such schemes to entice buyers when the property market is weak.

Hong Leong Group’s 71-unit luxury development Cuscaden Residence had such a scheme when it was launched in 2004 shortly after the Sars scare. Wing Tai Holdings also offered something similar for Duchess Crest in Bukit Timah in 1998, during the Asian financial crisis.

However, yield guarantees are a popular option for developers, said Joseph Tan, CB Richard Ellis’ executive director for residential. This is because such schemes force developers to manage units once they have been sold.

A check with Singapore’s three largest listed developers – CapitaLand, City Developments and Keppel Land – showed that none of them are currently offering any kind of rental guarantee schemes.

Units with yield guarantees could also come at a higher price, said Peter Ow, executive director for residential at Knight Frank. For example, developers who offer the interest absorption scheme at their properties usually charge a price premium of 2-3 per cent for units sold under the scheme, Mr
Ow pointed out. This is because the developers have to absorb the interest costs that would otherwise have been borne by the buyers. The same principle applies for units offering yield guarantees, he said.

Source: Business Times, 26 May 2009

Home hunters pack showflats in Balestier

aboutsingaporeproperty — Fri, 27 Mar 2009 14:18:00 +0000

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

TOP chance to pick up condo bargains

aboutsingaporeproperty — Sun, 15 Mar 2009 07:54:00 +0000

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

More projects with small units to be released this weekend

aboutsingaporeproperty — Thu, 12 Mar 2009 11:02:00 +0000

MORE projects with small apartments are being released for sale, with one offering units of just 344 sq ft – slightly over half the size of a squash court.

The releases follow the recent success of developments like Alexis, where small units have attracted plenty of buyers with their low overall prices. Prices at the project in Alexandra Road started at $450,000 for one-bedders, which are between 366 sq ft and 527 sq ft.

Source: Straits Times, 12 Mar 2009

A preview for the freehold Kembangan Suites at Jalan Masjid – which has 60 mainly small flats and eight shops – starts today. The project’s marketing material said prices will be revealed only at 10am with sales starting at noon.

Starting prices are at least $300,000 for the one-bedroom units, which range from 344 sq ft to 527 sq ft, according to the marketing material. The project also offers 581 sq ft two-bedroom units.

The 104-unit Domus in Irrawaddy Road will be released for sale this weekend with the interest absorption scheme.

The actual pricing has not been firmed up but will start from just below $500,000 for the 25 studios of 474 sq ft, said Savills Residential, which is marketing the project.

The project has penthouses, including a 926 sq ft double-storey one-bedroom penthouse.

Domus is next to a fairly new launch – I-Residences, where prices are hovering around $900 psf.

In nearby Balestier, The Mezzo – on the site of the former Ruby Plaza – will also be released for sale in a special preview tomorrow. It has 127 units including 20 one-bedders of 560 sq ft.

The unusual aspect of The Mezzo is that it is offering a 6 per cent annual rental guarantee for two years, apart from the interest absorption scheme. The rental guarantee kicks in right after the temporary occupation permit date.

The one-bedders will be priced from about $540,000 and the two-bedders from about $715,000, said HSR Property Group.