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).

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

THE buzz continues at property launches on the island. City Developments said yesterday that it achieved about $190 million of sales from selling about 150 units at The Arte at Thomson since March 21.

The freehold project is priced at $880 psf on average. No premium is being being charged for an interest absorption scheme (IAS) that CDL has extended to buyers. The scheme means buyers pay just the initial 20 per cent to CDL and defer paying the bulk of their purchase price until The Arte is completed. However, buyers have to take up a housing loan at the point of purchase.

CDL has released 180 of the total 336 units in the project, which comprises two 36-storey high towers.

The majority of The Arte’s buyers have private home addresses. Most of the units are going for under $2 million.

Over at Holland Road, Bukit Sembawang is releasing more units at its freehold Verdure from today. It has sold 14 of the 34 apartments in the five-storey project released last weekend. Verdure comprises 69 apartments, with an average price of about $1,350 psf, and six strata semi-detached homes, which cost about $4.8 million on average.

Bukit Sembawang had previously offered an IAS without charging any premium, but from today, buyers will have to pay 2 per cent more to benefit from the IAS.

Over at Tembeling Road in the Katong area, Alpha Land International is offering a small development with a total of 12 apartments. Prices in the five-storey freehold project, which is expected to be completed towards the end of this year or early next year, range from $663,840 (for an 818 sq ft two-bedroom unit) to $1.64 million (for a 2,379 sq ft four-bedder penthouse).

Alpha Land is offering an early bird discount in the form of renovation packages ranging from $10,000 to $25,000, depending on the size of the units. Tembeling Court is being marketed by Texan Associates.

Sim Lian Group will also launch its 360-unit HDB project Parc Lumiere tomorrow. Offered under HDB’s design, build and sell scheme, units in the Simei development have an average selling price of $425 psf. Parc Lumiere has four and five-room flats, with four-room flats selling for $378,000-$425,000 and five-room flats going for $462,000-$575,000. Source: Business Times, 17 April 2009

SOME high-end condominiums recorded sparkling weekend sales even though the overall property market was generally quiet in terms of new launches.

Of the two new previews, Illuminaire on Devonshire sold out its 72 units at $1,630 to $1,730 per sq ft (psf), while Verdure in Holland Road sold 14 units of 34 launched units at $1,400 psf.

Source: Straits Times, 14 April 2009

The 12-year-old Gallop Gables saw far stronger than expected demand, with investors picking up 28 units, even though they are about $3 million or more each.

Previously, the new projects that have attracted fairly strong interest, given today’s climate, were not in such prime areas. But some investors may be looking around now that the market has fallen quite a bit.

Mr Peter Ow of Knight Frank, which is marketing Verdure and Gallop Gables, said the response at these two sales showed individual investors are back.

‘These buyers are savvy investors who are already staying in prime areas,’ he said. ‘Generally, the property market is still weak, but there are value buys around. And people are beginning to see value in well-located projects.’

Of 14 Verdure units that Bukit Sembawang has sold during the preview, a few are penthouses. While the overall project is priced at $1,350 psf on average, the 14 were sold at an average of $1,400 psf, or from $1.5 million to $2.8 million.

A scheme offering interest absorption was available without any extra charge. The project, which has 68 units, will be launched this weekend.

Over at Gallop Gables near Botanic Gardens, Straits Trading sold 26 units – 16 more than its target. It had offered only 10 units with a guaranteed rental yield of 7 per cent for two years. The rest were purchased without the 7 per cent guarantee, but mostly with existing tenancies offering a rental yield of 3 to 5 per cent.

The buyers paid between $3,075,200 and $3,840,000, or an average price of $1,220 psf for the units, which averaged about 2,800 sq ft.

The buyers were mainly residents ranging in age from the mid-30s to the late 70s who bought for investment purposes, said Straits Trading, which had earlier said the sales would generate cash to allow it to invest in distressed assets.

A few buyers, it added, said they may live in the apartments after the end of the two-year rental guarantee period.

At Illuminaire, the affordable price drew both investors and speculators, industry experts said. As it has only one- and two-bedroom units, ranging in size from just 441 sq ft to 721 sq ft, the total price was kept low – from $749,000 to $1.21 million.

EL Development managing director Lim Yew Soon said he had changed the design of the project from a 36-unit development to a 72-unit one last September. By then, a three-bedroom showflat had already been completed – and had to be reconfigured into a smaller unit.
‘I realised the market would prefer small units,’ he said.

Mr Lim, who bought one unit for himself and kept two for business associates, said most buyers were keen on the interest absorption scheme, which was offered at no additional cost.

Some buyers also liked the unusual automated car parking system. There are two car lifts that will store cars in an adjoining multi-storey carpark block.

With over 80 new housing projects islandwide, buyers have more choices but completion delays will keep prices stable

Home buyers keen to upgrade from a Housing Board flat to a private condominium will have plenty of choice this year. That is going by data compiled by real estate services company CB Richard Ellis.

A total of 82 projects are currently ready to be put up for sale throughout this year, said CBRE, an international company with a research team in Singapore.

From the coastal areas of Pasir Panjang and Punggol to the residential zones of Simei and Sixth Avenue, there is a private apartment development waiting to be launched in almost every corner of the island.

Most are in the non-landed condominium category, aimed at Housing Board upgraders and young family starters.

CBRE’s list defined the projects on the list as those that are ‘launch-ready’. By this, it means projects that have all the necessary permits from the authorities so they can be marketed, although construction work may not have started.

Already, four have been launched – including the latest, Mi Casa condominium at Choa Chu Kang, whose units went on sale this weekend. A further two are expected to be launched within the next two months.

With private property prices falling when HDB resale flat prices are still holding fairly steady, it is music to the ears of those who want to upgrade but have not been able to amid high prices and not so many mass-market launches in recent years.

Writer Ng Hui Hui, 28, who is looking for a private apartment but finds prices a bit high now, feels the high number of launches will increase her chances of finding one at the right price.

‘I’m more hopeful because the number of launches offers a lot of choices. There’s more for me to consider,’ she said.

HDB upgraders have flexed their muscle at condo launches so far this year, buying many units at The Caspian beside Lakeside MRT station, Double Bay Residences in Simei and The Quartz in Buangkok, for example.

Mr Joseph Tan, CBRE’s executive director, residential, notes: ‘If there are a number of HDB upgraders who are ready to enter the market, the sales momentum can be sustained.’

Over at the 18-storey The Mercury in Shanghai Road launched three weeks ago, all 67 units – priced from over $700,000 for a 635 sq ft apartment – were snapped up.

Mr Victor Soh, director of the developer, Fortune Shanghai Road, said: ‘There was no delay in launching the project despite the bad market – we launched it when the project was ready. There were quite a number of people waiting for us to launch.

‘All our units have already been sold and we’re ready to start construction.’

While house-proud Singaporeans will enjoy poring over the launch-ready list, imagining their dream home, most projects may not actually go up for sale soon, as developers wait and see how the economy goes.

Only 10 out of the 82 could name a date or period, but even they said their dates are subject to change.

Still, judging by the small amount of dates given, the hold-out may not go beyond this year or the early part of the next, as the furthest indicated date a developer gave was the first half of next year.
Such delays also mean prices will not plummet too sharply, said a spokesman for listed developer City Developments.

He said: ‘This has helped to balance current demand and supply by mitigating the supply of new apartments entering the market.’

The tough economic times are weighing on some developers, with Ms Chua Chor Hoon, a senior research director for global real estate adviser DTZ, saying: ‘Some have been responding to the slow market by deferring projects that are due for completion to later years.’

A spokesman for residential project Verdure – a planned 75-unit, freehold development in Holland Road – said: ‘The market is so bad, we can’t launch it.’

Another, representing the exclusive 26-unit The Verv @ River Valley, said it was putting off its launch, explaining: ‘Blame it on the economy.’

Both spokesmen declined to be named.

The experience of upcoming mid-market, 24-unit Evergreen View at Geylang Lorong 36 echoes this.

Mr Thomas Sim, associate manager of real estate firm PropNex Realty, which is the selling agent, said: ‘We’ve only had the soft launch last month so far because the show unit is only slated for completion in May, and also partly because the market is poor now. As it is, the reaction from the soft launch wasn’t very good.’

A key part of marketing a condo is to build a show flat to entice prospective buyers. Another reason some projects are being delayed is that developers are reviewing their plans in order to reconfigure units to a smaller size, say industry players. The smaller sizes make the units more affordable.

Knowing about the list of 82 ‘launch-ready’ projects is good news for the likes of home-hunter John Yeo, 38.

The sales manager says: ‘This means I have time and don’t have to rush. I can take my time to choose. But of course, price and location must also be right.’

‘I’m more hopeful because the number of launches offers a lot of choices. There’s more for me to consider’ Writer Ng Hui Hui, a house hunter who finds prices too high now

‘This means I have time and don’t have to rush. I can take my time to choose. But of course, price and location must also be right’ Sales manager John Yeo, who is happy with the list of 82 launch-ready projects

Source: Straits Times, 11 April 2009