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

Brisk weekend sales indicate continuation of strong momentum

SALES of new condominium projects continued at a robust pace last weekend, despite some developers starting to test the market with slightly higher prices.

Buyers picked up 120 units at Waterfront Key in Bedok Reservoir at an average price of $735 per sq ft (psf), even though that price is higher than that at the neighbouring Waterfront Waves condo, where units are going at $700 psf on average.

Both are 99-year leasehold projects and are being jointly developed by Far East Organization and Frasers Centrepoint.

In the Upper Changi area, Hong Leong Group sold 50 more units of The Gale on Flora Road at prices ranging from $650 to $725 psf – up from $650 to $700 psf the previous weekend. This makes 265 units sold to date at the 329-unit freehold development, or about 80 per cent.

In the higher-end segment of the market, City Developments (CDL) has also raised prices for its newly launched Volari@Balmoral by 2 per cent, after it saw a fairly good take-up rate over the weekend.

CDL released 65 units out of a total of 85, and sold about 55 of them. The average price of the units sold was over $2,000 psf, it said in a press release.

The developer added that almost half the buyers were foreigners. Prices start from $2.7 million for a two-bedroom unit.

The transactions over the weekend indicate that this month’s home sales figures are likely to maintain the strong momentum started in February, which has seen more than 1,000 new homes sold every month.

Another interesting point: fewer buyers appear to be taking up the interest absorption scheme, which allows them to defer the bulk of their payments until their apartment is completed but often at a higher price.

Only a third of the buyers at The Gale took up the interest absorption scheme. About 20 per cent of Volari@Balmoral‘s buyers opted for the scheme, which means they paid 2 per cent more for their units.

At Waterfront Key, ‘practically all’ the buyers went with the normal progressive payment scheme, said Far East Organization’s chief operating officer Chia Boon Kuah. This could be because interest absorption for this project comes at a 4 per cent premium.

When asked why the prices were higher at Waterfront Key than at Waterfront Waves, Mr Chia mentioned the project’s ‘thoughtful facilities’, including three outdoor villas and two ‘island villas’, as well as the fact that all units would have views of either the park, reservoir or pool.

The developers released 176 units at Waterfront Key last Friday. A further 102 units will be released during the project’s public launch this Saturday. The condo has 437 units in all.

Of the buyers last weekend, about 60 per cent were HDB upgraders, said Mr Chia. They bought mainly the smaller units: all the 57 two-bedroom units from the first to 15th storeys have been sold, at prices starting from $593,000. The four-bedders, which are 1,518 sq ft in size, are going for up to $1.42 million each.

Source: Straits Times, 21 July 2009

PROPERTY sales over the past few days continued to post encouraging numbers.

City Developments is understood to have sold between 50 and 60 units of its 85-unit Volari@Balmoral condo at Balmoral Road. The 12-storey freehold project, priced at about $2,000 psf on average, will be built on the current Garden Hotel site. Residents will enjoy views of the lush greenery of the Goodwood Hill area. It was released for sale late last week.

Over at Bedok Reservoir, Far East Organization and Frasers Centrepoint have sold 120 units of Waterfront Key at an average price of $735 psf.

This pricing is about 5-8 per cent higher than the $680-700 psf average price at which the two developers are selling units at the adjacent Waterfront Waves, which was 78 per cent sold as of last Thursday. Both projects are 99-year leasehold.

As for their latest condo, the 437-unit Waterfront Key, 176 units have been released since Friday. Far East said that in terms of absolute quantum, prices range from $593,000 for a two-bedroom unit of 840 sq ft to $1.42 million for a 1,518 sq apartment with four bedrooms. The sole penthouse in the initial batch of 176 units is a 2,992 sq ft unit priced at $3.14 million.

Buyers of nearly all the 120 units sold did not opt for an interest absorption scheme (IAS), which comes at a 4 per cent price premium. The units released so far comprise a good mix of reservoir-facing, park-fronting and pool-view apartments. The 15-storey condo has a total of eight blocks.

Volari’s prices range from $1,800 psf to $2,300 psf. BT understands that an IAS is included in the price. However, the majority of buyers are understood to have opted for normal progressive payments, which means that they save 2 per cent on the pricing.

Developers have sold over 7,300 private homes in Singapore in the first six months of this year, surpassing the measly 4,264 units sold for the whole of last year. This has started to give developers some pricing power.

A seasoned property developer said that typically, price stability sets in when developers sell about 5,500 to 6,000 units over a 12-month period.

Increasingly, property analysts are predicting an increase in private home prices for the whole of this year and see the trend gaining momentum in 2010. Analysts’ estimates of full-year sales for this year range from around 9,000 to 14,000 units.

The strong home buying in recent months runs counter to the backdrop of wage cuts and job losses amid the recession.

Analysts credit the revival in home buying to developers’ strategy of chopping prices earlier this year, pent-up demand, the stock-market rally, a low interest rate environment, lack of trust among investors in financial instruments after Lehman’s collapse and the appeal of property as an anti-inflationary hedge.

Source: Business Times, 20 July 2009

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?

Despite the recent slump in the property market, new private properties are still being snapped up in the market.

Last month’s sales of new private homes jumped to 1,323 units, harking back to the days of the property boom, said observers.

In January, only 108 units were sold.

The figure was largely propped up by two newly launched heartland condominiums – the 293-unit Alexis at Alexandra Road and the 517-unit Caspian in Jurong.

Prices started from $450,000 at Alexis and $340,000 at Caspian.

‘Developers probably realised after January’s dismal sales that they had to lower their prices, while buyers noticed these discounts and decided to buy,’ said PropNex’s corporate communications manager Adam Tan.

According to CBRE Research executive director Li Hiaw Ho, the majority of last month’s buyers were HDB upgraders who put buying on hold while home prices surged in 2006 and 2007.

He estimated that private home sales this month would come up to about 400 to 600 units, bringing the total number of units sold to 1,800 to 2,000 for the January to March quarter.

‘A few projects are still selling fairly well, but they are not as large-scale as the projects launched last month,’ said Mr Li, who predicted that sales figures are likely to hover around 500 to 700 units a month for the second quarter of the year.

Developments that are anticipated to do well this month include Waterfront Waves in Bedok, which was first launched last year but relaunched in the middle of March, and Mi Casa condominium in Choa Chu Kang, which analysts are expecting to be launched at the end of the month.

They have 457 and 405 units respectively.

The rate of new launches this month is likely to be similar to last month’s, said Dr Chua Yang Liang, the head of research and consultancy at Jones Lang LaSalle Singapore.

‘This is backed by housing developers’ confidence in the latent demand by genuine homebuyers, encouraging them to release more,’ he said.

However, the islandwide take-up rate this month could dip as the market has been rather temperamental, especially in light of the volatile global stock market performance, he said.

So when is the right time to buy?

‘Many people ask that question but they should really be asking themselves where they want to buy, what they are buying it for, and what are their risk profiles,’ said PropNex’s Mr Tan.

‘Don’t buy blindly just because the price is good. As some of these places have two or three years till their completion, one should also consider the property’s surroundings, such as existing or future infrastructure. Go into this investment with about five to 10 years in mind.’

Source: Straits Times, 29 Mar 2009