Source : The Business Times, July 25, 2009
THE office market has posted a third consecutive quarter of negative take-up, according to government data for Q2. However, the negative take-up of 247,570 square feet in the second quarter was smaller than the 322,917 sq ft in Q1 and the 365,973 sq ft in Q4 last year.
CB Richard Ellis executive director Li Hiaw Ho expects take-up to remain in negative territory for the rest of the year. 'The impact of downsizing will be felt in the office sector for the next six months at least.'
Urban Redevelopment Authority (URA) figures show that the islandwide vacancy rate for offices continued to increase, hitting 10.8 per cent as at end-Q2 2009, compared with 10 per cent at end-Q1 2009 and a low of 7.3 per cent in second half 2007.
The vacancy rate for Category 1 space - office space in buildings in the Downtown Core and Orchard Planning Area which are relatively modern or recently refurbished, command relatively high rentals and have large floor plate size and gross floor area - was 6 per cent at end-Q2, up from 5.3 per cent at end-Q1. The vacancy rate for Cat 2 space (the rest of Singapore's office stock) rose from 11 per cent at end-Q1 to 11.9 per cent at end-Q2.
The median rental contracted in Q2 for Cat 1 offices was $10.59 per square foot per month, down 8.4 per cent from the preceding quarter. The drop was smaller than a 12 per cent decline in Q1.
However, the median rental for Cat 2 space fell 7.6 per cent to $5.11 psf per month in Q2 - a bigger fall compared with the 6.9 per cent drop in Q1.
Cat 1 median rental has eased nearly 28 per cent from the peak of $14.70 psf in Q2 2008. Over the same period, the Cat 2 median rental has slipped 21 per cent.
Looking ahead, property consultants are predicting gentler declines in office rents for the rest of 2009, while cautioning that the office market is unlikely to be out of the woods until demand turns positive.
In the retail property sector, the completion of ION Orchard and Orchard Central caused the vacancy rate for shop space in the Orchard Planning Area to spike to 16.2 per cent at end-Q2 from 4.7 per cent a quarter earlier. URA pointed to the lag time taken for tenants to retrofit and occupy the shop space in the newly completed malls.
CBRE's Mr Li said: 'These new malls already have high pre-commitment levels and vacancy rates in Orchard should move back to the 90 per cent level within a year, once tenants have moved in and started operations.'
The median rental signed in Q2 eased 2.4 per cent over Q1 in Orchard and Rest of City Area and fell a smaller one per cent in Outside City Area.
URA's rental indices for flatted factories and warehouses slid 4.2 per cent and 9.2 per cent respectively in Q2 over Q1. Warehouse vacancy rate rose from 7 per cent in Q1 to 9 per cent in Q2. Factory vacancy increased from 7 per cent to 7.8 per cent over the same period.
Sunday, July 26, 2009
Next Year May Not See Oversupply Of Homes
Source : The Straits Times, July 25, 2009
GLUT? What glut? Fears of an oversupply of private homes next year have eased - in fact there could even be a shortage.
The Urban Redevelopment Authority's (URA) second quarter real estate statistics, released yesterday, suggest any potential oversupply has been pushed back to 2011 or even later as private property developers delay and cut down on projects.
The number of private homes slated for completion for the whole of next year has fallen sharply to just 5,394.
That is down about 70 per cent from an estimated 17,454 early last year at the height of the last boom.
Just as developers have cut back on building, home buying has shot back up to boom-time levels.
For the past three months, more than 1,000 private homes have been sold each month. An average of 8,000 private homes have been sold each year since 2000.
This means that private home prices and rents could rise next year, as the supply of private property units in 2010 may not meet demand, especially if the current strong sales streak keeps up.
Caveats apply, of course, market watchers say. URA's statistics rely on figures that developers have provided, and dramatic changes from quarter to quarter have occurred before.
Also, the number of completed units could differ from the number sold, as developers could sell uncompleted units or be unable to sell completed units.
According to URA statistics, during the last boom in 2007 and last year, developers - confident that people would snap up private homes - obtained licences to sell 11,150 private homes set to be finished this year, and 9,188 homes in 2010.
But the collapse of Lehman Brothers last September and the resulting recession triggered fears last year that there would be too many private homes on the market next year amid an economic slowdown.
Concerned that units would not sell, developers have since slashed some projects and pushed back the completion dates of others. As a result, URA's figure for the total planned units slated for completion this year and beyond has fallen by 6,000 - from over 68,000 in the first quarter of 2008 to the current 62,350.
But although almost all of URA's projected completion figures have declined gradually over the period from the third quarter of last year to the first quarter this year, the slide shows signs of having just bottomed out.
In the third quarter of last year it was projected that around 13,400-16,000 units would be completed every year after 2010. This fell to a range of 12,100-13,900 in the fourth quarter and then to 10,900-13,800 last quarter.
Although it still remains below pre-recession levels, this range has risen slightly in the last quarter to 11,200-13,600 units every year from 2011 onwards.
The bulk of project completions has been shifted from next year to 2011 and later, with project completion figures increasing by an average of 350 for each year from last quarter's figures.
To date, 5,158 private units have been finished in the first half of this year, and URA expects 1,051 more units to be ready within the next six months.
GLUT? What glut? Fears of an oversupply of private homes next year have eased - in fact there could even be a shortage.
The Urban Redevelopment Authority's (URA) second quarter real estate statistics, released yesterday, suggest any potential oversupply has been pushed back to 2011 or even later as private property developers delay and cut down on projects.
The number of private homes slated for completion for the whole of next year has fallen sharply to just 5,394.
That is down about 70 per cent from an estimated 17,454 early last year at the height of the last boom.
Just as developers have cut back on building, home buying has shot back up to boom-time levels.
For the past three months, more than 1,000 private homes have been sold each month. An average of 8,000 private homes have been sold each year since 2000.
This means that private home prices and rents could rise next year, as the supply of private property units in 2010 may not meet demand, especially if the current strong sales streak keeps up.
Caveats apply, of course, market watchers say. URA's statistics rely on figures that developers have provided, and dramatic changes from quarter to quarter have occurred before.
Also, the number of completed units could differ from the number sold, as developers could sell uncompleted units or be unable to sell completed units.
According to URA statistics, during the last boom in 2007 and last year, developers - confident that people would snap up private homes - obtained licences to sell 11,150 private homes set to be finished this year, and 9,188 homes in 2010.
But the collapse of Lehman Brothers last September and the resulting recession triggered fears last year that there would be too many private homes on the market next year amid an economic slowdown.
Concerned that units would not sell, developers have since slashed some projects and pushed back the completion dates of others. As a result, URA's figure for the total planned units slated for completion this year and beyond has fallen by 6,000 - from over 68,000 in the first quarter of 2008 to the current 62,350.
But although almost all of URA's projected completion figures have declined gradually over the period from the third quarter of last year to the first quarter this year, the slide shows signs of having just bottomed out.
In the third quarter of last year it was projected that around 13,400-16,000 units would be completed every year after 2010. This fell to a range of 12,100-13,900 in the fourth quarter and then to 10,900-13,800 last quarter.
Although it still remains below pre-recession levels, this range has risen slightly in the last quarter to 11,200-13,600 units every year from 2011 onwards.
The bulk of project completions has been shifted from next year to 2011 and later, with project completion figures increasing by an average of 350 for each year from last quarter's figures.
To date, 5,158 private units have been finished in the first half of this year, and URA expects 1,051 more units to be ready within the next six months.
HDB Prices Up 1.4 Per Cent
Source : The Business Times, July 25, 2009
Decline in upfront cash required makes resale flats more affordable
PRICES of Housing Board flats rose 1.4 per cent in the second quarter to a record high, reversing a first-quarter dip of 0.8 per cent.
The number of transactions also soared - up 58 per cent in the three months to June 30 - as confidence grew and buyers rushed back into the market.
One reason for the HDB market's resilience amid testing economic times is the decline in the amount of cash required upfront to buy a resale flat. This amount is called cash-over-valuation (COV) and is falling or at least stable across all flat types.
Fresh figures released by HDB yesterday showed that the median COV for all flat types fell to just $3,000 in the second quarter compared with $4,000 in the first quarter. The median COV is at a relatively low $5,000 for three- and four-roomers and stayed at zero for five-room and executive flats, for both the first and second quarter.
Median COV for two-roomers declined from $7,000 in the first quarter to $6,000 in the second.
This is a marked change from the 2007 property boom, when median COV hit $22,000 in the fourth quarter, pricing many first-time buyers out of the resale market.
COV has come down due to valuations of resale flats catching up, said ERA Asia Pacific associate director Eugene Lim.
So even though values of HDB resale flats are high, they have become more affordable as buyers can get bank loans for the purchase and do not have to fork out high amounts of cash.
Sales activity was robust in the quarter with transactions up to 10,184 compared with 6,446 in the first quarter. They were also up 31 per cent from the 7,763 units sold in the same period last year.
Sales of five-roomers rose 80 per cent - 2,713 were moved - over the first quarter while executive flat transactions surged 100 per cent to 753. Four-room flat sales climbed from 2,488 to 3,787.
PropNex chief executive Mohamed Ismail noted that sales of the bigger flat types had suffered in the three quarters up to the end of March amid growing concerns about Singapore's worst recession.
'These numbers are a clear sign that people's market confidence is growing,' he said, adding that feedback on the ground indicated that demand in mature estates far exceeds supply.
The sales of larger flat types also explain the strong demand from HDB upgraders who sold their flats to buy private homes, said property veteran Nicholas Mak.
Private home sales, especially in mass-market suburban condos, have enjoyed brisk sales since February.
Meanwhile, HDB rents were stable. Median rents for two-room and five-room flats for the second quarter were unchanged but fell by $100 for three-room, four-room and executive flats.
HDB plans to launch a further 6,000 units under its build-to-order scheme over the next six months. About 2,400 will be three-room and smaller flats. The bulk of new flat supply will be in Punggol. So far, HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands this year.
Analysts predict that HDB flat prices will enjoy modest increases as confidence continues to grow.
But the falling COV for large flats could indicate limited upside for prices of these flat types, said Mr Mak. 'This could also limit the HDB upgraders' demand for private property in the short term,' he said.
Decline in upfront cash required makes resale flats more affordable
PRICES of Housing Board flats rose 1.4 per cent in the second quarter to a record high, reversing a first-quarter dip of 0.8 per cent.
The number of transactions also soared - up 58 per cent in the three months to June 30 - as confidence grew and buyers rushed back into the market.
One reason for the HDB market's resilience amid testing economic times is the decline in the amount of cash required upfront to buy a resale flat. This amount is called cash-over-valuation (COV) and is falling or at least stable across all flat types.
Fresh figures released by HDB yesterday showed that the median COV for all flat types fell to just $3,000 in the second quarter compared with $4,000 in the first quarter. The median COV is at a relatively low $5,000 for three- and four-roomers and stayed at zero for five-room and executive flats, for both the first and second quarter.
Median COV for two-roomers declined from $7,000 in the first quarter to $6,000 in the second.
This is a marked change from the 2007 property boom, when median COV hit $22,000 in the fourth quarter, pricing many first-time buyers out of the resale market.
COV has come down due to valuations of resale flats catching up, said ERA Asia Pacific associate director Eugene Lim.
So even though values of HDB resale flats are high, they have become more affordable as buyers can get bank loans for the purchase and do not have to fork out high amounts of cash.
Sales activity was robust in the quarter with transactions up to 10,184 compared with 6,446 in the first quarter. They were also up 31 per cent from the 7,763 units sold in the same period last year.
Sales of five-roomers rose 80 per cent - 2,713 were moved - over the first quarter while executive flat transactions surged 100 per cent to 753. Four-room flat sales climbed from 2,488 to 3,787.
PropNex chief executive Mohamed Ismail noted that sales of the bigger flat types had suffered in the three quarters up to the end of March amid growing concerns about Singapore's worst recession.
'These numbers are a clear sign that people's market confidence is growing,' he said, adding that feedback on the ground indicated that demand in mature estates far exceeds supply.
The sales of larger flat types also explain the strong demand from HDB upgraders who sold their flats to buy private homes, said property veteran Nicholas Mak.
Private home sales, especially in mass-market suburban condos, have enjoyed brisk sales since February.
Meanwhile, HDB rents were stable. Median rents for two-room and five-room flats for the second quarter were unchanged but fell by $100 for three-room, four-room and executive flats.
HDB plans to launch a further 6,000 units under its build-to-order scheme over the next six months. About 2,400 will be three-room and smaller flats. The bulk of new flat supply will be in Punggol. So far, HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands this year.
Analysts predict that HDB flat prices will enjoy modest increases as confidence continues to grow.
But the falling COV for large flats could indicate limited upside for prices of these flat types, said Mr Mak. 'This could also limit the HDB upgraders' demand for private property in the short term,' he said.
HDB Resale Flat Prices Surge To Record High
Source : The Business Times, July 25, 2009
Some industry watchers are predicting further upside for the year
THE HDB resale market seems to be chugging along nicely despite the recession. Soaring demand for resale flats sent prices to a record high in the second quarter, and some industry watchers are predicting further upside for the year.
APPRECIATING BLOCKS - Upgrading activity aside, the inflow of permanent residents, many from China and India, also contributed to demand for resale flats
Data from the Housing and Development Board yesterday showed the resale price index rising 1.4 per cent from the previous quarter to 140.2 in Q2. This is the highest level seen since 1990.
The increase surpassed HDB's flash estimate of a 1.2 per cent rise. It also reversed a 0.8 per cent fall in Q1 - the first slide after nine straight quarters of growth. The price dip in Q1 now seems like a 'statistical blip', said property consultant Nicholas Mak.
Executive flats saw the biggest percentage rise in median resale prices, up 2.2 per cent from a quarter ago to $455,000.
Strong interest in resale flats helped sustain the market. Buyers and sellers filed 10,184 resale applications in Q2 - swelling 58 per cent from Q1 and 31 per cent from a year ago. According to HDB, the quarterly resale registration volume last crossed the 10,000-mark more than four years ago - it was 11,562 in Q4, 2004.
Most of the 10,184 applications in Q2 were for four-room flats, followed by three-roomers and then five-roomers.
However, applications for executive flats showed the greatest increase, doubling from a quarter ago to 753 in Q2. Those for five-room flats also jumped 80 per cent to 2,713. The sharp surge in resale activity involving larger flats suggests that there were more owners who sold their flats to buy private homes, said Mr Mak.
Market analysts have flagged HDB upgraders as a significant group of buyers who revived the private property market. Many went for units in mass-market projects such as Mi Casa and Double Bay Residences.
C&H Realty managing director Albert Lu pointed out that owners of smaller flats are also moving to larger flats. Prices of five-room and executive flats have languished in the last few quarters, making the move more attractive, he said.
Upgrading activity aside, the inflow of permanent residents (PRs) also contributed to demand for resale flats. HSR Property Group chief operating officer Dennis Yong observed that his firm has up to 10 per cent more resale transactions involving PRs in the last few months, and many of them are from China and India.
Buyers remained unwilling to pay high premiums for HDB flats. The median cash-over-valuation (COV) was $3,000 across all flat types in Q2, down slightly from $4,000 in Q1. Notably, most five-room and executive flats were still unable to command any COV.
In a way, the low COV sustained demand for HDB resale flats, said PropNex CEO Mohamed Ismail. 'As the demand is strengthening quickly, sellers are expected to demand a higher COV.' Mr Ismail expects the resale price index to gain around 3 per cent to 145 points by the end of the year. C&H Realty's Mr Lu also projects a 2-3 per cent increase in resale prices.
Just a few months ago, property consultants had feared that HDB resale prices would drop as much as 10 per cent for the whole year. Signs of a stabilising economy and improved sentiment in the property market seem to have soothed nerves.
Statistics from the Urban Redevelopment Authority yesterday also painted a more calming picture. While prices in the residential, commercial and industrial sectors still fell in Q2, the declines were smaller than a quarter ago.
Some industry watchers are predicting further upside for the year
THE HDB resale market seems to be chugging along nicely despite the recession. Soaring demand for resale flats sent prices to a record high in the second quarter, and some industry watchers are predicting further upside for the year.
APPRECIATING BLOCKS - Upgrading activity aside, the inflow of permanent residents, many from China and India, also contributed to demand for resale flatsData from the Housing and Development Board yesterday showed the resale price index rising 1.4 per cent from the previous quarter to 140.2 in Q2. This is the highest level seen since 1990.
The increase surpassed HDB's flash estimate of a 1.2 per cent rise. It also reversed a 0.8 per cent fall in Q1 - the first slide after nine straight quarters of growth. The price dip in Q1 now seems like a 'statistical blip', said property consultant Nicholas Mak.
Executive flats saw the biggest percentage rise in median resale prices, up 2.2 per cent from a quarter ago to $455,000.
Strong interest in resale flats helped sustain the market. Buyers and sellers filed 10,184 resale applications in Q2 - swelling 58 per cent from Q1 and 31 per cent from a year ago. According to HDB, the quarterly resale registration volume last crossed the 10,000-mark more than four years ago - it was 11,562 in Q4, 2004.Most of the 10,184 applications in Q2 were for four-room flats, followed by three-roomers and then five-roomers.
However, applications for executive flats showed the greatest increase, doubling from a quarter ago to 753 in Q2. Those for five-room flats also jumped 80 per cent to 2,713. The sharp surge in resale activity involving larger flats suggests that there were more owners who sold their flats to buy private homes, said Mr Mak.
Market analysts have flagged HDB upgraders as a significant group of buyers who revived the private property market. Many went for units in mass-market projects such as Mi Casa and Double Bay Residences.
C&H Realty managing director Albert Lu pointed out that owners of smaller flats are also moving to larger flats. Prices of five-room and executive flats have languished in the last few quarters, making the move more attractive, he said.
Upgrading activity aside, the inflow of permanent residents (PRs) also contributed to demand for resale flats. HSR Property Group chief operating officer Dennis Yong observed that his firm has up to 10 per cent more resale transactions involving PRs in the last few months, and many of them are from China and India.
Buyers remained unwilling to pay high premiums for HDB flats. The median cash-over-valuation (COV) was $3,000 across all flat types in Q2, down slightly from $4,000 in Q1. Notably, most five-room and executive flats were still unable to command any COV.
In a way, the low COV sustained demand for HDB resale flats, said PropNex CEO Mohamed Ismail. 'As the demand is strengthening quickly, sellers are expected to demand a higher COV.' Mr Ismail expects the resale price index to gain around 3 per cent to 145 points by the end of the year. C&H Realty's Mr Lu also projects a 2-3 per cent increase in resale prices.
Just a few months ago, property consultants had feared that HDB resale prices would drop as much as 10 per cent for the whole year. Signs of a stabilising economy and improved sentiment in the property market seem to have soothed nerves.
Statistics from the Urban Redevelopment Authority yesterday also painted a more calming picture. While prices in the residential, commercial and industrial sectors still fell in Q2, the declines were smaller than a quarter ago.
Private Home Pices Fall 4.7% In Q2
Source : Channel NewsAsia, 24 July 2009
In data out on Friday, private home prices fell 4.7 per cent in the second quarter of this year, compared with the previous three months. This is the fourth straight quarter of falls, but it is much better than the record 14.1 per cent decline in the first quarter.
Private housing
Homebuyers have been turning up in growing numbers at property launches and analysts said this is due to increasing optimism that the worst may be over for the economy.
Nicholas Mak, property analyst, said: "I think many market participants expect inflation to start creeping in over the next one to two years and real estate is seen as a good hedge for inflation."
While overall prices have fallen, market watchers said they expect a bottoming out soon, with a rebound in the second half of this year.
In all, 4,654 new homes were sold last quarter, compared to a total sale of 4,264 units in 2008. But the number of transactions appears to be moderating.
Mr Mak said: "Sales have been very encouraging, with developers selling over 4,000 private homes. Reason is pent-up demand. Going forward, this kind of numbers in each quarter is not really sustainable.
"We will probably go back to 2,000-plus private homes sold in each quarter, which is what the market can probably sustain in the medium term," said Mr Mak.
Market watchers see this as a bottom-up recovery, led by the mass market private condominium sector, with participation mainly by Singaporeans. However, they expect a shift to the mid- to high-end condominium sector, with greater participation by foreigners.
Meanwhile, HDB resale prices have bucked the trend of declines, with prices rising 1.4 per cent in the April to June period. The number of transactions crossed the 10,000 mark for the first time since the last quarter of 2004. - CNA/so
In data out on Friday, private home prices fell 4.7 per cent in the second quarter of this year, compared with the previous three months. This is the fourth straight quarter of falls, but it is much better than the record 14.1 per cent decline in the first quarter.
Private housingHomebuyers have been turning up in growing numbers at property launches and analysts said this is due to increasing optimism that the worst may be over for the economy.
Nicholas Mak, property analyst, said: "I think many market participants expect inflation to start creeping in over the next one to two years and real estate is seen as a good hedge for inflation."
While overall prices have fallen, market watchers said they expect a bottoming out soon, with a rebound in the second half of this year.
In all, 4,654 new homes were sold last quarter, compared to a total sale of 4,264 units in 2008. But the number of transactions appears to be moderating.
Mr Mak said: "Sales have been very encouraging, with developers selling over 4,000 private homes. Reason is pent-up demand. Going forward, this kind of numbers in each quarter is not really sustainable.
"We will probably go back to 2,000-plus private homes sold in each quarter, which is what the market can probably sustain in the medium term," said Mr Mak.
Market watchers see this as a bottom-up recovery, led by the mass market private condominium sector, with participation mainly by Singaporeans. However, they expect a shift to the mid- to high-end condominium sector, with greater participation by foreigners.
Meanwhile, HDB resale prices have bucked the trend of declines, with prices rising 1.4 per cent in the April to June period. The number of transactions crossed the 10,000 mark for the first time since the last quarter of 2004. - CNA/so
UOL Sells 180 Units Of Meadows Condo
Source : The Business Times, July 25, 2009
UOL yesterday sold 180 of the 250 units made available at a private preview of its condominium Meadows@Peirce.
Units in the 479-unit freehold project in Upper Thomson Road were sold for an average of $880 per sq ft, the developer said. Of these, 87 three-bedroom units were sold for between $1.1 million and $1.5 million each.
IN DEMAND - The development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocks
The development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocks. Units range from 517 sq ft one-bedroom apartments to 3,068 sq ft five-bedroom penthouses. Ten of the 49 penthouses were sold at yesterday's preview.
UOL initially planned to release 150 units at the preview, but raised this to 250 due to demand, said group chief operating officer Liam Wee Sin.
At the official launch on Tuesday, 100 more units will be released at an average price of $880 psf. UOL is offering buyers an interest absorption scheme.
Mr Liam said that home sales have picked up strongly in recent months. 'The successful preview demonstrates the pent-up demand in the Thomson area for a new development,' he said.
Units at two 99-year leasehold condominiums - Far East Organization's Centro Residences at Ang Mo Kio and TID's Optima@Tanah Merah - are slated for release at previews next week.
UOL yesterday sold 180 of the 250 units made available at a private preview of its condominium Meadows@Peirce.
Units in the 479-unit freehold project in Upper Thomson Road were sold for an average of $880 per sq ft, the developer said. Of these, 87 three-bedroom units were sold for between $1.1 million and $1.5 million each.
IN DEMAND - The development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocksThe development, on what used to be the Green Meadows condominium site, comprises a 14-storey tower and three five-storey blocks. Units range from 517 sq ft one-bedroom apartments to 3,068 sq ft five-bedroom penthouses. Ten of the 49 penthouses were sold at yesterday's preview.
UOL initially planned to release 150 units at the preview, but raised this to 250 due to demand, said group chief operating officer Liam Wee Sin.
At the official launch on Tuesday, 100 more units will be released at an average price of $880 psf. UOL is offering buyers an interest absorption scheme.
Mr Liam said that home sales have picked up strongly in recent months. 'The successful preview demonstrates the pent-up demand in the Thomson area for a new development,' he said.
Units at two 99-year leasehold condominiums - Far East Organization's Centro Residences at Ang Mo Kio and TID's Optima@Tanah Merah - are slated for release at previews next week.
Fragrance Group Buys Two More Properties
Source : The Business Times, July 25, 2009
PROPERTY and hotel firm Fragrance Group has bought two more properties, taking the total value of its acquisitions in the past month to close to $100 million. The company yesterday announced the acquisition of a 4,453-square-metre plot of land on Telok Kurau Road for $36.5 million and a 2,056-sq-m freehold site on Pasir Panjang Road for $23 million. The company's two other acquisitions since mid-June cost a total of $33.51 million.
Fragrance Group chief executive Koh Wee Meng declined to comment on the identities of the sellers and on his company's specific plans for the new acquisitions.
Construction and sale of the Telok Kurau development is expected to begin in the second half of FY2009. Meanwhile, said Mr Koh, tenancy at the 14 two-storey shophouses at the Pasir Panjang location will continue for a 'minimum of one to two years'.
The $59.5 million purchases cap a busy week for the company. On July 21, it acquired the seven-storey Premier Centre from Hong Leong Group for $18 million, or $1,076 per square foot (psf). The office block is located at the corner of Beach Road and Tan Quee Lan Street.
Early last month, the company was awarded the tender for a Short Street hotel site by the Urban Redevelopment Authority. Its winning bid of $15.51 million, or $353 psf, was 76 per cent higher than the $8.8 million trigger price, and 11 per cent more than the next highest bid.
Fragrance Group has launched more than 20 landed properties and apartments to date. Additionally, its Fragrance Hotel chain has 20 branches islandwide, including a hostel on Dunlop Street. In its latest financial results, the group posted an 11.4 per cent increase in net profit for the second quarter ended June 30 to $17.7 million. Turnover rose 33.1 per cent to $79.5 million. The group's shares closed six cents up at 61.5 cents yesterday.
PROPERTY and hotel firm Fragrance Group has bought two more properties, taking the total value of its acquisitions in the past month to close to $100 million. The company yesterday announced the acquisition of a 4,453-square-metre plot of land on Telok Kurau Road for $36.5 million and a 2,056-sq-m freehold site on Pasir Panjang Road for $23 million. The company's two other acquisitions since mid-June cost a total of $33.51 million.
Fragrance Group chief executive Koh Wee Meng declined to comment on the identities of the sellers and on his company's specific plans for the new acquisitions.
Construction and sale of the Telok Kurau development is expected to begin in the second half of FY2009. Meanwhile, said Mr Koh, tenancy at the 14 two-storey shophouses at the Pasir Panjang location will continue for a 'minimum of one to two years'.
The $59.5 million purchases cap a busy week for the company. On July 21, it acquired the seven-storey Premier Centre from Hong Leong Group for $18 million, or $1,076 per square foot (psf). The office block is located at the corner of Beach Road and Tan Quee Lan Street.
Early last month, the company was awarded the tender for a Short Street hotel site by the Urban Redevelopment Authority. Its winning bid of $15.51 million, or $353 psf, was 76 per cent higher than the $8.8 million trigger price, and 11 per cent more than the next highest bid.
Fragrance Group has launched more than 20 landed properties and apartments to date. Additionally, its Fragrance Hotel chain has 20 branches islandwide, including a hostel on Dunlop Street. In its latest financial results, the group posted an 11.4 per cent increase in net profit for the second quarter ended June 30 to $17.7 million. Turnover rose 33.1 per cent to $79.5 million. The group's shares closed six cents up at 61.5 cents yesterday.
Home Supply Pipeline Shrinks, Prices Stiffen
Source : The Business Times, July 25, 2009
However, URA price index for private homes still shows fall in Q2, confounding analysts
LATEST government numbers are offering clues as to why some developers are busy looking for land and nudging up home prices. The supply pipeline for private homes has shrunk, from about 71,600 units at end-Q2 last year to 62,600 units as at end-Q2 2009. The stock of unsold units in uncompleted projects with planning approvals has also contracted from about 43,500 units to around 38,500 units over the same period.
Developers had not acquired much residential land over the past year or so in the aftermath of the financial crisis but have enjoyed a spectacular revival in home sales over the past six months. Lately, however, two sites from the government reserve list were triggered for launch by developers.
Developers have also regained some pricing power of late. Urban Redevelopment Authority's (URA) price index for private homes fell 4.7 per cent in Q2 over the preceding quarter. The fall was less steep than the 5.9 per cent decline for the period that URA's flash estimate had shown earlier this month. The latest decline is also much less than the 14.1 per cent quarter-on-quarter price drop in Q1. While a debate rages on why URA's Q2 price index lags the price gains seen in the market during the period, property consultants are expecting further price increases in the current half.
'But we're not going to see runaway prices as there will be price resistance from buyers, especially in the upgraders market as there's the issue of affordability,' says Knight Frank chairman Tan Tiong Cheng. 'Developers will be mindful of competition from the secondary market as new projects are completed. From a consumer's viewpoint, if prices get too high, they could either give the market a miss or look for alternatives - like picking up a home from earlier investors who can afford to sell below developers' prices,' he said.
'There's another reason why prices are unlikely to run away, at least not in the mass market - and that's because the government has, under its reserve list, a substantial supply of land for this segment,' Mr Tan added.
Giving a more bullish take, Credo Real Estate managing director Karamjit Singh says private home prices started to turn in April/May and estimates that depending on market segment, prices have increased anywhere between 15 and 30 per cent from the bottom in Q1. He forecasts the total increase between April and year-end could be in the order of 20 to 60 per cent, with the biggest hikes in the high-end segment. 'So far, the home buying has been led mainly by Singaporeans and PRs. When foreigners and institutional funds buy in a bigger way, then momentum in the high-end residential sector will receive a boost.'
URA's real estate data yesterday showed a 79 per cent quarter-on-quarter jump in private home sales by developers to 4,654 units in Q2 - the third highest quarterly figure on record, according to CB Richard Ellis (CBRE). Significantly, there was a more even spread of sales across the regions in Q2, unlike Q1, when developer sales were concentrated in the Outside Central Region (OCR), where mass-market suburban condos are located.
In Q2, the Core Central Region (CCR), which includes the prime districts 9, 10 and 11, financial district and Sentosa Cove, accounted for 31.2 per cent of homes sold by developers. The Rest of Central Region (RCR) had a 39.2 per cent share, thanks to projects such as 8 @ Woodleigh, The Arte, The Mezzo and Vista Residences; while OCR's share was 29.6 per cent. The housing recovery is filtering up.
The momentum of sales in the secondary market was also strong, with 3,059 units sold in the resale market in Q2, almost three times the 1,144 units in Q1. Subsale deals more than doubled from 412 in Q1 to 940 in Q2. In the residential leasing market, 10,327 leases were contracted in the April-June period, 7.8 per cent above the 9,579 leases done in Jan-March, CBRE said. With more expats being hired on local terms or smaller housing allowances, rents continued to slide in Q2, albeit more moderately.
However, URA price index for private homes still shows fall in Q2, confounding analysts
LATEST government numbers are offering clues as to why some developers are busy looking for land and nudging up home prices. The supply pipeline for private homes has shrunk, from about 71,600 units at end-Q2 last year to 62,600 units as at end-Q2 2009. The stock of unsold units in uncompleted projects with planning approvals has also contracted from about 43,500 units to around 38,500 units over the same period.
Developers had not acquired much residential land over the past year or so in the aftermath of the financial crisis but have enjoyed a spectacular revival in home sales over the past six months. Lately, however, two sites from the government reserve list were triggered for launch by developers.
Developers have also regained some pricing power of late. Urban Redevelopment Authority's (URA) price index for private homes fell 4.7 per cent in Q2 over the preceding quarter. The fall was less steep than the 5.9 per cent decline for the period that URA's flash estimate had shown earlier this month. The latest decline is also much less than the 14.1 per cent quarter-on-quarter price drop in Q1. While a debate rages on why URA's Q2 price index lags the price gains seen in the market during the period, property consultants are expecting further price increases in the current half.
'But we're not going to see runaway prices as there will be price resistance from buyers, especially in the upgraders market as there's the issue of affordability,' says Knight Frank chairman Tan Tiong Cheng. 'Developers will be mindful of competition from the secondary market as new projects are completed. From a consumer's viewpoint, if prices get too high, they could either give the market a miss or look for alternatives - like picking up a home from earlier investors who can afford to sell below developers' prices,' he said.
'There's another reason why prices are unlikely to run away, at least not in the mass market - and that's because the government has, under its reserve list, a substantial supply of land for this segment,' Mr Tan added.
Giving a more bullish take, Credo Real Estate managing director Karamjit Singh says private home prices started to turn in April/May and estimates that depending on market segment, prices have increased anywhere between 15 and 30 per cent from the bottom in Q1. He forecasts the total increase between April and year-end could be in the order of 20 to 60 per cent, with the biggest hikes in the high-end segment. 'So far, the home buying has been led mainly by Singaporeans and PRs. When foreigners and institutional funds buy in a bigger way, then momentum in the high-end residential sector will receive a boost.'
URA's real estate data yesterday showed a 79 per cent quarter-on-quarter jump in private home sales by developers to 4,654 units in Q2 - the third highest quarterly figure on record, according to CB Richard Ellis (CBRE). Significantly, there was a more even spread of sales across the regions in Q2, unlike Q1, when developer sales were concentrated in the Outside Central Region (OCR), where mass-market suburban condos are located.
In Q2, the Core Central Region (CCR), which includes the prime districts 9, 10 and 11, financial district and Sentosa Cove, accounted for 31.2 per cent of homes sold by developers. The Rest of Central Region (RCR) had a 39.2 per cent share, thanks to projects such as 8 @ Woodleigh, The Arte, The Mezzo and Vista Residences; while OCR's share was 29.6 per cent. The housing recovery is filtering up.
The momentum of sales in the secondary market was also strong, with 3,059 units sold in the resale market in Q2, almost three times the 1,144 units in Q1. Subsale deals more than doubled from 412 in Q1 to 940 in Q2. In the residential leasing market, 10,327 leases were contracted in the April-June period, 7.8 per cent above the 9,579 leases done in Jan-March, CBRE said. With more expats being hired on local terms or smaller housing allowances, rents continued to slide in Q2, albeit more moderately.
Mass Market Buyers Prop Up Home Prices
Source : The Straits Times, July 25, 2009
Cheaper condos see smaller price declines; sales of big HDB flats up
THEY were shut out of the property market during the most recent boom in 2007, when furious demand for luxury homes drove up home prices far beyond their reach. Now, buyers of cheaper mass market homes - defined loosely as bigger HDB flats and condominiums in the suburbs - are back in the market with a vengeance.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop compared to pricier prime and city-fringe. -- ST PHOTO: DESMOND WEE
They doubled their purchases of five-room and executive HDB flats between March and June, pushing overall HDB prices up 1.4 per cent to hit a new high in the quarter, according to Housing Board (HDB) data released on Friday.
Mass market buyers also picked up four out of every 10 private homes sold, a shopping spree that resulted in twice the number of homes being sold in the second quarter than the first quarter, said the Urban Redevelopment Authority (URA). The number of resales nearly trebled while sub-sales more than doubled.
The strong demand for cheaper condos meant that while private home prices still fell 4.7 per cent in the second quarter, it was a far smaller decline than the plunge of 14.1 per cent in the first quarter.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop in the quarter - 2.3 per cent - compared to pricier prime and city-fringe properties, which saw prices fall by double that amount. Rents for private homes continued to fall 5.2 per cent in the quarter, though 8 per cent more leases were signed.
Consultants had actually expected prices to increase in the second quarter, as home buyers flooded back and developers started to selectively raise prices.
'Our own analysis showed that private home prices in the second quarter rose,' said DTZ's head of South-east Asia research Chua Chor Hoon. She said the price increases ranged from 3 per cent for some suburban resale homes, to 11 per cent for homes in the prime districts.
In response to queries, the URA said that while prices have risen in some projects, there were still other developments that saw prices fall in the quarter.
But private home prices are likely to show a definite pickup from the third quarter, consultants say. 'The second quarter will possibly be the last quarter of price declines,' said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.
'If developers remain cautious and tread carefully with price increases, this momentum in the market could continue. But if developers are impatient and jack up prices too quickly, that may hurt demand as buyers are still price-sensitive.'
Mr Nicholas Mak, a long-time property consultant, said he expects overall prices to show an increase in the second half of this year. His reasons: the recovery in global stock markets, relief buying due to a shorter-than-expected recession, and low interest rates that make property purchases look more attractive.
The outlook has also been boosted by the fact that demand is no longer restricted to the mass market, he said. In recent months, more buyers have been keen on mid-tier and high-end condos such as The Arte at Thomson or One Devonshire in Somerset. Even at suburban condos, buyers seem to be opting for larger, more expensive units. Yesterday, developer UOL Group sold 180 units in a single day at Meadows@Peirce in Upper Thomson.
While the project offers smaller units from 517 sq ft in size, most units sold had at least three bedrooms and were priced at $1 million and above, said UOL's chief operating officer Liam Wee Sin.
The improved economic outlook also meant that offices and shops also saw slower declines in prices and rentals in the second quarter. Office prices fell 3.9 per cent, while rents fell 7.7 per cent.
But these numbers are unlikely to turn positive soon as recent retrenchment exercises dampen the office sector, said Mr Li Hiaw Ho, executive director of CBRE Research. He was more upbeat about shopping malls, as there is still 'healthy demand' for existing shop space. Shop rents eased 2 per cent in the second quarter and prices fell just 1.4 per cent.
No oversupply of homes next year
GLUT? What glut? Fears of an oversupply of private homes next year have eased - in fact there could even be a shortage.
The Urban Redevelopment Authority's (URA) second quarter real estate statistics, released yesterday, suggest any potential oversupply has been pushed back to 2011 or even later as private property developers delay and cut down on projects.
The number of private homes slated for completion for the whole of next year has fallen sharply to just 5,394.
That is down about 70 per cent from an estimated 17,454 early last year at the height of the last boom.
Just as developers have cut back on building, home buying has shot back up to boom-time levels.
For the past three months, more than 1,000 private homes have been sold each month. An average of 8,000 private homes have been sold each year since 2000.
This means that private home prices and rents could rise next year, as the supply of private property units in 2010 may not meet demand, especially if the current strong sales streak keeps up.
Caveats apply, of course, market watchers say. URA's statistics rely on figures that developers have provided, and dramatic changes from quarter to quarter have occurred before.
Also, the number of completed units could differ from the number sold, as developers could sell uncompleted units or be unable to sell completed units.
According to URA statistics, during the last boom in 2007 and last year, developers - confident that people would snap up private homes - obtained licences to sell 11,150 private homes set to be finished this year, and 9,188 homes in 2010.
But the collapse of Lehman Brothers last September and the resulting recession triggered fears last year that there would be too many private homes on the market next year amid an economic slowdown.
Concerned that units would not sell, developers have since slashed some projects and pushed back the completion dates of others. As a result, URA's figure for the total planned units slated for completion this year and beyond has fallen by 6,000 - from over 68,000 in the first quarter of 2008 to the current 62,350.
But although almost all of URA's projected completion figures have declined gradually over the period from the third quarter of last year to the first quarter this year, the slide shows signs of having just bottomed out.
In the third quarter of last year it was projected that around 13,400-16,000 units would be completed every year after 2010. This fell to a range of 12,100-13,900 in the fourth quarter and then to 10,900-13,800 last quarter.
Although it still remains below pre-recession levels, this range has risen slightly in the last quarter to 11,200-13,600 units every year from 2011 onwards.
The bulk of project completions has been shifted from next year to 2011 and later, with project completion figures increasing by an average of 350 for each year from last quarter's figures.
To date, 5,158 private units have been finished in the first half of this year, and URA expects 1,051 more units to be ready within the next six months.
HDB prices up 1.4 per cent
PRICES of Housing Board flats rose 1.4 per cent in the second quarter to a record high, reversing a first-quarter dip of 0.8 per cent.
The number of transactions also soared - up 58 per cent in the three months to June 30 - as confidence grew and buyers rushed back into the market.
One reason for the HDB market's resilience amid testing economic times is the decline in the amount of cash required upfront to buy a resale flat. This amount is called cash-over-valuation (COV) and is falling or at least stable across all flat types.
Fresh figures released by HDB yesterday showed that the median COV for all flat types fell to just $3,000 in the second quarter compared with $4,000 in the first quarter. The median COV is at a relatively low $5,000 for three- and four-roomers and stayed at zero for five-room and executive flats, for both the first and second quarter.
Median COV for two-roomers declined from $7,000 in the first quarter to $6,000 in the second.
This is a marked change from the 2007 property boom, when median COV hit $22,000 in the fourth quarter, pricing many first-time buyers out of the resale market.
COV has come down due to valuations of resale flats catching up, said ERA Asia Pacific associate director Eugene Lim.
So even though values of HDB resale flats are high, they have become more affordable as buyers can get bank loans for the purchase and do not have to fork out high amounts of cash.
Sales activity was robust in the quarter with transactions up to 10,184 compared with 6,446 in the first quarter. They were also up 31 per cent from the 7,763 units sold in the same period last year.
Sales of five-roomers rose 80 per cent - 2,713 were moved - over the first quarter while executive flat transactions surged 100 per cent to 753. Four-room flat sales climbed from 2,488 to 3,787.
PropNex chief executive Mohamed Ismail noted that sales of the bigger flat types had suffered in the three quarters up to the end of March amid growing concerns about Singapore's worst recession.
'These numbers are a clear sign that people's market confidence is growing,' he said, adding that feedback on the ground indicated that demand in mature estates far exceeds supply.
The sales of larger flat types also explain the strong demand from HDB upgraders who sold their flats to buy private homes, said property veteran Nicholas Mak.
Private home sales, especially in mass-market suburban condos, have enjoyed brisk sales since February.
Meanwhile, HDB rents were stable. Median rents for two-room and five-room flats for the second quarter were unchanged but fell by $100 for three-room, four-room and executive flats.
HDB plans to launch a further 6,000 units under its build-to-order scheme over the next six months. About 2,400 will be three-room and smaller flats. The bulk of new flat supply will be in Punggol. So far, HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands this year.
Analysts predict that HDB flat prices will enjoy modest increases as confidence continues to grow.
But the falling COV for large flats could indicate limited upside for prices of these flat types, said Mr Mak. 'This could also limit the HDB upgraders' demand for private property in the short term,' he said.
Cheaper condos see smaller price declines; sales of big HDB flats up
THEY were shut out of the property market during the most recent boom in 2007, when furious demand for luxury homes drove up home prices far beyond their reach. Now, buyers of cheaper mass market homes - defined loosely as bigger HDB flats and condominiums in the suburbs - are back in the market with a vengeance.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop compared to pricier prime and city-fringe. -- ST PHOTO: DESMOND WEEThey doubled their purchases of five-room and executive HDB flats between March and June, pushing overall HDB prices up 1.4 per cent to hit a new high in the quarter, according to Housing Board (HDB) data released on Friday.
Mass market buyers also picked up four out of every 10 private homes sold, a shopping spree that resulted in twice the number of homes being sold in the second quarter than the first quarter, said the Urban Redevelopment Authority (URA). The number of resales nearly trebled while sub-sales more than doubled.
The strong demand for cheaper condos meant that while private home prices still fell 4.7 per cent in the second quarter, it was a far smaller decline than the plunge of 14.1 per cent in the first quarter.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop in the quarter - 2.3 per cent - compared to pricier prime and city-fringe properties, which saw prices fall by double that amount. Rents for private homes continued to fall 5.2 per cent in the quarter, though 8 per cent more leases were signed.
Consultants had actually expected prices to increase in the second quarter, as home buyers flooded back and developers started to selectively raise prices.
'Our own analysis showed that private home prices in the second quarter rose,' said DTZ's head of South-east Asia research Chua Chor Hoon. She said the price increases ranged from 3 per cent for some suburban resale homes, to 11 per cent for homes in the prime districts.
In response to queries, the URA said that while prices have risen in some projects, there were still other developments that saw prices fall in the quarter. But private home prices are likely to show a definite pickup from the third quarter, consultants say. 'The second quarter will possibly be the last quarter of price declines,' said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.
'If developers remain cautious and tread carefully with price increases, this momentum in the market could continue. But if developers are impatient and jack up prices too quickly, that may hurt demand as buyers are still price-sensitive.'
Mr Nicholas Mak, a long-time property consultant, said he expects overall prices to show an increase in the second half of this year. His reasons: the recovery in global stock markets, relief buying due to a shorter-than-expected recession, and low interest rates that make property purchases look more attractive.
The outlook has also been boosted by the fact that demand is no longer restricted to the mass market, he said. In recent months, more buyers have been keen on mid-tier and high-end condos such as The Arte at Thomson or One Devonshire in Somerset. Even at suburban condos, buyers seem to be opting for larger, more expensive units. Yesterday, developer UOL Group sold 180 units in a single day at Meadows@Peirce in Upper Thomson.
While the project offers smaller units from 517 sq ft in size, most units sold had at least three bedrooms and were priced at $1 million and above, said UOL's chief operating officer Liam Wee Sin.
The improved economic outlook also meant that offices and shops also saw slower declines in prices and rentals in the second quarter. Office prices fell 3.9 per cent, while rents fell 7.7 per cent.
But these numbers are unlikely to turn positive soon as recent retrenchment exercises dampen the office sector, said Mr Li Hiaw Ho, executive director of CBRE Research. He was more upbeat about shopping malls, as there is still 'healthy demand' for existing shop space. Shop rents eased 2 per cent in the second quarter and prices fell just 1.4 per cent.
No oversupply of homes next year
GLUT? What glut? Fears of an oversupply of private homes next year have eased - in fact there could even be a shortage.
The Urban Redevelopment Authority's (URA) second quarter real estate statistics, released yesterday, suggest any potential oversupply has been pushed back to 2011 or even later as private property developers delay and cut down on projects.
The number of private homes slated for completion for the whole of next year has fallen sharply to just 5,394.
That is down about 70 per cent from an estimated 17,454 early last year at the height of the last boom.
Just as developers have cut back on building, home buying has shot back up to boom-time levels.
For the past three months, more than 1,000 private homes have been sold each month. An average of 8,000 private homes have been sold each year since 2000.
This means that private home prices and rents could rise next year, as the supply of private property units in 2010 may not meet demand, especially if the current strong sales streak keeps up.
Caveats apply, of course, market watchers say. URA's statistics rely on figures that developers have provided, and dramatic changes from quarter to quarter have occurred before.
Also, the number of completed units could differ from the number sold, as developers could sell uncompleted units or be unable to sell completed units.
According to URA statistics, during the last boom in 2007 and last year, developers - confident that people would snap up private homes - obtained licences to sell 11,150 private homes set to be finished this year, and 9,188 homes in 2010.
But the collapse of Lehman Brothers last September and the resulting recession triggered fears last year that there would be too many private homes on the market next year amid an economic slowdown.
Concerned that units would not sell, developers have since slashed some projects and pushed back the completion dates of others. As a result, URA's figure for the total planned units slated for completion this year and beyond has fallen by 6,000 - from over 68,000 in the first quarter of 2008 to the current 62,350.
But although almost all of URA's projected completion figures have declined gradually over the period from the third quarter of last year to the first quarter this year, the slide shows signs of having just bottomed out.
In the third quarter of last year it was projected that around 13,400-16,000 units would be completed every year after 2010. This fell to a range of 12,100-13,900 in the fourth quarter and then to 10,900-13,800 last quarter.
Although it still remains below pre-recession levels, this range has risen slightly in the last quarter to 11,200-13,600 units every year from 2011 onwards.
The bulk of project completions has been shifted from next year to 2011 and later, with project completion figures increasing by an average of 350 for each year from last quarter's figures.
To date, 5,158 private units have been finished in the first half of this year, and URA expects 1,051 more units to be ready within the next six months.
HDB prices up 1.4 per cent
PRICES of Housing Board flats rose 1.4 per cent in the second quarter to a record high, reversing a first-quarter dip of 0.8 per cent.
The number of transactions also soared - up 58 per cent in the three months to June 30 - as confidence grew and buyers rushed back into the market.
One reason for the HDB market's resilience amid testing economic times is the decline in the amount of cash required upfront to buy a resale flat. This amount is called cash-over-valuation (COV) and is falling or at least stable across all flat types.
Fresh figures released by HDB yesterday showed that the median COV for all flat types fell to just $3,000 in the second quarter compared with $4,000 in the first quarter. The median COV is at a relatively low $5,000 for three- and four-roomers and stayed at zero for five-room and executive flats, for both the first and second quarter.
Median COV for two-roomers declined from $7,000 in the first quarter to $6,000 in the second.
This is a marked change from the 2007 property boom, when median COV hit $22,000 in the fourth quarter, pricing many first-time buyers out of the resale market.
COV has come down due to valuations of resale flats catching up, said ERA Asia Pacific associate director Eugene Lim.
So even though values of HDB resale flats are high, they have become more affordable as buyers can get bank loans for the purchase and do not have to fork out high amounts of cash.
Sales activity was robust in the quarter with transactions up to 10,184 compared with 6,446 in the first quarter. They were also up 31 per cent from the 7,763 units sold in the same period last year.
Sales of five-roomers rose 80 per cent - 2,713 were moved - over the first quarter while executive flat transactions surged 100 per cent to 753. Four-room flat sales climbed from 2,488 to 3,787.
PropNex chief executive Mohamed Ismail noted that sales of the bigger flat types had suffered in the three quarters up to the end of March amid growing concerns about Singapore's worst recession.
'These numbers are a clear sign that people's market confidence is growing,' he said, adding that feedback on the ground indicated that demand in mature estates far exceeds supply.
The sales of larger flat types also explain the strong demand from HDB upgraders who sold their flats to buy private homes, said property veteran Nicholas Mak.
Private home sales, especially in mass-market suburban condos, have enjoyed brisk sales since February.
Meanwhile, HDB rents were stable. Median rents for two-room and five-room flats for the second quarter were unchanged but fell by $100 for three-room, four-room and executive flats.
HDB plans to launch a further 6,000 units under its build-to-order scheme over the next six months. About 2,400 will be three-room and smaller flats. The bulk of new flat supply will be in Punggol. So far, HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands this year.
Analysts predict that HDB flat prices will enjoy modest increases as confidence continues to grow.
But the falling COV for large flats could indicate limited upside for prices of these flat types, said Mr Mak. 'This could also limit the HDB upgraders' demand for private property in the short term,' he said.
Slower Sales For HDB's Condo-Style Projects
Source : The Straits Times, July 26, 2009
Renewed interest in property more focused on private, HDB resale sectors.
THE numbers show it: Singapore has been gripped by a buying frenzy that seems to have pervaded every segment of the property market.
Sales volume for HDB resale flats has surged 58 per cent in the second quarter, and private home sales have even spread from the mass market to the upper-mid-tier segment.
Parc Lumiere, a DBSS project, sold well because most of the units were priced below the $500,000 psychological barrier, said a market player. -- PHOTO: SIM LIAN GROUP.
But while sales have been brisk at condos, the pace has been somewhat slower in the HDB hybrid condo-style flat sector, also called Design, Build and Sell Scheme (DBSS) projects.
These condo-style HDB flats have better finishes and facilities, and are built by private developers.
A survey by The Sunday Times shows that sales at three centrally located DBSS projects - The Peak@Toa Payoh, Park Central at Ang Mo Kio and Natura Loft at Bishan - do not seem to have moved as briskly compared to the pace seen in the HDB resale market and for private mass market homes, where projects such as 8@Woodleigh in Potong Pasir were fully sold out in a short timeframe.
Sales are hovering at the 70 per cent to 75 per cent level, despite the fact that buyers no longer have to ballot and can buy a flat via walk-in selection.
Analysts note that 70 per cent is a decent level of sales but point to a number of reasons these DBSS flats have not performed as well as their peers - the exception being Parc Lumiere at Simei, which has sold 93 per cent of its 360 flats since its April launch.
Firstly, the target audience - HDB home buyers - are highly price-sensitive. Prices for bigger flats - hitting the upper range of $600,000 and just over $700,000 each - are out of reach for many buyers, say analysts.
This is why Parc Lumiere was a sell-out, said PropNex chief executive Mohamed Ismail, although its location was less central. 'Most of the flats were priced below the $500,000 psychological barrier.'
Also, the only flat types left are five-roomers, which may be too big for young couples buying their first property.
Secondly, new private projects have been attractively priced by developers during recent launches, narrowing the price gap between DBSS flats and private condos.
'Home buyers will prefer to buy private property, especially if compared to the higher-range DBSS flats which cost up to $730,000,' said Mr Ismail.
Furthermore, DBSS flats are subject to HDB rules such as the $8,000 household income ceiling, ethnic quota and a five-year minimum occupation period.
With this income ceiling, apartments priced above $700,000 will be a stretch for first-timers, said property veteran Nicholas Mak, former head of research at Knight Frank.
Amid the recession, such buyers are also more conservative and are unlikely to commit to pricey homes, he said.
Such DBSS projects, however, will start to see renewed interest if and when private property prices start to creep up, say market watchers.
'When this happens, there will be a distinct price jump between DBSS properties and private condos,' said ERA Asia Pacific associate director Eugene Lim.
Then, such HDB condo-style flats will appeal to those who cannot afford private property but find the main supply of HDB flats too basic, added Mr Ismail.
This is already starting to happen, according to DBSS developers.
A spokesman for United Engineers, which is developing Park Central, said that with the recent property market warming up, 'there has been an increase in sales queries and appointments at our sales office, especially in the months of June and July'.
All DBSS developers have so far held on to their prices despite the recession.
Meanwhile, other developers such as QingJian Realty, which built Natura Loft, are pulling in buyers in innovative ways such as holding lucky draws in which home buyers stand to win cars.
As to whether DBSS buyers can make a profit from resale demand in the future - after the five-year occupation period - this will depend on how high prices are in the private mass market at that time, added ERA's Mr Lim.
Renewed interest in property more focused on private, HDB resale sectors.
THE numbers show it: Singapore has been gripped by a buying frenzy that seems to have pervaded every segment of the property market.
Sales volume for HDB resale flats has surged 58 per cent in the second quarter, and private home sales have even spread from the mass market to the upper-mid-tier segment.
Parc Lumiere, a DBSS project, sold well because most of the units were priced below the $500,000 psychological barrier, said a market player. -- PHOTO: SIM LIAN GROUP.But while sales have been brisk at condos, the pace has been somewhat slower in the HDB hybrid condo-style flat sector, also called Design, Build and Sell Scheme (DBSS) projects.
These condo-style HDB flats have better finishes and facilities, and are built by private developers.
A survey by The Sunday Times shows that sales at three centrally located DBSS projects - The Peak@Toa Payoh, Park Central at Ang Mo Kio and Natura Loft at Bishan - do not seem to have moved as briskly compared to the pace seen in the HDB resale market and for private mass market homes, where projects such as 8@Woodleigh in Potong Pasir were fully sold out in a short timeframe.
Sales are hovering at the 70 per cent to 75 per cent level, despite the fact that buyers no longer have to ballot and can buy a flat via walk-in selection.
Analysts note that 70 per cent is a decent level of sales but point to a number of reasons these DBSS flats have not performed as well as their peers - the exception being Parc Lumiere at Simei, which has sold 93 per cent of its 360 flats since its April launch.
Firstly, the target audience - HDB home buyers - are highly price-sensitive. Prices for bigger flats - hitting the upper range of $600,000 and just over $700,000 each - are out of reach for many buyers, say analysts.
This is why Parc Lumiere was a sell-out, said PropNex chief executive Mohamed Ismail, although its location was less central. 'Most of the flats were priced below the $500,000 psychological barrier.'
Also, the only flat types left are five-roomers, which may be too big for young couples buying their first property.
Secondly, new private projects have been attractively priced by developers during recent launches, narrowing the price gap between DBSS flats and private condos.
'Home buyers will prefer to buy private property, especially if compared to the higher-range DBSS flats which cost up to $730,000,' said Mr Ismail.
Furthermore, DBSS flats are subject to HDB rules such as the $8,000 household income ceiling, ethnic quota and a five-year minimum occupation period.
With this income ceiling, apartments priced above $700,000 will be a stretch for first-timers, said property veteran Nicholas Mak, former head of research at Knight Frank.
Amid the recession, such buyers are also more conservative and are unlikely to commit to pricey homes, he said.
Such DBSS projects, however, will start to see renewed interest if and when private property prices start to creep up, say market watchers.
'When this happens, there will be a distinct price jump between DBSS properties and private condos,' said ERA Asia Pacific associate director Eugene Lim.
Then, such HDB condo-style flats will appeal to those who cannot afford private property but find the main supply of HDB flats too basic, added Mr Ismail.
This is already starting to happen, according to DBSS developers.
A spokesman for United Engineers, which is developing Park Central, said that with the recent property market warming up, 'there has been an increase in sales queries and appointments at our sales office, especially in the months of June and July'.
All DBSS developers have so far held on to their prices despite the recession.
Meanwhile, other developers such as QingJian Realty, which built Natura Loft, are pulling in buyers in innovative ways such as holding lucky draws in which home buyers stand to win cars.
As to whether DBSS buyers can make a profit from resale demand in the future - after the five-year occupation period - this will depend on how high prices are in the private mass market at that time, added ERA's Mr Lim.
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