Source : The Business Times, August 17, 2009
Private home sales in Singapore soared to a record high for the second straight month in July, indicating increased confidence and speculation in the city-state's property market, government data showed on Monday.
The Urban Redevelopment Authority (URA) website showed developers sold 2,767 private homes in July, smashing the previous monthly record of 1,825 units that was set in June.
Mohamed Ismail, CEO of PropNex, a real estate broker, noted that over 40 per cent of sales involved mid- to higher-tier homes costing above S$1,000 ($692) per square foot, indicating the boom was no longer restricted to cheaper apartments.
The higher selling prices were also 'a result of developers reacting to consumers' demand and raising the prices', he added.
The URA data showed that City Developments, Fraser & Neave's property arm Frasers Centrepoint and banker Wee Cho Yaw's UOL Group were among developers with the largest number of sales.
National Development Minister Mah Bow Tan said last month that there were signs of speculation in Singapore's property market and warned the government may step in to calm the market.
Private home sales in Singapore, Hong Kong and China have soared since February this year, despite the weak global economy, helped by low interest rates and the huge amount of savings amassed by many households. -- REUTERS
Monday, August 17, 2009
Developers Sold Record 2,767 Private Homes In July
Source : The Business Times, August 17, 2009
Singapore developers posted another month of record sales in July.
They sold a total 2,767 private homes last month, a 52 per cent jump from the 1,825 private homes they sold in June this year, according to latest data released on Monday by Urban Redevelopment Authority.
Singapore developers posted another month of record sales in July.
They sold a total 2,767 private homes last month, a 52 per cent jump from the 1,825 private homes they sold in June this year, according to latest data released on Monday by Urban Redevelopment Authority.
Home Prices Hit 2007 Peak
Source : The Straits Times, Aug 17, 2009
Residential prices may fall about 20%: Analyst
ANTI-SPECULATIVE measures, falling rental yields and ballooning supply may drive residential property prices down by about 20 per cent, says an analyst.
'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' Ms Wirawan said. -- PHOTO: THE BUSINESS TIMES
Sounding a contrarian view that runs against current sentiments, RBS Singapore analyst Fera Wirawan warned that prices of some segments of the market have risen to 2007 peaks amid a strong upswing in buying levels.
Based on her analysis, prices of mass-market homes, or low-end private properties, are now at peak October 2007 levels, while prices of mid-tier and high-end homes are just 8 per cent and 22 per cent off their peaks respectively.
With prices surging 16 per cent to 26 per cent in recent months, the residential property sector may have peaked, Ms Wirawan cautioned.
'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' she said.
Average selling prices (ASPs) at recent property launches are 30 per cent to 80 per cent above the ASPs of nearby projects. This is markedly higher than the historical average of 20 per cent.
'Capital values have been rising in the face of falling rents and a full supply pipeline, a phenomenon we attribute to low average mortgage rates of 2 per cent.'
She noted that the strong residential volumes were triggered by Frasers Centrepoint's launch of the mass market Caspian project at an affordable $580 per sq ft in February, which attracted a high take-up owing to pent-up demand in the mass residential segment.
The positive sentiment from the sale of Caspian units quickly filtered through to the mid-tier and high-end segments.
This frantic level of buying, in annualised terms, almost matched the record number of new homes sold by developers in 2007. Property developers here sold more than 7,000 private homes in the first half of this year, double what they sold in the same period last year.
Read the full story in Monday's edition of The Straits Times.
Residential prices may fall about 20%: Analyst
ANTI-SPECULATIVE measures, falling rental yields and ballooning supply may drive residential property prices down by about 20 per cent, says an analyst.
'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' Ms Wirawan said. -- PHOTO: THE BUSINESS TIMESSounding a contrarian view that runs against current sentiments, RBS Singapore analyst Fera Wirawan warned that prices of some segments of the market have risen to 2007 peaks amid a strong upswing in buying levels.
Based on her analysis, prices of mass-market homes, or low-end private properties, are now at peak October 2007 levels, while prices of mid-tier and high-end homes are just 8 per cent and 22 per cent off their peaks respectively.
With prices surging 16 per cent to 26 per cent in recent months, the residential property sector may have peaked, Ms Wirawan cautioned.
'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' she said.
Average selling prices (ASPs) at recent property launches are 30 per cent to 80 per cent above the ASPs of nearby projects. This is markedly higher than the historical average of 20 per cent.
'Capital values have been rising in the face of falling rents and a full supply pipeline, a phenomenon we attribute to low average mortgage rates of 2 per cent.'
She noted that the strong residential volumes were triggered by Frasers Centrepoint's launch of the mass market Caspian project at an affordable $580 per sq ft in February, which attracted a high take-up owing to pent-up demand in the mass residential segment.
The positive sentiment from the sale of Caspian units quickly filtered through to the mid-tier and high-end segments.
This frantic level of buying, in annualised terms, almost matched the record number of new homes sold by developers in 2007. Property developers here sold more than 7,000 private homes in the first half of this year, double what they sold in the same period last year.
Read the full story in Monday's edition of The Straits Times.
Pte Homes Sales Hit High
Source : The Straits Times, Aug 17, 2009
DEVELOPERS sold a whopping 2,767 units of new private homes in July. This easily beat the 1,825 units sold in June, which already surpassed the level seen at the height of the boom two years ago.
The July sales figure accounts for more than half of last year's sales of 4,264 units. -- PHOTO: THE GALE
The July sales figure accounts for more than half of last year's sales of 4,264 units.
Home hunters had plenty to choose from last month, as developers launched 2,878 units, up from 1,637 units in June, according to data from Urban Redevelopment Authority.
Top-sellers in that month include The Gale in Flora Road, Meadows @ Pierce in Tagore Avenue, Waterfront Key in Bedok Reservoir Road. All three sell for a median price of below $1,000 psf.
At the 329-unit The Gale, 294 units were picked up at a median price of $696 psf.
The 479-unit Meadows @ Pierce launched 400 units in July and sold 286 units at a median price of $919 psf.
The 437-unit Waterfront Key launched 310 units and sold 191 units at a median price of $734 psf.
DEVELOPERS sold a whopping 2,767 units of new private homes in July. This easily beat the 1,825 units sold in June, which already surpassed the level seen at the height of the boom two years ago.
The July sales figure accounts for more than half of last year's sales of 4,264 units. -- PHOTO: THE GALEThe July sales figure accounts for more than half of last year's sales of 4,264 units.
Home hunters had plenty to choose from last month, as developers launched 2,878 units, up from 1,637 units in June, according to data from Urban Redevelopment Authority.
Top-sellers in that month include The Gale in Flora Road, Meadows @ Pierce in Tagore Avenue, Waterfront Key in Bedok Reservoir Road. All three sell for a median price of below $1,000 psf.
At the 329-unit The Gale, 294 units were picked up at a median price of $696 psf.
The 479-unit Meadows @ Pierce launched 400 units in July and sold 286 units at a median price of $919 psf.
The 437-unit Waterfront Key launched 310 units and sold 191 units at a median price of $734 psf.
Interest In Residential Land Picks Up
Source : The Sunday Times, August 16 2009
But market for en bloc sales is not going to take off just yet, say property analysts
The year's only collective sale tender so far has closed with more than one interested bidder, indicating demand for residential land may be returning.
Dragon Mansion, at 18 Spottiswoode Park Road, was last month the first collective sale site to be launched for sale this year.
Dragon Mansion, at 18 Spottiswoode Park Road, was last month the first collective sale site to be launched for sale this year. -- PHOTO: BT
The freehold site, which is more than 30 years old, is designated for residential use with a plot ratio of 2.8 and could potentially yield an estimated 120 units of 1,000 sq ft apartments in a new development.
CKS Property Consultants, which is marketing the site, said it saw interest from developers because 'basically there are no freehold collective sale sites on the market right now'.
However, the firm declined to comment if the asking price of more than $120 million had been offered.
'Developers are still cautious at this moment because there is no way to tell how the market moves, so they are still price-sensitive. There are no transactions yet, so it's hard to tell,' said CKS.
Property consultancy Credo Real Estate said last month that some five to 10 collective sales may take place this year, but they will probably involve small to mid-sized sites. Dragon Mansion, at 41,874 sq ft, is considered such a site.
Ms Chua Chor Hoon, property consultancy DTZ's head of South-east Asia research, said: 'In this economy, the appetite is for smaller, more digestible pieces of land, simply because they cost less.'
To be sure, the collective sale market is not going to take off right away, say property analysts. Since the collapse of Lehman Brothers, the number of en bloc sales has fallen like a house of cards - from 116 collective sales completed in 2007 to just eight last year.
Said Ms Chua: 'Interest is returning from developers because they sold so many units in the last few months. Some of them need to replenish their land banks.
'But for collective sales, time is needed to put together the sales committee and get the required quota of people to agree to sell. If this process has not started by now, it's unlikely the sites will enter the market this year.'
The good news is that private home sales have been on the rise since February, leading to greater optimism in the industry. Developers sold 1,825 new units in June - more than double the number sold a year ago.
A research note by the Royal Bank of Scotland Asia Securities Singapore said 'the residential market is peaking', as prices for private residences rose 16 per cent to 26 per cent last month from March lows.
It also said this was 'driven by a 200 per cent year-on-year surge in primary volumes that, when annualised, matched 2007 record levels'.
This newfound optimism in the market has prompted a 20-storey freehold residential development located at 320 Guillemard Road to be put up for sale by expression of interest last Wednesday.
Cassia View, which is owned by the Lee family of Hotel Royal, sits on a 35,511 sq ft site and comprises 72 two- to three-bedroom apartments and penthouse units, with a total strata area of 89,362 sq ft.
Property consultancy Colliers International, which is marketing the property, said it has received nearly 10 preliminary inquiries about the site and expects to have at least three serious bids by the time the offer closes on Sept 2.
Mr Ho Eng Joo, executive director of investment sales at Colliers International, said: 'Right now there are not too many freehold sites on the market. The successful buyer could either redevelop the property or carry out minimal refurbishment works on the property and put the individual units up in the market later for strata sale.'
He also pointed out: 'Demand has been so strong that even the Government's reserve sites have been triggered for sale.'
Three government land parcels were triggered for sale in the last month, after developers indicated interest by committing to minimum bids.
They are plots located at the corner of Yio Chu Kang and Seletar roads (the minimum bid is $40.5 million); at Dakota Crescent, near the upcoming Dakota MRT station on the Circle Line ($130 million); and Chestnut Avenue in Bukit Panjang ($62 million).
CB Richard Ellis executive director Jeremy Lake said: 'The fact that private-sector land is not readily available and not easy to obtain means bidding for these plots will be very competitive.
'Each may get more than 10 bids perhaps, and pricing should surprise on the upside rather than on the downside.'
He added: 'As for collective sales, a few months ago, they were a non-starter. If Dragon Mansion is successful, it may be a positive sign for the market.'
But market for en bloc sales is not going to take off just yet, say property analysts
The year's only collective sale tender so far has closed with more than one interested bidder, indicating demand for residential land may be returning.
Dragon Mansion, at 18 Spottiswoode Park Road, was last month the first collective sale site to be launched for sale this year.
Dragon Mansion, at 18 Spottiswoode Park Road, was last month the first collective sale site to be launched for sale this year. -- PHOTO: BTThe freehold site, which is more than 30 years old, is designated for residential use with a plot ratio of 2.8 and could potentially yield an estimated 120 units of 1,000 sq ft apartments in a new development.
CKS Property Consultants, which is marketing the site, said it saw interest from developers because 'basically there are no freehold collective sale sites on the market right now'.
However, the firm declined to comment if the asking price of more than $120 million had been offered.
'Developers are still cautious at this moment because there is no way to tell how the market moves, so they are still price-sensitive. There are no transactions yet, so it's hard to tell,' said CKS.
Property consultancy Credo Real Estate said last month that some five to 10 collective sales may take place this year, but they will probably involve small to mid-sized sites. Dragon Mansion, at 41,874 sq ft, is considered such a site.
Ms Chua Chor Hoon, property consultancy DTZ's head of South-east Asia research, said: 'In this economy, the appetite is for smaller, more digestible pieces of land, simply because they cost less.'
To be sure, the collective sale market is not going to take off right away, say property analysts. Since the collapse of Lehman Brothers, the number of en bloc sales has fallen like a house of cards - from 116 collective sales completed in 2007 to just eight last year.Said Ms Chua: 'Interest is returning from developers because they sold so many units in the last few months. Some of them need to replenish their land banks.
'But for collective sales, time is needed to put together the sales committee and get the required quota of people to agree to sell. If this process has not started by now, it's unlikely the sites will enter the market this year.'
The good news is that private home sales have been on the rise since February, leading to greater optimism in the industry. Developers sold 1,825 new units in June - more than double the number sold a year ago.
A research note by the Royal Bank of Scotland Asia Securities Singapore said 'the residential market is peaking', as prices for private residences rose 16 per cent to 26 per cent last month from March lows.
It also said this was 'driven by a 200 per cent year-on-year surge in primary volumes that, when annualised, matched 2007 record levels'.
This newfound optimism in the market has prompted a 20-storey freehold residential development located at 320 Guillemard Road to be put up for sale by expression of interest last Wednesday.
Cassia View, which is owned by the Lee family of Hotel Royal, sits on a 35,511 sq ft site and comprises 72 two- to three-bedroom apartments and penthouse units, with a total strata area of 89,362 sq ft.
Property consultancy Colliers International, which is marketing the property, said it has received nearly 10 preliminary inquiries about the site and expects to have at least three serious bids by the time the offer closes on Sept 2.
Mr Ho Eng Joo, executive director of investment sales at Colliers International, said: 'Right now there are not too many freehold sites on the market. The successful buyer could either redevelop the property or carry out minimal refurbishment works on the property and put the individual units up in the market later for strata sale.'
He also pointed out: 'Demand has been so strong that even the Government's reserve sites have been triggered for sale.'
Three government land parcels were triggered for sale in the last month, after developers indicated interest by committing to minimum bids.
They are plots located at the corner of Yio Chu Kang and Seletar roads (the minimum bid is $40.5 million); at Dakota Crescent, near the upcoming Dakota MRT station on the Circle Line ($130 million); and Chestnut Avenue in Bukit Panjang ($62 million).
CB Richard Ellis executive director Jeremy Lake said: 'The fact that private-sector land is not readily available and not easy to obtain means bidding for these plots will be very competitive.
'Each may get more than 10 bids perhaps, and pricing should surprise on the upside rather than on the downside.'
He added: 'As for collective sales, a few months ago, they were a non-starter. If Dragon Mansion is successful, it may be a positive sign for the market.'
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