News and Views

Friday, 16 November, 2012

RESIDENTIAL MARKET

New private home sales cool rapidly in October
New private home sales plummeted 26 per cent last month as the sixth round of cooling measures took some heat out of the market.
Buyers snapped up 1,948 units in October compared with 2,621 in September – a decline likely caused in part by an Oct5 policy change aimed at preventing buyers from over-extending themselves.
If executive condominium units were included, last month’s sales would total 2,624, with suburban units again powering the new-homes market.
Last month’s slower sales will not prevent this from being a landmark year for residential property. There were 19,507 private homes sold in the first 10 months – easily eclipsing the record of 16,292 sold in all of last year.
Experts say the latest cooling measures probably hit buying sentiment, but developers also took a breather, holding back launches as they took stock of the possible impact.
ERA Realty key executive officer Eugene Lim said that while sales volumes fell, the fact that almost 2,000 new units were transacted indicates that the market remains robust. Home buyers have quickly got used to the new restrictions, he added.
New-sales figures last month also look strong given that the average monthly sales were 1,364 units last year and 1,385 in 2010.
“The market will continue to be fuelled by high liquidity and attractive home loan interest rates. Also, private property and Housing Board home owners who have made profits are re-investing their gains into the property market,” Mr Lim said.
“So market confidence is still high, despite warnings of a slower economy going forward.”
As developers have sold most units in previously launched projects, especially in suburban areas, more launches can be expected in the lead up to Christmas.
These include the 483-unit Eco Sanctuary, the Echelon with 508 units, the 338-unit Sennett Residence and Spottiswoode Suites, a development of 175 homes.
Most experts expect sales this year to hit a record of about 22,000 units.
Source: The Straits Times –16 November 2012
Sale of 4 suburban sites to yield 2,045 private homes
Four sites located in suburban areas and which can yield 2,045 private homes are being pushed out for sale to meet the continuing strong demand for property away from the city.
Two plots of land, one at Jurong West Street 41 and the other at Ang Mo Kio Avenue 2, were launched for sale yesterday under the confirmed list.
A third land parcel, also at Jurong West Street 41, was made available for application under the reserve list. Confirmed-list land goes on the market regardless of interest, while reserve-list sites need to be triggered for sale by an acceptable initial offer.
Then there is a commercial and residential site at Yishun Ring Road, which will be launched for sale by public tender on Nov 27.
All four sites will offer 99-year-leasehold homes. Property consultants say that overall, the plots should see moderately keen interest from developers.
In particular the Ang Mo Kio plot, which is expected to yield 680 homes, should be keenly contested, and may see as many as 15 bidders.
Eugene Lim, key executive officer of ERA Realty Network, said of the Ang Mo Kio site: “It is an excellent location as it is an established estate, and there have not been any new launches in that locality. It can cater to upgraders and downgraders in the locality.”
The land parcel at Jurong West launched for sale yesterday should see five to 13 bidders.
The 240,661.7-sq-ft site, which has a maximum GFA 673,853.1 sq ft, could potentially have 660 homes.
It is also within walking distance to Lakeside MRT Station.
The Yishun Ring Road mixed-use plot is a 95,346.7-sq-ft site with a maximum GFA of 266,970.8 sq ft and is expected to yield 160 homes.
ERA’s Mr Lim noted that the plot is the first mixed residential and commercial site released by HDB this year. “The mixed site gives developer the flexibility. Mixed developments have been popular as seen from the successes of those that have been launched in the past.”
He added that the area comprises predominantly HDB flats, and the new mixed development will “add live to rejuvenate Yishun”.
“The newest condominium launched in Yishun was Skies Miltonia, and it was the top-selling project for the month of October,” said Mr Lim.
Source: Business Times –16 November 2012
Multiple-lease site attracts 23 bids
The first-ever residential site launched with multiple lease options at Jalan Jurong Kechil in the Upper Bukit Timah area has received an overwhelming response from developers – attracting 23 bids for the 1.02-hectare land parcel.
The highest bidder was World Class Developments (North), a subsidiary of Aspial Corporation, which bid $73.8 million or $481.51 per square feet per plot ratio (psf ppr).
Only one bid was tendered for the shorter lease term of 45 years while there were none for the 30-year tenure, the third option offered by the Urban Redevelopment Authority (URA).
The top bid of $73.8 million is 10.3 per cent higher than the second highest bid of $66.9 million by CEL Property.
Most bids clustered around the median bid of $246 psf ppr, ranging from $198 to $302 psf ppr.
The lowest bid came from Kwan House, with a bid price of $23.3 million or $151.99 psf ppr for a 45-year lease. URA indicated that the 60-year leasehold equivalent of Kwan House’s bid would be $25.6 million or $169.3 psf ppr.
Property consultants BT spoke to expressed surprise at the number of bids, saying the site received the highest number of bids since the Westwood Avenue residential site, that closed in December 2009 with 32 bids.
 The experience of existing properties with substantially run-down leaseholds is that most buyers are less keen on them due to concerns about long-term value depreciation. However, the keen competition among bidders in this tender shows that they are confident of demand despite the shorter leasehold.
In a statement released by Aspial Corp yesterday evening, the management said they would explore various development options which include condominium and retirement housing.
But ERA Realty key executive officer Eugene Lim felt the high price and competitive bidding reflected the location of the land parcel. “It is located in an established residential estate. It has a tranquil environment, is close to the nature reserve and is attractive to residents who prefer serenity,” he explained.
He expects the selling price to start from $1,100 psf owing to the average selling price of $1,600 for a one-bedroom unit at Suites at Bukit Timah, which is located down the road from the land parcel.
Mr Lim added that the development will likely consist of small units with an affordable quantum that targets investors, and it is likely to be popular among those looking to gain a foothold in the Bukit Timah area.
Source: Business Times –16 November 2012