Core central home rents up 12% in Q2

Core central home rents up 12% in Q2
Rising sentiment filtering down to other areas
(SINGAPORE) Some say that rentals for private homes islandwide have never risen so much from one quarter to another over the past decade.
Not surprisingly, it was the Core Central Region (CCR) - which includes prime districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - that posted the biggest increase in rents for condos and private apartments in Q2 over the preceding quarter. They rose 12 per cent.

But the buoyant demand for housing in the prime areas continued to filter down to the rest of the market in Q2, as reflected in a 10 per cent rise in URA’s rental increase for the Rest of Central Region (RCR) and a 9.4 per cent hike in the Outside Central Region (OCR).

OCR covers suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, while RCR includes areas like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong.

Knight Frank said that, based on its research, rentals for properties in the East Coast, Thomson and Bishan areas grew by a strong 10 to 12 per cent quarter-on-quarter in Q2 this year, matching the rental growth seen in the CCR.

‘Noticeably, more foreign companies and expatriates are becoming more concerned with rising housing rentals and costs. Nonetheless, their top priority is to be able to enrol their children in international schools here, where the supply of teachers and space for students is far more inelastic when compared to rental properties,’ Knight Frank director (research & consultancy) Nicholas Mak said.

URA’s 12 per cent rental index hike for the CCR in Q2 was much higher than a 7.6 per cent gain registered in Q1.

CB Richard Ellis executive director Li Hiaw Ho said: ‘The slew of en-bloc sales in the past two years being concentrated in the CCR has led to a shortage of apartments for rent in the region, as reflected in this region leading the pack in terms of the increase in the rental index for non-landed properties in Q2.

‘This uptrend is expected to continue as developments which have been collectively sold give way to redevelopment. Some of the major en-bloc sales in the prime area in Q2 include Leedon Heights, Himiko Court, Elmira Heights and Fairways Condominium.’

URA’s overall rental index for private homes in Q2 was up 10.4 per cent from the preceding quarter, and 31.2 per cent higher year-on-year.

‘This is the highest quarter-on-quarter, and year-on-year growth since URA made rental data available to the public. Nonetheless, as of Q2 2007, private residential property rentals are still about 21.4 per cent lower than the all-time high in Q1 1996,’ said Knight Frank’s Mr Mak.

Source : Business Times - 28 Jul 2007

The subsale train gathers speed

The subsale train gathers speed
Shadow of speculation on record home sales, prices
By KALPANA RASHIWALA
(SINGAPORE) The prices are climbing but developers are poised to sell more private homes than ever before. There is also evidence to show that speculative activity has been accelerating by the quarter.
The property mania that has gripped Singapore of late has been captured in hard, official numbers.

Developers sold 9,385 uncompleted private homes in the first six months of this year, less than a thousand units shy of the record 10,363 units sold through all of last year, according to latest official figures. Market watchers expect the eventual sales for 2007 to range between 14,000 and 18,000 units, assuming that the US sub-prime mortgage woes do not have a contagion effect here.

As expected, the prices have been rising fast. The Urban Redevelopment Authority’s (URA) price index for private homes shot up 8.3 per cent in Q2 over the preceding quarter. This means that the index has risen 13.5 per cent for the first six months of this year.

A straw poll of property consultants by BT suggested that the full-year price increase could come in between 23 and 30 per cent. So prices still have between 8 and 15 per cent to climb in the second half.

The downside risk remains from the correction in the US sub-prime market. ‘Unless this spreads into global financial markets, the Singapore property market is unlikely to be affected in the immediate term,’ Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang says. ‘Meanwhile, we are watching the market very closely,’ he added.

One aspect that bears watching is the surging speculative activity. Subsales islandwide jumped 67.4 per cent to 1,254 units in Q2. More than half the subsale deals in Q2 were in the Core Central Region (CCR), which includes districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa.

Islandwide, subsale deals accounted for 9.7 per cent of the total private housing deals in Q2. During the same period last year, such deals made up just 2.6per cent of the pie. Still, the latest figures are way short of speculative fever that raged in Q21996, when 28 per cent of total private residential transactions involved subsale deals.

Knight Frank director Nicholas Mak reckons that the share of subsale deals will continue to grow gradually but is unlikely to reach the levels seen in 1996. ‘Back then, the ease of getting 95 to 100 per cent bank financing for property purchases was a key reason fuelling speculative activity. Nowadays banks are more cautious,’ he says.

Going forward, subsale activity may find another engine. It may be driven not so much by the prospect of big, instant gains but by those who bought their homes on deferred payments and reach the point where they have to pay the bulk of their purchase price, says DTZ Debenham Tie Leung executive director Ong Choon Fah. ‘So rather than fork out more money, they may just sell their units since the market has gone up so much in the last couple of years or so since they bought them,’ Mrs Ong reckons.

Subsales involve projects that have yet to receive a Certificate of Statutory Completion, while resales, which are also secondary market transactions, cover completed developments.

The total number of resales jumped 40.2 per cent quarter on quarter to 6,514 units in Q2. This brought total secondary market transactions in Q2 to 7,768 units, up 44 per cent from the preceding quarter and, according to Knight Frank, a level not seen before in the private property market.

Also interesting is the breakdown in the price index for non-landed homes by regions. In all three regions - CCR, Rest of Central Region (RCR) and Outside Central Region (OCR) - the price gains in Q2 over Q1 were higher for completed homes than for uncompleted ones, reversing the general trend seen for at least the past couple of years.

‘The trend reversal seen this quarter across all markets is reflective of the urgent demand for completed residential properties for immediate occupation by those who have sold their homes through en bloc sales looking for replacement properties,’ Colliers International director Tay Huey Ying said.

In tandem with URA’s earlier flash estimate, non-landed homes in RCR (including places like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong) posted the biggest price gains in Q2, with an overall (both uncompleted and completed homes) increase of 8.1 per cent, followed by CCR (up 7.9 per cent ) and OCR - which covers suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok - rising 7.2 per cent.

Ms Tay argues that the price recovery in this region can be attributed not just to a general filtering-down effect from the higher-priced tiers, but also to investors buying units in older developments with en bloc sale potential such as Neptune Court, Ivory Heights, Lakepoint Condominium and Clementi Park.

DTZ’s Mrs Ong reckons that the rate of price gains may moderate in the second-half. ‘Developers who bought their sites through en bloc sales in 2006 and earlier, before the surge in land prices seen this year, can probably sell their new projects without setting benchmark prices. Developers are likely to be more sensitive in pricing their projects so aggressively until things are clearer.’

Source : Business Times - 28 Jul 2007

First-time URA data confirms soaring prime office rents

First-time URA data confirms soaring prime office rents 
In move to provide more transparency, govt agency releases office rental data by location
By Fiona Chan, Property Reporter 
THE Government has released office rental figures by location for the first time, confirming what the industry already knows - prime office rents have shot up by much more than the rest of the market.
Yesterday, it revealed median rents for two categories of offices: prime office buildings, which are highly sought-after and command high rents, and all other offices on the island.

The Government’s prime office category consists of 22 top-end buildings downtown and in Orchard Road, which are fairly new in appearance and have large floor plates. While it did not give any examples, the list is likely to include top-grade buildings like Republic Plaza in Raffles Place.

In these offices, median rents of new leases rose by 13.9 per cent to $10.33 per sq ft (psf) per month in the April to June period.

For the rest of the office market - comprising more than 2,000 buildings that make up 80 per cent of Singapore’s office space - median monthly rentals went up by 8.9 per cent to reach a much more modest $4.90 psf.

These lower rents are ‘more reflective of the typical rental paid by office tenants in Singapore’, the Urban Redevelopment Authority (URA) was quick to note in its statement.

As Singapore undergoes an acute shortage of prime office buildings and growing demand from expanding businesses, office rents have jumped to a level that some fear may threaten the Republic’s competitiveness.

And this is why the URA has been anxious to provide more transparency as to exactly how much typical businesses are paying for office space.

Property experts said the URA’s rental breakdown more accurately reflects Singapore’s tiered office market and makes official data easier to compare with figures published by property firms, who use similar categories.

Yesterday’s data also showed that while office rents may be climbing, as a whole they are still nowhere near the top asking rents recently reported in some buildings. At 6 Battery Road, for instance, asking rentals have reached $18.50 psf per month.

‘The pace of rental increases has been maintained but may not be as high as the landlords wish us to believe,’ said Mr Colin Tan, associate director at Chesterton International. ‘But it cannot be denied that rents are increasing…We should be more worried about the future.’

Indeed, the rise in rents is still gaining speed. Across the island, rents were up 11 per cent in the second quarter, on top of the 10.4 per cent increase in the previous three months.

Similarly, prices of offices that are bought, as opposed to rented, are going up. They rose 8.9 per cent in the second quarter, more than double the 4.3 per cent rise in the first quarter.

As office rents and values climbed, vacancy rates dropped across the board. They have now shrunk to 8 per cent, a level not seen since 1996, said property firm Knight Frank.

By office type, vacancies fell to 5 per cent in the prime category, and to 8.7 per cent for the rest of the market.

Market experts expect the office shortage to continue into next year and boost rents and prices further.

The office squeeze has boosted industrial property, which some companies have turned to for cheaper offices. This pushed up prices of multiple-user factory space by 8 per cent in the second quarter, double the 4 per cent rise previously. Rents rose 6.1 per cent, from 4.6 per cent.

As for shops, rents rose by 7.1 per cent in the second quarter, compared to only 1.4 per cent in the first quarter. Prices went up 4.6 per cent, from 1.7 per cent in the first three months.

The URA also gave median monthly rents of shops by location.

Source : Straits Times - 28 Jul 2007

Private homes: Rents up 10.4% in 2nd quarter

Private homes: Rents up 10.4% in 2nd quarter
Big hike due to slew of collective sales, but still 21% lower than 1996 high
By Fiona Chan, Property Reporter
ALL private home owners have good reason to celebrate these days, but landlords should really pop the champagne - while their tenants should drown their sorrows.
Rents rose at an unprecedented rate in the April to June period, outpacing home prices which were far from sluggish.

Official figures showed yesterday that rents jumped 10.4 per cent in the quarter, trumping the 7.6 per cent rise in the first three months of the year. They are now 31.2 per cent higher than a year ago.

This is the highest quarterly and yearly growth since the Government made rental data public, said property firm Knight Frank. It is also the first time private home rents have shown double-digit growth in a quarter, it added.

Rents this year have gone up 18.7 per cent, compared to only 14.1 per cent in the whole of last year, added consultancy CB Richard Ellis.

More important, rents rose across the board, according to new Urban Redevelopment Authority (URA) figures yesterday.
Although the core central region still led the pack with a 12 per cent jump over the first quarter, the rest of Singapore was not far behind.

Rents in the city fringe areas went up 10 per cent while those in suburban districts were just behind with a 9.4 per cent rise.

Knight Frank’s latest data shows that homes in the East Coast, Thomson and Bishan areas saw rents rise by 10 to 12 per cent, matching the pace in the prime districts.

But while landlords enjoy the bubbly, their tenants are far from happy with surging rents becoming a source of concern among foreign companies bringing in growing numbers of expats.

To help tenants get a better idea of the market, the Government yesterday released data on median home rentals, breaking it down for the first time by project.

This allows potential tenants to compare median rentals - that is, the level at which half the rentals are higher and the other half lower - of individual condominiums.

The figures showed that The Pier at Robertson, for instance, commands a median monthly rental of $6.30 per sq ft (psf), or $3,150 for a 500 sq ft unit. At the other end of the spectrum, Neptune Court has median monthly rentals of $1.56 psf, or $1,560 for a 1,000 sq ft apartment.

This new data is available on the URA website. The agency also took pains to point out that while median rents overall rose to $2.17 psf per month, there were ‘a significant number of properties which were rented out at below $1.50 psf per month’.

Also, while rents are soaring, they are still some 21 per cent lower than the 1996 high, said Knight Frank.

The key reason for the rental rebound is the slew of collective sales, said experts. And as more and bigger estates are torn down, rents can be expected to surge further as displaced owners and tenants look for hew homes.

Similarly, private home prices are set for a good run.

They jumped 8.3 per cent in the second quarter to hit a level not seen since 1997. But what raised eyebrows was that prices of non-landed homes in the city-fringe areas outpaced those in red-hot prime districts.

Even in suburban areas, prices climbed 7.2 per cent - well above the 2 per cent rise in the previous quarter.

Perhaps most significantly, prices of completed homes rose more than those of uncompleted ones for the first time in at least two years.

This is a sign that the strong price rebound is due to genuine buying demand, said property consultants. Traditionally, prices of uncompleted homes tend to lead price increases because more people want to buy new homes.
Source : Straits Times - 28 Jul 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com

Prices of HDB resale flats up for most types, towns

Prices of HDB resale flats up for most types, towns 
HDB data, to be published every quarter, gives buyers detailed market info
GIVING THE FACTS: With the HDB market on the upswing after many years in the doldrums, the board has released a slew of information online at www.hdb.gov.sg that breaks down data for 26 HDB towns. — ST PHOTO:
 
IT’S been a long time coming, but the HDB market is on the upswing after many years in the doldrums.
Prices shot up 3 per cent in the three months to June 30 - the biggest jump since 1999 - and well up on the 1.25 per cent rise in the first quarter.

The price surge reflects increased activity in the resale market, which recorded 8,700 transactions in the quarter - 38 per cent up on the first quarter.

In the second quarter, 70 per cent of the homes sold were at prices above their official valuation.

Prices rose for most flat types and towns.

The HDB also released a slew of information on median resale prices, rental rates and cash over valuation (COV) to help keep buyers up to speed on the market.

VIDEO

The data - on the HDB’s website www.hdb.gov.sg - is broken down into the 26 HDB towns.

This comes after industry experts complained that the previous sales figures were grouped by region and not so effective given the way flat prices differ from one town to the next.

The new figures show median values for resale prices, COV figures and rental rates - a first for the HDB.

A median price means half of the units sold or rented above that value, half below.

It used to release average rents each quarter, but average prices can be misleading as a single large transaction can distort the overall picture. The new figures show that median rental prices are still far below some of the ‘headline’ prices reported in the media recently.

A four-room flat in Bukit Merah, for example, was recently reported to have been rented at $2,200 a month, but the HDB data shows the median for such flats is $1,400.

One tenant Mr S.T. Leng, 41, whose landlord recently hiked the rent of his three-room flat from $900 to $1,500 due to ‘market rates’, said the new information will give tenants and buyers more negotiating power.

‘This will help everyone be more realistic, and has definitely come at the right time,’ he said.

The figures also paint a more accurate reflection of COV values for each town.

Take Clementi. Previous figures for the western region put the COV at $8,800 for an executive flat. The truer figure contained in the new data puts it well above - $65,000.

This is more accurate, and useful for both buyers and sellers, say industry players, who welcomed the new data.

‘Consumers will increasingly want such fine-tuned data and transparency will become more crucial in the market,’ said PropNex chief executive Mohamed Ismail.

C&H Realty managing director Albert Lu said he was not surprised by the HDB market’s good performance last quarter, and expects prices to keep going up, at least for the rest of the year.

HDB’s new figures will now be published every quarter.
Source : Straits Times - 28 Jul 2007

S’pore F1 race set for Sept 28 next year

S’pore F1 race set for Sept 28 next year 
By Leonard Lim 

CALLING all Formula One fans: Mark September 28, 2008 down in your diaries.
That is the date for the Singapore Grand Prix, the International Automobile Federation (FIA), motorsport’s governing body, revealed yesterday.

Next year’s schedule features a total of 18 legs, with street races in Singapore and Valencia the new additions.

The European GP in Valencia will be held on Aug 24.

The Singapore leg could also be the first to be staged at night, if safety requirements are met.

It will be sandwiched between the Belgian GP a fortnight earlier and the Shanghai GP on Oct 19.
In May, a team led by hotelier Ong Beng Seng clinched a five-year deal to stage a leg of the glamorous F1 Grand Prix here.

The race will be on a 5.2-km street circuit around the Marina Bay area, taking in sights such as the Esplanade, Merlion and Singapore Flyer.

Marketing executive Mervyn Foo was one of those who were thrilled to hear the news last night.

‘I’m handing in my leave form on Monday,’ said the 28-year-old.

‘It’s going to be a week of nothing but watching F1 with my friends.’

Tickets for the Singapore Grand Prix will go on sale to the public in mid-December.
Source : Straits Times - 28 Jul 2007

Prices rising across the board in property market

Prices rising across the board in property market 
Private homes the biggest winners, but HDB resale prices also up 3 per cent
By Joyce Teo, Property Correspondent 
THE property boom is now ringing across the country, with all segments, including the HDB market, recording rising prices.
The biggest winners were private homes, with prices up 8.3 per cent in the April to June quarter. This is on top of a 4.8 per cent increase in the first three months of the year.

The number of new homes sold hit a record 5,129 units in the second quarter, 7 per cent up on the first quarter.

Landed homes, which have not moved much over the past year, also sprang into life and registered price rises of 7.1 per cent, up from 2.9 per cent in the first quarter.

And resale prices in the HDB market rose 3 per cent, up from a 1.25 per cent rise in the first quarter.

‘The benefits of the improving economy are now being seen more widely across the board, demonstrated by the mass market increases and a higher number of HDB upgraders,’ said property firm Jones Lang LaSalle’s regional managing director, Mr Chris Fossick.

Government figures also show that demand is pushing up private home prices in most parts of the country.

Prices in central Singapore, the city fringes and suburban areas rose between 7.2 per cent and 8.1 per cent in the second quarter.

‘The even performance across all regions…is a positive as it implies that there is now greater uniformity in wealth creation across all segments,’ said Ms Tay Huey Ying,of property consultancy Colliers International.

The wealth of data released yesterday by the Urban Redevelopment Authority (URA) - it included new information on housing rentals and office rents - also revealed some notable developments in the roaring market.

One was the bigger jump in prices of completed homes over uncompleted ones.

In the central core region - where the most expensive housing is found - prices of completed homes rose 8.5 per cent, compared with 7.1 per cent for uncompleted ones.

Usually, glamorous launches of prime homes attract higher prices than completed ones. But the huge number of displaced en bloc sellers looking for a roof over their heads has boosted demand for existing property.

Consultants said that because of strong leasing demand - in part contributed by owners and tenants displaced by en bloc sales - completed properties have become more attractive for investors, too.

Indeed, rents have been soaring, with some owners demanding a doubling of rent or more - and getting it.

The new figures have also cast more light on property speculation. In the second quarter, owners’ sales of uncompleted homes amounted to less than 10 per cent of the total deals done.

But there was a hike in the prime central core region, where such sales accounted for 19.4 per cent of deals done. This is up from 12.4 per cent in the first quarter.

By contrast, in the second quarter of 1996 - when speculation was rife - subsales accounted for about 28 per cent of all deals.

On the supply side, 43,018 - mostly flats but with about 3,000 houses - will be built between now and 2010, the URA said. About 76 per cent of these will be completed in 2009 and 2010.

Overall, private home prices are now about 18.5 per cent below the 1996 peak and at a level similar to that in the second half of 1994.

Also yesterday, the HDB released more information on sales, including median resale prices, rental data and the amount of cash-over-valuation (COV) that buyers are paying.

It shows, for example, that the median COV for a five-room flat can reach $60,000 in Bukit Timah town, but is zero in Woodlands.
 
Source : Straits Times - 28 Jul 2007