Singapore home sales in June up 80% from May

Singapore home sales in June up 80% from May

By Ng Baoying,

SINGAPORE: June was the best performing month in terms of home sales since the property market tumbled last September, according to numbers released by the URA on Tuesday.

Altogether, 801 private homes were sold, a jump of 80 per cent from May.

But there were also more units launched. The number of units launched in June leapt 125 per cent from May to 1,069 units, meaning that there were more unsold properties in the market.

However, analysts said this would not deter developers from launching even more units in July to capitalize on the momentum, before the arrival of the Hungry Ghost Month.

Colliers International expects around 1,300 units to be launched in July, as developers pre-empt the traditionally slow-moving 7th lunar month in August.

In June, most transactions occurred in the suburban regions while prime locations saw some weakness in sales. No units valued at S$4,000 per square foot or more changed hands last month.

Nicholas Mak, director of Knight Frank, said: “The pick-up is predominantly in mid-tier mass market, because the buyers are owner occupiers. Residents in HDB estates around private condos for sale are forming the backbone of the demand.”

Tay Huey Ying, director for research and advisory at Colliers International, said: “In the current uncertain economic climate, developers are going to continue to delay launches of higher-end projects and likely to focus on mass-market tiers.”

With the suburban market being a price-sensitive one, analysts see developers continuing to employ pricing strategies.

Knight Frank’s Nicholas Mak said: “Developers must price their products quite attractively to generate sales. Any increase in prices, especially a sharp increase, will chase away buyers.”

Prices may be seen softening, but analysts say there will not be a free-fall as underlying demand will put a cap on how far prices may dip. - CNA/ir

 
Source : Channel NewsAsia - 16 July 2008

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Singapore Feasibility study on caverns attracts 3 bidders

Singapore Feasibility study on caverns attracts 3 bidders

By RONNIE LIM
THREE contenders have surfaced to bid for a feasibility study on how caverns can be opened up beneath land-scarce Singapore for a wide range of exciting uses - from power stations and water reclamation to wafer fabs and R&D labs.

Economic possibilities cited for the caverns include using them for data centres, warehouses, and port and airport logistics centres.
 
Geostock, Tritech Consultants and Amberg & TTI Engineering have made submissions to carry out the underground rock cavern (URC) usage study, said a spokeswoman for JTC Corporation, the coordinating government agency for the project.

Due to the specialised nature of the work, the industrial landlord specified in its tender, called in May, that only companies with URC experience and expertise could bid. ‘The tender award is likely to be made next month,’ the JTC spokeswoman told BT.

In the tender document, other economic possibilities cited for the URCs include using them for data centres, warehouses, and port and airport logistics centres.

Among the contenders, France’s Geostock, jointly with Jurong Consultants, is in a consortium that has won the contract to provide the basic engineering design and manage the construction of the $700 million Phase 1 Jurong Rock Cavern oil storage project beneath Jurong Island.

Tenders for the construction proper are being evaluated, with an award expected around the fourth quarter, the JTC spokeswoman said.

Tritech Consultants is a specialist civil and geotechnical consultancy formed by a group of specialist engineers from Singapore, Malaysia, the UK and China.

The third contender, Amberg & TTI Engineering, is a consultancy that focuses on tunnelling and underground infrastructure. The Far East regional office of Switzerland’s Amberg Engineering, it has been involved in various MRT projects here.

Because of the wide- ranging usage possibilities, the consultant that wins the tender will have to work with various government agencies. These include the Energy Market Authority on power stations, the Civil Aviation Authority of Singapore on airport logistics or the Public Utilities Board on water reclamation.

The consultant will have to study proven URC uses in other countries and determine if they can be applied here.

It will also have to look at the environmental and health aspects and the likely public reaction on issues such as radiation, pollution and damage to existing buildings. The study will also look at the cost of building URCs, including excavation costs, for specific uses.

Source : Business Times - 16 July 2008

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Choice Singapore Tanah Merah site for sale

Choice Singapore Tanah Merah site for sale

Bids expected at around $250 psf ppr, 20% below price paid for neighbouring plot in 2006

By ARTHUR SIM

A CHOICE Government Land Sale (GLS) site at Tanah Merah Kechil Avenue is on sale by public tender. But bids are expected to be around $250 per sq ft per plot ratio (psf ppr) - or about 20 per cent less than the $318.50 psf ppr paid for a neighbouring GLS site in 2006.

The new site, which is on the GLS confirmed list, has a land area of 106,298.9 sq ft and a maximum permissible gross floor area of 297,643.4 sq ft.

CBRE Research executive director Li Hiaw Ho said Waterfront Waves, a new condominium at Bedok Reservoir, is being offered at an average of $800 psf, while a sub-sale unit at Casa Merah was sold for $750 psf in March.

In the resale market, units at nearby East Meadows changed hands at an average price of $660 psf in the first half of this year. ‘Based on these comparables and taking into account the current market situation, as well as higher construction costs in view of new planning guidelines on bay windows and planter boxes, we expect a new 99-year leasehold project in this location may fetch around $750-$800 psf,’ said Mr Li. ‘This translates to a possible land price of around $240-260 psf ppr for the site.’

Unlike the GLS site sold in 2006, the new site is right next to Tanah Merah MRT station, which is also the interchange station for Changi Expo and Changi Airport. Mr Li believes the future project on the site will be attractive to upgraders in Bedok New Town and private home owners in the East Coast area. ‘It will also be attractive to expatriates looking to rent homes along major transport nodes,’ he said.

Knight Frank director (consultancy and research) Nicholas Mak said sales picked up in July, as some residential projects were launched at affordable prices. ‘The slight pent-up demand in this segment is due to the lack of major mass-market project launches and the steady rise in HDB resale prices,’ he said. But potential buyers in the mass to middle-tier markets are price-sensitive and there is a limit to what they are willing to pay, he noted.

As such, he reckons new units on the latest GLS site could likely fetch an average price of $700-$750 psf and the land price for the site should be $250-$300. The site can potentially be developed into a 10 to 12-storey condominium with about 230 to 270 units, he said.

The Urban Redevelopment Authority said earlier it wants to expedite the development of land around MRT stations to help increase the use of public transport.

Source : Business Times - 16 July 2008

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Frasers Centrepoint in $30m India deal

Frasers Centrepoint in $30m India deal

It’s acquiring 74% stake in KS Realty which owns 20.7 acre plot in Chennai

By EMILYN YAP

BUILDING a presence in India’s residential property market, Frasers Centrepoint will acquire a 74 per cent interest in Indian property firm KS Realty Constructions for $30.02 million.

Frasers Centrepoint’s subsidiary, Frasers India (I), entered into a conditional agreement with Kotak India Real Estate Fund-I and KS Realty for the deal. Kotak Fund will hold the remaining 26 per cent interest in KS Realty.

KS Realty owns a 20.7-acre plot of land along Old Mahabalipuram Road, which is known as the IT corridor in Chennai, India. The firm is principally involved in building residential units on the land.

The $30.02 million purchase price took into account KS Realty’s audited net asset value of around 559 million rupees (S$17.7 million) as at March 31, 2008, and the estimated project development value of the land. The acquisition will be funded from internal sources.

According to a Frasers Centrepoint spokesman, the target is for KS Realty to develop a 1,500-unit condominium project in phases over six years. Units will range from 1,300 sq ft 2-bedroom apartments to 1,800 sq ft 3-bedroom apartments. Blocks with prime views may have penthouses with duplex layouts.

The condominium will also include recreational facilities such as a clubhouse with a gymnasium and swimming pools.

‘As part of its regional growth strategy, Frasers Centrepoint has been looking at Tier I, II and III cities in India,’ said its spokesman. ‘Chennai is witnessing a smart makeover with the ongoing construction activities, resulting from the demand from the IT sector, which has certainly given a push to real estate developments in this city.’

Under the collaboration, Frasers Centrepoint can offer its expertise and strong brand name, while KS Realty shares its local knowledge, the spokesman noted.

Frasers Centrepoint is a subsidiary of Fraser and Neave (F&N). F&N does not expect the acquisition to have a material effect on the group’s net tangible assets or earnings per share for the current financial year.

Shares of F&N closed six cents down at $4.38 yesterday.

Source : Business Times - 16 July 2008

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Singapore Property counters lose ground over rising costs, pricing power concerns

Singapore Property counters lose ground over rising costs, pricing power concerns

CITY Developments Ltd fell the most in more than four months, leading declines by Singapore developers after Credit Suisse Group AG said that rising construction costs and an inability to raise prices will erode profits.

City Developments, Singapore’s second-largest developer, fell 58 cents, or 5.3 per cent, to $10.36 at the close of trade. CapitaLand Ltd, its closest domestic rival, dipped 21 cents, or 3.6 per cent, to $5.60, its biggest decline in three weeks, and Keppel Land Ltd, the third-largest real estate firm, lost 6 cents, or 1.3 per cent, to $4.65, its weakest since Sept 13, 2006.

Singapore private home prices rose at the slowest pace in almost four years in the second quarter on concerns that the global credit squeeze will dampen economic growth. Prices of so-called mass market homes, defined as those that cost between $1,000 and $1,200 per square foot, may change ‘marginally’ this year, said CapitaLand chief executive officer Liew Mun Leong in an interview on July 10.

Developers’ profits may decline because of ‘the risk of increasing construction costs’, weaker confidence and lower ‘pricing power, even for mass-market projects’, Credit Suisse analyst Tricia Song wrote in a report yesterday.

Singapore’s private home sales rose 82 per cent as slowing price increases attracted buyers. A total of 801 residential units were sold last month, compared with 441 in May, and 284 in April, the Urban Redevelopment Authority said on its website yesterday.

Still, a higher proportion of new homes available for sale was not sold in the month, said Nicholas Mak, head of research and consultancy at Knight Frank in Singapore. ‘This would result in a gradual increase in the number of unsold properties in the developers’ inventory,’ he said.

Singapore’s biggest developers will start reporting second-quarter earnings at the end of this month. — Bloomberg

Source : Business Times - 16 July 2008

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Singapore Private home market stirs to life again

Singapore Private home market stirs to life again

Developers’ Q2 sales double to 1,542 from Q1 but still a far cry from 2007
By KALPANA RASHIWALA
(SINGAPORE) Developers sold 1,542 private homes in the second quarter, double the 762 units in the preceding quarter. This takes the total sold in the first half of the year to 2,304, according to the Urban Redevelopment Authority yesterday.

The Q2 number was shored up by the sale of 801 private homes in June alone - a huge jump from the 453 units sold in May and, in fact, the best monthly showing since August last year, when the impact of the US sub-prime crisis struck home.

Even so, the first-half sales - these numbers do not include executive condos - amounted to just about a quarter of the volume in the same period last year.

CB Richard Ellis predicts that full-year sales volume will come in at 4,000-5,000 units, less than half the record 14,811 private homes that developers sold in 2007.

BT’s analysis of URA’s data showed that the stock of private homes that could be launched for sale immediately but have been held back continued to mount, hitting 13,005 at end-June, up 20.5 per cent from the preceding quarter and 68.5 per cent higher than the 7,720 units as at the end of last year.

These units are in projects with the necessary approvals for sale - that is, they have secured sales licence and Building Plan approvals - and include projects under construction as well as those that have received Temporary Occupation Permit.

In addition, there were 3,379 units launched but unsold at the end of June this year - some 40.3 per higher than the end-2007 number.

‘Developers probably got more projects launch-ready by end-June, encouraged by the recent response at showflats,’ a property consultant said.

Looking ahead, this pool of yet-to-be-launched units is expected to be dynamic. ‘For the next one to two quarters, we could see the stock coming down if take-up remains encouraging. In turn, the encouraging sales may also spur other developers to get projects launch-ready and that could again add to the pool of yet-to-be-launched units,’ she added.

URA’s latest monthly survey of developers’ homes sales data in June showed ‘no consistent pattern of a downward adjustment in prices of new launches’, CBRE executive director Li Hiaw Ho said.

‘The differential between the prices contracted in June and in May or April could be attributed to adjustments for floor height and orientation. However, in line with the flash estimates, we expect only a marginal upside in residential prices in Q2.’

Developers launched 1,069 private homes in June, a jump of 125 per cent from 476 units in May.

For the whole of Q2, developers launched a total of 1,820 private homes, taking the figure for first-half 2008 to around 3,200 units.

Knight Frank’s analysis showed that, in June, most units were launched for sale in the Rest of Central Region (RCR) - which commanded a 57 per cent share or 612 units.

The region also accounted for 57 per cent of total private homes sold by developers in June. Successful project launches such as Dakota Residences and Clover By The Park helped boost RCR’s share in June.

For Q2, RCR also made up the lion’s share or 44.2 per cent of units launched, according to Knight Frank.

The highest-priced transaction in June came to $3,653 per square foot, for a unit at Nassim Park Residences, compared with $4,612 psf for a Scotts Square apartment in May. The lowest priced deal last month was $541 psf for an apartment at Sunflower Regency on Lorong 20, Geylang. In May, the lowest price of $518 psf was set by a unit at Palm Galleria in Telok Kurau.

Colliers International director (research and consultancy) Tay Huey Ying said: ‘As developers are increasingly forgoing aggressive pricing strategy in favour of competitive pricing strategy, cumulatively, this will result in a softening in price level for the general market.’

She expects developers to ramp up launches before the Hungry Ghosts Month starts on Aug 1, and predicts that launch volume could cross 1,300 units for July. As new launches are expected to be priced attractively, developers’ sales could possibly hit 1,000 units.

 
Source : Business Times - 16 July 2008

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How Singapore HDB flats are priced affordably

How Singapore HDB flats are priced affordably 

I REFER to the letter from Mr See Leong Kit, ‘Market-based pricing has cost buyers dearly’ (July 7).

HDB adopts a market-based pricing approach so as to reflect the true subsidy that buyers enjoy. Under this approach, HDB determines the market value of the flat, based on its location, finish and other attributes. Then, it sells the flat at a discount to the market value. HDB buyers understand this, and appreciate that new HDB flats are priced lower than resale flats. Similarly, when they want to sell their flat in the open market, they do so at the prevailing market value, not at their cost of purchase of the flat.

We also wish to highlight that this approach has enabled HDB to continue to price its flats affordably despite the current sharp escalation in construction costs. Currently, a new four-room flat can cost close to $300,000 to develop, taking into account land, building and other costs. This is significantly higher than the subsidised price of a four-room flat in Punggol/Sengkang sold by HDB at about $200,000 to $260,000.

Through the market-subsidy approach to pricing, HDB has been able to keep its flats affordable for Singaporeans. On average, first-time flat buyers need to pay only about 20 per cent of their monthly household income to service their housing loan. This is well within the 25 to 30 per cent that is commonly cited internationally as the benchmark for affordable housing. Lower-income households can enjoy additional help in the form of the Additional CPF Housing Grant.

Mr See commented that young couples have to wait as long as six years for new flats. This is incorrect. New Build-To-Order flats take about three years to complete from time of registration. Those with urgent housing needs can consider the resale market where there is a wide range of resale flats to match the preference and budget of buyers. Eligible first-time buyers can also enjoy a CPF Housing Grant of $30,000/$40,000.

Kee Lay Cheng (Ms)
Deputy Director (Marketing & Projects)
for Director (Estate Administration & Property)
Housing & Development Board
 
Source : Straits Times - 16 July 2008

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Lower Singapore car sales slow May retail growth

Lower Singapore car sales slow May retail growth 

4.8% rise in receipts from last year due more to higher prices than sales volume

By Bryan Lee, Economics Correspondent 
PUTTING ON THE BRAKES: Car sales were down 1.9 per cent as rising pump and COE prices kept showrooms quiet. Excluding vehicle sales, retail sales were up 7.9 per cent. — ST FILE PHOTO
 
RISING inflation and fears of a slowing economy kept Singapore shoppers at bay in May, with retail sales growth slowing despite strong increases in average wages.
Shops, supermarkets and other retailers recorded a lower- than-expected 4.8 per cent rise in receipts from a year earlier, a marked decrease from April’s 7.5 per cent surge.

Analysts said tills are likely to stay quieter as the global credit crisis escalates. For their part, shopkeepers called for a cut in the goods and services tax (GST).

‘If we reduce the GST by even 1 percentage point, that might help with inflation,’ Singapore Retailers Association president Jannie Tay told Bloomberg News yesterday.

‘When consumer confidence and the economy are down, people certainly will be more careful about spending,’ she said.

The data, published yesterday by the Department of Statistics, was lower than a 6.2 per cent median in a Bloomberg poll of 16 economists.

Much of the slump came from lower car sales, down 1.9 per cent, as rising pump and certificate of entitlement (COE) prices kept showrooms quiet. Excluding vehicle sales, retail sales were up 7.9 per cent. Even so, economists said most growth came from higher prices, not volume rises. After adjusting for prices, overall sales volume shrank 0.7 per cent. Excluding car sales, volume rose 1.7 per cent.

‘The relatively healthy nominal numbers mask the true underlying trends. Strip that away and there’s not that much to cheer about,’ said OCBC Bank economist Selena Ling. ‘In this environment of high uncertainty and volatility, people tend to hoard cash.’

HSBC Bank economist Robert Prior-Wandesforde said the weaker May figures were puzzling, given that incomes were rising strongly and the first of the Government’s two ‘growth dividends’ was being paid out.

‘Singapore appears to mark quite a contrast with the United States, where consumers look to have spent some of their tax rebates which were paid at roughly the same time.’

Petrol station sales were the biggest gainer in May, up 30.2 per cent, driven mostly by surging oil prices. Spending was up 12.1 per cent at department stores and 13.9 per cent at supermarkets.

Analysts doubt the mid-year Great Singapore Sale will turn things around. Ms Ling said June’s figures could be worse as last year’s sales were probably boosted by shoppers trying to avoid last July’s GST rate hike.

Said Mr Prior-Wandesforde: ‘For a country as famous for shopping as Singapore, its shoppers have not been doing a lot of it for some years now, despite favourable fundamentals.’

Source : Straits Times - 16 July 2008

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S’poreans want more help to have babies

S’poreans want more help to have babies 

Affordable childcare, improved work-life balance are some of the items on their wish list

By Li Xueying 
 
WANT more babies?

Then please help with affordable childcare, a better work-life balance, and more financial support.

This is the plea from Singaporeans when asked what can be done to encourage them to get married and have children - and more of them.

Their wish list emerged yesterday when the Government released the findings gathered from more than 10 dialogues its agencies held with more than 300 people. They range from young singles to childless couples as well as parents.

Singapore has been grappling with having too few babies for about two decades, despite various measures to encourage marriage and parenthood.

At the dialogues held in the past four months, one key concern was the Singapore woman’s struggle to balance children and career. It was highlighted yesterday by Senior Minister of State for Finance and Transport Lim Hwee Hua, who chaired the dialogues with five MPs.

She said the participants gave various solutions while the Government has also looked into what other countries, like Sweden, have done. Ideas include giving maternity leave beyond the current three months; introducing paternity leave which will stress shared responsibility between mothers and fathers, and providing affordable quality childcare.

Deputy Prime Minister Wong Kan Seng, chairman of the National Population Committee, is expected to speak on the subject in Parliament on Monday.

At yesterday’s press conference, the issue of making paid paternity leave mandatory - and longer - was also raised by two MPs involved in the dialogues, and National Family Council chairman Lim Soon Hock. Now, male civil servants get three days of paternity leave, but it is not compulsory in the private sector.

Mr Lim said making it compulsory was key in the raft of recommendations his council submitted to the Government last week. ‘We want to promote this. Paternity leave can help lighten the load of our womenfolk who are career-minded.’

MPs Hri Kumar and Michael Palmer, both lawyers, also took the same stance.

But who should foot the bill?

In Sweden, parents get, among other things, 13 months of parental leave. The generous policies are funded by a 25 per cent goods and services tax and a 56 per cent tax on top earners, noted Mrs Lim. But cost aside, she said the ‘bigger challenge’ for policymakers here is to adapt the model to the local context.

She recounted feedback that some mums here return to work before their three months of maternity leave are up over worries their careers would suffer.

‘So the challenge is to find that sweet spot,’ she said.

Meanwhile, Mrs Yu-Foo Yee Shoon, Minister of State for Community Development, Youth and Sports, said her ministry will look at infant care following feedback that current options are too limited and too expensive. This is particularly so for working-class mothers, she added.

Singles have also said they are at a loss on how to socialise to find partners. They also complained that private matchmaking agencies are too profit-oriented.

‘We will look at how SDU can develop and complement the private sector,’ said Mrs Yu-Foo, referring to the Social Development Unit, the government matchmaking agency.
Source : Straits Times - 16 July 2008

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Up 77%: Singapore New private home sales

Up 77%: Singapore New private home sales
 
Best showing since last Sept following US sub-prime woes, but market still cautious

By Joyce Teo, Property Correspondent 
CLOVER BY THE PARK: The 616-unit Bishan development saw 197 units sold.
 
SALES of new private homes shot up 77 per cent to 801 units last month, from just 453 in May, on the back of more project launches.
That was the best showing since September last year when the property market slowed in the wake of the United States’ sub-prime woes and stock market jitters.

But these numbers do not necessarily signal the return of the good times. The mood in the property market remains cautious, particularly as more bad news emerges from the US, market watchers say.

Last month, the total number of units launched by developers - mostly in the mass to mid-end segment - registered a dramatic jump of 124 per cent to 1,069 units, according to monthly figures released by the Urban Redevelopment Authority (URA) yesterday.

Developers are stepping up launches despite the weak sentiment as they want to launch ahead of the Hungry Ghost month starting on Aug 1, said Colliers International director for research and advisory Tay Huey Ying. Some home-hunters believe it is unlucky to buy at this time.

Some developers hope to clear stocks of 99-year leasehold properties which will become less attractive as the leases run down, she said.
Last month’s healthy sales figures were propped up, to a large extent, by the volume done at two large 99-year leasehold projects.

The 616-unit Clover by the Park in Bishan, alone accounted for 197 units sold - out of 308 units launched for sale - at a median price of $765 per sq ft (psf). The 348-unit Dakota Residences in Dakota Crescent sold 144 of 210 launched units at $978 psf.

Most of the properties sold last month were under $1,000 psf, indicating demand from upgraders, said the director of Savills Residential, Mr Ku Swee Yong. Only projects which were priced realistically sold fairly well, he said.

June sales show there is latent demand but buyers are price-sensitive, said DTZ executive director and regional head for consulting and research Ong Choon Fah.

Knight Frank director of research and consultancy Nicholas Mak said the number of launches has risen faster than sales figures, which could result in a gradual rise in the number of unsold housing stock.

If this stock builds up, it will be one of the factors that could weigh on prices.

But for now, this month’s sales figures are expected to be even stronger owing to more new launches, consultants said.

However, there should be a drop in next month’s home sales due to the Hungry Ghost month coupled with continuing fallout from the US housing crisis, said Mr Mak.

Price weakness, if any, will register only in the third or fourth quarter, he said.

The turnout at new showflats remains strong but potential buyers are very cautious when it comes to committing to a purchase, market watchers say.

‘There’s no push factor to buy now,’ said Mrs Ong. ‘Sentiment has been affected over the weekend by the US news. But affordability is still there.’

As developers are increasingly forgoing aggressive pricing strategies in favour of competitive pricing, cumulatively, the general market will see softer prices, said Ms Tay.

Colliers International’s research shows that luxury apartment prices already fell 3.9 per cent from the first quarter to an average of $3,049 psf in the second quarter, she said.

Meanwhile, the URA yesterday put up for sale a condominium site that is just next to the Tanah Merah MRT station.

Consultants expect a new 99-year leasehold project on the site to fetch average prices of between $700 psf and $800 psf.

Source : Straits Times - 16 July 2008

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