Developers seek more affordable sites

Developers seek more affordable sites

Wider spread of plots for tenders could ease bidding frenzy

By Jessica Cheam

DEVELOPERS are in talks with the Government, seeking an increase in the supply of affordable sites across the island for mass- to mid-market projects.

Real Estate Developers’ Association of Singapore (Redas) president Simon Cheong said yesterday that a good spread of such sites would lead to less aggressive bidding, which would in turn mean greater affordability for home buyers.

Recent bidding for some land, including far-flung sites, has been more aggressive than usual with sites seeing a dozen or more bids from developers amid booming demand.

This tends to drive up the price of the land, which then filters down to higher unit prices when the condo goes on sale.

Redas is in discussions with the Urban Redevelopment Authority (URA) for the release of a wider spread of sites under its Government Land Sales Programme.

This means not just suburban sites near MRT stations, but also those further afield, so that developers have a variety of sites to bid for.

The programme’s confirmed list of sale sites, which was suspended late last year when the market was in the doldrums, will resume next year - a government move to increase the supply of new sites and cool rising prices.

These confirmed sites will be put up for sale according to a pre-determined schedule, and regardless of developers’ prior expressions of interest.

‘We’d like to work with the URA, to see there’s a more even spread and adequate sites. Perhaps, in the next confirmed list, we will have sites more spread out across the island,’ said Mr Cheong at the Redas Mid-Autumn Festival celebration at The Fullerton Hotel yesterday.

He also reiterated the view that Singapore’s property boom was not a bubble.

Flash estimates released by the URA on Thursday showed private home prices surging 15.9 per cent last quarter, reversing four quarters of decline.

While this is evidence of a private residential market rebound, analysts have expressed concern over a possible bubble amid an uncertain economic outlook.

But Mr Cheong, who is also SC Global’s chairman and chief executive, said the property run here is ‘based on fundamentals, and is not unique’. Across the region, Hong Kong, Shanghai and Beijing have also seen a property revival, he said.

‘That’s a testament to the good economic policy of the Asian economies,’ he said.

‘We do not have a credit crisis like in the West. In fact, we have net savings… and it’s not unreasonable to think that it’ll go towards properties.’

City Developments’ group general manager Chia Ngiang Hong added that strong buying momentum was due to pent-up demand over the past year.

Last year, developers sold only 4,264 units, while sales are expected to total between 13,000 and 15,000 this year.

Mr Cheong said that ‘prices will remain firm’ for the near future and that buyers can be assured that developers ‘will produce where there’s demand’.

Hong Leong Group chairman Kwek Leng Beng too was optimistic, saying: ‘I am of the view that within the next three to five years, Singapore will have recovered well.’

Frasers Centrepoint chief executive Lim Ee Seng noted that tender bids for land have been on the high side recently.

Among the sites awarded recently, Far East Organization submitted a bid of $119.08 million for the mainly residential site at the corner of Yio Chu Kang Road and Seletar Road - 35 per cent higher than the second bid.

A land parcel at Dakota Crescent recently drew 13 bids and a higher-than- expected top bid of $329 million from UOL - way above the trigger price of $130 million for the reserve list site.

‘The release of more land will enable bids to be lower, and this will translate to lower prices for buyers,’ said Mr Lim.

It is in everyone’s interest that the price appreciation in the property market is long-term and gradual, he said.

Redas also celebrated its 50th anniversary at yesterday’s event, where Trade and Industry Minister Lim Hng Kiang was the guest of honour.

In a speech to 300 industry players, Mr Cheong said: ‘There is more than sufficient supply of housing in the pipeline to meet future demands. Hence, there is really no need to panic.’

Source : Straits Times - 03 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Developers ready to launch, but may hold their fire

Developers ready to launch, but may hold their fire

Many looking at market conditions, competition before deciding launch date

By KALPANA RASHIWALA AND UMA SHANKARI

(Singapore)

DEVELOPERS are busy getting projects launch ready. However, whether they release them by this year’s end or next year will depend on market conditions, ‘ground feedback’ from potential buyers and the segment of the market the projects are in.

Far East Organization began previewing its Alba condo at Cairnhill Rise this week. The property giant is believed to have released 18 units up to the seventh floor of the 18-storey freehold condo, which has a total 50 units. The 18 units range from 1,862 to 2,250 sq ft.

Under the project’s ‘white plan’, Far East can customise apartment layouts to suit buyers’ preferences. The developer told BT that prices start from $2,400 psf. Alba comprises a single Y-shaped tower; most floors will have three units per floor although there are two levels in the development with just one unit per floor.

Oxley Land also began previewing Suites@Guillemard at Lim Ah Woo Road yesterday. The five-storey freehold project comprises 72 units, of which 45 are smallish one-bedders of 258-527 sq ft. The smallest unit is said to have been snapped up at about $400,000. As of 6pm yesterday, more than 50 units in the project were said to have been sold. The average price is believed to be about $1,000 psf. No interest absorption scheme (IAS) was offered.

Other developers will also be rolling out projects with smaller units. Frasers Centrepoint chief executive Lim Ee Seng said that the company’s upcoming project in Serangoon, Residences Botanique, will have a large number of small units to cater to increased demand for such homes. ‘I do see a lot of young people buying,’ said Mr Lim, adding that many such buyers are looking for smaller apartments, which are more affordable for them.

Developers say they will study market conditions carefully before going ahead with launch plans.

City Developments’ residential launches planned for the rest of the year include the 228-unit The Quayside Isle Collection at Sentosa Cove and a condo on the former Albany site at Thomson Road with about 160 units. A spokeswoman said the developer will consider market conditions and the readiness of the project before deciding whether to launch in Q4 2009 or wait until next year.

CapitaLand said its 165-unit condo on the former Char Yong Gardens site will be launch ready by the end of the year. But, it could not confirm if the project will definitely be launched by end-2009.

EL Development’s managing director Lim Yew Soon said that his company will consider various factors before deciding to launch a project. ‘Is the current market valuation able to support the expected launch price? If yes, we can proceed. If no, we will have to either lower our launch price or defer the launch till the market valuation increases,’ he said.

‘Are there any other projects in the vicinity that are also launching soon? If possible, we’ll try to avoid launching on the same weekend to avoid competition.’ Mr Lim is aiming to roll out EL Development’s next project, at Stevens Close, in Q2 next year.

Savills Singapore managing director Michael Ng reckoned that generally developers are likely to launch mass- and mid-market projects this year, and restock their landbank in these segments next year when the government resumes sales of sites from the confirmed list.

However, developers are unlikely to be in a hurry to sell off their luxury residential projects since it will be harder for them to find replacement land, given the more difficult regime currently for collective sales, Mr Ng argued.

‘The luxury segment will improve much more in the next 12 months with the influx of more high networth buyers, particularly from Asia this round,’ he said.

According to Urban Redevelopment Authority data, the stock of yet-to-be sold units from all projects with pre-requisites for sale has shrunk from over 18,000 units as at the end of last year to 14,791 as at end-Aug this year. The figure includes unsold units in launched or partly launched projects as well as developments that have yet to be launched.

Of the 14,791-unit supply at end-Aug, 44.3 per cent or 6,551 units are in Core Central Region); with 4,745 units in Rest of Central Region and 3,495 units or 23.6 per cent in Outside Central Region, where suburban condos are located. However, there is more supply in the pipeline. At end-Q2 2009, there were 23,354 unsold units for which developers had obtained planning approvals but not bagged the pre-requisites for sale, though these can be secured in a relatively short time. A further supply of about 2,000 private homes can be built on five reserve list sites triggered recently.

Source : Business Times - 03 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com

Banks may have to raise capital, MAS warns

Banks may have to raise capital, MAS warns

Regulators also say it is keeping close watch on property market and prices

By SIOW LI SEN

(Singapore)

MORE capital raising for banks - including Singapore banks - is on the cards as global regulators look to strengthen the banking system, said Monetary Authority of Singapore (MAS) managing director Heng Swee Kiat.

In addition, global regulators are considering a minimum global liquidity standard to address liquidity concerns, said Mr Heng yesterday.

He also mentioned that the MAS is keeping a close watch on the property markets and the upcoming monetary policy review will continue to focus on maintaining price stability. ‘To improve the resilience of banks, global regulators have agreed to raise the levels and quality of bank capital,’ he said. Mr Heng was speaking at the opening of the Risk Management Institute’s (RMI) new facilities.

On liquidity, he said regulators are considering the introduction of a minimum global liquidity standard that includes a stressed liquidity coverage requirement underpinned by a longer term structural liquidity ratio. ‘MAS is involved in the discussions on both the capital and liquidity proposals and supports the broad thrust of these initiatives.’

As MAS’ regulatory framework has generally been regarded as conservative, we are in a good position to comfortably adopt these more stringent standards,’ said Mr Heng.

Earlier, Mr Heng said that while confidence has returned to the financial markets with more recent forecasts for global economic growth revised upwards, much remains to be done.

‘There is palpable relief that the global economy has avoided the abyss. But some players seem to have forgotten that we have just gone through the worst financial crisis since the post-war period,’ said Mr Heng.

The clean-up of the wreckages will take time, he said. For example, the International Monetary Fund recently revised its estimate of the write-downs on expected losses by financial institutions on bad assets to $3.4 trillion.

The MAS is involved in discussions at the Financial Stability Board, the Basel Committee on Banking Supervision and other fora to consider proposals to strengthen the regulatory framework.

The focus is on two key areas: regulatory capital framework and liquidity risk management standards, he said.

At home, the MAS is monitoring closely the property markets, given the revival in investor confidence, he said.

With the revival in investor confidence and generally conducive global liquidity conditions, authorities have been keeping a close watch on the asset markets, he said.

MAS recently disallowed the Interest Absorption Scheme and Interest-Only Housing Loans for private residential property lending.

‘We will closely monitor developments in the property market and the broader economy. Our upcoming Monetary Policy review in October will continue to focus on MAS’ objective of maintaining overall price stability for the medium-term.’

DBS Group Holdings spokeswoman Karen Ngui said it was not unexpected that banks might be asked to raise more capital.

‘We feel we are well capitalised at this point in time,’ said Ms Ngui.

DBS Bank chairman Koh Boon Hwee said on Wednesday that banking business in the future will not be as lucrative as it was before the onset of the current global recession, sparked by reckless lendings.

Speaking at a conference, he said capital requirements for banks would go up and returns would come down.

Source : Business Times - 03 October 2009

Buy Sell Rent invest In Singapore Property Real Estate

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com