Redefining the luxury property sector

Redefining the luxury property sector

By Linette Lim / Lynda Hong | Posted: 04 October 2011 2327 hrs

SINGAPORE: Location, location and location is the mantra for anyone looking to buy a property. And traditionally, homes in the right neighbourhoods have always maintained their values better.

According to Cushman and Wakefield, median prices of high-end homes have dipped just five percent from the peak of 2008′s prices to between S$3,400 and S$3,500 per square foot. The lower-end markets, however, are still down by some 12 per cent.

Donald Han, vice chairman from Cushman & Wakefield, said: “Developers for luxury market, (the) majority of their sites are of freehold nature. It is not unlike your mass market, which is typically on a 99-year lease.

“You need to sell fast, or else you will end up with a shortening lease term, making it less competitive. A lot of luxury projects, which is located in prime 9, 10 and 11 – tend to be freehold in nature.”

CIMB noted that generally, negative sentiment from the global financial crisis has spilled over, with high-end properties remaining out of favour.

Colliers International noted that properties in the “Core Central Region” as having the smallest quarterly growth of just 0.8 per cent since the market bottomed out in the second quarter of 2009. It has also registered the slowest growth as compared to other properties in the rest of Singapore.

Stepping up the game is SC Global, which is attempting to define a whole new super-luxury property segment. Its latest five-bedroom apartment, The Marq, will be decked throughout in Hermes products, makers of the iconic Birkin handbag which has a starting price of about US$10,000.

When ready by March 2012, the 6,200 square foot unit at The Marq will feature furniture, fabrics, rugs, carpets, wallpaper, and made-to-measure leather upholstered Hermes items.

While the apartment is not for immediate sale, SC Global said it will consider catering to demand.

Simon Cheong, Chairman and CEO of SC Global, said: “Going forward, we would be happy if our customers have similar Hermes furnishings… we would be happy to provide that. It says a lot when a global brand like Hermes – they have many places to pick (from) but they picked Singapore. And within Singapore they picked SC Global to showcase their products.”

The Marq on Paterson Hill currently holds the record for the priciest high-rise home in Singapore. To join the super luxury club, you will need to pay around S$6,000 per square foot for your home.

If rents are anything to go by, the super-luxury segment may have to offer more than Hermes though.

According to Jones Lang LaSalle, rentals in the prime districts have started to fall for the first time since the first quarter of 2008. The fall in rents in the luxury segment is the steepest at about two per cent (quarter-on-quarter in Q3 2011) to S$5.13 per square foot per month.

-CNA/ac

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

DBSS project to be launched in Bedok »« Time to relook property cooling measures, say analysts

Time to relook property cooling measures, say analysts

Time to relook property cooling measures, say analysts

By Joanne Chan | Posted: 04 October 2011 1951 hrs

SINGAPORE: A shortage of resale flats in the market is causing prices to shoot up and it may be time to relook some of the property-cooling measures, say property watchers.

Resale flat prices, which were already at an all-time high, rose 3.8 per cent in the third quarter this year – higher than the 3.1 per cent pace recorded in the second quarter.

Since property-cooling measures were introduced last year to take the heat off the exuberant market, the number of HDB resale flat transactions has dropped significantly – by 30 per cent compared to a year ago, said property firms.

Market watchers said there has been a slowdown in the supply of resale flats, as home owners are put off by the rule that requires them to sell off their flat first before they are granted a higher bank loan of 80 per cent.

Eugene Lim, key executive officer at ERA Realty, said: “Most sellers prefer to buy first, then sell. For people who do not qualify for HDB loan and they have to take a bank loan, they only would be able to get a maximum 60 per cent loan. And therefore there is a requirement for 40 per cent equity.”

HDB resale flats have also been generating good rental yield. Industry players said they have seen a spike in rental transactions and it is unlikely that home owners will give up their HDB flats, thus adding to the supply crunch.

Tan Kok Keong, head of research and consultancy at OrangeTee, said: “Some segments of the public housing can be rented out. Every unit that’s kept from the market means that one new household does not have the choice to buy that public housing.”

Mr Tan also pointed out that the Minimum Occupation Period (MOP) before flats can be rented out used to be one to three years. For home owners who bought a flat in 2008 or 2009, before the MOP was raised to five years, they would have been able to rent out their flats and use the yield to pay for a second mortgage on a private home.

The government has increased the supply of new flats to draw first-time home owners away from the resale market. But there is a limit to how much demand can be diverted – first-timers account for a quarter of resale transactions. And not all are willing to wait two-and-a-half years for a new flat to be built.

With such market conditions, sellers are commanding higher cash premiums – adding to the overall transaction price. Industry players said the median cash-over-valuation (COV) in the third quarter is about S$35,000 to S$37,000, similar to the previous quarter.

To ease the supply crunch, there was a suggestion to relax the bank loan criteria for HDB upgraders.

ERA Realty’s Mr Lim said: “I think when the 60 per cent rule was implemented, the objective was to instil prudence in the buyers. But if you look at the practical point of view, if I’m selling my flat to buy another flat, eventually I will still end up with one property and one mortgage.”

If the shortage situation is not resolved, market watchers expect resale flat prices to inch up by another three to four per cent in the last quarter of this year. This would bring the overall price increase to more than 10 per cent in just one year – which makes owning a flat an increasing financial burden.

-CNA/ac

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

Redefining the luxury property sector »« Prices rise for HDB flats around new Circle Line stations

Prices rise for HDB flats around new Circle Line stations

Prices rise for HDB flats around new Circle Line stations

By Lip Kwok Wai | Posted: 05 October 2011 2202 hrs

SINGAPORE: Prices for HDB flats around the 12 remaining Circle Line stations, due to open this Saturday, have risen, according to property agents.

They said a three-room flat around Holland Village station now costs 10 per cent more compared to last year, going as high as S$440,000.

Over at Telok Blangah, a five-room high-floor unit recently transacted at S$810,000. A similar unit further away from the station was said to have cost about S$110,000 less.

Rental rates are also not spared, having risen by 10 to 20 per cent. The rent for a four-room flat in the same area could range between S$2,500 and S$2,800.

Property agents said the Cash-Over-Valuation (COV) for resale transactions has also gone up by 10 to 20 per cent in the areas near the stations.

-CNA/ac

Source : Channel NewsAsia – MediaCorp Pte Ltd Copyright

Time to relook property cooling measures, say analysts »« Buyers prefer HDB’s Sale of Balance Flats units