Real Estate Lastest Monthly News Market Review Report

Real Estate Lastest Monthly News Market Review Report

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Real Estate Lastest Monthly News Market Review Report

 

Mindy Yong 杨雯诗

Tel: (+65) 91002985

Fax: (+65) 64021826

mindy@mindyyong.com ( email me )

Singapore Real Estate 2008, 6-Month Market Review and Projection

“Where is the Market Heading?”

6-Month Market Review and Projection For Singapore Real Estate 2008

The Myth, Reality and Awkwardness of 2008

Now, let me take you through the market performance in the past six months by way of answering the following questions and then do a projection of the real estate market in the next six months:

(A) How has the market performed? (B) How different is it this time than last? (C) What do all these mean to real estate agents in general? And where do we go from here?

A – How Has the Market fared?

(1) Private Home Prices Jump 31% in the whole of 2007

From October up to end of December 2007, Singapore private home prices rose 6.6%, compared to 8.3% in the third quarter. For the whole year, home prices climbed 31% over 2006. Take up rate for new homes hit a record 15,000 new homes in 2007. It is a 34.5% growth over the 11,147 new homes sold in 2006.

Here are the price movements of condos and apartments in the last quarter of 2007 (Oct – Dec):

- In the Core Central Region, prices increased 7.0% (8.3% in the third quarter) on a quarterly basis in second quarter. This region comprises the traditional prime districts 9, 10 and 11 and Marina Bay and Sentosa.
- In the Rest of Central Region, prices increased 7.3% (7.9% in the third quarter) on a quarterly basis in the second quarter. This region comprises locations like Queenstown, Bukit Merah, Outram, Bishan, Kallang and Marine Parade.
- Outside Central Region, prices increased 7.5% (7.9% in the third quarter) in the same period. This region comprises locations like Woodlands, Jurong, Hougang, Ang Mo Kio, and all the outlaying areas.

Myth or Reality (1) : For the whole of 2008, barring any miracles, the take-up rate of new homes should be less than 10,000 given current uncertainties in the global economy. With Singapore’s domestic economy continued to be strong (driven by the ongoing boom in the construction sector) and the allure of Singapore as a safe haven and a global financial hub for a bigger portion of private wealth, the upside is still good.

The booming domestic sector should continue to support the sale of mid-end and mass-market homes which are expected to experience a healthy growth of 10% to 15% price rise. For the luxury homes segment, prices and take-up rate are expected to moderate, having gone through a vintage year of fast growth.

Awkwardness (1) : Sale volume and prices may continue to grow in 2008 on the back of sustained inflow of foreign funds seeking safe haven outside the United State of America, but buying activities may be restricted to institutional and corporate type of portfolio investments, such as bulk purchases (e.g. overseas property funds acquiring a number of blocks in a project), swop deals (e.g. between developers) and marriage deals (e.g. local and overseas joint ventures buying back own projects for mid-term investment income). Such purchases usually occur in selected areas like the Core Central Region and the outskirt of Orchard Road areas.

(2) Condo / Apartment Sales and Foreign Ownership of Private Homes in 2007

Table 1 – FIRST HALF 2007 Total Sale of private apartments/condos (including sub-sales)

(FB = foreign buyers) Source of statistics SISV RealinkFirst half private property sales were 19,801 units. Foreigners accounted for 2,763 or 13.95% of total transactions.

Table 2 – SECOND HALF 2007 Total Sale of private apartments/condos (including sub-sales)

(FB = foreign buyers) Source of statistics SISV Realink

Second half private property sales were 11,666 units. Foreigners accounted for 1,986 or 17.02% of total transactions.

Table 2.2 – Comparison between FIRST and SECOND HALF 2007 non-landed properties transactions (including sub-sales)

In the second half of 2007, while primary sales dropped 81.65% to only 2,565 units sold, private secondary sales actually improved 56.23% to 9,101 units sold, on the strength of spectacular hikes in private rentals. For the whole year, the first half outperformed the second half by 8,135 transactions.

Table 3 – Percentage of foreign ownership of condos / apartment in First and Second half of 2007

In the second half, the absolute numbers of foreign purchasers of condo / apartments were down. However, the percentage of foreign purchasers actually went up 2.02 percentage point. It means that while the overall purchases were reduced due to one reason or another, the number of foreign purchasers did not change drastically. It was reduced by only 1,103 units (3,205 – 2,102) for the whole year.

Myth or Reality (2) : Although the overall private home sales went down in the second half of 2007, foreign ownership of Singapore private homes gained in percentage term, especially for high-end homes.

The Million Dollar Question now is: “Will the trend of ‘sustained foreign buying’ continue in the first half of 2008?” From the appearance of the statistics, the answer has to be a YES. This is because of the following reasons:

(i) The threat of an economic recession in the US in 2008 looms larger each time a global financial institution made a revelation of massive write-down in relation to its exposure to the US sub-prime mortgages (e.g. UBS, Citigroup, and Merrill Lynch).
(ii) The value of US dollar will continue to weaken against Singapore dollar throughout the year, and Singapore will continue to be a safe haven for international funds.
(iii) The European economy is similarly under the weather due to its symbiotic relationship with the US market.
(iv) The Chinese real estate market has shown signs of over-heating and the risks of investing there have grown much larger.

Awkwardness (2) : With limited upside of less than 10% projected price growth, the buying activities may continue to thin, which means the percentage gain of foreign ownership will continue to rise amid smaller business volume for real estate agents.

(3) Landed Property Sales in 2007

(3.1) Good Class Bungalows (GCBs)
In 2007 so far, a total of 96 GCB were transacted amounting to $1.28 billion. The value is an all-time record and has surpassed slightly the $1.24 billion achieved for the whole of 2006.

However, in terms of transaction volume, GCB transactions from January to November this year still falls short of the 118 deals transacted for the whole of 2006. This could be due to the phenomenal rise in GCB prices and the restrictions placed on non-residing foreigners (only PRs are allowed to own GCB provided they obtained the approval from the land authority).

(3.2) Upside of Landed Home Prices Good
There are a number of compelling reasons for landed home prices to rise further:
 Limited stock - Currently, there are 68,360 landed houses in Singapore, making up only 29% of the total 233,143 private property stock.
 Limited new supply - In the next five year, supply of landed homes will remain subdued with only 1,872 landed units under construction and another 2,579 landed units being planned, accounting for only 6.6% of all new supply expected from the second half of 2007 to 2011.
 High rental return - Rents of landed homes have outpaced its capital values, according to URA’s rental indices for all the landed property types. In the first half of the year, rents of detached houses increased by 13%, semi-detached houses by 11.4% and terrace houses 17.3% hike in rents.

Table 4 - Sale of Landed Properties in First-half of 2007

Source of statistics SISV RealinkTable 5 - Sale of Landed Properties in Second-half of 2007

Source of statistics SISV RealinkTable 6 – Sale of Landed Properties in 3 Years starting 2005

Myth or Reality (3) : The increase in demand for landed properties continues to go up from 2005 onwards. However, the fundamentals on landed properties are different from non-landed properties. The former hinges on continued good performance of locals; while the latter the continued confidence in Singapore by foreigners. The following factors may lead to more locals having to dispose of their landed properties and down grade to smaller homes in 2008 and 2009:(i) the domestic economy relies only on the construction and services sector,
(ii) the traditional economic drivers such as electronics and pharmaceuticals continue their slump especially the electronics sector which has gone through 15 quarters without growth,
(iii) the threat of our trading partners, i.e. the EU and the US going into recession this year.

Awkwardness (3) : With more positives than negatives in the domestic economy in 2008 and a general expectation that 2009 will be an even better year, sellers in general will factor in the completed casinos, the F1 Circuit, the Gardens at the Marina (which has nothing to do with their landed property prices) when putting their homes on the market. With such a rosy economic backdrop, it will be tough for inexperienced agents to ‘talk down’ the asking price.

(4) Sub-sales of private homes – volume down but value hit 10-year high

The number of sub-sale transactions fell to 1,374 (or a quarter-to-quarter decline of 23%) in the third quarter of 2007. There were 1,184 or 13.9% of sub-sales in the second quarter and 6.3% in the first quarter of 2007.

Sub-sale value of apartments transacted in the first three quarters of 2007 was at an all-time annual high of $6.7 billion. However, in terms of volume, it is about half of what it was in 1995.

Sub-sales deals made up 19% of the volume, up from 16% in the second quarter. Median sub-sale prices are at a new record high of $1,246 psf. Quarter-to-quarter, the increase is 13.6% and a year-on-year increase of 25%.

The value per transaction of sub-sale apartments is also at a record high this year at $1.71 million per transaction. However, some prestigious projects have already shown sign of fatigues such as The Sail in Marina Bay which, according to caveats lodged, saw six (6) transactions in December 2007. The sub-sale prices of many units have drastically dropped – suggesting forced sales.

Table 7 – Sub-sale activities over the past 3 years

Myth or Reality (4) : In 2008, the developers will price their new launch projects at a 15% to 20% premium to factor in higher inflation risks and to protect the value of redevelopment sites where construction have not started. It will take longer time for developers to offload leftover units due to higher asking prices and ample supply of new condos and hybrid HDB flats in the next one to two years. By 2010, there will be an additional 43,000 new condos and apartments available either for occupation or launches in many parts of Singapore.

Awkwardness (4) : With a short-lived bull-run, investors and speculators alike will be left with high-priced properties that they have bought in 2007 before the en bloc craze came to a sudden halt. With Deferred Payment Scheme scrapped and banks tightening credit, sellers and agents will be hit be a double whammy of high inflationary pressure on holding / marketing costs while new supply of similar condos continue to rise.

(5) En bloc deals at all time high

For the whole of 2007, a total of 109 en bloc sale deals worth $13.3 billion were done. But, en bloc sales will be a passing phenomenon this year due to a combination of negative factors against en bloc sales such as:

 Massive Government Land Sale Programme (since January 2007)
 Withdrawal of Stamp Duty postponement (from January 2007)
 Withdrawal of Deferred Payment Scheme (from September 2007)
 Increase of Development Charge percentage from 50% to 70% of market value (from July 2007)
 Change in the Collective Sale Law (from Oct 2007)

Table 8 – Past 10-year en bloc sale record

Myth or Reality (5) : The slew of collective sales in the whole year of 2007 yielded $13.3 billion in total collective sale proceeds. The huge cash windfalls would be arriving for thousands of en bloc sellers who would need replacement properties. Most of the amount is due to come in between mid 2008 all the way to 2010, and this will prompt a pickup in market activity. Assuming 50% of the sellers affected by en bloc sales already have a second home, there will be at least $5 billion about to be ploughed back into the market from 2008 through to 2011.

Many owners of old condos and apartments, such Bayshore Park and some privatised HUDC projects, are hoping that the Government will increase the plot ratio in the new Master Plan to be promulgated this year, and this will allow them to sell their apartments collectively for a huge windfall.

Awkwardness (5) : A minority of en bloc sellers already flexed their muscles at the HDB resale flat market pumping up prices to unrealistically high level. Almost all flat sellers are now hoping to sell their flats to en bloc sellers and they will be willing to pass over a chance to sell at the market price and prefer to wait for their ‘Prince charming’.

(6) Investment sales hit historic high at $51 billion in 2007

Total investment sales of property registered an all-time historic record of $50.8 billion in 2007. It is a 66% jump from 2006’s $30.57 billion. Incidentally, the aggregate investment sales figure for eight long years of recession - from 1996 to 2003 - was only $54.9 billion.

Investment sales refer to major investment transactions like office buildings and shopping centres, as well as sites bought for development including collective sale deals, Government Land Sale (GLS) programme and strata-titled units of at least $5 million. They do not cover purchases of single property units by individuals.

Investment sales are considered a barometer of developers’ and big investors’ mid-to-long-term confidence in the market.

Table 9

With the passing of the new collective sales law and hefty increase in Development Charge percentage and DC rate, en bloc sales are expected to dwindle.

Residential deals halved from $20.3 billion in first half of the year (due mainly to robust collective sales) to $10.3 billion in the second, due to the sudden and drastic slowdown in collective sales.

Myth or Reality (6) : 2008’s overall investment sales of property are likely to be lower and hover around $30 billion. This is based on the assumption that foreign funds are still keen on Singapore’s commercial buildings and developers are still bullish about the Government Land Sale Programme. However, the situation will pan out depending very much on the resilience of the US economy against recession.

Awkwardness (6) : Sale of big ticket properties continue to shore up official numbers while individual agents are struggling to attract enquiries about their resale residential listings.

(7) HDB Resale Flat Prices Grew 17.4% in 2007

HDB resale flats price index registered a 5.6% increase in the fourth quarter of 2007. The quarter-on-quarter increases of HDB resale flats are as follows:

Table 10 – Price growth of HDB resale flats quarter-on-quarter

For the whole year, prices of HDB resale flats grew by 17.4% in 2007. The whole year resale transaction volume was 26,215 (excluding resale flats sold by HDB itself) and the majority of resale flats were transacted at high cash-over-valuation (COV) towards the second half of the year.

(7.1) More and more resale flat buyers need to fork out higher cash
Spurred on by the upward trend, flat sellers are now asking for prices that are significantly higher than valuations. And since July 2007, Cash-over-Valuation (COV) has become a norm for HDB resale flats and about 80% of HDB resale transactions attracted cash above valuation.

According to HDB figures, the median price for four- and five-room flats are $18,000 above valuation. For two- and three-room flats, the median amount was $15,000. The highest amount paid above valuation for a five-room flat was $150,000. The figures were $57,500 for a four-room flat and $40,000 for a three-room flat.

HDB statistics show that the median COV for executive flats in Bukit Timah rose to $137,500 in the third quarter of 2007. In Marine Parade, the COV for five-room flats hit $84,000 in the same quarter.

(7.2) Interests in HDB Resale Flats Up since July 2007
The table below shows the transaction volume of HDB resale flats for the whole of 2007.

Table 11 – Increasing volume of HDB resale flats transactions Month-on-Month

The tables below show that the 10 largest Housing estates have the highest number of flats sold; while the 3 smallest housing estates enjoy the highest transacted prices, due to rarity and good location.
Table 12 – The 10 largest HDB Estates sell the highest number of flats

Table

13 – The highest transaction prices always come from smaller HDB Estates

(7.3) HDB Resale Prices are Trending Upwards since July 2007
In December 2007, newer Design-and-Build 5-room flats at the precincts around Blocks 687 (A-D) and 690 (A-F) of Woodlands were transacted at between $320,000 and $347,000 depending on different attributes such as floor levels and facing. Other 5-room flats at older precincts have been transacted at the price range of between $270,000 and $300,000.

Six months earlier in June 2007, similar Design-and-Build 5-room flats at the same Woodlands precincts were transacted at between $270,000 and $315,000. That is a difference of 18.5% and 10% growth in transacted prices over a 6-month period.

Likewise, in December 2007, newer Design-and-Build 5-room flats at the precincts of Blocks 680 (A-E) to 683 (A-E) of Jurong West were transacted at between $307,000 and $370,000 depending on different attributes such as floor levels and facing. Other 5-room flats at older precincts have been transacted at the price range of between $205,000 and $287,000.
In June 2007, similar Design-and-Build 5-room flats at the same Jurong West precincts were transacted between $290,000 and $318,000. That is a price growth of around 15% for the similar resale flats.

(7.4) Case study on Tampinese Executive Flats
A study was done on the capital appreciation of Executive flats in Tampines during the past 12 months.

The parameter of the study is to compare prices of two categories of E flats – one group with poor attributes (therefore lower sale prices) and the other with good attributes (therefore higher sale prices) - and track the price mobility. The study yielded the following results:

Table 14

* LF = Low Floor / MF = Mid-Floor / HF = High Floor

 The price growth year-on-year (October 06 and Nov 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = $47,000 (14.7% increase in price)
Price increase of Highest priced E flat = $119,000 (27.3% increase in price)

 Compare First half-year growth (Oct 06 and May 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = - ($3,000) (price actually dropped)
Price increase of Highest priced E flat = $12,000 (2.8% increase in price)

 Compare Second half-year growth (May 07 and Nov 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = $50,000 (15.7% increase in price)
Price increase of Highest priced E flat = $107,000 (24.5% increase in price)

The following conclusions are drawn from the study:

(i) The comparative data shows that the price increase occurred only in the second half of 2007. This means that the HDB resale market is beginning to experience the effect of a better economy and the heightened activities may continue for a few years.
(ii) Price surge in E flat occurred after prices for private homes had reached a new historic height. It also showed that many middle-income group purchasers have been squeezed out of the private home market.
(iii) Resale flats with good attributes, such as high floor level, younger in age (newer in flat design) and closer to amenities like MRT station and shopping mall, achieve higher and faster appreciation in capital value.

Myth or Reality (7) : HDB resale activities have returned to the forth after the past 8 years of doldrums. While the psf prices of private condominiums have increased by leaps and bounds, the unit floor area costs of HDB flats in the heartlands remain affordable. With more and more middle income earners being squeezed out of the private property market, resale HDB flats have regained their favour among the higher income earners – hence the increases in transaction volumes as well as resale prices of larger HDB flats such as 5-room and executive flats.
Sellers of HDB flats that attracted high COVs may upgrade to mass market private homes with spare cash from the high COVs and thereby pumping up market activities. However, the high COVs for HDB resale flats may cause mass market property prices to climb and once again put private homes out of reach of HDB upgraders.

Awkwardness (6) : More and more sellers of mass market private homes are increasing their asking prices with the logical thinking that if HDB flats could fetch more than $700,000, a four-room private condo should command at least $1 million. Before more new condos come on stream, the tug-of-war between the sellers’ asking prices and the realistic prices buyers are willing to pay may cause the market to go through a three- or four-month drought.

B – How different is this time?

The second half real estate market told a very different story from the first half. The global situation has worsened since last August with the revelation of the sub-prime mortgage problems in the US effectively sidelining the majority of buyers. While the whole year records look impressive, the detailed numbers of the second half results were worrying, to say the least.

(1) The world may go into recession following the cues from the US

The huge losses experienced on the first day of Wall Street augur ill for the entire global economy. Year 2008 will be a volatile and difficult year for the US – the world’s largest economy. The US domestic economy will slow down due to the financial market woes.

The housing crisis in the US is far from over and the credit markets and still saddled with bad debts. With write-offs of over US$40 billion by banks looking to clear their books of sub-prime loans and investments, 2008 looks set to be more of the same story.

This will certainly drag down the entire economy and put pressure on corporate earnings. The crisis is affecting everybody, not just the financial sector.

The threat of recession, inflation and even stagflation cannot be dismissed. It appears that 2008 will be amongst the most challenging market environments facing the US and the rest of the world in many years.

(2) Massive inflation causing entire market to be jittery about 2008

As houses become more expensive and prices of food and petrol continue to climb, Singapore inflation rate could hit a high of 6% in the first three months of 2008.

With an 18% to 25% upward revision, the increase in annual values of properties is significantly higher this year and the quantum of the recent taxi fare hike, food price and oil price increases are all much higher than earlier expected. As such, the inflation rate this year will exceed the Monetary Authority of Singapore’s forecast of 3.5 to 4.5 per cent for 2008.

The consumer price index (CPI) surged 4.2% in November 2007 year on year, a 25-year high. And housing value has a significant weight in the CPI.

However, the irony facing Singapore is that a likely US recession this year could ease inflationary pressure with demand for essential goods and oil going lower as a result.

(3) Inflation but a falling real estate rate

With the cheapening of US dollars, more foreign investors are bringing their funds into the Singapore system in bid to salvage the value of the money they are holding. This has resulted in two developments: firstly, an asset price inflation, and secondly a falling interest rate.

The two phenomena do not usually occur together. When they happen, that is, rising asset prices despite a falling Sibor (Singapore Interbank Offered Rate), asset price inflation will escalate.

The three-month rate has fallen from 3.44% a year ago to 2.13% in the second week of January 2008. This is a negative real interest rate as the bank’s interest rate is lower than the inflation rate.

The challenge this year for Singapore economy is how to stave off the possibility recession in the US. There will be a second round of gradual appreciation of Sing dollar against the US dollar. It is expected that Sing dollar will appreciate against the US unit from 1.43 at the end of the first quarter to 1.39 in the same period in 2009.

(4) Foreigners account for a quarter of total residential sales

Foreigners and permanent residents (PRs) chalked up 7,902 sales from January to November, which accounted for 24.9% of total residential sales so far.

The sales figures are the highest in 13 years, due to a robust regional economy and increasing arrivals of expatriates in Singapore.

Institutional investors also entered the market in a big way, picking up anything from several units to whole condo blocks and even development sites. They include Macquarie Global Property Advisors, Goldman Sachs and United States-based Wachovia Development.

The buying momentum propelled high-end condo prices pass the $4,000 psf mark and surged past the $5,000 psf mark for the very first time in local history. A 53rd floor 5,048 sq ft penthouse unit at The Orchard Residences went for $5,600 per sq ft in October, or slightly more than $28 million.

All thanks to participation of foreign buyers, other developments that have registered sales of above $4,000 psf include Hilltops, Ritz-Carlton Residences and Scotts Square.

In the meantime, MAS data shows deposits by non-residents totalled $29.8 billion in October 2007. Compared to 2002, the deposits were only $10.6 billion. Foreigners not residing in Singapore are not allowed to open bank accounts here in Singapore but the rule does not apply to individuals who intend to invest in real estate in Singapore.

(5) Foreign investment funds are top buyers of Singapore real estate

The total investment sales volume so far this year is $50.78 billion. Likewise, foreign funds are responsible for the majority of the purchases of investment properties. These foreign funds include names like Macquarie Global Property Advisors (MGPA), US-based Goldman Sachs, US-based Wachovia Development Corporation, German SEB and Dubai World Group – with MGPA topping the chart with $4.3 billion of purchases.

(6) One million foreigners making Singapore home

Singapore’s population is 4.68 million. This number has been contributed by qualified foreigners coming to Singapore in drove – to be exact 1,005,500. This is the highest number of immigrants in more than twenty years and the first time Singapore receives over a million new immigrants.

In terms of percentage rise, this year’s increase is 14.9% compared with last year which also achieved an impressive growth at 9.7%. The number of Singaporeans and permanent residents here also grew 1.8%, the same as the previous year.

In terms of population increase, the one-million-addition makes up a 4.4% rise over the previous year. The last time Singapore enjoyed a higher increase in population was in 1982 where population grew by 4.5%.

(7) Sales in the second half of 2007 were not as brisk the first

Despite strong overall sale figures for the whole year, the actual situation on the ground (especially towards the end of the year) was harsher than it appeared on paper. Let’s look at two aspects of the general market: (a) transaction figures; and, (b) marketing period (as such per listing’s holding costs).

(7.1) Transaction figures

Table 15 – Transaction figures with statistics on foreign purchasers

The allure of oceanfront living at Sentosa Cove and Keppel Bay can be seen in the second half of 2007. Despite a general weakness of the market, District 4 continues to attract strong demands from foreign buyers.

(7.2) Marketing period and holding costs
Listings took longer marketing period to sell, if they are sold at all. Below shows the statistics of marketing period (therefore holding costs) for every listing sold.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property
Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse & land right here.

MINDY YONG
( +65 ) 91002985
mindy@mindyyong.com ( email me )

All Singapore property condo / apartment, Real Estate name list

All Singapore property condo / apartment, Real Estate name list

01, Singapore Property Condo / apartment Listing - Project Start from 01 - 09

02, Singapore Property Condo / apartment Listing - Project Start from A

03, Singapore Property Condo / apartment Listing - Project Start from B

04, Singapore Property Condo / apartment Listing - Project Start from C

05, Singapore Property Condo / apartment Listing - Project Start from D

06, Singapore Property Condo / apartment Listing - Project Start from E

07, Singapore Property Condo / apartment Listing - Project Start from F

08, Singapore Property Condo / apartment Listing - Project Start from G

09, Singapore Property Condo / apartment Listing - Project Start from H

10, Singapore Property Condo / apartment Listing - Project Start from I

11, Singapore Property Condo / apartment Listing - Project Start from J

12, Singapore Property Condo / apartment Listing - Project Start from K

13, Singapore Property Condo / apartment Listing - Project Start from L

14, Singapore Property Condo / apartment Listing - Project Start from M

15, Singapore Property Condo / apartment Listing - Project Start from N

16, Singapore Property Condo / apartment Listing - Project Start from O

17, Singapore Property Condo / apartment Listing - Project Start from P

18, Singapore Property Condo / apartment Listing - Project Start from Q

19, Singapore Property Condo / apartment Listing - Project Start from R

20, Singapore Property Condo / apartment Listing - Project Start from S

21, Singapore Property Condo / apartment Listing - Project Start from T

22, Singapore Property Condo / apartment Listing - Project Start from U

23, Singapore Property Condo / apartment Listing - Project Start from V

24, Singapore Property Condo / apartment Listing - Project Start from W

25, Singapore Property Condo / apartment Listing - Project Start from X

26, Singapore Property Condo / apartment Listing - Project Start from Y

27, Singapore Property Condo / apartment Listing - Project Start from Z

What’s NEW in Singaporepore REAL ESTATE Market From 01 Dec to 30 Dec 2007

What’s NEW in Singaporepore REAL ESTATE Market From 01 Dec to 30 Dec 2007

Introduction

As expected, the last month of 2007 was very quiet and uneventful – to the disgust of many agents who subscribe to the notion of productivity equals profit from activities. There were a number of inconsequential policy changes concerning the real estate market. They are not expected to have any major impact on the fate of the property market.

Most of the changes, including CPF changes and Development Charge changes, have already been made known months ago and therefore did not cause a ripple.

More announcements were made regarding the Government Land Sale Programme for next year and that too did not cause any excitement as investors and developers had already been primed. Here are summaries of December’s news.

(A) Global financial market still uncertain in 2008

(A.1.) More bad news from the US sub-prime woes

The US sub-prime problems continue to claim their victims going into Christmas. A couple of embarrassing corporate news was unveiled including one that concerned Switzerland’s largest bank UBS and the world’s largest wealth manager. The bank announced further write-downs of around 10 billion dollars (6.8 billion euros) due to the US subprime mortgage crisis.

In an unprecedented move, Singapore’s Government Investment Corporate bought, together with an unknown Middle Eastern investor, roughly 9% stake of the bank.

On 17 December 2007, Washington-based mortgage finance company Fannie Mae forecast further decline in US housing market in 2008. It said that existing home sales will drop 12% and existing home prices will fall another 4.5% in 2008, painting a bleak picture for the troubled US housing market.

According to forecasts from the National Association of Realtors (NAR), median home prices in the US declined for the first time since the Great Depression. Not only have homebuilders and mortgage companies been affected by the subprime crisis, banks and brokerages have been hit, posting write-downs and losses of more than $80 billion.

There was evidence in abundance to show that the US housing crisis is not yet over. Economists of all subscriptions expect US housing prices to decline further as an increase in foreclosures adds to a glut of unsold homes on the market, forcing sellers to cut prices.

(A.2.) MAS sees more uncertainties next year

The Singapore central bank has also sounded warning that there will be more uncertainties in 2008 due to the current financial market turmoil. The region is facing increased risks to its growth outlook.

The Asia Pacific region as a whole is enjoying strong inflows of funds which have been channelled into property, equity and other financial assets. However, the risk is increasing and this makes it difficult for corporations and banks to sustain financial performance.

MAS said that household debts growth in October accelerated to 15.5% due to increase demands which are evenly spread. The growth is the fastest in almost 11 years. Home loan growth was up 14.4% while business loans galloped at 18.5%.

The negative housing equity situation has improved a great deal, with the proportion of negative mortgage accounts having halved to 2.5% in September 2007 from 5.1% in the same period in 2006.

The rise in banks’ property exposure has been driven mainly by loans to property-related firms. Loans to individuals for investment purposes have also increased recently.

However, the MAS continues to be concerned about the double-digit growth of business loans being driven by the building and construction sector though the non-performing loans ratio of this industry has improved likewise.

(B) New measures concerning properties announced this month

(B.1.) New definition of Development baseline takes effect 1 January 2008

From 1 Jan 2008, the old definition of development baseline being the highest of either the value resulting from the intensity guideline of 1958 Master Plan or 1980 Master Plan will be abolished.

Development baseline will be simply defined as the value of the approved development. The historical baseline values in the master plans of 1958 and 1980 will no longer play any part in the calculation.

The Development Charge payable is the difference of development ceiling (being the maximum value approved) and development baseline.

However, land owners who keep to the allowed use under the current master plan will still not be affected by the new way of computing Development Charge.

(B.2.) New CPF interest rates to be effective on 1 January

From 1 Jan 2008, CPF members will earn one percent higher interest on their first $60,000 of savings as follows:

• Their Special, Medisave and Retirement Account (SMRA) will attract 5% instead of 4% previously.

• Their Ordinary Account (OA) will receive 3.5% for up to $20,000.  Anything higher than the required $60,000 attracts the same interest rate.

For savings beyond $60,000, a minimum rate of 2.5% will apply. However, the HDB subsidised loan rate will not be affected by the latest CPF interest rate change.

(C) Events that could affect 2008 real estate market

(C.1.) Luxury home segment unlikely to dominate market like last year

There could be only 4,600 private homes, or 26% of the total number of new homes, to be launched next year in the Core Central Region (CCR). This year, there were 5,700 new units or 38% of the total 15,000 new homes launched.

Altogether, a total of 17,800 new private homes are expected to be launched in 2008. Though this figure is higher than last year’s, there will be fewer luxury homes. As such, prices of high-end homes should hold strong in CCR.

Among the high-end projects expected to be launched next year are Marina Bay Suites, Sentosa Quayside, Goodwood Residence in Bukit Timah and The Hamilton at Scotts Road.

However, developers are not expected to rush the launches as there are good reasons for them to time the public launches to take advantage of the casino effect later on in 2009 and 2010.

The few positive factors such as en bloc sellers seeking replacement properties, foreigners looking for a safer haven, and soaring rents may still be the major deciders to hold the market together.

(C.2.) Mass market home may dominate next year

For the residential sector, the buying activities should be concentrated in the mass market next year as high-end homes have become too expensive for most.

Government Land Sales programme should be more subdued in the first half of next year as the demand has already cooled off in the fourth quarter of 2007.

Prices of mass-market private homes are likely to appreciate 10% to 15% in 2008, after rising about 25% this year. But development costs had shot up by more than 30% so far this year. As such, there is still upside for mid-range home prices, which are still below their peaks.

While foreign buyers may not affect mid-range market so much, other external factors such as the US sub-prime market problems, rising oil prices and the US economy are universal and will likewise affect the mid-range market. If the external forces turn out to be neutral, the Singapore property market recovery will continue. But if they worsen, nobody will be spared.

(C.3.) More mass market home in mid-term

The Government has again played a heavy hand in state intervention of the real estate market by announcing an expansive programme of land sales for the first half of 2008.

A total of 21 residential sites, mainly in the mass market segment which include new plots at Choa Chu Kang, Tampines and Sengkang will be released for public tender soon.

The land sales programme includes 17 new sites for sale, out of which 11 are in the confirmed list. Eight of them are residential, mostly in suburban areas such as West Coast Crescent, Yishun and Sembawang.

(C.4.) Fewer new property launches in the last quarter of 2007

Property sales in the fourth quarter of 2007 stood at $2.9 billion so far. The figure dwarfed in comparison with the previous quarter’s $15.6 billion

Even with the time lag between a transaction and the lodgement of a caveat, it is unlikely that the fourth quarter figure can suddenly rise to match any of the previous quarters’ sales figures this year. In fact, property sales broke record with closing figure of $24.2 billion in the second quarter.

In fact, the weak performance of the property market is not surprising at all after the double whammy of US sub-prime crisis and the withdrawal of the deferred payment scheme in October. Buyers now understand the risks involved in property purchases and have been more prudence in their purchases.

Another reason for the sharp fall in transactions is the lack of new property launches in the last quarter of the year.

(D) News on Government land Sale programme

(D.1.) Lukewarm response at Boon Lay site

At the close of the tender, only two bids were received by URA for the 99-year leasehold site between Boon Lay Way and Lakeside Drive.

The top bid was put in by Frasers Centrepoint at $205.6 million - or $248 per sq ft per plot ratio (psf ppr) - for the 236,731 sq ft site. The site which could yield 828,552 sq ft in gross floor area (GFA), is a stone throw away from the Lakeside MRT station. The surprising weak response of the site may be due to the withdrawal of an earlier plan by Canadian International School to relocate to Jurong East.

Rising building costs and shrinking profit margin may have kept out the other bidders.

(D.2.) Government Land Sale (GLS) programme will continue in 2008

The Ministry of National Development will continue to release more quality land through its Government Land Sales (GLS) Programme, despite some private property analysts predicting supply glut in the near future.

[See Annex A for “Where are the GLS sites”]

A total of 37 sites will be offered in the first half of 2008 - 11 in the confirmed list (down from 14 for the current 2007 second half programme) and 26 in the reserve list (one site fewer than in the current list).

The number of sites to be released in the first-half of next year will roughly be similar in scale to the offerings for second half of 2007. See table below for details.

	1st half 2008	2nd half 2007
Private homes	8,250 units	8,000 units
Commercial space	4.4 million sq ft	3.8 million sq ft
Hotel rooms	5,850 rooms	6,500 rooms

The bulk of the supply for the first half of next year will continue to come from the reserve list, where sites are launched for tender only upon application by developers.

About 44,500 new private homes will be completed by 2010. Out of these, 17,800 units or 40% will be in the Core Central Region, which includes prime Orchard Road, Marina Bay and Sentosa Cove.

(E) Sub-sale may make a return next year

(E.1.) Fewer sub-sales deals but sub-sale value hits all-time high

Sub-sale value of apartments transacted in the first three quarters of this year is at an all-time annual high of $6.7 billion. However, in terms of volume, it is about half of what it was in 1995.

The number of sub-sale transactions fell to 1,374 (or a quarter-to-quarter decline of 23%) in the third quarter of this year.

Median sub-sale prices are at a new record high of $1,246 psf. Quarter-to-quarter, the increase is 13.6% and a year-on-year increase of 25%.

The value per transaction of sub-sale apartments is also at a record high this year at $1.71 million per transaction.

(E.2.) Lower supply and more TOP may drive up sub-sale deals

In light of a lower supply of quality homes in choice locations and with various new developments becoming available for immediate occupation, sub-sale activities may hot up early next year.

The number of sub-sale apartments in the luxury band fell 41% to 317 transactions but it still makes up 45% of sub-sale transactions.

The overall value of sub-sale apartments for the whole of 2007 is expected to increase further, backed by potential price increases.

[See Annex B for “Who is the hottest in Sub-sales”]

(F) En bloc sales news

(F.1.) En bloc deals surpassed $13 billion this year

The sparkle of en bloc sales has been doused in the second half of the year. With December drawing to a close, only 27 sites worth $2.81 billion were sealed in the second-half this year. In the first half of the year, a total 82 en bloc deals worth $10.49 billion were transacted.

However, compared with the whole of last year where 79 deals amounting to $8.2 billion, this year’s tally of $13.3 billion from 109 deals is still breath-taking.

En bloc sales for 2008 look set to be a subdued affair with the Development Charge percentage still standing tall at 70% of market value; and the new Collective sale rules making all parties work doubly hard for their money.

However, on a brighter note, with the economy cruising at comfortable speed, developers may still be keen to land-bank as long as there are ‘quality sites’ ripe for the picking. Any site with good investment potential will still attract fierce bidding.

Industry players also agree that the pace at which developers acquire more redevelopment sites through en bloc sales will be a function of how their newly launched projects perform.

(F.2.) Developers unlikely to pay high price for collective sale

Developers will probably not pay high prices for collective sale sites from now on as the US sub-prime market woes have taken some froth out of the exuberant market. As such, supply volume may begin to slip.

Though not expecting a massive landslide in property prices, developers in general acknowledge that there would be a little slowdown in activities next year.

Developers have become the victims of their own success. They are now grappling with rising costs, shortage of construction materials and inadequate skilled labour.

However, the developers are well aware of the imminent challenges posed by rising oil prices, a weakening US dollar, the sub-prime crisis and occasional shocks in the supply of construction materials.

(F.3.) En bloc sale news: Amber Park at $750m

District 15 Amber Park, in Amber Gardens, Katong, is now on the collective sale market for $750 million or $1,234 per square foot per plot ratio.

The freehold site has a land area of 213,673 sq ft and has an approved gross floor area of 607,601 sq ft. The site could yield about 375 apartments with an average size of 1,600 sq ft.

There will be no development charge based on the existing plot ratio of 2.843, which is slightly higher than the gross plot ratio of 2.8 in the 2003 Master Plan.

(G) Foreigner’s interest in Singapore real estate never wanes

(G.1.) 78 Shenton Way sold for $650m to German group

Germany’s Commerz Grundbesitz Investmentgesellschaft (CGI) group has acquired 78 Shenton Way for $650 million or $1,857 psf based on a total net lettable area of about 350,000 sq ft.

The building seller, a joint-venture between Credit Suisse and CLSA funds, made a cool $301.5 million from the transaction. The joint venture had bought the building in January 2007 for $348.5 million. Not bad for a year’s work.

CGI, which is the capital investment company for the open-ended fund Haus-Invest, is making its maiden entry into the Singapore real estate market

(G.2.) Apollo Centre sold to US funds for $205m

AEW Capital Management, an US property fund manager, has acquired Apollo Centre for $205 million or $1,378 per sq ft (psf) of lettable floor area.

Apollo Centre, located at the junction of Eu Tong Seng Street and Havelock Road, is a seven-storey commercial building with shops on the basement, first and second storeys and offices on the upper floors.

It sits on 54,600 sq ft of land and has a gross floor area of around 217,500 sq ft. The lettable floor area is 148,700 sq ft. It is on a 99-year lease, with 75 years left.

[See Annex C for “Who is AEW”]

(G.3.) Goldman seeking to make $1 billion on DBS Building

After holding on to the purchase of DBS Building along Shenton Way for two years, the building owner Goldman Sachs is sourcing for a buyer to pay it a cool $1 billion profit.

Goldman had acquired DBS Building for $789 psf or $690 million two years ago and is now asking for at least $2,000 psf of net lettable area (NLA) or $1.75 billion.

However, property analysts estimated that in the current market, Goldman Sachs may fetch around $1,750 psf to $1,800 psf of NLA for DBS Building, given the building’s age and short balance land tenure.

[See Annex D for “What has Goldman been up to”]

(G.4.) Foreigners bought a quarter of total residential sales

Foreigners and permanent residents (PRs) chalked up 7,902 sales from January to November, which accounted for 24.9% of total residential sales so far.

The sales figures are the highest in 13 years, due to a robust regional economy and ever increasing arrivals of expatriates in Singapore.

Institutional investors also entered the market in a big way, picking up anything from several units to whole condo blocks and even development sites. They include Macquarie Global Property Advisors, Goldman Sachs and United States-based Wachovia Development.

The buying momentum propelled high-end condo prices pass the $4,000 psf mark and surged past the $5,000 psf mark for the very first time in local history.

A 53rd floor 5,048 sq ft penthouse unit at The Orchard Residences went for $5,600 per sq ft in October, or slightly more than $28 million. The 175-unit leasehold condominium is being built above the Orchard MRT Station.

All thanks to participation of foreign buyers, other developments that have registered sales of above $4,000 psf include Hilltops, Ritz-Carlton Residences and Scotts Square.

In comparison, last year’s price record - set in December by a unit in Marina Bay Residences - was only $3,450 psf.

[See Annex E for “Foreign participation in buying commercial buildings”]

(H) News on HDB Resale Market

(H.1.) Buyers snap up new flats from HDB

As though it still needs further proof – the property bull is in the HDB market.

On 10 December 2007, HDB received more than 1,700 hopeful applications for just 316 new flats in Hougang, Punggol and Sengkang.

The 316 flats comprise 233 four-room, 57 five-room and 26 executive flats, with prices ranging from $142,000 for a four-room flat in Hougang to $358,000 for an executive flat in Sengkang.

In terms of sales, almost every unit of the HDB’s unsold stock, released once every two months, has been snapped up immediately.

Just three years ago, there were as many as 10,000 unsold flats languishing in the market. But this figure had been dramatically trimmed to 2,400 as at 31 Oct 2007.

The HDB has said it would progressively offer all its unsold stock for sale in near term.

Annex A

Where are the GLS sites

Below are tables showing the estimated launch dates for all the sale sites next year.

Residential sites on the confirmed list

Location	No of units	Estimated Launch Date
Westwood Avenue	50	January 2008
West Coast Crescent	305	January 2008
Yishun Ave 1/ Ave 2	515	January 2008
Lorong 2 Lorong 3 Toa Payoh	535	February 2008
Sembawang Greenvale Phase 2	94	February 2008
Choa Chu Kang Drive	495	March 2008
Woodleigh Close	270	April 2008
Tampines Ave 1/Ave 10	575	June 2008

Residential sites on the reserve list

Location	No of units	Estimate Launch Date
Tampines Road (Landed)	35	Available for sale
Jalan Jurong Kechil	240	Available for sale
Punggol Field/Punggol Road (EC)	620	Available for sale
New Upp Changi/Tenah Merah Kechil	305	Available for sale
Bishan Street  14	535	Available for sale
Yishun Ave 11 (Executive Condo)	375	February 2008
Upp Changi Rd North/Flora Dr	380	March 2008
Chestnut Ave	435	March 2008
Jurong West ST 42 (EC)	465	March 2008
Sengkang East Ave/Buangkok Dr (EC)	465	April 2008
Upp Thomson Road	380	April 2008

Sengkang West Ave/Fernvale Link	465	June 2008
Sembawang Road/Canberra Dr	290	June 2008

Annex B

Who is hottest in Sub-sales

Icon has consistently been one of the top two developments in terms of sub-sales this year.  Its median sub-sale price went up 26% quarter-on-quarter to $1,495 in the third quarter. So far this year, 512 units in Icon have been sub-sold once.

The other hot candidate for sub-sale is The Sail @ Marina Bay which saw median sub-sale price going up by 21% quarter-on-quarter to $2,093 psf.  So far this year, a total of 370 units at The Sail have been sub-sold.

One-north Residences also registered a significant number of sub-sales, probably due to the allure of a ‘Silicon Valley’ look-alike culture of the R&D hub and the promises of high rental.

Annex C

Who is AEW

AEW and its affiliates manage more than US$41 billion of real estate assets and securities in North America, Europe and Asia. The group set up an office in Singapore in April as a base from which to expand in the region.

Office rents in the city fringe area are about $8.00 psf per month (psf pm) while retail rents range from $8.00 to $8.50 psf pm.

Annex D

What has Goldman been up to

Goldman has been very busy of late buying up prime office buildings in the central business district. In August this year, it purchased Chevron House at Raffles Place from CapitaLand for $730 million or $2,780 psf of NLA.

It is also expected to purchase the adjacent Hitachi Tower from CapitaLand for around $3,000 psf, or about $840 million.

Thanks to foreign funds such as Goldman Sachs, investment in Singapore’s office sector has seen an astonishing $14.9 billion worth of transactions so far this year -  three times the sales figure for the whole of last year.

The severe constraints in demand/supply situation have pushed prime office capital values to nearly $3,000 psf from about $2,000 psf at the start of this year.

Annex E

Summary of foreign participation in buying of commercial buildings

In April this year, TSO Investment, a unit of a CLSA Capital Partners-managed property fund, sold SIA Building at Robinson Road to European pension fund manager SEB for about $1,780 psf of net lettable area.

In September, SEB also bought 12 floors at Springleaf Tower in the Anson Road area at $2,088 psf of net lettable area.

In October, Allco Commercial Real Estate Investment Trust acquired KeyPoint in the Jalan Sultan/Beach Road area for $370 million or $1,186 psf of net lettable area. The deal includes income support of up to $10.5 million for two years to be provided by the seller.

In August, a Goldman Sachs-linked fund bought Chevron House (formerly Caltex House) along Raffles Place for $2,780 psf, a record for an office block here. The tenure of land on which Chevron House stands is 99-year leasehold with a remaining lease of about 81 years.

The Goldman Sachs group is also expected to finalise the purchase of Hitachi Tower early next year for about $3,000 psf. Hitachi Tower is just next to Chevron House and facing Collyer Quay.

Hitachi Tower has a 999-year leasehold status. The value of Hitachi Tower is higher than Chevron House also because it is not limited by rental caps for Chevron’s lease. It is unlikely that in the near-term, rental value at Chevron House would have any upside.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse & land right here.

MINDY YONG

( +65 ) 91002985

mindy@mindyyong.com  ( email me )

http://www.hotvictory.com

What’s NEW in the REAL ESTATE Market From 01 Nov to 30 Nov 2007

What’s NEW in the REAL ESTATE Market From 01 Nov to 30 Nov 2007
Introduction

November 2007 seemed like a quiet month. However, it is not without some noteworthy developments.

The government relaxed the rule on ownership of Executive Condominium (EC) – seen as restoring parity between EC and HDB resale flat ownership regulations.

Towards the end of the month, the market witnessed a gradual warming to the Government Land Sale Programme. By 28 November, more ‘quality sites’ were upgraded to the confirmed list after developers put in bids to unlock the reserved sites for open tender. Many of them will be released for public tender from December onwards.

Below describes the strong ‘flowing undercurrent’ beneath a ‘quiet market’.

(A) Uncertainties reigns in the US market

- (A.1.) US mortgage defaults and delinquencies will increase in 2008

The downturn in the US housing market had yet to run its full course.

About US$900 billion of sub-prime mortgages have been securitised into fixed-income instruments, and the high level of unsold homes is pushing down the price of those instruments further and debasing the value of the securities backed by those mortgages.

Citigroup recently revealed that it had additional US$11 billion write-down tied to sub-prime mortgage and the revelation rekindled fears of the extent of the credit crunch. The equity markets and the dollar crumbled under pressure and the benchmark US Treasury yields is kept at a two-year low.

To survive this financial crisis, the US market needed to get rid of at least 200,000 to 300,000 excess units. It would be a disaster if housing prices continue to fall and the Fed may have to further cut rates to perhaps 3.5%.

(B) New measures concerning properties announced this month

- (B.1.) Developers must reserve 90% of EC units for First-timer buyers

The Housing Development Board (HDB) now requires developers of executive condominiums (EC) to reserve at least 90% of units during the first month of the launch for first-time buyers who have not enjoyed any housing subsidy before.

No need to pay Resale Levy
In the meantime, resale levy for those who have enjoyed a housing subsidy before is also waived when they buy a new EC flat.

Two bites of the cherry
EC owners who had received a housing subsidy can also enjoy a second subsidised public housing unit, be it an EC, HDB flat or flat built and sold by private developers under the Design, Build and Sell Scheme (DBSS).

These EC owners can now buy another new EC, or a new flat built by the HDB or private developers, after a 30-month waiting period.

Resale levy for second new flat
However, those who used a housing grant for their first new EC will have to pay a resale levy of $55,000 on their original home if they move into a new HDB flat - to ensure a fair distribution of housing subsidies. (If payable, the amount of resale levy for HDB Executive flats is $50,000)

But this by itself is a relaxation of policy as before this, those who bought a new EC unit were barred permanently from buying a second new EC unit, HDB flat, or flat built and sold by private developers under the DBSS.

The change is probably prompted by the fact that owners of private properties have been allowed to buy new HDB dwellings after a 30-month wait from the time they dispose of their homes.

- (B.2.) Annual Values of Properties to be raised in 2008

The Inland Revenue Authority of Singapore (IRAS) has announced that Annual Values (AVs) for all HDB flats will be increased. However, 90% of HDB flat owners need not pay more property tax in 2008 due to the tax rebates in 2008.

AVs refer to the value of a property in a year if it were rented out as investment. They form the basis of property tax which is 10% of AVs for all properties. But owner-occupied homes are given a concessionary tax rate of 4%.

As of now, all owners of 1-room and 2-room flats do not need to pay any property tax at all. Likewise about 13% of all 3-room flats owners do not need to pay any tax due to offset of GST rebates which have been given since 1994 when GST was introduced.

- (B.3.) No more cooling off measures – for now

Minister for National Development, Mah Bow Tan told parliament that further action was not needed to further cool the real estate market. The government will instead closely monitor the property market to ensure that any price rise is supported by economic fundamentals and demands for private housings are met.

Explaining the chopping of the Deferred Payment Scheme, Mr Mah said that it was worrying as close to 90% of buyers of private properties by Singapore property developers opted for the payment scheme. The cancellation of the scheme will encourage greater financial prudence among investors.

According to official data, prices of private houses in Singapore have increased by 21% since the start of the year. But with the latest announcement, it is safe to presume that the government will not introduce the Property Gain Tax anytime soon.
(C) Rents continue to rise at phenomenal rate

- (C.1.) Orchard Road prime Retail rents 4th highest in Asia

Singapore’s busiest shopping street, Orchard Road, is now world’s 14th most expensive area. It is the 4th most expensive shopping location in this region, after those in Hong Kong, Tokyo and Seoul.

The recent survey studied the retail rents in the world’s top 231 shopping locations across 44 countries. It showed that annual prime rates increased by 11.3% for Orchard Road. Although rents in Singapore will continue to rise, it will be slower than the rent rises in other cities, notably in India.

The trend will help Singapore remain competitive and maintain its attractiveness as a retail destination in the region. Rental growth across Asia as a whole has increased by 23.8%.

- (C.2.) Raffles Place Retail rents are higher

In tandem with a soaring demand for office space in Raffles Place business district, rents for shop space there have also risen 24% in the past two years.

- Average gross rent for Raffles Place ground floor space is between $18 and $35 per sq ft a month, up from $13 to $25 psf a month two years ago.

- Space in the basement levels are priced at between $12 to $25 psf a month, compared with $9 to $18 psf a month two years back.

- In the upper floors, rents now hover between $8 to $14 psf a month, up from $6 to $9 psf a month two years ago.

With no new supply in sight, the upward trend is expected to continue as the economy charges ahead and tenants are expected to pay 10% to 15% more in the coming years.

Most retail centres in Raffles Place such as OUB Centre, Raffles Xchange, One Fullerton and Republic Plaza are enjoying full occupancy.

Comparatively in Orchard Road, retail rents have been registering single-digit increases in the past few years as rents there are already very high.

- (C.3.) Singapore prime Office rents rose the fastest in the world

Singapore also has the fastest growing prime office rent in the world, outpacing Mumbai.

Average prime office rents have risen 82.6% to $12.60 psf a month by end of September 2007. However, London’s West End is the most expensive place to rent an office if you have US$328.91 to spend for every square foot a year, followed by Bumbai.

At US$102.37 psf a year, Singapore is ranked 11th on the list of worldwide office rentals. Hong Kong is still more expensive than Singapore at 10th position with costs at US$106.31 psf a year.

- (C.4.) Rising rents hit the poor hard

Rising rents in the open market are forcing more low-income Singaporeans to queue for subsidised HDB rental flats, but the waiting period is now twice as long. They now must wait five to 11 months instead of two to six months to move into a rental HDB flat.

Applications for such flats went up 11%. Most of the 3,000 or so applicants in the queue now are unlikely to get a home until the first quarter of next year.

The Housing Board is converting three blocks in Boon Lay and Woodlands into 938 rental units expected to be ready early next year. It will also convert two blocks in Redhill to about 290 rental homes and build 976 units in Choa Chu Kang, Sembawang and Yishun, all by next year.

Rents for HDB flats have shot up by more than 30%. Only families earning no more than $1,500 a month are allocated subsidised rental flats.

- (C.5.) Desperate measure - Old flats vacated under SERS to be rented out

To increase the supply of rental flats, HDB will release a batch of old flats left vacant under the Selective En bloc Redevelopment Scheme (Sers) to the public on a short term basis.

The first batch of 120 units - 60 three-room flats and 60 4-room flats - in five blocks in Tiong Bahru Road will be leased out to a master tenant on a three year tenancy, with option to renew for another three years.

HDB will continue to increase the supply of about 4,000 to 5,000 units if the need arises.

(D) En bloc sale news

In the third quarter of this year, only 13 en bloc deals worth about $1.1 billion were done, down from $6.4 billion for 45 sites in the previous quarter. The en bloc sale market took the full brunt of the sudden 40% increase of Development Charge percentage to market value (i.e. from 50% to 70% of market value) and a hefty half-year rate review (over 58% increase).

In October 2007, only one project Toho Garden was sold collectively. However, in November the en bloc sale market was more active. Here are the details:

- (D.1.) 15 houses in Balestier sold en bloc

In the first landed property en bloc sale, a total of 15 houses were sold for $61 million to a joint venture company set up by a Chinese property developer and his Singaporean partner.

Owners of each of the 15 District 12 landed properties received about $4 million or $739 psf of potential gross area. The sale price represents an en bloc premium of close to 3 times the current market value of the houses.

The en bloc deal took 18 months to complete as 100% consent must be obtained before the sale is sealed due to their land title status. (For strata-titled apartments, the consent is 80% or 90% of the majority by share value and floor area)

- (D.2.) 5 old apartment projects in Kent Road area sold en bloc together

A stretch of five old apartment projects behind Blk 51 Kent Road was sold en bloc to KSH Holdings for $120 million. The combined site area is 74,355 sq ft with a plot ratio of 2.8 and the unit price works out to be $580 psf ppr.

The five District 8 developments, looking from the Central Expressway (CTE) include Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui which is opposite Norkfolk Court and off Rangoon Road. This leaves Mergui Mansions standing alone

- (D.3.) Makeway View sold for $162.8m

District 11 Makeway View in the Newton area has been sold collectively for $162.8 million or $1,583 psf per plot ratio including an estimated $21.5 million development charge (DC).

Each of the 32 owners will receive gross sale proceeds of about $3.7 million to $10.4 million per unit.

The freehold site has a land area of 41,582 sq ft and is zoned for residential use. It has a plot ratio of 2.8 which gives a maximum height of 36 storeys. The breakeven cost for a new project on the site is about $2,100 psf.

The en bloc sale was sealed in a private treaty arrangement following a tender that closed last month. Under the new en bloc sale rules (effective 4 Oct 07), a private treaty sale is allowed after the public tender but the sale must be concluded within 10 weeks after the close of the tender.

- (D.4.) District 9 Grange Heights on the collective sale market

District 9 Grange Heights condo at No 15, 19 and 23 of Grange Road at the Leoniehill Road vicinity has been put up for collective sale for $845 million or $2,200 psf per plot ratio (ppr). The sale is by tender.

The freehold site has a land area of 136,678 sq ft and a plot ratio of 2.8 which gives a maximum height of 36 storeys. No development charge is payable for the site.

According to the marketing agent, an exclusive 36-storey condominium development may be erected on the site with a gross floor area of about 35,554 sq m (382,695 sq ft), subject to approval and payment of development charge. This could yield some 80-90 apartments units with an average size of 3,800 sq ft based on ultra-luxurious apartment concept.

(E) Foreign interest in top-tier properties in Singapore still strong

- (E.1.) Hilltops sold for $3,900 psf

The District 9 Cairnhill Circle estate is now one of the most expensive prime estates in Singapore, with prices of the posh Hilltops condo by SC Global going between $7million and $12 million.

In all, the freehold 20-storey condo has 240 apartments. So far, 30 units have been launched since October. Of the 30 units, 28 were sold for around $3,900 psf.

Three-bedroom units command nearly $7 million, while four-bedroom and larger units could sell for up to $12 million.

Consistent with the trend in Orchard area, buyers of Hilltops units are primarily foreigners.

- (E.2.) Helios sold for $3,900 psf

Nearby, the 140-unit Helios Residences sold 69 units at an average of over $3,000 psf each.

Though the market has quietened down a little, interest for luxurious properties is still strong as more funds are being channelled into Singapore to take advantage of a stronger Sing dollar against the US dollar.

- (E.3.) 90% buyers of Sui Generis at Balmoral foreigners

In District 9 Balmoral area, 16 of 23 units released at the 40-unit Sui Generis were sold through road shows in Indonesia and Hong Kong in the past two months.

Prices fetched ranged from $2,300 psf to $2,580 psf. About 90% of the buyers were foreigners.

- (E.4.) CDL-Wachovia buy two blocks at District 9 Cliveden

Grange 100 Pte Ltd, a joint venture between City Developments Ltd (CDL) and US-based Wachovia Development Corporation is buying two blocks, or a total of 44 units, at CDL’s freehold Cliveden at Grange condo for $432.4 million or $3,750 per sq ft (psf).

CDL’s move has been widely seen as a precursor to its plan of a residential real estate investment trust (Reit) to which it could spin off apartments held for investment.

Many analysts reckon that the CDL-Wachovia joint venture would divest the two blocks to a residential Reit.

In this joint venture, Wachovia holds the majority share of 60% while CDL takes the rest. The

- (E.5.) 60% of Amber Residences condo sold

More than 70 of the 114 units at Amber Residences in Amber Road were sold during a private preview on 18 November 07 at an average price of $1,650 per square foot (psf) with some high floor unit being sold for more than $1,800 psf.

The Amber residence has a single tower block of 21 storeys. It is made up of mainly two; three and four-bedroom apartments, there are also six penthouses.

So far, the sales were done by private invitation only and most of the buyers were locals.

Given the lull season of the year, the 60% sold performance is considered impressive.

(F) News on Government Land Sale (GLS) Programme

The market mood took a sudden change after the Deferred Payment Scheme was scrapped. Developers were more cautious and there was no jostling, though buying activities still continued tentatively.

However, by late November, bidding activities seemed to pick up a bit of momentum. By then, more quality land parcels under the reserved list were upgraded to the confirmed list after some small-timer developers put in bid at slightly higher than government’s reserved price to trigger a public tender exercise to be called.

By 28 November, property analysts were quoted as ‘being surprised’ by the winning bid of $134 million for an Ang Mo Kio residential site. Here are the roll-down.

- (F.1.) First land tender after the withdrawal of DPS drew only 2 bids

The first land sale tender exercise after the withdrawal of the deferred payment scheme told much about how local developers felt about the government’s move.

The tender for a 99-year leasehold residential site at Enggor Street behind the Icon development drew just two bids on 1 November 2007. Far East Organisation offered to pay $233.8 million or $852 psf per plot ratio while GuocoLand offered $150.98 million or $550 psf ppr for the land.

- (F.2.) Developers are buying mass market lands quietly - taking advantage of the lull

First an unnamed developer put in a bid of $220,700,000 for the reserved site opposite Tanglin Regency to trigger the public tender for the site in late November.

Then within a week, a Woodlands Ave 2 condo site attracted 8 bids and was eventually awarded to a new-comer developer.

Around the same time, an unknown developer entered a bid of $187 million for a 3.2ha, 99-year leasehold residential site at Simei Street 4, triggering a public tender which will be launched in early December.

The price offered by the developer works out to $235 psf ppr. The site has a 2.3 plot ratio - giving it a maximum gross floor area of 797,400 sq ft. However, the good location of the plot would definitely attract much higher tender prices later.

The difference between confirmed sites and reserved sites is this: the Government will only release a site for sale if an interested party submits an application for the site to be put up for tender with an offer that is higher than the Government’s reserved price. But, confirmed sites are released for tender at a pre-determined date, without the need for the sale to be triggered by an application.

- (F.3.) Condo site near Braddell MRT station available

A 150,211 sq ft 99-year leasehold site at the corner of Toa Payoh Lorong 2/3 has been made available under the reserve list.

The suburban site has a plot ratio of 4.2 and can be developed into a 530-unit condominium project. The site is within walking distance from Braddell MRT Station.

Analysts are divided on how much a brand new condo project in Toa Payoh would fetch in terms of psf price given the current tentative market mood and the site’s mass market tag.

Given the historic record bid by Far East Organisation in September 2007 for a similar site near Ang Mo Kio MRT station, some analysts reckoned that Far East might submit a similar bid of around $601 psf per plot ratio.

- (F.4.) Ang Mo Kio site nets $134m bid

The public tender for the third public housing site slated for Design Build and Sell Scheme (DBSS) has been won by Greatearth Development who put in the top bid of $134.2 million. The second DBSS site at Boon Keng Road was successfully awarded in June 2007.

The site has a site area of 16,789.1 sq m and an allowable storey height of 36. The new blocks can accommodate 550 flats.

The winning bid works out to be $212.4 per sq ft (psf) per plot ratio. The break-even price should be about $500 psf and the developer may launch the flats from $580 psf or at starting price of $560,000.

The high bid price caught some property analysts by surprise but reflects developers’ confidence in the demand for public housing and suburban condominiums.

- (F.5.) Bishan residential site up for sale

The Housing Development Board will release a residential site at Bishan Street 14 for sale by tender. The 99-year leasehold site has a land area of 129,200 sq ft and a plot ratio of 4.9.

The site is considered ‘good’ as it is very near to Junction 8. It is facing the Bishan ITE college and Bishan Stadium.

Private apartments in the Bishan area are now selling for about $800 psf in the resale market. Construction costs for mass market condos now stand at about $300 psf.

- (F.6.) More than 7,000 new flats expected over next 7 months

In the wake of exorbitant asking prices of resale HDB flats across the island, the Housing Development Board (HDB) has taken a decisive move to signal to Singaporeans in general that there is no need for panic as there will be sufficient supply of new flats.

More than 7,000 new HDB flats will be released for sale over the next half-a-year. It will launch seven residential land plots that could yield another 3,200 flats, ranging from two-room flats for the low-income group and privately-designed flats (DBSS) and executive condominiums (EC).

The land slated for DBSS projects will be in choice locations such as Bishan, Simei, Toa Payoh and Bedok. The EC sites to be made available next year will be in Yishun, Jurong, and Sengkang.

Two build-to-order projects were launched yesterday:

• Segar Meadows in Bukit Panjang Ring Road, comprising 412 three- and four-room flats.

• Compassvale Beacon in Punggol Road, comprising 750 two-, three-, and four-room flats.

Recent response to HDB’s flat-selection exercises has been overwhelming, primarily from newly-weds. HDB received almost 8,000 applications for 400 flats in Telok Blangah and more than 1,600 applications for 516 homes in Punggol.

The 4,800 applications to buy HDB’s build-to-order flats have more than doubled the number launched last year.

Prices of resale HDB flats grew by 11% in the first nine months of this year, while prices of private homes shot up 22.9%.

(G) News on HDB Resale Market

- (G.1.) HDB resale flat prices surge 6.6%

HDB resale prices went up 6.6% in the third quarter. In the second quarter, the prices increased 3% and the two quarters’ aggregate brought this year’s total price increase to a double digit growth of 11%.

However, in terms of volume, HDB re-sale transactions fell 11% to 7,700 in the third quarter, after a 38% rise in the previous quarter.

Third-quarter HDB data showed the amount of cash-over-valuation that buyers are paying has increased substantially across the board, though the movement is more pronounced in popular neighbourhoods.

Increases in the median prices of three-room flats in Ang Mo Kio (central) were 11.8%, in Bedok (east) 6.4% and Queenstown (central) 5.6% respectively. And for five-room flats, they grew at 13.1%, 16% and 20.6% respectively.

In Clementi, Bukit Timah and Toa Payoh, the median COV for executive flats hit $155,000, $137,500 and $127,000. However, the figures might not be representative of the overall market situation as the transactions were fewer than 20 flats in these areas.

In general, the areas requiring the least cash-over-valuation were Woodlands, Yishun and Bukit Panjang. (See Annex B for details)

The Central area, Queenstown and Marine Parade were the locations where buyers have to fork out more cash in order to stand a chance to own a flat there.

- (G.2.) Median Cash-Over-Valuation (COV) for HDB resale flats up 140%

About 80% of resale flats in the third quarter attracted cash over valuation (COV). The median price is now $17,000 above valuation. It was $7,000 in previous quarter. As such, the increase in median COV is 140%.

However, the number of resale transactions fell 11% in the third quarter from 8,700 to 7,700.

The price increases were more pronounced in popular neighbourhoods such as Ang Mo Kio, Bedok, Queenstown, Clementi, Bt Timah and Toa Payoh.

The quantum of the price increase clearly shows the strength of the demand due to a robust economy. In response, HDB has expedited its building programme. More than 26,700 flats are expected to be completed between 2007 and 2011.

A market survey indicates that asking prices for larger flat types may vary some $50,000 to $200,000 above valuation. Traditionally, when there is a bull-run, larger flats such as Executive Maisonettes (EM) and Executive Apartments (EA) in choice locations would achieve a larger quantum in capital appreciation – sometimes as high as more than $100,000 a year. (See Annex A for a case study on Tampinese E flats)

- (G.3.) Marine Parade 5-room flat sold for $750,888

A retired couple paid a record $750,888 for a 32-year-old 5-room Marine Parade flat on 27 November. The 23rd storey flat was recently renovated and it offers full sea views.

Another push factor for the record price is the block’s proximity to the underpass that leads to East Coast Park. The old couple has previously lived abroad in Germany and Australia and their previous homes also offered sea views.

The last HDB record price of $730,000 was also set by a 5-room flat in Marine Parade in early November. It is also situated on a high floor and near East Coast Park.

But analysts say the highest record price is not typical of HDB market. This is because the old couple bought it as their retirement home and has paid cash for it. Had they been an ordinary couple, they might not have been able to take a bank loan for it.

(H) Where is the market heading?

The Singapore Dream is far from over. In fact, it is just the beginning.

While there will be more new houses available for sale in 2008, demands will also be higher as more foreigners and local upgraders from the heartlands are coming out in force to meet the supply.

Forget about ‘buyer’s market’ or ‘seller’s market. Get ready for ‘Agent’s Market’.

- (H.1.) En bloc sellers will support home prices

About 5,700 residential units from the 39 private apartment projects were sold collectively in the first half of 2007. Owners of these units will have to look for replacement homes sooner or later.

Assuming two-thirds of them do come out and buy a property, it would be about 3,900 homes to be transacted. As the total payout to en bloc sales during the period was $6.381 billion, the expected transactions later on when the en bloc sellers start to make their replacement purchases, could be worth $4 billion, plus minus a few ten millions.

As prices in the prime area are already near historic peak, developments in the fringe and suburban areas such as Bukit Timah, Upper Bukit Timah, Clementi, Novena/Thomson, and Upper East Coast will be the most likely targets.

Out of the 5,700 owners affected by collective sales in the second quarter of 2007, about 2,795 of them owned homes in the prime districts of District 9, 10 and 11. And 50% of such owners already have at least two properties.

Likewise, rents will also increase due to the same reason as ‘displaced tenants’ would also need alternative accommodation.

- (H.2.) Continual arrival of expatriates to drive rents

The number of expatriates working in Singapore has grown by an impressive 14.9% from 875,500 in 2006 to over one million so far in 2007. This is the highest annual growth in the arrival figures in a decade.

With the familiar full employment rate returning to Singapore and the buoyant economy generating a phenomenal rate of high-end jobs, the number of expatriates in Singapore is expected to explode.

As it is, average apartment rents in the prime districts rose by 13% to $3.70 per square foot (psf) a month between the second quarter and third quarter of 2007. The high-end residential rents continue to rise to $6 psf a month.

Average rents shot up even higher in the other non-prime areas. For example, average rents in Districts 8 and 12, on the fringe of the city, have risen by 35% and 23% respectively to about $1.90 psf a month.

- (H.3.) The ten largest HDB heartlands sell more flats - the smallest estates command the highest price

This trend will continue for some years. In fact, the entire HDB resale market is getting warmed up and will be more exciting by the days.

Despite the perceived ‘quietness’ in the market, the HDB resale market clocked in 2,340 (advanced estimate) resale transactions compared with the previous month’s 2,463 deals.

With the complete input of sales figure to be updated by the end of the first week of December, the November resale figures should be higher than October.

The volume of HDB resale transactions has been gradually rising, reflecting an economy in expansion. Below shows a breakdown of increases in transaction volume over the previous months.

Months Transaction
January 07 - 2,313
February 07 - 1,958
March 07 - 1,217
April 07 - 2,089
May 07 - 2,184
June 07 - 2,250
July 07 - 2,385
August 07 - 2,553
September 07 - 2,385
October 07 - 2,463
November 07 - 2,340 (so far)

With a very promising economic prospect, two categories of resale flats will take the lead to climb the price ladder – one is flats in choice location and the other, the larger Executive flats.

For example, 5-room flats in Marine Parade have been dominating the headlines. However, the total resale transactions in Marine Parade in November were only 17 flats. The breakdown is as follows: 3-Room flats sold: 8; 4-Room flats sold: 6; 5-Room flats sold: 3.

Out of the three sold, two made it into the headlines of national newspaper in the month of November.

Another example is Executive flats in Tampines. The capital value of Executive flats in Tampines has risen by 30% year-on-year and the quantum of increase is $129,000 for the best unit there. (See Annex A & Annex B for details)
- (H.4.) Private home market isn’t fairing badly either

The private property market is on a path of modest and steady growth on the back of a strong and sustainable economy.

In fact, the median transacted price for private apartments across the island rose 3.3% from $960 psf in September to $992 psf in October.

While buyers may become more cautious in the wake of the scrapping of the deferred payment scheme, the private home market is not expected to collapse. The number of new private home units launched and sold will likely to remain close to current levels.

In the Central Core area
Hilltops in the Cairnhill area, and Scotts Square, sold quite well with 24 units and 33 units sold respectively.

The first unit at Boulevard Vue at Angullia Park was sold in October for $3,900 psf. The first 20 units in the 28-unit Suites @ Amber were sold at between $1,224 psf and $1,440 psf.

In the East coast area
In the mid-range, new projects in the east such as Aalto, De Centurion, Suites @ Amber and The Seafront On Meyer achieved median prices ranging from about $1,300 to $1,600 psf.

In the Western area
Park Natura in Bukit Batok sold 101 units and became the top seller in primary market sales during October, followed by a distanced second of 49 units sold at Aalto in the Amber Road/Peach Garden vicinity.

Park Natura’s median transacted price was $1,022 psf; while Aalto about $1,300 psf.

Developers should be able to sell about around 2,000 new homes in the last quarter of this year, bringing their full-year sale tally to around 16,000 units. They sold 11,147 new private homes for the whole of 2006.

The official URA private home price index, which has already risen 22.9% in the first three quarters from end-2006, is likely to go up to 27% for the whole year.
Annex A

Case Study on Tampines Executive flats

A study was done on the capital appreciation of Executive flats in Tampines during the past 12 months.

The parameter of the study is to compare prices of two categories of E flats – one group with poor attributes (therefore lower sale prices) and the other with good attributes (therefore higher sale prices) - and track the price mobility. (The reason E flats are chosen is because they best reflect the economic situation)

The study yielded the following results:

PRICE	October 2006	January 2007	May 2007	Nov 2007
Lowest	$318,000 (Blk 309 - LF) 14 yrs old	$345,000 (Blk 328 / LF)	$315,000 (Blk 430 - MF) 21 yrs old	$365,000 (Blk 427 - LF) 21 yrs old
Highest	$436,000 (Blk 856E - MF) 12 yrs old	$466,000 (Blk 856 / HF)	$448,000 (Blk 865B - LF) 12 yrs old	$565,000 (Blk 856B - MF) 12 yrs old

* LF = Low Floor / MF = Mid-Floor / HF = High Floor

- The price growth year-on-year (October 06 and November 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = $47,000 (14.7% increase in price)
Price increase of Highest priced E flat = $129,000 (30% increase in price)

- Compare First half-year growth (Oct 06 and May 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = - ($3,000) (price actually dropped)
Price increase of Highest priced E flat = $12,000 (2.8% increase in price)

- Compare Second half-year growth (May 07 and November 07) between Executive flats with same attributes:

Price increase of Lowest priced E flat = $50,000 (15.7% increase in price)
Price increase of Highest priced E flat = $117,000 (26.8% increase in price)
Conclusion

The following conclusions were drawn after the study:

(1) The comparative data shows that the price increase occurred only in the second half of 2007 and the forces that drove the second half surge were quick and powerful.

(2) Price surge in E flat occurred after prices for private homes had reached a new historic height. It also showed that many middle-income group purchasers have been squeezed out of the private home market.

(3) Resale flats with good attributes, such as high floor level, younger in age (newer in flat design) and closer to amenities like MRT station and shopping mall, achieve higher and faster appreciation in capital value.

It is a little pre-matured to conclude if speculative activities have been channelled into the HDB resale market.
Annex B

The tables below show that the 10 largest Housing estates have the highest number of flats sold; while the 3 smallest housing estates enjoy the highest transacted prices, due to rarity and good location.

Estate Total Number of Flats Flats Sold
(1) Jurong West 66,133 163 (2nd in volume)
(2) Tampines 61,109 139 (5th in volume)
(3) Woodlands 56,221 224 (top in volume)
(4) Bedok 55,293 153 (3rd in volume)
(5) Hougang 47,227 128 (7th in volume)
(6) Yishun 46,205 141 (4th in volume)
(7) Ang Mo Kio 43,768 108 (9th in volume)
(8) Bt Merah 40,054 103 (10th in volume)
(9) SengKang 39,534 131 (6th in volume)
(10) Choa Chu Kang 38,933 114 (8th in volume)

Estate Total Number of Flats
Bt Batok - 31,522
Toa Payoh - 30,755
Bt Panjang - 29,498
Kallang/ Whampoa - 28,203
Pasir Ris - 27,504
Geylang - 26,560
Queenstown - 25,975 (High resale prices)
Clementi - 23,460
Jurong East - 21,903
Serangoon - 21,204
Bishan - 18,971 (High resale prices)
Sembawang - 17,664
Punggol - 15,727
Central - 7,651 (Top in resale price)
Marine Parade - 6,535 (High resale prices)
Bt Timah - 2,423 (High resale prices)
Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property

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What’s NEW in the REAL ESTATE Market From 01 October to 30 October 2007

What’s NEW in the REAL ESTATE Market From 01 October to 30 October 2007

Introduction

As though they had planned this for a long time, in October 2007 the Singapore government, not once but twice, ‘flexed its muscle’ against property purchasers purportedly to keep property prices in check against a backdrop of a comprehensive inflation, global financial market uncertainties, dwindling supply of office space and prime residential homes, and a large inflow of foreign companies into Singapore along with their huge war chest.

In two swift and surprising moves, the government made into law the proposed new en bloc sale rules which aimed to make en bloc sales tougher; and later in the same month, it withdrew Deferred Payment Scheme for uncompleted properties – a move seen as preventing a property bubble and a prelude to more things to come.

Below describes the ‘nerves of the market’ after the respective government initiatives had been announced.

(A) Uncertainties reigns in October market

(A.1.) 2208 may not be as good – projected 4-6% growth

The Monetary Authority of Singapore (MAS) said that for the first time in four years, Singapore faces a very uncertain outlook for 2008 due to high oil prices and the chances of further turmoil in the global financial market.

The economic sectors that powered Singapore ahead this year – property, wealth advisory and capital markets – are likely to be subdued due to the above-mentioned negative factors.

Among the domestic asset market-related activities, financial services are expected to continue to perform well in the last quarter of the year. But equity trading activities may slow down in 2008. Domestic debt market could also be dragged down by a more tentative mood amid lingering concerns over the credit market. Demand for wealth management services may be affected as a result.

Prospects for the construction sector are very promising, as many projects will reach completion stages and payments will be forthcoming.

However, the Asian region will continued to be spooked by the uncertainties in the US. Exports and growth will be affected by the situation in the US.

(A.2.) Oil spike threaten to shave off Singapore’s GDP growth

Crude oil surpassed US$90 a barrel in late October. This will push up business costs in Singapore, noticeably in wages, rents and daily essentials.

One of the vital counter measures taken by Monetary Authority of Singapore (MAS) was to gradually strengthen Sing dollar to avoid importing inflation from outside. However, if oil prices continue to increase unabated, MAS will have to tighten the measure further.

Every US$10 increase in oil prices from the current levels would shave Singapore’s GDP growth by about 0.5 to 1 percentage point. Singapore’s GDP growth this year is estimated to be between 7% and 8%. (22 Oct)

(A.3.) US may go into recession next year

Although sub-prime mortgage assets account for only 14% of all securitised assets in the US, the crisis has become the largest economic problem in three decades. If it drags on, Asian economies will be similarly hard hit like in 2001.

In the first half of 2007 and before the sub-prime mortgage crisis reared its head, US consumption accounted for a record 72% of GDP, or about US$9.5 trillion.

Now that the economy is hit by the mortgage crisis, consumer spending may drop drastically. If the US consumers start to save, nobody on the demand side can fill the big shoe.

The root of the problem is that the high consumption in the past few years were not supported by rising income but by a wealth effect which was caused by a property bubble that has now burst.

The ballooning effect has all but disappeared and it is now unlikely for US consumers to extract equity from their home with prices still going through a free fall. (18 Oct)

(A.4.) With s strong Sing dollar more liquidity is expected

However, the mixed signal comes from a strong Sing dollar. Interest rates in Singapore are going to stay cheap for some time. This is because the Monetary Authority of Singapore (MAS) has announced that it will raise the pace of Singapore dollar appreciation to counter imported inflation. The move will lead to higher money inflows and will benefit home buyers, consumers and corporate borrowers.

Instead of a higher interest rate to combat volatility of the financial markets and the increased chance of a recession in the United States, borrowers will now enjoy lower interest rate as foreign funds began to flow back to take advantage of a strong Singapore dollar.

There will be higher liquidity in the local market which will continue to keep interest rates and cost of borrowing low.

A stronger Sing dollar will make people want to invest in local equity markets as they will get both capital and asset returns. (12 Oct)

(B) Government passed new en bloc rules to dampen collective sales

(B.1.) New collective sale rules took effect on 4 October

The Land Titles (Strata) (Amendment) Act, enacted by Parliament on 20 September 2007, took effect from 4 October 2007.

The new rules aimed at making the sale process more regulated and transparent. More stringent conditions would have to be met, such as setting up of a Sale Committee at an extraordinary general meeting (EOGM) and be endorsed by at least 50% of the residents. A new five-day cooling-off period after signing the collective sale agreement was also introduced.

The changes will apply to all developments that have not obtained the mandatory majority consent from at least 80% of owners by share value, or 90% for estates less than 10 years old.

Full details in attachment – Annex A
(B.2.) En bloc sale volume dwarfed in third quarter

Having been primed, en bloc sale volume had already nosedived in the third quarter even before the new en bloc laws were made official. From July to September of 2007, only 24 sites worth a total of $1.96 billion were sold compared with 51 sites worth $6.92 billion in the second quarter.

The cautious mood in the collective sales market was due to the global credit tightening, the higher price tags and the two hikes in DC rates in July and September 2007. (The July revision was ad hoc and aimed to douse the en bloc sale fever)

For the first time since 2006, the residential investment sales only accounted for $2.9 billion or 21.4% of the total investment sales in the third quarter.

The cautious mood in the third quarter had caused the residential investment sales to nosedive 68.3% from the previous quarter. (16 Oct)

(B.3.) Mad rush to meet new collective sale rules

As there was earlier no mention of the actual start date for the new en bloc rules, the sudden announcement caught many real estate agents by surprise. And what ensued was a mad rush for signatures. They had to knock on doors and cajole owners right up to the last minute.

Some of the projects got their go-ahead at the eleventh hours, such as the Newton Lodge when the last signature was faxed from Shanghai a few minutes before midnight. Chestnut Ville in Upper Bukit Timah had the last signature appended at 10pm.

Three prospective en bloc projects which barely made it were Amber Park, Thomson View and Villa delle Rose.

For those who have missed out the deadline, such as Clementi Park, Pine Grove and Botanic Gardens View, they would have to restart the process all over again under the new rules. (7 Oct)

(B.4.) Only one collective sale site sold – District 19 Toho Garden

District 19 Toho Garden, a condominium on Yio Chu Kang Road near the junction of Ang Mo Kio Avenue 3 and Hougang Avenue 2, has been sold en bloc to GuocoLand for $62.5 million or $594 psf ppr, inclusive of a development charge of $9.8 million.

The site has an area of 86,900 sq ft and a plot ratio of 1.4, which gives a maximum height of five storeys.

However, the other 17 collective sale projects in other parts of Singapore are not as fortunate. See details of other en bloc project in Annex B. (22 Oct)
Details of other en bloc projects – Annex B

(C) URA launched more land to meet increasing demand

In fact, more individual plots of vacant land were officially launched for tender in October than any other months this year. Below outlines the information:

(C.1.) Simon Road plot near Kovan Melody attracted fierce bidding

The URA land sale of Simon Road was awarded to Duke Development, a new property development company set up by former UOB Kay Hian brokers, amidst a fierce tender which included property bigwigs such as Far East Organization, Hong Leong Holdings, Frasers Centrepoint and Allgreen Properties.

The 190,000 sq ft site near Kovan Melody went to the top bid of $290 million or $437 psf per plot ratio. The breakeven point will be about $800 psf. To be profitable, the developer must sell above $900 psf. (3 Oct)

(C.2.) Jurong East land parcel for tender

URA has launched the tender for a 2.2-hectare site flanked by Lakeside MRT Station and LakeHolmz condo. The site can be developed into around 680 apartments averaging 1,200 sq ft.

The site is estimated to be worth about $300 psf ppr. The breakeven cost for a new condo should be about $650 psf and the average selling price should be around $700-750 psf.

A vacant plot of land near to Lakeshore has been earmarked for an International School. That may prompt more developers to bid for the land. (18 Oct)

(C.3.) State resumed sale of in-fill sites to meet rising demands

For the second time in history, the Singapore Land Authority (SLA) released in-fill sites at popular residential areas for private individuals to build their own dream home.

Two GCB sites in District 11 Eng Neo Avenue Good Class Bungalow (GCB) area had been auctioned off, along with Moonbeam Walk off Holland area, Bedok Close, Jalan Insaf at Bishan vicinity, and Somm Road off Petain Road. All the sites, including the pair in the GCB areas, will be granted a 99-year leasehold tenure.

In-fill sites are essentially disused state land within popular areas which have been put to economic use. They could be parks, gardens, sub-stations, or even septic tanks previously. At least four of the above sites are at a cul-de-sac (end of a no-through road).

The benefits of re-using this land within the popular and matured estates include saving resources since these sites are nearby or already connected to infrastructure and they are cheaper. (26 Oct)

(C.4.) URA auction of Sembawang land fully taken up

12 sub-divided landed housing plots near Sembawang Beach were sold at a competitive bidding held by URA for a total $37.09 million or an average of about $285 psf. The plots can be developed into a total of 57 landed homes. (31 Oct)

Response to the auction reflected the current bullish market mood as small-time developers, contractors/engineering firms and individual investors thronged the auction venue.

Here are some facts on the winning bids.

The only bungalow plot of 4,477 sq ft was won by an individual investor for $940,000.
The biggest plot of land measuring 43,687 sq ft and is designated for 23 terrace houses was won by an engineering firm at $14.3 million or $327.33 psf.
Two plots of land - one designated for 14 terrace houses and another for three terrace houses were won by Fragrance Group for $9.2 million and $1.76 million respectively. The bid prices work out to be $294 psf and $270 psf respectively.
Another single semi-detached plot was sold to the boss of Fragrance Group for $289 psf.

(D) Price trend in October 2007

Despite a general slowdown in new home market, a few benchmark home prices were created at some areas, giving testimony that the underlying strength of the market is still strong. However, having said that, it must be pointed out that the benchmark was made before the announcement of the withdrawal of Deferred Payment Scheme.

(D.1.) Prices of private properties rose in third quarter

According to the Urban Redevelopment Authority (URA), prices of all properties have increased from end-2006 to the end of the third quarter 2007. Below are the details:

Types	From 2nd to 3rd Quarter	From end 2006
Private residential	8.3%	22.9%
Office	8.1%	22.7%
Shop	3.0%	9.5%
industrial	3.2%	15.8%

Likewise, rentals of all properties have also increased. The details are as follows:

Types	From 2nd to 3rd Quarter	From end 2006
Private residential	11.4%	32.2%
Office	14.8%	40.7%
Shop	8.1%	17.5%
industrial	8.7%	22.4%

About 65,400 private residential units are in the pipeline, comprising the supply from projects that are already under construction and those that have been granted planning approval and will be constructed within 6 months to 2 years. (26 Oct)

(D.2.) New benchmark prices before DPS was scrapped

All the following sales had registered a new benchmark price for the respective areas including:

$2,772 psf for Turquoise at Sentosa Cove
$2,888 psf for Three Buckley in Newton area
$1,577 psf for The Rochester in the one-north vicinity
$1,449 psf for Gardenvista on Dunearn Road in the Upper Bukit Timah area
$1,327 psf for The Beacon Edge at Tembeling Road
$1,044 psf for Vetro at Mar Thoma Road
$1,080 psf for The Lakeshore in Boon Lay Way (16 Oct)

(D.3.) New record sale price for Orchard penthouse

The new sale record for penthouse is $28 million or $5,600 psf for a 53rd storey penthouse at the Orchard Residences. The buyer of the 5,048 sq ft unit is believed to be a foreigner.

The 175-unit condo right in the heart of Orchard Road has been 73% sold, with all four penthouses already snapped up. The project sits on a 99-year leasehold land. (12 Oct)

(D.4.) Average capital value of luxury apartment surpassed 1997 peak

In the first three quarters of 2007, the average capital value of luxury apartments in Singapore has risen 43.5% since the last quarter of 2006.

The average value of luxury apartments achieved in the third quarter this year has surpassed the 1997’s peak. At $2,827 psf, it is 59% higher than the $1,778 psf achieved in 1997 before the market suddenly ground to a halt in the aftermath of the Asian currency crisis. (13 Oct)

(D.5.) Private home prices rise unevenly

While property prices rose averagely across the board in the third quarter of 2007, the quantum of increases are uneven and the price gap between different projects at different locations and with different attributes can be quite wide. Quite a number of uncompleted private residential projects in the suburban areas are still very affordable. (See table below for information)

Project	District	Lowest psf	Highest psf	Time period
Lakeshore	22	$590	$866	Aug – Sept 07
The Centris	22	$486	$661	Aug – Sept 07
The Raintree	21	$487	$1,039	Aug – Sept 07
Yew Tee Res	23	$453	$558	Aug – Sept 07
Ferraria Pk	17	$521	$750	Aug – Sept 07
Northwood	27	$493	$635	Jun – July 07
Sensoria	27	$556	$642	Jun – Jully 07

The number of vacant units has gone up from 11,506 units in the second quarter this year to 12,550 units. In percentage term, vacancy rate has gone up from 4.9% to 5.4%.

In the meantime, another 9,224 new units have been added into the supply line to be ready by 2011. In total, the potential new supply of condos and apartment has increased from 56,182 to 65,406 units. (26 Oct)

(D.6.) Rents for private home continue upward trend

According to URA’s statistics, rents for private homes have risen in the July-September period. Rents for private home are expected to go up by another 40%. The percentage increase across the island is as follows:

Rents rose 12.2% in the core central region, which covers Orchard, Holland, River Valley, Bukit Timah, Marina Bay and Sentosa.

Rents rose 11.9% in the rest of the central region, which covers Marine Parade, Queenstown, Geylang and Bishan.

Rents rose 11.8% in the Outside Central Region. (27 Oct)

See “Why rents for private homes will continue to go up?” – Annex C

(D.7.) Office rents continue to go up

Office rentals went up 14.8% in the July-September period. In the April-June period, office rents went up by 11%. From the end of 2006, office rents have gone up by 40.7%.

URA figures also showed that occupied office space rose by 645,840 sq ft in the July-September period. This was almost 54% higher than the 419,796 sq ft recorded in the April-June period.

Median rents for prime offices reached $11.89 per sq ft (psf) per month in the July-September period compared with the increase from $10.33 psf per month in the April-June period.

Median rent for general offices was up from $4.60 psf a month in the April-June period.

Vacancy rate for prime office space fell to 2.8% from 5% in previous quarter. (27 Oct)

(E) October 2007 price trend in HDB resale flats

(E.1.) Prices for new and resale flats to go up

HDB has managed to sell a huge portion of its stock of unsold new flats. For example, 1,269 new HDB flats were offered in the North and West zones in the April bi-monthly sale exercise. Out of these, 92% or 1,172 flats were sold. Then in June, 992 new flats in the North-east zone were offered and 97% or 892 flats were snapped up.

HDB has stated in general that the pricing policy takes into consideration the affordability factor for the public, changes in the market value of resale flats, individual attributes of the flats and the general demand and supply condition in the resale market.

So far, resale prices have been rising steadily with the latest resale price index registering an increase of 6.6% in the third quarter of 2007 quarter-on-quarter. (11 Oct)

(E.2.) Number of unsold new HDB flats drop to 3,500

The stock of unsold HDB flats has dropped to 3,500 units. It may be further reduced to about 2,200 units by year end.

In the recent HDB’s bi-monthly walk-in sale exercise, 4,800 people filed in online applications for 489 units available for sale. This means that the flats were almost 10-time oversubscribed.

The projected completion programme of HDB flats in the next few years is as follows: (18 Oct)

Financial Year 2006-2007 1,764 flats
Financial Year 2007-2008 6,300 flats
Financial Year 2008-2009 1,700 flats
Financial Year 2009-2010 4,000 flats
Financial Year 2010-2011 13,000 flats

(E.3.) Higher cash over valuation (COV) for HDB flats

According to data released by the Housing Board on 26 October 2007, five-room flats in popular areas like Queenstown, Tiong Bahru and Toa Payoh are being sold for more than $100,000 above valuation.

Since July this year, COV has become a norm and about 80% of HDB resale transactions attracted cash above valuation. This may be due to middle-income buyers, who had been priced out of the private home market, buying cheaper public flats.

According to HDB figures, buyers of executive flats are forking out the highest median cash-over-valuation amounts. For example, the median price is $155,000 in Clementi. Overall, the median amount for this flat type was $25,000.

The median price for four- and five-room flats, are $18,000 above valuation. For two- and three-room flats, the median amount was $15,000.

The highest amount paid above valuation for a five-room flat was $91,500. The figures were $57,500 for a four-room flat and $40,000 for a three-room flat.

In general, the areas requiring the least cash-over-valuation were Woodlands, Yishun and Bukit Panjang. The Central area, Queenstown and Marine Parade were the locations where buyers have to fork out more cash in order to stand a chance to own a flat there.

However, total HDB resale transactions in the third quarter were 8,700 units - a fall of 11% after rising 38% in the second quarter. (27 Oct)

See “Why HDB resale prices will continue to rise?” – Annex D
(E.4.) Median HDB rent went up

The overall median rental for HDB five-room flats went up by 21.2% in the July-September period.

For HDB resale flats, median rents crossed the $2,000 mark for five-room flats in Bukit Merah and the Central area, as well as executive flats in Bishan, Kallang/ Whampoa, Clementi and Queenstown.

Overall, median rents were $1,200 for three-room units, $1,400 for four-room units, $1,600 for five-room flats and $1,700 for executive flats. (27 Oct)

(F) Deferred payment scheme withdrawn

The government on 26 Oct 2007 made a surprise withdrawal of the Deferred Payment Scheme (DPS) for property purchases with immediate effect - in view of the strong economic and property market conditions.

The rationale for DPS is no longer valid with the current robust economy. In fact, with no requirement to prove repayment abilities, many speculators have taken advantage of the DPS to engage in sub-sale activities, causing a property bubble to form recently.

From now on, buyers will have to ensure that they have sufficient funds or are able to secure adequate loans from banks before they commit to buying a property. (26 Oct)

The withdrawal of DPS immediate brought about the following responses:

(F.1.)Stock exchange in tailspin

Except for CapitaLand which has extensive overseas operations, major local developers have become poorer in stocks. The table below gives a gist of their losses in share prices.

Developers	Share price as at 27 Oct	Losses
CapitaLand	$8.10	+ 5 cents
City Developments	$15.80	- 50 cents or 3.1%
Allgreen Properties	$1.69	- 9 cents or 5.1%
Wing Tai	$3.44	- 18 cents or 5%

Many believe the sell-down was just a knee-jerk reaction to the Government’s surprise move on 26 Oct 2007.

Many bankers were of the view that the change would only affect only a small group of HDB upgraders who cannot afford two mortgages. Most property analysts were of the view that the run-up in the residential property market has been buttressed by strong economic fundaments such as high economic growth, rising rents, and a tight supply of new properties. (30 Oct)

(F.2.) Investors buy into bank shares

However, bank stocks rose after the announcement of the withdrawal of Deferred Payment Scheme (DPS).

The exit of DPS was seen as positive for banks whose risks have been considerably reduced as more genuine buyers will come forward. The buyers will be compelled to take up home loans which will be drawn down progressively. The net result, the property market will be backed by the correct fundamentals.

The second reason for the bank to cheer the government’s initiative is that the risks of default by corporate borrowers are always higher than individual households in a downward market.

The removal of the scheme will restore some balance, and the banks should have their exposure to households raised while lessening their exposure to developers.

The removal of DPS will definitely cool the property market somewhat and buyers will become more cautious in the near term. For the time being, newly launched projects may suffer from a slower take-up rate.

But in the longer term, property prices will be rising more realistically or falling in line with economic fundamentals.

(F.3.) All is not lost with DPS withdrawal – real economy is still red-hot

A report by Goldman Sachs Global Investment Research said that those who are likely to be affected by the withdrawal of the Deferred Payment Scheme (DPS) are speculators, foreign buyers and buyers who are stretching their affordability to buy a property.

While the high-end residential market will also be affected by the withdrawal, it is the mid to mass market which will take the full brunt of the government’s move. This is because such projects saw more buyers using the DPS. With the new rule, there will be a need for buyers in these two categories to secure financing before they could commit to the purchase.

As such, in the short run, the pace of new launches and take-up of new launches are expected to slow as property prices are likely to come under some downward pressure. This may lead the developers to offer lower discounts on price.

However, all is not lost as there are also positive factors to support the growth of the property market. Such factors include strong job creation and economic growth.

Latest amendments to En bloc Sale rules Annex A

The Ministry of Law has announced that the Land Titles (Strata) (Amendment) Act, enacted by Parliament on 20 September 2007, will take effect from 4 October 2007. It will affect en bloc sale projects in the following ways:

En bloc sale projects where the required 80% or 90% majority consent of owners (based on share value) has not been obtained as at 4 October 2007 will have to comply with the new rules.

En bloc sale projects where the required 80% or 90% majority of owners (based on share value) have signed the Collective Sale Agreement (CSA) will not be affected by the new ruling.

The new amendments are summarised as follows:

(I) Additional Consent Requirement – by building’s GFA

In the past, an application for an en bloc sale can be made if there is consent from the owners holding at least 80% of share value if the development is more than 10 years old, and 90% if the development is less than 10 years old.

(1) The new rule of majority consent requires approval from owners representing at least 80% of the building’s gross floor area (GFA) if the development is more than 10 years old, or 90% if it is younger than 10 years old.

(II) Formation and Proceedings of an En Bloc Sale Committee

Previously, the law did not contain rules to govern the formation and the proceedings of an en bloc sale committee.

The new rules regulate the formation of the sale committee and the sale committee’s proceedings. These rules have been adapted from the provisions in the Building Maintenance and Strata Management Act (BMSMA) 2004 in respect of the council of the management corporation. Other details include the following:

(a) Formation of Sale Committee

(2) A decision to form an en bloc sale committee will have to be made by ordinary resolution passed at a general meeting. There can only be one sale committee per development at any time.
(3) Members of the sale committee will have to be elected at the meeting. Similarly, a sale committee may be dissolved by ordinary resolution at a general meeting.
(4) A person standing for election to the sale committee must meet certain eligibility criteria. For example, such a person has to be an owner of a unit in the development; or be nominated by an owner which is a company; or be a member of the immediate family of the owner who is nominating him.
(5) A person standing for election to the sale committee must declare his interest or relationship, if any, with a property developer, property consultant, marketing agent or legal firm.

(b) Proceedings of Sale Committee

(6) The sale committee shall convene general meetings to consider key issues including the following:

the appointment of any lawyer;
the appointment of property consultant;
the appointment of marketing agent;
the apportionment of sale proceeds;
the terms and conditions of the Collective Sale Agreement (CSA); and,
the terms and conditions of the Sale and Purchase (S&P) agreement.

These changes will ensure that owners will have the opportunity to discuss such key issues before consenting to them.

(7) The sale committee shall keep minutes of its proceedings and must, within 7 days after each meeting, either display the minutes on the management corporation’s notice board or pass the minutes to all owners.

(III) Collective Sale Agreement

Previously, the law did not regulate drafting and signing of the CSA. There are three changes made to the rules, including:

(8) The en bloc sale committee must provide a preface to the CSA listing the clause numbers and page numbers where important information such as reserve price, apportionment method, etc. may be found.
(9) When an owner signs the CSA in Singapore, the lawyer appointed for the en bloc sale will have to be present to explain the legal terms and liabilities and address any doubts that the owner may have.
(10) An owner can rescind his agreement to be a party to the CSA within a 5-day cooling-off period after signing the CSA for the first time.
(11) The Sale Committee must provide updates of the consent level every 4 weeks. The updates on the consent level must also be certified by a lawyer.
As it is, the CSA will lapse after one year from the first signature. When no buyer is forthcoming after that one year, the Sale Committee ceases to exist.

(IV) Mode of Sale: By Public Tender or Public Auction

Previously, the mode of sale was not regulated. Now the new rules require the mode of sale to be as follows:

(12) Every launch of an en bloc sale must be by public tender or auction.
(13) Following a tender or auction, especially one which fails to achieve the price acceptable to the sale committee, the sale committee can engage in follow-up negotiations for sale by private treaty with any bidder to get the best deal for the owners. But any sale by private treaty must be concluded within 10 weeks from the close of the tender or auction.
(14) The sale committee must obtain from an independent valuer a valuation report on the value of the en bloc sale site as at the date of the close of the tender or auction on the same date.
(15) The sale committee will be required to provide the owners with information on the bids received as soon as practicable after the close of the tender or auction or, where applicable, after the sale committee has entered into a sale by private treaty.

(V) Return of Moneys in Management Fund and Sinking Fund

Previously, the buyer-developer was entitled to the moneys remaining in the management fund and sinking fund upon the termination of the strata scheme following an en bloc sale.

(16) The new rules provide that upon the legal completion of an en bloc sale, the moneys in the management fund and sinking fund of a management corporation shall be returned to the en bloc sellers according to their shares value allotments.

En bloc projects still in the market Annex B

(1) Hertford Mansion

District 8 Hertford Mansion at Hertford Road/Bristol Road near Farrer Park has been put on the en bloc sale market with an indicative price of $12 million or $744 per sq foot per plot ratio (psf ppr). The 11,527 sq ft plot is not too far away from Kandang Kerbau (KK) Women’s and Children’s hospital

The break-even cost for Hertford Mansion is about $1,100 to $1,200 psf.

It could be rebuilt into a small 5-strorey apartment block with 20 units of 900 sq ft each. There is no development charge payable for this site. (4 Oct)

(2) Holland Hill Lodge

District 10 Holland Hill Lodge is asking for $16 million or $1,108 psf ppr. Situated behind Hollandia, the site area is very small at 9,033 sq ft.

There is 100% consent from all the owners and there is no need for Strata Titles Board’s approval. As such, when a buyer is found the legal completion can be done within three months.

The break-even price for Holland Hill Lodge is approximately $1,500-$1,600 psf. There is no development charge payable for this site. (4 Oct)

(3) Spanish Village

District 10 Spanish Village on Farrer Road has been put on the collective sale market for $878 million or about $1,700 psf ppr.

It has a land area of 331,457 sq ft and a plot ratio of 1.6 which allows a storey height of up to 12. There is an estimated $23 million in development charge (DC) payable. (9 Oct)

(4) Royalville

District 9 Royalville, off Sixth Avenue has been put on the collective sale market for $330 million to $350 million or about $1,235 to $1,305 psf ppr

The 19-year old freehold project has a site area of 174,176 sq ft and a plot ratio of 1.4 which gives a maximum height of 5 storeys. (9 Oct)

(5) Welkin Mansions

District 9 Welkin Mansions at 17 River Valley Close is up for en bloc sale for for $130 million or $1,800 psf ppr.

The project is diagonally opposite Pacific Mansion which is also on the en bloc sale market. The site can be built up to 36-storey apartment block with about 48 units of around 1,500 sq ft. (11 Oct)

(6) Westwood Apartments

District 10 Westwood Apartments at 15 Orchard Boulevard has been put on the en bloc sale market for $488 million or $2,800 psf ppr.

The freehold 62,179 sq ft site is the first luxury collective sale site to be launched under the new en bloc sale rules and during the current market lull.

Currently, the project has 48 units but it can be redeveloped in a 20-storey condominium project with 69 units of around 2,500 sq ft each.

The site is near to Orchard Road and the surrounding luxury residences such as the St Regis Residences, Parkview Eclat, and Orchard Residences. (11 Oct)

(7) Northshore Bungalows

In Punggol, Northshore Bungalows is on the en bloc market for $92.4 million, excluding development charges of $14 million.

Currently, the development comprises 20 units of bungalows and two plots of bungalow land with swimming pool and a clubhouse. The 129,585 sq ft site has a plot ratio of 2.1 and is zoned for 2-storey bungalows. (11 Oct)

(8) The Estoril

District 10 The Estoril on Holland Road has been put up for collective sale for $208 million or $1,536 psf ppr.

The 44-unit project has a land size of 84,600 sq ft and will be able to accommodate 75 new units of around the size of 1,800 sq ft. The estimated breakeven is around $2,000 to $2,050 psf.

In July, nearby 162-unit Tulip Garden was sold for $516 million or about $1,018 psf ppr. (16 Oct)

(9) Elizabeth Towers

District 9 Elizabeth Towers at No 12 Mount Elizabeth is being put up on the en bloc sale market. The owners are asking for $673 million or $2,666 psf ppr. No development charge is payable.

The en bloc sale site has an area of 54,318 sq ft site. URA has already given the planning approval for the site to be built up to a plot ratio of 4.647.

Currently, the freehold project has 80 apartment units comprising 3-bedroom units, maisonette and penthouses. (18 Oct)

(10) Villa delle Rose

District 10 Villa delle Rose at No 2 Taman Nakhoda in Holland Road area is being put on the en bloc sale market with a price tag of $700 million or $1,758 psf ppr. There is an estimated $31 million in development charge payable.

The freehold site has a land area of 297,132 sq ft and a plot ratio of 1.4 which allows a maximum height of 5-storey.

Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. (18 Oct)

(11)Novena Hill

Novena Hill at No 33 Jalan Novena is put up on the en bloc sale market for $56 million to $60 million, or up to $1,777 per sq ft of potential gross floor area.

The freehold site opposite the Ministry of Home Affairs is within District 11 and surrounded by smallish apartment developments. (20 Oct)

(12) Cavenagh Gardens

District 9 Cavenagh Gardens on Cavenagh Road, near the Istana has been put up on the en bloc sale market for $619 million or $2,308 per sq ft of potential gross floor area.

The freehold site has an area of 130,000 sq ft and if approval is granted by the State, the new owner will be able to acquire an adjacent State land to form a bigger parcel.

However, if no approval is granted, the new buyer may resort to refurbishment or doing an addition and alteration (A&A) instead of redeveloping the entire project so as to keep the current 13-storey form. (20 Oct)

(13) Willyn Ville at Holland Village

District 10 Willyn Ville at No 1 Holland Avenue is put on the en bloc sale market for $120 million or $2,153 psf ppr.

The freehold site has a land area of 39,802 sq ft and a plot ratio of 1.4 which gives a maximum storey height of five. No development charge is payable for this project. (23 Oct)

(14) Rich East Garden

District 16 Rich East Garden at No 300 Upper East Coast Road is up for collective sale for $90 to $95 million or $619 to $653 psf ppr (including development charge).

The freehold site has a land area of 105,000 sq ft site and a plot ratio of 1.4 which gives a maximum storey height of five.

Behind Bayshore Park, the site may be redeveloped into about 100 apartments with an average size of 1,400 sq ft each. Currently, there are only 40 units in the project. (23 Oct)

(15) Amber Glades

District 15 Amber Glades, off Amber Road, has been put up for collective sale for $145 million or $1,345 psf ppr, excluding a development charge of about $9 million.

The redevelopment site has a land area of 40,917 sq ft and a plot ratio of 2.8 which gives a maximum storey height of 36.

The site can be redeveloped into 88 new apartments of 1,300 sq ft each. The breakeven price is about $1,700 to $1,800 psf. The launch price could be over $2,000 psf.

In August, a smaller site off Meyer Road was sold for $58 million or an estimated unit land price of $882 psf per plot ratio including a development charge. (24 Oct)

(16) Thomson View Condo

District 20 Thomson View Condo, along Upper Thomson Road, has been put up for en bloc sale for $550 million or $652 psf per plot ratio. The asking price is inclusive of development charge estimated at $110 million and a differential premium of about $80 million for topping up of remaining lease period to full term of 99 years.

New owner of the 540,314 sq ft site may be able to acquire an adjacent state land of about 39,000 sq ft along Bright Hill Drive subject to approval by the authorities.

The site is zoned residential with a plot ratio of 2.1 which gives a maximum storey height of 24. (31 Oct)

(17) Chancery Court

District 11 Chancery Court a privatised HUDC estate along Dunearn Road has been put up for collective sale for $468 million or about $1,614 psf per plot ratio.

The asking price is inclusive of a development charge of $65.5 million and a differential premium of $52 million for topping up of the site’s lease to full-term 99 years. The former HUDC estate was completed in 1993.

The 136-unit project has a site area of 259,137 sq ft land and can be redeveloped into a new condo with about 242 units with an average size of 1,500 sq ft. The site has a plot ratio of 1.4 which gives a maximum storey height of five. (31 Oct)

“Why rents for private homes will continue to go up?” Annex C

Quarter-to-quarter, rents for private homes were up by 11.4% over the 10.4% increase in the second quarter of the year. Altogether, in the past three quarters, rents for private homes have gone up by 32.2%. In 2006, rents went up by 14.1% for the whole year.

More than 2,000 apartments sold in en bloc sales

The severe constraint in demand and supply of private homes has been the main culprit for pushing up private home rentals. Altogether, more than 100 residential projects have been sold en bloc and soon construction works will take over and more than 2,000 apartment units would be taken out of the supply line within this one to one-and-a-half year.

Few units will be completed in 2008

On the other hand, few units will be completed in 2008 and as such there is no respite for the shortage. According to URA’s data, only 5,541 homes will be completed in 2008. Taken into consideration the 2,000-odd units that will be withdrawn from the market, the net supply will be even lesser.

Why HDB resale prices will continue to rise? Annex D

Unemployment rate dropped to the lowest in a decade and a robust service industry awaiting one of the most lucrative trades to come to fruition in two years time, Singapore really have reasons to believe that all things will become dearer, especially real estate. Below outlines a couple of strong reasons why HDB resale prices will soar.

Jobless rate at the lowest in ten years (31 Oct 2007)

According to the Manpower Ministry (MOM), Singapore’s jobless rate fell to 1.7% for the first time in ten years.

57,600 more new jobs were created in the third quarter of 2007, compared to the increase of 43,000 in the same quarter last year.

In all, the total employment for the first three quarters of 2007 was 171,500, which is close to the 176,000 posted for the whole of 2006.

The services sector continued to contribute to the employment gains, creating 34,500 more jobs in the third quarter. Manufacturing added 11,800 jobs. The red-hot construction sector created 10,800 jobs.

The Integrated Resorts (IRs) will groom more affluent people (11 Oct 2007)

The prospect of the two integrated resorts which will incorporate a casino each and the robust financial services industry will continue to fuel the economic expansion in Singapore.

With a possible economic contraction in the US and Europe, Singapore is likely to benefit from greater inflows of wealth from risk averse foreign investors looking safer havens.

Figures from Standard Chartered’s wealth management business put the annual increase in inflow of foreign based private funds into Singapore at over 16% annually.

The number of Singaporeans holding at least US$1 million (S$1.48 million) in liquid assets can hit 29,000 by 2011.

That will be an increase of 7,000 or about 7% a year while their combined assets is expected to snowball from the current US$64 billion to US$85 billion (S$125.4 billion) in four years.

Singapore will have the highest number of people with more than US$600,000 in liquid assets to their name. The number of affluent people residing in Singapore will grow from 410,000 in 2006 to more than 600,000 by 2011, with the value of their assets increasing from almost US$140 billion to US$210 billion. (11 Oct)

Singapore Real Estate - Buy , Sell , Rent ,invest ,Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com ( email me )
http://www.hotvictory.com

What’s NEW in the REAL ESTATE Market From 1 September to 30 September

What’s NEW in the REAL ESTATE Market From 1 September to 30 September

September started tentatively with property buyers taking cover from a slew of bad news originating from the financial markets the world over. Towards the end of the month, morale boosting news started to creep in and a stock market revival has restored some of the bruised confidence. By the time of this market review, real estate agents should be busier in their work as compared to the beginning of the month. Below describes the “ebb and flow” of the real estate market in September.

(A) Local banks are reportedly tightening credit

Though one big bank openly rebuffed the accuracy of the above report, the Credit Bureau Singapore (CBS) gave a different perspective a few days later when it released its independent findings on home loans. The gist is as follows:

CBS said that its own property loan index shows a hunger for credit to finance properties under the current property boom.

The number of property owners with more than one home loan has gone up by 64% to 38,520 in June this year.

In all, average home loan application per month is around 10,000, but only around 40% to 50% of the application would be approved probably due to the ‘multiple applications’ that would not be able to qualify for a home loan easily. (13 Sept)
See other details in Annex A.

(B) Banks must spell out home loan rates upfront

From 14 September, all the 107 local and foreign banks which are members of Association of Banks in Singapore (ABS) will have to follow a set of guidelines when promoting their home loan packages. They must inform borrowers upfront of the following:

The different interest rates being charged for different home loan packages before they take up the loan offers.

The financial indicators being benchmarked against for home loan rates, such as the three-month Singapore Inter-bank Offered Rate or the Central Provident Fund rate.

The banks’ prerogative to change the board rate at any time by giving 30 days’ notice,

Letter of Offer must include the above details. (9 Sept)

(C) Mortgage growth will double

Currently, most local banks are only financing a maximum of around 80% of the value of a property, despite MAS rules allowing a higher percentage of 90% funding. This means that borrowers will have to fork out more front-end cash.

In the 11 months to March this year, mortgage growth in Singapore remained under 3% even though home sales have almost doubled over the same period of time. However, according to current official figures, home loans are up 8.1% in July from 6.9% in June. In general, banks expect mortgage growth to reach double digits by the end of the year. (5 Sept)

(D) Number of new homes to come on stream

To reassure the public that there is sufficient supply of new homes and allay fears that some prospective home buyers might be priced out of the market, the URA released statistics showing the on-coming supply of new homes up to year 2010.

The potential supplies include 2007 (3,899 units now under construction), 2008 (6,579 units - comprising 6,257 units now under construction and 322 units being planned), 2009 (15,846 units – comprising 10,229 units now under construction and 5,617 units being planned), and 2010 (16,727 units - comprising 5,284 units now under construction and 11,443 units being planned).

See other details at Annex B.

(E) Sub-sale data

According to figures released by URA, sub-sales of private homes in the Core Central Region are 19.4%, the Rest of Central Region 10.4% and the Outside Core Region (OCR) under 5%. When taken as a percentage of total new sales within the respective regions, the proportion of sub-sales was just 7% for the OCR, but 53% for the CCR and 27% for the RCR. However, readers should take the statistics with a pinch of salt as ‘flipping’ of properties is untraceable as ‘buyers’ and ‘sellers’ are doing it ‘under the radar’ where no stamp duty and legal fees payable as there is usually no formal contract on such transactions.
See more details at Annex C.

(F) Private rental index by IRAS

On the whole, the statistics reflect a bullish outlook of the real estate market. Private apartment rents in Core Central region were up by 12% - the highest among all the three regions. The other two regions also saw apartment rents going up by 10% and 9.4% respectively. (19 Sept)

See more details at Annex D.

(G) Private residential rents likely to rise by 40%

Rents of private residential properties continued their flight path in the third quarter of this year, soaring 8% to 10% above the second quarter’s 10.4% increase.

Rents in the most remote heartlands in Woodlands and Mandai, which are near the Singapore American School, clocked the highest rates in rent increases in the third quarter, surging between 25% and 30%.  From the look of it, the full-year rental growth is likely to be as high as 40%. (29 Sept)

(H) Office rents will stay high in near future

Official figures show that average monthly rent in Raffles Place is now $14.50 per square foot (psf) with the dearest office space going for $18.00 psf (A grade A office space at Republic Plaza was rented at $17.50 psf). The average rent is 11% higher than in the second quarter of 2007.

In the Orchard Road zone, monthly rental shot up by 25% compared to last quarter. Orchard Road offices are now going for an average of $10.60 psf per month. (29 Sept)

(I) More HDB resale flats sold with higher “Cash-Over-Valuation”

Over the past eight months, HDB resale transactions have edged up slowly and steadily, reaching 2,553 transactions for the whole of August; the lowest resale figure this year was 1,217 in March. Transactions picked up steam from April and have not stopped since. (15 Sept)

Price wise, HDB resale prices have shown some sign of strength over the past eight months. More than 70% of the resale flats were sold above the market valuation prices.
See more details of HDB Resale Transaction in 2007 at Annex E; and details on upward trend of HDB resale prices in two typical HDB heartland locations at Annex F.

(J) High tender prices for Government Land Sale (GLS) programme

Two events that happened between a week of each other has restored some confidence in the otherwise jittery real estate market. On 11 September, Far East Organisation paid $202.9 million or $601 psf ppr for a 99-year leasehold site at Ang Mo Kio.

The particular site has a superb location being conveniently situated next to the Ang Mo Kio MRT station, and 15 minutes away from Orchard by train. (12 Sept)

(K) Highest $2b bid for Marina View plot

A parcel of state land in Marina View behind One Shenton and The Sail @ Marina Bay condominiums attracted a historic top bid of $2.02 billion or $1,409 psf of gross floor area. Earlier that month, experts predicted that the parcel could only fetch slightly higher than $1billion, given the uncertainty of the financial market.

The winning bid was put in by Australian Macquarie Global Property Advisers (MGPA), a private equity real estate fund management firm partly owned by Australia’s Macquarie Bank Group.

The eye-popping prices in the two instances underline developer’s confidence in the Singapore economy in the near term. This might be a sign that some foreign real estate funds may channel their attention to Singapore in the near term, given the lingering uncertainties in US and Europe. (20 Sept)

(L) Total private property transactions have gone up this year

The total number of private properties sold between January and August 2007 is 24,945 units.

New Condos/apartments
Comparing this year and the same period last year developers have sold 1,591 more new condos/apartments and this represents a 36.32% growth over last year.

Resale Condos/apartments
There were 8,497 more transactions this year compared to the same time period last year and this is a 126.95% jump over last year.

New Landed homes
Developers sold fewer new landed homes so far this year compared to the same period last year where 225 new landed homes were sold. Only 116 new homes were sold during the same period this year.

Resale Landed homes
There were 1,950 more landed homes sold this year compared to the same time period last year and it was a 106.38% increase in transactions. The landed home market has improved by 83.82% over the same period last year.

Overall private home transactions
Total transactions have jumped over 125% so far this year compared to the same period last year.

(M) Prospect of landed property excellent

The upside of landed home prices in the near term is excellent. There are a number of compelling reasons for landed home prices to rise fast, including:

Limited stock - Currently, there are 68,360 landed houses in Singapore, making up only 29% of the total 233,143 private property stock.

Limited new supply - In the next five year, supply of landed homes will remain subdued with only 1,872 landed units under construction and another 2,579 landed units being planned, accounting for only 6.6% of all new supply expected from the second half of 2007 to 2011.

High rental return - Rents of landed homes have outpaced its capital values, according to URA’s rental indices for all the landed property types. In the first half of the year, rents of detached houses increased by 13%, semi-detached houses by 11.4% and terrace houses 17.3% hike in rents.

Without a doubt, landed housing will always be a coveted prize in land-scarce Singapore. (27 Sept)

(N) En bloc sellers will swamp the resale market next year

So far this year, there were over 60 en bloc transactions between January and July 2007.  The second quarter saw 34 collective sale sites sold. Altogether, a total of 2,796 units will be taken out of the market.

Judging from the time needed to obtain a Sale Order, those en bloc sale sellers are likely to receive the 95% of the sale proceeds in the first three months of next year. Even if only half of these en bloc sellers are buying a replacement home, the demand for homes should increase across the board, including HDB flats. (29 Sept)

Annex A

New home loan applications went up but took a break in August

According to the Credit Bureau (S) Pte Ltd, the number of new home loan applications surged this year. In May alone, there were 17,323 such applications.

Since the start of the market boom in 2005, there have been 10,000 new home loan applications every month, out of which an average of 4,000 applications would be approved each time.

In May, a total of 4,856 applications were approved. This was a direct result of more new home transactions.

In June, 4,794 new home loan applications were approved out of a total of 16,017 applications. The number of new home loan applications fell to 13,870 in August in tandem with the unveiling of the US sub-prime market problems in the July/August period.

Overall, property loan approvals jumped 12% in June 2007 to 50,514 compared with the same time period in 2006. (13 Sept 2007)

Annex B

Number of new homes to come on stream

Excerpt of expected supply of private homes

Annex C
Sub-sale percentage to overall sale of private residential properties

Annex D

Annex E
HDB Resale Transaction up to August 2007

Sub-total from January to August 2007 = 16,949 transactions
Sub-total from January to August 2006 = 18,763 transactions
Whole year resale transactions in 2006 were 27,705 flats.

Some of the plausible reasons to explain the growing interests in HDB resale flats include the worsening of the US sub-prime market situation and en bloc sale sellers buying into larger HDB resale flats, as more and more en bloc sale projects nearing legal completion.

Annex F
Price comparison From January 2006 to August 2007

(1) Ang Mo Kio – 3-room flats (Table A)

In August 2007, out of the 50 three-room flats sold in Ang Mo Kio estate, 28% of the transactions were done at the higher price bracket. The details are as follows:

Percentage share of flats sold (Table B)

Tampines – Executive Apartments (Table C)

Comparing the highest price in the beginning of 2006 with the highest in June 2007, the sale price of Executive Apartments in Tampines has increased by $78,000 in the highest bracket.

Singapore Real Estate - Buy , Sell , Rent ,invest ,Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
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mindy@hotvictory.com  ( email me )

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Where has the Singapore property bull gone? – September newsletter

Where has the Singapore property bull gone? – September newsletter

The previously frantic en bloc sale market has finally ground to a halt. Between April and July, there were a total of 34 successful en bloc deals, but in August there was only one deal struck. In September, it was a complete stand-still.

The government’s supply-side measure of jacking up the development charges has worked perfectly well to douse an over-heated collective sale market. It seems that, in the next three to six months, only en bloc sale projects with superb qualities and competitive prices will have a realistic chance of finding a buyer.

In the US, a worsening housing slump and a credit crunch may land the US economy on clutches. New home sales in the US plummeted in August to the lowest ebb in seven years. It is now much harder for home owners in the US to obtain any mortgage loan that is above US$417,000. Financing for larger homes had simply dried up in the aftermath of the sub-prime crisis.

There is now an even deeper fear that businesses in the US might cut back on spending and investing and in so doing push the economy further into a recession.

Likewise in Singapore, the local banks are cutting back on home loans. They now scrutinise a borrower’s creditworthiness more closely and treat it as the number one consideration in deciding loan eligibility.

In fact, there have been 10,000 new home loan applications every month since the property boom last year, however, at this moment only an average of 4,000 applications would be approved each time. This must be interpreted as an alarm bell sounding. It means that if banks continue to be cautious, about 60% of the new condo owners will be unable to obtain financing when their new condos receive TOP next year.

When you recommend a deal to me, you get 10% of the commission I earn.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com  ( email me )

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Prices of Singapore landed properties set to roar - September newsletter

Prices of Singapore landed properties set to roar - September newsletter

With the financial market woes subsiding, the prospect of landed home sale in Singapore looks much brighter in the near term.

As it is, there will only be another new 1,872 landed units being added into the market in the next three to four years. Add that to the current 68,360 landed houses in Singapore, there would only be around 70,232 landed homes compared with the total of about 250,000 private properties in the next few years. In short, landed properties would make up only around 28% of the total private property stock.

Unlike the meteoric rise of upscale apartment prices since last year, there are still many good bargains in the landed home market in outlaying areas. The near term should see more upper-middle income earners jostling for a coveted prize of land before the bull-run sets in motion again anytime soon.

From the investment yield perspective, the current rental yield for landed homes is extremely high with some semi-detached houses asking for $8,000 a month in rent. In fact, rents for semi-detached houses have risen by 11.4% year-on-year.

Detached houses are now dearer to rent with an increase of 13% in the yearly rental index. Rents for terrace houses have gone up by 17.3% compared to last year.

The push-pull factors of limited supplies and soaring rents should heighten the demand for landed residential properties in the next few months. The current market lull should be cherished by house hunters trying to reach the star. They will do well to grab a house of their choice and not let the opportunity slip. The property bull may be roused anytime from now -  home prices are set to roar again.

When you recommend a deal to me, you get 10% of the commission I earn.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property

Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com  ( email me )

http://www.hotvictory.com

What’s NEW in the REAL ESTATE Market From 1 August to 1 September

What’s NEW in the REAL ESTATE Market From 1 August to 1 September

(A) Home market rises in oblivion to US market woes

URA statistics showed 1,378 new homes were sold last month. The feat was achieved despite the US sub-prime market woes and the sale volume was actually 20% better than the 1,150 new homes sold in June.

A total of 72 new homes with higher than $4,000 psf price tag were sold in July compared with just 16 in June. Another 145 homes were sold for $3,000 psf to $4,000 psf. 755 units were sold within the price range of between $1,000 and $3,000. The rest of the 406 or 30% were in the sub-$1,000 psf range.

The top selling condominium projects last month were The Rochester and Reflections at Keppel Bay where an Islamic fund snapped two tower blocks. The Parc at West coast area, Soleil@Sinaran at Novena area were sold out within 2 weeks of their public launch in mid-August.

According to statistics released by HDB, resale transactions had increased by 38% from 6,258 last quarter to 8,700 this quarter. In total, the first half transactions of resale HDB flats were 14,966.

(B) Government hands out more Housing Grant to more households

The income ceiling for AHG eligibility has been raised from $3,000 to $4,000. This means that about 50% of the households in Singapore would qualify for the scheme. The AHG can be used to buy a new or resale flat.

The grant amount has also been raised from $20,000 to $30,000. The maximum grant of $30,000 is for household whose income is $1,500 or below; and a household with combined gross income of $4,000 will qualify for an additional $5,000 grant under the AHG – over and above the normal CPF Housing Grant of $30,000 or $40,000.

This means that the total grant a person from the lowest income group can receive is $70,000 on condition that at least one of the flat owners must be gainfully employed continuously for a minimum of two years when they apply to buy the flat.

(C) First $60,000 in CPF Ordinary Account earn additional 1%

The Government will now pay 3.5% interest on Ordinary Account (OA) balances and 5% on the Special, Medisave and Retirement Account (SMRA) balances. Currently, the interest on OA balances is 2.5% and SMRA balances is 4%.

The higher rate is applicable to the first $20,000 of a member’s OA balance, and the first $60,000 in all his CPF accounts combined. The housing withdrawal rule does not change with the additional 1% increase in CPF interest. But from now on, CPF members will not be allowed to withdrawal this $60,000 for investment in stocks, unit trusts and other investments under the CPF Investment Scheme (CPFIS). The concessionary HDB loan rate of 2.6% remains unchanged.

(D) Buy-back-and-lease scheme for 2-room and 3-room flats

The government will buy back smaller flats from elderly HDB flat owners who are 62 years or older. HDB will buy back the remaining lease period after leaving 30 years intact. The flat owner will be paid a lump sum and then an annuity which is monthly instalments for the remainder of his life.

For example, if a person bought a HDB flat at the age of 30, and when he turns 62 after 32 years, the flat will have 67 years remaining in lease and HDB will ‘buy back’ 37 years, leaving 30 years’ lease intact. Going by the current market price the retiree will get around $50,000. The money will then fund his retirement.

(E) En bloc law to change in early October

The current statute that governs en bloc sale will be made more transparent and fairer for the various stakeholders. Among the proposed changes to take place in early October include:

Sale Committees: Sales committees must be properly formed and elected at an Extraordinary General Meeting. The signing of Collective sales agreements (CSAs) will be witnessed by lawyers who can clarify doubts and explain terms and liabilities.

Majority consent to include area of development : The definition of majority consent has been changed to mean 80% of share value as well as 80% of the areas of the development. Currently majority consent means 80% or 90% of the project’s share value, depending on whether it is more than 10 years old or less. In the new rule, the first condition still applies but now a second condition is required which include 80% or 90% of the area of the development, again depending on whether the project is more than 10 years old or less.

Requirement of tender or auction
Every launch for sale must be through a public tender or auction which means that the sale committee cannot call for ‘expression of interest’ as the majority consent would have to be obtained prior to that.

(F) Development Charge rate rose sharply in September review

The development charge (DC) rates have received the largest rise in decade, raising an average of 58% for non-landed residential land and 42% for commercial uses.

Non-landed residential DC rate for Orchard Road/ Nassim Road / Napier Road / Cairnhill areas has gone up by 54% to $11,900 psm.

Non-landed residential DC rate for Keppel Road area has gone up by 33.33% from $2,100 psm to $2,800 psm in September 2007.

Non-landed residential DC rate for Anson Road area has gone up by 66.66% from $2,940 psm to $4,900 psm.

The reason for the sharp rise in DC rate this time round is due to the substantial appreciation in land values over the past six months. DC rates are adjusted twice yearly in March and September.

Changes already made this year:

- No more Stamp duty deferment – it must be paid within 14 days of real estate contract.
- Additional 2% more on Goods and Services Tax – affecting real estate agent’s commission
- Employer’s CPF contribution increased to 14.5%; employee’s own contribution 20% - total 34.5%
- Development Charge percentage to market value raised from 50% to 70%.

Singapore Real Estate - Buy , Sell , Rent ,invest Singapore Property
Buy, sell and rent Singapore real estate: private property, residential apartments, commercial and industrial properties. HDB flats for sale and rental. Foreign investors, buyers, tenants or relocating expats can easily find their ideal landed house, bungalow, semi-d, terrace, condominium, townhouse, private apartment, HDB, HUDC, office, shop, factory, warehouse ; land right here.

MINDY YONG
( +65 ) 91002985
mindy@hotvictory.com ( email me )

http://www.hotvictory.com