Keppel, other developers rev up for sales

KEPPEL Corporation and Keppel Land are releasing a new batch of 30 units at their Reflections at Keppel Bay condo today at an average price of $1,950 per square foot (psf), assuming buyers will take the deferred payment scheme (DPS).

Buyers who opt for the normal progressive payment scheme pay 3 per cent less. Sizes of units range from 900 sq ft to 1,600 sq ft. The 99-year development is still under construction.

Reflections at Keppel Bay comprises a total of 1,129 units, of which 638 were sold as at end-July, according to Urban Redevelopment Authority data released this week. In July alone, five units were sold at prices ranging from $1,641 psf to $2,195 psf.

Keppel is also riding on the current uptick in home buying to release for sale units at the completed Caribbean Residences nearby at an average price of $1,300-1,400 psf.

Caribbean Residences comprises a total of 168 apartments at the completed 99-year-leasehold Caribbean at Keppel Bay condo that the group had leased out as corporate residences earlier. The majority of the apartments are leased with tenancies ranging from six months to two years, and these units will be sold with the existing tenancies.

Most of the apartments at Caribbean Residences are located in two blocks which are eight and nine storeys high. So far, about 30 of the 168 units are said to have been sold in the past few weeks and the group is riding on the buyer interest to release more apartments.

‘However, not all the remaining units at Caribbean Residences are being put on the market at the same time,’ a Keppel spokeswoman said. The 30 units sold recently were mostly two-bedders.

Keppel is developing the two projects on the former Keppel Harbour site.

Property consultants say developers are working hard to release more projects, to take advantage of the pick-up in home-buying sentiment.

Next week, NTUC Choice Homes will preview its 39-storey Trevista condo in Toa Payoh. The 99-year-leasehold project will have a total of 590 units.

Singapore Land is also expected to begin selling next week Trizon, a freehold condo on the former Himiko Court site in the Mount Sinai area.

The 24-storey development comprises a total of 289 units.

SingLand bought Himiko Court in May 2007 for $336 million, or $821 psf of potential gross floor area, inclusive of an estimated $1.07 million development charge. Market watchers reckon Trizon may be priced about $1,400 psf on average.

Source: Business Times, 21 Aug 2009

Private home sales up 52%

SALES of private homes hit a new high for the second straight month in July, surging about 52 per cent from June.

Low interest rates, relatively lower prices and a fear of missing the bottom are some reasons behind the strong sales. Although there were also signs of speculation, a significant portion of the sales was backed by real demand, said analysts.

According to the Urban Redevelopment Authority, 2,767 units were sold last month, compared to 1,825 in June. The total number of private homes sold in the first seven months of the year hit 10,017 units.

Property consulting firm Cushman and Wakefield director Donald Han said: “With another five more months to go, (sales could) potentially cross the 15,000 mark. It might go as high to 16,000 to 18,000; it will definitely be one of the records being set.”

Out of the total number of units sold last month, more than half were in the suburban areas, about 27 per cent of the transactions were in the city fringe areas, while 18.6 per cent were in prime districts.

The five best selling developments last month were The Gale near Changi airport, Meadows@Peirce at Upper Thomson Road, Waterfront Key along Bedok Reservoir Road, Sophia Residences near Dhoby Ghaut and Parc Imperial at Pasir Panjang.

Analysts say July’s sales numbers will be unmatched in August, due to the Hungry Ghost Month (Aug 20), which is a traditionally slow period for sales. Less than 1,400 units are expected to be sold then.

Source: Today, 18 Aug 2009

Prices inch up as home sales hit new highs

Record 2009 sales on the cards as developers seek balance between volume and price

(SINGAPORE) Even as news of the 52 per cent month-on-month jump in developer home sales to a stunning 2,767 units in July begins to sink in, analysts are revising their predictions for the full year.

The 1,825 units sold in June already constituted a record but that number was surpassed effortlessly last month as buyers, eager not to miss the boat, rushed in and developers rolled out tempting new offerings. They launched 2,878 private homes in July, up 75.8 per cent from the June figure. For a year that started gloomily, 2009 may shatter private home sales records.

From Jan 1 to July 31 this year, developers sold 10,017 private homes. The previous full-year record of 14,811 units set in 2007 is likely to be overtaken with some market watchers forecasting sales of up to 16,000 units for the full year 2009.

But it will be a toss-up between developers wanting stronger price appreciation and booking more sales, some property pundits say. Evidence of price increases at some projects has surfaced from a Colliers International analysis of the Urban Redevelopment Authority’s data on developer sales in July. Examples include Martin Place Residences, The Beverly at Toh Tuck Road, Concourse Skyline at Beach Road and Floridian in Bukit Timah.

In part, the higher prices can be explained by more transactions involving units on higher floors or with better orientation in July, compared to June. But developers have also become more confident about seeking higher prices as they’ve sold more units in ongoing projects. Also, new projects released in recent weeks have been priced higher than levels prevailing, say, in Q1 this year.

Frasers Centrepoint chief operating officer Cheang Kok Kheong says: ‘The price increase varies from segment to segment and from project to project. For the mass market, my gut feel is the increase has been about 10-15 per cent from the lows of January-February 2009.’

Knight Frank executive director Peter Ow says: ‘Buyers are price sensitive at this juncture. There’s a limit to how quickly developers can raise their prices. The jump in sales in July was driven by launches at prices that are still reasonable despite the fact that they are higher than Q1 launch prices.

‘When they see developers selling well at launches, it increases the fear factor in people who have not bought or invested yet – that they will miss the boat.’

Mr Cheang says his gut feel is that developers may sell a total of 15,000 to 16,000 units for the whole year.

Nicholas Mak, a property consultant, is gazing at the same sort of numbers, citing continuing optimism among buyers that the worst is over for Singapore’s property market.

CB Richard Ellis executive director Li Hiaw Ho reckons that there’s a good chance of surpassing the market peak of 14,811 units in 2007.

Apart from pricing, how many homes developers sell for the rest of this year will also depend on the type of projects they release.

According to the URA figures, the strong sales in July was led by the Outside Central Region (OCR) – where mass-market homes are typically located. It accounted for about 64 per cent of the 2,878 private homes that developers launched and 54 per cent or 1,502 of the 2,767 units sold.

The main projects that contributed to the high July sales in OCR included The Gale (294 units sold), Meadows @ Peirce (286 units), Watefront Key (191 units) and Optima @ Tanah Merah (132 units).

After the strong spate of sales, developers are left with fewer 99-year leasehold mass-market projects that buyers have hungered for this year. One of them, NTUC Choice Homes’ Trevista in Toa Payoh, goes on the market next week. There are also condos in Yishun and the West Coast bought on land at state tenders, which could be put on the market before year-end. In the mid-market segment, CapitaLand’s condo of about 1,000 units on the Gillman Heights site is also expected to be launched in the current half.

In Q2, the Rest of Central Region accounted for 751 or 27.1 per cent of primary market sales; top contributors included Parc Imperial (137 units) and Ascentia Sky (116 units). The Core Central Region had the smallest share of 18.6 per cent or 514 units. The star performers in this segment were Sophia Residences and Volari, with sales of 173 units and 79 units respectively in July.

Whereas home sales more than trebled in OCR from 432 units in June to 1,502 units in July, sales eased in both CCR and RCR over the same period.

Units costing up to $1,000 psf accounted for 57.5 per cent of developers’ July sales, not far off a 59.8 per cent share in June, according to Colliers’ analysis.

Still, Colliers International director for research and consultancy Tay Huey Ying points out that positive sentiment and improved confidence continue to spill into the higher market segments as seen in the surge in units priced above $2,000 psf that developers sold – from 37 units in June to 98 in July. The latest figure was boosted by the sale of 58 units in this price range at Volari at Balmoral Road.

However, there was no unit priced above $3,500 psf that changed hands in July, unlike June, when there was one.

Source: Business Times, 18 Aug 2009

July sales of new private homes at all-time high

A total of 2,767 units sold, with just over half in suburban areas

PRIVATE home sales rocketed to a record in July as buyers defied the economic downturn to propel the property market into unprecedented territory.

Prices are also on the same track with values rising amid the rush to seal deals.

Developers sold a whopping 2,767 units of new private homes last month. This easily beat the 1,825 units sold in June, itself a number that had never been reached in the 2007 boom.

The numbers ‘almost defy belief’, said PropNex chief executive Mohamed Ismail, who described the recovery as nothing short of amazing.

The buying splurge brought new home sales in the first seven months of the year to 10,017 units. This is only about 10 per cent below the full-year level in 2006 when the market was on its way up. It is also well up on the 4,264 homes sold in all of last year.

Developers are cashing in on the heightened interest. They launched 2,878 units in July, up from 1,637 in June, according to Urban Redevelopment Authority data yesterday.

Just over half the units sold last month – including the top three sellers – were in suburban areas, which attract largely locals.

Buyers snapped up 294 flats at The Gale in Flora Road at a median price of $696 per sq ft (psf). In Upper Thomson, Meadows @ Peirce launched 400 units in July and sold 286 at a median level of $919 psf.

Waterfront Key in Bedok Reservoir Road launched 310 units and sold 191 at a median price of $734 psf.

Projects such as Centro Residences and Ascentia Sky were sold at prices that have not been seen before in their areas.

There was also some interest in high-end homes – Sophia Residence in Sophia Road and Volari in Balmoral Road did well. The highest price done was at Nassim Park Residences, where four units sold for a median price of $3,273 psf.

‘With signs of the economy improving, home buyers are taking advantage of the opportunity to make their purchases,’ said CBRE Research executive director Li Hiaw Ho. ‘Investors have also turned to focus on property after having lost faith in financial structured products.’

Other consultants pointed to a positive stock market performance in July, increased supply, pent-up demand, as well as the affordable total quantum for smaller sized units.

They now say there is a good chance of this year’s sales surpassing the 2007 record of 14,811 units, though they do not see a repeat of July sales.

More are also sounding a note of caution over the price run-up.

While Mr Ismail believes this year’s sales will reach a record level, he said developers should not get carried away by the surge in demand. Marking prices higher would be ‘akin to throwing cold water on a fire’, he said.

Barring any unexpected shocks to the market, prices are likely to hit a plateau soon as they have risen too much too fast, said property expert Nicholas Mak.

He said sales could reach up to 16,000 units this year, with as much as 40 per cent coming from suburban areas.

CBRE Research said a few 99-year projects such as Trevista in Toa Payoh, a project in West Coast Crescent and another in Yishun Avenue 1 are expected this year. Trevista is already said to have attracted a long list of potential buyers.

However, Jones Lang LaSalle’s head of research, South-east Asia, Dr Chua Yang Liang, warned that in terms of overall islandwide demand, the take-up rate in July has slipped slightly compared with the previous months.

‘This suggests that developers might have been too zealous with the overall supply when demand still remains fragile.

‘Unless we begin to record positive growth in the larger global and domestic economies, the recent spike in demand and prices, if prolonged, may cause asset-driven inflation in the longer term, if wage increases do not keep in pace.’

Source: Straits Times, 18 Aug 2009

Mass-market home prices ‘at 2007 peak’

Residential prices may fall about 20%: Analyst

ANTI-SPECULATIVE measures, falling rental yields and ballooning supply may drive residential property prices down by about 20 per cent, says an analyst.

Sounding a contrarian view that runs against current sentiments, RBS Singapore analyst Fera Wirawan warned that prices of some segments of the market have risen to 2007 peaks amid a strong upswing in buying levels.

Based on her analysis, prices of mass-market homes, or low-end private properties, are now at peak October 2007 levels, while prices of mid-tier and high-end homes are just 8 per cent and 22 per cent off their peaks respectively.

With prices surging 16 per cent to 26 per cent in recent months, the residential property sector may have peaked, Ms Wirawan cautioned.

‘The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,’ she said.

Average selling prices (ASPs) at recent property launches are 30 per cent to 80 per cent above the ASPs of nearby projects. This is markedly higher than the historical average of 20 per cent.

‘Capital values have been rising in the face of falling rents and a full supply pipeline, a phenomenon we attribute to low average mortgage rates of 2 per cent.’

She noted that the strong residential volumes were triggered by Frasers Centrepoint’s launch of the mass market Caspian project at an affordable $580 per sq ft in February, which attracted a high take-up owing to pent-up demand in the mass residential segment.

The positive sentiment from the sale of Caspian units quickly filtered through to the mid-tier and high-end segments.

This frantic level of buying, in annualised terms, almost matched the record number of new homes sold by developers in 2007.

Property developers here sold more than 7,000 private homes in the first half of this year, double what they sold in the same period last year.

When annualised, sales are only 2 per cent short of the record 14,811 sold in the 2007 boom year.

The low-end segment performed the best in the first three months of this year, contributing 63 per cent of the 2,552 primary units sold.

The second quarter, however, saw a change, with 40 per cent of the 4,552 units sold represented by the mid-tier segment, followed by 31 per cent in the high-end segment.

The broad-based recovery has fuelled a sharp rally of property counters such as City Developments and SC Global Developments.

The Singapore FTSE ST Real Estate index, which tracks Singapore-listed property stocks, has doubled from its March lows.

With increasing speculation, worsening affordability, declining rental yields and plentiful supply in the property development pipeline, prices are likely to cool, said Ms Wirawan.

‘The Government is watching the market and could implement anti-speculative policies if speculation in the market goes on unabated,’ she said. ‘We expect prices to fall 10 per cent to 20 per cent in the residential sector over the next 12 months.’

National Development Minister Mah Bow Tan said last month that signs of speculation are re-emerging in the property market and stressed that the Government is monitoring the the situation closely. His comments came after speculative pricing practices began to emerge late last month, especially in the mass-market segment.

Ms Wirawan pointed to the sale of Centro Residences, a mass-market 99-year leasehold project located at Ang Mo Kio, which was sold at between $1,100 and 1,200 psf.

That price, she said, was close to the price of a bulk purchase of Sui Generis, located at Balmoral Park, a prime area, which sold for $1,260 psf.

Industry players generally agree that it is not sustainable to price low-end properties at about $1,000 psf.

The Government recently made cautionary statements owing to concerns that such homes may become unaffordable to the mass-market home-buyer.

The warning, however, appeared to have fallen on deaf ears as property launches continued to attract throngs of buyers, including many Housing Board upgraders, over the first two weekends of this month.

DMG & Partners Securities analyst Brandon Lee said that he expects ‘residential sales momentum to continue’, while OCBC Investment Research analyst Foo Sze Ming said demand in the mass-market segment was more sustainable.

Source: Straits Times, 17th August 2009

No more ‘future MRT stations’ in condo ads

TWO developers which included unconfirmed locations of future MRT stations in their condo advertisements have stopped using the information as a selling point.

UOL Developments has altered publicity material for its Meadows@Peirce, removing a location map that showed several MRT stations on the planned Thomson Line, which will be ready only in 2018.

Far East Organization has removed the supposed site of a future station in Marine Parade from a webpage on the Silversea condo.

The moves came after The Straits Times ran an article over the weekend on developers using unconfirmed MRT information in their sales materials.

Ms Claire Cher, spokesman for UOL Group, parent of UOL Developments, said the company realised that station sites in its Meadows@Peirce advertisements ‘have not been confirmed’.

‘We have therefore taken steps on the very day the article appeared to remove the map from all our publicity materials.

‘It was never our intention to mislead buyers,’ she said.

Ms Cher also said the company is writing to buyers to inform them of the possibly inaccurate information, but stopped short of offering them outright the option to withdraw from their purchase.

One buyer, Mr Sean Chia, 37, said ‘it is good’ that UOL has corrected the ads. But he said he did not buy a unit there because of the proposed stations, which he pointed out were ‘not near’ the development.

‘We bought because of the location – it is close to a reservoir and there is a lot of greenery around. It is also a huge plot,’ he said.

Advertising Standards Authority of Singapore chairman Eleanor Wong said developers should avoid misleading advertisements.

‘Certainly, an advertiser should never make it seem like a ‘planned’ station has already been built; or oversell the certainty of the station being built if things are still open to confirmation.’

She added that builders should also ‘be careful not to give the impression that an MRT station is nearby if it is not’.

Far East Organization spokesman Oh Thay Lee gave the assurance that the company will now use only confirmed information on MRT lines and stations in its property advertisements.

She admitted that Far East ran an advertisement on July 11 on the Silversea that had a map which indicated the location of a possible MRT station in Marine Parade.

‘Since then, we have not used this map in our print advertisements,’ she said.

Subsequent Silversea ads, however, still had the line ‘near to the future Marine Parade MRT Station’. Far East said this too will be removed.

Source: Straits Times, 13 Aug 2009

Centro will be released over 3 years

With the residential market picking up strongly, Far East Organization yesterday said it had decided to launch Centro Residences in Ang Mo Kio in phases over the next three years.

The reason, it said, was the Government’s plan to rejuvenate Ang Mo Kio into a vibrant town. “We see vast potential for the enhancement of real estate values in this area,” Far East said in a statement.

So far, it has sold about 65 per cent – or 93 of the 144 units launched – of phase one since a preview last week.

Source: Today, 4 Aug 2009

Property launches here see sustained interest

(SINGAPORE) Property launches again attracted strong interest at the weekend – days after the government warned buyers against over-committing themselves.

‘Our ground checks last weekend revealed that buyers continued to throng showflats,’ DMG & Partners Securities analyst Brandon Lee said in a note yesterday.

TID – a joint venture between Hong Leong Group and Japan-listed developer Mitsui Fudosan – has sold all 297 units at Optima@Tanah Merah since the public preview began on Thursday last week. Buyers include HDB flat owners and private property owners, who took up the units at an average price of about $810 per sq ft.

In response to the huge turnout at the showflat, TID held two rounds of balloting for apartments at the 99-year leasehold project. Some 600 ballots were cast.

The ‘showflat was filled to the brim, with over 200 people at any one point, and insufficient agents to tend to all visitors’, Mr Lee said in his note.

Far East Organization reported good sales for Centro Residences at Ang Mo Kio. About 65 per cent – or 93 of 144 units released in the first phase – have been sold at prices from $1,100 psf.

According to the group’s executive director and property sales chief operating officer Chia Boon Kuah, most buyers took up units for their own occupation or as investments for their children. Half of them are HDB upgraders, while the other half are private housing owners.

Seeing potential for property values in the Ang Mo Kio area to rise, Far East plans to market the 329-unit Centro Residences in phases until it obtains its temporary occupation permit (TOP). Phase two sales will begin next year and phase three the year after next. ‘We are confident that Centro Residences will be fully sold before TOP,’ Mr Chia said.

National Development Minister Mah Bow Tan said last Wednesday that signs of speculation are re-emerging in the property market. The government is watching the situation closely, he stressed. Industry views are mixed as to whether his comments will cool buying sentiment.

Source: Business Times, 4 Aug 2009

Sold out in 3 days

297-unit Optima homes sold for around $810 psf; other launches also see strong demand

SINGAPORE may still be mired in recession, but tell that to the home hunters who are flocking to the latest launches.

In the east, a new 297-unit condominium development on the doorstep of Tanah Merah MRT station completely sold out in the three days that followed its preview last Thursday.

Units at Optima went for an average price of around $810 per sq ft, or from $470,000 to $2.06million per unit.

Demand remained strong even after developer TID – a joint venture between Hong Leong Group and Mitsui Fudosan – raised prices by 5per cent, from $790 psf on Thursday to $830 psf by Friday.

Keen buyers were already seen queueing days before the launch of the 99-year leasehold condominium.

And TID had to conduct a ballot of 120 units for 300 buyers just before midnight on Thursday to prevent them having to camp out overnight for the public launch the next day.

Buyers were a good mix of HDB upgraders and investors, said the Hong Leong Group spokesman.

City Developments has now put on fast track the launch of its 396-unit project at the former Hong Leong Garden condominium site.

Over in Ang Mo Kio, another new suburban launch has attracted relatively strong demand, though some price resistance may have settled in over the weekend.

The 329-unit Centro Residences has sold 93 out of the 144 units that were released for sale last week.

Most of the units sold were two- to three-bedders. The smallest two-bedders have been sold, leaving those from 872sqft and above, and priced from $1million.

Far East Organization said yesterday that 50per cent of the buyers are HDB upgraders from nearby towns, while the rest are residents from private estates.

Prices at the 99-year leasehold condominium started from $1,100 psf – a price level more typical of city-fringe or prime projects, property watchers observed.

‘Such prices can get you a freehold condo in Upper Bukit Timah,’ said Mr Nicholas Mak, a former property consultant. ‘Buyers should be a bit more rational. Demand at such price levels shows that some buyers may be getting carried away by the current euphoria.

‘If they are hoping for capital appreciation, they must ask themselves who is going to buy from them at an even higher price when a three-bedroom unit in a suburban project is usually priced less than $1,000 psf,’ he added.

Elsewhere, some other fairly new launches continued to attract buyers, but at a much slower pace.

Waterfront Key in Bedok Reservoir sold another eight units at an average price of $735 psf, bringing total sales to 193 out of 278 released units.

At the 329-unit The Gale in Flora Road, sales remained around the 90per cent level cited late last week.

Source – Straits Times, 4th Aug 2009

No need to rush for mass market homes

Supply still ample, including units under or slightly above $1,000 psf, so first-time buyers need not panic

Property experts say there is no shortage of mass market homes for sale in Singapore, referring to properties under $1,000 per sq ft or slightly above it.

Apart from new launches coming up, there are also unsold units from existing launches.

These include the remaining phases of Far East Organization and Frasers Centrepoint’s site in Bedok Reservoir, and smaller projects by other developers, said CBRE.

Also, Hong Leong Group’s sites in Flora Road and Pasir Ris Drive 1 already comprise more than 3,000 new units.

There is also ample leasehold land available for redevelopment, though not all sites will be equally attractive.

Suburban plots purchased by developers include sites in Yishun, Khatib, Toa Payoh, West Coast and Optima in Tanah Merah, said CBRE executive director of residential Joseph Tan.

While the price outlook may be unclear, what is clear is that mass market prices are unlikely to go back to the previous lows, he said.

New suburban launches are unlikely to hit the market at levels of around $500 psf or slightly more, as land prices have gone up since then, he said. HDB prices have also risen.

‘Broadly, initial launch prices of mass market developments are now in the range of $600 psf to $700 psf,’ he said.

He added that those in a more attractive location will command a premium. For instance, he said the project he is marketing, Optima, started at $790 psf as it is right next to a Tanah Merah MRT station entrance and at the fringe of an HDB estate instead of inside one.

In general, the plentiful supply pipeline will keep suburban prices in check to a certain extent, experts said.

But first-time buyers must be aware that sentiment does at times get ahead of reality. The current market situation is a good example, said property veteran Nicholas Mak, formerly director of research and consultancy at Knight Frank.

The buying momentum is not sustainable past this year if foreign buyers continue to stay away, he said.

‘Some people think that they are buying at a ‘recession price’. They are wrong because developers always price at the level the market can bear,’ said Mr Mak.

Some suburban and city-fringe projects are being priced at levels near the previous peak or even at record levels, he cautioned.

A developer who declined to be named conceded: ‘Developers are businessmen. If I can sell at a higher price, why not?’

Said Mr Mak: ‘When the new launches are completed and the expected demand does not come, some investors will sell their units and prices could come down. Then some investors may be caught.’

In any case, there is a big pool of potential supply out there that can absorb any surge in demand, he said.

‘You can’t just look at the new suburban launches from developers. You also have to look at the supply in the resale market and also the HDB resale market,’ he said.

‘Usually, resale units tend to be cheaper and bigger than newly launched units.’

Second-quarter data from the Urban Redevelopment Authority (URA) shows that there are 38,482 units of unsold uncompleted homes.

Of this number, some 14,000 units are in the suburban areas or what the URA terms as outside the central region.

Considering developers have on average over the past five years sold 3,200 units of private suburban homes a year, this number provides enough supply for nearly 41/2 years, said Mr Mak.

So first-time buyers should not panic and rush into the market. They should take their time in finding their dream home. Do the necessary research, as National Development Minister Mah Bow Tan urged buyers last Wednesday.

Source: Sunday Times, 2 Aug 2009