Biz Times: Private home market stirs to life again

Private home market stirs to life again

Developers’ Q2 sales double to 1,542 from Q1 but still a far cry from 2007

 

(SINGAPORE) Developers sold 1,542 private homes in the second quarter, double the 762 units in the preceding quarter. This takes the total sold in the first half of the year to 2,304, according to the Urban Redevelopment Authority yesterday.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Source: Business Times

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Straits Times: Posh condo on sale amid weak market

Posh condo on sale amid weak market

 

A LUXURY condominium that lets residents park their cars right in front of their high-rise units has been released for sale at a price analysts consider rather steep, given the quiet market.

The Hamilton Scotts project – it has special lifts to bring the cars to the desired floor – will likely be listed at an average of $3,800 per sq ft (psf), said developer Hayden Properties yesterday.

 

That will price the 52 regular units of about 2,700 sq ft at between $8 million and $12 million each. The 30-storey freehold condo in Scotts Road also has two junior penthouses of about 3,200 sq ft and two penthouses of around 7,100 sq ft.

 

Market insiders say the condo could be priced between just under $3,000 psf to over $4,000 psf, while one market watcher says it could have fetched between $3,500 and $4,500 psf last year.

 

However, the $3,800 psf average price is still relatively high given the cooling market for luxury homes.

 

There are several posh projects in the pipeline, but developers have been holding back launches amid the uncertain climate.

 

The luxury segment has taken a big hit after the dizzying highs hit last year. Prices are down about 10 per cent with falls of a further 5 to 10 per cent expected by the end of the year, said Savills Singapore.

 

The only other major luxury development released for sale this year was the 100-unit Nassim Park Residences. More than half the units have been sold since May, with prices averaging $3,000 psf.

 

‘Hayden is probably keen to take advantage of this quiet period to launch, after the release of Nassim Park Residences and before the Hungry Ghost Festival,’ said Savills director of marketing and business development Ku Swee Yong.

 

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, believes The Hamilton Scotts has enough appeal to defy the trend somewhat: ‘There will still be takers as it is a unique product. But this is the time for mass market projects.’

 

The recent pickup in launches was almost all in the mass market or mid-tier segment.

 

Hayden managing director Ong Chih Ching said it should be able to get offers if the project is priced correctly. However, it would not sell if the price is not right.

 

‘We are previewing it and not launching it because this is not the right climate to launch,’ said Ms Ong, who added that Hayden has temporarily halted sales at its ultra- posh Ritz-Carlton Residences until the mood improves.

 

Source: Straits Times

UOL to invest up to $500m in overseas hotels

UOL to invest up to $500m in overseas hotels

It anticipates huge growth in the hospitality industry

 

SINGAPORE developer UOL Group said yesterday that it will spend up to $500 million over three years acquiring hotels in the United States, Australia and throughout Asia, in expectation of a boom in global travel.

 

‘We see tremendous growth in the hospitality industry, especially from the Asia-Pacific where there is a growing group of new rich, and they all want to see the world,’ said UOL’s president and chief executive officer Gwee Lian Kheng at the Reuters Global Real Estate Summit in Singapore.

 

‘Budget air travel is also growing, and we think that with all these factors, tourism in the world will continue to boom,’ said Mr Gwee, whose firm owns the Pan Pacific global hotels brand and who also heads hospitality group Hotel Plaza.

 

The firm, which paid US$165 million in January for a Singapore residential land site, sees continued strength in the sector, even as first-quarter private home sales in Singapore dipped to a five-year low amid fears of a global recession.

 

‘If you tell me that the market is dead, I disagree because we’re still a fairly strong economy compared with other parts of the world,’ said Mr Gwee, a 35-year property veteran.

 

UOL, whose largest shareholders are Singapore’s number-two bank United Overseas Bank and its chairman Wee Cho Yaw, has a market value of about US$2 billion.

 

It is among the few developers to have continued to put up Singapore residential projects for sale this year, even as most large builders delayed sales to wait out a moribund market.

 

The firm’s luxury Nassim Park project, launched in early June, is now 55 per cent sold and at average prices of about $3,000 per square foot, Mr Gwee said, but he acknowledged that sales have slowed significantly compared to a year ago.

 

UOL has moderated its asking prices due to weaker demand, but has been able to maintain its profit margins at well over 15 per cent, he said, adding that UOL will for the next three years focus on the low and mid-tier segments where demand is expected to be stronger.

 

‘Prices in the luxury market could see a slowdown, but the mid and lower-tier will still go up, partly because of all the people who sold their homes en bloc last year,’ Mr Gwee said.

 

Thousands of Singaporeans collectively sold their apartment blocks to developers in a ferocious land-grab over the past two years in en bloc sales, and some developers believe these sellers have yet to purchase replacement homes.

 

UOL now has about 80 per cent of its investments in Singapore and the remainder overseas, and is also looking abroad for growth but prefers to do so defensively, Mr Gwee said.

 

Its top pick now is China, particularly its second-tier cities. The firm is also looking to acquire distressed US assets such as offices or hotels at a good price, but will wait for uncertainties caused by the US sub-prime mortgage crisis to clear up before doing so.

 

‘Right now it’s still too early. The sub-prime issue is still not resolved and there’s still a lot of currency risk when you buy overseas, so we’ll let all these clear up first,’ Mr Gwee said. — Reuters

 

Source: Business Times

Apartments above $10m still shine in dull market

Apartments above $10m still shine in dull market

In the landed sector, demand for GCBs remains strong, says CBRE

 

(SINGAPORE) The high-end residential sector has been largely subdued in 2008, but at least 50 luxury apartments costing above $10 million each have been sold so far this year. And the tally for the full year, according to property consultant CB Richard Ellis (CBRE), is expected to come in at about 70 to 100 units.

 

This will be lower than the 139 such units sold for the whole of 2007, but still significantly higher than the 2006 full-year figure of 23 units, CBRE’s research shows.

 

Putting things in perspective, CBRE Singapore’s managing director Pauline Goh says: ‘One point to note is that luxury home prices in 2006 were lower than in 2007. Hence, fewer units would have touched the $10 million mark back in 2006. There was also a smaller supply of upscale developments with big units back then compared with 2007 and H1 2008.’

 

The 50-odd luxury apartments costing above $10 million each sold so far this year are the tally at June 17 and include not just units sold at Nassim Park Residences, which was previewed in May, but also a unit each transacted at Cliveden at Grange, The Tomlinson, The Grange and The Orange Grove condos.

 

BT understands that the highest-priced transaction so far this year is a $19.7 million ground-floor unit sold at Nassim Park Residences.

 

In the landed sector, a total of 23 Good Class Bungalows (GCBs) have changed hands so far this year for a total of $380 million.

 

‘We’re quite confident that at least 50 to 60 GCBs will be sold for the whole of 2008. Demand will continue to be strong from Singaporeans as well as PRs, but deals are limited by availability of GCB stock,’ Ms Goh predicts.

 

Last year, a total of 87 GCB deals totalling $1.15 billion were sealed, against the record 119 transactions worth $1.23 billion in 2006.

 

As for the outlook for luxury apartment sales, Ms Goh says: ‘Singapore has a lot going for it; the government has put in so much effort to build Singapore into a global city. We’ll have the integrated resorts, special events like Youth Olympic Games and F1 night race. Singapore is on the radar screens of a lot of international investors. However, the flow of bad news from the US has to stabilise before confidence returns.

 

‘On the other hand, as Nassim Park Residences shows, if the product is right, there can be very, very strong demand. The project is in a very niche location; arguably the best luxury location in Singapore.’

 

Market watchers say the volume of transactions for apartments costing more than $10 million for the rest of 2008 will depend partly on when developers release new prime-district condos and their strategy on the mix of unit sizes.

 

Developers have tended to veer towards bigger units in the past couple of years but some analysts say some developers are now considering changing tack for upcoming projects. These developers are wondering whether it will make more sense now to have a higher proportion of smaller units – given weaker sentiment.

 

‘The idea is to make the absolute price quantums smaller, say $3-5 million per apartment, which will mean a bigger pool of buyers, compared with having a lot of biggish units in a project costing, say, above $10 million,’ an analyst says.

 

Source: Business Times

‘Old money’ props rise in luxury home sales

‘Old money’ props rise in luxury home sales

Prices hold firm surprisingly; investment climate may have stabilised, analysts say

Strong take-up: At UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold in May at a median price of $2,929 per square foot, URA data show

 

 

 

(SINGAPORE) Developer sales of new homes jumped to 441 units in May from 284 units in April, with some property consultants already calling it a ‘sharp rebound’.

 

While May sales were still relatively low compared to 2007 levels, several launches in prime and city-fringe locations did well.

 

According to Urban Redevelopment Authority (URA) data, at UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold at a median price of $2,929 per square foot (psf). Sources also told BT that most of these units were sold to Singapore’s ‘old money’.

 

Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘Based on what we have seen in the past few months, high net worth individuals (HNWIs) have not been affected by the slowdown in the global economy.’

 

While these buyers may be more ‘picky’ now, ‘they don’t want to wait for prices to fall just to save 5 per cent’, he said. And with banks generally offering low interest rate returns, these HNWIs are looking to ‘park’ their money in real estate instead.

 

A check with UOL revealed that since last week, Nassim Park Residences has been marketed overseas and more than 50 units have now been sold. UOL Group’s general manager of marketing, Dolly Lian said that as things stand, more than 30 per cent of the buyers are foreigners and the average selling price is $3,300 psf. This is higher than $3,000-$3,200 psf average selling price that some market watchers expected.

 

It is understood that most of the foreign buyers are from Indonesia.

 

Another popular development in May was Macly Group’s 102-unit Vutton, with 72 units sold at a median price of $1,225 psf. A market watcher said this is in the same price range as UOL’s Pavilion 11, also off Moulmein Road, which was sold in 2007.

 

Also selling well in May was Ascend Land’s 106-unit The Verve, off Balestier Road. During the month, 42 units were transacted at a median price of $985 psf. According to URA data, 84 units have been sold so far. In April, eight units were sold at a median price of $1,055, while in March the median price was $1,187 psf.

 

Collier’s International’s director for research and advisory Tay Huey Ying said that while the rebound in sales activity could be ‘just a monthly fluctuation, it may also be a sign that most genuine buyers have come to accept that the current price levels have reached a fair level’.

 

Ms Tay noted that the number of new launches increased 74 per cent in May from April. ‘This encouraging response could be just what is needed to trigger more of such launches in the coming months,’ she said.

 

She added, however, that developers will remain cautious with regard to pricing, ‘as buyers in today’s market tend to be price-sensitive’.

 

CB Richard Ellis executive director (residential) Joseph Tan said: ‘Based on the transactions in May, contrary to market expectations, there was no downward adjustment of prices.’

 

Luxury prices in particular ‘seemed to hold firm’ as projects like Boulevard Vue, Scotts Square and Nassim Park Residences maintained $3,000-psf levels, he said. And in the eastern and western parts of Singapore, prices held at $800-$900 psf at projects including Breeze by the East, Blu Coral, The Ambrosia, The Lakeshore and Crystal Heights.

 

Still, not everyone was as sanguine about the state of the property market.

 

Knight Frank director (research and consultancy) Nicholas Mak said that while total new sales in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) rose 60.9 per cent month on month, the OCR saw a 14.6 per cent drop in sales volume month on month.

 

According to Mr Mak: ‘Essentially, the slight rise in sales volume can be attributed to some stability in investment sentiment. However, it should be noted that this escalation is still 32 per cent below the 12-month average figure.’

 

Looking at take-up rates (new sales versus new launches) in the three regions, Jones Lang LaSalle local director and head of research (South-east Asia) Chua Yang Liang said these were 87 per cent for CCR, 84 per cent for RCR and 146 per cent for OCR.

 

He said the strong take-up rates in CCR and RCR were a result of ‘latent demand spurred on by softening prices’, while the take-up rate in OCR was ‘the result of low supply of new launches over what appears to be a minimum demand threshold – an average of 113 units over the past six months – in the region’.

 

Source: Business Times

New private home sales up 55%

New private home sales up 55% 

 

Highest monthly figure so far this year follows softening of prices, surge in total units launched

By Joyce Teo, Property Correspondent 

 

SINGAPORE‘S private residential property market has started showing some signs of life after several months in the doldrums, thanks in part to an easing of prices.

Last month, developers sold 441 new homes, excluding executive condominiums, a sharp 55 per cent jump on the figure for April – albeit a low base – of 284 home sales.

 

That made May the best month so far this year, according to the monthly sales figures released by the Urban Redevelopment Authority yesterday.

 

The improved sales came on the back of 474 new homes launched by developers – a 75 per cent surge over April – though many of the units sold were from earlier launches.

 

Still, consultants caution against reading too much into the latest figures. They say the market is generally still taking a breather, as many buyers prefer to stay on the sidelines.

 

Sales have improved from a very low base but they remained 32 per cent below the 12-month average, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

 

The figures ‘do not necessarily imply that the private residential market has overcome the protracted lull sparked off by global economic woes’, he said.

 

‘The market is still at a plateau. Going forward, we will still see range- bound prices and volume of between 300 and 600 units a month. Sentiment is still very cautious,’ he said.

 

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, said median prices have eased.

 

The chief executive of PropNex, Mr Mohamed Ismail, said that most May sales were done at a median price of below $1,000 per sq ft (psf), a stark contrast to the end of last year when the median price of almost two-thirds of all sales was over $1,000 psf.

 

‘Upon closer scrutiny, we can see that less than 50 per cent of the units launched were actually sold.’

 

Also, slightly over half the sales were from earlier launches, he said.

 

Still, there are a few bright spots. While some are struggling to sell, developer Macly Group sold 72 out of 102 units of Vutton in the Novena area at $1,057 psf to $1,416 psf.

 

In the luxury market, the 100-unit Nassim Park Residences is the star performer, logging in sales of over 50 units since its soft launch at end-May.

 

As these are large apartments, prices range from about $10 million to a whopping $19.5 million, sources said.

 

The prime Nassim Road project – being developed by UOL Group, Kheng Leong and Orix Corp – has already hit a high of $3,800 psf – far better than its low of $2,318 psf.

 

One buyer is Mr Wee Ee Cheong, son of UOL chairman Wee Cho Yaw, who bought a penthouse for $18.33 million.

 

Just over 30 per cent of the buyers are foreigners. The project has already been launched in Jakarta and Hong Kong, said UOL.

 

Another luxury development Scotts Square in the Orchard area registered sales of four units at a median price of $3,818 psf last month.

 

The relatively strong sales in central Singapore were the result of ‘latent demand spurred on by softening prices’, said Dr Chua.

 

‘Going forward, we reckon that developers are likely to keep prices competitive to keep the market demand stable,’ he said. As long as prices remain affordable, price-sensitive buyers will return, he added.

 

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said the level of transactions and price levels seen last month are sustainable.

 

Source: Straits Times

Developers to unveil more modestly-priced condos

Developers to unveil more modestly-priced condos

Dakota slated for preview this month at under $1,000 psf average, lower than earlier indicated

 

(SINGAPORE) Developers are getting ready to release mass- to mid-market condos, encouraged by the response to modestly-priced developments recently.

 

City Developments Ltd (CDL) previewed Shelford Suites about a week ago at an average price believed to be around $1,550 psf, although CDL’s spokeswoman said the average price for the five-storey freehold project in the Shelford/Adam roads vicinity is in the $1,500 to $1,700 psf range.

 

The property giant is also aiming to preview by the end of this month or early July the first phase of Livia, a 724-unit condo at Pasir Ris Drive 1.

 

The 99-year leasehold condo, near Pasir Ris MRT Station, is being developed by a joint venture involving CDL, Hong Realty and Hong Leong Holdings.

 

‘The average price will be revealed closer to the preview,’ CDL’s spokeswoman said.

 

However, market expectation is that CDL will price the project attractively, at below $700 psf for the initial phase.

 

Those taken in by the charms of riverfront-living close to the city can look forward to Ho Bee’s and NTUC Choice Homes’ preview of The Dakota later this month.

 

The average price of the 99-year leasehold condo is expected to be ‘under $1,000 psf’, BT understands. This is lower than than the $1,000-1,100 psf average price expectation Ho Bee had indicated in June last year when the developers emerged as the top bidder for the plot at a state tender.

 

The 348-unit project is expected to be 20 storeys high and will front Geylang River. It will also be close to Dakota MRT Station, which opens on the Circle Line next year. The Dakota will comprise six blocks with a mix of two-, three- and four-bedroom apartments, and penthouses.

 

Over in Pasir Ris, CDL’s spokeswoman said that the company is in ‘in the final stage’ of preparing a phased soft launch of Livia. The condo is targeted at the mass market and will comprise several blocks of 15 to 16 storeys with two-, three- and four-bedroom apartments, and penthouses.

 

Elsewhere on the island, freehold projects with tiny studio units dubbed ‘shoebox apartments’ (ranging from under 400 sq ft to about 500 sq ft in size) in places like Sophia Road and Race Course Road, have been selling fairly quickly at around $1,100 to $1,400 psf in the past couple of months.

 

Over in the Botanic Gardens vicinity, UOL Group, Kheng Leong and Orix Corporation will officially launch today Nassim Park Residences condo.

 

Nearly 50 units have been sold at an average $3,000-3,200 psf since the preview began the week of Vesak Day, although this is expected to go up slightly from today.

 

 

Testing the market: CDL previewed Shelford Suites about a week ago at $1,500-$1,700 psf. The group is also aiming to preview the first phase of Livia, a condo in Pasir Ris, by month’s end or early July.

 

Source: Business Times