HDB resale flat prices - already at record high levels - are likely to continue rising this year, said National Development Minister Mah Bow Tan on Wednesday.
'The flat prices would probably go up ... by 1 per cent, 2 per cent,' said Mr Mah. 'It will just keep on going up if the economy recovers as people expect, and if confidence returns but affordability will always be there.'
HDB resale prices rose 1.4 per cent in the second quarter to a record high.
By Joyce Teo
Extracted from The Straits Times
02 Sep 2009
Thursday, September 3, 2009
Sunday, August 9, 2009
Demand for private homes on an upward curve
(SINGAPORE) Even as Urban Redevelopment Authority yesterday launched the tender for a plum 99-year leasehold site for condo development at Dakota Crescent, expectations are running high that developers will trigger the launch of more housing sites from the government's reserve list in the coming months.
This is against a backdrop of strong sales for mass-market projects, the latest being the Optima condo next to Tanah Merah MRT Station.
Mass-market home prices have risen about 10 to 20 per cent from the recent low in Q1, according to property consultants.
One concern is whether the market is running out of supply of mass-market condos and whether this will set the base for further price hikes.
The current pipeline has about 7,500 mass market homes yet to be launched on sites sold in the past, according to CB Richard Ellis data. These include three 99-year leasehold condo projects in Toa Payoh, Yishun and West Coast Crescent on earlier sites sold by the government.
The rest include 99-year projects by Hong Leong Group on a large historic landbank in Pasir Ris, projects by Far East Organization and Frasers Centrepoint on remaining land on the former Waterfront site along Bedok Reservoir, and a host of freehold projects by various developers in places like West Coast Road, Tampines Road, Yio Chu Kang Road, Toh Tuck Drive and Hillview Avenue.
After the recent launch of two housing sites (at Dakota Crescent and Chestnut Avenue) from the government reserve list following successful applications by developers, this list still has sites that can potentially generate a total of about 5,800 private homes. Some are attractively located near MRT stations in places like Bishan, Serangoon Ave 3, Bartley Road and Bedok. The last two sites will be ready for application by developers in November and December respectively.
The government could add more sites to its reserve list for first-half 2010, or even reintroduce the confirmed list, where sites are launched according to a prestated schedule, unlike reserve list sites, which are launched for tender only upon successful application by developers undertaking to offer minimum bids acceptable to the state.
It will take some time for site launches to translate to new condo launches. However, ensuring there's enough supply should not be a nagging issue.
But beyond looking at supply, one needs to also understand why demand has spiked since February. Developers have sold a total of 7,250 private homes in the first six months of 2009 - exceeding the 4,264 units sold in the whole of last year. Some consultants are predicting the number for the whole of this year may reach the record of 14,811 units set in 2007.
The current home buying wave began in the mass-market segment, then permeated upwards. Some of the buying represents pent-up demand. People are also taking the opportunity to pick up their dream home at current prices - which despite recent price hikes are still below peak-2007 levels - for fear of missing the boat as they did during the property run-up in 2006 and 2007.
Property speculators are also busying themselves.
But other factors are also at play that are creating a paradigm shift which could suggest that 'natural demand' henceforth may be higher than the average 8,000 private homes developers sold annually over the past 10 years (between 1999 and 2008).
These include an increase in immigration into Singapore over the past few years as it embraces foreign talent and wealth and a gradual 'internationalisation' of the Singapore property market as foreigners are drawn by Singapore's emergence as a global city.
Another point to consider when understanding why there could be higher natural demand for private homes is to look at the public housing segment.
The Housing & Development Board's construction of new flats has slowed down over the years. During 1981-85, an average of about 37,000-plus flats were built by HDB per year. In 1998 too, some 36,600 new flats were built. Later in the face of a supply glut, HDB scaled back building new flats; the figure eased to about 10,000 units a year completed in 2002 and 2003, and fell further to about 5,000 units completed in 2007.
A smaller supply of new HDB homes has made it easier for HDB residents to sell their flats in the resale market and upgrade to entry-level private homes in the suburbs.
Incomes of Singaporeans have grown over the decade, making more aspire to own a private home.
The low-interest rate policies adopted by governments around the world to cope with the global financial meltdown have translated to near-zero returns on fixed deposits and low mortgage rates - making property an attractive investment option. The strong distaste for structured financial products post-Lehman has made property more sought-after.
The home-buying frenzy of late has also come about due to a confluence of two important factors - a recognition of value by buyers (following price chops by developers in Q1) and an improvement in sentiment.
More value-recognition will emerge for real estate as Singapore's railway network is doubled to 278 km by 2020, boosting connectivity and cutting travel time from homes in locations once called suburbs to the city.
Perhaps we should not be too surprised if strong demand for private residential properties persists. Of course, if another international disaster takes place and foreign property investors again exit, demand could dive, like it did last year during the global financial crisis.
Spikes and dips in home buying and property prices could become more pronounced by virtue of Singapore's real estate market becoming more international.
By Kalpana Rashiwala
Extracted from The Business Times
7 August 2009
This is against a backdrop of strong sales for mass-market projects, the latest being the Optima condo next to Tanah Merah MRT Station.
Mass-market home prices have risen about 10 to 20 per cent from the recent low in Q1, according to property consultants.
One concern is whether the market is running out of supply of mass-market condos and whether this will set the base for further price hikes.
The current pipeline has about 7,500 mass market homes yet to be launched on sites sold in the past, according to CB Richard Ellis data. These include three 99-year leasehold condo projects in Toa Payoh, Yishun and West Coast Crescent on earlier sites sold by the government.
The rest include 99-year projects by Hong Leong Group on a large historic landbank in Pasir Ris, projects by Far East Organization and Frasers Centrepoint on remaining land on the former Waterfront site along Bedok Reservoir, and a host of freehold projects by various developers in places like West Coast Road, Tampines Road, Yio Chu Kang Road, Toh Tuck Drive and Hillview Avenue.
After the recent launch of two housing sites (at Dakota Crescent and Chestnut Avenue) from the government reserve list following successful applications by developers, this list still has sites that can potentially generate a total of about 5,800 private homes. Some are attractively located near MRT stations in places like Bishan, Serangoon Ave 3, Bartley Road and Bedok. The last two sites will be ready for application by developers in November and December respectively.
The government could add more sites to its reserve list for first-half 2010, or even reintroduce the confirmed list, where sites are launched according to a prestated schedule, unlike reserve list sites, which are launched for tender only upon successful application by developers undertaking to offer minimum bids acceptable to the state.
It will take some time for site launches to translate to new condo launches. However, ensuring there's enough supply should not be a nagging issue.
But beyond looking at supply, one needs to also understand why demand has spiked since February. Developers have sold a total of 7,250 private homes in the first six months of 2009 - exceeding the 4,264 units sold in the whole of last year. Some consultants are predicting the number for the whole of this year may reach the record of 14,811 units set in 2007.
The current home buying wave began in the mass-market segment, then permeated upwards. Some of the buying represents pent-up demand. People are also taking the opportunity to pick up their dream home at current prices - which despite recent price hikes are still below peak-2007 levels - for fear of missing the boat as they did during the property run-up in 2006 and 2007.
Property speculators are also busying themselves.
But other factors are also at play that are creating a paradigm shift which could suggest that 'natural demand' henceforth may be higher than the average 8,000 private homes developers sold annually over the past 10 years (between 1999 and 2008).
These include an increase in immigration into Singapore over the past few years as it embraces foreign talent and wealth and a gradual 'internationalisation' of the Singapore property market as foreigners are drawn by Singapore's emergence as a global city.
Another point to consider when understanding why there could be higher natural demand for private homes is to look at the public housing segment.
The Housing & Development Board's construction of new flats has slowed down over the years. During 1981-85, an average of about 37,000-plus flats were built by HDB per year. In 1998 too, some 36,600 new flats were built. Later in the face of a supply glut, HDB scaled back building new flats; the figure eased to about 10,000 units a year completed in 2002 and 2003, and fell further to about 5,000 units completed in 2007.
A smaller supply of new HDB homes has made it easier for HDB residents to sell their flats in the resale market and upgrade to entry-level private homes in the suburbs.
Incomes of Singaporeans have grown over the decade, making more aspire to own a private home.
The low-interest rate policies adopted by governments around the world to cope with the global financial meltdown have translated to near-zero returns on fixed deposits and low mortgage rates - making property an attractive investment option. The strong distaste for structured financial products post-Lehman has made property more sought-after.
The home-buying frenzy of late has also come about due to a confluence of two important factors - a recognition of value by buyers (following price chops by developers in Q1) and an improvement in sentiment.
More value-recognition will emerge for real estate as Singapore's railway network is doubled to 278 km by 2020, boosting connectivity and cutting travel time from homes in locations once called suburbs to the city.
Perhaps we should not be too surprised if strong demand for private residential properties persists. Of course, if another international disaster takes place and foreign property investors again exit, demand could dive, like it did last year during the global financial crisis.
Spikes and dips in home buying and property prices could become more pronounced by virtue of Singapore's real estate market becoming more international.
By Kalpana Rashiwala
Extracted from The Business Times
7 August 2009
Friday, July 31, 2009
Suburban condos drawing buyers
IN THE latest sign of the buoyant suburban property market, home hunters in Ang Mo Kio have been submitting cheques to buy homes at prices rarely seen outside Singapore's prime central areas.
Buyers are said to be paying prices starting from $1,150 per sq ft (psf) for the upcoming 329-unit Centro Residences by Far East Organization.
This means two-bedroom units cost more than $800,000, while three-bedroom apartments will cost $1.1 million and above.
Consultants said the Centro Residences is one of the few 99-year leasehold projects in the suburban areas that has crossed this level.
Jones Lang LaSalle's head of South-east Asia research, Dr Chua Yang Liang, said he was 'a bit shocked' by the pricing.
'I'm afraid at this moment there's a lot of euphoria, so there will be demand for this project even at this price,' he said.
Plus points for the project include its location in a popular mature estate right next to the Ang Mo Kio MRT station, as well as its proximity to international schools.
But Dr Chua voiced concern over the 'long-term sustainability of this pricing', saying that upgraders may not be able to afford it.
At another suburban condo, Optima, located next to the Tanah Merah MRT station, more than 40 people lined up yesterday afternoon to stake claim on the 297 units for sale, even before the showflat opens on Friday.
Many of those in the Optima queue were property agents holding places for their clients with blank cheques in hand.
However, some in the queue were possibly property agents lining up with a view to buying properties for their own investment purposes.
Pricing for the 99-year leasehold project has not even been finalised, according to developer TID, a tie-up between Hong Leong Group and Japan's Mitsui Fudosan.
Agents estimate that prices will be about $750 to $850 psf, with two-bedroom units going for about $600,000 to $700,000 and three-bedroom units from $700,000 to over $800,000.
They say buyers are so keen on the units that they have submitted blank cheques for them to fill in the amounts once the price list is available - a fairly common tactic in a boom market, and one that has resurfaced in recent weeks.
TID was alerted to the existence of the queue at about 5pm yesterday. At 10pm last night, TID representatives told those in the queue to go home, saying that the queue would not be recognised. The queue soon dispersed.
'We're not going to sell anything until Friday,' a Hong Leong spokesman had said earlier. A preview would be held for Hong Leong and TID staff on Thursday.
Last week, Hong Leong said in a press release that more than 1,000 inquiries have come in for Optima, which it said was 'the last condominium site available in the vicinity' of the Tanah Merah area.
With developers starting to tentatively raise prices for projects on the back of strong demand, Jones Lang LaSalle's Dr Chua warned that these price increases 'need to be supported by economic growth or wage growth in the long term', or they may lead to 'excess inflation' and a property bubble.
Far East will start its preview of Centro tomorrow and will release two-bedroom and three-bedroom units. Agents say some buyers have already written cheques to register their interest.
One reason for the relatively high price of Centro is the cost of the land. Far East bought the state-owned site in September 2007 for $601 psf of potential gross floor area, a record price for suburban condo land.
Over the weekend, suburban condos continued to do fairly well. Far East sold another 59 units at its Waterfront Key condo in Bedok Reservoir, bringing the total number of units sold to 278. The average price was $735 psf.
UOL Group also sold 70 units at Meadows@Peirce in Upper Thomson over the weekend, after selling 180 units on the first day of sales on Friday. The buyers, mainly Singaporeans, paid an average of $880 psf.
But weekend sales were slower at mid-tier projects closer to the city. Far East sold five units of Silversea in Amber Road at an average price of $1,380 psf, for a total of 59 units sold so far. At its Vista Residences in Thomson, seven more units were sold at prices starting from $1,100 psf, bringing total units sold to 144.
By Fiona Chan
Extracted from The Straits Times
28 July 2009
Buyers are said to be paying prices starting from $1,150 per sq ft (psf) for the upcoming 329-unit Centro Residences by Far East Organization.
This means two-bedroom units cost more than $800,000, while three-bedroom apartments will cost $1.1 million and above.
Consultants said the Centro Residences is one of the few 99-year leasehold projects in the suburban areas that has crossed this level.
Jones Lang LaSalle's head of South-east Asia research, Dr Chua Yang Liang, said he was 'a bit shocked' by the pricing.
'I'm afraid at this moment there's a lot of euphoria, so there will be demand for this project even at this price,' he said.
Plus points for the project include its location in a popular mature estate right next to the Ang Mo Kio MRT station, as well as its proximity to international schools.
But Dr Chua voiced concern over the 'long-term sustainability of this pricing', saying that upgraders may not be able to afford it.
At another suburban condo, Optima, located next to the Tanah Merah MRT station, more than 40 people lined up yesterday afternoon to stake claim on the 297 units for sale, even before the showflat opens on Friday.
Many of those in the Optima queue were property agents holding places for their clients with blank cheques in hand.
However, some in the queue were possibly property agents lining up with a view to buying properties for their own investment purposes.
Pricing for the 99-year leasehold project has not even been finalised, according to developer TID, a tie-up between Hong Leong Group and Japan's Mitsui Fudosan.
Agents estimate that prices will be about $750 to $850 psf, with two-bedroom units going for about $600,000 to $700,000 and three-bedroom units from $700,000 to over $800,000.
They say buyers are so keen on the units that they have submitted blank cheques for them to fill in the amounts once the price list is available - a fairly common tactic in a boom market, and one that has resurfaced in recent weeks.
TID was alerted to the existence of the queue at about 5pm yesterday. At 10pm last night, TID representatives told those in the queue to go home, saying that the queue would not be recognised. The queue soon dispersed.
'We're not going to sell anything until Friday,' a Hong Leong spokesman had said earlier. A preview would be held for Hong Leong and TID staff on Thursday.
Last week, Hong Leong said in a press release that more than 1,000 inquiries have come in for Optima, which it said was 'the last condominium site available in the vicinity' of the Tanah Merah area.
With developers starting to tentatively raise prices for projects on the back of strong demand, Jones Lang LaSalle's Dr Chua warned that these price increases 'need to be supported by economic growth or wage growth in the long term', or they may lead to 'excess inflation' and a property bubble.
Far East will start its preview of Centro tomorrow and will release two-bedroom and three-bedroom units. Agents say some buyers have already written cheques to register their interest.
One reason for the relatively high price of Centro is the cost of the land. Far East bought the state-owned site in September 2007 for $601 psf of potential gross floor area, a record price for suburban condo land.
Over the weekend, suburban condos continued to do fairly well. Far East sold another 59 units at its Waterfront Key condo in Bedok Reservoir, bringing the total number of units sold to 278. The average price was $735 psf.
UOL Group also sold 70 units at Meadows@Peirce in Upper Thomson over the weekend, after selling 180 units on the first day of sales on Friday. The buyers, mainly Singaporeans, paid an average of $880 psf.
But weekend sales were slower at mid-tier projects closer to the city. Far East sold five units of Silversea in Amber Road at an average price of $1,380 psf, for a total of 59 units sold so far. At its Vista Residences in Thomson, seven more units were sold at prices starting from $1,100 psf, bringing total units sold to 144.
By Fiona Chan
Extracted from The Straits Times
28 July 2009
No property bubble forming
PROPERTY developers are enjoying the surge in interest from buyers but they do not believe that speculation has reached a stage where the Government needs to step in.
They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.
'It's not a bubble, it's just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,' said Cushman and Wakefield managing director Donald Han.
But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely. Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.
'The Government's message is quite clear: Don't rush as there is a lot of supply coming onstream,' said Sing Holdings chief executive Lee Sze Hao.
A property consultant who declined to be named told The Straits Times: 'There shouldn't be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.
Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.
The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said. The Government will do something only if there is a queue at every project and every unit is snapped up, he added.
Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.
The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today. The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.
By Joyce Teo
Extracted from The Straits Times
31 July 2009
They also maintain that the prevailing economic conditions will begin to cool the buying frenzy and stop a bubble forming in its tracks.
'It's not a bubble, it's just a blister after the pain we experienced in the global financial crisis and it comes before a recovery,' said Cushman and Wakefield managing director Donald Han.
But some developers and industry insiders acknowledge that the comments from National Development Minister Mah Bow Tan this week are timely. Mr Mah cautioned about a bubble forming, hinted at intervention if speculation got out of hand and advised buyers to tread carefully and not charge headlong into the market.
'The Government's message is quite clear: Don't rush as there is a lot of supply coming onstream,' said Sing Holdings chief executive Lee Sze Hao.
A property consultant who declined to be named told The Straits Times: 'There shouldn't be panic-buying. Buyers may pull back a bit, not knowing whether the Government will step in or not. The fact is that the Government has opened its mouth; it can do things indirectly.
Many feel the hype, which centres on several condominiums, will likely be short-lived amid a recession.
The market is seeing cashed-up investors ready to spend, which is different from speculators looking to buy another apartment to make a quick buck, he said. The Government will do something only if there is a queue at every project and every unit is snapped up, he added.
Buyers have certainly been out in droves visiting the new showflats and buying new homes off the plan. Queues have been forming and developers have raised prices in response.
The interest was evident last night at Tanah Merah, where crowds gathered at the 297-unit Optima showflat although the public launch is scheduled for today. The response was so strong that the developer TID held a ballot at midnight for about 300 genuine buyers who were queueing outside the showflat earlier so they did not have to stay overnight.
By Joyce Teo
Extracted from The Straits Times
31 July 2009
Tuesday, July 28, 2009
Housing market shows classic recovery signs
Three classic signs of a recovery have emerged in the Singapore housing market. Subsales and foreign buying have accelerated while the share of HDB upgraders in the private home buying pie has declined.
The number of subsale deals for private homes has more than doubled from 414 in Q1 this year to 1,041 in Q2 and the median subsale price has also risen 18.1 per cent over the same period to $959 psf, based on Jones Lang LaSalle's analysis of caveats lodged for private homes captured by URA's Realis system as at July 17.
HDB upgraders' share of total caveats, which had been increasing for six consecutive quarters since Q4 2007, slipped in Q2 this year as purchases by those with private addresses rose at a faster clip. This could be because Q2 saw more mid and mid-upper projects launched, compared with predominantly mass-market launches catering to upgraders in Q1, says Knight Frank chairman Tan Tiong Cheng.
The number of caveats for private homes lodged by foreigners, including PRs, nearly tripled - from 496 in Q1 to 1,418 in Q2. The increase outpaced a 103.9 per cent rise in Singaporean buying. As a result, foreigners' share of private home buying rose from 15.5 per cent in Q1 to 20.5 per cent in Q2. The most popular districts among these buyers were Districts 9, 10 and 15 while the more sought-after projects included Rivergate and Martin Place Residences (district 9), The Arte (district 11), The Lakeshore in Jurong and Mi Casa in Choa Chu Kang
'Singapore properties are more affordable today than they were during the peak. Foreigners, like local buyers, are finding value in the local property market and looking at the upside potential,' says JLL's head of South-east Asia and Singapore research Chua Yang Liang, adding that the positive economic growth in China, India and Indonesia had nudged their citizens into investing here. He also observed a rise in purchases by Myanmar buyers.
Malaysians were the top buyers of homes in Singapore in Q2, making up 29.3 per cent of total caveats lodged by foreigners, followed by Indonesians (20.3 per cent share), mainland Chinese (14.9 per cent) and Indians (12.1 per cent).
Foreigners were drawn to prime district projects like Martin Place Residences in the primary market and Rivergate and Seaview in the secondary market in Q2, said CB Richard Ellis executive director (residential) Joseph Tan.
JLL's head of residential Jacqueline Wong has seen more high networth individuals from India, Hong Kong and China looking to make their maiden property investments here. 'They are not PRs and are looking at apartments 3,000 sq ft and above in the Orchard Road belt. They're drawn by value; prices in the luxury sector are today about 15 to 25 per cent below the 2007 peak levels,' she said.
Going ahead, foreign buying is expected to gain momentum, if the property recovery and regional economic upturn continue.
In the subsale market, the most popular projects transacted in Q2 were Rivergate (95 units), The Centris (46 units) and City Square Residences (45 units). Rivergate and Phase 2 of City Square Residences obtained Temporary Occupation Permit (TOP) in March, and Centris, this month.
The median subsale price in Rivergate has risen from $1,200 psf in Q1 to $1,400 psf in Q2 and that for The Centris increased from $587.50 psf to $625 psf. City Square Residences' median subsale price rose from $791 psf to $893 psf and that for The Sail @ Marina Bay, from $1,321 to $1,623 psf.
Subsales are secondary market deals in projects that have yet to obtain Certificate of Statutory Completion. This could be three to 12 months after the project gets TOP. Market watchers note that there's typically more sales activity around the time that projects receive TOP.
'There are buyers who like to have the finished product because it's ready for immediate occupation or renting out,' says Knight Frank chairman Tan Tiong Cheng. Sellers who bought for investment, especially on Deferred Payment Scheme, can also cash out.
Analysts reckon that with a significant number of private homes heading for completion in the next 18 months, more subsale transactions can be expected.
Buyers with HDB addresses accounted for 44 per cent of total caveats lodged for private homes in Q2, down from the 56 per cent share in the preceding quarter.
The fall in proportion of purchases by HDB ugpraders was due to a bigger Q-on-Q jump of 174 per cent in Q2 in caveats lodged by those with private addresses, compared with a 70.8 per cent increase in caveats lodged by those with HDB addresses.
The most popular projects among HDB upgraders in Q2 were Mi Casa, with 145 caveats at a median price of $630 psf, followed by Double Bay Residences (106 units changed hands at a median price of $665 psf) and The Arte, (87 units transacted at $899 psf median price).
The share of HDB upgraders may slip further in coming months as the proportion of mass-market developments among project launches lessens as developers release more upper-end condos.
By Kalpana Rashiwala
Extracted From The Business Times
25 July 2009
The number of subsale deals for private homes has more than doubled from 414 in Q1 this year to 1,041 in Q2 and the median subsale price has also risen 18.1 per cent over the same period to $959 psf, based on Jones Lang LaSalle's analysis of caveats lodged for private homes captured by URA's Realis system as at July 17.
HDB upgraders' share of total caveats, which had been increasing for six consecutive quarters since Q4 2007, slipped in Q2 this year as purchases by those with private addresses rose at a faster clip. This could be because Q2 saw more mid and mid-upper projects launched, compared with predominantly mass-market launches catering to upgraders in Q1, says Knight Frank chairman Tan Tiong Cheng.
The number of caveats for private homes lodged by foreigners, including PRs, nearly tripled - from 496 in Q1 to 1,418 in Q2. The increase outpaced a 103.9 per cent rise in Singaporean buying. As a result, foreigners' share of private home buying rose from 15.5 per cent in Q1 to 20.5 per cent in Q2. The most popular districts among these buyers were Districts 9, 10 and 15 while the more sought-after projects included Rivergate and Martin Place Residences (district 9), The Arte (district 11), The Lakeshore in Jurong and Mi Casa in Choa Chu Kang
'Singapore properties are more affordable today than they were during the peak. Foreigners, like local buyers, are finding value in the local property market and looking at the upside potential,' says JLL's head of South-east Asia and Singapore research Chua Yang Liang, adding that the positive economic growth in China, India and Indonesia had nudged their citizens into investing here. He also observed a rise in purchases by Myanmar buyers.
Malaysians were the top buyers of homes in Singapore in Q2, making up 29.3 per cent of total caveats lodged by foreigners, followed by Indonesians (20.3 per cent share), mainland Chinese (14.9 per cent) and Indians (12.1 per cent).
Foreigners were drawn to prime district projects like Martin Place Residences in the primary market and Rivergate and Seaview in the secondary market in Q2, said CB Richard Ellis executive director (residential) Joseph Tan.
JLL's head of residential Jacqueline Wong has seen more high networth individuals from India, Hong Kong and China looking to make their maiden property investments here. 'They are not PRs and are looking at apartments 3,000 sq ft and above in the Orchard Road belt. They're drawn by value; prices in the luxury sector are today about 15 to 25 per cent below the 2007 peak levels,' she said.
Going ahead, foreign buying is expected to gain momentum, if the property recovery and regional economic upturn continue.
In the subsale market, the most popular projects transacted in Q2 were Rivergate (95 units), The Centris (46 units) and City Square Residences (45 units). Rivergate and Phase 2 of City Square Residences obtained Temporary Occupation Permit (TOP) in March, and Centris, this month.
The median subsale price in Rivergate has risen from $1,200 psf in Q1 to $1,400 psf in Q2 and that for The Centris increased from $587.50 psf to $625 psf. City Square Residences' median subsale price rose from $791 psf to $893 psf and that for The Sail @ Marina Bay, from $1,321 to $1,623 psf.
Subsales are secondary market deals in projects that have yet to obtain Certificate of Statutory Completion. This could be three to 12 months after the project gets TOP. Market watchers note that there's typically more sales activity around the time that projects receive TOP.
'There are buyers who like to have the finished product because it's ready for immediate occupation or renting out,' says Knight Frank chairman Tan Tiong Cheng. Sellers who bought for investment, especially on Deferred Payment Scheme, can also cash out.
Analysts reckon that with a significant number of private homes heading for completion in the next 18 months, more subsale transactions can be expected.
Buyers with HDB addresses accounted for 44 per cent of total caveats lodged for private homes in Q2, down from the 56 per cent share in the preceding quarter.
The fall in proportion of purchases by HDB ugpraders was due to a bigger Q-on-Q jump of 174 per cent in Q2 in caveats lodged by those with private addresses, compared with a 70.8 per cent increase in caveats lodged by those with HDB addresses.
The most popular projects among HDB upgraders in Q2 were Mi Casa, with 145 caveats at a median price of $630 psf, followed by Double Bay Residences (106 units changed hands at a median price of $665 psf) and The Arte, (87 units transacted at $899 psf median price).
The share of HDB upgraders may slip further in coming months as the proportion of mass-market developments among project launches lessens as developers release more upper-end condos.
By Kalpana Rashiwala
Extracted From The Business Times
25 July 2009
Mass market buyers prop up home prices
THEY were shut out of the property market during the most recent boom in 2007, when furious demand for luxury homes drove up home prices far beyond their reach.
Now, buyers of cheaper mass market homes - defined loosely as bigger HDB flats and condominiums in the suburbs - are back in the market with a vengeance
They doubled their purchases of five-room and executive HDB flats between March and June, pushing overall HDB prices up 1.4 per cent to hit a new high in the quarter, according to Housing Board (HDB) data released yesterday.
Mass market buyers also picked up four out of every 10 private homes sold, a shopping spree that resulted in twice the number of homes being sold in the second quarter than the first quarter, said the Urban Redevelopment Authority (URA). The number of resales nearly trebled while sub-sales more than doubled.
The strong demand for cheaper condos meant that while private home prices still fell 4.7 per cent in the second quarter, it was a far smaller decline than the plunge of 14.1 per cent in the first quarter.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop in the quarter - 2.3 per cent - compared to pricier prime and city-fringe properties, which saw prices fall by double that amount.
Rents for private homes continued to fall 5.2 per cent in the quarter, though 8 per cent more leases were signed.
Consultants had actually expected prices to increase in the second quarter, as home buyers flooded back and developers started to selectively raise prices.
'Our own analysis showed that private home prices in the second quarter rose,' said DTZ's head of South-east Asia research Chua Chor Hoon. She said the price increases ranged from 3 per cent for some suburban resale homes, to 11 per cent for homes in the prime districts.
In response to queries, the URA said that while prices have risen in some projects, there were still other developments that saw prices fall in the quarter.
But private home prices are likely to show a definite pickup from the third quarter, consultants say. 'The second quarter will possibly be the last quarter of price declines,' said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.
'If developers remain cautious and tread carefully with price increases, this momentum in the market could continue. But if developers are impatient and jack up prices too quickly, that may hurt demand as buyers are still price-sensitive.'
Mr Nicholas Mak, a long-time property consultant, said he expects overall prices to show an increase in the second half of this year. His reasons: the recovery in global stock markets, relief buying due to a shorter-than-expected recession, and low interest rates that make property purchases look more attractive.
The outlook has also been boosted by the fact that demand is no longer restricted to the mass market, he said. In recent months, more buyers have been keen on mid-tier and high-end condos such as The Arte at Thomson or One Devonshire in Somerset. Even at suburban condos, buyers seem to be opting for larger, more expensive units. Yesterday, developer UOL Group sold 180 units in a single day at Meadows@Peirce in Upper Thomson.
While the project offers smaller units from 517 sq ft in size, most units sold had at least three bedrooms and were priced at $1 million and above, said UOL's chief operating officer Liam Wee Sin.
The improved economic outlook also meant that offices and shops also saw slower declines in prices and rentals in the second quarter. Office prices fell 3.9 per cent, while rents fell 7.7 per cent.
But these numbers are unlikely to turn positive soon as recent retrenchment exercises dampen the office sector, said Mr Li Hiaw Ho, executive director of CBRE Research. He was more upbeat about shopping malls, as there is still 'healthy demand' for existing shop space. Shop rents eased 2 per cent in the second quarter and prices fell just 1.4 per cent.
By Fiona Chan
Extracted From The Straits Times
27 July 2009
Now, buyers of cheaper mass market homes - defined loosely as bigger HDB flats and condominiums in the suburbs - are back in the market with a vengeance
They doubled their purchases of five-room and executive HDB flats between March and June, pushing overall HDB prices up 1.4 per cent to hit a new high in the quarter, according to Housing Board (HDB) data released yesterday.
Mass market buyers also picked up four out of every 10 private homes sold, a shopping spree that resulted in twice the number of homes being sold in the second quarter than the first quarter, said the Urban Redevelopment Authority (URA). The number of resales nearly trebled while sub-sales more than doubled.
The strong demand for cheaper condos meant that while private home prices still fell 4.7 per cent in the second quarter, it was a far smaller decline than the plunge of 14.1 per cent in the first quarter.
What helped jam the brakes on the decline were suburban homes, which saw the smallest price drop in the quarter - 2.3 per cent - compared to pricier prime and city-fringe properties, which saw prices fall by double that amount.
Rents for private homes continued to fall 5.2 per cent in the quarter, though 8 per cent more leases were signed.
Consultants had actually expected prices to increase in the second quarter, as home buyers flooded back and developers started to selectively raise prices.
'Our own analysis showed that private home prices in the second quarter rose,' said DTZ's head of South-east Asia research Chua Chor Hoon. She said the price increases ranged from 3 per cent for some suburban resale homes, to 11 per cent for homes in the prime districts.
In response to queries, the URA said that while prices have risen in some projects, there were still other developments that saw prices fall in the quarter.
But private home prices are likely to show a definite pickup from the third quarter, consultants say. 'The second quarter will possibly be the last quarter of price declines,' said Ms Tay Huey Ying, director of research and advisory at property firm Colliers International.
'If developers remain cautious and tread carefully with price increases, this momentum in the market could continue. But if developers are impatient and jack up prices too quickly, that may hurt demand as buyers are still price-sensitive.'
Mr Nicholas Mak, a long-time property consultant, said he expects overall prices to show an increase in the second half of this year. His reasons: the recovery in global stock markets, relief buying due to a shorter-than-expected recession, and low interest rates that make property purchases look more attractive.
The outlook has also been boosted by the fact that demand is no longer restricted to the mass market, he said. In recent months, more buyers have been keen on mid-tier and high-end condos such as The Arte at Thomson or One Devonshire in Somerset. Even at suburban condos, buyers seem to be opting for larger, more expensive units. Yesterday, developer UOL Group sold 180 units in a single day at Meadows@Peirce in Upper Thomson.
While the project offers smaller units from 517 sq ft in size, most units sold had at least three bedrooms and were priced at $1 million and above, said UOL's chief operating officer Liam Wee Sin.
The improved economic outlook also meant that offices and shops also saw slower declines in prices and rentals in the second quarter. Office prices fell 3.9 per cent, while rents fell 7.7 per cent.
But these numbers are unlikely to turn positive soon as recent retrenchment exercises dampen the office sector, said Mr Li Hiaw Ho, executive director of CBRE Research. He was more upbeat about shopping malls, as there is still 'healthy demand' for existing shop space. Shop rents eased 2 per cent in the second quarter and prices fell just 1.4 per cent.
By Fiona Chan
Extracted From The Straits Times
27 July 2009
HDB prices hit record high
PRICES of Housing Board flats have reached a historical record, rising 1.4 per cent in the second quarter this year, reversing a first-quarter dip of 0.8 per cent.
Fresh data released from the HDB on Friday shows the resale price index rising to 140.2 - beating the previous record set in the fourth quarter of last year when it hit just over 139.
The figures have come in slightly higher than flash estimates released earlier this month which showed that prices rose 1.2 per cent.
6,000 BTO flats
The board said it plans to launch another 6,000 units under its build-to-order scheme in the next six months, of which some 2,400 units would be three-room and smaller flats.
The bulk of new flat supply would be in Punggol.
To date, the HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands in 2009 to ramp up supply.
By Jessica Cheam
Extracted from The Straits Times
24 July 2009
Fresh data released from the HDB on Friday shows the resale price index rising to 140.2 - beating the previous record set in the fourth quarter of last year when it hit just over 139.
The figures have come in slightly higher than flash estimates released earlier this month which showed that prices rose 1.2 per cent.
6,000 BTO flats
The board said it plans to launch another 6,000 units under its build-to-order scheme in the next six months, of which some 2,400 units would be three-room and smaller flats.
The bulk of new flat supply would be in Punggol.
To date, the HDB has launched about 2,000 new flats in Punggol, Sengkang and Woodlands in 2009 to ramp up supply.
By Jessica Cheam
Extracted from The Straits Times
24 July 2009
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