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16 August 2012

16th August, Thursday




Sale of private homes jumps 42% in July

Source: Business Times

Demand for private residential homes, excluding executive condominiums (ECs), rebounded in July, with 1,943 units snapped up last month, 42 per cent more than the 1,371 units sold in June.

Even as mass-market sales continued to monopolise the market, the Core Central Region (CCR) - which includes Districts 9, 10 and 11, Downtown Core (including Marina Bay) and Sentosa - saw the steepest rise in buying activity, with 253 units sold in July, an increase of 79 per cent month on month.

This was propped up by the launch of V on Shenton - 144 of the 190 units at the development sold in July, at a median price of $2,061 per sq ft (psf), making up 57 per cent of sales in the region.

Sales in the Outside Central Region (OCR), where mass-market projects are located, also continued to drive primary-market sales, accounting for 77.7 per cent, or 1,509 of the 1,943 private homes (excluding ECs) sold last month. Two of July's top-selling projects, Parc Centros in Punggol and Parc Olympia at Upper Changi, sold 492 units at a median price of $924 psf and 204 units at $874 psf, respectively.

Said an analyst: "The modest median launch prices of $874 and $924, which are fairly comparable to the neighbouring projects, reflect local buyers' growing resistance to further price increase."

Elsewhere in the Rest of Central Region (RCR), developers sold a total of 181 units out of the 281 released. The only new project launched, The Line @ Tanjong Rhu, found 13 buyers for the 62 units released from the 130-unit development. Other previously launched developments such as Eight Riversuites (33 units sold), M66 (28 units sold), Nottinghill Suites (12 units sold) and Idyllic Suites (11 units sold) continued to move units. As a result, sales volume was up 52.1 per cent in the region.

"The strong sales in the mid-tier RCR were contributed by the increasing prices of suburban homes. For example, Naung Residence, a new development located in the OCR that was launched in July 2012, sold six units at a median price of $1,455 psf, which was at the upper-end of the price range of mid-tier homes. In July, about two-third of the private housing units sold in the RCR were in the price range of $1,001 to $1,500 psf. Thus, the overlapping of prices of private homes in the OCR and RCR could make the housing units in the RCR more appealing to home buyers,” another analyst said.

Looking ahead, primary market activity is expected to slow down in August, due mainly to the seventh lunar month, noted another analyst. "Developers are expected to stagger new supply in order to sustain home-buying momentum, concentrating on moving units from previously launched projects. Sales volume is expected to ease to about 1,300-1,600 units. Meanwhile, positive performance in the CCR may embolden some developers to step up on moving more units in the region," she added.

Some projects, including eCO, Riversails and One Dusun, have already started gathering interest ahead of their launches which might be scheduled for September, noted Lee Sze Teck, senior manager of research and consultancy at DWG.

"Other possible launches in the next few months include Skies Miltonia, The Sennett, Waterbay and Heron Bay. Waterbay and Heron Bay are both EC projects," he added.


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Luxury home prices, rents to go further south

Source: Business Times

Prices of Singapore's luxury prime properties continue to lose steam despite a pick-up in the segment's sales volume in the second quarter, and this trend is likely to continue, says a report by a consultancy.

The average resale capital value for prime luxury properties fell 2.9 per cent quarter-on-quarter in 2Q to around $2,380 per sq ft (psf), marking a second consecutive quarterly fall after a long period of stability.

At the same time, resale capital values of typical prime properties also dipped during the period by 1.5 per cent from the last quarter to about $1,350 psf.

The spike was mainly driven by healthy uptake in both new sale and resale segments, which recorded a respective growth in volumes of 38.5 per cent and 22.9 per cent over the previous quarter.

A higher number of prime market developments launched in 2Q also helped to generate interest and buoy transaction volumes. A total of 101 core central region (CCR) units were launched in April and May (close to the 112 launched during 1Q), providing new supply to the segment.

An estimated 778 units were completed in 2Q, up almost five times from 1Q. The largest project, The Trizon, added 289 units to the market, followed by Rochelle at Newton with 129 units and RV Suites with 96 units.

However, the jump in supply dampened overall yields as average prime rental values dipped 1.2 per cent from Q1 to around $49 psf per annum ($4.08 psf per month), while average typical prime rental values fell 2.2 per cent to $38 psf per annum ($3.16 psf per month).

Explaining the segment's lacklustre rental performance, the consultancy said: "Rents have fallen, especially in older prime properties, large units, and properties facing construction. Lower rents are increasingly being accepted in struggling projects, while housing allowances are being reduced and expatriates are relocating to other countries negatively impacting leasing demand."

The consultancy expects further declines in both rents and capital values over the next 12 months in the prime residential segment amid lingering uncertainty in the global economy, and as tenants and buyers look for good-value properties in the light of falling housing allowances and high prices.


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Investment Sales


Freehold Kovan residential site up for sale

Source: Business Times

Kovan Lodge - one of the last few older freehold blocks on Kovan Road - was put up for sale by tender Wednesday.

Comprising a total land area of 27,090 sq ft, the residential-zoned site currently occupied by Kovan Lodge is said to have the potential to be redeveloped into a much bigger residential development, subject to the authorities' approval.

If approval is granted to purchase an adjoining plot of state land of about 505 sq ft, the site could be built up to 38,633 sq ft based on the present gross plot ratio of 1.4, which translates to around $802 per sq ft per plot ratio (psf ppr) based on the indicative asking price of $31 million.

The tender will close on 25 September.


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