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18 December 2012

18th December, Tuesday




New private home sales slide by 44%

Source: The Straits Times

Home buyers purchased just 1,087 new private units last month - the lowest figure this year - as the school holidays and festive season dampened sales.

The figure is 44 per cent lower than the 1,948 units sold in October, as the sixth round of cooling measures introduced in early October also took a toll on buying momentum and market sentiment.

Including executive condominiums (ECs), developers sold 1,266 homes, the Urban Redevelopment Authority (URA) said Monday.

Experts say developers turned cautious and held back launches last month, as they assessed the impact of the cooling measures on demand before deciding whether to push out new projects.

Only 773 homes were launched for sale last month, well down on the average monthly launch of 1,987 units in the first 10 months of the year.

Home buyers could also have hit the brakes as the subdued global economic outlook next year affected buying sentiment.

Concerns also remain over the "fiscal cliff" in the United States and the debt crisis in Europe. These are likely to drag down growth next year should the situation worsen, cautioned Mr Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group.

One analyst said that some developers could be keeping their launches for next year instead, as the end of the year is a traditionally slow period owing to the holiday season.

Another analyst noted, however, that the caps in loan terms imposed by the Monetary Authority of Singapore have also begun working through the property market.

The market is expected to pick up in the first quarter of next year as a string of launches enter the market.

Some of these include Sennett Residences in Potong Pasir, Urban Vista in Tanah Merah, Qbay in Tampines, Duo in Ophir Road and a condominium project in Jalan Lempeng.

Still, even with last month's low figure, the property market is headed for a banner year.

Already, an impressive 20,879 new private homes have been sold in the first 11 months of the year - easily eclipsing the record 16,292 units sold in 2010.

November's top-selling projects include Eco Sanctuary in Chestnut Avenue with 140 units sold at a median price of $1,050 per sq ft (psf), d'Leedon in district 10 with 133 units sold at $1,431 psf, and Riversails in Upper Serangoon where 81 units were snapped up at $858 psf.


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Property option fee: Woman loses appeal

Source: The Straits Times

A housewife submitted a cheque to pay a 1 per cent option- to-purchase fee concerning a $27.6 million Swettenham Road bungalow.

But the cheque for $276,000 bounced and the seller sued Madam Leong Miew Fong for the fee payable. She did not file her defence in the case and the High Court ordered her to pay the $276,000 by default.

She applied to the High Court last month to set aside the judgment but did not succeed.

Last month, Assistant Registrar Kevin Tan dismissed her move to set aside the outcome, pointing out that her failure to pay the fee did not prevent the seller from enforcing the option-to-purchase transaction, based on the terms of the valid contract.

Lawyers said the case underscores the need to make clear in any option-to-purchase contract whether the deal takes effect only after the option-fee money is paid, to avoid a similar incident.


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Investment Sales


UEL buys Anson Road block for $410m

Source: The Straits Times

Infrastructure firm United Engineers (UEL) is buying a commercial block in Anson Road for $410 million.

The company has acquired the 23-storey property from the Central Provident Fund Board and fellow owner 79 Anson.

It is 99 per cent occupied, with technical consultants Kellogg Brown & Root Asia Pacific the anchor tenant.

UEL said in a statement Monday that the Anson Road acquisition, which will be its first commercial property within the central business district, will provide a stable rental income with potential to increase rates.

It added that there is potential for capital growth given the property's location near the port land - at Tanjong Pagar, Keppel and Pulau Brani - which has been earmarked to become a waterfront city.


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Collective sales players in no hurry to bid for sites

Source: The Straits Times

Given the less-than-buoyant demand for collective sales sites this year, market analysts expect the same in the coming months, with developers favouring smaller sites, as they did throughout 2012.

One analyst said the imposition of a 10 per cent Additional Buyer's Stamp Duty (ABSD) on the acquisition of development land from December 2011, resulted in increased caution among developers who channelled their attention to smaller land parcels. "Developers find greater flexibility and ease to redevelop on smallish sites within five years, thus enabling these acquisitions to be eligible for remission of the ABSD," she added.

Although the ABSD might have resulted in more cautious transactions in the en-bloc market this year, a couple of records were still broken and new highs set.

For example, the sale of Thomson View condominium) at $712 per sq ft per plot ratio (psf ppr) or $590 million, was the largest residential collective deal since June 2007.

Said one analyst: "The developers who paid the heftiest prices to some sites were not the regular players - they could have few land banks in their stable and are willing to pay a premium in order to win the sites and stay in business."

Another analyst said: "Mixed-use sites will continue to find favour and residential sites near MRT stations are expected to draw keen interest."

Data compiled by a consultancy showed that the year-to-date value of transactions is expected to be around $2 billion, about two-thirds of last year's $3.2 billion.

This is from the 24 sites sold to date this year, compared with the 51 transactions recorded in 2011. Only three out of the 24 sites sold were in the prime districts of 9,10 and 11, with the rest mainly from sites in the suburban areas and city fringe.

Analysts said the lack of reasonably good sites and a more cautious attitude among developers towards projects in the mid-tier segment compared with mass-market ones where demand continues to be strong, also contributed to the lacklustre performance of the market this year.

But with land prices likely to inch up next year, analysts think over-prized sites in prime locations will most probably be shunned by developers.

Analysts noted that capital flows from the third round of quantitative easing (QE3) and the low interest rate environment could help sustain demand for homes and in turn keep demand for land fairly stable despite the challenging market conditions ahead.


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International Markets


China property curbs to continue

Source: Business Times

China's reviving economy and strong housing demand are likely to put home prices on a gentle upward trend next year, and the government probably will keep in place controls aimed at curbing property inflation, a poll found Monday.

The latest survey of 15 economists and property market analysts, conducted between 10 and 14 December, predicts a 7.0 per cent increase in house prices in 2013 and a rise of 5.0 per cent in 2014.

A modest rise in home prices might be acceptable to policymakers, provided it underpins hopes for a broad recovery in the world's second-biggest economy.

The latest poll points to expectations of a quickening in the property market, as the previous poll in July had forecast house prices to rise 2.5 per cent in the second half of 2012.

Analysts polled in the survey believe national property curbs will be kept in place in 2013 and the current home purchase restrictions limit scope for sharp price gains.

None of the 15 respondents expect China to remove restrictions on the number of homes a family can own next year while 13 of 15 respondents believe there will be no reduction in down payments payable by first home buyers in 2013.

Meanwhile, 13 of 15 respondents also expect China to expand its trial property tax to more cities beyond Shanghai and Chongqing, where it was imposed early last year. Most respondents said China's property markets are over-valued, a view unchanged over the last three polls.


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London home sales lacklustre as December prices nosedive

Source: Business Times

London home sellers cut asking prices by the most for a December in five years as an influx of supply and seasonal factors undermined pricing power.

Asking prices fell 4 per cent from the previous month to an average £464,398 (S$919,090), a property website said Monday. Average prices in England and Wales fell 3.3 per cent, the most since January 2002. The decline in London may be a portent of a "less frothy" market in 2013.

New London listings rose 10 per cent in December from a year earlier, and a continued flow of sellers would help to support "more competitive" pricing next year. Monthly declines in the capital were led by a 6.5 per cent drop in Tower Hamlets and a 4.8 per cent decline in Hounslow.

In London, asking prices are still up 6.8 per cent from a year earlier, compared with a national increase of 1.4 per cent.

The number of new property listings across the country will probably remain around the 1.2 million level seen in each of the last three years, and that may help to support values. Nationally, the average price was £228,989 in December.

Nine of the 10 regions tracked by the website posted declines in December from the previous month, led by a 5.3 per cent drop in the south-west. The only increase was a 0.8 per cent gain in the East Midlands.


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