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07 July 2012

7th July, Saturday




Yields for private homes sag in Q2

Source: Business Times

Rental yields for non-landed private homes fell across all regions in the second quarter of 2012, data compiled by the Singapore Real Estate Exchange (SRX) showed.

In particular, rental yields for homes in the core central region (CCR) took the biggest hit, sliding 6.4 per cent to 3.2 per cent in 2Q from 3.42 per cent in the previous quarter.

Other non-landed units in the rest of the island also experienced declining yields.

Homes in the rest of central region (RCR) and outside central region (OCR) recorded yields of 4.02 per cent and 3.99 per cent, down 2.7 per cent and 5.2 per cent respectively from the previous quarter, dragging down overall non-landed private home yields by 5.9 per cent to 4.01 per cent.

The volume of rental transactions for non-landed private homes also tumbled across all regions to 7,198 transactions in 2Q, from 7,498 in the period before, according to data from SRX, which represents about three-quarters of Singapore's private rental market.

Industry watchers expect leasing demand for higher-end private homes to slow in the coming quarter as rental budgets for expatriates are tightened amid global economic uncertainty.


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Lower COVs draw buyers back to HDB resale market

Source: The Straits Times

The number of Housing Board resale flats changing hands is creeping back up, according to estimates from property firms.

They said buyers are returning to the resale market now that cash premiums, known as 'cash over valuation' or COV, have fallen and stabilised. There is also rising demand from second-time flat buyers, permanent residents and a burgeoning number of private property downgraders.

At Dennis Wee Group (DWG), one of the biggest agencies in the HDB resale market, 6,100 resale transactions have been logged in the second quarter of this year, with four-roomers garnering the most interest. This is a 3.5 per cent increase over the previous quarter.

'The steep plunge in COVs in the past two quarters has enticed buyers back into the resale market,' said DWG's senior manager of research and consultancy Lee Sze Teck.

Softening COVs mean that they have become comparable to the resale levy buyers fork out if they want a new flat. Depending on flat type, the resale levy for a second-timer ranges between $15,000 and $50,000.

According to agency data culled from several firms, overall median COVs are now about $26,000, compared to $35,000 in the fourth quarter of last year.

The steady rise of suburban condominium prices, including that of executive condominiums, has been another factor.

With three-bedroom units in far-flung areas like Sengkang and Pasir Ris crossing the $1 million mark, buyers are turning back to HDB resale flats which offer better value for money in terms of space.

The rise of private property prices has also led to another phenomenon: downgraders who cashed in the profits on their condominium units and now want to move back into HDB units.

In all, property experts say the market is calmer now, having digested the various government measures to ease the public housing crunch. These include tightening the rules for purchasing resale HDB flats, releasing a bumper crop of new HDB flats and allowing a wider spectrum of first-time buyers to apply for them.


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North-east region may see glut of homes, says report

Source: The Straits Times

A spate of project launches in the north-east has sparked concern that there will be an oversupply of homes in the coming years.

Sites that can yield more than 10,000 homes have been sold in Punggol, Buangkok and Sengkang alone since September 2009, according to a research firm.

These have been developed into projects such as A Treasure Trove, Watertown, H2O Residences and The Luxurie.

If other north-east estates like Hougang, Seletar and parts of Upper Serangoon are included, almost 14,000 units on about 25 sites are on the cards. These units, which include executive condominiums (ECs), are expected to be ready from 2014 to 2016.

Three EC sites in Punggol that can yield about 1,415 homes are also up for grabs in the government land sales (GLS) programme for the current half of the year. And this does not include upcoming Housing Board (HDB) build-to-order launches.

Experts say that while there remains demand from HDB upgraders for private and EC projects, the bumper supply of sites does look 'worrisome'.

An analyst played down the oversupply risk because 46 per cent of the upcoming flats in Punggol, Sengkang and Buangkok are ECs. This includes the EC sites to be sold in the later part of this year. ECs will take at least eight years - three years of construction and a five-year MOP - before they enter the secondary market. This staggered supply will reduce the chance of a glut.

Another analyst noted that Pasir Ris, which has also seen an increasing number of launches, may be of more concern.

NV Residences, The Palette, Ripple Bay, Palm Isles, Seastrand and Sea Esta plus EC projects Belysa and Watercolours have all hit the market recently. The ratio of private to public housing in Pasir Ris is expected to more than double when these projects are completed. This ratio will be significantly higher than the islandwide figure and the highest ratio among all towns, she pointed out.


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Balestier attracts buyers who find city centre pricey

Source: The Straits Times

Savvy home buyers, including expatriates on tight budgets and unable to afford the expensive city centre, are looking to nearby Balestier as a handy substitute.

Balestier homes can be 20 per cent cheaper than some nearby prime areas, yet are still fairly central, experts said. The area is also starting to shed its messy, occasionally seedy, image.

Various new condominiums like Nova 88 have sprung up in the past year, adding more than 400 new homes to the eclectic tenant mix of shophouse eateries, hardware shops and contractors.

A further 1,400 new homes will be ready by 2015, said an analyst.

Project sales are healthy. For example, Far East Organization's Vista Residences at Jalan Datoh has only eight units left, priced at about $1,800 per sq ft (psf). EL Development's Skysuites 17, launched last year, has one penthouse left. Units sold at an average $1,400 psf - in line with the $1,200 to $1,500 psf median selling price of launches in the area, experts said.

But this is lower than launches in nearby Novena, in prime district 11, which are fetching some $2,000 psf.

Rental yields in the Balestier and Novena area are on par at 3.3 to 4 per cent said DWG senior manager of research and consultancy Lee Sze Teck.

One factor attracting investors and expats is the plethora of shoebox units, especially at small to mid-sized condos like Okio.

Consultants said Balestier's old world charm, good food and attractions like Zhongshan Park, make it appealing to buyers and tourists, boosting its vibrancy.

Mr Lee said the area 'has shed most of its undesirable image'. In 2002, the Urban Redevelopment Authority recognised Balestier Road as rich in cultural and built heritage.

An investor recently bought three units at Cradels for about $1.8 million in total. 'It is less than five minutes to the city area, where prices are at a peak,' said the businessman, a permanent resident. He feels rental demand will hold up as more foreigners come here to work. They are also less likely to buy, given the 10 per cent additional buyer's stamp duty. 'The price is reasonable... When you invest you want to choose an area where there are fewer developments so there's room for growth,' he said.


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8,000 new private homes estimated in H2: analysts

Source: Channelnewsasia

Property developers will launch some 8,000 new private homes over the next six months, according to analysts' estimates.

While there are small risks of oversupply in the horizon, market watchers told Channel NewsAsia that private property prices should remain stable this year.

A consortium comprising Hong Leong Group, City Developments and TID Residential won the tender for the site at Mount Vernon in January this year which is expected to yield more than 700 private home units.

Besides the plot of land at Alexandra Road, which was awarded in December last year, analysts forecast another mixed residential-commercial project at Bukit Panjang should excite home buyers in the second half of 2012.

Analysts believe demand will remain robust.

But any major financial crisis lasting more than two years could dampen sales, especially from a growing group of investors.

This year, analysts estimate new home sales to surpass last year's record 17,750 private home units.


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