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17 July 2012

17th July, Tuesday




Despite June blip, home sales set blistering pace

Source: Business Times

The momentum may have slowed in June, but developers have sold many more private homes in the first half of 2012 than they did last year.

June saw 1,371 units being sold, excluding executive condos - a 19.5 per cent drop, month-on-month. But in the first six months of this year, developers have offloaded 12,098 units - a big jump from the 8,039 private homes sold during the same period in 2011.

In fact, sales during the first six months are not very far from the 15,904 units sold for the whole of last year, based on preliminary numbers from the Urban Redevelopment Authority (URA).

Property consultants expect developer sales to hit an all-time high of 18,000-22,000 units this year - surpassing the current record of 16,292 units set in 2010.

URA will release the final 2Q developer sales figures, taking into account returned units, on 27 July.

Market watchers expect prices to remain stable in the second half. URA's flash estimate for its Q2 2012 private home price index was up 0.3 per cent from Q4 last year.

Analysts also point to competing supply from the resale market as buyers warm to more attractive price points for older completed properties.

However, prices are unlikely to crash assuming demand remains resilient, say industry players. Owner-occupiers as well as investors have been drawn to property as an anti-inflation hedge, especially given the current low interest rate environment and affordable lumpsum investment size as developers include small units in their projects.

URA's developer monthly sales stats show that Outside Central Region (OCR), where mass-market projects are located, continued to drive primary-market sales in June, accounting for 81 per cent of the 1,371 private homes excluding ECs sold last month. However, the number of units sold in OCR shrank 8 per cent month on month.

Sales in Rest of Central region dived 67.1 per cent month-on-month to 119 units in June. However, sales in Core Central Region rose 4.4 per cent to 141 units, helped by the launch of 1919 at Mount Sophia - 74 of the project's 75 units sold at a median price of $2,042 psf.

Islandwide, June's top selling projects include River Isles in Punggol, with 263 units sold at a median price of $835 psf; Sea Esta in Pasir Ris (255 units at $906 psf median price); and a nearby EC project, Watercolours (201 units at $735 psf median price).


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S'pore office - world's 16th most expensive

Source: Business Times

The Singapore office market is the 16th most expensive in the world - placing it in a more competitive spot compared with other Asia-Pacific financial centres like Hong Kong, Tokyo, Shanghai's Puxi and Beijing, according to a consultancy's ranking of the world's 50 most expensive office markets.

Its Prime Office Occupancy Costs survey showed that tenants of such spaces here had to fork out rent, taxes and service charge amounting to a total of US$117.39 per sq ft (psf) per annum.

This remains lower than Hong Kong's Central, which became the most expensive location for companies with occupancy cost of US$248.83 psf per annum.

Singapore is also cheaper than other up-and-coming financial centres like Beijing and Shanghai's Puxi area.

The report looked at prime office space in 133 cities worldwide, with data based on occupancy costs per annum as of 31 March 2012.


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Investment Sales


Property investment deals pick up in Q2

Source: The Straits Times

Investment activity in the real estate sector picked up in the second quarter, but a consultancy expects that overall activity this year will not be as strong as last year's.

Real estate investment activity rose to $6.9 billion in the three months to 30 June, up 48 per cent from the first three months of the year.

This brings the total value of all property investment deals in the first half of the year to $11.6 billion, lower than the $17.1 billion worth of deals completed in the same period last year.

Property firms were still the most active investors in the quarter, accounting for about 74 per cent of investment transactions.

Between April and June, property firms bought office buildings Tower Fifteen and KeyPoint, and retail mall Hougang Plaza, among others.

They were also active in the purchase of Government Land Sales (GLS) sites, snapping up all GLS sites for sale during the quarter, except for an industrial site which was bought by a civil engineering firm.

The consultancy said investment activity in the next six months will likely be dominated by developers purchasing GLS sites and Reit activity.


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Three freehold residential sites up for collective sale

Source: Business Times

A slew of collective sales has hit the market in the form of one freehold residential site in Upper Serangoon, Chancery Garden and Kismis Lodge.

The first of the two adjoining sites at Upper Serangoon is a 20,228-sq-ft site at 1 Surin Avenue. It is currently occupied by a two-storey detached house which is vacant. The second adjacent 22,618-sq-ft site at 790 Upper Serangoon Road was formerly the Singapore Crocodile Farm, which has ceased operations.

They are on the market with an indicative pricing of $40 million. Inclusive of a development charge of $6.1 million, the price works out to some $934 per sq ft (psf), according to the marketing agent.

"With a total land area of 42,846 sq ft, the site can be re-developed to accommodate some 26 units of cluster terrace houses, with areas ranging from 3,500 sq ft to 5,000 sq ft each," said the marketing agent. The tender closes on 15 August.

Another development, Chancery Garden, a prime freehold mixed landed site in District 11, is put up for collective sale by tender.

Sitting on a site area of about 29,468 sq ft and comprising 10 units of apartments and townhouses housed in a three-storey block, it has an expected minimum price of $45 million, or $1,527 psf.

The site is zoned for two-storey mixed landed housing. The marketing agent said the developer can choose to build a total of 18 units of strata terraces, six strata semi-detached and 10 strata terraces, or any other configurations subject to approval.

The tender for Chancery Garden closes at 3pm on 23 August.

The last site up for collective sale is Kismis Lodge. This is the first time the site is being put up for sale.

Located off Toh Tuck Road, the plot currently comprises 64 units of walk-up apartments with a land area of 70,283 square feet.

The owners are asking for between $90 million and $95 million, which translates to about $1,281 to $1,352 psf.

The site is zoned for three-storey mixed landed housing, which allows the developer to build a combination of conventional terrace houses, semi-detached houses and detached houses; or cluster landed housing with strata terrace houses, strata semi-detached houses and strata bungalows with communal facilities.

The tender for Kismis Lodge closes at 2.30pm on 15 August.


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International Markets


Prices for London homes drop 3.6%

Source: Business Times

London home sellers cut prices by a record for the month of July as an increase in supply added to pressure on the property market during the traditional summer lull, a property website said.

Asking prices dropped 3.6 per cent from June to an average £460,304 (S$908,903). Across England and Wales, values fell 1.7 per cent to £242,097.

Property demand weakened in July as bad weather curbed viewings, and the London Olympics added to "distractions". As Britain's housing market struggles to recover, the Bank of England last week announced details of its new lending programme aimed at boosting credit to the economy.

In London, part of the price decline may have reflected a tax increase on properties costing at least £2 million, announced by the government in March. Values in Kensington and Chelsea, the capital's most expensive district, fell 5.1 per cent in July to £2.03 million.

The number of new sellers rose 6 per cent in July from June. The biggest decline in asking prices was recorded in Brent, down 8.9 per cent, followed by Kingston-upon-Thames, down 5.8 per cent. Hackney and Greenwich were the only districts to record increases. Values in London were up 6.4 per cent in July from a year earlier.

Of the 10 regions tracked, only one, the West Midlands, recorded a monthly increase in prices in July. Average house values rose 2.3 per cent from a year earlier.


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