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12 June 2012

12th June, Tuesday




New suburbans now at prime resale prices

Source: Business Times

The price gap between new suburban homes and secondary prime property has been narrowing as buying euphoria escalates prices of the former.

For instance, one-bedroom units at CapitaLand's Sky Habitat in Bishan have achieved per sq ft prices exceeding $1,700 despite its 99-year leasehold status and its location in a traditionally off-prime area.

In contrast, such prices could have easily gotten the buyer a freehold resale unit of a similar size located in Singapore's prime districts, comprising those in the core central region (CCR).

To illustrate, one can acquire a freehold one-bedder unit at completed developments such as Mulberry Tree - which is a short five-minute walk to Velocity@Novena Square and Novena MRT - or District 11's Nineteen Shelford Road - which is within a one-km radius from popular primary schools such as Nanyang Primary and Raffles Girls Primary - for an asking price of around $1,700 psf, according to property sales portal,

Said an analyst: "We believe May was the nascent start to a trend where those savvy enough to realise that the price gap between suburban and prime districts have been closing, start their due diligence to shop for a prime unit and may put pen to paper in either June or July."

In fact, interest in resale non-landed private CCR homes has already started to pick up with an increasing number of units being transacted over the past few months, according to data compiled by the Singapore Real Estate Exchange (SRX) and the Urban Redevelopment Authority (URA).

Beyond the core region, activity in the broader secondary market has also been gaining speed.

According to preliminary data extracted from URA Realis, the number of resale units in May totalled 621 units, superseding that of developer sales (504 units).

However property consultants expect sentiment to remain cautious and does not expect an increase in sales volume over the next few months, though they are positive on the longer term prospects of the local property market.


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HDB won't shrink flats, says Khaw

Source: The Straits Times

National Development Minister Khaw Boon Wan has offered some clarity on the ever-emotive issue of HDB flat sizes, giving his assurance that Singapore will not go the way of cities such as Hong Kong and Tokyo, where flats have become tiny.

Speaking to The Straits Times, Mr Khaw said the Government is committed 'to maintain a good quality of life', and there are no plans to shrink HDB flats. Any future change in flat sizes will depend largely on family sizes, he said.

As for future flat sizes, Mr Khaw said he would clear the backlog of demand for flats before considering changes to flat designs.


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Buyers still active in property sector

Source: The Straits Times

Developers notched up healthy weekend sales at both mass market and upscale projects.

High-end 1919 on Mount Sophia is already more than 90 per cent sold after 68 of the 75 black-and-white apartments on offer were snapped up. The freehold project being developed by Aurum Land was launched last Saturday. It is due for completion by 2015.

Average prices range from $2,000 per sq ft (psf) to $2,200 psf, while patio units - on the ground floor with a bigger balcony - start from $1,600 psf. Unit sizes range from 560 sq ft to 1,302 sq ft. This works out to at least $1.12 million for a 560 sq ft unit.

On the mass market front, Hoi Hup Realty's Sea Esta sold nearly 200 units at its preview on Sunday. One-bedroom units, of at least 517 sq ft, are on offer from $488,000. Three-bedders, measuring at least 904 sq ft, start from $760,000. The 376-unit condo is expected to be officially launched next week.

Another recent launch, Tropika East in suburban Eunos, has sold 45 of its 105 units. The freehold project is being developed by Tong Eng Group and was launched last Saturday. A three-bedroom unit of between 1,033 sq ft and 1,109 sq ft will cost from $1,150 psf to $1,275 psf - a minimum price of $1.3 million. Penthouses of 840 sq ft to 1,819 sq ft are going for $1,000 psf on average, so the smallest penthouse starts from $1 million. One- and two-bedders are also available. The condo, near the upcoming euHabitat, will be ready by June 2016.

In Punggol, Qingjian Realty's River Isles has sold about half of its released units. Launched on 2 June, the 99-year-leasehold project has a total of 610 units, but only 410 have been released to date. Units are going for between $830 and $850 psf, on average. Three-bedroom units - measuring 893 sq ft to 1,173 sq ft - cost at least $736,500.

An analyst said that the robust weekend sales are a sign that the momentum seen in the first four months of the year is likely to spill over into the next few months. He said Singapore is still considered a safe haven for investors, despite global worries.

'Interest rates are still low, and people still have confidence in the market,' said Mr Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Realty. 'Some might think the property market is more stable now, compared to the stock market, which has more volatility.'


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Industrial land tenure halved to 30 years

Source: Business Times

The Ministry of Trade and Industry (MTI) is halving the maximum tenure for industrial sites under its land sales programme to 30 years - to make industrial property more affordable to genuine industrialists.

The tenure reduction applies to nine larger plots in the slate of 19 land parcels in the second-half 2012 Industrial Government Land Sales Programme announced Monday as well as to six sites in the first-half slate that have yet to be launched.

Halving the maximum 60-year tenure will also enhance the government's flexibility for land redevelopment since the sites will revert sooner to the state.

An analyst said: "The move will make developers more prudent in their land bids because when it comes to end-property sales, 30-year leasehold properties are very vulnerable to market changes. During Lehman's collapse in 2008, only one or two banks were providing financing for such properties."

Another analyst noted: "This is a clear attempt to keep industrial property prices in check, amid concerns about prices rising beyond the reach of manufacturers, especially SMEs. By reducing the land tenure, MTI hopes to keep prices within reach of genuine industrialists. Casual investors unfamiliar with industrial property are likely to have less preference for shorter tenure."

The 30-year tenure applies to the larger sites, including those in relatively choice locations such as Ubi Avenue 4, Serangoon North Avenue 5, Sunview Road and Buroh Street in the Jurong area, and Woodlands Avenue 10, which would be targeted at developers since they're unlikely to be within reach of industrialists.

To cater to industrialists who prefer to build their own customised premises, MTI will continue its 1H strategy of releasing smallish plots in Tuas South on short tenure. However, MTI has lengthened slightly the land tenure - from 19 years previously to 22 years - for the 10 small sites in Tuas South on the 1H 2012 reserve-list slate that are being moved to 2H's confirmed list. Property consultants suggest that this could be in response to feedback on difficulty in securing bank financing for sites below 20 years.

For 2H 2012, MTI will offer a total of 23.72 hectares of industrial land across 16 confirmed-list sites and three reserve-list plots - close to the 23.97 hectares slated for H1. This means that the government is releasing 47.69 ha of land for this year's Industrial Government Land Sales Programmes - 1.4 times that of last year.

MTI also highlighted that an annual supply of 500,000 sq m of multiple-user factory space - including strata industrial units - is expected to be completed in 2012 and 2013. "This is about three times the average annual supply for the past five years and will ensure that there is sufficient supply of affordable factory space for industrialists."


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