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16 November 2012

16th November, Friday




New private home sales take a hit after mortgage curbs

Source: Business Times

Home sales by developers slowed significantly as they held back launches and took stock of curbs on home loan tenures which took effect on 6 October.

Statistics compiled by the Urban Redevelopment Authority based on developers' sales data show that 1,948 private homes excluding executive condos (ECs) were sold in the primary market in October, down 25.7 per cent from September.

However, no alarm bells have been set off, with many market watchers noting that last month's sales still exceeded the 1,633 units which developers launched in the same period, continuing a trend seen since June. The October launch figure was down 26.6 per cent from September.

A property expert says: "The general direction in terms of home buying volume in the primary market still seems to be up. Month to month, there may be some cooling off. There's bound to be some reaction when government introduces more sets of measures. People sit back, reflect and hold back their buying decision for a while.

In the first 10 months of this year, developers have sold 19,792 private homes. But the pace of sales will slow from the year-to-date average monthly sales volume of 1,979 units to around 1,300-1,500 units each for November and December. The school holiday and festive season along with a more cautious mood among those affected by the tightened mortgage rules are cited as reasons.

Still, the full-year tally will touch a fresh high, forecast at around 22,000 to 24,000 units by property agents. The previous record, in 2010, was 16,292 units. Last year, the figure was 15,904 units.

October's top-selling project was Heron Bay, an EC project on Upper Serangoon, with 354 units sold at a median price of $738 per sq ft (psf), followed by the Skies Miltonia condo in Yishun (309 units sold at $1,034 psf median price). The highest psf achieved by a developer last month was a unit at Sage in Nassim Road which fetched $4,289 psf.


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Govt releases four leasehold sites for 2,045 homes

Source: Today

The Government Thursday said it would release this month four more 99-year leasehold sites that can be developed into 2,045 homes, as it continued to inject new supply amid record high housing prices.

For the fifth time this year, the Government announced the site releases on the same day as it published monthly developer home sales data.

Mr Lee Sze Teck, Senior Manager of Training, Research and Consultancy at DWG, said: "This method of releasing sites for sale together with the release of developers' sale numbers is starting to lose its bite. Despite this and announcements from the Government that there are almost 100,000 homes in the pipeline, developers' sales volume remains high."

Two land parcels - at Jurong West St 41 (Parcel A) and Ang Mo Kio Ave 2 - were launched for sale by public tender Thursday under the Confirmed List of the Government Land Sales (GLS) programme, the Urban Redevelopment Authority (URA) said.

Another site at Jurong West St 41 (Parcel B) was made available Thursday by the URA under the Reserve List of the GLS. Under the Reserve List, the tenders will be launched only when a developer submits an application committing to bid at a minimum price acceptable to the Government.

Separately, the Housing and Development Board (HDB) will launch for sale by public tender a mixed commercial and residential site at Yishun Ring Road on 27 November.

The first Jurong site, sitting on 240,661 sq ft of land and with a maximum permissible gross floor area (GFA) of 673,852 sq ft, can yield about 660 units. Located in the Jurong Gateway area, the estimated top bid could be in the range of $670 to $720 per sq ft per plot ratio (psf ppr), or $451.5 to $485.2 million, almost similar to the one for the Boon Lay Way site in June, Mr Lee said.

The second Jurong site, with a land area of 199,209 sq ft and maximum GFA of 557,785 sq ft, can be developed into about 545 homes. Although it is nearer the Lakeside MRT Station than the first site, it is unlikely to be triggered given that Parcel A is on the Confirmed List, Mr Lee said.

The Ang Mo Kio site, occupying 198,889 sq ft of land and with a maximum GFA of 696,123 sq ft, can yield about 680 units. Near the future Mayflower MRT Station and just beside landed housing estates, the estimated top bid would be in the range of $750 to $800 psf ppr, or $522.1 million to $556.9 million, higher than that for the Bright Hill Drive site in August, according to Mr Lee.

The Yishun mixed-use site is likely to be well received by developers and buyers, Mr Lee said, noting that the commercial development will have a ready catchment population from the BTO launches, HDB flats, schools and industrial estates nearby. The estimated top bid could be in the range of $700 to $750 psf ppr or $186.9 million to $200.2 million, he added.


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Developers keen on shorter lease site

Source: The Straits Times

A residential site that comes with a shorter-than-normal lease has attracted a surprising 23 bids. It was the best response for a site in recent years but fell short of the 32 offers received for a Westwood Avenue residential plot in December 2009.

The 1.02ha site in a private estate in Upper Bukit Timah's Jalan Jurong Kechil neighbourhood was offered for sale with a variable lease option of 30, 45 or 60 years.

It can be developed into a condominium, flats or retirement housing. This is the first time the Government had made land available with the development option of retirement homes.

The top bid of $73.8 million for a 60-year lease came from the Aspial Corporation subsidiary World Class Developments. This translates to a price of $482 per sq ft per plot ratio (psf ppr). Bigger developers were noticeably absent from the tender exercise while smaller players like Chip Eng Seng and Roxy Pacific Holdings were in the fray. The lowest bid came from Kwan House with $23.3 million. It was also the only developer to tender for a 45-year lease. No bids were received for a 30-year lease.

Despite the shorter-than-usual lease, analysts expect that completed units could go for a selling price of $900 to $1,100 psf.

An analyst said most buyers are less keen on properties with shorter leases because of concerns over long-term value depreciation. But many analysts agreed that the strong interest from developers indicates market confidence that homes with shorter leases will still sell.

In the event the site is developed for retirement housing, analysts say it will be an an untested segment of the real estate market.

DWG's senior manager of training, research and consultancy, Mr Lee Sze Teck, said a firm taking the risk on retirement homes now might reap benefits later. "They could have a first-mover advantage in this retirement home property segment," he said.

But another analyst said that the developer could face problems if buyers cannot find banks prepared to finance shorter leases of up to 60 years.


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