Real News‎ > ‎2012‎ > ‎October 2012‎ > ‎

12 October 2012

12th October, Friday




Prime properties face further demand slowdown

Source: Business Times

The latest round of property cooling measures is expected to make its impact felt on the high-end residential sector, with developers facing more overhang in the short term.

Prime properties in the core central region (CCR) in particular can expect demand to slow further, given the higher downpayment required (for investors affected by the lower loan-to-value ratio) or higher monthly mortgage instalments, which can be expected to increase 13-21 per cent depending on tenure, said a report released Thursday.

The high-end segment could also see vacancy risks arising from weak rental demand and unsold units, said the report.

While demand for mass market homes too might be affected in the near term, headline prices should remain sticky. This is because system vacancy rates stand at 6.8 per cent, well below the long-term average of 7.9 per cent. In addition, developers may choose to delay property completion, supporting shorter-term prices.

That being said, demand is expected to fall in the near term, with some buyers put off by the negative carry, as a shorter loan tenure translates to higher monthly instalments - which may prove unattractive if the rental income received is insufficient to cover the monthly instalments.

In addition, some investors may be inclined to "downtrade", opting for longer-tenure loans (capped at 35 years), but buying properties close to half the ticket size of what they would have been able to afford earlier.


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Hillview to become next property hotspot

Source: Channelnewsasia

Sales of new private homes have been brisk in the past year for projects in neighbourhoods like Pasir Ris and Punggol.

And some industry players said the Hillview area, located in the western part of Singapore, could be the next up-and-coming spot with more projects lined up.

The Hillier - a mixed development project at Hillview Avenue - is one of several new offerings in the area. It has seen strong take-up, with 96 per cent of the total number of units sold.

DWG's senior manager for training, research and consultancy, Lee Sze Teck, said: "It is a private residential enclave, so it will attract quite a fair bit of people who want the peace and tranquility to stay there. Of course, the traffic network there is not so built-up yet but with the upcoming Downtown MRT line, it will improve the network in the area."

Analysts predict that Hillview, along with nearby Cashew, Chestnut and Diary Farm areas, could garner more interest. It is estimated that there would be over 2,000 new units in these areas in the next five years.

These projects include The Hillier (528 units), Eco Sanctuary (483 units), Tree House (429 units), Foresque Residences (496 units) and an upcoming condominium by Kingsford Development which could yield up to 500 units.

Market watchers said prices of new projects have climbed and could encourage developers to put in more optimistic land bids.

For example Foresque, when it was launched, it was about S$1,200 per sq ft (psf) and that set the new benchmark. When The Hillier came in, it is now on average transacting between S$1,500 psf and S$1,600 psf.

Another area with bright prospects in the long term is Woodlands, located in the northern part of Singapore. Property analysts said this optimism is driven by two key factors - better connectivity and increasing commercial activities in the area.

The existing Woodlands MRT station will link up with the upcoming Thomson Line which will be fully completed in 2021.

The median price of non-landed private homes in Woodlands rose by 6.9 per cent in the third quarter this year from the first quarter of 2011. This is slightly lower than the 7.2 per cent increase in overall median price of similar homes in the mass market segment over the same period.

And there should be more upside ahead when the potential of the area is realised.

Jurong East is also earmarked as a property hot spot in the next 10 to 15 years, as the area is slated to be a new commercial hub under the Urban Redevelopment Authority's Masterplan 2008.


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$331 million bid for site near Lavender

Source: The Straits Times

A firm linked to the Hotel 81 chain has put in the top bid in a nine-way contest for a well-located development site near Lavender MRT station.

The $331.3 million bid for the 0.84ha site, available for hotel, commercial and residential use, was significantly higher than market expectations.

Experts had earlier tipped the price to come in between $650 and $930 per sq ft per plot ratio (psf ppr). But the top offer, submitted by Hotel 81-linked Forward Land, works out to a higher $994 psf ppr.

Dennis Wee Group's senior manager of training, research and consultancy, Mr Lee Sze Teck, noted that the buoyant tourism industry has led to higher demand for hotel rooms and room rates - hence the strong bids for the site.

"The successful bidder could be looking at building a four-star hotel on the site," he said, noting that Forward Land had lost out on two previous hotel tenders in the past year.

Another analyst added that the site is "favourably located near Lavender MRT station". "Shopping, eating and other amenities are all nearby so hotel guests or residential occupiers would find the location very convenient," he said.


Links to the story:$331m-top-bid



Investment Sales


Q3 investment sales soar

Source: Today

The real estate investment sales market in Singapore surged 19.6 per cent in the third quarter from the previous three months, recording a total transaction value of almost S$9 billion, the highest quarterly total seen since the first quarter of last year, a property consultancy said Thursday.

The residential segment recorded S$3.7 billion of transactions in the investment sales market, up 26.7 per cent from the previous three months, and making up 41 per cent of the overall value in the third quarter.

The residential collective sales market yielded nine transactions totalling S$1.02 billion in the quarter, with the coming Thomson MRT Line attracting significant interest for properties surrounding the proposed stations.


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