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16 October 2012

16th October, Tuesday




Sales of new private homes hit 3-year high

Source: The Straits Times

New private home sales jumped by about 84 per cent last month compared with August, to 2,621 units sold, the highest monthly figure since July 2009.

The latest spike in sales came as the National Development Ministry revealed that 26,800 HDB flats, 22,400 non-landed private homes and 1,100 landed homes are set to be completed in 2014.

This is a sharp rise in supply compared with the 11,300 HDB flats, 12,500 non-landed private homes and 700 landed homes due for completion this year.

One reason for last month's surge was that August's figure of only 1,427 units - a 27 per cent drop from July's number - was partly due to the inauspicious Hungry Ghost Festival.

But the sharp rise is less dramatic when executive condominiums (ECs) are factored in. When EC sales are included, last month's figure of 2,771 units sold falls short of the 3,138 homes moved in February.

An analyst said the 17,913 units sold by developers in the first nine months of the year have already topped the previous full-year record in 2010 of 16,292. He expects that this year's total could hit 21,000 units.

Mr Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group, said another reason for the pick-up in sales could be the narrowing gap between resale and new prices.

Data from the Singapore Real Estate Exchange Residential Property Flash Report found resale prices of non-landed private homes had some of their strongest gains in the past year last month, up 2.5 per cent from August. In contrast, average prices in the primary new sales market fell 2.2 per cent.

The 748-unit eCO, along Bedok South Avenue 3, was the top performer, selling 402 units of the 513 launched in the month.

Last month's take-up rate exceeds the 2,224 new private units launched - a sign that "demand is still healthy enough to absorb the new supply", one analyst said. Analysts were however divided on October’s sales figures.


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Property cooling measures proving successful: Khaw

Source: Business Times

Five sites yielding some 2,880 homes have been released for sale, even as the government has pledged that it remains ready to cool the housing market if necessary.

Of the five 99-year-leasehold sites launched for sale this month under the government's plans to ensure a significant supply of housing - public and private - in the next two years, two are executive condominium (EC) sites. The first EC site is next to Flo Residence, at the junction of Punggol Field Walk and Punggol East. Sitting on 153,999 sq ft of land, it has maximum gross floor area (GFA) of about 461,997 sq ft and is expected to yield 435 units.

Lee Sze Teck, senior manager of training, research and consultancy at DWG, thinks that, although the demand for ECs should remain healthy, the take-up rate may be slow because of the number of options in the market.

He expects the site to attract a top bid of $270 to $320 per sq ft per plot ratio (psf ppr), and pull in four to eight bidders. Other analysts peg the bid at $280 to $329 psf ppr. They expect "moderate interest", given that the site is located away from Punggol MRT Station and the town centre. The tender for this land parcel closes on 6 December.

The second site, located next to Sky Habitat in Bishan St 14, sits on a 120,855-sq-ft plot, and has maximum GFA of 592,189 sq ft, enough for 645 units. The land parcel set aside for Sky Habitat was sold to CapitaLand in February last year at $550 million, or $869 psf ppr.

One analyst reckons that a reasonable land price for the parcel released for sale - one which would yield a launch price attractive to home buyers - could range from $680 to $735 psf ppr. Ten to 15 bids could be submitted, he said. However, CapitaLand is likely to protect is market position, which could ensure the top bid does not fall below $830 psf ppr, he said. DWG's Mr Lee expects the site to attract more than 10 bidders, with the top bid between $800 and $850 psf ppr.

The tender for this site closes on 29 November.

Another EC site at the Sembawang Crescent- Sembawang Drive junction, measuring 233,760 sq ft, will be launched for tender on 30 October. It has a total GFA of 654,527 sq ft and can yield about 650 units.

One analyst thinks that this land parcel is a choice site for a quality EC development due to its relative proximity to Sembawang MRT Station and Sembawang bus interchange." He expects the top bids to sit between $295 and $330 psf ppr. "As there's no other new EC project in the vicinity, it could attract some interest from developers. The tender could attract four to seven bids."

But another analyst pointed out that Sembawang is a relatively small new town, so the immediate market catchment could be limited; demand could instead come from "a wider geography". He reckons four to six bidders will submit offers.

DWG's Mr Lee noted the sales performance of One Canberra - 299 units out of 665 units sold as at last month - could result in cautious bidding for this site. He expects the top bid to be between $250 and $300 psf ppr, comparable to the $293 psf ppr for the One Canberra site last October.

Two other sites in Tampines Ave 10, Parcels C and D, were made available for application by developers through the reserve list. Parcel C is approximately 238,860 sq ft, and has maximum GFA of about 668,806 sq ft. It is expected to contain 680 units. Parcel D is 168,567 sq ft and has maximum GFA of 471,988 sq ft. It is expected to contain about 470 units.

DWG's Mr Lee said these sites may not be triggered, given the availability of other choice sites on the confirmed and reserve lists; that being said, the trigger price could be $300 to $350 psf ppr. If both land parcels are launched for sale today, Parcel C could fetch $388 to $441 psf ppr, and Parcel D, $390 to $441 psf ppr, said another analyst. The sites will be launched for tender only upon successful application by a developer who pledges to offer a minimum bid price acceptable to the state.


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Govt ready to stabilise market if needed: Khaw

Source: Today

Strong demand for residential property is likely to persist which could cause prices to rise beyond sustainable levels, but National Development Minister Khaw Boon Wan assured Parliament Monday that the Government stands ready to stabilise the property market if needed.

He attributed the strong property demand to recent announcements of further monetary expansion in both the United States and the euro zone, as well as the current low interest rate environment.

Mr Khaw noted that both the private property and Housing Board resale market have shown signs of stabilising.

For private property, growth in prices has moderated significantly from 18 per cent in 2010, to 6 per cent last year, and to 0.9 per cent in the first three quarters of this year. Growth for the HDB's yearly Resale Price Index (RPI) for resale flats has also come down from 14.1 per cent in 2010, to 10.7 per cent last year and to 3.9 per cent in the first three quarters of this year. Nonetheless, flash estimates for the third quarter of this year show a 2-per-cent uptick in the resale price index, from the previous quarter, noted Mr Khaw.

"We remain ready to act, if and when necessary," he said, noting recent curbs on loan tenures introduced by the Monetary Authority of Singapore.

Each year, around 15,000 families are formed through marriages involving citizens, noted Mr Khaw, and the 25,000 flats that have been built yearly in the last two years have provided a buffer. "But of course there are other additional demand, such as upgraders, downgraders and second timers," he said.

"In fact, if not for other policy changes, I will be beginning to wind it (the supply) down a little bit, other than because now we have this new subject of catering for singles. So we have to deliberately ramp it up a little bit higher in order to cater for singles. We're still mulling over it. Very hard to put a figure on how much should we cater for singles."


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Investment Sales


Two sets of Tg Katong shophouses for sale

Source: Business Times

A pair of freehold four-storey shophouses at Tanjong Katong Road, owned by a family trust, has been launched for sale by public tender. The owner is seeking offers in the region of $10-12 million for the plot of land which measures 3,811 sq ft with a total gross floor area of 11,046 sq ft.

Located within the gazetted Tanjong Katong Conservation area, the properties consist of two units of retail shops on the ground floor and six units of apartments on the upper floors.

The subject site is zoned Residential with Commercial on the first storey and has a gross plot ratio of 3.0.

The properties are currently fully tenanted with estimated total gross monthly rental revenue of $18,350.

The tender for the subject properties closes on 2 November 2012 at 2.30pm.


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