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30 October 2012

30th October, Tuesday




Coming up: Over 100,000 housing units

Source: The Straits Times

The number of new private properties in the pipeline has ballooned to more than 100,000 units at the end of the third quarter, said the Urban Redevelopment Authority (URA) Monday.

The news may bring cheer to buyers concerned about the persistent uptick in prices but dismay to those who had bought for investment or leasing purposes.

The upcoming private home supply comprises 83,975 private residential units, 9,824 executive condominiums and 10,070 units from land sites that the Government has sold, or that are slated for sale. This is the highest-ever total recorded since data was collected in 2001.

The URA said many of the units will be completed in the next three or four years. More than 35,000 units will be ready next year and in 2014, with the rest completed after that.

More than 36,000 private residential units or about 44 per cent of the upcoming supply remain unsold. Developers have some leeway to hold back units, but not much. A cooling measure last year requires that they build and sell residential units within five years or face a 10 per cent stamp duty.

In addition, the Housing Board (HDB) announced it will roll out another 6,400 Build-To-Order flats next month in Bedok, Choa Chu Kang, Queenstown, Sengkang and Toa Payoh, bringing its crop of new flats this year to the promised 27,000 - also a record high.

The hefty numbers, combined with the Government's move to slow the influx of foreign labour, will likely hit the rental market the hardest in the coming years, said analysts.

The vacancy rate of completed private residential units has increased slightly to 6.1 per cent in the third quarter from 5.9 per cent the quarter before, said the URA.

For now, buyers seem undeterred and willing to pay. Private home prices rose 0.6 per cent in the third quarter, up from 0.4 per cent in the second quarter. The HDB's resale price index climbed 2 per cent, up from 1.3 per cent in the second quarter.

Developers sold more private units in the third quarter - 5,916, up from 5,402 in the second quarter - despite launching 20 per cent fewer properties. Shoebox units accounted for 16 per cent of all sales in the quarter, less than the 19 per cent in the previous quarter, said the URA.


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HDB resale prices in Q3 ratchet up another 2%

Source: Business Times

Prices of resale flats stayed at a record high in the third quarter, after having grown at the fastest pace of the year.

The Resale Price Index (RPI) for 3Q stood at 197.9, an increase of 2 per cent over the previous quarter, data from the Housing and Development Board (HDB) showed yesterday. This was in line with earlier official estimates.

Resale prices had grown at a 1.3 per cent clip in the second quarter, and 0.6 per cent in the first quarter.

For the first nine months of the year, prices have gone up 3.9 per cent, the HDB said.

Analysts said that the rising HDB resale flat prices are due to the lack of supply relative to demand. Home owners held back from selling in the third quarter.

On the demand side, analysts cited buyers who cannot or prefer not to wait for a new flat, second-time home buyers and those ineligible for Built To Order (BTO) units, such as permanent residents and singles, for driving up prices.

As the cost of resale flats have headed north, so too has the premium that buyers have to pay out of pocket. The median cash-over- valuation (COV) in 3Q rose between 15 and 20 per cent from the previous quarter to $30,000 overall, data from analysts showed.

Resale flat prices should sustain their upward trajectory in the short run, said analysts.

But analysts do not expect growth for resale flat prices to reach the rates of the previous two years. They forecast overall increases of 5 to 7 per cent this year, compared to the 10.7 per cent last year and 14.1 per cent the year before.


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Private home market 'stabilising' despite rise

Source: Today

Private home prices rose at a faster pace than initially estimated to hit a new all-time high in the third quarter, boosted by the strong response to new launches last month, but analysts say the market has stabilised amid expectations the Government will impose more curbs if these are necessary to forestall the impact of hot money inflows.

Final data released Monday by the Urban Redevelopment Authority (URA) showed private residential prices rose 0.6 per cent in the July-September quarter from the previous quarter, a tick higher than the 0.5 per cent it estimated earlier this month and following from the 0.4 per cent rise in the second quarter.

The rise lifted the URA's private property price index to a new record of 208.2 points, up about 56 per cent compared to 133.3 points in the second quarter of 2009, the market's most recent cyclical trough.


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Heron Bay penthouse sold for record $1.774m

Source: Business Times

A new record price of $1.774 million has been set for a five-bedroom penthouse unit in the recently launched Heron Bay executive condominium (EC), surpassing last week's transaction for the most expensive EC to date. Last week, a double-storey penthouse at 1 Canberra in Yishun was sold for $1.61 million, setting a record for EC transactions.

To be sure, the higher prices are largely due to the size of some of these new ECs, analysts said.

The price for the Heron Bay penthouse unit, which stands at 2,845 sq ft, was $624 per sq ft (psf). The unit price for the 2,716-sq-ft 1 Canberra unit was $595 psf.

Before the 1 Canberra unit made headlines, a 2,476-sq-ft unit at The Rainforest in Choa Chu Kang was the most expensive EC with a price tag of $1.58 million, which translated to $637 psf.

A report published last week revealed that over 300 new ECs had been transacted above $1 million thus far, half of which were sold in the first eight months of this year.

The report attributed the increase in demand for ECs to a growing number of young, affluent buyers who seem to be snagging bigger and more luxurious penthouses or sky suites.

The rising trend for such luxurious buys, it said, could have been triggered by rock-bottom interest rates, rising incomes and many EC buyers escaping unscathed from the latest rounds of property curbs.

Furthermore, the growing number of resale Housing & Development Board (HDB) flats being sold at ever higher prices has deepened the pockets of many HDB upgraders who now have more to spend on their next property, which invariably would be an EC.

An analyst said these skyrocketing prices do not reflect overall pricing for ECs on the whole. "These type of transactions are not common. It is a one-off for big units, which is why there is a premium pricing to it," he said.


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HDB, URA release more rental data

Source: The Straits Times

The authorities are releasing more information on rentals to help landlords and tenants get a fuller picture of their options.

The rental data on private and public housing will be made available by the Urban Redevelopment Authority (URA) and the Housing Board (HDB) respectively on their websites.

The move, said the agencies, is aimed at providing timely information on rentals and helping people make informed decisions before signing a contract.

Those thinking of renting out an HDB flat, for instance, are now able to check the monthly rental for a particular room type at a specified block and road, if the transaction was done within the past year. They would also be privy to when the lease was taken up.

As for private properties, one is now able to check the monthly rental for a unit in a particular condominium or executive condominium and landed home, from as far back as the start of this year.

Such data includes the number of bedrooms if they are non-landed units, size of the place, street name and postal district.


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Shop and office rents continue decline in third quarter

Source: The Straits Times

While the prices of homes and industrial space continue to surge, shop and office rents are edging downwards.

Office rents dipped 0.1 per cent in the third quarter from the preceding three months while shop space rents were 0.3 per cent lower.

This was a slight improvement over the second quarter, where office rents fell 0.5 per cent while shop space dipped 0.3 per cent.

The smaller decline in office rents in the three months to 30 September, from the preceding quarter, was largely due to increased demand and a 237,000 sq ft contraction in supply during the period, said an analyst. Net new demand for offices more than doubled from the second quarter to 764,000 sq ft in the third, the highest take-up rate in 5 1/2 years.

She said it was still too early to conclude if office rents will bottom out soon due to the euro zone debt crisis and the risk of an office supply overhang. But the fall in rents this year in the Raffles Place and "new downtown" area, which encompasses buildings like One Raffles Quay and Marina Bay Financial Centre, should be capped at between 10 per cent and 15 per cent, she noted.

Another analyst added that increased retail space supply in the central region due to completion of new malls, coupled with falling demand, helped send down shop rentals, which have now declined for two consecutive quarters.

But he expects retail rents to remain firm this quarter given "stable supply conditions and continued healthy sentiments towards the local retail sector despite weaker performance in the economy".


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Industrial property prices step on the gas

Source: Business Times

While cooling measures kept home prices in check, the industrial property market kept racing away and registered a hike for the 12th consecutive quarter.

According to data released by the Urban Redevelopment Authority (URA), the industrial property price index rose 8.8 per cent in 3Q, to 183.3, comfortably surpassing the previous historic peak seen in 1Q 1997.

This brings total price growth for the first nine months of the year to 26.7 per cent, which is only slightly below the full year price gain of 27.2 per cent recorded in 2011.

Comparatively, as of 3Q 2012, the industrial property price index has also recovered by a whopping 102.8 per cent from its most recent trough in 3Q 2009, and has surpassed its most recent peak in 3Q 2008 by 59.4 per cent.

The unabated growth in prices comes as no surprise, given the spillover in demand from the residential market. In addition, industrialists continue to look to purchasing their own premises to have better control and certainty over their real estate costs in the face of rising rents.

Rental growth however lost some momentum, rising by 1.2 per cent in 3Q, from 2.8 per cent the previous quarter.

This could suggest that end-users have started resisting continuing rental growth. Also, the electronics clusters has been slowing down while the biomedical (pharmaceutical) cluster remains volatile - and both clusters are typically large space occupiers, said an analyst.

Going forward, analysts expect prices to grow at a slower pace of around 5-6 per cent in 4Q, but that the industrial property price index will likely exceed 2011's gain of 27.2 per cent. The rental index, on the other hand, will probably see an overall gain of less than 10 per cent.

They do not expect price growth to remain as robust going into 2013, due to local manufacturing activity potentially facing more headwinds and a strong supply of industrial space in the next two years.


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Investment Sales


About 49,000 sq ft at Delta House up for sale

Source: Business Times

A total 49,053 sq ft of freehold strata industrial space at Delta House in the Alexandra /Delta Road vicinity has come on the market. The space comprises two strata units, one with about 36,308 sq ft occupying the entire fourth level of the eight-storey building and another unit of 12,745 sq ft on the third level.

The two units are owned by a group of high net-worth investors. Based on a price of $1,100 psf, the lumpsum price works out to nearly $54 million.

Delta House was completed as an industrial building about 30 years ago, but under Urban Redevelopment Authority's current Master Plan 2008, the site is zoned for residential use with 2.1 plot ratio (ratio of maximum gross floor area to land area).

Delta House is on a site with land area of 88,537 sq ft and just about 200 metres from the upmarket Jervois Road residential belt.

A back of the envelope calculation shows that the site can be potentially redeveloped into a new condominium project with about 170 units of an average size of 1,000 sq ft.

The space being offered is equivalent to strata share value of 20.7 per cent in Delta House. The space is currently vacant.


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Two bungalows sold for $26.1m and $10.38m

Source: Business Times

There has been no dearth of bungalow transactions recently, despite signs of a slowing economy.

A Good Class Bungalow (GCB) at 27 Olive Road was sold for $26.1 million while another bungalow at 44 Faber Drive was sold for $10.38 million.

The GCB at 27 Olive Road was put up for sale by the estate of the late Khoo Oon Teik via an expression of interest exercise which closed on 18 September 2012.

Nestled in a GCB enclave at Caldecott Hill Estate, the bungalow has a land area of 23,423 sq ft, which translates to a land rate of about $1,114 per sq ft (psf).

The second bungalow at Faber Drive is located at an elevated site of 11,719 sq ft. This reflects a land rate of approximately $886 psf.


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Satinder Garcha buying Murray Terrace

Source: Business Times

Satinder Garcha's Elevation group is understood to have inked a deal to buy Murray Terrace for $75 million.

Talk in the market is that Mr Garcha plans to convert the conservation property into a hotel, subject to approval from the authorities.

US-based property fund group AEW is selling the property, which comprises a row of 14 conserved shophouses just off Maxwell Road and opposite URA Centre. Thirteen of these shophouses are three storeys high and the remaining one, four storeys high.

The premises, at Nos 2 to 28 Murray Street, are now leased as offices, with ad agency Leo Burnett being the anchor tenant.

Murray Terrace's net lettable area is about 50,000 sq ft, so assuming how the hotel rooms are carved out, the property could potentially yield about 150 rooms with an average size of 30 sq m (about 323 sq ft).

Murray Terrace is on a site with land area of 25,151 sq ft and a remaining lease term of about 60 years. The site is currently zoned for commercial use under Master Plan 2008.


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Record $3,214 psf for Sentosa Cove home

Source: The Straits Times

A Sentosa Cove bungalow has been sold for $32.5 million - a record price in terms of square footage, according to reports.

The price of the Ocean Drive home worked out to $3,214 psf on a land area of 10,111 sq ft. The previous record was set in 2010 for a $28.2 million property a few doors away that fetched $2,989 psf on a land area of 9,436 sq ft.

Homes in Sentosa Cove, which is the only area where foreigners can buy landed property, have a 99-year leasehold tenure.


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