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11 April 2013

11th April 2013, Thursday




Slump in private home resale market

Source: The Straits Times

The private home resale market took a major hit last month from the seventh round of cooling measures unveiled in January.

Resale volumes in March slumped by half from the same month last year.

The impact on prices was more muted, though, as average resale prices slid 2 per cent from February, Singapore Real Estate Exchange (SRX), a consortium of the country's leading property agencies said Wednesday.

A total of 609 transactions were recorded in March by SRX. This was 87 per cent higher than in February, as Chinese New Year fell within that month. But analysts noted that the figure was about 50 per cent lower than March last year. Condo resale volumes for the January to March period were also nearly 40 per cent lower than the preceding quarter.

DWG senior manager Lee Sze Teck cited sellers' "reluctance" to lower prices. This contrasts with the new sales market, where developers have been quick to offer incentives to offset the impact of cooling measures, Mr Lee said, pointing out that new sales rose by about 12.5 per cent in the first quarter from the preceding one.

But though volumes have come down sharply, prices did not follow suit in March.

The dip in condo resale prices was largest in the suburban region, which posted a 3 per cent decline to $1,071 per sq ft on average. That is still above the psychologically daunting $1,000 psf threshold that suburban condo resale prices exceeded for the first time in February this year.

City centre average resale prices dropped 2 per cent to $1,788 psf, while city fringe prices stayed largely flat at $1,301 psf on average last month, SRX said in its flash report.

"As long as interest rates stay low, holding costs are low and sellers are not compelled to cut prices," said an analyst.

Softening prices combined with higher rents boosted rental yields islandwide last month. The city fringe had the highest gross rental yield at 3.8 per cent, followed by suburban yields at 3.7 per cent. The city centre had the lowest rental yield at 3.1 per cent.

On a quarterly basis, however, overall condo resale prices grew 4.2 per cent, owing to stronger increases in January and February, SRX said.


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Strong debut for Twin Fountains EC in Woodlands

Source: The Straits Times

The first executive condominium (EC) to go on the market this year made a solid debut at its launch Wednesday.

As of 5pm Wednesday, there were 155 e-applications for Twin Fountains in Woodlands, said Frasers Centrepoint Homes chief executive Cheang Kok Kheong. That exceeded a third of the available units. Of that number, 31 per cent are by first-time buyers.

An analyst said the number of applications was a positive sign, especially since the launch was on a Wednesday, meaning that many buyers may be too busy at work to submit their applications. It points to strong demand this weekend, he said.

The 418-unit project is being jointly developed by Frasers Centrepoint and Lum Chang.

Units are priced from $580,000 for a two-bedroom apartment to $1.26 million for a four-bedroom dual-key unit, with pricing ranging between $660 and $790 per sq ft (psf).

E-application is open until 21 April. Successful applicants will be able to book units on 11 May. The project is due to be completed in October 2016.


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COV for HDB resale flats down slightly last month

Source: Today

The overall Cash-Over-Valuation (COV) for HDB resale flats dropped S$1,000 to end at S$31,000 for the month of March this year. This was the lowest monthly COV in the last six months. On a quarterly basis, HDB median COV fell S$1,000 to end at S$33,000, indicating the first drop since the beginning of last year, according to the residential property flash report released by the Singapore Real Estate Report (SRX) today.

Among the flat types/HDB towns which saw at least 10 resale transactions in the first three months of this year, the highest median COV of S$86,000 was registered by executive-type flats in Hougang.

Despite lower COVs, overall median resale price rebounded to S$460,000 last month, up 1.2 per cent from the previous month’s S$454,500. On a quarterly basis, overall median resale price rose 1.1 per cent to end at S$460,000 in the first quarter of this year.

Overall HDB median rentals have been constant at S$2,400 on both monthly and quarterly basis.


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HDB, private resale markets remain subdued

Source: Today

More private homes were sold on the resale market last month after a lacklustre February, but prices remained weak across all regions, according to the latest Residential Property Flash Report by the Singapore Real Estate Exchange (SRX).

Meanwhile, Housing and Development Board (HDB) resale prices recovered last month, but a slight dip in the cash over valuation (COV) figure signals subdued market sentiment in the near term.

Resale volume for non-landed private residential units jumped 87 per cent to 609 transactions in March, after a quiet February — when sales were partly dampened by the Chinese New Year — but was still only half that transacted in the same month last year, signalling that cooling measures announced since January are taking effect, data from the latest SRX report showed.

The report also showed that prices dipped 2 per cent over the previous month to reach an average of S$1,788 psf in the Core Central Region (CCR), 3 per cent to S$1,071 psf in the Outside Central Region (OCR) and remained flat at $1,301 psf in the Rest of Central Region (RCR).

“Clearly, the volume has been impacted by cooling measures for two straight months,” said an analyst. “Coupled with the large supply of completed units coming on stream, we expect some near-term weaknesses in the resale market,” she added, noting that 16,439 units will receive their Temporary Occupation Permits this year.

In the resale HDB market, the median selling price edged up 1.2 per cent from February to S$460,000 last month, but the median COV continued to fall for the third month to S$31,000, the lowest in the last six months.

“The dip in COV is expected due to the capping of the mortgage servicing ratio (announced in January). With the loan quantum affected, buyers’ ability to pay COVs is also capped. We are likely to see COVs dip to possibly S$20,000 to S$25,000 by year end,” said another analyst.

With access to bank loans limited, the MSR restrictions are also likely to affect buyers seeking an upgrade.

“With the MSR reduced from 50-60 per cent to 30 per cent, a lot of existing HDB owners have no motivation to do lateral upgrade. It’s a drastic move that renders owners unable to secure enough loans (for upgrade), and that’s why you’ll see HDB resale volume drop in coming months,” another analyst said.

Also on a quarterly basis, resale HDB flats saw their median price increase by 1.1 per cent, while COV fell by S$1,000 to S$33,000 in the first quarter — the first drop since the beginning of last year. “The (HDB) resale volume is estimated to be below 5,000 in 2013’s first quarter, more than 10-per-cent lower than 2012’s fourth quarter. This is the lowest transaction level since 2007,” said Mr Lee Sze Teck, DWG’s Senior Manager for Training, Research and Consultancy.


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Investment Sales


$300m too pricey for bungalow with pool, tennis court?

Source: The Straits Times

The eye-popping asking price of up to $300 million for a bungalow in the posh Nassim Road enclave has set tongues wagging.

But experts doubt a buyer can easily be found willing to part with such a vast sum for the large 85,000 sq ft plot and lavish home that comes with a tennis court and swimming pool.

A sloping driveway leads to the two-storey house built on elevated ground. The bungalow sits in the centre of the plot with a large grassy field occupying about a third of the site.

The asking figure, if secured, would smash previous records. And as well as the sky-high total figure, the asking price is also about 50 per cent above the record per sq ft (psf) price in the area, say industry watchers.

They suspect it could be on the market for some time despite the rarity of such a large plum site.


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JTC eases sub-letting rule for third-party facility providers

Source: Business Times

JTC Corporation has relaxed its sub-letting rule for third-party facility providers, halving the minimum space that each anchor tenant must occupy.

Made on 5 April, the change is in response to business needs and will apply to new anchor tenant applications, said a JTC spokesman.

According to a previous ruling, lessees of JTC property wishing to sub-let their gross floor area (GFA) to other tenants would have to sub-let at least 50 per cent of the building's GFA to one or more JTC-approved anchor tenants, each committing to a minimum GFA of 3,000 sq m. While the 50 per cent rule still stands, the minimum GFA for an anchor tenant has been reduced to 1,500 sq m.

Property consultants were largely supportive of the relaxation of the rule and says it provides more flexibility in securing smaller tenants.


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