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19 April 2013

19th April 2013, Friday




Record bid of $550m for plum Tiong Bahru housing site

Source: The Straits Times

An all-in bidding battle among 11 developers for a plum plot in Tiong Bahru ended up smashing price records for a residential site.

The land in Kim Tian Road drew a top bid of $550.28 million, or $1,163 per sq ft (psf) per plot ratio (ppr), from Keppel Land's Harvestland Development. The plot is 118,302 sq ft with a maximum gross floor area of 473,214 sq ft. The number of homes is capped at 500, due to traffic considerations.

That is the highest price per sq ft ever tendered for a purely residential site in the Government Land Sales (GLS) programme. It beat the old record set last August when Far East Organization offered $1,108 psf ppr, or $45.8 million, for a small Farrer Road site. It also trumped analysts' predictions that the top bid would not exceed $920 psf ppr with no more than 10 bidders in the fray.

At over half a billion dollars, the total amount is also among the largest sums ever bid for a GLS residential site.

The next two bids also went through the roof - a Far East Organization-led consortium offered $1,085 psf ppr, or $513.3 million, while a City Developments-led group put up $1,017 psf ppr, or $481.1 million.

While experts were surprised at the sheer size of the bids, they noted that developers are fighting tooth and nail to get well-located sites near MRT stations and to boost their land banks.

The fact that three of the 11 tenders were above the $1,000 psf ppr mark "indicates that some developers are still very bullish on the middle to high-end residential market segment", said an analyst.

Analysts noted that Tiong Bahru, a city-fringe heritage estate with art deco-style houses, has been revitalised in recent years by hip eateries and boutique retail outlets. It is also very near Orchard Road and the Central Business District.

DWG senior manager Lee Sze Teck said the developer could tap pent-up demand in Tiong Bahru considering that the last major project launch there was The Regency At Tiong Bahru, a freehold 158-unit condominium, in 2006.

There has also been a limited supply of new residential plots.

Keppel Land said it plans to develop the Kim Tian Road site into about 500 homes, ranging from 500 sq ft to 1,350 sq ft in one- to four-bedroom configurations.

DWG's Mr Lee estimates the breakeven price at between $1,500 and $1,550 psf with sale prices at $1,800 to $1,850 psf.


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Home prices moving the right way: Tharman

Source: The Straits Times

Property prices remain high but they are moving in the right direction, said Deputy Prime Minister Tharman Shanmugaratnam, adding that the Government has no plans for another round of cooling measures for now.

The Government is determined to lower the prices of homes relative to incomes, he added, but does not want to cause a crash in the short term.

"We're not planning another round of measures, but it depends on market conditions," said Mr Tharman, who is also Finance Minister and chairman of the Monetary Authority of Singapore (MAS).

"We're determined to achieve our objective of having prices come down relative to incomes. And that can be achieved both through income growth as well as some stabilisation or even cooling of prices, he said.

His comments came amid speculation that more cooling measures could follow the seventh and toughest round in January.

Mr Tharman, who also gave insights into the tax system, the economy and politics, and shared his vision of society in the future, said he believes "there is bound to be some softening in prices" as more new homes come into the market over the next two years.

But he did not completely shut the door to more measures.

The Government has a range of tools to stabilise the market, and can also tighten the criteria for banks giving loans, though it does not directly control the mortgage spreads, he said.

"Whether we do anything more on the MAS front, on the fiscal front, or on supply measures depends on market conditions. We don't rule out any measure," he said.


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Removing income ceiling for new HDB flats will drive up demand: analysts

Source: Today

Recently, National Development Minister Khaw Boon Wan floated a radical idea to remove the income ceiling for new HDB flats.

Some industry players said the suggestion would make public housing even more accessible to Singaporeans, but could raise some concerns.

Currently, the household income ceiling for new Built-to-Order flats is S$10,000 and for executive condominiums S$12,000.

Analysts said removing the income ceiling would definitely drive up demand for new HDB flats as more people would be eligible to buy them. That, in turn, would crimp demand for entry-level private condominiums.

Apart from obvious impact on the property market, analysts said it would have implications on how the government re-distribute wealth to Singaporeans too.

DWG’s senior manager of training, research and consultancy, Lee Sze Teck, said: "Your service and conservancy charges rebate or even Workfare Income Supplement to the lower income families and all these are actually tied down to the annual value of the home.

"When you remove the income ceiling, we are talking about people who are well to do, coming into the HDB market and getting financial assistance in this way. What will be the impact on society?

"What will those needy or who are at the the lower end of the income group think of such a move?"


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International Markets


China new home prices rise again

Source: Today

China’s new home prices were up for a third consecutive month, rising in March from a year ago as home buyers rushed to finalise deals to avoid a new capital gains tax.

Average new home prices across China rose 3.6 per cent last month, after an on-year increase of 2.1 per cent in February, according to a report Thursday.

Home prices rose month-on-month in 68 of 70 major cities in March, the most since September 2011 and up from 66 in February.

Compared with a year earlier, prices rose in 67 cities last month, up from 62 in February. New home prices in Guangzhou rose 11.1 per cent on-year, while those in Beijing climbed 8.6 per cent and Shanghai posted a 6.4-per-cent increase.


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