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21 February 2013

21st February, Thursday




Cooling moves dampen developers' outlook

Source: Business Times

Developers' market outlook turned pessimistic, following the introduction of the latest set of cooling measures in January, with more expecting moderately lower residential prices in the near term.

According to the Redas-NUS Real Estate Sentiment Index (RESI), the Current Sentiment Index, where respondents rate real estate market conditions now compared with six months ago, fell from 5.1 for 3Q 2012 to 4.6 for 4Q 2012.

The index ranges from 0 to 10, with a score below 5 indicating deteriorating market conditions and a score above 5 shows improving market conditions.

The Future Sentiment Index, where respondents rate overall property market conditions over the next six months too slipped, from 4.7 in 3Q to 4.0 in 4Q. As such, the Composite Sentiment Index fell from 4.9 to 4.3.

The prime residential sector showed the sharpest decline in 4Q with a current net balance of -27 per cent and a future net balance of -49 per cent, compared with -8 per cent and +2 per cent the previous quarter. In the suburban residential sector, current net balance was +10 per cent. Future net balance dropped significantly from +6 per cent in 3Q to -28 per cent in 4Q.

Suburban retail and hotel/serviced apartments were the two best performers with current and future net balances of +14 per cent and +9 per cent respectively.

According to the survey, 48 per cent of respondents expect moderately lower prices in the primary residential market, up from 10 per cent. 25 per cent (a significant drop from 58 per cent previously) expect prices to hold, and 28 per cent (from 33 per cent) expect a moderate price increase.

Overall, respondents plan to launch lesser units, with only 10 per cent indicating they will launch substantially more units, from 23 per cent previously. 43 per cent (down from 48 per cent previously) expect moderately more launches; 28 per cent (unchanged) expect the launches to hold at the same level. Notably, 20 per cent expect lesser units of new launches, compared with 4 per cent in 3Q.

Level of interest in land sales too dropped, with only 10 per cent expressing moderately greater interest in GLS, down from 32 per cent in 3Q. 38 per cent indicated moderately lesser interest, a big jump from 7 per cent previously.

Interest in en-bloc sales was also lacklustre - 35 per cent (compared with 61 per cent previously) expressed the same level of interest; 45 per cent (up threefold from 15 per cent) anticipate moderately less interest in en-bloc sales.

On the development cost front, labour cost continues to be a major concern, indicated by 59 per cent of respondents, from 55 per cent the previous quarter. One third of developers surveyed (33 per cent) note their concern in land cost, whereas 25 per cent express concern on building material cost.


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More resale flats sold at close to $1 million mark

Source: The Straits Times

A new record has been set for Housing Board resale flats, with a 1,750 sq ft executive maisonette in Bishan changing hands for $1.01 million last month. It broke the previous record of $1 million, set by a 1,615 sq ft executive apartment in Queenstown last year.

Fresh data from the Singapore Real Estate Exchange (SRX), which collects transaction information from larger property firms, also revealed that such sky-high prices are not one-offs.

While only one resale flat transaction breached the $900,000 mark in 2011, there were 18 last year. This year, even before two months have gone, the number has already reached 18.

Property analysts said these flats, mostly in established estates, are still value for money on a per sq ft (psf) basis when compared to private homes.

They expect resale records to be broken when choice units like those at the Pinnacle@Duxton hit the market in the next two years.


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Roxy-Pacific set to launch residential projects in April

Source: The Straits Times

Roxy-Pacific Holdings can expect to have a busy second quarter this year.

Its chief executive Teo Hong Lim said at a results briefing Wednesday that showflats at three of its sites will be completed by next month and are set to be launched in April.

The freehold sites at Lew Lian Vale, 334 Pasir Panjang and Wilkie Terrace were acquired by the group through collective sales.

But the Wilkie Terrace showflat will market units at its other site in nearby Adis Road first.

Marketing for units in Wilkie Terrace and its other site in Pasir Panjang Road will commence a few months later, depending on sales at the earlier launches.

Mr Teo also said prices for units at 334 Pasir Panjang and Lew Lian Vale are likely to be set at a minimum of $1,400 per sq ft (psf), while units in Adis Road will not fall below $2,000 psf.


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Office rents here half that of Hong Kong's

Source: Business Times

Singapore’s prime office rents are becoming more competitive, say a latest report.

Rents in the Central Business District (CBD) here last year came in at only half those in Hong Kong, which has the Asia-Pacific's highest rents at HK$104.47 per sq ft (S$16.66 psf).

The rental rates in Singapore, ranked 14th in the Asia-Pacific, were $8.61 psf last year; the Republic was the 11th in 2011.

Globally, rents in Hong Kong last year were second only to those in London; Tokyo fell from third to fifth.

Commercial rents here are kept low relative to, say, Hong Kong's, by the government's push to decentralise business activities beyond the CBD; this tempers leasing activity and leaves more vacancies in super-grade A spaces, thus moderating rents.

The report expects Singapore rents to bottom out, and then to start rising late this year and early next year, buoyed by robust demand.


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