Singapore Real Estate Rise in unsold housing units on city fringe Developers forced to offer big discounts to spur sales Source: Straits Times / Top of The News THE property market's woes have spread from the luxury sector to more modestly priced homes on the city fringe as new loan curbs keep buyers in check. Unsold units are piling up in areas such as Bukit Merah, Kallang and Marine Parade, with developers forced to dangle big discounts to move homes. However, bucking the trend, UOL Group's 186-unit Seventy St Patrick's in Marine Parade sold about 100 units at an average $1,630 per sq ft at a private launch at the weekend, a spokesman said. Homes in the area - dubbed the "rest of the central region" (RCR) in industry jargon - are right in the price range that leaves many buyers struggling to raise a mortgage, in the light of new rules that restrict lending. "Developers of suburban condos have not needed to slash prices as most HDB upgraders find launch prices of about $1,000 per sq ft (psf) affordable. But developers of RCR non-landed homes have had to cut prices to fit the total debt servicing ratio (TDSR) limits of buyers," said R'ST Research director Ong Kah Seng. Wealthy buyers of properties in the central city area generally do not require a loan and so are not affected by the TDSR, he added. The city fringe area had 414 completed but unsold units islandwide as at June 30. This was 29 per cent of the national total and up from the 20 per cent or 250 such units at the end of last year. The central city area accounted for 63 per cent of such units as at June 30, down from 70 per cent at the end of last year. Colliers International research director Chia Siew Chuin believes the build-up in completed but unsold units on the city fringe could be due to the recent completion of large-scale projects. "It is also more challenging to find buyers for projects in the (area) where homes are generally pricier than mass market condominium developments, especially in the light of the current weak market sentiment," said Ms Chia. There were about 300 units left unsold in total at the 1,040-unit The Interlace in Depot Road and the 360-unit Concourse Skyline in Beach Road as at June 30. The Interlace obtained its temporary occupation permit (TOP) in the third quarter of last year, while Concourse Skyline received it in the first quarter of this year. As at the end of last month, just six units had been sold at the 41-unit Riverside Melodies in St Michael's Road, which received its TOP in the second quarter. Project launches on the city fringe have had a mixed reception as well. About a week ago, the 500-unit Highline Residences in Tiong Bahru sold about 80 per cent of the first 160 units released. But the picture at older launches is less rosy. The 56-unit Cosmo Loft in Balestier, launched in May last year, had sold just five units as at Aug 31. The 128-unit Fulcrum in Fort Road, which started selling units in April 2012, has moved just 17 units with its last sale in May last year. #1 Suites in Geylang, on the market for over a year, had sold just 38 of 112 units as at the end of last month. "The pool of buyers who can afford RCR properties has definitely shrunk. Unit sizing and price quantum are even more critical areas to consider today to achieve sustainable sales," said Knight Frank Singapore research head Alice Tan. She noted that while the cost of a 680 sq ft two-bedder home in this area tends to range from $1,600 to just over $1,800 psf, or $1 million to $1.3 million, "any price beyond $1.3 million would be a stretch for many people". Before the TDSR, some leasehold apartments had even been launched at nearly $2,000 psf, added Mr Ong. Alex Residences in Alexandra and Sky Vue in Bishan, which were both launched in the second half of last year, have sold at average prices of $1,640 psf and $1,576 psf respectively, "way below (the prices of units in) the nearby projects launched before them, before TDSR", he said. As at the end of last month, Alex Residences had sold 214 of 429 units and Sky Vue 504 of 694.
Consultants noted that while sales momentum on the city fringe has slowed in line with overall market performance, developers have adjusted their expectations. The 99-year-leasehold Sky Habitat, for example, sold 120 units from April to last month. Prices have gone down from a median of $1,593 psf at the launch in April 2012 to $1,354 psf last month, said Ms Chia. It had sold just one unit at $1,530 psf from January to March. -By Rennie Whang Danger lurks when property consultants also trade Source: Business Times / Companies PROPERTY consultants may be tempted to invest in real estate, but to be a good consultant, one needs to be somewhat detached and not get carried away, says a veteran in the business. "Some of them think that with the knowledge they have, it is a sure thing; so they start to take positions. They may get carried away and start trading in property. But in their job as a property consultant, they are not supposed to do that," says Knight Frank Singapore's executive chairman, Tan Tiong Cheng, when asked to offer advice to those planning a career as a property consultant. Apart from clouded judgement, there could also be potential conflict of interest issues.
"As a property consultant or as an agent, you are supposed to serve your client, yet there have been cases where the agent took a position by buying the property from the client,'' said Mr Tan. -By Kalpana Rashiwala Oxley unit signs deal on Myanmar project Source: Business Times / Companies A SUBSIDIARY of property developer Oxley Holdings has signed an agreement on a Myanmar project. Oxley Myanmar will build a 20-storey commercial and residential development called Min Residence in Mayangon Township in northern Yangon. The project will last around three years. It will be on a 3,185-acre (1,289- hectare) plot of land owned by U Yang Ho. Oxley will pay for the construction cost of the project, to be determined after contracts are awarded to contractors and design consultants. It will clear the land, procure all construction works, appoint engineers, design, and advise on the marketing of the project.
It will split profits evenly with the land owner after deducting from sales proceeds a "land utilising cost" of US$58.9 million, and all construction costs and government taxes and fees, as well as other expenses. -By Cai Haoxiang Over half of UOL's new freehold condo in East Coast sold Source: Business Times / Singapore SEVENTY St Patrick's, a 186-unit freehold condominium in East Coast by developer UOL Group, sold around 100 units when privately launched over the weekend. Units were sold at an average price of S$1,630 per square foot (psf). The smallest unit sold was a two-bedder for about S$1.2 million, while the largest was a penthouse that went for around S$2.4 million. Around 16 penthouses out of 36 available were sold. Buyers were around 90 per cent Singaporean, with some buying the property for their children, The Business Times understands. Unit sizes for the development range from 700 sq ft for a two-bedroom to 1,647 sq ft for a four-bedroom penthouse. By comparison, nearby freehold apartment block St Patrick's Residences had three units exchange hands this year at an average price of S$1,226 psf. The units sold ranged from 1,206 sq ft to 2,519 sq ft, according to the Urban Redevelopment Authority's (URA) website. At Seventy St Patrick's, amenities include a 50-metre pool, a meditation deck, wet and dry reflexology paths, and jacuzzis. The development comprises nine blocks of five-storey buildings. It is being built on a site area of about 140,000 sq ft on St Patrick's Road. Estimated completion is end-2017. The Thomson-East Coast Line, an MRT line to be completed in 2023, will also have a station nearby called Marine Terrace MRT.
UOL shares traded last Friday at S$6.45. -By Cai Haoxiang Developer has faith in St Patrick's project UOL Group cites location next to upcoming MRT station as pull factor Source: Straits Times / Money DESPITE the gloom in the residential property market, developer UOL Group is confident of moving units at its latest East Coast development, 70 St Patrick's. Mr Liam Wee Sin, president (property), told The Straits Times yesterday that there is still "underlying demand if you have a good product". "The market has become more subdued and buyers are very selective... But if a development has the scarcity factor - in that it has attributes not easily found in most residential projects - as well as a strong product proposition, it will be sought after."
Mr Liam said 70 St Patrick's location in District 15, next to the upcoming Marine Terrace MRT station on the Thomson-East Coast Line, will be a draw. "The residential blocks are all arranged... such that each faces a different aspect of the surrounding amenities, and this gives buyers more options," he added. The 186 units at the low-rise freehold project go on sale today at an average price of $1,600 to $1,700 per sq ft (psf). Prices start at $1.2 million for a 700 sq ft two-bedder and go up to $2.5 million for a 1,647 sq ft penthouse. Industry sources said a number of buyers have already expressed interest in the development. The project is next to the 102-unit St Patrick's Residences, which launched last year. Units at the freehold project were sold at an average price of $1,226 psf over the past six months, according to Squarefoot Research. UOL is also keeping busy with OneKM, the retail mall below Katong Regency, which is expected to have its soft launch next month, said Mr Liam. The mall has 158 retail units spanning a net lettable area of 203,601 sq ft. Its anchor tenants include Cold Storage. Mr Liam said the company is working towards growing its recurring income via a diversified portfolio in the light of the softening residential market. In August, UOL embarked on its first overseas venture by acquiring a site in Bishopsgate, in the City of London, via a £97 million (S$200 million) purchase. It expects to operate a hotel on the mixed-use site under its Pan Pacific hotel flagship brand. Pointing out the site's location in London's financial district, Mr Liam said its proximity to the Liverpool Street Station and the future Crossrail, which will link the whole of Greater London, will be a "game-changer". "In all our ventures, we always apply the same investment principle. There must be a scarcity factor and high connectivity and that would help translate into positive demand," he said. -By Jacqueline Woo Global Economy & Global Real Estate Malaysian budget may address rising cost of living: economists No let-up seen in fiscal consolidation as KL strives to cut deficit, debt level Source: Business Times / Malaysia [KUALA LUMPUR] The Malaysian government is expected to introduce mitigating measures in next month's budget to alleviate the rising cost of living and provide new incentives to companies amid the impending implementation of the goods and services tax (GST), The Star newspaper said, quoting economists. Thousands of wish lists were submitted to Prime Minister Najib Razak during a two-week campaign last month to gather feedback. The question once again is how the government will balance the need to reform the country's economy and meet the expectations of the people, The Star said. Mr Najib is scheduled to present Budget 2015 in parliament on Oct 10. He had indicated last month that the upcoming budget would focus on stimulating growth, improving Malaysia's fiscal position and raising the people's standard of living.
In general, economists believe there would be no let-up in fiscal consolidation under Budget 2015, as the government strives to lower its deficit and debt level. Nevertheless, they say, policies are expected to remain expansionary, with the people's welfare and private-sector growth in mind. -From Kuala Lumpur, Malaysia |