Complete Property Market Updates of Singapore

Prices also show signs of weakening as buyers adopt a more cautious stance

THE private home market continued to weaken last month, with launches of new homes falling to their lowest level in at least 10 months.

Sales volumes and median prices also dipped, according to monthly figures released by the Urban Redevelopment Authority yesterday.

HOLDING UP: Some projects such as The Lakeshore (above) still enjoyed steady sales, with 32 of its 848 units taken up last month. — PHOTO: FAR EAST ORGANIZATION

Developers launched only 271 homes last month, fewer than half the 642 units launched in March.

The number of homes sold also fell, to 274 in the month, from 322 previously. These figures exclude executive condominiums.

‘It is clear that homebuyers were in no hurry to make purchases and were taking more time to assess the market,’ said Mr Li Hiaw Ho, the executive director of CB Richard Ellis (CBRE) Research.

He attributed this trend to the continuing instability of financial markets and increasing concerns over the higher cost of living.

Perhaps as a result of the slowdown, prices have begun to show signs of strain.

An analysis by property firm Knight Frank found median prices of new homes sold last month had slid 9 per cent to $943 per sq ft (psf), from $1,035 psf in March.

One reason for the lower prices could be that most of the homes launched and sold were in cheaper mass-market developments.

Eight out of 10 homes sold in the month cost $1,000 psf or less. Only seven homes, or about 2 per cent of the total sold, fetched more than $2,000 psf.

This is a major reversal from previous months. As recently as in December, more than 70 per cent of the homes sold for the month cost more than $2,000 psf.

The strength of the mass-market segment last month was the bright spot in an otherwise dismal set of figures yesterday.

 
The best-selling project was a suburban development: Stadia in Yio Chu Kang Road, which sold more than 90 per cent of its 56 units within the month.

‘Latent demand remains strong, especially for the mass-market projects that are reasonably priced between $750 and $850 psf,’ said Mr Chua Yang Liang, the head of South-east Asia research at Jones Lang LaSalle.

On the other hand, only three units were launched in the prime core central region. Demand for homes in this high-end area and in the mid-tier city-fringes remained fragmented and weak, said Mr Chua.

Property consultants said they expect buying activity to remain slow in the coming months as the current gloomy sentiment persists.

But some, such as CBRE’s Mr Li, expect sales to start improving next month as developers begin stepping up launches.

Mr Ku Swee Yong, Savills Singapore’s director of business development and marketing, said buyers are starting to return to the market.

‘I dare say last month’s sales numbers will be the lowest we will see this year,’ he said.

‘Showflat crowds are still pretty good, and from now on, we should see launches picking up.’

Having some high-profile launches would give the market a boost, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

‘Essentially, the lukewarm sentiment can be explained primarily by the lack of launches of major developments that might cause excitement.’

Source : Straits Times - 16 May 2008

$22 million transaction works out to $1,128 psf of built-up area

AMID the current quiet residential market, some deals are still being stitched up.

All four strata bungalows in a freehold cluster housing development near Eng Neo Avenue were snapped up at $5.5 million each at a preview on Friday last week by a European with a Singaporean wife.

Quartet on Vanda: The freehold cluster on a 12,300 sq ft site at Vanda Crescent off Dunearn Road was bought by a European and his Singaporean wife. Each two-storey unit has an attic, a basement and a swimming pool

The $22 million transaction works out to $1,128 psf of built-up area. ‘The units were bought partly for the buyers’ own use and partly for investment,’ said Jerry Tan, managing director of JTResi, the sole marketing agent for Quartet on Vanda. JTResi previewed the development over a ‘champagne supper’ at its premises on Club Street May 9 evening and the four units were sold during the course of the evening.

The bungalows, which are expected to be completed early next year, are being developed by Stanley Quek’s Region Development on a 12,300 sq ft site at Vanda Crescent off Dunearn Road. Each two-storey unit has an attic, a basement and a swimming pool. Built-up areas range from 4,844 sq ft to 4,919 sq ft.

‘The market is not as dead as people may perceive it to be. For better quality developments that are priced sensibly, there will be buyers,’ Mr Tan said.

Dr Quek is also developing a couple of conventional bungalows on the next-door plot which will come on the market soon, Mr Tan revealed. Each two-storey bungalow will have an attic and have a land area of about 5,000 sq ft.

JTResi, a seven-year-old boutique residential property consultancy, has also been quietly doing resale and leasing deals at The Grange, which received its Temporary Occupation Permit a couple of months ago. ‘About four weeks ago, we sold the penthouse at The Grange for $11 million to a Singapore PR who is from mainland China,’ Mr Tan revealed. The deal for the 4,400 sq ft duplex unit worked out to just under $2,500 psf and the seller had bought it from the developer for about $6.8 million in 2005, according to Mr Tan.

JTResi also recently brokered leasing deals in the development at a monthly rental of $15,000 for a three-bedroom apartment of 1,765 sq ft below the penthouse, and four-bedroom, pool-facing unit on a low floor at $16,000.

The Grange comprises two freehold blocks of 19 and 23 storeys.

Cushman & Wakefield last month also brokered the sale of a four-bedroom unit on the 17th floor of The Grange for $6.2 million or $2,692 psf. The buyer is a Singapore PR who is believed to have invested in other luxury apartments here.

The seller had bought the unit (in the subsale market) for $4.15 million or $1,801 psf in late 2006. ‘The vendor made a cool $2 million profit after holding the asset for 1.5 years. Due to the run-up in prices in the last 12 months, some vendors have made enough ‘paper gains’ to realise a decent profit even if they sell at today’s prices,’ said Cushman managing director Donald Han.

Mr Han estimates The Grange unit his firm sold recently might have fetched just under $3,000 psf had it changed hands last year when sentiment was stronger. ‘Generally, there’s support for prime residential properties which appeal to foreign investors and where yields are fairly attractive,’ he added.

Source : Business Times - 15 May 2008