Complete Property Market Updates of Singapore

CHUA YANG LIANG gives an overview of the proposals in the Draft Master Plan 2008 and presents a wish list to planners

BESIDES the three strategic commercial hubs of Jurong Lake District, Kallang Riverside and Paya Lebar Central, which will strengthen the CBD alongside with development plans for Tanjong Pajar and the Beach Road/Ophir-Rochor corridor, there were no major changes or surprises to the zoning, plot ratio and planning directions in the 2008 Draft Master Plan. This observation is based on our brief review of three areas in particular - Buona Vista, Paya Lebar, and Harbourfront (which includes Telok Blangah) that will house the interchanges of two major transit lines (existing and the future Circle Line).

 
The 2008 Draft Master Plan maintains the time-tested planning vision that focuses on improving the overall quality of life, supported by a pro-business environment. It maintains the central planning philosophy found in the 2003 Master Plan - that of improving the quality of urban spaces and supporting general economic growth. This vision is inherent within the four key thrusts of ‘home of choice, magnet for business, exciting playground, and home to cherish’ and the zoning maps that developed from there.

Market trends

This planning deliverable is a highly practical one and focuses on concretising market trends that are conducive to improving the quality of living spaces and favourable to the overall business environment in Singapore.

The 2008 Draft Master Plan has not only respected the organic development trends, such as supporting the interim uses of vacant government buildings and sites, for example, Dempsey Road and Wessex Estates, it has also formally accepted and recognised other key market forces that would help improve the overall quality of living in Singapore. For example, a notable change in Buona Vista was the re-zoning of a popular area in Holland Village from ‘Residential with commercial at first storey only’ and ‘Commercial and Residential’ to purely commercial use.

The continual agglomeration of retail and commerce activities in this neighbourhood over the past few years has permitted retail activities to reach a threshold level thereby strengthening the area’s image and attractiveness as an F&B neighbourhood that is well patronised by foreigners and young locals. Coupled with the upcoming Holland Village MRT station and the one-north intellectual cluster located slightly further south, re-zoning to permit full commercial activities within this area is practical and will further enhance the overall quality of living in and around the immediate vicinity.

Similarly, taking its cue from current market trends, the 2008 Draft Master Plan has also proposed more housing in key areas where demand has been strongest. The urban planners have proposed an additional 300,000-plus housing units (both private and public) islandwide with an emphasis on ‘water-fronting’. This is similar to that proposed in the 2003 Master Plan where over 300,000 housing units were also suggested.

The largest increase is in the central and north-east regions where some 39 per cent and 38 per cent of additional housing units (over the existing stock) have been proposed. Likewise, in terms of the distribution of total new supply, the central and north-east regions again topped the list at 40 per cent and 24 per cent respectively. This can be expected given the strong residential demand as reflected in the recent surge in property values in these regions. This proposed new supply should help ease the values in these areas in the longer term horizon.

Echoing this trend is Buona Vista, which witnessed several residential sites being introduced. A site in Holland Drive, which was previously zoned for a civic and community institution, was re-zoned as a residential site with a plot ratio of 4.2, while sites at Slim Barracks Rise and Dover Close East, which were initially zoned white, are now zoned residential. The re-zoning of these three sites will support the area’s growing prestige as an education and research hub in Singapore.

For the other planning regions, new housing has been proposed around existing water bodies, for example, reservoirs in Bedok and Lower Seletar, and the proposed 4.2 km waterway in Punggol. This concept of urbanising Singapore’s waterways is not new but it has been given a greater push with the strong market response to developments in the Sentosa and Harbourfront area over the past two years. This emphasis on providing more waterfront homes would greatly enhance social equity by making such homes more affordable to the regular guy on the street and not just limited to the affluent.

Shifts in preferences

However, the danger of following market trends is sudden shifts in preferences. Just like dark undercurrents are a result of changing tides, a sudden turn in market preference may send urban plans out of orbit. The secret is providing sufficient free play to accommodate such shifts. In line with the evolving landscape of Buona Vista as an R&D and education hub, a site next to Buona Vista MRT station, which was initially zoned commercial, has been re-zoned White. This gives the future developer more flexibility in its development, providing the free play that could potentially eliminate any shifts in market preferences and possibly enhance the area further.

Likewise, the Harbourfront has seen a similar trend in providing more ‘planning flexibility’. Notable changes in the region were the shift in sites at Telok Blangah Road that were initially zoned ‘Subject to detailed planning - Residential’ to ‘Reserve’ sites.

The ‘planning flexibility’ in this instance is not accorded to the private market but given to the statutory planners. The ‘Reserve’ zone effectively buys the planners some extra time to evaluate and deliberate on the optimal land use zones on these sites.

This shift in zoning could also be a reflection of the evolving market dynamism in the area, i.e. the shift in demographic profile in the surrounding neighbourhood, particularly in light of current developments such as Resorts World at Sentosa, Reflections at Keppel Bay, VivoCity and the HarbourFront offices.

Coupled with the government announcing its intention to create a leisure and recreational destination along the Southern Ridges by introducing a 2.2 km linear park along the Southern Ridges Park, this could potentially be an indication of future alternative plans for the area other than simply residential. Whatever the intention, we do know that the statutory planners are deliberating on the potential uses and are not ready to disclose the plans for these areas as yet.

Urban sustainability

While the 2008 Draft Master Plan has clearly articulated the medium-term planning objectives, it could be further enhanced with an expression of how our statutory planners perceive and support the issue of environmentalism, particularly on the concept of urban sustainability, which stems from greater environmental awareness today. Increasingly, we have seen more private occupiers demanding, and developers providing, environmentally friendlier buildings.

Urban sustainability is more than just green buildings; it contains the same basic principles of social, economic and environmental sustainability but applied to a bigger spatial context, i.e. the urban conurbation in which sub-systems such as transportation, housing, retail, education and tourism should be duly considered.

We have the first ever Leisure Plan that would see to the tripling of existing park connectors, providing residents 150 km of round-island access 24 hours a day. Could we see an Urban Sustainability Plan that sets the targets, deliverables and specific actions of each sub-system, all towards a sustainable urban environment?

The writer is the head of research, South-east Asia and Singapore, Jones Lang LaSalle

Source : Business Times - 29 May 2008

Devts include 150km round-island path, agri-tainment sites and urban hotspots

From a round-the-island jogging route to night festivals in the city, the Urban Redevelopment Authority (URA) has shown it is serious about fun by coming up with Singapore’s first Leisure Plan.

According to National Development Minister Mah Bow Tan, there is a need to ‘further sharpen Singapore’s distinctiveness as a vibrant yet liveable city’.

 
But the task is not simple, says URA chief executive Cheong Koon Hean. ‘It is not just about providing space and facilities to play, it is also about enhancing the variety and quality of leisure options we have around-the-clock, where there is something for everyone.’

Built on the 2003 parks and waterbodies and identity plans, the Leisure Plan aims to enhance Singapore’s quality of life. It is part of the 2008 Draft Master Plan that will also focus on sustaining economic growth.

The Leisure Plan seeks to provide recreation to suit everyone.

For those seeking active fun, more green spaces will be available.

For starters, a 150-km round-the-island route for joggers and cyclists is in the works. Linking park connectors and other trails from Changi to areas such as Punggol, Lim Chu Kang, Jurong Lake, Marina Bay and back, the route will be finished in 10-15 years. Stretches in some regions such as the Southern Ridges are already complete, and the next five years will see at least half the route laid out.

Bringing parks closer to homes, the park connector network will more than triple in size from 100 km to 360 km in the next 10-15 years. The web will expand further to include six more loops in the next five years, in areas such as Siglap-Kallang.

Parks will grow to 4,200 ha in the next 15 years, from 3,300 ha today. In the more immediate future, new parks in areas such as Lower Seletar Reservoir will appear.

Besides parks, more accessible waterways and new sports facilities will become must-go destinations for residents keen on outdoor play.

Beyond creating spaces, the Leisure Plan aims to carve out destinations with a distinctive character.

Under the second part of the plan, the 1,400-ha Kranji and Lim Chu Kang area will become a countryside getaway. Besides the 115 farms there, new parkland, new trails though Kranji Marshes, three agri-tainment sites and other facilities will be created.

In the city area, special lighting will dot areas such as Orchard Road, Bugis and Marina Bay to help give the island a vibrant nightlife.

And the National Heritage Board will step up the beat over two weekends in July in the Bras Basah and Stamford Road area, with night festivals featuring live music, street theatre and other performances. The Singapore Tourism Board will follow in September with its Singapore River Festival.

Arts activities and lifestyle hotspots such as Tanglin Village and Rochester Park will also provide urban entertainment.

Industry players are positive on more recreation. ‘The development of recreational venues is a boon to surrounding residential areas,’ said Cushman & Wakefield managing director Donald Han. ‘With more attractions and infrastructure being built, we are likely to see higher demand and a sustainable price increase over the longer term.’

Supporting that view, director of marketing and business development at Savills Singapore Ku Swee Yong said: ‘A planning approach that packages work and play around daily activities in one area, such as the proposed Jurong Lake District, will mean premium property prices in the area.’

In particular, more recreational venues will help the western region of Singapore shed its industrial image to present a better value proposition for home buyers. As Mr Han noted: ‘Residential prices in the east are traditionally higher because of the diversity of attractions in the area - golf courses, the beach, restaurants and interesting food and beverage chill-out concepts.’

Kranji Countryside Association president Ivy Singh-Lim supports the increased focus on agri-tainment. According to her, visitors will benefit from a refuge away from the city and farmers can gain additional income.

But Mrs Singh-Lim is concerned that development could encroach on the area’s rustic charm, and hopes agri-tainment will become just be ‘part of the scene (of sustainable agriculture)’.

URA will launch the Draft Master Plan 2008 exhibition tomorrow for the public to give feedback.

Source : Business Times - 22 May 2008

Number of foreign purchases fall; many buying homes in suburban areas

HIGH-END homes have become the first to buckle under the pressure of volatile market conditions and gloomy buyer sentiment.

Prices of luxury developments dipped in the first three months of this year, even as foreign buyers - a traditional source of demand for such properties - turned to cheaper options.

 
A report by property firm Savills Singapore released yesterday showed that prices of expensive homes fell 2.1 per cent in the first quarter, after a steady 21/2-year climb that saw values more than double.

Foreigners also began switching from the prime central districts to suburban areas, such as East Coast, Bukit Batok and Serangoon, said Savills.

Its analysis covered luxury developments located in districts 1, 4, 9, 10 and 11, which include Shenton Way, Sentosa, Orchard, Holland, Newton and Bukit Timah. The average price of these homes fell to $2,360 per sq ft (psf) in the period from January to March, from $2,410 psf in the previous three months.

At the very top end, the priciest condominiums registered a 2.9 per cent dip in prices to $3,577 psf in the first quarter, from $3,683 psf in the previous quarter, Savills said. These are developments that have crossed $2,500 psf.

While Savills would not disclose the names of the buildings it analysed, a check of caveats showed that luxury projects such as Ardmore Park and St Regis Residences in Cuscaden Road recently lodged sales at gradually lower prices.

Savills suggested that luxury condos might be more vulnerable to the global credit crisis.

On the bright side, foreign buying islandwide stayed strong despite the softening housing market, it added.

Foreign buyers took up 28 per cent of private homes in the first quarter, up from 25.9 per cent for the whole of last year.

But the total number of foreign purchases fell, in line with the general slowdown in market activity. Foreigners bought only 901 private homes from January to March this year, less than half the 2,245 homes they took up in the same period last year.

Surprisingly, many of the homes they bought were well away from their usual stronghold of districts 9 to 11.

Savills’ report showed that areas as far-flung as Changi and Hougang made it to the most-bought list, while traditionally foreigner-friendly areas such as Shenton Way dropped out of the top 10.

This could be because more of the foreign buyers now are expatriates living here with their families, rather than investors looking for prime assets, said Mr Ku Swee Yong, Savills’ director of business development and marketing.

‘Rentals are still holding up at high levels, and many expats who are more price-sensitive may now be converting from leasing homes to buying them,’ he said.

‘Some of these expats postponed buying homes last year, but now they could be taking advantage of the slowdown in the market to get a good deal.’

This would explain the foreign demand for suburban areas, as expatriates are likely to buy homes in neighbourhoods that have good schools or where they are currently renting houses.

Bolstering this theory is a sudden drop in the number of leasing transactions this year, said Mr Ku. Based on leases that were signed in 2006, there should be a lot more renewals this year than had actually taken place, he explained.

Savills expects private home prices to grow a moderate 5 per cent to 10 per cent this year.

Source : Straits Times - 13 May 2008

Leftover units offer immediate occupation, but buyers should take note of some things

With property developers holding back major launches as they wait out the gloomy market sentiment, eager buyers have had to turn to other avenues for a home.

Some with urgent housing needs are looking at older ‘brand-new’ condominiums - developments that have been completed for a number of years but still have unsold units.

At the 384-unit, 99-year leasehold Tanglin View, developed by Far East Organization, there are about 20 units left. Most are three-bedroom units, with an asking price of $1,400 psf.

At several of these condos, which have had unsold stock for a few years, all the remaining units have been taken up in recent months.

Far East Organization, for instance, held an open house last month for the leftover units at its four-year-old Water Place in Tanjong Rhu. The 437-unit development is now fully sold.

The company’s Tanglin View has about 20 unsold units, going for $1,400 per sq ft (psf).

But do such properties make good buys?

Some of the condos might have been priced above the market at the time they were launched, which is why there are still unsold units, said Mr Ku Swee Yong, the director of business development and marketing at Savills Singapore.

 
But now that their surrounding projects are mostly sold out, it might be worth paying a premium for immediate occupation or immediate rental income at these completed units, he added.

Another advantage is that buyers get to see the actual unit they are buying - the views, fittings, defects and so on, said consultants.

‘What you see is what you get, so there is less scope for misunderstandings,’ said Mr Colin Tan, the head of research and consultancy at Chesterton International.

What to look out for

Apart from the standard considerations - location, price and design - completed condos come with a few more checkboxes for you to tick off before you sign that contract.

Buyers should ask what the developers have done with the unsold condos since they were completed.

In some cases, the developers have left the units empty, which is what GuocoLand has done with Le Crescendo in Paya Lebar, where would-be buyers can see the actual units that are on sale.

Other developers rent out the unsold homes for interim income, but are willing to sell them with the tenancies.

At The Equatorial, developer City Developments is selling one last two-bedroom unit, tenanted, for $2.1 million.

If the unit has been rented out for five years or more, buyers should check the electrical wiring and plumbing to see whether they need to be changed, said Mr Tan.

‘The danger is that, on the surface, everything looks new and you think the same goes for services that cannot be seen,’ he noted, adding that ‘false ceilings can hide a lot of internal problems’.

While new condos come with a 12-month liability period for defects, this might not apply to condos that have been completed for some time, especially if they have been rented out in the meantime.

Consultants recommend that buyers check with the developers to see if they are willing to make good any defects found within a reasonable period.

For 99-year leasehold condos, it is also important to find out when the clock started ticking on the lease. ‘The buyer needs to check on the remaining lease period as these condos may be marketed as being new,’ said Mr Tan.

Orchard Scotts in Scotts Road, for instance, was completed last year, but its 99-year leasehold tenure started ticking in 2001.

Similarly, River Place in Havelock Road was completed in 2000 but the 99-year lease took effect in 1995.

Can you get a discount?

Some developers, such as Far East Organization, occasionally hold promotions for their completed projects in order to offload the units.

In the past few months, it has offered discounts on completed condos such as Icon in Tanjong Pagar, The Lakeshore in Jurong West and Hillview Regency in Bukit Batok.
Last week, it is understood to have offered stamp duty reimbursements for Hillview Regency units.

DTZ Debenham Tie Leung’s executive director, Ms Margaret Thean, said whether you can get a discount is ’subject to location’.

‘If a project is situated in a prime location, it is unlikely you will get a bargain. But if it’s a mass market project and on the outskirts, you’re likely to have more room to negotiate,’ she said.

Source : Sunday Times - 11 May 2008

Bank seeks to build complex of up to 400,000 sq ft to house backroom operations: sources

STANDARD Chartered looks set to be the next financial institution to head out east to Changi Business Park (CBP), which is fast becoming a hub for financial backroom operations.

Already, Citibank, Credit Suisse, DBS and OCBC have either staked their claims on space there, or are in the process of doing so.

As for Standard Chartered, sources say that it is looking to build a complex of between 300,000 and 400,000 sq ft to consolidate its backroom operations currently spread out in locations like Tampines, Bukit Merah and Bras Basah.

It is also understood that the bank expects to increase its headcount when it expands its offices to CBP.

It has already committed to take up over 500,000 sq ft of space at the upcoming Marina Bay Financial Centre.

Industrial and business parks developer Ascendas, which is a subsidiary of JTC Corporation, is said to be the developer of Standard Chartered’s CBP offices.

It will be a built-to-suit building which will be leased to Standard Chartered in a similar way that Ascendas Real Estate Investment Trust (in which Ascendas holds a 60 per cent stake) is developing and leasing to Citibank its new backroom office space at CBP.

Earlier, Citigroup said it would invest $220 million to cover the capital, relocation, rental and operating costs of the new CBP office and will lease the space until 2016 and has an option to extend its lease for another six years.

CBP is a 66.54 ha business park which currently comprises around 60 development plots. JTC revealed earlier that about 50 per cent of these have already been allocated. While it is not clear which plot will be the site for Standard Chartered’s new backroom office, a JTC map of the area reveals that Ascendas has been allocated plots near The Signature, which is also near Expo MRT Station.

Other plans afoot at CBP include a hotel.

While the idea of a hotel was first mooted several years ago, there was little interest from industry players then.

It is understood that interest for a hotel has now been revived with CBP growing to become more than just a business park.

Cushman & Wakefield managing director Donald Han believes that while CBP may not have the critical mass to become a sub-regional town centre, it could become a fringe commercial centre along the lines of Harbourfront or Alexandra Road which Mr Han believes came about through ‘organic growth’.

With more businesses moving to CBP, Mr Han says that the authorities may have to, ‘over time, transform CBP into a fringe centre too’.

Mr Han also believes that in the process, Singapore Expo could be amalgamated to create the critical mass that will sustain support functions like the hotel as well as retail facilities.

For now, however, Mr Han reckons CBP is still ‘a bit disconnected’.

Source : Business Times - 12 Feb 2008

1.1% rise in average price of units costing £2.5m or more; overall market unchanged

Luxury-home prices in London, the world’s most expensive city for prime real estate, rose at the fastest rate in four months as the overall UK market stagnated, industry reports showed.

The average price of houses and apartments costing at least £2.5 million (S$6.96 million) climbed 1.1 per cent in January from December, Knight Frank LLC said in a statement on Tuesday. There was no change in the average cost of homes across the country, HBOS plc said in a separate report.

‘It is being totally led by the purchase of properties of £10 million or more,’ Liam Bailey, head of residential research at Knight Frank, said in an interview. ‘The number of deals done at that level in the past three months was double a year ago.’

The wealthiest property buyers don’t need to borrow money to make purchases, so they’re not dependent on lenders that have made it more difficult and costly to obtain mortgages, Mr Bailey said.

Britons are now buying between 40 and 50 per cent of all London homes priced at more than £10 million, up from 30 per cent a year ago, according to Knight Frank, a real estate broker based in the city.

London’s most expensive new- built home was sold for £50 million last month to Hourieh Peramaa, a 75-year-old real estate entrepreneur from Kazakhstan, Sunday Times reported on Jan 27.

The house on Bishops Avenue in Hampstead, northwest London, has nine main bedrooms, 16 bathrooms and five reception rooms, and was acquired from Turkish businessman Halis Toprak.

Ms Peramaa plans to spend another £30 million extending and redecorating the property, the newspaper said.

Earlier in January, Lev Leviev, an Israeli diamond billionaire, paid £35 million for a house in the same district as Ms Peramaa, according to Daily Telegraph.

Indian steel entrepreneur Lakshmi Mittal owns the UK’s most expensive home. He paid £57 million in 2004 for a home close to Kensington Palace in central London. Both Kensington Palace Gardens and Bishops Avenue have been dubbed ‘Billionaires Row’.

January’s increase in luxury-home prices was the biggest since September, when prices advanced 1.2 per cent.

For the year ended Jan 31, the gain was 26 per cent, the smallest since October 2006.

Across Britain, prices in January were 4.5 per cent higher than a year earlier, according to HBOS, the country’s largest mortgage provider. Lenders are selling fewer mortgages as they contend with losses stemming from the collapse of the US sub-prime mortgage market.

Properties at the lower end of Knight Frank’s prime index are now moving more in line with the UK market, said Mr Bailey.

Bonus-earners in the UK’s financial industry will invest £2 billion in homes this year, compared with £5.5 billion in 2007, as they look for higher returns, Savills plc said in November. Savills and Knight Frank are the biggest brokers for prime London properties.

This year, top-quality dwellings in the UK capital will appreciate about 3 per cent, Knight Frank said on Tuesday, reiterating an October forecast. The Bank of England’s ability to cut interest rates to ward off an economic slowdown may be hindered by inflationary pressures, said Knight Frank.

‘It is fair to say that the issues of confidence and affordability that have so far dogged the main market may now promote a more cautious purchasing environment in the prime sector too,’ Mr Bailey said.

Britain is home to about 68 billionaires, according to the Sunday Times 2007 Rich List. Many are investors from China, India and Russia who have bought homes in London for its schools, stores, theatres and restaurants.

The most expensive houses can fetch as much as £4,000 a square foot, CB Richard Ellis Hamptons International estimates. That compares with about £2,075 a square foot in New York, the broker said.

Purchasing at such prices so far isn’t being inhibited by the prospect that the UK may impose an annual tax of £30,000 on wealthy individuals who live in the UK and keep their residence elsewhere for tax purposes, said Mr Bailey.

‘There is a lot of interest in deals being done by super-rich foreign buyers,’ he said. — Bloomberg

Source : Business Times - 7 Feb 2008

Q4 tempers spectacular growth of 2007; mass market may shine this year

Private home prices rose 31.0 per cent in 2007 - the biggest year-on-year jump since 1999 - despite a slowdown in the fourth quarter caused by the withdrawal of the Deferred Payment Scheme (DPS) and sub-prime woes, flash estimates show.

 
HDB resale prices also climbed some 17.4 per cent last year - the fastest growth seen since 1996 - as private home price gains filtered down. But HDB resale prices also saw a slowdown in growth in the fourth quarter.

At a doorstop yesterday, Minister for National Development Mah Bow Tan said that over the last few months, the government had taken several steps to try and cool down speculative activity in the property market. However, the market is also being affected by external factors beyond the authorities’ control, he said.

‘For Singapore, we are optimistic that we will continue to do well but there are many things beyond our control,’ Mr Mah said. ‘It is up to us to keep a close eye on the market and be able to tweak those policy levers that we can in order to keep property prices stable.’

Private home prices rose 6.6 per cent in the fourth quarter - down from the 8.3 per cent growth seen in the third quarter.

Similarly, HDB resale prices grew 5.6 per cent in the fourth quarter of 2007 - down from the 6.6 per cent rise for the previous quarter.

Experts said that the slowdown was brought on by both poor global market conditions as well as the removal of the DPS scheme.

Knight Frank managing director Tan Tiong Cheng said that the fourth-quarter slowdown was not surprising considering the sub-prime crisis in the United States.

‘People are still waiting for signs as to how bad the sub-prime situation will turn out,’ Mr Tan said. ‘It affects the whole outlook; people are uncertain.’

Demand could also be muted as lending by banks in the US, UK and Europe has been tremendously curtailed since the crisis, he said.

On the other hand, OCBC Investment Research analyst Winston Liew believes that the bigger culprit is the withdrawal of the DPS. ‘After the DPS was withdrawn, the whole market went down - the resale market, new launches and the stock market,’ he said. He has a ‘neutral’ rating on the Singapore property sector.

For the HDB resale market, the slowdown could also be attributed to buyers holding back in the face of rapidly increasing asking prices, said ERA assistant vice-president Eugene Lim.

‘The slowdown in price increase was largely expected as the market hit resistance level in the light of unrealistic sellers demanding for high cash-over-valuation (COV) transactions - particularly for the five-room and executive flat-types,’ said Mr Lim.

The slowdown in price growth, experts said, will continue in the first quarter of this year.

‘It is unlikely that there will be much activity in January or February,’ said Knight Frank’s Mr Tan. Agreed OCBC’s Mr Liew: ‘I would expect the rate of growth to slow down.’

CB Richard Ellis (CBRE), for example, expects the take-up of new homes to be between 9,000 and 11,000 units for 2008. By comparison, the property firm estimated that a record 15,000 new homes were sold in 2007, 34.5 per cent more than the 11,147 new homes sold in 2006.

This year, the property market will be driven by mid-end and mass-market homes, experts said. Prices and take-up of luxury homes are expected to moderate.

In the fourth quarter of 2007, the price increase was led by non-landed homes in outside central region (OCR) where the index showed an increase of 7.5 per cent.

The strong showing, CBRE said, could be attributed to new project launches during the quarter, such as Park Natura and Hillvista. Prices in the core central region and rest of central region rose by 7.0 per cent and 7.3 per cent respectively.

For 2008, ‘we expect a moderate rise in overall prices as luxury prices are likely to firm up at current levels while mid-tier and mass-market prices have the potential to rise by about 10-15 per cent’, said Li Hiaw Ho, executive director for research at CBRE.

Others were more bullish about the mass market. Ku Swee Yong, director of marketing and business development at Savills Singapore, predicts that mass-market prices will climb by 30-50 per cent this year.

In response to a question about the rapidly climbing prices in the mass market, Mr Mah told reporters that the government is watching the segment closely and will take action if necessary.

‘People who can’t afford the central region to buy or to rent are starting to look outside, which I think is the sensible thing to do,’ he said. ‘We will continue to keep an eye. We’re watching it every day. If necessary, we’ll do something, if not necessary we’ll just let it be.’

The overall price index for private homes could climb by anywhere between 10 per cent and 25 per cent this year, depending on how quickly the market recovers, experts said.

And for the HDB resale market, prices could climb by between 10 and 15 per cent, they said.

‘With the buoyant economy and expected positive market sentiment in 2008, the HDB property market in Singapore is likely to enjoy a double-digit growth in the 10-11 per cent range,’ said Mohamed Ismail, chief executive of property agency PropNex.

Source : Business Times - 3 Jan 2008

Bukit Batok home prices soar 43% but other districts drop as much as 20%

PRIVATE homes in some suburban areas proved the most resilient amid a general slowing in price rises across the board, the latest government figures show.

Some suburban areas performed very strongly, but others showed uneven price growth.

Data from Savills Singapore showed that prices in districts 23 and 24 - which include areas such as Bukit Batok, Choa Chu Kang and Hillview - rose 21 per cent to $694 per sq ft (psf) in the fourth quarter.

Within that overall region, average prices in Bukit Batok soared 43 per cent in the fourth quarter to reach $795 psf. But other districts, such as 16, 17, 18 and 19, paled in comparison.

In fact, some districts saw significant price dips. For instance, prices in districts 21 and 22, which include Clementi and Jurong, fell about 20 per cent to $737 psf in the fourth quarter.

Overall, fourth-quarter prices of non-landed homes outside the central region rose 7.5 per cent, according to initial estimates released yesterday by the Urban Redevelopment Authority.

Although that figure is below the 7.9 per cent rise in the third quarter, it is nonetheless higher than the 7.3 per cent fourth quarter rise in the rest of the central region and the 7 per cent rise in the core central region covering Orchard Road and Sentosa Cove.

While these are preliminary estimates, they lend support to a theory put forward by some property analysts - that mass market home prices will rise more than those of high-end and, possibly, mid-end homes.

The fourth-quarter price rise of homes outside the central region was largely supported by resale deals, considering there were few launches, said Savills Singapore director of marketing and business development Ku Swee Yong.

Existing projects, such as the 99-year leasehold Sun Plaza in Sembawang Drive, saw a 39 per cent rise in average price to $595 psf in the fourth quarter.

The only notable launch was the freehold 192-unit Park Natura across the road from Bukit Batok Nature Park. Buyers picked up 152 units in October and November at a median price of $945 psf.

Mr Ku is sticking to his earlier forecast for a rise of between 30 per cent and 50 per cent for mass market homes this year, which could send the current average mass market price of $730 psf to as much as $950 psf.

However, growth in the private mass market sector - which has the closest correlation to the HDB market - may be weighed down by the public housing resale market, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Initial estimates showed that fourth-quarter HDB resale prices rose 5.6 per cent, which placed the full-year rise at 17.4 per cent.

‘I don’t think HDB resale flat prices can keep growing at this rate for a year or so, because this group of buyers has a natural resistance to too much of an increase,’ said Mr Mak.

Besides, the Government will step in if HDB prices are growing too fast, he said.

Mass market launches expected this year include four projects on the former Waterfront View estate in Bedok Reservoir Road. Of the four, the 405-unit Waterfront Waves is expected to be launched in the first quarter.

Source : Straits Times - 3 Jan 2008

But fourth-quarter figures show signs of slower growth; HDB resale prices up 17.4%
By Fiona Chan, Property Reporter

HOME hunters can ring in the new year with some cheer - the roaring property market is finally showing signs of slowing.

Prices of all categories of homes grew at a lower rate at the end of last year, after months of climbing at a breakneck pace.

Growth braked the most at the highest end of the market, allowing cheaper suburban homes to lead the price rises for the first time in years.

Even with the slowdown, private home prices still beat most forecasts by shooting up 31 per cent for the whole year - triple that of 2006 and the most since 1999.

HDB resale prices climbed 17.4 per cent - the highest rise in a decade - up from only 2 per cent the year before.

‘It’s a spectacular rise,’ declared Mr Nicholas Mak, director of research and consultancy at Knight Frank.

Mr Li Hiaw Ho of property consultancy CB Richard Ellis (CBRE) estimated that developers sold a record 15,000 new homes last year, up from 11,147 in 2006.

Most property experts are unfazed by the smaller price rises in the last quarter, saying that the deceleration was ‘expected’ and ‘healthier’.

Fourth-quarter prices

·  Private homes up 6.6 per cent (8.3%)

·  Top-end homes up 7 per cent (8.3%)

·  City-fringe homes up 7.3 per cent (7.9%)

·  Suburban homes up 7.5 per cent (7.9%)

·  HDB resale flats up 5.6 per cent (6.6%)

*THIRD-QUARTER FIGURES IN BRACKETS

Growth in home prices slowed across the board from October to December, according to estimates released by the Government yesterday. The official figures will be out on Jan 25.

Overall, private home prices rose 6.6 per cent in the period, less than the 8.3 per cent in the previous three months.

At the top end, prices of homes in central areas such as Orchard, Cairnhill and Tanglin rose 7 per cent, down from 8.3 per cent growth in the July to September period.

City-fringe homes, such as in Marine Parade and Bishan, rose in price by 7.3 per cent, from 7.9 per cent earlier.

Suburban properties were the quarter’s star, thanks to new projects launched at benchmark prices, said Mr Li. Homes in areas such as Bukit Batok and Choa Chu Kang saw prices rise 7.5 per cent, just below the 7.9 per cent previously.

As for HDB resale flats, prices grew 5.6 per cent, a tad lower than the 6.6 per cent in the previous three months.

The lower price rises ‘may indicate that buyers are turning cautious in view of events in the fourth quarter,’ said Mr Eugene Lim, assistant vice-president of property firm ERA Singapore.

These include the global fallout from the United States sub-prime mortgage crisis and concerns over a possible US recession, which could have hurt investor confidence.

Yesterday, Minister for National Development Mah Bow Tan told reporters that while such ‘external factors’ are beyond the Government’s control, it will ‘keep a very close eye’ on the property market.

‘It’s really up to us…to tweak those policy levers’ to keep property prices stable or let them move in tandem with economic fundamentals, he said.

Already, the Government’s scrapping of the deferred payment plan in October may have cooled sentiment, especially for luxury homes.

But despite these pressures on demand, developers are not cutting prices, said Mr Lim. ‘We are seeing a situation where prices are not coming down, but neither are they going up.’

For this year, some buyers expect a market correction, as more homes come on stream.

But experts said home demand is set to stay strong this year on the back of a growing economy and population.

CBRE’s Mr Li expects luxury home prices to stay at current levels and cheaper homes to grow in price by 10 to 15 per cent. More bullishly, Mr Ku Swee Yong of Savills Singapore predicts suburban home prices will rise by 30 to 50 per cent.

Source : Straits Times - 3 Jan 2008

Auctions dominated by owners seeking good deals - not bank foreclosure

The value of properties sold at auctions in 2007 was the highest in eight years - and the second best showing ever. But property consultants reckon that this is about as good as things will get for now. Next year could see a slowdown led by the high-end residential sector, a star performer this year.

Colliers said that the value of properties sold at auctions conducted by private auction houses in 2007 reached $407.4 million, up 28.2 per cent from last year and just a tad shy of the $409.5 million achieved in 1999, when the market was recovering after the Asian Financial Crisis. Similarly, Knight Frank’s research showed the value of properties transacted at auctions rose 32 per cent to $422 million this year.

‘The big difference between 1999 and 2007 was that the record auction sales in 1999 was dominated by mortgagee sales as valuations had fallen a fair bit from the high in 1996 and this drew buyers. Whereas this year, auction sales were predominantly by property owners themselves who took advantage of the auction method to extract the best price, after two years of steep price appreciation,’ observes Colliers’ deputy managing director and auctioneer Grace Ng.

She expects the value of properties sold at auctions to fall by about 25 per cent to $300 million in 2008 as fewer high-end homes as well as fewer older apartments with en bloc potential may be put under the hammer. Ms Ng also expects the number of properties transacted at auctions to fall to about 160-170 next year from 204 this year.

Knight Frank’s executive director (auctions) Mary Sai too predicts a ‘cautious buying mood’ at auctions next year, citing stock market uncertainty and ‘exceptionally high price expectations from some owners’.

But assuming that the economy remains in fine fettle, Ms Sai expects strong demand for properties in mass-market developments, especially those near MRT stations or good schools. Auctions will also be a popular hunting ground for those who’ve sold their homes in collective sale and are looking for replacement properties within a short span of time, Ms Sai reckons.

The increase in value of properties transacted at auctions this year was achieved despite a drop in the total number of properties put up for auction, from 2,018 last year to 1,456 this year, going by Colliers’ figures.

The drop was due to a 54.4 per cent decline in the number of properties put under the hammer by mortgagees/banks in cases where borrowers defaulted on their property loan repayments.

The value of mortgagee properties sold at auctions this year fell 24.2 per cent to $143 million, while the value of properties sold by property owners themselves through auction nearly doubled to $265 million in 2007. Colliers attributed the nosedive in mortgagee sales to a vibrant economy and high employment situation which resulted in a lower (mortgage) default rate.

And even in instances where borrowers were facing difficulty servicing their property loans, the robust property market enabled them to sell their properties in the open market - instead of waiting for bank foreclosure.

On the other hand, 810 properties were put up for auction this year by their owners - up 35 per cent from last year and the highest in 10 years, according to Colliers.

This reflects the continuing trend of auction losing its stigma among property sellers, market watchers say. ‘Amidst the property boom this year, more owners turned to auction to attempt to achieve the best price for their properties,’ Ms Ng said.

There was a strong deceleration of auction sales in second-half 2007 - as the mood in auction halls became more subdued amidst US sub-prime mortgage woes, stock market turmoil, as well as stricter collective sales rules, hikes in development charges and withdrawal of the deferred payment scheme. After seeing 131 properties changing hands for $263 million in H1 2007, the market slowed to just 73 deals worth $144 million in H2, based on Colliers’ analysis.

The strong full-year auction sales in 2007 was buoyed by the vibrant residential market in the first half of this year, when sales were dominated by high- end residential condominiums and old apartments with potential for collective sale. The year also saw keen interest in shops/shophouse properties amidst the office supply crunch, as well as development sites put up for auction.

The value of non-landed residential properties sold at auction more than doubled to $109.5 million this year, from $41.5 million in 2006 - helped by the sale of 12 apartments at Tuan Sing’s Botanika development at Napier Road, which fetched a total $52.92 million. The value of shops/shophouses sold at auctions jumped 172 per cent, to slightly over $78 million this year, from only $28.9 million in 2006.

Source : Business Times - 28 Dec 2007