Sales of luxury homes still brisk

Outlook for this segment positive as it still has room to move up

LUXURY homes continued to sell well right to the end of 2009, updates from two developers show.

Malaysia-based YTL Corporation has sold six of the 13 villas at its Kasara project at Sentosa Cove, at prices ranging from $14 million to $22 million. This works out to about $1,600 per sq ft on average.

And on the mainland, CapitaLand has sold 60 apartments in the 165-unit Urban Suites condominium in the Cairnhill area, at prices ranging from $2,400 to $2,700 psf.

YTL sold the six villas in November and December through private previews. It will officially launch the remaining seven villas tomorrow.

CapitaLand started preview sales in Singapore for phase one of Urban Suites – on the former Char Yong Gardens site in Hullet Road – just before Christmas. Sixty units were released in phase one and sold to buyers prepared to purchase more than one.

CapitaLand, which is developing the project with Wachovia Development Corporation, plans to launch the second phase, comprising about 50 units, in Jakarta next week.

Both CapitaLand and YTL say the brisk sales indicate the luxury market is picking up.

‘The successful launch of Urban Suites is testament to buyers’ confidence in the fundamentals of the Singapore economy and the growth potential of the high-end property segment,’ said Patricia Chia, chief executive of CapitaLand’s residential arm.

YTL Singapore director Kemmy Tan said: ‘The mass market segment was the key driver last year, so the luxury segment still has room to move up. We are very positive on the outlook for 2010.’

At Kasara, selling prices will be bumped up slightly with the official launch. The villas, which range from 9,000 sq ft to more than 14,000 sq ft, will now be sold for an average $1,700 psf.

They were designed by DP Architects and aim to combine Asian architectural style with European interiors and fittings.

YTL said the six homes sold so far have been bought by Singaporeans and foreigners from the Asia-Pacific and Europe. Sentosa Cove is the only place in Singapore where foreigners can own landed property without special permission.

Over at Urban Suites, about two-thirds of the buyers are foreigners from countries including China, Australia and Canada. Most buyers bought two units, CapitaLand said.

It gave a one per cent discount to buyers who picked up more than one unit. Buyers have a choice of two, three and four-bedroom apartments as well as duplex and triplex penthouses. The units range from 1,044 sq ft to 4,715 sq ft.

Analysts say CapitaLand can be expected to raise prices for subsequent phases.

In a note yesterday, DBS Group Research analyst Adrian Chua said the prices achieved for the 60 units transacted so far exceed his expectation of $2,400 psf. ‘We continue to advocate going for the high-end property developers,’ he said.

Source : Business Times – 7 Jan 2010

7 Kasara Villas in Sentosa Cove go on sale

KASARA The Lake, an exclusive development of 13 luxury villas in ultra-posh Sentosa Cove, was formally launched yesterday after well-heeled VIPs snapped up half a dozen of them last month.

Six out of the seven villas put on sale initially were sold during the preview, open only to VIPs. Of those villas sold, the biggest 15,070 sq ft villa went for a little over $22 million.

The developer did not disclose just what type of VIPs the buyers were, except that three were Singaporean and the others foreign – Asian and European, including one Singapore permanent resident.

The positive response from Kasara’s preview despite the festive market lull reflected significant demand in the luxury property market, according to YTL Singapore managing director Kemmy Tan.

YTL Singapore is the developer of Kasara, as well as another project, Sandy Island, at Sentosa Cove.

The villas, ranging in size mainly from 9,000 sq ft to 10,000 sq ft, were launched at a price of about $1,610 per sq ft (psf). A single 14,600 sq foot villa is still up for grabs for anyone with a spare $15 million or $20 million or so.

Consultancy Savills Singapore managing director Michael Ng said the price would probably be raised gradually to $1,700 psf on average.

The posh development offers a view of the lake facing the Serapong golf course and a pool that has been designed to extend slightly above the lake amid a landscape of bamboo and eucalyptus trees.

The developer is counting on the prospect of the upcoming Sentosa integrated resort to help attract buyers.

Ms Tan said: ‘Foreign demand is increasing due to the presence of the integrated resorts, and Sentosa Cove, being the only area where foreigners can buy landed property, is well placed.’

DTZ South-east Asia executive director and head of consulting Ong Choon Fah said Singaporeans now formed a smaller proportion of buyers at the cove.

‘In the past two years, Singaporean buyers have decreased to 37 per cent (from about 50 per cent). The balance of 63 per cent are foreigners, permanent residents or companies.’ The profile of foreigners has widened to include those from Britain, the United States, Russia, Malaysia, India, Europe and Australia.

Ms Tan said the wealthy are gradually returning to the market, which is evident in deals done. Prices at Sentosa Cove rose to an average of $1,500 psf around the third quarter of last year from $1,100 psf to $1,200 psf in the first quarter of last year.

According to Savills’ analyses of Sentosa Cove Realis data, 80 per cent of transactions took place in the second half of last year when 25 sales were made – far higher than the five in the first half.

Savills said that 16 sales recorded in the fourth quarter did not include the sales of Kasara villas.

Ms Tan believes interested parties will buy now to take advantage of anticipated future price gains given the limited supply of about 320 properties at the cove and an expected upswing in demand.

Savills is suggesting that Sentosa Cove is undervalued.

‘The luxury end is a laggard. Investors are coming in now as they see a lot of upside in the high-end segment, where prices are still 25 per cent to 30 per cent away from the previous peak,’ said Mr Ng.

All bets seem to be on the high-end luxury market this year, according to industry players. They believe that if Kasara The Lake continues to be successful, this could encourage developers back into the high-end property segment.

Mrs Ong cited the example of CapitaLand’s recent Urban Suites launch, and speculated that projects located on the fringes of traditional prime districts might follow suit and get going again.

Source : Straits Times – 7 Jan 2010

Note: Please call Teak Hwa at 65 9858 0900 for viewing.

YTL’s Sentosa Cove development sees 50% take-up rate

Malaysia-based YTL Corporation is officially launching “Kasara – The Lake“, a collection of 13 luxury villas in Singapore’s Sentosa Cove.

Six of the 13 villas previewed have already been bought by buyers from Singapore, Europe and the Asia-Pacific region at prices ranging from S$14 million to S$22 million.

Villas range in sizes – from 9,000 square feet, with two good-sized parcels of more than 14,000 square feet.

Kasara is the only residential property in Sentosa Cove with views of the lake and the world-class Serapong golf course.

Margaret Thean, managing director of property consultancy DTZ, said the high take-up rate of the development during the preview demonstrates the optimism of market sentiment and confidence in Singapore’s luxury property sector.

She added that market sentiment will be further strengthened with the completion of developments around the Marina Bay Financial Centre and the two iconic integrated resorts later this year.

Source : Channel NewsAsia – 6 Jan 2010

Private home prices keep up momentum

They rose 7.3% in Q4, while HDB resale prices also continued to climb

Private home prices continued their ascent in Q4 last year, climbing an estimated 7.3 per cent from the previous quarter. This sent prices for 2009 up 1.7 per cent from a year ago, defying bleak prognoses of double digit falls when the financial crisis unfolded.

Resale prices for public housing were also on their way up in Q4, rising 3.8 per cent from the previous quarter. Year-on-year, the index gained 8.1 per cent to hit a record high.

With economic skies clearing, property consultants expect to see further price increases across the property market this year. For private housing, more activity could also come from the prime segment.

‘More high-end projects, acquired through earlier collective sale activity, are expected to be launched in the first half of 2010,’ said CB Richard Ellis executive director Li Hiaw Ho.

Knight Frank managing director of residential services Peter Ow foresees demand returning to the high-end sector, particularly from investors in China and India.

The market outlook has improved sharply from the same time last year.

Then, market watchers worried about the economic downturn and credit crunch were predicting a 10 to 20 per cent drop in the official private home price index for 2009.

That could have materialised if not for an unexpected pick-up in mass-market home sales, which gradually spilled over to the mid to high-end sectors.

In Q3 last year, the benchmark index shot up by 15.8 per cent from the preceding quarter, reversing a year-long decline.

And according to flash estimates from the Urban Redevelopment Authority (URA) yesterday, the index continued to rise in Q4, but at a slower pace, gaining 7.3 per cent from Q3. This brought the index back to a point between Q3 and Q4 2007.

Prices of homes in the rest of central region (RCR) led the growth in Q4, increasing 9.5 per cent from a quarter ago. Prices in the core central region (CCR) and outside central region (OCR) rose 7.1 per cent and 5.8 per cent respectively.

‘The good response to selective high-end projects launched in the fourth quarter contributed to this upward surge in home prices,’ said Mr Li.

For instance, based on URA data for November, 87 units at Marina Bay Suites were sold at a median price of $2,159 psf and 61 units at Espada were taken up at a median price of $2,322 psf.

OCR home prices rose much less in Q4 compared with Q3, when they had jumped 16.1 per cent. Ngee Ann Polytechnic real estate lecturer Nicholas Mak suggested this was because developers launched fewer major suburban projects at relatively high prices.

For full-year 2009, the private home price index notched a 1.7 per cent gain, underpinned by a strong price increase of 11.2 per cent from the OCR region. Prices in RCR grew 3.1 per cent while those in CCR shrank 2 per cent. The index had lost 4.7 per cent in 2008.

Consultants are anticipating larger price increases as the economy recovers. CBRE’s Mr Li believes that residential sales will ‘move at a moderate pace’ this year – 8,000-10,000 new homes could be sold and prices could rise 5-10 per cent.

Knight Frank’s Mr Ow expects private home prices to post an average growth of 10 per cent this year, while Mr Mak foresees a 10-20 per cent increase.

As for the public housing market, the economic whirlwind last year did not stop prices from hiking. Going by HDB flash estimates for Q4, the resale price index reached 150.7 points, up 3.8 per cent from the previous quarter and 8.1 per cent from a year ago.

‘Average prices in the HDB resale flat market continue to gather strength,’ said Mr Mak, attributing this to strong demand from newly-formed families, permanent residents and home seekers who got priced out of the private home market as prices there rose.

Mr Mak believes that HDB resale prices will climb another 8-15 per cent this year, while Prop-Nex CEO Mohamed Ismail tips further growth at 5-8 per cent.

HDB said yesterday that it will offer 1,300 build-to-order (BTO) flats in Choa Chu Kang and Hougang for sale today.

The agency ‘will continue to launch more BTO projects in 2010 if there is sustained demand for new flats’.

Source : Business Times – 5 Jan 2010

Private home prices surge 7.3 per cent

PRIVATE home prices shot up 7.3 per cent in the final three months of last year, allowing 2009 to finish in positive territory after a horror start.

Yesterday’s flash estimates indicated that prices overall increased by 1.7 per cent last year and it was all down to the final, frantic six months.

The 7.3 per cent jump in the October to December period built on a stellar 15.8 per cent surge in the third quarter – the biggest quarterly rise in 28 years and one that ended 12 dismal months of price decline.

‘In a bad year, we still managed to show a 1.7 per cent rise in prices. There’s certainly optimism in the Singapore property market,’ said Cushman & Wakefield managing director Donald Han.

That low overall figure is a stark reminder of how last year shaped up as a year of two halves, with dire results early on and a surge in the second six months.

Mass market housing was the star segment with record levels reached.

The Urban Redevelopment Authority (URA) data yesterday showed that non-landed home prices in the suburbs edged up 5.8 per cent in the fourth quarter. This is far lower than the 16.1 per cent climb in the third but it brought the full-year increase to 11.2 per cent.

‘If you want to go for deep discounts, you can’t find them now in the mass market,’ said Mr Han.

HDB resale prices – up 8 per cent last year to a new high – are helping to support mass market prices, experts said.

Prices of non-landed homes on the city fringes rose 9.5 per cent in the fourth quarter and were up 3.1 per cent overall for the year.

But prices for non-landed city centre homes were down 2 per cent for 2009 although the 7.1 per cent increase for the fourth quarter points to a recovery.

CBRE Research executive director Li Hiaw Ho said the good response to selective high-end projects launched in the fourth quarter, such as Marina Bay Suites, Cyan and Parvis, had fuelled the price rise.

The robust estimates from the fourth quarter last year have boosted confidence for this year, among the experts at least.

Ngee Ann Polytechnic lecturer Nicholas Mak said the 7.3 per cent rise, while smaller than the third quarter’s, was still ‘quite significant’, indicating that there is still sufficient momentum in the market to push prices higher this year.

The Shore Residences in Katong – launched on Jan 1 after a late December preview – did relatively well, selling 183 units out of 338 units that were released.

Overall, experts believe that by the end of the year, prices may have surpassed the previous peak.

Private home prices may rise by about 10 per cent to 12 per cent this year, with a slightly lower increase in the mass market segment and better upside in the high-end segment, experts forecast.

CBRE Research tips a smaller overall rise of 5 to 10 per cent.

PropNex chief executive Mohamed Ismail said prices will head up as more developers will be launching smaller units at higher prices on a per sq ft basis, especially from the second quarter.

While rises are tipped from every quarter, most agree that prices will moderate this year.

Much of the pent-up demand has been satisfied, said DTZ head of South-east Asia research Chua Chor Hoon.

‘There will be less panic or euphoric buying in view of the price increases…in 2009 and the possibility of more government measures if prices run ahead of economic fundamentals.

‘Affordability is a constraining factor in the mass market segment and any price increase in this segment will depend on the job market.’

Source : Straits Times – 5 Jan 2010

From ‘deep winter’ to a ‘hot summer’

 

IT WAS the rally that should never have happened. The world was in recession, credit was being crunched, investors across the board were in a state of near panic, yet no one seemed to have told real estate buyers.

After a tentative few months early in the year, property found its feet and staged the sort of upswing normally associated with economic booms, not near-busts.

Indeed, this year saw a recovery of Singapore’s residential market, said Frasers Centrepoint chief executive Lim Ee Seng.

‘We expected 2009 to be a very bad year for us but it turned out to be a good year,’ said EL Development managing director Lim Yew Soon.

Jones Lang LaSalle’s head of research for South-east Asia, Dr Chua Yang Liang, agreed: ‘It’s been a remarkable year – with transaction and pricing outperforming expectations, driven by latent demand, low interest rates and primed by lower pricing.’

Sales and prices of new private homes picked up significantly from April, a turnaround from the first quarter when sellers were cutting prices just to offload their homes.

As the private homes market swung quickly from despondency at the start of the year to ‘unwarranted enthusiasm’ in the middle, this year turned out to be a ‘record-breaking’ one, said DTZ head of South-east Asia research Chua Chor Hoon.

Record quarterly and monthly highs were achieved for launches and sales of new private homes while some new launches outside the city area sold at record prices, said Ms Chua.

Centro Residences in Ang Mo Kio, for instance, sold for more than $1,100 per sq ft (psf) – a suburban record.

Resale landed homes in prime districts also hit record prices while resale mass market home prices rebounded within two quarters to reach 2007 peak levels, Ms Chua added.

The four seasons

‘ONE of the hot topics this year was climate change, and if you apply that to the property market, it went through the four seasons for the first time ever,’ said Knight Frank chairman Tan Tiong Cheng.

The market is now in a ‘mild winter’ state, after a hectic year with an unusually hot summer, he said.

It started the year in deep winter – with only 108 new homes sold in January – the worst monthly sale figure on record. The mood was clearly grim.

Then came spring and sales quickly started to rise in February, easily pushing past the 1,000-unit mark to reach 1,332 units. March was similarly positive at 1,220 units.

By the time summer rolled around, market sentiment had improved tremendously.

Despite the heat, buyers were queueing outside showflats, eagerly awaiting their turn to pick a mass market unit.

Showflats of newly released projects aimed at HDB upgraders were packed to the brim on preview days with investors, singles, couples and families – often with grandparents in tow.

With affordability a key issue, developers turned to producing smaller and smaller units to satisfy those looking for an ‘affordable’ total outlay; never mind that the psf price may be high.

EL Development’s Mr Lim said: ‘Developers had to react to the market very fast. We were lucky to switch to small units for Illuminaire fast. Otherwise, we won’t be able to sell it out and at the price we achieved.’

Sales of new homes kept rising each month, culminating in a monthly record of 2,772 units in July.

‘We were supposed to be in a recession. The Government was talking about job losses which hit the lower-income group,’ said Knight Frank managing director, residential services Peter Ow.

‘Given the bleak outlook at that point, the momentum was surprising. It shows that you can never underestimate the purchasing power of the upgraders.’

Considering that the 2006-07 boom was led by the high-end segment with foreigners buying up a storm, many doubted the ‘bottom-up’ recovery was for real.

But it kept going strong amid concerns that a property bubble might be developing.

Government made its move

THAT prompted the Government to step in with anti-speculative measures in September.

It took away the interest absorption scheme, which allows buyers to defer payment until the project is completed, and said it will push out more supply.

An Urban Redevelopment Authority sample survey of recently launched projects showed that the average take-up rate of the interest absorption scheme was about 20 per cent to 25 per cent.

Property experts said at the time that the measures were minor and meant to get buyers to think twice about committing.

The Government continued to warn of the possibility of the market overheating. What followed seemed to suggest the measures had worked to some degree.

Signs of speculation disappeared, launches slowed and buyers were no longer rushing into new showflats to check out the latest launch and commit their cash.

Sales of new private homes slipped to 600 units last month, the second-lowest monthly sales this year.

But Jones Lang LaSalle’s Dr Chua feels the market will not see the full effect of the measures until early next year as activity traditionally winds down towards Christmas.

Ngee Ann Polytechnic lecturer Nicholas Mak believes there is a slowdown because developers have more or less run out of mass market projects while the high-end segment has yet to take off.

Looking ahead

EXPERTS say the slowdown – what DTZ’s Ms Chua describes as a ‘quieter and more rational mode’ – is a good thing.

It is a precursor to next year’s trend when the market is generally expected to revert to normal in terms of sales and upward price movements.

The bet is on a pick-up in the high-end segment as it has yet to push near previous peaks, experts say. With the opening of the two integrated resorts, more foreigners are expected to enter the Singapore market.

Dr Chua believes the high-end segment is likely to outperform the mass market on two levels.

Firstly, buyers of high-end homes are not so dependent on interest rates, which have been one of the key drivers in the mass market.

‘I reckon there is an upside to the currently low interest rates as we go into the second half of 2010 and that is likely to keep mass market activity in check,’ he said.

‘Secondly, regional economies have been performing better than expected and we can expect some of the higher-income foreigners to return to the Singapore market by the second to third quarter of 2010.’

Dr Chua does not expect a buying surge but more moderate growth.

‘I would describe the period since the collapse of Lehman Brothers in the later half of 2008 as that of a landscape of rolling hills. And now as we ascend, no one can really see what lies behind the knoll,’ he said.

Source : Straits Times – 30 Dec 2009

Banner year for good class bungalows

Demand looks robust going into new year after the $1.6b chalked up in 11 months

The Good Class Bungalow (GCB) market – the creme de la creme of the Singapore landed residential property market, at least on the mainland – has seen nearly 100 transactions worth a total of $1.6 billion in the first 11 months of this year.

The numbers, based on analyses of caveats by CB Richard Ellis (CBRE), are almost double the 51 deals valued at $827 million for the whole of last year.

The value also surpasses the full-year record for total value transacted of $1.23 billion set in 2006. But the number of deals so far this year is still shy of the record 119 set in 2006.

Credo Real Estate estimates GCB prices could have risen 5-10 per cent this year and projects a further 5-15 per cent appreciation in 2010. ‘Current GCB prices are not far off the peak levels established between mid-2007 and mid-2008,’ says the company’s managing director Karamjit Singh.

Sentiment in the GCB market is tipped to remain firm next year on the back of Singapore’s economic growth, and as the country attracts more high net worth new citizens.

However, some observers expect a slight easing in transactions as the strong pool of demand seen earlier this year has been substantially sated following a year of brisk sales.

CBRE director (luxury homes) Douglas Wong predicts 80-90 GCB deals next year worth a total of $1.2-$1.4 billion.

William Wong, managing director of RealStar Premier Property Consultant, also sees an easing in the number of GCB deals in 2010. ‘Demand is still strong, but the pool of buyers right now is not as big as, say, earlier this year. Most of those who wanted to buy a GCB have already bought this year, so demand has been substantially satisfied for now,’ he says.

‘Of course, the buying pool may expand again, for instance, as more high net worths from overseas become Singapore citizens.’

An upbeat Mr Singh declares: ‘Demand for GCBs is poised to remain robust as Singapore’s economy begins to grow again and the rich get to feel richer. GCBs are also popular investment tools played by seasoned high net worth individual investors when they smell capital appreciation potential.’

CBRE’s analyses of caveats data captured by URA Realis and SISV Realink as at Dec 11 show that 99 transactions worth a total of $1.58 billion have been done so far this year in GCB areas.

But with caveats yet to be lodged for any deals this month as well as some of November’s transactions, some industry watchers estimate the actual year-to-date tally could be closer to $1.7 billion, if not higher. There’s also talk of a few buyers choosing not to lodge caveats, perhaps to keep a low profile, although this can happen only if they’ve not taken a mortgage.

July was the busiest month this year with 23 deals done for $356 million. CBRE says 2009 has seen 20 GCB transactions at $20 million apiece and above, up from 12 in 2008, nine in 2007 and four in 2006. The number of GCB deals priced at $1,000 per square foot of land area and above has also risen from zero in 2006 to nine in 2007, 12 in 2008 and 24 in 2009.

This year’s strong showing was due to buyers deciding to make a commitment before prices increased further – when a price dip they had been hoping for earlier in 2009 did not materialise, says CBRE’s Mr Wong. This was amid a sudden improvement in property market sentiment when the stock market posted a stunning recovery.

Analysts also say a general distrust of financial instruments following the global financial crash has enhanced the appeal of GCBs to the well-heeled.

‘They’re evergreen investment products that would always be preferred by ultra-high net worth individuals. GCBs are limited in supply – the existing stock is about 2,400 – in an urban environment where landed housing is scarce. So there’ll never be an oversupply situation for GCBs. Most owners have strong holding power, reducing the risk of falling prices in a downturn,’ says CBRE’s Mr Wong.

Mr Singh says most buyers these days already own existing GCB properties and tend to trade in them. ‘There are also a handful of buyers seeking to upgrade from smaller landed properties or large apartments. The third category of buyers are new PRs and citizens, who qualify to own landed properties.’

Says CBRE’s Mr Wong: ‘About four, five years ago, the typical age of a GCB buyer would be in the mid-40s, but these days it would not be unusual to have a GCB buyer in the late 30s. Young professionals and entrepreneurs and PRs have been showing keen interest in the GCB market,’

In Singapore, foreigners need permission from the Land Dealings (Approval) Unit (LDAU) before they can own landed property.

On mainland Singapore, the main criteria are whether the foreigner is a Singapore PR and his or her economic contribution to Singapore. However, non-PR foreigners may buy landed homes on Sentosa Cove subject to LDAU approval.

Whether on the mainland or on Sentosa Cove, the landed home a foreigner is allowed to buy usually must not exceed 15,000 square feet in land area.

Source : Business Times – 17 Dec 2009

Paradise Island @ Sentosa Cove prices back to 2007 peak

Interest in waterfront homes at Sentosa Cove seems to have returned in recent months, as the opening of Resorts World at Sentosa looms. Since the beginning of November, a total of six properties — three luxury condominiums and three landed homes — have changed hands in the resale market at $1,406 to $2,423 psf.

In the week of Nov 6 to 13, one of the 29 villas on Ho Bee Group’s Paradise Island — a double-storey unit on 8,105 sq ft of land — was sold for $11.4 million, or $1,406 psf. The villas were completed in May and Ho Bee sold the last one for $22 million in August. Each villa has a private berth and all rooms have views of the waterways. The owner had purchased the villa in April 2007 for $9.18 million, or $1,133, hence reaping a 24% capital gain. In early November, a 7,029 sq ft villa sold for $10.8 million, or $1,536 psf. The owner had lso purchased it at launch for $7.1 million ($1,010 psf) in April 2007 and saw the price appreciate 52% in the past 2½ years.

When the villas at Paradise Island were launched, prices ranged from $1,047 to $1,208 psf, according to the URA Realis database of caveats. Since then, prices have climbed, reaching $1,500 psf two months ago, a level last seen in October 2007.

Meanwhile, a terraced house in the 99-year leasehold Ocean 8 enclave developed by IJM Properties Sdn Bhd, a unit of the Malaysian conglomerate IJM Corp Bhd, was sold for $6.4 million, or $2,423 psf, in a caveat dated Nov 13. The 2,637 sq ft house had changed hands twice before. The original owner purchased the property in October 2006 for $2.92 million ($1,109 psf), and flipped it in January 2007 for $3.5 million ($1,326 psf), enjoying an 20% gain.

The $2,423 psf is the highest psf price achieved at Ocean 8 to date. The last time a unit in the stretch of eight terraced homes changed hands above $2,000 psf was in May last year, when two units were sold for $5.5 million each — a 2,626 sq ft unit went for $2,097 psf, while a 2,691 sq ft unit was sold for $2,046 psf.

Just up the street along Ocean Drive is the 116- unit The Azure, a 99-year leasehold waterfront condo development by Frasers Centrepoint and completed last year. The property was launched in September 2005 at around $900 psf.

According to a Nov 10 caveat, a 1,701 sq ft apartment on the third floor was sold for $2.9 million, or $1,705 psf. This is the second time this year the unit has changed hands. It was last sold in June for $2.43 million ($1,429). The original owner purchased the property in October 2005 for $1.77 million ($1,043 psf).

At the end of Ocean Drive is the 264-unit The Oceanfront @ Sentosa Cove, which is being developed jointly by TID Pte Ltd and City Developments Ltd and expected to be completed in 1Q2010. A two-bedroom apartment on the eighth floor has changed hands three times since it was purchased in August 2006. The 1,711 sq ft unit was most recently sold for $3.1 million, or $1,811 psf. The seller appears to have made a quick flip as, according to URA Realis, the previous transaction was just this September for $3 million, or $1,753 psf. The initial owner purchased the unit at launch in 2006 for $2.28 million ($1,337 psf) and sold it in April 2007 for $3.25 million ($1,899 psf), a 42% price gain.

Source : The Edge – 7 Dec 2009

PS: For sales and rental of Sentosa Cove properties, pls contact us at 65 9858 0900.
Thanks, Teak Hwa

S’pore slips in property investment rankings

Singapore’s property market is looking relatively less attractive to investors as they worry about oversupply and overdevelopment on the island.

According to a joint survey by PricewaterhouseCoopers (PwC) and the US-based Urban Land Institute (ULI), Singapore is fifth in a ranking of Asia-Pacific cities’ property investment prospects, falling three notches from a year ago. In another ranking of development prospects, Singapore took 11th spot, down from seventh.

For the Emerging Trends in Real Estate Asia Pacific 2010 study, PwC and ULI gathered the views of more than 270 real estate investors, developers and other players from mid-September to early November. The report notes that sentiment across the region has improved but also warns against complacency, ‘with the prospects for Western economies precarious’.

One concern participants brought up about the Singapore market is the large supply of property coming on stream. For the residential sector, Urban Redevelopment Authority (URA) data in Q3 showed 59,700 private homes were in the pipeline and that, of these, 34,120 were unsold.

On the commercial front, CB Richard Ellis estimated last month that 7.72 million square feet of office space could be completed between Q4 this year and 2014.

Still, Singapore is one of the top five markets in the region to invest in, said Choo Eng Beng, PwC assurance real estate leader for Singapore. ‘This shows that despite issues with oversupply in Singapore, we are still recognised as a property investment hub.’

And while Singapore’s ranking dropped, its absolute rating actually improved marginally from 5.4 to 5.5 on a scale of one to 9.

Respondents were most optimistic about investing in the residential sector here, with 36.6 per cent of them believing at the time of the survey that it was time to buy. The hotel sector had the fewest supporters, with 21.9 per cent of respondents making a ‘sell’ call.

In the ranking of investment prospects, Shanghai jumped four notches to the top of the table, followed by Hong Kong, Beijing and Seoul.

But PwC and ULI noted that ‘the key driver for outperformance in Shanghai, and indeed in China generally, is the government’s decision to inject liquidity into the economy, leading to a surge in bank lending to the property sector and a sharp rebound in commercial property prices’.

Singapore also slipped in the table of development prospects, reflecting concerns about overdevelopment, the report said.

ULI finance senior fellow Stephen Blank suggested another reason for the drop: foreign developers may find it hard to break into the local market, which is ‘dominated by a number of large public and private owners and developers who have a long historical relationship with the city’.

Shanghai also took top spot in the development prospects ranking, with Mumbai and Ho Chi Minh City in second and third places.

By EMILYN YAP
Business Times

Pricey is right for 2010 home sales

Mass-market sales may ease, focus is on high-end homes

Markets are stabilising and developers here are ready to roll out pricey homes. Industry watchers are keeping their fingers tightly crossed for the high-end residential sector, which could see more launches next year if economies sail smoothly towards recovery.

According to Colliers International estimates, 10,671 private homes are set for launch next year. And 46 per cent or 4,958 units will be in the core central region (CCR).

Prime projects that could hit the market include the former Farrer Court site, which CapitaLand and partners bought en bloc in 2007, and Wheelock Properties’s Ardmore 3.

Another 33 per cent or 3,498 units will originate from the rest of central region (RCR). The outside central region (OCR) will account for the remaining 21 per cent or 2,215 launch-ready units.

The distribution of homes already launched this year is almost exactly the reverse, with the bulk of units coming from the booming mass-market sector. Colliers estimates that by end-December, 13,542 homes will have been released, of which 43 per cent or 5,822 units will be from OCR.

About 33 per cent or 4,429 units will be from RCR, while 24 per cent or 3,291 units would be from CCR.

‘Developers are likely to be encouraged to release more mid-tier or high-end units in 2010,’ says Colliers research and advisory director Tay Huey Ying. She cites several reasons – signs of investors and foreign buyers returning, improved economic prospects and the opening of the integrated resorts.

The strong take-up rate at Marina Bay Suites’ recent preview has raised hopes. Of the 90 units released, 87 were sold and the average price ranged from $2,200-$2,500 psf.

Jones Lang LaSalle (JLL) head of South-east Asia research Chua Yang Liang adds: ‘Positive sentiment from high net worth individuals and wealthy foreign buyers could return by H1 2010 and support transactional activity.’

Backing this view, a recent study by Barclays Wealth and the Economist Intelligence Unit found that wealthy individuals here plan to allocate a larger share of their investment portfolios to property in the next two years.

The big question is how much developers can sell fancy homes for, as doubts linger over the sustainability of economic recovery. DTZ Southeast Asia research head Chua Chor Hoon is one of several observers who expect ‘more upside potential’ for high-end property prices in the coming year.

According to Urban Redevelopment Authority indices, prices of non-landed CCR properties are still some way below the 2008 peak – 16.8 per cent down at Q3. In comparison, non-landed OCR property prices shot up this year and were just 2.5 per cent short of the peak.

Deutsche Bank analysts wrote in a report on Monday that high-end prices could rise 5-10 per cent in the coming year.

But even as optimism grows, some players are quick to highlight uncertainties. JLL’s Dr Chua stresses that new demand for property has to be backed by global or regional economic growth.

Several economists have flagged the risk of bubbles forming in Asian property markets. The Singapore government introduced cooling measures in September.

The Monetary Authority of Singapore also said more action may be needed if recent measures to dampen speculation prove insufficient.

City Developments executive chairman Kwek Leng Beng told BT last month the private home market here ‘will slow down’, following the MAS warning and the return of the confirmed list.

By EMILYN YAP
Business Times Dec 2009