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Property subsales - who wins and who loses 
For those who sold in the first seven months of this year, close to 97% came out ahead

Sentiment in the Singapore property market is now far from bullish, but data shows that nearly 97 per cent of those who have sold private apartments and condos in the subsale market in the first seven months of this year have made profits.

Only 3 per cent incurred losses, an analysis of caveats by Savills Singapore shows.

For those who turned a profit, the average gain per unit came to $417,563 or 36.5 per cent. Generally, the longer the holding period, the bigger the gain.

Subsale deals are seen as a proxy for the level of speculative activity in the market. On average, those who had bought their units in 2004 and sold them in the subsale market this year made the biggest gain, averaging nearly $692,000, or an 84 per cent profit. They are followed by those who had picked up units in 2005, who recorded an average gain of about $645,200 or 62 per cent from selling their homes in the subsale market this year.

In absolute dollar terms, the smallest average gain of around $175,600 was by those who bought their units this year, reflecting a holding period of just a few months.

The profit or loss in the calculation is the difference between sale and purchase prices and does not take into account stamp duty and other expenses.

'The fact is that longer holding periods allow for larger gains, shorter holding periods for smaller gains. This is consistent with the fact that real estate is a long-term investment. Investors with short exit time frames should look for alternative instruments,' said Savills Singapore's director of marketing and business development Ku Swee Yong.

Savills' analysis was based on 1,040 caveats for subsale transactions from Jan 1 to July 31 this year captured by Urban Redevelopment Authority's Realis system as at Aug 19. Of these, 821 had previous caveat records dating back to 2003 and Savills compared the latest subsale price of each unit with the earlier price paid by the seller to work out the profit or loss.

Citylights, Varsity Park Condo and The Sail @ Marina Bay had the most subsales in the first seven months of this year - 63, 47 and 45 respectively. The Sea View and City Square Residences had 30-plus subsales each. Park Infinia at Wee Nam, The Calrose, Icon and The Raintree each had 20-odd subsales.

Subsales, often seen as a gauge of speculative activity, refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion. This may be anywhere from three to 12 months after the project receives its Temporary Occupation Permit (TOP).

Market watchers note that many of the projects topping the subsale chart this year had either received TOP or are close to receiving TOP. Some of the units that changed hands in the subsale market could have been purchased on deferred payment schemes from developers in the past. Typically, such schemes run out when the projects get their TOP and that is when buyers have to pay the chunk of the purchase price to developers.

The deferred payment scheme was scrapped in October last year to discourage speculative buying.

Of the 25 loss cases for subsale deals done this year, sellers of about half the units had themselves bought theirs in the subsale market, while the other half had made direct purchases from developers. For instance, the four units sold in the subsale market at a loss this year at City Square Residences had all been picked up in the subsale market last year.Looking ahead, Savills' Mr Ku expects subsales to maintain at current levels, that is, about 150 units a month. Those who want to sell now will have to expect lower profits, he said.

'Whether in good or bad times, there will still be subsale losses from people being forced to make untimely sales due to corporate liquidation, bankruptcy, divorce,' Mr Ku added.

In cases where investors are sitting on potential losses, Jones Lang LaSalle Singapore's head of residential, Jacqueline Wong, said: 'My advice to my clients, who are usually foreigners, have bought in prime districts and are well off, would be, 'If you can, hang on. It will be just a temporary paper loss. Singapore has a lot of things going for it in the mid term'.'

Another seasoned property consultant said: 'A lot will depend on your entry price vis-a-vis other owners, especially in a big development. If a lot of them bought at say $1,000 psf from the developer and you got your unit later for $1,800 psf in the subsale market from an earlier buyer, you're in a disadvantageous position. If the market dives, the earlier buyers could offload their units at much lower prices than your cost price.

'On the other hand, everybody may be in the same boat. Say, if you've bought into a small project of 30 units and everyone's bought at about the same price, and if there's not much competition from surrounding projects, chances of prices going down substantially may be lower because everyone's locked in at the same threshold.'  - 2008 August 26    BUSINESS TIMES

Developers ponder tricky math before new launches 
Apart from pricing, a host of factors are critical in their launch decision

The recent spurt of purchases at projects like Nassim Park Residences, Dakota Residences and Clover By The Park, has got many industry players preparing for possible launches to ride the current buying wave.

Studying the extent of competition from secondary market deals is a vital part of the homework developers have to do before deciding on any launch.

The decision on whether to launch a project now is a tricky one. A host of factors have to be weighed - not just pricing, location and the product, but assessing the depth of demand in the particular neighbourhood or micro-market where a condo is located, how many projects have been launched in the area over the past few years, and even the buyer profile in earlier projects.

The ability to price projects attractively - from 7 to 25 per cent lower than market expectations 12 months ago - has been a critical factor in drawing buyers at recent launches.

An increasingly important factor is the prices at which earlier projects in the area had been sold in the past couple of years. Given the run-up in prices, some buyers in earlier projects may unload their units at prices below what the developer of the latest project in the area may be gunning for.

In fact, in at least one project in the Newton area, the developer is said to have started facing competition from earlier buyers in the same condo seeking to unload their units.

Keppel Land is still marketing the remaining units at Park Infinia at Wee Nam and its asking price is understood to be $1,400 to $1,800 psf. Earlier buyers in the same project are offering their units just a tad lower. KepLand first released the project in 2005 at prices well below $1,000 psf on average. So when the project received Temporary Occupation Permit a few months ago, earlier buyers were in a position to undercut the current price and still reap a nice profit.

So studying the extent of competition from secondary market deals is a vital part of the homework developers and agents have to do before deciding on any launch. 'Supposing you're a developer and your upcoming condo launch will be the fourth project to have been released in a particular location in the past two years and buyers in the earlier projects bought their units for, say, $800 psf average and your breakeven cost is around $900 psf, you could be in a difficult position if you need to launch today,' a seasoned industry player says.

'If a substantial number of buyers in the earlier projects bought for investment rather than owner occupation, they may consider leasing the units when the project is completed - and rental yields could be pretty attractive today based on the investors' purchase price - or they may decide to cash in their units for a profit. That could spell competition for the developer launching a new project in the area,' he added.

Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong says: 'The supply-demand pattern in the particular micro-market must be suitable for the project a developer is targeting to launch.'

'There may be pent-up demand in a location that has not seen any new projects launched in the past few years,' he adds.

A case in point would be Sim Lian's Clover by The Park condo in the popular Bishan area, near Catholic High School, which has sold over 200 units since it was released on June 25 at an average price of $750 psf. By some agents' reckoning, a project like that could have been priced at $800-850 psf on average about 12 months ago.

While many in the industry have lauded Clover's 'success', Credit Suisse's property analyst Tricia Song finds the response wanting. 'Given that the pricing is relatively attractive for a popular suburb that has not seen any new projects in years, we think the take-up is disappointing and is reflective of the cautious sentiment even among upgraders,' she said in a June 30 research note. 'If we exclude the 100 units that were sold during a private preview (on June 25) take-up has visibly slowed...'

Perhaps this reflects a smaller demand pool these days, in the absence of speculators and fewer foreign buyers.

As Knight Frank managing director Tan Tiong Cheng says: 'I think everybody's very cautious about whether they should or should not launch - and at what price levels. You don't want to start something that will run out of steam because it's priced too high or the demand pool just isn't big enough.'

DTZ executive director Ong Choon Fah notes that the recent home-buying spurt was created by developers releasing new projects in attractive locations at lower prices than initially expected. 'However, once a developer has started selling a project at a certain price, it becomes trickier to reduce the price as this then creates a problem of dealing with earlier buyers who paid the higher price.' The stakes are indeed high for developers to get the timing and price right for their launch.  - 2008 July 7   THE BUSINESS TIMES

Singapore's property boom cooling: analysts

Singapore's booming residential property sector is finally showing signs of cooling but projects including two casino developments should underpin long-term prices, analysts say.

The market was described by real estate giant Jones Lang LaSalle as the world's hottest in 2007, when the city-state's property prices surged 31 percent overall.

But this year the sector has not escaped wider concerns over a US-led global economic slowdown and inflationary pressures.

Private home prices rose 0.4 percent in the second quarter, the slowest increase in four years, the government's preliminary figures showed last week.

The second-quarter rise was also much slower than the 3.7 percent increase recorded in the previous three months but prospective buyers waiting for huge bargains may be disappointed.

Property analysts say prices are likely to fall further in the third quarter but experts rule out massive declines because of the multiplier effect from two multi-billion-dollar gaming resorts now under construction.

Housing demand is expected to pick up when the first of the two casinos opens next year, employing thousands, said Chua Yang Liang, head of Southeast Asia research with Jones Lang LaSalle.

Some of the workforce for the resorts will likely come from foreign countries, creating possible demand for housing, he said.

"To staff these people, you need housing so there will be a potential effect," Chua told AFP.

Foreigners currently make up more than 20 percent of Singapore's 4.6 million population.

The Marina Bay Financial Centre, a new financial district under construction which will also feature luxury apartments, should also underpin the market in the longer term, analysts said.

Tan Huey Ying, director for research with Colliers International real estate consultants, said prices are not about to spiral downwards even though second quarter figures indicate the residential property market may have peaked.

"Singapore's positive mid-term prospects on the back of the completion of the two integrated resorts and the Marina Bay Financial Centre will help to prop prices up," said Tan.

Values may hold, or decline by no more than three percent, in the third quarter but overall for 2008 home prices could still rise four to eight percent, said Tan.

Analysts from DTZ real estate consultancy said buyers are still interested in project launches.

"Some residential projects are enjoying sell-out status while others are being well received," said Margaret Thean, DTZ's executive director for residential.

Government approval for the two gaming resorts in 2005 was one of the major factors behind the revival of Singapore's property market, which had been stuck in a rut stemming from the 1997 Asian financial crisis.

Efforts to woo wealthy foreigners to take up residence in Singapore, along with an all-out bid to attract skilled foreign migrants, also drove the property market revival, analysts said.

The rebound left many expatriates struggling to cope with soaring rents which in some cases doubled over the past year. - 2008 July 6     Yahoo!

Mass market stays buoyant as buyers find price is right

Flash estimates for property price indices are in with numbers suggesting that price-sensitive buyers are bargain hunting or scaling down their expectations altogether.

The Urban Redevelopment Authority (URA) released estimates for the Q2 2008 price index for private residential property yesterday with prices rising just 0.4 per cent - a mere crawl compared to the 3.7 per cent increase in the previous quarter.

While this represents the slowest growth in four years, Jones Lang LaSalle's local director and head of research (South East Asia) Chua Yang Liang also notes that it is the, 'steepest' quarterly rate of change since Q3 2000.

Much of the activity was in the mid and mass-market as reflected by URA's index for three geographical regions. Prices of non-landed private residential properties increased by just 0.2 per cent in Core Central Region (CCR) and 0.7 per cent in Rest of Central Region (RCR), but climbed a more robust 1.3 per cent in Outside Central Region (OCR).

Dr Chua added that demand remained favourable in the OCR supported by average nominal wage increases in the Q1 2008 and 'dislodged residents of collective sale sites'.

Also robust was the Housing and Development Board's (HDB) resale market with estimates for the quarter revealing that the HDB Resale Price Index increased by 4.4 per cent over the previous quarter, and higher than the 3.7 per cent increase in Q1 2008.

Knight Frank director (research and consultancy) Nicholas Mak said that the mass market is 'influenced' by HDB's resale market and added that, 'the resale market has been steady'.

Indeed, while HDB resale volume did fall to 6,360 units in Q1 2008, a 6 per cent drop compared to Q4 2007, it actually increased by one per cent on a year-on-year (y-o-y) basis.

By comparison, secondary market private property transactions of 2,304 units in Q1 2008 was a fall of about 40 per cent, quarter-on-quarter (q-o-q) and a fall of 57 per cent, y-o-y, while primary market transactions of about 762 units was a fall of about 48 per cent in Q1 2008 q-o-q, and a fall of 84 per cent y-o-y.

ERA Realty Network assistant vice-president Eugene Lim also believes that a buoyant HDB resale market could boost HDB upgrader sentiment, but he pointed out that the strength of the HDB resale market can be attributed to 'upgraders, downgraders and permanent residents'. On the last group, Mr Lim estimates that based on in-house data, permanent residents account for about 20 per cent of the buyers in the HDB resale market.

And attention is likely to continue to be diverted away from high-end products.

'The market is not short of buyers and many astute investors have been shopping around, looking to scoop up value buys,' added Mr Lim.

CBRE Research executive director Li Hiaw Ho noted that in the private property market, most of the transactions were mid and mass-market projects with the majority of transactions in the $750-$1,000 psf price bracket.

As such, Mr Li expects sales volume of new launches to rise to between 1,200-1,400 units in Q2 2008, compared to just 762 units in Q1 2008.

Property consultants have so far been careful to not use the 'F' word to describe home prices. Most believe prices have 'plateaued' or 'softened', but not 'fallen'.

Colliers International director (research and advisory) Tay Huey Ying even believes that home prices have, 'remained stubbornly resilient to the extent that they continue to post a y-o-y increase of 20.4 per cent'.

Ms Tay also added that for the first six months of the year, home prices rose by 4.2 per cent. '(Developer's) current pricing strategy can be described as competitive, that is either similar to current market prices or marginally lower than competitors,' she added.

Ms Tay believes that home prices will continue to resist 'downward pressure' and expects prices to hold steady or decline marginally by not more than 3 per cent in Q3 2008.

Saying that mass-market prices have generally not been 'chased up' or preyed upon by the 'speculative element', Ms Tay believes this sector could be the best performing for the rest of the year.

This however needs to be put in context.

Knight Frank's Mr Mak does point out that prime property prices have increased by 52.4 per cent over the last two years. 'On this basis, it is not surprising that this market segment will lead the slowdown in price growth,' he added.   0 2008 July 2   THE BUSINESS TIMES

Central, prime condo take-up rates outpace other areas   Softer H1 prices in these areas cited, pointing to strong latent demand: JLL

Softening condo and private apartment prices in the first six months of this year in the prime and central districts - the latter of which covers the financial district, Harbourfront area and Sentosa Cove - have been accompanied by a push in demand in these locations.

This, according to a study by Jones Lang LaSalle, has been reflected in the higher primary market take-up rates for properties in these locations.

'This suggests the presence of a strong latent market where potential buyers are waiting at the sidelines, eagerly buying up properties when the price is right,' Jones Lang LaSalle's head of research (Southeast Asia) Chua Yang Liang says.

JLL measured the take-up rate as the ratio of the number of non-landed private homes sold by developers to such homes launched by developers. It then compared these take-up rates against the average resale prices in four locations on the island - prime (districts 9, 10 and 11), central (districts 1-4), east coast (15 and 16) and mass market (all other districts).

The prime and central districts achieved relatively higher take-up rates of 87 per cent and 250 per cent respectively during H1 2008 compared with take-up rates of 67 per cent for east coast and 66 per cent for mass-market during the same period.

The prime and central districts also saw weaker price movement. The average resale price for prime districts in H1 2008 was 12 per cent higher than in H1 2007 but down 3 per cent from the figure for full-year 2007. In the central districts, the H1 2008 average resale price represented an improvement of 9 per cent year-on-year but was flat against the full-year 2007 figure.

In the east coast, the H1 2008 average resale price raced 20 per cent ahead against a year ago while mass-market locations topped the chart with a 25 per cent year-on-year price gain.

'The conservative attitude of buyers coupled with cautious outlook by developers will continue to moderate market performance in terms of take-up rates. Buyers are generally sensitive and cautious about prices.

'Developers are more likely to discount prices to maintain the demand, either through direct discounts of between 5 and 10 per cent on selling prices as we're already seeing, or absorption of other costs like stamp duty and furnishing vouchers,' Dr Chua reckons.

JLL's study also showed that amidst the overall quieter market the number of non-landed private homes bought by those living in HDB flats as well as those with private addresses fell in the first five months of this year.

However, there was an increase in HDB upgraders' share of total non-landed private homes bought (in both primary and secondary markets) during the first five months of this year in all locations.

This was the case even in the prime districts, where buyers with HDB addresses made up 16 per cent share of total private apartments/condos bought in January to May 2008. This was higher than a 10 per cent share for the whole of last year in this location.

Most of the HDB upgraders who bought a prime district property in the first five months of 2008 picked up a unit in District 9, mainly at new project launches like Wilkie 80 and Mount Sophia Suites, according to JLL.

HDB upgraders accounted for 33 per cent of non-landed homes sold in the east coast in the first five months of 2008, up significantly from a 21 per cent share in full-year 2007.

In the mass-market districts - the traditional haunt of upgraders buying private property - their share was 39 per cent in Jan-May 2008, up from 32 per cent in 2007. In the central districts, the upgrader share edged up from 16 per cent last year to 19 per cent in the first five months.

'Although prices in 2007 have moved past the average-income buyers' affordability, the current softer prices as well as stronger economic performance in 2007 have provided the impetus for many HDB upgraders in all locations,' Dr Chua notes.

'As HDB resale flat prices are likely to remain strong given limited supply, upgraders who benefit from the gain in the resale market are likely to enter into the private market. We reckon the percentage of upgraders is likely to grow by year-end if developers and sellers keep prices at realistic levels,' he added.     - 2008 July 1    THE BUSINESS TIMES

• Freehold condo's in high demand

Apartments above $10m still shine in dull market 
In the landed sector, demand for GCBs remains strong

Prime condo prices heading for long, gentle decline 
Cushman model shows subdued market until 2012 but firm argues it's still a good time to buy

The high-end residential sector has been largely subdued in 2008, but at least 50 luxury apartments costing above $10 million each have been sold so far this year. And the tally for the full year, according to property consultant CB Richard Ellis (CBRE), is expected to come in at about 70 to 100 units.

The prices of condos and private apartments in the Core Central Region (CCR) will inch downwards and are unlikely to touch their recent peaks for almost the next four years, a model developed by Cushman & Wakefield (C&W) shows. The extent of the fall will depend on how slowly the Singapore economy grows, but C&W expects these median prices to drop between 8 per cent and 17 per cent from their peak of Q1 2008, before recovering by some time in 2012.

This will be lower than the 139 such units sold for the whole of 2007, but still significantly higher than the 2006 full-year figure of 23 units, CBRE's research shows.

Putting things in perspective, CBRE Singapore's managing director Pauline Goh says: 'One point to note is that luxury home prices in 2006 were lower than in 2007. Hence, fewer units would have touched the $10 million mark back in 2006. There was also a smaller supply of upscale developments with big units back then compared with 2007 and H1 2008.'

The 50-odd luxury apartments costing above $10 million each sold so far this year are the tally at June 17 and include not just units sold at Nassim Park Residences, which was previewed in May, but also a unit each transacted at Cliveden at Grange, The Tomlinson, The Grange and The Orange Grove condos.

BT understands that the highest-priced transaction so far this year is a $19.7 million ground-floor unit sold at Nassim Park Residences.

In the landed sector, a total of 23 Good Class Bungalows (GCBs) have changed hands so far this year for a total of $380 million.

'We're quite confident that at least 50 to 60 GCBs will be sold for the whole of 2008. Demand will continue to be strong from Singaporeans as well as PRs, but deals are limited by availability of GCB stock,' Ms Goh predicts.

Last year, a total of 87 GCB deals totalling $1.15 billion were sealed, against the record 119 transactions worth $1.23 billion in 2006.

As for the outlook for luxury apartment sales, Ms Goh says: 'Singapore has a lot going for it; the government has put in so much effort to build Singapore into a global city. We'll have the integrated resorts, special events like Youth Olympic Games and F1 night race. Singapore is on the radar screens of a lot of international investors. However, the flow of bad news from the US has to stabilise before confidence returns.

'On the other hand, as Nassim Park Residences shows, if the product is right, there can be very, very strong demand. The project is in a very niche location; arguably the best luxury location in Singapore.'

Market watchers say the volume of transactions for apartments costing more than $10 million for the rest of 2008 will depend partly on when developers release new prime-district condos and their strategy on the mix of unit sizes.

Developers have tended to veer towards bigger units in the past couple of years but some analysts say some developers are now considering changing tack for upcoming projects. These developers are wondering whether it will make more sense now to have a higher proportion of smaller units - given weaker sentiment.

'The idea is to make the absolute price quantums smaller, say $3-5 million per apartment, which will mean a bigger pool of buyers, compared with having a lot of biggish units in a project costing, say, above $10 million,' an analyst says.   - 2008 June 19    SINGAPORE BUSINESS TIMES

Even so, it argues that now may be a good time to look at buying into new developments, as the developers are unlikely to slash prices dramatically. Instead, a gentler decline is on the cards.

The trigger for this is 'there's still a lot of private housing supply', says C&W's head of forecasting Lee Chong Yong, who developed the model.

Mr Lee points to the Urban Redevelopment Authority's projections that about 8,000 non-landed private homes will be completed this year, followed by another 12,000 units next year, around 16,000 in 2010, and some 20,000 in 2011, before the supply eases to around 8,000 units again in 2012.

'Some of these units have not been launched yet. As time goes on, the unsold or yet-to-be-sold stock will keep creeping up, until 2011. The extent to which there will be downward price pressure from this will depend on the pace of economic growth. The stronger the economic growth, the faster the supply can be absorbed,' Mr Lee says.

Assuming Singapore's GDP grows at a rate of 4 per cent a year between 2008 and 2012, the median per square foot (psf) price for non-landed private homes in CCR - which includes the prime districts 9, 10 and 11, Downtown Core location and Sentosa Cove - will fall a total of 17 per cent between the Q1 2008 high and Q1 2012.

Based on a higher 5 per cent GDP growth rate, the price decline will be a lower 12 per cent over the same period.

If GDP grows at 6 per cent, the median price will decline 8 per cent between early 2008 and Q3 2009 before recovering back to the Q1 2008 high by end-2012.

C&W also tracked developers' sales in 255 new condo projects across Singapore and constructed an islandwide non-landed private residential new sales price index, which showed a 2.2 per cent decline between the peak in December last year and May this year.

'From the start of the credit crunch in August 2007 through to May 2008, developers of only 10 per cent of the 255 new condo projects tracked have cut their prices by more than a fifth,' C&W said.

C&W argues that 'compared to the 1997-1998 Asian crisis, today's falling prices are at present moderate without any signs of panic from the developers'. During the Asian crisis, most developers cut prices by at least 20 per cent while some reduced asking prices by up to 40 per cent in 12 months, it said.

The property consultancy group says 'now would be a good time to consider buying into new developments'. It also notes that expats living in Districts 9, 10 and 11 have seen a doubling of rents over the past two years, while sale prices of many condos are starting to see a slow price decline. 'For expats expecting to stay in Singapore, it would be a good time to consider buying (a condo) to take advantage of this short-term dip in the market,' C&W's head of residential Connie Looi says.

But JPMorgan analyst Christopher Gee gave a different view, saying that compelling values were needed to get buyers back to the market. 'The fear of making a purchase now, only to have prices fall later, is what's holding buyers back at this stage. Developers too don't want to sell too cheap; if prices recover, then they would have missed out on making bigger profits.'

One property market watcher said that tempting buyers back would require mass-market condos to be launched at $600-$650 psf on average, compared with a price of $700-$800 psf last year.

In the mid-range category, a freehold condo in the Balestier area for instance would today need to be priced at $900-plus psf, instead of the $1,000-plus psf they're still being marketed at, based on last year's pricing. For freehold projects in the prime districts 9,10 and 11, what would lure buyers back today would be an average price of no more than $3,000 psf, instead of $3,500-$4,000 psf last year, another industry observer said.

Giving his take, an experienced property industry player said: 'How Singapore home prices will pan out will depend on both internal and external factors. Residential property prices have fallen in many markets across the globe, such as the US, Europe, UK, Australia, Vietnam and China. If we want to be in line with the rest of the world, we'll also see some slide.'   - 2008 June 14   SINGAPORE BUSINESS TIMES

S'pore luxury homes ninth most expensive globally 

Luxury homes in Singapore are the second most expensive in Asia and the ninth most expensive in the world.

According to a report by Citi and Knight Frank, luxury home prices here are now US$2,423 per sq ft.

The only place in Asia where they are more expensive is Hong Kong, where they cost US$4,507 psf. Even Tokyo is cheaper than Singapore, coming in third most expensive at US$2,334.

Worldwide, London is the most expensive, followed by Monaco and St Jean Cap Ferrat (France) at US$6,191, US$5,888 and US$5,853 psf respectively.

The global luxury home market is supported by jet-setting high net-worth individuals who think nothing of owning homes on every continent.

As an example, the report describes a Brazilian/Russian family that owns apartments in New York, Geneva, Ibiza and, until recently, Singapore.

The family reportedly spends equal periods at each property, with business and social ties meaning they find it possible to change location for long or short periods with ease.

'In many ways, none of their properties is regarded as either a primary or secondary residence,' the report says. 'In fact, they feel equally at home in all of them.'

The report ranks high net-worth individuals in four categories - those with US$1 million to US$10 million; US$10 million to US$100 million; US$100 million to US$1 billion; and more than US$1 billion.

It found that 15.7 per cent of entry-level high net-worth individuals own four or more homes. In the second, third and fourth (the richest) categories, the respective percentages increased to 23.3, 31.5 and 60 per cent.

Importantly, the report found that in both developed and emerging economies, uncertain economic and political conditions did not affect the growth in numbers of high net-worth individuals, with the growth of their wealth, 'similarly undimmed throughout 2007'.

Citing data from Scorpio Partnership, the report says the most significant growth in 2007 was in the US, where the number grew almost 120,000 to 3.1 million. China had the second-largest increase, with the figure rising almost 46,000 to 373,000 - almost as many as Germany.

'Despite the credit crunch, extraordinary wealth creation has continued across the global oil and commodity sectors,' the report says.

An example of the strength of the global luxury home market is that in London the number of £pounds;10 million-plus sales in Chelsea, Knightsbridge and Belgravia rose 190 per cent in the six months to January 2008 from the same period a year earlier.

In the US, where prices fell 4.5 per cent over the past year and 4.2 per cent in New York generally, prices for prime Manhattan properties rose 25 per cent.

Knight Frank's head of residential research Liam Bailey said: 'Prime locations have held their own. London, New York, Shanghai and others are proving that almost any residential market tied to the global economy maintains confidence among purchasers.'   - 2008 May 21   ASIA ONE

Prime properties in for 5% fall in '08: UBS
Bank expects modest 0-5% growth in mass and mid-tier segments

Analysts from Swiss bank UBS believe Singapore's property market will 'remain intact', but they are nonetheless projecting a drop of 5 per cent in prime property prices for the year.

In the more affordable mass and mid-tier segments, where prices increased at a slower pace, UBS expects a modest growth of between 0-5 per cent in prices this year.

In its report on the Singapore property market, UBS says that in light of the uncertainty over the global economic outlook, buyers are likely to defer purchases of new property for at least six months. UBS said that demand 'is highly dependent on the market's outlook for the next three or four years, when the projects are completed'.

It added that with supply of new homes on the rise, there could be pressure on developers to reduce launch prices to 'stimulate demand' - and some developers may start cutting prices as early as the second quarter of this year.

While the larger developers are expected to have more holding power, smaller ones could feel the strain of holding costs sooner. UBS estimates that of the units to be launched between this year and 2010, around 9 per cent are held by small, unlisted developers. Still, it said that there is little evidence to suggest that the market will be affected if small developers 'capitulate and cut prices aggressively when holding costs build up'.

In its report on the current property market conditions, UBS made comparisons with the previous property slump of 1998. 'Markets appear to be pricing a 70 per cent fall in Singapore residential prices, similar to 1998,' it noted.

But UBS said: 'We think the residential market in 2008 will not replicate the 1998 scenario where launch prices fell by 50 per cent in a year, and stock prices fell by 75 per cent.'

It added that expected GDP growth of 3.5 per cent should keep population inflow positive, which combined with negative real interest rates and low unemployment should underpin resale prices.

'Even if job growth were to halve in 2008 to 90,000-100,000, this could still mean housing demand for at least around 15,000-18,000 units, assuming half the newly- weds (23,000 per annum) want to move out, and around 6,000 new households - of new permanent residents and expatriates - relocate to Singapore,' UBS added. It pointed out that the figure is much higher than the expected number of home completions - 8,700 in 2008 and 16,000 in 2009.

As such UBS believes that current share prices for listed property developers have been 'over-corrected'.

'Allgreen's price ($1.17 per share currently) attributes no value to its residential (portfolio), while City Development's price ($12 per share currently) implies a 70 per cent writedown in unsold land,' said UBS.

UBS said that it has adjusted the revalued net asset value and earnings per share for Allgreen, City Developments, CapitaLand and Keppel Land, and given current price levels 'we have retained our Buy ratings on all these developers'.  - 2008 February 5    SINGAPORE BUSINESS TIMES   

Market conditions delay Marina Bay Suites launch

The launch of Marina Bay Suites has been postponed, with 'market conditions' cited as the cause by Keppel Land group chief executive Kevin Wong.

The news comes as a surprise as the consortium developing it - Keppel Land, Cheung Kong Holdings/Hutchinson Whampoa and Hongkong Land, had earlier said that the launch would be around end-January, before the Chinese New Year.

The consortium also said then that over 600 potential buyers, half of them foreigners, had registered their interest in buying into the 221-unit luxury development, priced at around $3,000 psf.

However, at a press conference to announce the company's full-year financial results yesterday, Mr Wong said that the launch would now be after the Chinese New Year - within the first quarter of 2008. He also said that units would be 'progressively released in tandem with market conditions'.

Keppel Land's other launches, including the next phase of Reflections at Keppel Bay, The Tresor and Madison Residences, will all be staggered to follow the launch of Marina Bay Suites to ensure that they do not coincide.

For Reflections at Keppel Bay, which has 400 units remaining, Mr Wong said that its launch would be around mid-2008.

Adopting the cautiously optimistic tone already shared by other developers, he said: 'If everything picks up in the second half of the year, then we will be back in business.'

His announcement follows Wing Tai deputy chairman Edmund Cheng's comment on Monday that it would monitor global markets 'to see how things pan out before we launch anything'. Wing Tai projects that have yet to be launched include Belle Vue Residences and L'Viv.

Earlier this month, City Developments also said that depending on construction schedules, and if the opportunity arose, it could consider short-term leases for Lucky Tower, which it acquired through a collective sale in May 2006.

Keppel Land's Mr Wong does expect prices in the high-end sector to be affected if a recession takes hold of the United States economy. 'But we expect mid to mass-market prices to go up steadily,' he added.

Mr Wong, who said that Keppel Land saw a default rate of about 5 per cent on its projects during the last property slump in the mid-1990s, added: 'There will be some (if there is a recession in 2008) but the percentage will be fairly low.'

Commenting on the postponement of the Marina Bay Suites launch, Knight Frank director (research and consultancy) Nicholas Mak said that 'developers are all watching each other now, but someone has to take the plunge first to test the water'.

'Because of the thin volume at the moment, the market is looking for direction. But we must bear in mind that the volume and price increases in 2007 was out of the ordinary.'

Mr Mak also highlighted that developments with licences to sell will increase as the year progresses. 'If developers wait for prices to go up, everybody could be launching at the same time.'   - 2008 January 30  SINGAPORE BUSINESS TIMES

Property sales set for big drop in Q4
Early numbers show Q4 private property deals at $2.9b, nowhere near Q3's $15.6b

Weakening market sentiment could have a bigger impact on property sales if early numbers for the Q4 2007 transactions are anything to go by.

In a preliminary analysis of caveats lodged by DTZ Debenham Tie Leung (DTZ), the value of all private property transactions for Q4 to date is about $2.9 billion.

This figure does not represent the full fourth quarter. There is also a time lag between a transaction and the lodgement of a caveat. Still, doubling or even tripling this figure will not bring it close to Q3's figure of $15.6 billion and Q2's record breaking figure of $24.2 billion.

DTZ executive director Ong Choon Fah also pointed out that apart from the continuing effects of the US sub-prime crisis, the property market was also jolted by the withdrawal of the deferred payment scheme in October. 'It made people understand that there were risks involved,' she added.

Signs of poorer market conditions were already apparent in the third quarter. In DTZ's analysis for Q3, transactions for all private homes fell 36 per cent to 8,416 units. But this was attributed to seasonal market activity marked by the Hungry Ghost Month, as well as the reduced number of developer launches.

Mrs Ong believes that fewer launches in Q4 could be the culprit if sales do fall.

According to its report, the number of developer sales in Q3 reflected a 41 per cent quarter-on-quarter (q-o-q) drop to just 1,956 transactions with developers apparently monitoring the market for possible sub-prime impact.

Now, well into the fourth quarter, new launches still appear to be on hold. Mrs Ong believes that there are 'genuine buyers' in the market but developers could nevertheless be choosing to take their time to decide on pricing, or, launch developments in phases to test the market.

But she said that there is no evidence that developers or sellers are prepared to accept lower prices. 'Prices are still inching up even though the activity level has dropped,' she added.

Mrs Ong said that the recent strong performance of the private residential market has allowed many developers to accumulate financial reserves and most are not in need of immediate revenue. 'Developers don't feel the need to launch immediately. They can still launch next year, while some may even be considering waiting until the opening of the integrated resorts creates more buzz,' she added.

The number of transactions in Q3 was bolstered by the high number of deals in the secondary market which saw 6,434 homes change hands. This represents a q-o-q drop of 34 per cent, but the decrease is of a lesser magnitude compared with that of developer sales.

And although collective sales slowed in Q3, DTZ says apartments in the secondary market in the prime districts continued to perform, largely due to price increases.

The number of secondary market apartments sold in Q3 fell 33 per cent q-o-q to about 5,300 units with foreigners accounting for 1,590 or 30 per cent of these transactions. DTZ noted that this was among the highest since 1995. The strength of the secondary market was partly due to the buoyant leasing market which also encouraged foreigners to buy homes ready for immediate occupancy.

Bucking the downward trend of all category of buyers were corporate or institutional buyers.

In Q3, transactions attributed to companies actually rose by 11 per cent with 958 homes changing hands. DTZ said this was the largest number of units purchased in a quarter.

Apart from the reported acquisition of a block at Costa Del Sol by the Ong Beng Seng family, DTZ highlighted the sale of 49 out of 58 units in Duchess Crest, registered as company transactions. DTZ executive director (residential) Margaret Thean added that unlike the bulk sale at Costa Del Sol, the Duchess Crest transactions were not done by a single company either.

She added: 'This reflects that foreign investors and property funds still have confidence in the Singapore market.' Ms Thean also said: 'With the sub-prime crisis in the US, some of these funds may also be increasingly looking outside the US to invest.'  - 2008 December 3    THE BUSINESS TIMES

A sprinkling of new benchmark home prices

Several new units sold by developers set record prices in various parts of Singapore last month, despite the overall lacklustre market, latest figures show.

Data released by the Urban Redevelopment Authority (URA) yesterday show that just 529 homes were sold in September, down from 1,731 in August and 1,381 in July.

However, despite the low volume, several of the units sold set new benchmarks in various parts of Singapore - including Sentosa Cove, science hub one-north and Boon Lay - analysts said.

They indicated that the high prices fetched, although only in some cases, show there is a strong, 'genuine' demand for new homes, despite September's low take-up of new homes.

'Even though the market is quiet, you still see these kinds of prices, which means that there are many serious buyers out there,' said Savills Singapore's director of marketing and business development, Ku Swee Yong.

A unit in Ho Bee's Turquoise at Sentosa Cove was sold for $2,772 per square foot (psf), which analysts said is likely to be a new benchmark for Sentosa.

And over in the Newton area, a unit in Three Buckley went for $2,888 psf, a record for the area. In fact, all 11 units were sold at a median price of $2,853 psf, which is itself a new benchmark for the location, said Li Hiaw Ho, executive director of CBRE Research.

New benchmarks were also set in the suburbs.

In the west, a unit at United Engineers' The Rochester went for $1,577 psf, a new record for the one-north vicinity. And near Upper Bukit Timah, a unit in Far East Organization's Gardenvista on Dunearn Road sold for $1,449 psf. Mr Ku said that both prices were new highs in their respective areas.

Elsewhere, a unit in The Beacon Edge at Tembeling Road was sold at $1,327 psf while a unit of Vetro at Mar Thoma Road was sold for $1,044 psf. Both were new levels achieved at their respective locations, CBRE said.

But perhaps most unexpectedly, a unit in Far East Organization's The Lakeshore in Boon Lay Way went for $1,080 psf - taking most property analysts by surprise, as the project in the far western part of Singapore has been on the market for more than two years.   - 2007 October 16    SINGAPORE BUSINESS TIMES

$5,600 psf for penthouse new high in property price here  53rd-storey Orchard Residences unit fetches over $28m

A new  record property price for Singapore has been set, even though fewer sales are being made in high-end residential projects since the time of the US sub-prime mortgage crisis.

Orchard Residences: About 73 per cent of the total 175 units in the condo are said to have been sold

CapitaLand and Sun Hung Kai Properties are said to have sold earlier this week a penthouse on the 53rd storey of The Orchard Residences for about $5,600 per square foot (psf), or over $28 million. This surpasses the previous benchmark of $5,500 psf set in August when a 54th storey penthouse fetched about $27.8 million.

This means that all four penthouses in the 99-year leasehold development are now sold.

The developers are said to have sold about 73 per cent of the total 175 units in the condo. The buyer of the final penthouse sold this week is believed to be a foreigner. The 5,048 sq ft unit has five bedrooms, a study and a family room.

A stone's throw away, Wheelock Properties (Singapore) is said to have sold more than 30 apartments at its freehold Scotts Square since the official launch of the project on Sept 28.

The developer is said to have largely maintained its average price at around the $4,000 psf mark from its preview in July, when it sold about half of the project's 338 apartments.

Over in Sentosa Cove, Ho Bee has sold 38 of the 50 units it has released so far in its 91-unit condo, Turquoise, since late September. The units have been sold at prices ranging from nearly $2,500 psf to $2,770 psf.

The average price is about $2,600 psf, Ho Bee Investment executive director Ong Chong Hua said when contacted by BT yesterday. Buyers of the 38 units - which include four penthouses - were an equal mix of foreigners and Singaporeans, he said.

Apartments at the 99-year leasehold Turquoise typically cost around $5.3 million for a three-bedroom unit, $6.4 million for a four-bedder and around $9.3 million for a penthouse.

DTZ Debenham Tie Leung executive director (residential) Margaret Thean acknowledges that buyers, both local and foreign, have been more cautious after the stock market setback at the time of the US sub-prime mortgage crisis.

'But we still see activity going on. For the high-end projects, we've not noticed any withdrawal of liquidity. The only difference is that prospective buyers are more cautious, doing more calculations and being more selective in their choice of investment before making a commitment,' she said.

Market watchers also say that the recovery in the stock market in recent weeks has led to a return of confidence in the property market, as seen in a pick-up in subsales activity lately.

Over in the Seletar Hills area, Tong Eng Brothers unit Fairview Developments is launching two landed developments. One is the freehold 8 @ Stratton, comprising eight cluster semi-detached houses priced at $1.98 million to $2.2 million.

The houses have built-up areas ranging from 3,595 sq ft to 3,649 sq ft and strata areas of 4,930 sq ft to 5,145 sq ft. The second project is Nim Green, a collection of just three terrace houses - a corner unit with an asking price of $2.5 million and two intermediate units with a price tag of about $2 million.    - 2007 October 12   SINGAPORE BUSINESS TIMES

The price of luxury
Flush with cash, the high-end residential market is flourishing

Strong corporate profits and a global commodities boom in 2006 helped grow fortunes and sparked a surge in demand for trophy homes.

Riding high: Hayden Properties' latest development at 37 Scotts Road features a glass car elevator so owners can park and show off their rides from their living room --

A survey by Cap Gemini and Merrill Lynch shows the number of high net worth individuals (HNWI) worldwide increased 8.3 per cent in 2006 to 9.5 million, with Singapore reported to have the fastest-growing number - up 21.2 per cent to 67,000.    With this rising affluence, it is not surprising that high-end homes are being snapped up as soon as they go on the market, as they are just another example of luxury goods in hot demand.

Prices of high-end apartments continue to rise steadily, with new launches commanding increasingly higher rates in the prime districts of 9, 10 and 11. The average price of high-end residential property rose 9.1 per cent to $1,960 per sq ft from the last quarter, while the average price for super-luxury residential homes was even higher at $2,990 psf. The number of homes costing more than $5 million increased almost 54 per cent last year to 650. Foreign purchases at the top end of the market are also increasing.

'Singapore is increasingly acknowledged as a safe haven for investments, backed by a strong Singapore dollar and an attractive tax regime,' says Galen Tan, a managing director of EFG Private Bank. 'An increasing number of high net worth clients have included Singapore as a part of their multi-generation wealth succession planning and are attracted to the conducive environment for retirement.'

Foreign purchases stand at 60 per cent of transactions above $5 million, compared with 39 per cent in 2006 and 14 per cent in 2005 ( See Table 1). Looking at the top 10 transactions over the last five or six years in terms of price, the past two years have seen significant increases - from about $2,050 psf in 2000 to $3,090 in 2006 and $4,078 in first-half 2007. The number of units sold above $4,000 psf in July this year soared more than 350 per cent to a record 72, compared with just 16 in June.

Escalating prices of super-luxury apartments have not put buyers off. In fact, most such developments - like The Marq at Paterson Hill, Parkview eclat, Scotts Square and The Boulevard Residences - have reported good sales, with foreigners buying off the plan without even viewing show flats. At the high end of the market, we are dealing with excess wealth, not merely income. Hence, some of the factors that influence the rest of the market do not come into play in this segment.

High-end apartments indisputably cost more nowadays, but what do you get for your $5 million? Is there really much difference between, say, a $1 million apartment, a $5 million and a $10 million model? Besides the current property boom which has pushed up land prices, there is another reason for the soaring prices of top-notch apartments. Developers are loading them with more luxurious features to justify higher pricing. We note that apartments above the $5 million mark boast dramatic additions, such as top-of-the-line fixtures and finishes, sophisticated amenities and sprawling living areas that normal apartments do not have. Parkview eclat, for example, offers superior finishes and state-of-the-art appliances such as mirror televisions, spas and custom showers to create a hideaway for hard-working owners to take a break from their hectic lifestyles.

Hayden Properties' latest development at 37 Scotts Road has taken opulence to an even higher level. It features a glass car elevator so owners can park their exotic wheels near their entrance. Assuming the development costs $3,000 per sq ft, it will cost as much as $600,000 for the parking space. Aside from providing additional functionality, such features imply a certain social status for owners. Large living areas and bedrooms are other common characteristics of luxury apartments. Hence, units that come with separate guest suites, spacious home entertainment rooms, wine cellars and open spaces, which were rare in the past for high-end apartments, are offered more commonly now.

The Marq at Paterson Hill and Cliveden at Grange offer the spaciousness of a bungalow in a luxury condominium setting. The love of space is reflected in the increasing number of large units sold. From January to July 2007, 1,250 units bigger than 2,500 sq ft were sold - 75 per cent more than in the same period last year. (See Table 3)

In terms of amenities, we have also seen vast improvements. Developers are increasingly aware that people are not buying a mere home but a lifestyle. In the past year, some developers have come up with creative ideas to provide a more attractive living experience for purchasers.

St Regis Residences and Beaufort on Nassim are tying up with hotel operators to provide hotel-style services. And Hilltops by SC Global promises a resort-style environment. We expect this trend of joint ventures between developers and prestigious hotel brands to continue.

Another distinguishing feature of luxury apartment buildings is the level of security. Developers are expected to place more emphasis on this as personal privacy and safety are big concerns. High-tech equipment such as fingerprint recognition and even eye scanners are being installed to identify residents and visitors. Cameras are mounted in every corner, panic buttons are wired to the bedside and a security guard placed outside each apartment to provide 24-hour surveillance.

The list continues, with buildings designed with infrared sensors that will sound alarms to warn security guards if moving objects are detected. Other security measures such as bullet-proof windows, a separate route and lifts for evacuation, a safe room that is bullet-resistant and wired with a phone line, back-up generators and keyless entry systems could be seen in future projects.

Compared with prices of high-end property elsewhere, Singapore has room for growth. In London, the average price for top-end apartments stands around $8,900 psf. In Monaco, the price of a luxury condominium averages $5,000 psf, while in New York it is about $4,500 psf. Apartments at Roppongi Hills, Tokyo, average around $3,400 psf, while in Hong Kong, prices of luxurious apartments average $3,100 psf, though those in the super-luxury category have now topped $7,800 psf.

Despite recent turmoil in global financial markets, the mid to long-term outlook for the Singapore economy remains positive, with the government upgrading GDP growth from 5-7 per cent to 7-8 per cent this year. The narrowing of the revised forecast to just a single percentage point range - from the usual two-point range - shows the government's confidence. Furthermore, Prime Minister Lee Hsien Loong has increased the long-term GDP growth target by one percentage point to 4-6 per cent per annum.

Going forward, we expect the property market to remain optimistic, with high-end prices likely to increase another 20-30 per cent a year until 2010, mainly due to the quality of projects and increasing land prices.

Land prices are likely to rise at a slower pace after strong growth in 2006. The increase in apartment prices is likely to be attributed to the fancy items and amenities that developers include. Furniture from the exclusive Lamborghini or Armani/Casa lines, Hasten Vividus beds that cost almost $120,000 apiece and high-end entertainment systems are just a few of the new frills that will allow developers to market the project as unique, so as to command a premium. -  2007 September 27  SINGAPORE BUSINESS TIMES

Subsales picking up after lull as sellers temper their demands

After a lull of about six weeks, activity seems to be picking up in the subsale market on the back of the stock market rally and more reasonable demands from sellers.

'It's not as good as before sub-prime but much better than during the subprime, from mid-July to mid-August,' said CB Richard Ellis executive director (residential) Joseph Tan.

'There have been definitely more inquiries and there's been more response to ads. Whether this will lead to more subsale volume is hard to say,' he added.

Jerrytan Residential Pte Ltd executive director Jason Tan too has seen a 'mild pick-up' in subsales of condos in Districts 9 and 10 in the past couple of weeks or so ever since the stock markets in the US and Singapore started rising again.

ERA Realty Network divisional director Andrew Soh too has seen more subsale deals in the last two to three weeks in the Sentosa Cove and Marina Bay locations. A unit at Oceanfront condo at Sentosa Cove was sold for $2,550 per square foot in the subsale market two weeks ago, reaping the seller a handsome profit of over $2 million as he had purchased the unit (also in the subsale market) in September last year for $1,750 psf.

Jerrytan Residential's Mr Tan says: 'Sellers are lowering their expectations after the reality check provided by the sub-prime stock market crash. But they're still making healthy profits as they may have bought the units a little while ago.'

For instance, the owner of a unit at The Grange recently sold his 2,300 sq ft apartment in the subsale market for about $2,500 psf or a total of about $5.76 million, against his original purchase price of about $1,450 psf from the developer around July 2005. His net profit after factoring in agents' fees, stamp duty and legal fees would be around $2.2 million.

In some instances, the spur to sell in the subsale market and take a profit now is that the projects may be receiving Temporary Occupation Permit (TOP) within the next year and those who bought their units on deferred payment schemes from the developer, paying only 20 per cent of the purchase price so far, will soon have to pay up another 65 per cent of their purchase price.

'Our advice to these investors is that if there is a good margin from their investment, they could lock in their profit now. They can always reinvest in another property,' Mr Jason Tan says.

'Buyers picking up units through the subsale market are also starting to feel more confident again, after the stock market's recovery. They're prepared to hold the properties as a mid- to long-term investment but are also eyeing the possibility of selling much sooner, when the projects receive TOP. The outlook is still good, as there will be limited supply of completed brand-new developments in Districts 9 and 10 over the next six to 12 months,' he added.

However, ERA's Mr Soh sounds more cautious. 'Supply in the subsale market is more than demand. I may be wrong but I think the high-end residential property clock is at 9 o'clock. My advice is to take a profit now and not be too greedy. Supply in the subsale market is greater than demand. It's tough to find buyers in the subsale market now, unless you go overseas.'

Colliers International's analysis of caveats captured by the Urban Redevelopment Authority's Realis system shows that the months of May, June and July saw the most subsale activity in the first eight months of 2007, with more than 600 such deals in each of these three months.

The Sail @ Marina Bay, Citylights, Icon and The Lakeshore, were the most widely traded projects in the subsale market in the May-July period with 151, 93, 90 and 68 transactions respectively.

However, subsales fell drastically by more than 50 per cent to just 299 transactions in August. 'Usually, caveats are lodged upon the option being exercised, so a slowdown in subsales from mid-July would only be reflected in the caveats about two weeks later, starting August,' says the firm's director of research and consultancy Tay Huey Ying.

She forecasts that subsale activity will stage a rebound. - 2007 October 9     SINGAPORE BUSINESS TIMES

SNAPSHOT 2007 September

SINGAPORE BUSINESS TIMES   2007 September 18

More properties sold for $4,000 psf in July

Developers managed to sell 72 homes for more than $4,000 per square foot last month - four-and-a-half times the 16 homes they sold at this price in June, latest figures show.

According to Knight Frank's analysis of official data released yesterday, the big jump came as a result of the launch of Scotts Square by Wheelock Properties (Singapore).

Sixty-four of the total 150 units in the project sold by the developer in July were in the above $4,000 to $4,500 psf price band, while the other 86 units were sold in the above $3,500 to $4,000 psf range.

The median price for the 150 units sold at Scotts Square was $3,959 psf, with the lowest price being $3,638 psf and the highest $4,428 psf, according to the Urban Redevelopment Authority's (URA) data on the number of homes in uncompleted projects launched and sold by developers in July.

Other projects that saw primary market sales at above $4,000 psf last month include The Orchard Residences, The Marq On Paterson Hill and Cliveden at Grange.

'These were the same developments that contributed to the number of units that were sold above $4,000 psf in June,' Knight Frank said.

The median price for the 25 units sold by City Developments for Cliveden in July was $3,729 psf, with the range of prices being $3,265 psf to $4,162 psf.

SC Global sold two units at The Marq in July, at $4,908 psf and $4,978 psf.

The Orchard Residences saw six primary market transactions last month at prices ranging from $2,808 psf to $4,577 psf, with a median price of $4,047 psf.

Soon Su Lin, chief executive of Orchard Turn Developments, the project's developer, confirmed that the company has sold a penthouse for $5,500 psf - a new record for a condo in Singapore - but that the transaction was registered only in early August.

Examples of projects with primary market transactions at median prices above $3,000 psf in July include The Lumos at Leonie Hill, Parkview Eclat at Grange Road and Paterson Suites at Paterson Road/Lengkok Angsa.

The URA data also showed there were some projects with transactions at much lower prices in other segments of the real estate market.

GuocoLand sold 19 units at The Quartz in Buangkok at a median price of $648 psf, with the actual prices ranging from $554 to $749 psf.

Five homes at Suffolk Premier were sold at $481 to $753 psf and six units at La Casa in Woodlands fetched $506-561 psf. Far East Organization sold 13 units at The Lakeshore near Boon Lay MRT Station at $684-866 psf.

Brisbane Development sold six cluster landed homes at the freehold Illoura project at Old Holland Road at $970 to $1,175 psf while Clydesbuilt Capital found buyers for two freehold strata-titled detached homes at Lornie 18 at $1,150 psf each.

Grensburg Investment sold 65 units at Fontaine Parry at Poh Huat Road at $591-994 psf.

United Engineers sold 365 homes at The Rochester in the one-north precinct at $905 to $1,680 psf.

CapitaLand sold 55 units at The Seafront On Meyer at $1,364-$2,182 psf. Knight Frank's analysis shows that developers sold a total of 1,378 uncompleted homes in July, up nearly 20 per cent from the figure for June.

The total number of uncompleted homes launched in July increased 15.7 per cent to 1,315 units over the same period. - by Kalopana Rashiwala     SINGAPORE BUSINESS TIMES  16 August 2007

Prime-central districts price gap narrows
Price-spread shrinks to 1% in 2005-06 from 7% in 2004

The gap between the average selling prices for private apartments and condos achieved by developers in the traditional prime districts compared with emerging central districts narrowed to just one per cent in 2005 and 2006, the latest analysis of caveats by DTZ Debenham Tie Leung shows.

The price-spread between the two areas was 7 per cent in 2004. In that year, lifestyle projects like The Sail @ Marina Bay in the Central Business District and The Berth by The Cove at Sentosa Cove were introduced, boasting waterfront housing.

Central districts cover districts 1 to 4 and include the CBD, the HarbourFront area and Sentosa Cove. The established prime districts are 9, 10 and 11.

The gap was at its widest in 2002 at 29 per cent. The price convergence between the two areas in the past couple of years reflects the steady increase in prices of lifestyle projects with waterfront housing themes in the central districts.

DTZ said: 'With most of these new exclusive projects being 99-year leasehold, compared with still predominantly freehold homes in the traditional prime districts, the price convergence reflects the dwindling importance of tenure but a growing preference for unique lifestyle concepts.'

The property firm's executive director, Ong Choon Fah, said that projects in the central districts could overtake 99-year projects in the prime districts on a selective basis.

'There's potential for this in the Marina Bay area because it offers the whole live, work, play concept in a waterfront setting that will also have gardens, a museum, and the Marina Bay Sands with one million sq ft of retail space.'

DTZ's analysis of caveats captured by the URA Realis system also shows that while 2,063 apartments/condos sold by developers in the prime districts last year was almost unchanged from 2005's figure of 2,061 units, the number of non-landed homes sold in the central districts rose 9 per cent last year to 884, the highest since 1996.

The increase was on the back of several lifestyle projects launched in the popular Marina Bay and Sentosa Cove waterfront locations.

The concept of inner-city living in the traditional CBD received a boost last year, with the launch of The Clift and Lumiere, which further buoyed developer sales in the central districts.

While primary market sales of non-landed homes in the prime districts were flat last year, it was a different story in the secondary market, where strong collective sales activity drove up the number of prime district non-landed homes sold by 88 per cent to 3,603.

This is an all-time high and surpassed the last peak of 1999 by 34 per cent, a result which was helped by prime-district en bloc sales.

DTZ estimates that about 2,310 non-landed homes changed hands through en bloc sales in the prime districts last year.

'However, taking into account developments which were collectively sold towards end-2006 and which will be recorded in 2007, as well as some transactions where caveats have not been lodged, less than half of the prime apartments transacted in the secondary market are estimated to have been sold individually,' the firm said.

The secondary market in prime districts was also boosted by price gains in prestigious developments like Ardmore Park.

DTZ predicts that momentum in the prime districts will strengthen - particularly in the primary market as developers launch new projects on en bloc sites.

'Together with strategic projects like The Orchard Residences and Scotts Square, average selling prices in prime districts will continue to rise,' it said.

The secondary market in prime districts will also benefit from further price recovery and steady rental increases, which should fuel investor interest.   - 29 March 2007    SINGAPORE BUSINESS TIMES

Foreigners make up 30% of non-landed subsale buyers
The 325 units they bought in 2006 is 2.5 times that for 2005

Foreigners including permanent residents bought 325 private apartments/condos on the subsale market last year, a sharp rise from the 131 units they bought in 2005.

The 325 subsale units foreigners bought last year gave them a 30 per cent share of the 1,075 non-landed homes purchased in the subsale market in 2006. This is higher than a 25 per cent share in the preceding year and the highest level since 1995, according to the latest analysis of caveats by property consultancy DTZ Debenham Tie Leung.

Property market watchers say the knowledge that there's a big enough pool of foreign buyers willing to pick up a home in the subsale market is a key factor fuelling the confidence of property speculators.

DTZ executive director Ong Choon Fah sees the rising prominence of foreign buyers in the subsale market as a reflection of Singapore's rise as a global city. 'Singapore has so much to offer as a package that foreigners still see good value from buying units in highly sought-after projects on the subsale market - even if prices are higher than developers' launch prices for the projects,' she said. 'And these foreigners seem to be buying for investment (rental income) or for their own use - not to flip.'

Knight Frank executive director Peter Ow said: 'If a foreigner wants a certain development and it's sold out, he may have no choice but to buy it in the subsale market. Most of these foreigners are probably looking to stay in the unit.'

Another seasoned agent reckons that speculators - that is, those who aim to sell units in the subsale market shortly after buying them - are predominantly Singaporeans, although there are some foreigners including PRs as well. 'You have to be based here, or have a very good network in Singapore, to make sure you don't miss out on the previews,' he said.

Subsales refer to secondary market deals (that is, properties not bought directly from developers) in projects that have yet to receive Certificate of Statutory Completion.

The certificate is typically issued about a year after a project receives Temporary Occupation Permit. Sub-sales are often seen as an indication of the level of speculative activity in the property market.

DTZ's analysis was based on caveats data captured by Urban Redevelopment Authority's Realis system, which allows an analysis of nationalities of buyers in the subsale market, but not of the sellers, many of whom will be speculators. Foreigners' 30 per cent share last year among those who bought units in the subsale market is the highest since 1995. In that year, foreign buyers accounted for 32 per cent, or 961 of the total 3,033 condos/apartments purchased in the subsale market.

Although the number of subsale apartments/condos bought by Singaporeans also increased from 391 in 2005 to 686 last year, their percentage share has declined from 74 per cent to 64 per cent over the same period, reflecting the growing foreigner share.

Indonesians were the biggest group of foreigners who bought non-landed private homes in the subsale market in 2006, followed by Malaysians. Others included UK nationals, Indians, mainland Chinese, Koreans and US citizens.

The Sail @ Marina Bay drew the most foreign buyers in the subsale market last year (41 units). Others include The Coast and Oceanfront (both on Sentosa Cove), The Imperial and Botanic on Lloyd.

While there was a spike in the number of subsale private apartments/condos bought by foreigners last year, the 325 units they picked up in the subsale market formed only 7 per cent of the total 4,739 apartments/condos bought by foreigners last year.

This is an increase from a 4 per cent share in the previous year, but in line with the overall 6 per cent share of subsale deals for overall condo/apartment transactions covering all nationalities in Singapore last year. The number of subsales for condos/apartments in Singapore in Q4 last year was 533, an 85% jump from the preceding quarter and more than double the 208 subsale caveats for non-landed private homes lodged in Q4 2005.  - by Kalpana Rashiwala     SINGAPORE BUSINESS TIMES   21 March 2007

Luxury project launches leave some unhappy
Agents showing up with blank cheques

The strong buying at recent luxury property launches may have been welcomed by developers, but some would-be buyers and agents are unhappy at being left out in the cold.

Strong interest: A crowd of about 200 buyers and agents turned up at One Shenton on the first day of its soft launch

They complain that the principle of first-come first-served was thrown out the window at some hot launches.

There was also ambiguity over the so-called 'VIP' list for sought-after projects like Marina Bay Residences, City Developments' One Shenton and BS Capital's Lumiere.

The agents told BT that being on the list was crucial to secure a choice unit, as all the three developments were launched to private invitees first.

They said that at certain launches, priority was given to agents holding the greatest number of cheques. For example, an agent with 10 blank cheques from prospective buyers would be allowed into the showflat to book units before an agent with one or two cheques - regardless of who got there first. Agents collected blank cheques ahead of launches so they could book units quickly for clients once they were let into the showflats.

City Developments told BT it strove to ensure fairness and order at the launch of One Shenton. 'Under overwhelming and unrelenting crowd conditions, we did our best to maintain crowd control in an orderly fashion and we will continue to make improvements to best serve the needs of our customers,' a spokeswoman said.

The way some launches were handled also came under fire.

BT understands that in one extreme case, a potential buyer who failed to clinch two units at Marina Bay Residences during the launch in December last year has sent lawyer's letters to developer BFC Development - a consortium comprising Cheung Kong Holdings, Hong Kong Land and Keppel Land - and marketing agent CB Richard Ellis (CBRE).

The thwarted buyer alleges that the CBRE associate agent marketing the project asked for a commission in return for securing two units. Industry practice - aimed at preventing conflict of interest - is that agents only receive commission from sellers.

Asked about the alleged incident, a CBRE spokesman said: 'There was a lot of activity at the Marina Bay Residences sales office during the launch, and in the process, a prospective buyer mistakenly thought she was entitled to buy two units. 'Subsequently, we received a complaint from her stating that the two units were not sold to her because she was unwilling to pay our agents any commission. We have responded to her, stating that her complaint is without basis.'

On the flip side of the buyer's claim, market watchers say some overeager buyers at some projects were willing to pay agents to get units.

In the CBRE case, all units in the 428-unit 99-year leasehold project were snapped up while the disgruntled buyer was negotiating with an agent.

Market watchers say that with the luxury property segment so buoyant, further charges of unfairness could arise as the atmosphere is like that at the Great Singapore Sale where everyone is out to get the best bargain. -  by Uma Shankara    SINGAPORE BUSINESS TIMES   January 30, 2007

Buyers of luxury projects slow to lodge caveats

Analysts cite speculators looking to resell units quickly, new deferred payment scheme

2007:  Buyers of luxury apartments launched of late are not rushing to stake legal claim on the properties by lodging caveats on them, official data shows.

 

 

 

 

 

 

 

 

 

Figures from the Urban Redevelopment Authority's (URA) Realis website shows that in some instances, fewer than a quarter of the units sold have seen caveats lodged on them even a few months after the launch.

Industry players attribute this to a variety of reasons, including speculators looking to sell their properties quickly, the newly introduced deferred payment scheme, and good buyer-developer relationships.

At Marina Bay Residences, for example, just 75 caveats for new sales had been filed as of Jan 31, although the 428-unit development was fully sold by mid-December last year. The project is by a consortium comprising Keppel Land, Cheung Kong Holdings and Hongkong Land.

Similarly, only 66 new sale caveats have been lodged for the 111 apartments sold in Wheelock Properties' Ardmore II. The project has 118 units.

Other recently launched developments where the number of new sale caveats lodged falls short of the number of units sold include City Developments' St Regis Residences (87 new sale caveats lodged for around 128 units sold) and Tribeca By The Waterfront (29 caveats for more than 112 units sold) and Ho Bee's The Coast at Sentosa Cove (98 caveats for more than 240 units), among others.

Lawyers BT spoke to said that while lodging a caveat when acquiring a new property is not mandated by law, new owners are usually advised to do so to stake their claims on their properties.

One reason for this new trend could be due to buyers looking to resell their apartments soon after buying them.

'Nowadays, there are a number of people who don't lodge caveats when they buy,' said DTZ Debenham Tie Leung executive director Ong Choon Fah. 'We suspect the caveats are popping up in the subsale market instead.'

URA classifies caveats for new projects as either those for new sales or those for subsales.

Mrs Ong said she first started noticing the trend about 1-2 years ago. While historically, for every development, there have always been some buyers who choose not to lodge caveats, the proportion has increased over the past couple of years, she says.

Another reason is the deferred payment schemes offered by developers, which means there is no immediate need to get financing.

Deferred payment schemes have been a popular option for property buyers, accounting for more than 90 per cent of transactions in recent new Marina Bay and downtown projects, according to Citigroup.

Such arrangements also favour buyers looking to resell their properties on the subsale market.

'The deferred scheme may be encouraging the entry of speculators and fuelling stronger price increases in the primary residential market,' said Citigroup economist Chua Hak Bin. 'Sub-sale transactions have quadrupled from two years ago. Median prices of uncompleted projects have risen by about 20 per cent from their recent lows, double that of the 10 per cent for completed projects.'

The scheme allows buyers to fork out only a 10 per cent or 20 per cent downpayment on a property, with the rest due upon completion - sometimes as much as three years later. Buyers need not worry about further payments during the construction phase and the ample period of three years also allows the buyer time to resell the property for a profit.

Buyers could also simply be letting the task of lodging caveats slide, since they are secure in the knowledge that big-name developers are not likely to sell the same unit twice, said Norman Ho, senior real estate partner with law firm Rodyk & Davidson. This is especially likely, he said, considering the volume and speed of recent high-end property launches.

'They (buyers of new properties) are buying directly from the developers, so they are very, very safe - the developer is not going to sell the same property twice,' said Mr Ho.

Despite this, lawyers will always advise clients to file caveats just to cover all bases.

More caveats for newly launched upmarket developments are likely to be filed in the coming weeks. Mr Ho explained that in every transaction, there is a time lag of about five weeks between the time the option-to-purchase is granted by the developer and the time the sale-and-purchase agreement is signed by both parties. The sale-and-purchase agreement is needed before a caveat can be filed.

However, with the high levels of resale and subsale activity on the market now - aided in part by the deferred payment scheme - the proportion of new sale caveats lodged is unlikely to climb by too much, market watchers said.   - by Uma Shankari    SINGAPORE BUSINESS TIMES   February 5, 2007 

• Single Family Residences
• Resales Market
• Singapore residential rentals

HPL, foreign fund set to buy Horizon Towers for $500m
If deal goes ahead, it will be the biggest en bloc sale yet in dollar terms

A partnership involving Hotel Properties Ltd (HPL) and a foreign property fund is said to have conditionally agreed to buy Horizon Towers at Leonie Hill for $500 million, say sources.

Horizon Towers: The site can be redeveloped into a condo with about 375 units averaging 1,800 sq ft each

If the deal proceeds, it will mark the biggest collective sale yet, in dollar terms.

The price reflects a unit land price of about $810 to $820 per square foot of potential gross floor area inclusive of an estimated $45 million to $50 million lease upgrading premium to top up the 204,742 sq ft site's lease to 99 years from a remaining term of about 71 years.

No development charge is payable.

The site can be redeveloped into a new condo with a plot ratio of 3.2828. This means the site can be redeveloped into a condo with a gross floor area of more than 670,000 sq ft - sufficient for about 375 units averaging 1,800 sq ft.

The break-even cost for a new upmarket condo project on the site could be about $1,350 psf, some market watchers reckon. The tender for the site closed in August last year without takers at the $500 million reserve price set by owners. However, around the turn of the year, HPL is said to have sprung into action with an offer. The sprawling leasehold property, set on elevated ground near Grange Road, is currently home to 199 apartments and 11 penthouses in two towers.

Market watchers say HPL has been stirring from a long slumber of late.

In April last year, HPL bought Beverly Mai on Tomlinson Road through a $238 million collective sale, working out to $1,184 psf per plot ratio inclusive of an estimated development charge of $16.8 million. And just last week, it bought out its partners in the Forum building on Orchard Road, setting the scene for a redevelopment of the property as well as HPL's adjoining properties, including the Hilton hotel.

In March last year, HPL attracted a new major shareholder when Wheelock Properties (Singapore) bought a 21 per cent stake from GuocoLand.

Market watchers say they would not be the least bit surprised if Wheelock were to team up with HPL for some of the latter's property development ventures, given the chemistry between the chiefs of the two companies - David Lawrence and Ong Beng Seng. -  SINGAPORE BUSINESS TIMES   February 2007

Home prices rise 10%, sharpest since '99

2007:  The latest flash estimate shows that housing prices were 10 per cent higher in the final quarter of 2006 than a year before - the biggest year-on-year rise since 1999.

Yesterday's figures from the Urban Redevelopment Authority were also 3.7 per cent up on the previous quarter, again the highest quarterly increase since 1999. And most analysts believe that when the URA releases the full official figures for last quarter they could be even higher than yesterday's preliminary ones.

Colliers International director (Research & Consultancy) Tay Huey Ying notes that the flash estimates take into account caveats lodged in the first 10 weeks of the quarter, supplemented by information on new units booked, so figures for 'hot projects' like Grand Duchess, The Ford @ Holland and Marina Bay Residences are probably not reflected.

'The final figure for Q4 to be released in about four weeks' time is likely to be closer to 4 per cent,' she said.

The buoyant price index is largely attributed to the high-end segment of the property market. Colliers' figures show that in Q4 2006, the price of luxury residential apartments increased by 9.8 per cent quarter-on-quarter (q-o-q). For the whole year, luxury prices increased by 35 per cent.

Yet, prices are expected to moderate this year. 'With the awards of the two integrated resorts having successfully taken place in 2006, the market is expected to be more subdued - although still active - in 2007 unless there are more surprise economy-boosting announcements by the government,' said Ms Tay.

The flash estimates are still open to interpretation though.Noting that the 10 per cent annual increase in the index is 'reminiscent' of earlier boom times, Knight Frank director (research & consultancy) Nicholas Mak says it could indicate the beginning of another 'bull run'.

'It is reminiscent of the recovery in 1999 but it appears to be more gradual and sustainable,' he added. The property boom of those times proved to be short-lived.

Still, Mr Mak qualifies that the 'characteristics' of the recovery in 1999 were quite different as that one was a 'bottom up' recovery. 'Now, we see the high-end influencing the mid-tier segment,' he said.

The mass market could take longer to recover. The Housing and Development Board also released flash estimates for its resale flats price index and it increased by just 0.9 per cent q-o-q.

The HDB resale price index can indicate the optimism of the mass market as those who resell HDB flats might upgrade to their first private property.

Mr Mak notes that performance in the mass market, with new launches like The Centris, was 'patchy'. 'We will need to see two more quarters of sustained HDB growth first,' he added.

ERA Singapore vice-president Eugene Lim does reveal, however, that there has been a significant increase in the number of people upgrading within HDB property, suggesting that for those in that income bracket, things are looking up.

According to the property firm's sales data, representing about 40 per cent of the HDB's resale market, transactions for larger five-room flats now account for 23 per cent of its total market transactions, while executive flats make up about 8 per cent.

This is up from 18 per cent and 5 per cent a year ago. Transactions for resale four-room flats fell from 41 per cent a year ago to 38 per cent today, while the proportion of resale three-room flats transacted went down from 33 per cent a year ago to 31 per cent.

Mr Lim believes that buyers of larger flats represent a new 'sandwich class' of price sensitive buyers, and it is hard to say whether their increased activity will eventually spill over to the mass market.

Mr Lim maintains that the latest flash estimate reflects that prices are still 'stabilising' and that any increase in HDB prices in 2007 will be between one and 2 per cent.

Launches of upcoming mass market developments will determine whether there will be a broad-based recovery. DTZ Debenham Tie Leung executive director Ong Choon Fah for one believes that these launches 'will stimulate demand'.

'There is latent demand there,' she said, maintaining that the previous drop in Q3 2006 in the resale price index was 'insignificant'. She did add that there is a 'need to match prices'.

Demand in 2007 is more likely to come from those who make gains from offering their properties for collective en bloc sale.

'The en bloc deals are going to push up the prices of those projects that are complete and unsold,' said Savills Singapore director (marketing & business development) Ku Swee Yong.

Perhaps most bullish of the analysts, Mr Ku even believes the property price index will end 2007 at around 155 points, up 19.2 per cent. -  by Arthur Sim and Uma Shankari    SINGAPORE BUSINESS TIMES     4 January 2007

•  Urban Redevelopment Authority's press release