Chinese now comprise largest buying group of Bungalows
Foreigner's share of bungalow deals hit 11.7% in 2010, up from 9.1% in 2009

The Chinese picked up 15 bungalows in District 4 last year, nearly double the eight properties they acquired in the area in 2009.

Mainland Chinese replaced Malaysians as the biggest foreign buyers (including permanent residents) of bungalows across Singapore last year, shows a caveats analysis by CB Richard Ellis.

China nationals picked up 19 properties in 2010, giving them a 3.3 per cent share of the total 571 caveats lodged for bungalows last year.

HK citizens were in second place, with 11 deals or 1.9 per cent share, followed by Malaysians, who picked up eight bungalows (1.4 per cent share).

In 2009, Malaysians were the number one buyers, followed by UK citizens and mainland Chinese.

Foreigners' (including PRs') share of bungalow purchases across Singapore rose from 9.1 per cent in 2009 to 11.7 per cent in 2010, surpassing their 11 per cent share in 2007.

Companies' share of purchases rose from 10.8 per cent in 2009 to 12.3 per cent last year. Singaporeans remained the predominant buyers of bungalows, accounting for 434 deals (76 per cent of all bungalow purchases) last year.

However, this is lower than their 80.1 per cent share in 2009.
Throughout Singapore, a total 571 caveats were lodged for bungalow purchases last year, up 6.3 per cent from 2009 but still 29.7 per cent lower than the high of 812 deals in 2007.

The Chinese were most active in District 4 (which includes Sentosa Cove) where they picked up 15 bungalows last year, nearly double the eight properties they acquired in the area in 2009.

They were the biggest foreign buyers in the district for both years.
Singaporeans, however, bought even more bungalows in the district - 15 in 2009 and 23 in 2010.

After the Chinese, Indonesians were the next biggest foreign buyers of bungalows in District 4 with six deals, followed by Malaysians (three deals) last year.

District 10 - a high-end bungalow location on mainland Singapore - last year saw three purchases each by Australians and Malaysians, and two purchases each by Chinese and UK citizens. --2011 SINGAPORE BUSINESS TIMES

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Landed homes : Lure of scarcity

When private home prices made their sterling recovery in the second half of 2009, landed homes didn't miss out on the action. The Urban Redevelopment Authority (URA) price indices for detached, semi-detached and terrace houses recovered by 22-26 per cent in 2H 2009, after falling some 18-21 per cent from the market peak in the second quarter of 2008 to Q2 2009.

This upward trend is likely to continue because of the scarcity of landed homes in Singapore. Out of a total housing stock of 1.14 million units, only 69,500 or 6.1 per cent are landed homes.

While new landed projects are limited, home buyers are always willing to buy older properties in the resale market. On average, 380 new landed homes and 2,800 resale landed homes changed hands annually between 2004 and 2009.

Moreover, there is also a certain degree of speculative activity in the landed market. An analysis of the caveats lodged for subsales of new landed properties in the past year shows a gain of 5.5 to 34 per cent from their original prices two to three years ago.

Landed properties offer a certain prestige to homeowners in the middle to high-income groups. Nowadays, well-heeled homebuyers in their mid-30s are especially attracted to entry level bungalows with a land area of 4,000-5,000 sq ft and costing $4-$5 million. Some of these can be found in Lynwood Grove and Cotswold Close.

Equally popular are strata bungalows like Goodman Crest and Bellaville which have the same built-up area as the average bungalow but cost less - around $2.5-$3.5 million - because of the shared ownership of land and communal facilities like swimming pool and landscaped garden.

Similarly, cluster terrace houses are seen as value for money as opposed to condominiums because of their generous built-up areas of over 3,000 sq ft. These also come with communal facilities which appeal to families with young children.

However, the downside of cluster terrace developments is the rather crowded conditions within the compound and the higher volume of vehicular traffic they generate in the neighbourhood.

At the top of the Singapore housing pyramid are the good class bungalows (GCBs) which are the most prestigious and expensive type of housing. In just the first two months of 2010, some 14 GCBs were transacted, compared with just three in the first quarter of 2009.

Among the 14, the most expensive GCB was a Swettenham Road house, which sold for $31.5 million in January. It has a land area of 29,569 sq ft.

In 2009, the highest priced GCB was sold in October at $38.67 million. It is located in Victoria Park Road and has a land area of 32,077 sq ft.

Over at Sentosa Cove, Kasara villas, which range from 9,000 sq ft to over 14,000 sq ft, were sold at $14-$22 million in November 2009. These villas come with designer finishes and top quality fittings.

The reason why leasehold landed homes in Sentosa Cove can fetch prices equivalent to, if not higher than, their freehold counterparts on the mainland is because of the resort island status, foreigners' eligibility to buy and above all, limited supply of around 400 units. Foreigners are not allowed to buy landed properties on the mainland and even permanent residents need special approval from the authorities to buy one.

In 2009, a landed project in Seletar Hills estate called Luxus Hills was launched. The first phase of 78 terrace houses was sold within a few weeks. In the second phase, another 30 units sold quickly at a similar price range. The terrace houses fetched $1.7-$2 million while the semi-detached houses fetched $2-$2.2 million.

Estrivillas, a cluster housing project in Jalan Lim Tai See comprising 38 semi-detached and one detached house, was launched in November 2009. By January this year, 24 of the 39 units had been sold at $3.5-$3.8 million.

In the resale market, transactions in January and February this year show that the median price of semi-detached and terrace houses was $2.5 million and $1.5 million respectively. A year ago, the corresponding median prices were $1.76 million and $1.16 million.

Developers marketing landed properties should emphasise the limited land resources and hence, the value of landed properties in the long-term. Secondly, owners do not have to pay maintenance fees for houses, unlike condominiums. Unless a house is very old, the upkeep is generally inexpensive. Spending money on one's own property beats contributing $3,000 to $4,000 a year to a condo management or sinking fund.

Landed homes are also attractive as investments as they can fetch good rentals. Proximity to premier schools, international schools and embassies is definitely an advantage.

At the top, GCBs in Bukit Timah can be leased out at $18,000 to $25,000 a month while standard detached houses can fetch $12,000 to $18,000, depending on their size and condition. Semi-detached houses can command a monthly rent of $8,000 to $12,000 while terrace houses can achieve $3,000 to $7,000.

Limited supply results in the relatively inelastic prices of landed homes, and increasingly, those who hold such properties will find them a boon as more often than not these are assets that appreciate in value over time.   --2010 March 25  BUSINESS TIMES 

Bungalow prices to hold steady

Landed property enjoyed a fantastic year in 2010. Good Class Bungalows in the prime districts of 9, 10 and 11 did particularly well in terms of sales. But good performance was seen for all types of bungalows in the prime districts, and the eastern districts of 15 and 16. Total sales value of bungalows in these three categories alone amounted to $3.3 billion last year, 46 per cent higher than the sales done in 2009.

A total of 88 Good Class Bungalows (GCBs) in districts 9, 10 and 11 changed hands in 2010, compared to 84 in 2009, an increase of about 5 per cent. These bungalows, located in designated GCB Areas, are sought after by ultra-high-net-worth individuals (UHNIs). Median prices for GCBs also saw the highest percentage growth among all bungalow segments last year. The median price for GCBs in 2010 was $1,129 per square foot, up 31 per cent from $865 psf in 2009.

In fact, most owners who bought their GCBs five years ago would have enjoyed close to a 300 per cent appreciation in property values. These bungalows in the exclusive enclaves of Nassim, Tanglin, Dalvey and Cluny Park are in high demand as elite homeowners in these areas tend to hold on to such prized assets, making supply scarce.

Besides GCBs, other bungalows in the prime districts have also experienced phenomenal growth both in terms of transaction volumes and price. A total of 95 bungalows changed hands in 2010 compared to 75 in 2009.

The median price per square foot has also gone up from $1,018 psf in 2009 to $1,207 psf in 2010. It is getting more pricey to own a bungalow in the prime districts these days as most of them could easily command prices above $7 million. Demand for bungalows in Bukit Timah is naturally high due to their proximity to some of Singapore's prestigious schools, such as Nanyang Primary School, Anglo-Chinese School (Barker Road) and Raffles Girls' Primary School.

Another popular bungalow market is in the eastern part of Singapore - in district 15 (which includes Katong and East Coast) and 16 (including Upper East Coast and Bedok). A total of 93 bungalows were sold in these two districts last year, 24 per cent more than the 75 transactions in 2009. The median price has also risen 28 per cent from $732 psf in 2009 to $937 psf in 2010.

As prime district bungalows get pricier, some buyers have switched their search to the east where prices could be 10-30 per cent lower.

Bungalows in Katong are in greater demand. Easy access to food amenities, the short drive via East Coast Parkway to the Central Business District and the presence of top schools in the vicinity are key reasons for the high demand for bungalows here.

The Singapore bungalow market was poised for a superb bull run this year, with prices expected to soar by another 10-20 per cent until the government came out with its Jan 13 cooling measures.

Impact of new measures

However, the new rules should have a limited impact on the bungalow segment due to the short supply and strong holding power of the owners.

The lower loan-to-value limit on new private home purchases for those already servicing a housing loan should not pose a major problem to most bungalow buyers. In fact, most of these well-heeled buyers do not make use of the maximum financing.

As well, owners of these bungalows, especially GCB owners, tend to hold on to their properties for many years. It is also the norm for them to own a few such properties to keep for the next generation.

Despite the cooling measures, there are still many buyers searching for their dream bungalows. The only negative impact of the measures we have seen so far is a standoff between sellers and buyers. Sellers are unwilling to lower their prices while buyers are expecting price declines. This situation has created a price gap, which means fewer bungalow transactions are likely in the months ahead.

There are still many offers coming in from buyers but these are generally lower than what sellers expect. In fact, we are seeing some sellers withdrawing their properties from the market, with a view to relaunching them six to 12 months later. Some have opted to lease out their bungalows instead of selling them, for the time being.

Trend in 2011

Going forward, we expect the sales volume of bungalows to drop by about 20 per cent for the year. First quarter sales are likely to fall more steeply, by 30 per cent or more, before picking up again from the second quarter. The Chinese New Year festivities in February, coupled with the introduction of the cooling measures in January, are the main reasons for the big drop expected in Q1 sales.

Short-term investors or speculators who usually look for a 10-20 per cent profit margin within one to two years are effectively driven out of the market by the punitive seller's stamp duty in the Jan 13 cooling package. Bungalows with redevelopment potential may also lose some of their appeal. Before the measures, developers or investors would pay a high premium to own such bungalows.

However, they now have to be prudent as their margins will shrink due to the higher stamp duty they will have to pay when selling the redeveloped properties. On the other hand, bungalows with existing tenancies seem to be the star attraction for investors.

Despite a slowdown in bungalow transactions this year, prices on the whole are likely to remain stable, with a gradual increase of 5 per cent from 2010.

With the economy doing well, bungalow sales should be relatively healthy even if they may not match the vibrancy of 2010. Overall household wealth has risen over the years and owning a bungalow is a growing status symbol.

The upside potential for bungalows remains promising given that the price of a brand-new bungalow in a prime district would generally be below $2,000 per sq ft of built-up area. This compares well with a new condominium in the same vicinity which would be priced above $3,000 psf of strata area.

Furthermore, we are seeing a steady increase in the number of ultra-rich Singapore permanent residents taking up citizenship here. This means they no longer face restrictions on the number of bungalows they can own in Singapore.

All in all, demand for bungalows will remain strong, as long as interest rates do not rise dramatically, and there are no further cooling measures.

Bungalow hunt

For those still searching for a bungalow, here are a few tips on what to look for:

• Location: As with any property investment, location is the most important criterion in selecting a bungalow. When the market picks up, bungalows in prime locations will appreciate faster than those elsewhere.

  For example, many bungalows in the prime districts have tripled in value over the past five years. Those in the eastern districts have doubled over the same period. It is also easier to resell a bungalow in a prime district as there is a bigger pool of buyers.

• Shape and gradient of land: The best choice is a regular-shaped plot with a broad frontage as it allows the house to have an imposing entrance. And the land should be flat rather than undulating. Better still would be a plot on elevated ground, especially if it comes with a panoramic view, which is hard to come by.
• Zoning: There are various kinds of zoning for bungalow land - such as Good Class Bungalow Area (GCBA), bungalow and mixed landed.

  Only GCBs, which are governed by stringent planning requirements, are allowed to be built in a GCBA. For a plot zoned for mixed landed use, terrace and semi-detached homes as well as bungalows are allowed.

  Hence, zoning has a bearing on the prestige of the neighbourhood. Bungalows built on sites zoned specifically for bungalows tend to fetch higher values as there will only be bungalows in that area instead of a mixture of terrace, semi-detached houses and bungalows.

• Redevelopment potential: Due to their plot ratio and site specifications (such as road frontage and depth of plot), some bungalows have huge redevelopment potential, and these properties are much sought after by developers.

  --  2011 March 3   BUSINESS TIMES  The writer is managing director, RealStar Premier Property Pte Ltd

 - - -

Developers' sales of private homes surged 82 per cent month on month to 1,544 units in July from the low of 847 units in June, according to latest official figures. This reflects a resumption in home buying, which had taken a breather during the school holidays and World Cup.

However, sales are expected to slip to around 800-1,000 units again in August, on the back of slower launches during the Hungry Ghost Month, say some property agents. After this ends on September 7, both launches and sales will pick up again, they reckon.

In the first seven months of this year, developers have sold 9,957 private homes (excluding executive condos), after last year's strong sales of 14,688 units.

CB Richard Ellis expects the full-year figure will be about 14,000 units. Jones Lang LaSalle's estimate is 13,000-14,000 while DTZ's SE Asia research head Chua Chor Hoon puts the number at 13,000-15,000 units.

'The outlook still remains positive against the backdrop of Singapore's economic growth and the low interest rate environment but buyers will be more selective given that so many Government Land Sale sites are being sold; this will translate to greater choice of new projects.

'Prices have also been on the rise, so potential buyers will be more discerning in picking properties that have better potential for rental income or capital appreciation,' Ms Chua added. DTZ's data shows that secondary market prices of completed private homes appreciated about 6-8 per cent in the first half of this year; her full-year forecast is an 8-13 per cent increase.

CB Richard Ellis executive director (residential) Joseph Tan reckons that developers are unlikely to test new price benchmarks when they resume launches next month. But prices are unlikely to fall below current levels either, as land prices remain high, he adds.

On the other hand, signs of buyer price resistance continue to prevail. Colliers International's analysis of official developer monthly sales data released by Urban Redevelopment Authority shows that the proportion of private homes sold by developers priced at $1,500 psf and below was at its highest level in 10 months in July, at 88 per cent.

The Outside Central Region, where mass-market properties are typically located, accounted for 42.8 per cent of the total 1,544 units sold by developers in July, while the Core Central Region, where the most expensive homes in Singapore are found, had a 17.9 per cent share.

Nonetheless, a handful of buyers picked up properties at top-line prices in July, notes CB Richard Ellis executive director Li Hiaw Ho. The most expensive apartment/condominium unit (in terms of $ per square foot) sold by a developer in July was a unit at Boulevard Vue which fetched $4,600 per square foot. BT understands that Far East Organization sold the high-floor unit of 4,456 sq ft for $20.5 million.

URA's data shows that other high-end deals last month included a unit at The Orchard Residences which sold at $4,099 psf and another at Skyline @ Orchard Boulevard at $3,719 psf.

The least expensive non-landed home was a unit at The Minton in Hougang which was transacted at $612 psf.

July's surge in primary market sales came on the back of three major launches - 368 Thomson, Terrene at Bukit Timah and The Scala at Serangoon Avenue 3. Together, they made up 46.6 per cent of the total 1,544 units developers sold in July.

The top-selling project was The Scala, with 400 units transacted at a median price of $1,173 psf.

Also helping to boost last month's sales were sell-out launches for three projects that comprised mostly one-bedders - the 51-unit Centra Studios at Lorong 25 Geylang, 99-unit Haig 162 and Leicester Suites (46 of its 47 units were sold last month). 'Their success could be attributed to the affordably-priced small-format units they offered,' says CBRE's Mr Li.

Developers launched 1,335 private homes in July, up from 1,010 units in June.

Projects expected to be released after Ghosts Month include NV Residences in Pasir Ris, Twin Peaks on the Grangeford site, Cityscape in Mergui Road and Killiney 118.

Two executive condo projects - the 573-unit Esparina Residences at Compassvale Bow in Sengkang and Chinese developer MCC Land's 406-unit The Canopy in Yishun - are slated for release in October, say market watchers.   --2010 August 17    BUSINESS TIMES

Landed homes' capital values rise faster than apartments, condos
Average cap value of prime resale freehold landed homes up 5.1% in Q4

Average cap values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the fourth quarter as well as the whole of 2010

DTZ's analysis referred only to resale landed and non-landed homes, that is, properties that had already obtained Certificate of Statutory Completion.

'The limited stock of landed homes has made them prized assets, especially those in the prime districts. Landed homes currently account for about 26 per cent of Singapore's total private housing stock (including executive condos), with very limited supply in the pipeline. In contrast, the supply of non-landed private homes is injected at a faster pace via the Government Land Sales programme and collective sales,' says DTZ's Southeast Asia research head Chua Chor Hoon.

The average capital value of prime resale freehold landed homes stood at $1,693 per square foot (psf) on land area in Q4 2010, up 5.1 per cent from the previous quarter, taking the full-year increase to 17 per cent. For suburban freehold landed houses, the average capital value increased 4.3 per cent quarter on quarter to $993 psf in Q4, resulting in a full-year appreciation of 15.5 per cent.

In the non-landed segment, the average cap value for 99-year suburban condos remained unchanged at $660 psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8 per cent. The average price of prime freehold condos increased 0.4 per cent quarter on quarter to $1,520 psf in Q4, also reflecting an 8 per cent full-year price 

DTZ said prices in these two segments are hitting resistance, having risen by about 18 per cent and 36 per cent since their respective Q1 2009 troughs following the global financial crisis. The latest cap values are also above the respective Q4 2007 peak levels, it noted.

'Greater prudence is also being exercised on buyers' part following the latest property cooling measures introduced on Aug 30. Buyers are more selective and prefer projects with good location attributes such as proximity to MRT stations, schools or the central business district,' DTZ said.

On the other hand, the Q4 2010 average cap value of freehold luxury condos (above 2,500 sq ft) in the prime districts was $2,630 psf, about 6 per cent shy of the Q4 2007 peak of $2,800 psf. The latest Q4 figure was unchanged from the preceding three months while the full-year 2010 increase was 9.6 per cent.

'With a limited pool of buyers being able to afford these luxurious units which require a large quantum sum, this segment has seen more subdued purchasing activity,' DTZ said.

The firm's executive director (residential) Margaret Thean said: 'Although there's less activity in the high-end segment, we're still seeing strong interest from Chinese and Indian nationals, and increasingly from institutional investors such as funds. They have confidence in future price growth due to Singapore's strong economic fundamentals. As for individual foreigners buying for owner occupation, completed developments near renowned schools particularly interest them.'

Ms Chua predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 5 per cent if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

She expects prices of landed homes to continue to outperform those of apartments and condos due to their relative scarcity appeal.   - 2010 December 23   SINGAPORE BUSINESS TIME

Record year in the offing for good class bungalow sales

Good times continue to roll for the Good Class Bungalow (GCB) market, with some high-profile business personalities involved in the latest transactions. They include palm oil giant Wilmar International's chairman and CEO, Kuok Khoon Hong, and Prima Group boss Bernard Cheng.

The latest deals have boosted the volume of GCB transactions between January and August this year to about 60 deals with a total value of around $900 million, surpassing the $830 million transacted in the whole of last year, latest figures from CB Richard Ellis (CBRE) show. The actual year-to-date numbers could be higher if caveats for some deals done in August have still not been lodged, suggest property market watchers.

CBRE's director, luxury homes, Douglas Wong is now predicting record GCB sales totalling $1.2 billion to $1.4 billion for the whole of this year, encompassing 80-90 transactions - up from his earlier forecast of around $1.1 billion-$1.2 billion made just three weeks ago. Up to now, the highest full-year value of GCB transactions was achieved in 2006 - involving $1.23 billion across 119 deals.

Savills Singapore director of investment sales & prestige homes Steven Ming said that while the GCB market remains active, 'buyers continue to approach purchases with measured optimism and are sensitive to price increases'.

Wilmar's head honcho, Mr Kuok, and his wife are said to have bought two adjoining GCB properties on Victoria Park Road last month for a total of about $44.17 million. The couple paid about $24.5 million for No. 35 Victoria Park, a two-storey bungalow with a swimming pool; the price works out to $750 per square foot (psf) based on the land area of 32,688 square feet. The sellers are believed to be members of the Khoo family linked to Kimly Construction.

Mr Kuok and his wife also picked up the next-door property at 37 & 39 Victoria Park, an old single-storey bungalow, for $19.65 million or about $660 psf. The seller is said to be Ng Cheong Bian, son of the late Ng Bok Eng, dubbed 'king of cloves'.

Both properties - Nos. 35 and 37/39 Victoria Park - have 999-year-leasehold tenure.

Bungalow market watchers say they would not be surprised if the Kuoks amalgamate the two plots for redevelopment into a plush new GCB on sprawling grounds of more than 60,000 sq ft.

DTZ is understood to have brokered the sale of both properties.

Last month, Prima Group boss Bernard Cheng is believed to have sold his freehold bungalow at Queen Astrid Park for $24 million or about $877 psf to Zain Fancy. A person bearing the same name was formerly head of Morgan Stanley Real Estate Investing for Asia Pacific and who late last year joined Och-Ziff Asia Real Estate as executive managing director and is based in Singapore. The entity is part of New York-based fund management giant Och-Ziff Capital Management Group.

Ho Tian Yee, managing director of Pacific Asset Management, is said to have picked up a bungalow at Astrid Hill in July for $20.5 million or $654 psf on its land area of about 31,360 sq ft. Meanwhile, 12 Bishopsgate, with a land area of around 16,550 sq ft, changed hands last month for slightly more than $19 million or about $1,150 psf.

The year began slowly for the GCB market with just three deals worth about $27.5 million in the first quarter. However, things soon gained momentum with around $432 million worth of deals done in Q2 and about $436 million in July and August.

GCBs are the creme de la creme of Singapore's housing market, with stringent planning requirements. There are only about 2,400 such bungalows in Singapore's 39 gazetted GCB Areas. 'Liquidity, cheap financing and the general belief that the worst of the economic crisis is over are fuelling this run,' says Savills' Mr Ming.

'Furthermore, it appears the wealthy are allocating a greater proportion of their investments to real estate. GCBs, being limited in nature but highly desired amongst the rich, become highly sought after.' - 2009 September 4   BUSINESS TIMES

Q4 private home price slide is worst in decade

In its worst showing since Q4 1998, the official private home price index slid 5.7 per cent in Q4 last year over the preceding quarter. For full-year 2008, the index fell 4.3 per cent, reversing a 31.2 per cent jump in 2007.

Property consultants are predicting a further decline of 10-20 per cent this year in the benchmark index, with upmarket homes continuing to be the worst hit, as in 2008. This sector was the most overheated during the run-up in 2006 and 2007.

'The bid-ask gap is very high; any buyer that comes in now wants to make sure he's buying at very attractive prices to cushion against future risk. As a result, most transacted prices are quite distressed,' said DTZ executive director Ong Choon Fah.

BT understands buyers are looking at prices at least 20 per cent below Q3 2008 levels before they are willing to commit.

URA's non-landed private home price index for Core Central Region (CCR) fell 6.3 per cent quarter-on-quarter in Q4, or a full-year drop of 5.5 per cent. CCR includes the prime districts, financial district and Sentosa Cove. In the Rest of Central Region, the price drop was 5.5 per cent for Q4, and 4 per cent for the full year. Outside Central Region, a proxy for suburban mass-market locations, suffered the smallest declines, of 4.7 per cent in Q4 and 1.6 per cent for the whole year.

The declines in URA's indices were far smaller than the price drops estimated by property consultants. CB Richard Ellis said that last year, average prices of new luxury homes under construction fell 30 to 35 per cent for prime districts 9 and 10, while those in Marina Bay and Sentosa Cove eased 10-13 per cent.

URA's price indices are weighted according to the moving average mix of transactions for the preceding 12 quarters, and this tends to make changes in the indices more muted during sharp market swings.

For this year, JP Morgan analyst Chris Gee said: 'The critical factor that will affect private home prices in 2009 - probably more importantly than the economy and jobs market - will be banks' financing of property. Banks seem happy to lend to the right type of buyers, but they're more conservative on valuations and tighter on loan-to-value.'

As for developers, smaller players have already started to chop prices. 'Among bigger developers, some are restructuring their portfolios and re-evaluating their risk positions,' DTZ's Mrs Ong noted.

A seasoned developer pointed to a diversity of strategies among developers, according to their financial strength, profit margin for each project and their view of when the recovery will take place. 'Some will cut and sell; some will package things that effectively give more discounts; some will lease instead of selling; some will just sit it out and wait for better times.

'Projects will be slowed down or delayed, stretching out the supply coming into the market, which in itself is a regulating mechanism,' he said.

In the public housing segment, the Housing & Development Board's (HDB) resale flat price index still inched up 1.5 per cent quarter-on-quarter in Q4 to scale a new peak. But this was slower than the 4.2 per cent rise posted in Q3.

ERA Asia Pacific associate director Eugene Lim said: 'We've been seeing more transactions with decreasing cash-over-valuations (COVs). The days of transactions with above $50,000 COVs are over.'

He is predicting a sub-1 per cent rise in the HDB resale flat price index for each of Q1 and Q2 this year. 'If the recovery takes longer, we may see the price index flatten in H2 2009 before decreasing, if the situation worsens.'

Knight Frank director Nicholas Mak predicted a 5 to 10 per cent correction in HDB resale flat prices this year, as the weakening economic conditions filter into the HDB market.

ERA's Mr Lim noted that 'in uncertain times, home buyers go for the 'safer' option of HDB flats to ease their financial burden'. He estimated 30,000 to 31,000 HDB resale transactions were done in 2008 - surpassing the 29,436 in 2007.

As for the private housing sector, CBRE predicted developers may sell 5,000-6,000 units in 2009, as falling prices boost take-up. It put the figure for last year at 4,300 to 4,400 units - just 30 per cent of 2007's record volume. Sales also slowed in the secondary market. CBRE estimated about 7,400 to 7,600 resale deals were done last year - against nearly 21,000 transactions in 2007. The 1,600 to 1,650 subsale deals it estimated for 2008 were also a far cry from the 2007's figure of 4,863.  - 2009 January 3   BUSINESS TIMES

20% drop in luxury home prices

Savills Singapore is predicting price drops of more than 20 per cent in the next five quarters for high-end and super-luxury private homes.

This would follow declines of 14.3 per cent and 12 per cent respectively for these two segments in the first nine months of 2008 from the peak in Q4 last year.

The forecast is probably the grimmest announced by a property consultancy here - although some rival firms BT spoke to yesterday said that privately, they have similar estimates.

Research analysts at stockbroking houses/banks have already been making downbeat pronouncements, predicting declines of about 30 per cent or more for luxury home prices byl end-2009.

In its report yesterday, Savills said that the high-end and super luxury segments are more vulnerable to the deteriorating global investment climate. The average capital value for high-end (non-landed) residential homes fell to $2,065 per square foot in Q3 2008, 4.6 per cent lower than the preceding quarter and 14.3 per cent below the Q4 2007 peak of $2,410 psf.

In the super luxury league, the average capital value slipped to $3,240.40 psf in Q3, down 5.2 per cent from the preceding quarter and 12 per cent lower than the Q4 2007 figure.

Savills expects mass- market home prices to fall 5 to 8 per cent in the next five quarters - arguing that a price drop in this segment will be cushioned by continued support from HDB upgraders and other buyers picking up private homes for their own occupation.

The fundamentals of the mid-tier and mass-market segments are stronger today than during the Asian Crisis downturn, partly due to Singapore's more open immigration policy, Savills said.

Permanent residents have accounted for 14.3 per cent of private home purchases (excluding ECs) in the first nine months of this year, up from a 12 per cent share in 2004. PRs are likely to become a strong demand driver in the residential market in the coming months, Savills reckons.

Foreigners (including PRs) had 24.8 per cent share of private home purchases (including ECs) in the first nine months of 2008, down from a 25.9 per cent share for the whole of last year but still ahead of sub-20 per cent shares between 2000 and 2004.

In Q3 2008, a total of 4,287 caveats were lodged for private homes (including ECs), covering both primary and secondary markets - 9 per cent higher than the 3,934 caveats lodged in the preceding quarter.

However, the total value of private homes transacted edged up only slightly to $5.68 billion in Q3 from $5.62 billion in Q2.

'The average value of each unit transacted decreased, as evidenced by the very successful sales at mass market projects such as Livia and Clover by the Park. The proportion of transactions in the luxury and super luxury sectors dropped compared with mass market, as rich investors were more cautious about big-ticket purchases,' said Savills' director of marketing and business development Ku Swee Yong.

The average monthly rental value for high-end non-landed homes tracked by Savills contracted for the second consecutive quarter, slipping 3.6 per cent quarter-on-quarter to $5.62 psf in Q3.

This followed a 1.2 per cent drop in Q2. 'For full- year 2008, we expect prime rents to ease 4 to 6 per cent and fall a further 7 to 13 per cent in 2009,' Mr Ku said.

Tenants may now seek more competitive rentals, softening the market.

'So far, the impact on the local rental market has been limited, despite rents beginning to come off their peaks. The quarters ahead, however, should see a more entrenched rental decline as demand weakens in the face of a global economic slowdown,' Mr Ku said.

Savills also said that 10,923 leasing deals were recorded for private homes (excluding ECs) in the July to September quarter this year, the highest Q3 figure since 2000.

The leasing volume for Q3 2008 was up about 20 per cent from the preceding quarter and 25 per cent above the figure in the same period a year ago.

The strong leasing volume may have been contributed by a seasonally active Q3 that coincides with the opening semester of some international schools, as well as displaced tenants from collective sales completed last year, downgrading from high rental units to more affordable ones, and completion of new projects with attractive facilities and competitive rents.

However, Savills expects rental demand drivers to weaken in coming quarters. Savills' residential leasing head Patrick Lai says: 'The inflow of expats is expected to slow down, although we're still seeing an influx of foreign talent into Singapore, particularly in the healthcare, pharmaceutical, R&D and logistics industries.'   - 2008 November 21   BUSINESS TIMES

Prime property districts' prices show 1st fall in 4 years: DTZ  
Downward pressure may increase as speculators dispose of units, it says

Property prices in the prime districts of District 9, 10 and 11 have registered their first fall in four years and DTZ Debenham Tie Leung believes that this downturn in sentiment could spill over to the non-prime districts.

In an analysis of resale prices based on its own basket of properties, DTZ found that prices of private residential properties in Q2 this year reflected the first correction in the past four years, led by non-landed residential units in the prime districts.

DTZ's basket of properties for prime freehold non-landed resale residential homes include Cairnhill Crest, The Pier at Robertson and Botanic on Lloyd and capital values averaged $1,410 per square foot (psf) in Q2 2008, reflecting a 4.7 per cent quarter-on-quarter (qoq) decline. Capital values had remained at $1,480 psf for the two previous quarters.

While it should be pointed out that luxury home prices have reached new heights in recent years, DTZ said that it also tracks a separate basket of luxury properties which includes premier developments like Ardmore Park.

Outside the prime districts, capital values of freehold and leasehold non-landed resale residential units remained unchanged, averaging $750 psf and $610 psf respectively, holding steady at this level for three consecutive quarters after both sectors registered 7 per cent increases in Q4 last year.

And the outlook for rest of the year is likely to be challenging.

DTZ said that with high inflation compounding the expected economic slowdown globally, prices of private residential properties are set for further corrections.

'Besides smaller developers, some of the bigger developers are also likely to reduce selling prices to move sales especially for developments that have been on the market for some time.'

'In addition, the sub-sale market is expected to be active with speculators disposing their units, especially those who have purchased multiple units on Deferred Payment Schemes and are most likely to dispose some or all units to avoid stretching their financial limits,' it added.

While some speculators may feel that renting remains an option for them, DTZ said that as rentals come under pressure in 2009-2011 due to the surge in new home completions, it is unlikely that speculators will want to hold on to their units for rental income.

DTZ does believe that there was significant wealth creation in the run-up to the recent 'economic boom' of 2006 and last year, and there is 'pent-up demand' from many who have been waiting for an opportune time to buy. 'Take-up will eventually pick up when the market senses that prices have bottomed,' it added.

On the pick-up in sales towards the end of Q2 2008 for 'attractively located and reasonably-priced projects', DTZ's executive director (Residential) Margaret Thean said: 'At the end of the second quarter, we began to witness the return of market confidence and an improved buying sentiment. Some residential projects are enjoying sell-out status while others are being are well-received. This is clearly indicated by the sell-out status of projects such as Suites 123 while Nassim Park, Parc Sophia, Dakota Residences and Clover by the Park received encouraging response.    - 2008 July 2    THE BUSINESS TIMES

Private homes losing speculative froth 
Subsale activity slowed in Q4; rising rents defined 2007

The level of speculative activity in the private property market, as measured by the extent of subsales, slowed considerably in Q4 last year, especially in the Core Central Region (CCR), according to the latest official data.

Islandwide, subsales as a percentage of total private housing sales fell from 14.4 per cent in Q3 last year to 10.7 per cent in Q4, while in the CCR, the hotbed of speculation, the subsale percentage fell from 24.8 per cent to 18.6 per cent over the same period. Property consultants attributed the drop to uncertainty about the financial markets as well as the withdrawal of the deferred payment scheme in October 2007.

Reflecting the current housing shortage, the stock of completed private homes increased by just 1,448 units last year - the smallest rise in at least 12 years. The stock had increased by 4,008 units in 2006, 7,453 units in 2005, and 10,969 units in 2004.

Rents of condos and apartments rose significantly last year - by 42.3 per cent in CCR (comprising the prime districts 9, 10, 11, Downtown Core and Sentosa), an even higher 47 per cent in the Rest of Central Region (RCR), and 41.9 per cent in Outside Central Region (OCR).

'Looking back at 2003/2004, developers were cautious and there were not many housing starts. So three or four years down the road, we're seeing a fall in terms of new home completions,' DTZ executive director Ong Choon Fah explains. 'Of course there have also been a lot of en-bloc sales in the past two years and some of these properties have been demolished,' she adds.

'The situation is even more severe in the prime areas, and we've been seeing a lot of expats fanning out from the prime districts to RCR, to rent private homes, which probably explains why the increase in non-landed rents was steeper in RCR compared to the CCR,' Mrs Ong explains.

With many private residential projects likely to be completed only in late 2008 and 2009, property consultants including Knight Frank managing director Tan Tiong Cheng expect rentals for non-landed properties to increase further this year. The rise could be less steep - perhaps 20 per cent, or around half the rate of increase for last year.

Yesterday's data on the private property market by Urban Redevelopment Authority showed that the overall price index for private homes rose 6.8 per cent in Q4 over the preceding quarter, slower than the 8.3 per cent hike in Q3. For the full year, the index was up 31.2 per cent, three times the 10.2 per cent rise in 2006.

In terms of regions, the price index for non-landed private homes in CCR rose 7.5 per cent in Q4, more measured than the 8.3 per cent gain in Q3. Price indices for RCR and OCR advanced 7.7 per cent and 7 per cent respectively in Q4, slightly more modestly than in Q3.

For the whole of last year, the non-landed home price index for CCR rose 32.7 per cent, while RCR and OCR indices were up 30.4 per cent and 26.4 per cent respectively.

Developers sold a record 14,811 private homes last year, surpassing the previous high in 2006 by 32.9 per cent. They launched a total of 14,016 units in 2007, 26.6 per cent above the 2006 figure and also a new high.

Knight Frank director (research and consultancy) Nicholas Mak predicts that URA's overall private residential property price index will rise at a more sluggish pace - around 10-15 per cent - this year, as buyers become more prudent.

Colliers International director (research and consultancy) Tay Huey Ying reckons that subsales as a percentage of total private homes sales islandwide will continue trending down in the coming months, to average about 8 per cent for the whole year, as the market moves to a 'healthier and more sustainable set of fundamentals'.

Less speculation could also slow the hike in home prices, she says. 'As a result, developers are less likely to bid aggressively for development sites and this will affect the success rates of collective sales,' she adds.

Some seasoned market players are predicting that home prices in CCR could take a hit of up to 10 per cent this year; those in RCR will be flat, perhaps rising slightly; while OCR will post the biggest gains of about 10-15 per cent.

'There's significant supply of projects for launch in CCR, and that will weigh down on prices. Foreign buying will thin because of the financial market turmoil which is hitting high-net-worth bankers and others,' a veteran industry observer suggests.

BT learnt yesterday that the release of the high-profile Marina Bay Suites, which was initially slated for the end of this month, has been delayed till after the Chinese New Year festivities - by which time the Budget should also be announced and hopefully lift sentiment.   - 2008 January 26   SINGAPORE BUSINESS TIMES

Singapore's private home prices rose 6.6% in Q4 08

Singapore private home prices rose at a slower quarterly pace of 6.6 per cent in the last three months of 2007, according to government figures released on Wednesday.

The Urban Redevelopment Authority's price index for private residential property rose 6.6 per cent in the final three months of 2007, slowing from the 8.3 per cent rise in July-September.

In the whole of 2007, private home prices rose 31 per cent.

The Singapore government said in October that developers could no longer sell uncompleted property on a deferred payment scheme in a bid to reduce speculation in the real estate market.

Other recent measures taken by authorities include raising development charges to make it more expensive for companies such as CapitaLand and City Developments to buy out existing condominiums for redevelopment into larger apartment blocks with more units.

A separate index compiled by the Housing Development Board showed resale prices of government-built HDB apartments rose 5.6 per cent in the fourth quarter, slower than the 6.6 per cent quarterly gain in July-September. --  2008 January 2    REUTERS

Home prices feel pull of gravity after 31% rise

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

'With the buoyant economy and expected positive market sentiment in 2008, the HDB property market in Singapore is likely to enjoy a double-digit growth in the 10-11 per cent range,' said Mohamed Ismail, chief executive of property agency PropNex.   - 2008 January 3  SINGAPORE BUSINESS TIMES

• URA's News Release

Good class bungalow prices surge 40% 
Huge wealth creation, high networth PRs cited for hike; smaller gains likely next year

The demand for gracious bungalow living is chugging along quite nicely.

In fact, average prices of Good Class Bungalows (GCBs) are expected to appreciate by about 10 to 15 per cent next year. This appears even more impressive if you consider that this year, they have already climbed by nearly 40 per cent to $710 per square foot of land area.

The expected appreciation could propel the total value of GCB transactions to increase slightly in 2008, although the number of transactions may be slightly lower, Savills Singapore director (Prestige Homes) Steven Ming predicts.

The first 11 months of this year saw a total of 96 GCB transactions adding up to $1.28 billion. The value is an all-time record and has surpassed slightly the $1.24 billion achieved for the whole of last year. However, the number of GCB transactions from January to November this year is still shy of the 118 for the whole of 2006, according to an analysis by Savills Singapore based on caveats data from Urban Redevelopment Authority's Realis system.

'I don't expect the number of GCB transactions to increase next year, because prices have gone up quite rapidly in the past 12 to 15 months. The GCB market is generally restricted to Singaporeans and Permanents Residents with special approval to buy landed homes.

'Some of these potential buyers may have bought GCBs at much lower prices in the past and may take time to adjust to higher prevailing prices now. But having said that, there's been a lot of wealth creation over the past few years as seen in the reasonable number of record prices being set,' Mr Ming said.

Credo Real Estate managing director Karamjit Singh, too, predicts moderate price upside for GCBs for next year, despite forecasting overall flat property prices. 'GCB values will benefit from the enormous wealth created from the economic boom, and the influx of high networth individuals who become permanent residents (PRs), while supply remains scarce,' he adds.

While demand-supply fundamentals remain sound next year for Singapore's real estate sector as a whole, including GCBs, the crucial factor is how the currently-shaky sentiment pans out, Mr Singh said.

Record prices were set for two adjacent bungalows at Nassim Road in the past few months - 32G Nassim Road, which was sold for just under $20 million or $1,504 psf of land in September, followed by 32H Nassim Road in October at an even higher $1,899 psf.

Raffles Education founder and chairman Chew Hua Seng is believed to have picked up 32H Nassim Road, for which he paid $25.5 million. Mr Chew is said to own a few other bungalows nearby.

The prices achieved for 32G and 32H Nassim Road surpassed the previous record for GCBs, of $1,308 psf set only in August this year, when Hong Kong group Wharf (Holdings) sold Glencaird, a conservation bungalow at 15 White House Park, for $28.8 million.

However, market watchers highlight that for the 32G and 32H Nassim Road transactions, each property's land area is just slightly over 1,200 sq metres - lower than the minimum 1,400 sq metres (or 15,070 sq ft) plot size stipulated under Urban Redevelopment Authority guidelines for GCBs. Savills' Mr Ming argues nonetheless that these two properties will be bound by GCB regulations if they were to be redeveloped. This means that they cannot be more than two storeys high, their built-up area is limited to 35 per cent of the total land area, and the plots cannot be subdivided further.

The year has also seen quite a few GCBs being flipped. 21 Cluny Hill was bought for $15 million in January and changed hands again for $20.2 million in June. 46 Mount Echo Park was sold for $10 million in January and again for $12.8 million in March.

'Some savvy bungalow investors with deep pockets, saw value in investing in freehold GCBs earlier this year, when their prices were lagging quite a bit behind those of 99-year bungalows on Sentosa Cove. The gap has since narrowed and these investors have been able to offload their GCB investment for a handsome profit,' Mr Ming said.

Over at Sentosa Cove, seafronting bungalow sites have fetched as much as $1,696 psf this year. These are vacant sites sold by the precinct's master developer, Sentosa Cove Pte Ltd, to buyers to build their dream homes on them.

The supply of completed bungalows for sale in the upscale waterfront housing locale is still limited, but Savills' director of business development and marketing Ku Swee Yong says that owners are asking for $1,800 psf to $2,400 psf depending on the direction they face. 'The main reason for higher bungalow values on Sentosa Cove than in mainland Singapore is because of expedited approval for foreign buyers of landed property on Sentosa Cove. This has been a great draw for those who want to be PRs in Singapore and park a fraction of their wealth here,' Mr Ku said.  - 2007 December 19   SINGAPORE BUSINESS TIMES

The ascent of landed housing
Solid gains await with double-digit price growth and Singapore's scarcity of land

The private residential market has been hogging the headlines in the past 18 months. Overall prices recovered in 2004 and 2005 by 0.9 per cent and 3.9 per cent respectively, and home prices shot up by 10.2 per cent in 2006 and another 13.5 per cent in the first half of 2007, led mostly by the condominium segment of the market.

It has been pretty obvious that non-landed homes have been leading the way in the strengthening residential market, with prices growing from a marginal 1.1 per cent in 2004 to 4.5 per cent in 2005, 11.1 per cent in 2006 and 14.2 per cent in the first six months of 2007 alone, according to numbers from the Urban Redevelopment Authority (URA).

What of landed properties then? Will landed properties match their high-rise counterparts in the price spiral?

Prices of landed homes have risen in line with the rest of the market. (See Table above) From a marginal 0.6 per cent rise in 2004, prices of landed homes grew by 2.4 per cent in 2005, 6.7 per cent in 2006 and 10.1 per cent in the first half of 2007.

A breakdown in price of the different landed property types shows that detached houses have made the most headway over the past year. According to URA numbers, prices of detached houses rose by 12.3 per cent in H1 07, after increasing by 8.1 per cent in 2006.

As for semi-detached and terrace houses, their indices rose by 7.6 per cent and 9.3 per cent respectively in the first half of 2007, from 5.3 per cent and 5.2 per cent respectively in 2006. As detached houses comprise Good Class Bungalows (GCB), the price increases have been more pronounced given the demand for high-end homes.

Based on caveats for GCBs, the average price has risen by an estimated 30 per cent in 2006 and a further 25 per cent in the first half of 2007. Not only are prices registering double-digit growth, it has also been observed that certain GCBs have been sold and resold within 12 to 18 months.

An example of this trend is a GCB at Queen Astrid Park that was sold for $12.5 million in April 2006, only to be resold at $16 million in May and then again in December 2006 for $18 million. This is an increase of 44 per cent in seven months. Another GCB at Nassim Road was first sold for $9.8 million in February 2005 only to be sold another three times for $15 million in August 2006, $18.4 million in December 2006 and $24.2 million in June 2007, an increase of 147 per cent over some 28 months.

Overall, it appears that there are several solid reasons for optimism in the landed housing market, especially in the next 12 months.

As prices of landed property in Singapore have not risen as steeply as their non-landed counterparts, there would generally be some better bargains in the landed market compared with luxury condominiums that have already attained very high benchmarks.

Aside from the GCB market, the comparatively slower rise in prices for landed properties could be viewed more favourably vis-a-vis upper and middle-upper income local home buyers who might have been priced out of the luxury condominium market, especially in the very prime locations.

Secondly, landed housing will always be considered a scarce commodity in the Singaporean landscape. With limited land, landed housing at present comprises 29 per cent of all housing stock throughout the island as at June 2007, or 68,360 units out of 233,143 private homes. Due to its inherent scarcity, landed housing would always be the ultimate goal of Singaporeans, especially since foreigners are not ordinarily allowed to purchase these properties.

With regard to scarcity, landed housing can be an attractive investment property in the near future as a source of regular income. As Singapore welcomes more foreign professionals to its shores, houses for rent could prove to be valuable assets for rental income, especially so for foreign professionals who might be used to living in landed properties back home and are not allowed to purchase similar types of accommodation while working in Singapore.

In the first six months of 2007, URA's rental indices for all the landed property types improved significantly. (See Table 2) During this period, rents of detached houses increased by 13 per cent followed by a 11.4 per cent rise for semi-detached houses and a extraordinary 17.3 per cent jump in rents for terrace houses. Compared with capital values of landed residences, rents have increased much faster.

Examples of recent rental transactions where the increases were evident include a detached house at Woodgrove Estate which was renewed at $15,000 a month, a 25 per cent increase from the previous rent of $12,000 a month. A detached house at Chancery Lane was rented at $16,500 a month, while a semi-detached house at Lim Tai See Walk was rented at $11,000 a month.

From a supply standpoint in the next five years, 1,872 landed units are under construction with another 2,579 landed units planned. Compared with the 28,082 non-landed units under construction and the 35,077 non-landed units that have not started, new supply of landed homes only account for 6.6 per cent of all new supply expected from the second half of 2007 to 2011, making it fairly certain that landed residential homes are going to remain a scarce product for the foreseeable future.

An increase in landed prices of some 20 per cent for the whole of 2007 might very well be on the cards, given an accumulation of the above factors. Demand for landed housing should increase, and prices would follow suit once the home-buying public realises that there are investment, as well as rental income opportunities in landed houses, and that prices have also not risen as much compared with condominiums in the prime areas.

Ultimately though, it will be the fundamental reality that landed housing will always be a scarce product in Singapore's urban landscape that bodes well for this type of housing in the medium to long term.    - 2007 September 27     SINGAPORE BUSINESS TIMES

Q3 may see slowdown in private home sales
But new launches may accelerate activity again, say market watchers

Private home sales are expected to slow this quarter - the result of the twin effects of the US sub-prime woes which made the headlines in August and the just-ended Hungry Ghost month.

But the pace of activity is expected to pick up again as developers step up launches and confidence recovers, say property market watchers.

Fresh price benchmarks may still be set for projects offering compelling propositions, but developers are likely to tread carefully before upping prices.

CB Richard Ellis (CBRE) estimates that the total number of new private homes sold by developers in the primary market during Q3 will be 3,500-4,000 units including sales from ongoing projects. This is lower than the 5,129 units sold in Q2 and 4,783 units transacted in Q1 this year.

Activity also decelerated in the secondary market in Q3. 'Whereas the first and second quarters saw resale volumes of 4,645 units and 6,514 units respectively, it is likely that Q3 figures will be lower, probably in the region of 4,000 to 4,500 units,' CBRE executive director Li Hiaw Ho says.

'Anecdotal evidence suggests that subsale activities have been muted as investors become more cautious,' Mr Li added. Subsales as a percentage of total private housing sales are likely to fall below the 7.4 per cent and 9.7 per cent in Q1 and Q2, he predicts.

Subsales, often used as a gauge of speculative activity, involve projects that have yet to receive a Certificate of Statutory Completion, while resales, which are also secondary-market transactions, cover completed developments.

But the current slowdown in activity is not such a bad thing, says DTZ Debenham Tie Leung executive director Ong Choon Fah.

'The market has been going up quite dramatically. It's good that people step back and evaluate their positions before moving on. This window also creates an opportunity for people to enter the market. When the market is so hot, everytime you put in an offer at the seller's asking price, he raises his price,' she says.

Ong Chong Hua, executive director of Ho Bee Investment, also describes the current slowdown as 'a healthy consolidation after a robust period of growth in sales volumes as well as prices'.

'Activity will start picking up slowly and I think confidence will come back, as developers start launching more projects. Buyers will be cautious but underlying demand is still strong. The share market seems to have consolidated and strong economic fundamentals are still in place for Singapore and the Asian region,' he said.

Among the projects expected to be released soon are MCL Land's Hillcrest Villas cluster terrace homes along Dunearn Road, Ho Bee's Turquoise condo at Sentosa Cove, Bukit Sembawang's Paterson Suites and SC Global's Hilltops in so said to have Cairnhill. CapitaLand is albegun selling Latitude at Jalan Mutiara at around $2,800 per square foot on average.

Projects that are slated for launch in Q4 include Lippo's condo on Sentosa Cove, Ritz-Carlton Residences at Cairnhill, and the second phase of Marina Bay Financial Centre.

Says DTZ's Mrs Ong: 'Sales activity may be slow for the next couple of months, but this will depend on the type of projects launched and their price points. If developers release projects that are targeted at home owners, demand is still very much there. But if they're targeting investors or want to set benchmark prices, buyers will take a longer time to consider.'

Ho Bee's Mr Ong said: 'Developers will definitely be more cautious in moving up prices and trying to set benchmarks all the time. They will test the waters.

'But I don't think anybody will cut prices because fundamentals are still strong. There's still a shortage of homes, with a lot of those who sold their homes in en bloc sales looking for replacement properties.'

CBRE's executive director (residential) Joseph Tan reckons that the market could still see benchmark prices if the right kind of products are offered, such as branded residences.

Looking to the final quarter of 2007, the residential market will remain active as the government's projected economic growth rate of 7 to 8 per cent for 2007 remains on track. 'If developers sell around 3,000 to 4,000 units in Q4, then the total number of new homes sold in 2007 will be a new record of 17,000 to 18,000 units,' CBRE's Mr Li said.

This will be significantly higher than the 11,147 units sold in the primary market last year. -   2007 September 12   SINGAPORE BUSINESS TIMES   by Kalpana Rashiwala

The demand for single family residences seems to be on the increase by foreigners as multinationals expand their presence in the city.

Foreigner home buys hit record in Q1 07

Companies and foreigners upped their share of caveats lodged for private home purchases in the first quarter of this year, according to an analysis of caveats by estate agents DTZ Debenham Tie Leung.

Companies accounted for 8 per cent, or 538 of the total 7,042 caveats lodged for private homes in the first quarter of the year, up from a 6 per cent share in the preceding quarter.

The 538 homes that companies bought in Q1 this year is an increase of 15.2 per cent from the preceding quarter and the highest quarterly figure ever captured by the Urban Redevelopment Authority's Realis caveats data, which go back to Q1 1995.

During the height of the last major bull run in Q2 1996, companies bought 462 private homes while the figure for Q3 1999, a year that saw a short-lived property rally, was 413.

Companies include both entities incorporated in Singapore and overseas and these buyers would include property funds as well as high-net-worth individuals who set up offshore companies to purchase properties for tax or confidentiality reasons, suggests DTZ executive director Ong Choon Fah.

Some of the caveats for private homes lodged by companies are for collective sale deals.

Among the caveats lodged by companies in the first quarter were 35 caveats for Amaryllis Ville, 24 for The Fernhill, 12 for Water Place and 11 for Marina Bay Residences.

Mrs Ong expects corporate buyers like funds to continue growing in importance as private residential property buyers. 'Traditionally, overseas property funds buy offices in Singapore, but with opportunities becoming more limited, they will increasingly turn to the residential sector,' she added.

DTZ's analysis of caveats lodged for private homes captured by the Realis system also shows that foreigners (including permanent residents) snapped up 1,938 private homes in the first three months of this year.

While this is up just marginally from the 1,934 caveats lodged by foreigners in the preceding quarter, it is nonetheless the highest level of foreign purchases in a quarter ever captured by Realis.

Foreigners also upped their share of private home purchases to 27 per cent in Q1 this year, a figure that has been previously surpassed on just one other occasion. That was in Q4 1995, when foreigners accounted for 32 per cent or 1,534 of the total 4,781 caveats lodged for private homes.

DTZ also observed that while the number of private apartments and condos that foreigners bought from developers in the primary market declined 21 per cent quarter-on-quarter to 540 in Q1 2007, the number of apartments/condos foreigners picked up in the secondary or resale market rose 13 per cent to 1,315 over the same period. 'This was the largest number of resale apartments that foreigners purchased in a quarter. Foreigners accounted for a 32 per cent share in overall resale condos/apartments transacted. This trailed only Q4 1995, when the share was 48 per cent,' DTZ said.

'Unlike new projects, private homes in the secondary market are usually ready for lease. This therefore attracts foreign investors who wish to have a share in the current buoyant leasing market. Similarly, resale properties are valued by foreigners who are new in Singapore and require immediate accommodation. There are also some who have received permanent residence and are keen to own residential properties, partly as rents have been rising,' DTZ observed.

Projects that saw a high percentage of caveats lodged by foreign buyers in the secondary market in Q1 included Costa del Sol, Caribbean at Keppel Bay, The Nexus, Cuscaden Residences, Pebble Bay and Leonie Gardens. Districts 10, 9 and 15 were the three most popular locations for foreigners who bought condos and private apartments in the secondary market in Q1.

As for foreigners who purchased condos/apartments directly from developers in the primary market, the three most sought-after districts in Q1 were 9, 10 and 11, followed by 15 and 1.

Tribeca, Residences @ Evelyn, RiverGate, St Regis Residences, Waterfall Gardens and Marina Bay Residences were among the projects that saw a high proportion of foreign buying in the primary market in Q1.

The 540 condos/apartments that foreign buyers purchased from developers in Q1 accounted for 28 per cent of developer sales of non-landed homes during the period.

Indonesians and Malaysians continued to be the largest groups of foreign buyers of overall private homes in Q1 this year, accounting for 21 per cent and 19 per cent respectively of caveats, followed by buyers from India, with a 14 per cent share. Indian nationals picked up 275 private homes in Q1 this year, an increase of 13 per cent from Q4 last year.

Buyers from the United Kingdom were the fourth-largest home buying market in Q1 (9 per cent share) followed by mainland China (5 per cent). Australians lodged caveats for 100 private homes in Q1, up 15 per cent from the preceding quarter. Koreans also continued to increase their investments in private residential properties in Singapore, picking up 96 homes in Q1, reflecting a 30 per cent quarter-on-quarter increase and a 380 per cent year-on-year jump.     - SINGAPORE BUSINESS TIMES   2007 June 5  

Sharpest rise in private home prices in 7 years

Housing prices have made their steepest climb in seven years - and there is no let-up in sight.

According to flash estimates for the first three months of this year from the Urban Redevelopment Authority (URA), private home prices rose from 130.2 points in the fourth quarter of 2006 to 136.2 points in the first quarter of this year, an increase of 4.6 per cent.

This represents the highest quarter-on-quarter increase since the 5.3 per cent seen in the final quarter of 1999.

In line with URA's decision to release more detailed data on the residential market, it also published estimates for price indices for non-landed private residential property in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR).

Its estimates show that the price index in the CCR increased by 5.6 per cent compared to 4.9 per cent in Q4 2006. The index rose 2.9 per cent for the RCR and 2.6 per cent for the OCR, compared with 2.2 per cent and 1.5 per cent in the previous quarter.

CBRE Research executive director Li Hiaw Ho attributed the 'unprecedented high levels' of prices largely to sales of more luxury projects in the first quarter of the year.

Based on CBRE Research's data, sales at new launches will likely exceed 3,500 units in the first quarter. Of these, Mr Li says that between 30-40 per cent could be in the CCR.

Mr Li also highlights several hot spots outside the luxury market that are doing well including Farrer/Holland Road, Meyer/Amber Road and Buona Vista, where he believes new projects are being priced at 50 per cent more than what they would have fetched a year ago.

Colliers International director for research and consultancy Tay Huey Ying reckons that the government's announcement of a potential population increase to 6.5 million has 'boosted market confidence in the RCR and OCR segments'. She concludes that: 'Such a sizeable population target would immediately put the brakes on any concerns over the current excess supply in the market.'

The RCR and OCR segments are still likely to be driven largely by owner-occupiers rather than investors. 'The prospects of the leasing market in the CCR will continue to be brighter than those in the OCR for reasons of proximity to the CBD, shopping and entertainment facilities in Orchard Road and the upcoming integrated resorts,' she said.

As such, the continued high level of collective sales will be an important factor in balancing supply and demand, and property prices.

Savills Singapore director for marketing and business development Ku Swee Yong says that, by his calculations, there will be a net negative supply of some 500 homes this year, based on the 3,500 homes he believes will be lost to collective sales. The figure for net negative supply for 2008 is expected to be higher, he said.

Although foreigners and investors are credited for supporting the luxury market, those 'displaced' by en bloc sales in the CCR could be stimulating other property segments. 'There are people who are panic buying because they have sold their existing homes through en bloc deals,' Mr Ku said, adding: 'If they are willing to downgrade, they should be OK.'

The Housing and Development Board (HDB) resale price index has also increased by 1.2 per cent since the previous quarter from 103.6 to 104.8 points.

Noting that it is the highest increase since the last peak in Q1 2005, PropNex CEO Mohamed Ismail said that choice flats are now being transacted at $5,000-$10,000 above valuation, unheard of just a year ago.

PropNex's data show that demand was for bigger flats - five-room and executive flats. Mr Mohamed says the number of these larger units available is dwindling, and he expects the overall increase in the resale price index to hit 5 per cent for 2007.

ERA Singapore assistant vice-president Eugene Lim also agrees that the 'momentum' in the HDB resale market is driven by larger flats, especially those in mature estates.

In 2006, although overall volume of resale flats fell below 30,000 for the first time in a decade, ERA's data shows that executive flat resale volume of 2,229 units was 9.5 per cent higher than 2005. For five-room flats, the 6,421 units sold was 9.3 per cent higher than 2005.

Mr Lim says that the relaxing of restrictions on subletting HDB flats has not yet had much impact on the public housing market, although he believes the current market is already 'tight'. 'Foreigners living here on a lower budget are finding it difficult to find HDB flats to rent,' he said.    - by Arthur Sim    SINGAPORE BUSINESS TIMES    2007 April 3

Foreigners buy record 4,980 private homes in '06

The number of private homes bought by foreigners, including permanent residents, went up by 39 per cent last year to an all-time high of 4,980, according to the latest caveats analysis by DTZ Debenham Tie Leung.

This increased foreigners' share of total caveats lodged for private homes last year to 23 per cent, up slightly from 22 per cent in 2005 - though still shy of the peak figure of 24 per cent in 1995. These private homes include apartments/condos plus landed properties.

Indonesians accounted for the lion's share or 22 per cent of foreign buyers last year, followed by Malaysians (20 per cent share), Indians (11 per cent) and UK citizens (9 per cent).

The biggest jump in the number of caveats lodged for private homes last year came from Koreans (up 174 per cent), followed by US citizens (an increase of 85 per cent) and Australians (up 53 per cent ), according to DTZ.

Singaporeans' share of private homes bought slipped to 76 per cent in 2006, the second lowest level since 1995, according to DTZ's analysis, which is based on caveats captured by Urban Redevelopment Authority's Realis system. The URA's data on caveats go back to 1995.

The surge in foreign buying of private homes last year was achieved on the back of a 78 per cent jump in the number of condos/apartments they bought in the secondary market to an all-time high of 3,056 units. As a result, foreigners accounted for 28 per cent of all condo/apartment caveats in the secondary market last year, up from a 25 per cent share in 2005.

The secondary or resale market involves the purchase of properties which are not bought directly from developers. This includes subsale transactions (involving projects that have yet to receive a Certificate of Statutory Completion), although the vast majority of secondary market deals are for resales in completed projects that have already received certificates.

'Developments which were recently completed and those which offer attractive rental yields drew strong foreign interest in 2006. These include Ardmore Park, Amaryllis Ville and Grange Residences.

'Besides the prime districts, there were also some areas that were popular with selected foreign communities, such as Indians in the case of District 15 (for example, Pebble Bay and Water Place),' DTZ said in its report. 'Hopes for further price and rental gains drove foreigners' continued interest for resale properties,' it added.

However, in the primary market, the number of apartments/condos that foreigners bought directly from developers dipped 2 per cent to 1,683 units in 2006.

Projects that saw a high proportion of foreign buying from developers in the primary market last year included The Tate Residences at Claymore Road (foreigners accounted for 37 caveats, or 64 per cent of the total 58 caveats lodged for the condo last year) and RiverGate at Martin Road (foreigners accounted for 63 per cent of caveats), The Cosmopolitan (54 per cent), One Jervois (50 per cent), St Regis Residences (46 per cent) and Ritz Residences (44 per cent).  - by Kalpana Rashiwala     SINGAPORE BUSINESS TIMES   21 March 2007

Bungalow sales could exceed $1b in 2006

Savills Singapore predicts that there could be more than a record $1 billion worth of Good Class Bungalow (GCB) transactions this year, up 18 per cent from the $845 million for the whole of 2005.

The property consultancy says that in the next two years the average GCB land price could rise from the present $500-$600 per square foot (psf) to about $800 psf.

Savills director (prestige homes) sees the average GCB land price in prime locations like Nassim, Cluny and Chatsworth rising from about $700 psf to about $1,000 psf over the same time frame. This is in line with Savills' prediction last month that super-luxury condo prices could pass $4,000 psf by 2010.

'Healthy demand, coupled with limited supply and the exclusive lifestyle offered by the GCB market, is likely to encourage prices to move up further,' Savills said in a report yesterday.

Between January and October this year, a total of 94 GCB deals (including GCB land sales) were registered.

While this is still fewer than the 104 deals recorded for the whole of last year, the total transaction value of $985 million in the 10 months has already surpassed the $845 million achieved for the whole of last year, Savills noted.

The average transacted value of a GCB has risen from around $8 million in 2005 to about $10 million in 2006, and Mr Ming predicts the figure will cross the $11 million level next year.

Savills attributes this year's strong price gain to rapid wealth creation, the Singapore growth story and improved market confidence as well as new buyers.

'A GCB has largely been the trophy home of Singaporeans because of prevailing restrictions preventing foreigners from buying them.

'Increasingly, we are hearing that more permanent residents are receiving approvals to buy GCBs, although this group of buyers forms only a small fraction of all GCB transactions.' - SINGAPORE BUSINESS TIMES   December 8, 2006

Districts 1, 4, 9, 10 and 11 expected to make up 52% of total private homes that could be launched next year

Slightly more than half of about 14,700 private homes that could be launched next year will be in the traditional prime districts of 9, 10, 11 and the increasingly popular areas of Marina Bay (District 1) and Sentosa Cove/Harbourfront (District 4), says CB Richard Ellis (CBRE).

This is higher than the estimated 40 per cent share commanded by these five districts out of the estimated total of 10,100 to 10,300 private homes launched this year.

Districts 1, 4, 9, 10 and 11 have recorded some of the most spectacular gains in residential property prices this year.

But some market watchers say the pace of price appreciation in these areas could be dampened by their higher share of launches next year.

At Marina Bay and Sentosa Cove, prices have surged about 40 per cent over the past year, fuelled partly by the 'IR effect'.

In the traditional prime districts, the increase has been lower at 20-30 per cent.

Knight Frank managing director Tan Tiong Cheng says the high proportion of launches in the traditional prime districts of 9, 10 and 11 next year is due to the slew of collective sales in these areas in the past two years.

'So when these sites are redeveloped, these locations will account for a sizeable chunk of new launches,' he said.

Market watchers highlighted one factor that could help offset the dampening effect that new launches could have on prices in districts 1, 4, 9, 10 and 11 - existing stock will shrink over the next 12-18 months as collective sale properties are pulled down for redevelopment.

The price equation also depends on other factors - such as whether en bloc sellers in these districts seek replacement units in the same area or move elsewhere, and also whether the strong wave of foreign buying will continue. But whatever the case, Knight Frank's Mr Tan reckons it may be difficult to escape the fact that more launches in these locations could dampen the rate of price appreciation.

Agreeing, DTZ Debenham Tie Leung's executive director Ong Choon Fah said: 'People will have more alternatives, and they can exercise their choice. However, they may still be willing to pay for a unique development. So prices which new developments will be able to command will increasingly be product-driven, not just location-driven.'

It should also be noted that not all the 14,700 private homes that may be launched next year will in fact be released next year. CBRE reckons the actual figure could be closer to 10,000-12,000 units.

In terms of take-up, CBRE predicts that developers could sell about 8,000-10,000 private homes next year - up from its estimate of 9,200-9,500 for this year.

It also estimates that luxury home prices could rise a further 10-15 per cent next year, after increasing by the same quantum this year.

Islandwide, as measured by the Urban Redevelopment Authority's private home price index, CBRE sees next year's increase at about 5-8 per cent, after this year's 8-9 per cent gain.

CBRE's director (residential project marketing) Joseph Tan says prices will rise next year because land prices have risen by 10-50 per cent and construction costs have gone up substantially.

Key launches in districts 1, 4, 9, 10 and 11 next year will be Keppel Group's Keppel Bay (phase 2), Lippo's condominium at Sentosa Cove, CapitaLand's and Sun Hung Kai's apartment development on the landmark Orchard Turn site and Singapore Press Holdings' freehold condo at Thomson Road.

CBRE's analysis shows that 32 per cent, or around 4,700, of the estimated 14,700 homes that could be launched next year are freehold projects in districts 9, 10 and 11.

Of this figure, the highest concentration will be in the Grange/Paterson area with about 800 units (17 per cent), followed by 650 units (14 per cent) in Devonshire/Leonie Hill.

Then come Kim Seng Rd/River Valley with 640 homes, and Cairnhill/Peck Hay with 630 homes. -  SINGAPORE BUSINESS TIMES     December 13, 2006

Luxury Single Family Residential
Districts 9,10, 11

2007:   A freehold  development on Thomson Road in highly sought-after District 11 has been put up for collective sale by tender - with a price tag of between $62.2 million and $68.2 million. Property firm Credo Real Estate, which is marketing the 47-unit The Albany, said the price includes an estimated development charge of about $170,000.

The site has a land area of 41,700 sq ft and a plot ratio of 2.8 - giving any potential residential project a gross floor area of 116,700 sq ft. This means that the asking price works out to $533-$584 per sq ft per plot ratio (psf ppr).

However, any buyer could also pick up another 12,000-13,000 sq ft of adjoining state land for which the Singapore Land Authority has given its in-principle approval, said Credo. The cost of the state land is estimated at $5.8 million, and the site similarly has a 2.8 plot ratio. Inclusive of the state land, the asking price for the residential site will be effectively lowered to $436-$475 psf ppr.

'This translates into a break-even cost of about $730-$775 psf of potential saleable floor area for the developers,' said Yong Choon Fah, Credo's director.

The maximum building height for both plots of land is 36 storeys. The successful developer could build some 135 units of an average size of about 1,100 sq ft each, Ms Yong said.

Current owners would each walk away with $1.2 million-$1.4 million per unit if the asking price is met - an en-bloc premium of about 60-70 per cent, she said.

The Albany is the first residential site to be put up for collective sale this year.

The site is diagonally opposite Thomson Medical Centre, and is a short distance from Revenue House, the Novena MRT Station, and the Novena Square and United Square shopping malls.

The tender for the site will close at 2.30pm on Feb 1. - SINGAPORE BUSINESS TIMES   January 4,  2007

The lure of prime properties

Hunting for an address in district 9, 10 or 11? With prices falling, there are now more choices in terms of location, size, aesthetics and budget

old postal codes have long been discarded but Singaporeans still think of the prime residential areas as districts 9, 10 and 11. And while the recent property sales have mostly focused on lower-priced apartments outside the prime belt, those hunting for a good address will still have plenty to choose from.

Now, there is the added attraction of a lower price tag for a home anywhere in Cairnhill, Draycott, Orchard, Tanglin, Grange, Paterson, River Valley, Holland, Bukit Timah, Dunearn and Newton (under the new postal codes, these are sectors 22 to 30).

At the peak of the property market in 1996, even when prices ranged between $1,000 and $1,800 psf, nearly 2,300 new apartments in the prime area were sold. This was because several new projects were launched such as Ardmore Park, Duchess Crest and Scotts 28.

Home prices have moderated since then. We estimate that current prices of prime apartments are now some 25-30 per cent lower. While the majority of home buyers used to pay more than $1.5 million for a prime apartment of 1,200 sq ft, they now pay around $1.2 million. In fact, those willing to settle for smaller units need only spend between $700,000 and $1 million.

Last year, prices had moderated to between $750 psf and $1,500 psf and 2,000 new prime properties were sold. Again, take-up was supply-driven as several new projects were launched, namely, Belmond Green, Glentrees, The Paterson, Robertson 100, The Marbella and The Shelford.

However, in the first five months of this year, only 198 new homes in the prime area were sold, largely due to the lack of new project launches. Prices have remained relatively stable since the fourth quarter of last year.

Unlike residential developments in the suburban areas, around 40 per cent of those who buy prime properties are Singaporeans. Foreigners make up another 30 per cent, with the remaining buyers being permanent residents and companies.

Indonesians are key players among the foreigners, accounting for nearly 30 per cent of foreign buyers. Encouraged by the strong interest, a number of local developers even marketed their projects in Jakarta, Medan and Surabaya.

Some of these projects include Belmond Green, Novena Suites and The Paterson. Purchases by other nationalities were less significant and fewer in number.

Expat enclave

These foreign buyers, as well as many local ones, see prime residential property as good investments. These are the most rentable properties since the prime districts are an expatriate enclave.

During the 1996/97 peak, top luxury apartments could command rentals of around $5 per square foot while the average apartments in the prime area were able to fetch around $3.60 psf. For the latter category, the average yield achieved was 3.5 per cent.

In the last five years, rents have moderated downwards due to a gradually shrinking expatriate base and an increase in the supply of rental homes. At present, prime apartment rents average $2.35 psf, for a yield of around 3.1 per cent. Nevertheless, these areas still command the highest rents in Singapore. In the current low interest rate environment, the net returns are higher than leaving money in the bank.

Anyone looking for a home in the prime area right now will have a wide variety to choose from in terms of location, size, aesthetics and budget. Some of the projects are in move-in condition while others are still under construction. Currently, most of the available units are found in Grange/Paterson/Tom linson, Dunearn/Newton, Bukit Timah and Holland Road areas.

As for new projects that are likely to be launched in the coming months, there is a good spread in districts 9, 10 and 11. We expect more new launches in the Cairnhill/Draycott area, as well as in the Penang/Somerset area.

Niche concepts

In the current competitive environment, developers will adopt new and innovative marketing strategies or niche lifestyle concepts to make their projects more appealing.

Recent examples include Glentrees, which featured three garden concepts for its loft, apartment and terrace units; and The Cornwall and Leonie Studio, with studio units targeted at single professionals.

Most of the units would be priced between $800,000 and $1.25 million, a popular price band that suits the budget of today's buyers looking for a unit in the prime area. - by Joeseph Tan   SINGAPORE BUSINESS TIMES     10 Jan, 2003

It's not just rich Indonesians but also high net-worth permanent residents who are eyeing high-end homes in Singapore, going by anecdotal evidence.

The fall in residential prices has made luxury homes here seem more attractive to such buyers, and among the projects they are interested in are Ardmore Park, Grange Residences (costing from $3 million to $4.4 million each), 9 Nassim (above $5 million each) and the townhouses and semi-detached homes at Casabella in Duchess Avenue ($1.9 million to $2.3 million each).

Even recent prime landed property launches like Trevose 12 and Oak Villas have attracted the attention of non-Asian PRs based in Singapore, property agents told BT.

This despite the restrictions on non-Singaporeans buying landed property. PRs can buy landed homes with a maximum plot size of 15,000 sq feet, and only for owner occupation. They also need prior approval from the government.

CB Richard Ellis director (residential) Joseph Tan estimates that about 70 per cent of non-Singaporeans looking for properties here now may be PRs planning to buy a home for owner occupation, while the remaining 30 per cent would be non-resident foreigners eyeing an investment.

When luxury home developer Marco Polo Developments recently sold eight Grange Residences condos at an average price of $1,352 per square foot in a test launch, it discovered that six of the 13 joint buyers for six of these units were Singapore PRs, says the company's CEO and managing director David Lawrence. The remaining two units were bought by single purchasers.

The PRs who bought Grange Residences apartments included a US citizen and two Australians, among others, besides Indonesians. Singaporeans and non-PR Indonesians made up the rest of the buyers.

One reason behind the buyer profile could be Grange Residences' location near the diplomatic missions, said Mr Lawrence.

PRs - including those from Britain and Myanmar - also featured among buyers of the final 13 apartments and one penthouse at Ardmore Park which Marco Polo sold over the past four months.

'There may be a trend of Singapore becoming more attractive to international high-net-worth individuals who tend to become PRs here. These people have the money and this, coupled with the drop in home prices, makes a top-end home in Singapore even more attractive on an international basis,' noted Mr Lawrence.

The average $1,500 psf price tag for the final 13 apartments at Ardmore Park and the eight units at Grange Residences sold recently is just about half that of top-end London homes in locations like Mayfair, Knightsbridge and Belgravia, he pointed out.

Some property agents marketing high-end homes have also sensed greater interest among PRs.

'We see the extra one or two non-Asians walking into showflats for premier properties these days,' said CBRE's Mr Tan. 'Some of them have have done their sums and may think it's better to buy a home than to rent one, if they are planning to live here for the long term,' he suggested.

DTZ Debenham Tie Leung CEO Ho Tian Lam too reported that 'Europeans and Americans working here have lately been dropping by at showflats for high-end landed projects like Trevose 12 and Oak Villas to see if they qualify to buy a unit'. 'They may feel the market has dropped a lot and it's a good time to buy a high-end property,' said Mr Ho. Grange Residences' average pricing of $1,352 psf would seem an attractive price today - against the $2,000 psf Marco Polo had indicated in April 1997.

Mr Lawrence said Marco Polo has withdrawn the four remaining units and plans to do another small release after Chinese New Year, with an official launch of the condo slated around September next year, when the 164-unit freehold project receives Temporary Occupation Permit.

Mr Lawrence acknowledged the high-end property market is 'a little difficult at the moment'. He said government policies here and elsewhere in Asia are currently leaning towards stopping further deflation of property - the principal asset of the middle-class. 'It does not mean prices will zoom up, but the government policy is likely to be one that stabilises property prices and sees a gentle reflation,' he said.  - by Kalpana Rashiwala    Singapore Business Times      October 10, 2002 

• Luxury Condominium
• Singapore Property