A NEW index tracking the property market shows that developers and other industry players remain positive but believe conditions will cool down from the bullish levels seen in recent months.
More developers also believe the slowing global economy and an increased supply of new development land may hit market sentiment over the next six months.
The Real Estate Sentiment Index, which was launched at a seminar yesterday, also points to rising interest rates and an excessive supply of new property launches as market risks. The index has been jointly developed by the Real Estate Developers Association of Singapore (Redas) and the department of real estate at the National University of Singapore (NUS). It is based on data collected in a quarterly survey of Redas members to get a snapshot of market sentiment. The poll started in the first quarter.
The reading for the second quarter stood at 5.9, down from 6.8 in the first quarter. This shows that while industry players are still positive, they expect market conditions to worsen.
With empirical data, it is always about the past, said Dr Yu Shi Ming, head of NUS' department of real estate.
'With the index, we hope that as soon as a policy is announced, we can get a sense of how the industry feels,' he said.
Redas chief executive Steven Choo said that apart from its members, policymakers, banks and other firms may find it useful.
There have been about 70 respondents for the survey each quarter - about 60 per cent are developers and the rest consultants and other industry figures.
About 51 per cent of developers polled for the second quarter expect prices of new launches to rise, compared with 85 per cent in the first quarter. About 68 per cent expect more new units to be launched over the next six months, compared with 83 per cent in the first quarter.
About half of the developers polled feel the level of interest for public and private development land will remain unchanged in the near term. Developers are most concerned with rising land prices, followed by the cost of building materials and labour.
At Redas' seminar yesterday, Rider Levett Bucknall's managing partner, Mr Winston Hauw, said: 'It's good to tender this year as there's more uncertainty next year. We think prices will go up slightly next year.'
Source: Straits Times, 30 Jul 2010
Showing posts with label Market Reports. Show all posts
Showing posts with label Market Reports. Show all posts
Friday, July 30, 2010
Thursday, July 29, 2010
NUS estimates confirm private home prices tapered off in June
(SINGAPORE) Latest flash estimates from National University of Singapore (NUS) confirm what property industry players have already experienced on the ground - a rapid slowdown in the growth of non-landed private home prices in June compared with May.
NUS's overall price index for non-landed homes for June rose 0.3 per cent month on month, compared with month-on-month gains of 2.4 per cent each for May and April.
It was the same story for the sub-index for the Central region, which covers a basket of properties in districts 1-4 and 9-11. It increased 0.7 per cent month on month in June, slower than gains of 2.1 per cent in May and 3.4 per cent in April.
The sub-index for Non-Central region was unchanged in June from the preceding month, after rises of 2.7 per cent in May and 1.7 per cent in April.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
DTZ executive director (consulting) Ong Choon Fah said: 'The latest indices confirm the slowdown in buying momentum felt on the ground in June - because of the school holidays, World Cup and continued uncertainty in the eurozone economies.
'People found no reason to rush and buy a home. Developers have also been holding back launches and the projects they did launch were not priced at the top end of their own target range; so developers have also moderated their own price expectation.'
Since the end of last year, all three NUS indices have appreciated - to the tune of 8.7 per cent for the overall index, 8.2 per cent for Central region and 9.2 per cent for Non-Central region. Based on the latest June flash estimates, NUS's overall SRPI is now 36.3 per cent above the post-financial crisis low in March 2009. Over the same period, the growth for the Central region has been 42.1 per cent and that for the Non-Central region, about 33.3 per cent.
The June flash estimate for Central region is still 3.5 per cent below the pre-crisis high in November 2007. However, for the Non-Central region, the latest index surpassed its respective pre-crisis peak in January 2008 by 11.2 per cent. As a result, the overall SRPI flash estimate for June is 5.7 above its November 2007 high.
Looking ahead, Mrs Ong reckoned the overall and Central region indices are likely to remain flat in July, but the index for the Non-Central region could either be flat or post a marginal increase, supported by high cash-over-valuations in the HDB resale market.
Meanwhile Hong Leong Holdings said yesterday it has sold over 75 per cent of the 468 units available at The Scala, a 99-year condo at Serangoon Avenue 3. The units are sized between 474 and 2,142 sq ft, and sold at an average of $1,150 per square foot. Buyers comprised a good mix of HDB upgraders and investors, with the majority made up of locals.
Source: Business Times, 29 Jul 2010
NUS's overall price index for non-landed homes for June rose 0.3 per cent month on month, compared with month-on-month gains of 2.4 per cent each for May and April.
It was the same story for the sub-index for the Central region, which covers a basket of properties in districts 1-4 and 9-11. It increased 0.7 per cent month on month in June, slower than gains of 2.1 per cent in May and 3.4 per cent in April.
The sub-index for Non-Central region was unchanged in June from the preceding month, after rises of 2.7 per cent in May and 1.7 per cent in April.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
DTZ executive director (consulting) Ong Choon Fah said: 'The latest indices confirm the slowdown in buying momentum felt on the ground in June - because of the school holidays, World Cup and continued uncertainty in the eurozone economies.
'People found no reason to rush and buy a home. Developers have also been holding back launches and the projects they did launch were not priced at the top end of their own target range; so developers have also moderated their own price expectation.'
Since the end of last year, all three NUS indices have appreciated - to the tune of 8.7 per cent for the overall index, 8.2 per cent for Central region and 9.2 per cent for Non-Central region. Based on the latest June flash estimates, NUS's overall SRPI is now 36.3 per cent above the post-financial crisis low in March 2009. Over the same period, the growth for the Central region has been 42.1 per cent and that for the Non-Central region, about 33.3 per cent.
The June flash estimate for Central region is still 3.5 per cent below the pre-crisis high in November 2007. However, for the Non-Central region, the latest index surpassed its respective pre-crisis peak in January 2008 by 11.2 per cent. As a result, the overall SRPI flash estimate for June is 5.7 above its November 2007 high.
Looking ahead, Mrs Ong reckoned the overall and Central region indices are likely to remain flat in July, but the index for the Non-Central region could either be flat or post a marginal increase, supported by high cash-over-valuations in the HDB resale market.
Meanwhile Hong Leong Holdings said yesterday it has sold over 75 per cent of the 468 units available at The Scala, a 99-year condo at Serangoon Avenue 3. The units are sized between 474 and 2,142 sq ft, and sold at an average of $1,150 per square foot. Buyers comprised a good mix of HDB upgraders and investors, with the majority made up of locals.
Source: Business Times, 29 Jul 2010
Real estate gets a new gauge of market pulse
New industry-backed index to measure sentiment shows mood has sobered slightly
(SINGAPORE) In a historic move, the Real Estate Developers' Association of Singapore has teamed up with the National University of Singapore's Department of Real Estate (DRE) to develop a Real Estate Sentiment Index (RESI), and it shows a lower reading for the second quarter of this year than for the first quarter.
Developers and industry players continue to express positive sentiments but expect market conditions to be less robust, Redas and DRE said.
More respondents were still positive (rather than negative) on the overall performance of the prime and suburban private residential markets over the next six months but the consensus as indicated by net balances weakened in the second quarter compared with the first quarter.
On the other hand, the net balance for offices improved substantially, in tandem with improving sentiment in this segment in April-June.
The survey also found that 51 per cent of developers polled for Q2 expect price growth for new residential launches, down from 85 per cent in Q1.
About 68 per cent of developers surveyed in Q2 expect more units to be launched over the next six months, down from 83 per cent in the Jan-March period.
The findings of the survey will be officially released this morning at the Redas Property Prospects Update 2010 seminar at Orchard Hotel.
Some market watchers welcomed Redas efforts in coming up with an objective method of gauging the confidence level of senior executives of property developers - and making it public. 'It's good to hear from the horse's mouth,' said DTZ executive director Ong Choon Fah.
Redas CEO Steven Choo noted that 'while business expectation surveys are available for the manufacturing and service industries, there is currently no indicator specifically tracking sentiment in the fast-paced real estate market of Singapore'.
Some industry watchers also pointed to the refreshing change at Redas. 'Previously, something like this, showing a slowdown in sentiment, would have been considered extremely sensitive and developers may have tried to hide it. Now they're more open about it,' said an observer.
Mrs Ong said: 'Releasing the RESI shows just how far Redas has come. It reflects the maturity of the property market and stakeholders. It's important to give the true market signals to all stakeholders - including home buyers and government - if we're going to have a sustainable property market based on sound fundamentals.'
Redas and DRE developed the quarterly structured-questionnaire survey, which is conducted among senior executives of Redas member firms - mostly developers but also property consultants, architects, quantity surveyors and other professionals.
Dr Choo, who assumed the post of Redas CEO nearly a year ago, says: 'The partnership between NUS and Redas has ensured academic rigour and added credibility to the new index. We are confident that in time, RESI will become an authoritative index and a highly-valued forward indicator for the property market, as well as an invaluable tool to guide the market and industry players, including investors and policymakers.'
Redas received about 70 responses for each of the Q1 and Q2 surveys - from largely the same people.
The survey measures respondents' perceptions of current market conditions/ performance (now, compared with six months ago) and future expectations (over the next six months).
The RESI comprises three indices. The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 7.2 in Q1 to 5.8 in Q2. The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 6.4 to 5.9.
As a result, the Composite Sentiment Index, which is the average of the two indices, declined from 6.8 in Q1 to 5.9 in Q2.
The index ranges from 0 to 10, with a score below 5 indicating deteriorating market conditions. A score above 5 shows improving market conditions. The Q2 score shows that developers and industry players continue to express positive sentiments and expect market conditions to remain favourable, but less robust than before.
Source: Business Times, 29 Jul 2010
(SINGAPORE) In a historic move, the Real Estate Developers' Association of Singapore has teamed up with the National University of Singapore's Department of Real Estate (DRE) to develop a Real Estate Sentiment Index (RESI), and it shows a lower reading for the second quarter of this year than for the first quarter.
Developers and industry players continue to express positive sentiments but expect market conditions to be less robust, Redas and DRE said.
More respondents were still positive (rather than negative) on the overall performance of the prime and suburban private residential markets over the next six months but the consensus as indicated by net balances weakened in the second quarter compared with the first quarter.
On the other hand, the net balance for offices improved substantially, in tandem with improving sentiment in this segment in April-June.
The survey also found that 51 per cent of developers polled for Q2 expect price growth for new residential launches, down from 85 per cent in Q1.
About 68 per cent of developers surveyed in Q2 expect more units to be launched over the next six months, down from 83 per cent in the Jan-March period.
The findings of the survey will be officially released this morning at the Redas Property Prospects Update 2010 seminar at Orchard Hotel.
Some market watchers welcomed Redas efforts in coming up with an objective method of gauging the confidence level of senior executives of property developers - and making it public. 'It's good to hear from the horse's mouth,' said DTZ executive director Ong Choon Fah.
Redas CEO Steven Choo noted that 'while business expectation surveys are available for the manufacturing and service industries, there is currently no indicator specifically tracking sentiment in the fast-paced real estate market of Singapore'.
Some industry watchers also pointed to the refreshing change at Redas. 'Previously, something like this, showing a slowdown in sentiment, would have been considered extremely sensitive and developers may have tried to hide it. Now they're more open about it,' said an observer.
Mrs Ong said: 'Releasing the RESI shows just how far Redas has come. It reflects the maturity of the property market and stakeholders. It's important to give the true market signals to all stakeholders - including home buyers and government - if we're going to have a sustainable property market based on sound fundamentals.'
Redas and DRE developed the quarterly structured-questionnaire survey, which is conducted among senior executives of Redas member firms - mostly developers but also property consultants, architects, quantity surveyors and other professionals.
Dr Choo, who assumed the post of Redas CEO nearly a year ago, says: 'The partnership between NUS and Redas has ensured academic rigour and added credibility to the new index. We are confident that in time, RESI will become an authoritative index and a highly-valued forward indicator for the property market, as well as an invaluable tool to guide the market and industry players, including investors and policymakers.'
Redas received about 70 responses for each of the Q1 and Q2 surveys - from largely the same people.
The survey measures respondents' perceptions of current market conditions/ performance (now, compared with six months ago) and future expectations (over the next six months).
The RESI comprises three indices. The Current Sentiment Index, where respondents are asked to rate overall Singapore real estate market conditions now compared with six months ago, fell from 7.2 in Q1 to 5.8 in Q2. The Future Sentiment Index, where respondents rate overall property market conditions over the next six months, also slipped from 6.4 to 5.9.
As a result, the Composite Sentiment Index, which is the average of the two indices, declined from 6.8 in Q1 to 5.9 in Q2.
The index ranges from 0 to 10, with a score below 5 indicating deteriorating market conditions. A score above 5 shows improving market conditions. The Q2 score shows that developers and industry players continue to express positive sentiments and expect market conditions to remain favourable, but less robust than before.
Source: Business Times, 29 Jul 2010
Sunday, July 18, 2010
Home Run
A large number of new properties are set to be launched in the next six to 12 months. The Sunday Times looks at what savvy buyers should look out for.
Sovereign debt crises may have hobbled property markets elsewhere, but not here it seems.
Buoyed by Singapore’s strong economic recovery, optimism has staged a vigorous comeback, with property developers set to launch at least 3,500 new homes by year-end on top of about 8,500 they have already released so far this year.
This will result in an estimated total of between 12,000 and 14,000 new units this year.
And the supply of available building land shows no sign of drying up: 31 residential sites will be up for grabs from the Government Land Sales (GLS) programme in the second half of this year.
In the years ahead, new residential enclaves are predicted to emerge with the completion of the Circle Line, boosting once sleepy areas such as Paya Lebar, Mountbatten and Dakota.
Up, up and away
Analysts say that despite the uncertainty triggered by eurozone sovereign debt issues, overall buying interest here remains positive – especially in mass-market and mid-tier projects.
Although the overall upbeat sentiment has dipped slightly of late, with lower volume and slower price increases, the residential market looks set to remain largely strong given the strength of the economic rebound.
The Government forecasts a stunning 13 to 15 per cent growth in gross domestic product (GDP) this year, up sharply from an earlier prediction of 7 to 9 per cent, due mainly to the huge recent surge in manufacturing.
DTZ South-east Asia research head Chua Chor Hoon is upbeat about the market. ‘There is still buying interest and more new developments are being planned for launch in the coming months. If they are well taken up, that would motivate more developers to launch other projects and stimulate more buyer interest,’ she said.
Knight Frank manager of consultancy and research Ong Kah Seng is slightly more cautious about prospects, but still thinks the outlook is good.
‘Buyers are likely to rethink about rushing into home purchases and adopt a wait-and-see attitude… However, although sales will moderate, it is still reflective of a healthy residential market.’
Against this broadly bullish backdrop, prices have continued to climb ever higher.
Official estimates show they rose a higher-than-expected 5.2 per cent in the second quarter of this year after a 5.6 per cent jump in the first.
Prices are now 1.5 per cent above their peak in the second quarter of 1996.
And property experts are pencilling in price increases for the full year of between 12 per cent and 20 per cent, with the average estimate at about 15 per cent.
CB Richard Ellis (CBRE) residential director Joseph Tan thinks that because economic fundamentals ‘are still intact’, home prices will increase slightly in the second half of the year.
‘Projects which are well located and are close to main transport nodes could still enjoy a slight premium,’ he added.
Prime pickings
With developers looking to make the most of this positive market, Knight Frank is anticipating another 17 major launches (of at least 50 units each) within the next six months – a total of 4,056 apartments added to the market.
Upscale residences in districts 9, 10 and 11 are likely to make up almost half of these major launches, but a surge of mid and mass-market developments is slated from next year onwards as GLS land sites situated mainly outside the central regions are released, Mr Ong said.
CBRE notes that 38 apartment launches – inclusive of small to mid-size projects – are likely within the next six months.
Of these, 22 are located in the core central region, 10 in the rest of the central region and six outside the central region – allowing home buyers to cherry pick according to their budgets.
They range from Allgreen Properties’ prime 360-unit Skysuites @ Anson in Enggor Street to the mass market 408-unit executive condominium project in Yishun Avenue 10 by MCC Land.
In addition, experts say that prime developments are beginning to appear in numbers on the horizon as developers scent rising prices.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said developers may have held back many of their high-end launch-ready projects, some of which were prime freehold sites from the ‘en bloc’ fever three years ago.
‘Some developers may have decided that high-end prices may take even longer to reach their desired levels. Given that there are still risks ahead, they may decide to make the best of an uncertain situation and launch within the next few weeks and months,’ he added.
A buyer’s spread
With 15 residential sites sold through the GLS programme in the first half of this year (four of which were executive condominiums) – and more than double that number planned for the second half – the property pipeline shows no sign of drying up.
Mass and mid-market homes are likely to be launched on these sites in areas such as Simei Street 3 and Hougang Avenue 2 as the Government attempts to dampen demand.
The plots are certainly being snapped up by developers eager to replenish their land banks and willing to pay top dollar for well-located plots.
A 99-year leasehold residential site at Simei Street was released for tender in March received a total of 18 bids, with the top bid at $152.7 million or $523 psf per plot ratio (ppr) coming from developer Chip Eng Seng. This was well above market expectations of between $300 and $400 psf ppr.
UOB Kay Hian property analyst Vikrant Pandey estimates the break-even price for the site to be in the range of $800 to $850 psf and, assuming a 15 per cent development margin, the average selling price to upwards of $970 psf.
‘Resale prices for the secondary market projects in the vicinity are in the range of $600 to $800 psf. The top bid is quite aggressive, factoring in a 20 to 30 per cent future price appreciation in the region,’ he said.
Similarly, the hotly contested tender of a choice residential plot in Boon Lay Way next to Lakeside MRT station attracted a whopping 14 bids in May, with Keppel Land (Mayfair) putting in the top bid of $499 psf ppr, or $302.98 million.
Property experts estimate the break-even level for units on the site will be $800 to $850 psf, with an eventual selling price of about $950 psf – which factors in a 10 to 20 per cent future rise in prices within the next year.
DTZ’s Ms Chua said that developers were already inching up prices at new projects, with many recent launches being priced higher than neighbouring projects.
However, the bumper release of 31 residential sites by the GLS programme in the second half of this year could dampen some of the exuberance in the market, moderating mass market prices.
There are 18 residential or residential/commercial sites on the programme for confirmed sale, with another 13 sites for residential use put on the reserve list.
The plots – which include 20 that are new and not rolled over – could accommodate 13,905 new homes and are anticipated for launch next year.
They are located in areas such as Jurong West and Pasir Ris but also in mass-market areas like Hougang and Tampines.
The sites commanding the most attention are, predictably, those with the best locations and amenities.
CBRE’s Mr Tan said sites with better amenities and close to MRT stations will generally attract more interest from developers. And mixed-use sites located at the town centre of HDB estates are likely to be vied for.
One of the most attractive sites is the land parcel at the junction of Woodland Avenue 1 and Woodgrove Avenue, he said, which is located within the American expatriate enclave and close to the Singapore American School.
Mr Tan pointed out that condominiums and landed homes in the nearby Woodgrove Estate were enjoying strong rentals, and the last condominium project launched in this location – Rosewood Suites in November 2008 – was fully sold.
Elsewhere, the commercial- cum-residential site in New Upper Changi Road and Bedok North Drive is expected to attract strong bidding, given that it will be the first comprehensive development in Bedok New Town and comprise a retail mall, residential units and a bus interchange.
Knight Frank’s Mr Ong added that close proximity to existing and upcoming MRT sites could well drive prices higher at a number of new plots.
These include the Alexandra Road site, the Tanah Merah Kechil site – near existing condos East Meadows and Optima@Tanah Merah – and the Petir site next to City Developments’ recently launched 429-unit Tree House.
Chesterton’s Mr Tan said: ‘The fact that there are still en bloc transactions taking place – most of which are in the suburbs – indicates that developers will still bid for land.’
However, with economists predicting a slowdown in growth in the second half of this year due to concerns over the European debt crisis and the bumper supply of land released, some analysts are less bullish.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that with an average of three tenders a month, developers were both limited in their budget and manpower resources.
‘We might see the level of interest in GLS sites drop towards the end of this year… If signs of economic uncertainty re-emerge and if companies start putting their expansion plans on the backburner, developers might start bidding more cautiously,’ he said.
Source: Sunday Times, 18 Jul 2010
Sovereign debt crises may have hobbled property markets elsewhere, but not here it seems.
Buoyed by Singapore’s strong economic recovery, optimism has staged a vigorous comeback, with property developers set to launch at least 3,500 new homes by year-end on top of about 8,500 they have already released so far this year.
This will result in an estimated total of between 12,000 and 14,000 new units this year.
And the supply of available building land shows no sign of drying up: 31 residential sites will be up for grabs from the Government Land Sales (GLS) programme in the second half of this year.
In the years ahead, new residential enclaves are predicted to emerge with the completion of the Circle Line, boosting once sleepy areas such as Paya Lebar, Mountbatten and Dakota.
Up, up and away
Analysts say that despite the uncertainty triggered by eurozone sovereign debt issues, overall buying interest here remains positive – especially in mass-market and mid-tier projects.
Although the overall upbeat sentiment has dipped slightly of late, with lower volume and slower price increases, the residential market looks set to remain largely strong given the strength of the economic rebound.
The Government forecasts a stunning 13 to 15 per cent growth in gross domestic product (GDP) this year, up sharply from an earlier prediction of 7 to 9 per cent, due mainly to the huge recent surge in manufacturing.
DTZ South-east Asia research head Chua Chor Hoon is upbeat about the market. ‘There is still buying interest and more new developments are being planned for launch in the coming months. If they are well taken up, that would motivate more developers to launch other projects and stimulate more buyer interest,’ she said.
Knight Frank manager of consultancy and research Ong Kah Seng is slightly more cautious about prospects, but still thinks the outlook is good.
‘Buyers are likely to rethink about rushing into home purchases and adopt a wait-and-see attitude… However, although sales will moderate, it is still reflective of a healthy residential market.’
Against this broadly bullish backdrop, prices have continued to climb ever higher.
Official estimates show they rose a higher-than-expected 5.2 per cent in the second quarter of this year after a 5.6 per cent jump in the first.
Prices are now 1.5 per cent above their peak in the second quarter of 1996.
And property experts are pencilling in price increases for the full year of between 12 per cent and 20 per cent, with the average estimate at about 15 per cent.
CB Richard Ellis (CBRE) residential director Joseph Tan thinks that because economic fundamentals ‘are still intact’, home prices will increase slightly in the second half of the year.
‘Projects which are well located and are close to main transport nodes could still enjoy a slight premium,’ he added.
Prime pickings
With developers looking to make the most of this positive market, Knight Frank is anticipating another 17 major launches (of at least 50 units each) within the next six months – a total of 4,056 apartments added to the market.
Upscale residences in districts 9, 10 and 11 are likely to make up almost half of these major launches, but a surge of mid and mass-market developments is slated from next year onwards as GLS land sites situated mainly outside the central regions are released, Mr Ong said.
CBRE notes that 38 apartment launches – inclusive of small to mid-size projects – are likely within the next six months.
Of these, 22 are located in the core central region, 10 in the rest of the central region and six outside the central region – allowing home buyers to cherry pick according to their budgets.
They range from Allgreen Properties’ prime 360-unit Skysuites @ Anson in Enggor Street to the mass market 408-unit executive condominium project in Yishun Avenue 10 by MCC Land.
In addition, experts say that prime developments are beginning to appear in numbers on the horizon as developers scent rising prices.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said developers may have held back many of their high-end launch-ready projects, some of which were prime freehold sites from the ‘en bloc’ fever three years ago.
‘Some developers may have decided that high-end prices may take even longer to reach their desired levels. Given that there are still risks ahead, they may decide to make the best of an uncertain situation and launch within the next few weeks and months,’ he added.
A buyer’s spread
With 15 residential sites sold through the GLS programme in the first half of this year (four of which were executive condominiums) – and more than double that number planned for the second half – the property pipeline shows no sign of drying up.
Mass and mid-market homes are likely to be launched on these sites in areas such as Simei Street 3 and Hougang Avenue 2 as the Government attempts to dampen demand.
The plots are certainly being snapped up by developers eager to replenish their land banks and willing to pay top dollar for well-located plots.
A 99-year leasehold residential site at Simei Street was released for tender in March received a total of 18 bids, with the top bid at $152.7 million or $523 psf per plot ratio (ppr) coming from developer Chip Eng Seng. This was well above market expectations of between $300 and $400 psf ppr.
UOB Kay Hian property analyst Vikrant Pandey estimates the break-even price for the site to be in the range of $800 to $850 psf and, assuming a 15 per cent development margin, the average selling price to upwards of $970 psf.
‘Resale prices for the secondary market projects in the vicinity are in the range of $600 to $800 psf. The top bid is quite aggressive, factoring in a 20 to 30 per cent future price appreciation in the region,’ he said.
Similarly, the hotly contested tender of a choice residential plot in Boon Lay Way next to Lakeside MRT station attracted a whopping 14 bids in May, with Keppel Land (Mayfair) putting in the top bid of $499 psf ppr, or $302.98 million.
Property experts estimate the break-even level for units on the site will be $800 to $850 psf, with an eventual selling price of about $950 psf – which factors in a 10 to 20 per cent future rise in prices within the next year.
DTZ’s Ms Chua said that developers were already inching up prices at new projects, with many recent launches being priced higher than neighbouring projects.
However, the bumper release of 31 residential sites by the GLS programme in the second half of this year could dampen some of the exuberance in the market, moderating mass market prices.
There are 18 residential or residential/commercial sites on the programme for confirmed sale, with another 13 sites for residential use put on the reserve list.
The plots – which include 20 that are new and not rolled over – could accommodate 13,905 new homes and are anticipated for launch next year.
They are located in areas such as Jurong West and Pasir Ris but also in mass-market areas like Hougang and Tampines.
The sites commanding the most attention are, predictably, those with the best locations and amenities.
CBRE’s Mr Tan said sites with better amenities and close to MRT stations will generally attract more interest from developers. And mixed-use sites located at the town centre of HDB estates are likely to be vied for.
One of the most attractive sites is the land parcel at the junction of Woodland Avenue 1 and Woodgrove Avenue, he said, which is located within the American expatriate enclave and close to the Singapore American School.
Mr Tan pointed out that condominiums and landed homes in the nearby Woodgrove Estate were enjoying strong rentals, and the last condominium project launched in this location – Rosewood Suites in November 2008 – was fully sold.
Elsewhere, the commercial- cum-residential site in New Upper Changi Road and Bedok North Drive is expected to attract strong bidding, given that it will be the first comprehensive development in Bedok New Town and comprise a retail mall, residential units and a bus interchange.
Knight Frank’s Mr Ong added that close proximity to existing and upcoming MRT sites could well drive prices higher at a number of new plots.
These include the Alexandra Road site, the Tanah Merah Kechil site – near existing condos East Meadows and Optima@Tanah Merah – and the Petir site next to City Developments’ recently launched 429-unit Tree House.
Chesterton’s Mr Tan said: ‘The fact that there are still en bloc transactions taking place – most of which are in the suburbs – indicates that developers will still bid for land.’
However, with economists predicting a slowdown in growth in the second half of this year due to concerns over the European debt crisis and the bumper supply of land released, some analysts are less bullish.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that with an average of three tenders a month, developers were both limited in their budget and manpower resources.
‘We might see the level of interest in GLS sites drop towards the end of this year… If signs of economic uncertainty re-emerge and if companies start putting their expansion plans on the backburner, developers might start bidding more cautiously,’ he said.
Source: Sunday Times, 18 Jul 2010
Monday, July 5, 2010
Private residential market continues to rise in Q2
Property consultancy Jones Lang LaSalle said residential capital values in the resale market for the private condominiums continued to rise on the back of encouraging sales volume in the second quarter of this year.
The firm said estimates showed that the prime and central capital values led the way in the quarter’s growth by registering 8 per cent and 7.6 per cent on average.
The prime market saw average capital value for typical prime properties reaching $1,350 per square foot, surpassing the last peak for the first time.
Average capital value for luxury prime properties reached $2,500 per square foot, which is some 8.4 per cent below the last peak.
The growth has also been supported by an improvement in rental income.
Prime rentals have grown by 10.8 per cent on average, over the first half of this year.
Jones Lang LaSalle said this is supported by increased leasing demand from expatriates in the financial and petrochemical sectors.
In terms of sales volume, 3,127 caveats were lodged in the resale market in Q2 based on preliminary figures from the Urban Redevelopment Authority.
Jones Lang LaSalle noted that Chinese buyers are the most resilient amidst softening foreign demand due to uncertainties arising from the eurozone debt crisis.
It said Chinese buyers accounted for 18.5 per cent of caveats lodged by foreigners in the secondary market in the second quarter of 2010, up from 6.2 per cent in the first quarter of 2007.
It added that high net worth individuals from China may turn to Singapore as luxurious home prices are around 24 per cent below that of Hong Kong and 10 per cent below the last peak.
This makes Singapore properties comparatively more attractive.
But Jones Lang LaSalle’s head of Research for Southeast Asia, Dr Chua Yang Liang said the resale market is expected to see a further slowdown in both transactional volume and price growth in the next half of the year, following cues from the primary market, which has seen fewer project launches and lower sales volume in recent months.
Source: Channel News Asia, 5 Jul 2010
The firm said estimates showed that the prime and central capital values led the way in the quarter’s growth by registering 8 per cent and 7.6 per cent on average.
The prime market saw average capital value for typical prime properties reaching $1,350 per square foot, surpassing the last peak for the first time.
Average capital value for luxury prime properties reached $2,500 per square foot, which is some 8.4 per cent below the last peak.
The growth has also been supported by an improvement in rental income.
Prime rentals have grown by 10.8 per cent on average, over the first half of this year.
Jones Lang LaSalle said this is supported by increased leasing demand from expatriates in the financial and petrochemical sectors.
In terms of sales volume, 3,127 caveats were lodged in the resale market in Q2 based on preliminary figures from the Urban Redevelopment Authority.
Jones Lang LaSalle noted that Chinese buyers are the most resilient amidst softening foreign demand due to uncertainties arising from the eurozone debt crisis.
It said Chinese buyers accounted for 18.5 per cent of caveats lodged by foreigners in the secondary market in the second quarter of 2010, up from 6.2 per cent in the first quarter of 2007.
It added that high net worth individuals from China may turn to Singapore as luxurious home prices are around 24 per cent below that of Hong Kong and 10 per cent below the last peak.
This makes Singapore properties comparatively more attractive.
But Jones Lang LaSalle’s head of Research for Southeast Asia, Dr Chua Yang Liang said the resale market is expected to see a further slowdown in both transactional volume and price growth in the next half of the year, following cues from the primary market, which has seen fewer project launches and lower sales volume in recent months.
Source: Channel News Asia, 5 Jul 2010
Thursday, July 1, 2010
HDB resale prices climb 3.8% in Q2
Prices of resale HDB flats went up for the fifth consecutive quarter to surpass the 1996 peak by nearly 18%.
HDB’s flash estimate for the second quarter showed the Resale Price Index (RPI) rise 3.8% on-quarter to 160.9, surpassing the 1996 peak of 136.9 points.
Some analysts said the second quarter tends to see the strongest activity as many home buyers leave their flat purchases till after the Lunar New Year.
But others didn’t expect resale prices to rise so quickly, because of the government’s aggressive launch of new flats this year.
The government on Wednesday announced its single largest launch of HDB flats and said if demand continues it will add more units for sale, bringing the total to 16,000 for the whole of this year.
Analysts said this will help assure home buyers there are enough flats to go around, and will in the long-term, moderate prices of resale flats.
But over the next few months, they do not expect any let-up either in resale demand or price.
Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said: “In the HDB market, although the slowdown might be more in terms of the Cash Over Valuation, or the seller’s expectations, the buyers, I think, are fairly bullish because in a way, the HDB public housing market forms the very base, the cheapest form of housing to anyone in Singapore.”
Furthermore, analysts said mass market condominiums are still out of the reach of most buyers.
Despite a slowdown in sales in recent months, private home prices have remained firm, increasing at 5.2 percent in the second quarter.
This is slightly smaller than the 5.6 percent rise in the first three months of this year.
It is also one of the smallest rate of increases in the last 12 months.
ERA Asia Pacific’s Associate Director Eugene Lim added that developers “are not likely to cut prices to move sales, as most of them have strong balance sheets.”
Chris Koh, Director of Dennis Wee Group, estimated that private home transactions have gone down by about 20 percent in recent months.
He said: “You speak to some of us who do private property transactions, we will tell you, yeah, the market is correcting a bit.
“We’re not seeing a steep rise in prices anymore for the private market. Instead private property prices have only inched one, two percent up and you can see that it’s more or less starting to plateau out.
“If that happens maybe the HDB market will mirror it….but at the moment I’m not seeing that in the HDB market yet.”
Overall, market watchers expect resale prices for 2010 to increase by 8 to 15 percent.
On Thursday, the government announced three more land parcels for sale, which could yield about 1,300 residential units, including 460 Executive Condominium flats.
The Urban Redevelopment Authority will also launch another three sites later this month, which will include sites for residential purposes.
In total, the Government Land Sales (GLS) Programme for the second half of 2010 comprises 27 residential sites and four mixed-use sites where private residential housing can be built.
The total potential supply of 13,905 private residential units is the highest potential supply quantum from any half yearly GLS Programme since the Confirmed List/Reserve List system started in the second half of 2001.
Source: Channel News Asia, 1 Jul 2010
HDB’s flash estimate for the second quarter showed the Resale Price Index (RPI) rise 3.8% on-quarter to 160.9, surpassing the 1996 peak of 136.9 points.
Some analysts said the second quarter tends to see the strongest activity as many home buyers leave their flat purchases till after the Lunar New Year.
But others didn’t expect resale prices to rise so quickly, because of the government’s aggressive launch of new flats this year.
The government on Wednesday announced its single largest launch of HDB flats and said if demand continues it will add more units for sale, bringing the total to 16,000 for the whole of this year.
Analysts said this will help assure home buyers there are enough flats to go around, and will in the long-term, moderate prices of resale flats.
But over the next few months, they do not expect any let-up either in resale demand or price.
Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said: “In the HDB market, although the slowdown might be more in terms of the Cash Over Valuation, or the seller’s expectations, the buyers, I think, are fairly bullish because in a way, the HDB public housing market forms the very base, the cheapest form of housing to anyone in Singapore.”
Furthermore, analysts said mass market condominiums are still out of the reach of most buyers.
Despite a slowdown in sales in recent months, private home prices have remained firm, increasing at 5.2 percent in the second quarter.
This is slightly smaller than the 5.6 percent rise in the first three months of this year.
It is also one of the smallest rate of increases in the last 12 months.
ERA Asia Pacific’s Associate Director Eugene Lim added that developers “are not likely to cut prices to move sales, as most of them have strong balance sheets.”
Chris Koh, Director of Dennis Wee Group, estimated that private home transactions have gone down by about 20 percent in recent months.
He said: “You speak to some of us who do private property transactions, we will tell you, yeah, the market is correcting a bit.
“We’re not seeing a steep rise in prices anymore for the private market. Instead private property prices have only inched one, two percent up and you can see that it’s more or less starting to plateau out.
“If that happens maybe the HDB market will mirror it….but at the moment I’m not seeing that in the HDB market yet.”
Overall, market watchers expect resale prices for 2010 to increase by 8 to 15 percent.
On Thursday, the government announced three more land parcels for sale, which could yield about 1,300 residential units, including 460 Executive Condominium flats.
The Urban Redevelopment Authority will also launch another three sites later this month, which will include sites for residential purposes.
In total, the Government Land Sales (GLS) Programme for the second half of 2010 comprises 27 residential sites and four mixed-use sites where private residential housing can be built.
The total potential supply of 13,905 private residential units is the highest potential supply quantum from any half yearly GLS Programme since the Confirmed List/Reserve List system started in the second half of 2001.
Source: Channel News Asia, 1 Jul 2010
Private home prices up 5.2% in Q2
Private home prices remained firm in the second quarter, sending the residential property price index to a record high of 184.1 points.
Private residential prices increased by 5.2 percent quarter-on-quarter in the April-June period, according to flash estimates released by the Urban Redevelopment Authority (URA) on Thursday.
The figure beats the 3 percent rise forecast by some analysts. But market watchers do not expect further anti-speculative measures to be implemented by the government.
Sales-wise, industry figures showed that the number of caveats lodged in Q2 fell by 19.2% on-quarter to 7,041.
While sales volume moderated, prices continued to grow, albeit at a slower pace.
Private home prices were up 5.2 percent in Q2, after rising 5.6 percent in the first three months of this year.
The rise in Q2 pushed the residential property price index to an all-time high, surpassing the market peak (181.4 points) in Q2 of 1996.
Still, analysts said it is too early to call for additional cooling measures.
Liang Thow Ming, from Credo Real Estate, said: “Compared to 1996, I think we are a little bit above in terms of prices, especially in mass-market (homes). However in terms of income, I think we are also well above the 1996 level. So in that sense where affordability is concerned, it’s still pretty well-maintained. So I don’t think there is a bubble over here.”
In Q2, prices for mass-market homes (those outside the central region) showed the highest growth of 5.7 percent, partly due to price points set by new projects like Tree House and The Minton.
Consultancy firm CB Richard Ellis said another reason for the increase is the rising prices of resale transactions in locations where several sites from the government land sales programme had been sold in the past six to nine months.
Meanwhile, private homes in the city and prime districts (core central region) cost 5.1 percent more. And those in the city fringe (the rest of central region) saw price increases of 4.5 percent.
In comparison, for the first quarter of 2010, prices of non-landed private residential properties increased by 4.4 percent in the core central region, 7.9 percent in the rest of the central region and 4.3 percent in the outside central region.
Home prices are also expected to soften as the government rolls out more state land for tender in the second half.
Jones Lang LaSalle’s Head of Research (Southeast Asia), Dr Chua Yang Liang, said: “Prices are likely to remain stable or grow very moderately for the next few quarters. This is given that transaction volumes have come off in the earlier quarters and the few months that we’ve seen. And usually going by the long-term trend, as transaction volume comes down, prices will follow suit. In terms of the rate of increase, it will slow down or remain stable.”
Observers expect prices to grow by up to 3% for the next two quarters, bringing the full-year price increase to 20 percent.
Source: Channel News Asia, 1 Jul 2010
Private residential prices increased by 5.2 percent quarter-on-quarter in the April-June period, according to flash estimates released by the Urban Redevelopment Authority (URA) on Thursday.
The figure beats the 3 percent rise forecast by some analysts. But market watchers do not expect further anti-speculative measures to be implemented by the government.
Sales-wise, industry figures showed that the number of caveats lodged in Q2 fell by 19.2% on-quarter to 7,041.
While sales volume moderated, prices continued to grow, albeit at a slower pace.
Private home prices were up 5.2 percent in Q2, after rising 5.6 percent in the first three months of this year.
The rise in Q2 pushed the residential property price index to an all-time high, surpassing the market peak (181.4 points) in Q2 of 1996.
Still, analysts said it is too early to call for additional cooling measures.
Liang Thow Ming, from Credo Real Estate, said: “Compared to 1996, I think we are a little bit above in terms of prices, especially in mass-market (homes). However in terms of income, I think we are also well above the 1996 level. So in that sense where affordability is concerned, it’s still pretty well-maintained. So I don’t think there is a bubble over here.”
In Q2, prices for mass-market homes (those outside the central region) showed the highest growth of 5.7 percent, partly due to price points set by new projects like Tree House and The Minton.
Consultancy firm CB Richard Ellis said another reason for the increase is the rising prices of resale transactions in locations where several sites from the government land sales programme had been sold in the past six to nine months.
Meanwhile, private homes in the city and prime districts (core central region) cost 5.1 percent more. And those in the city fringe (the rest of central region) saw price increases of 4.5 percent.
In comparison, for the first quarter of 2010, prices of non-landed private residential properties increased by 4.4 percent in the core central region, 7.9 percent in the rest of the central region and 4.3 percent in the outside central region.
Home prices are also expected to soften as the government rolls out more state land for tender in the second half.
Jones Lang LaSalle’s Head of Research (Southeast Asia), Dr Chua Yang Liang, said: “Prices are likely to remain stable or grow very moderately for the next few quarters. This is given that transaction volumes have come off in the earlier quarters and the few months that we’ve seen. And usually going by the long-term trend, as transaction volume comes down, prices will follow suit. In terms of the rate of increase, it will slow down or remain stable.”
Observers expect prices to grow by up to 3% for the next two quarters, bringing the full-year price increase to 20 percent.
Source: Channel News Asia, 1 Jul 2010
Wednesday, June 30, 2010
Price index for non-landed private homes up 2.6%
NUS's May reading comes ahead of today's URA Q2 flash estimate
(SINGAPORE) Latest flash estimates from the National University of Singapore show that its overall price index for non-landed private homes rose 2.6 per cent in May over the preceding month. Since the end of last year, the index has appreciated 8.6 per cent.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
The sub-index for the central region, which covers a basket of properties in postal districts 1-4 and 9-11, grew 2.5 per cent in May over the preceding month, and 7.9 per cent year to date.
The sub-index for non-Central region rose at a slightly faster clip, of 2.6 per cent month-on-month in May and 9.1 per cent year to date.
Developers' sales have slowed since May as Europe's economic crisis affected financial markets, causing home buyers to withdraw to the sidelines, even ahead of the June school holidays and World Cup season. The market is expected to enter a consolidation phase, marked by slower sales as developers try their best to maintain prices and potential buyers hold back their purchases, hoping for price cuts.
Tomorrow, the Urban Redevelopment Authority will release its second quarter flash estimate for the official private home price index. In Q1, the index climbed 5.6 per cent over the preceding quarter. CB Richard Ellis yesterday predicted a 2-3 per cent quarter-on-quarter rise in this index for Q2. URA's index covers both completed and uncompleted properties, including the new launches market.
'The price points of new mass-market projects launched in the second quarter were at similar levels to those launched in the previous quarter, but those in the mid-tier segment (city-fringe locations and landed homes) have inched up slightly,' the property consultancy said.
Joseph Tan, executive director (residential) at the firm, forecasts that home prices are likely to remain firm despite his prediction that developers' new private homes sales will slow to about 2,000 units in Q3 from an estimated 4,000 units in Q2 and 4,380 units in Q1. 'Home prices are likely to stay stable given the positive outlook on the economy and strong boom in manufacturing and exports,' he added.
CBRE estimates that developers sold about 600-700 private homes in June, compared with 1,078 homes in May and 2,207 units in April.
The developers are estimated to have sold 8,300 units in the first half of this year. They sold 14,688 new homes for the whole of last year.
Commenting on second- quarter sales in the developer sales or primary market, the property consulting group said: 'The projects that sold well were mostly in the low to mid-tier price range. Sales of new upmarket homes moved at a slower pace in the second quarter as foreign investors held back their purchases due to the weakening of some foreign currencies against the Singapore dollar.'
Based on caveats lodged, HDB upgraders' share of new private home purchases slipped from 37.9 per cent in Q1 to 33.7 per cent in Q2. 'The reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter compared to the first quarter,' it added.
In the resale market, CBRE estimates that some 3,400-3,600 private homes changed hands in Q2, about 15-20 per cent lower than the 4,261 units in Q1. 'Subsales numbered around 500 in Q2, down from 806 in the preceding quarter, as the market became less bullish and sellers were mindful of the stamp duty payable if they sold their property within a year of purchase,' it said. Subsales and resales refer to secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales involve projects with CSC.
NUS's overall SRPI is now 36.1 per cent above the post-financial crisis low in March last year. Over the same period, the growth for the central region has been 41.7 per cent and that for the non-central region, 33.2 per cent.
Despite the stronger increase in the central region, the flash estimate index for May for the location was still 3.7 per cent shy of the pre-financial crisis peak in November 2007. In contrast, for the non-central region, the latest index has already exceeded its respective January 2008 pre-crisis peak by 11.1 per cent. As a result, the overall SRPI flash estimate index for May is 5.5 per cent above its November 2007 high.
Source: Business Times, 30 Jun 2010
(SINGAPORE) Latest flash estimates from the National University of Singapore show that its overall price index for non-landed private homes rose 2.6 per cent in May over the preceding month. Since the end of last year, the index has appreciated 8.6 per cent.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
The sub-index for the central region, which covers a basket of properties in postal districts 1-4 and 9-11, grew 2.5 per cent in May over the preceding month, and 7.9 per cent year to date.
The sub-index for non-Central region rose at a slightly faster clip, of 2.6 per cent month-on-month in May and 9.1 per cent year to date.
Developers' sales have slowed since May as Europe's economic crisis affected financial markets, causing home buyers to withdraw to the sidelines, even ahead of the June school holidays and World Cup season. The market is expected to enter a consolidation phase, marked by slower sales as developers try their best to maintain prices and potential buyers hold back their purchases, hoping for price cuts.
Tomorrow, the Urban Redevelopment Authority will release its second quarter flash estimate for the official private home price index. In Q1, the index climbed 5.6 per cent over the preceding quarter. CB Richard Ellis yesterday predicted a 2-3 per cent quarter-on-quarter rise in this index for Q2. URA's index covers both completed and uncompleted properties, including the new launches market.
'The price points of new mass-market projects launched in the second quarter were at similar levels to those launched in the previous quarter, but those in the mid-tier segment (city-fringe locations and landed homes) have inched up slightly,' the property consultancy said.
Joseph Tan, executive director (residential) at the firm, forecasts that home prices are likely to remain firm despite his prediction that developers' new private homes sales will slow to about 2,000 units in Q3 from an estimated 4,000 units in Q2 and 4,380 units in Q1. 'Home prices are likely to stay stable given the positive outlook on the economy and strong boom in manufacturing and exports,' he added.
CBRE estimates that developers sold about 600-700 private homes in June, compared with 1,078 homes in May and 2,207 units in April.
The developers are estimated to have sold 8,300 units in the first half of this year. They sold 14,688 new homes for the whole of last year.
Commenting on second- quarter sales in the developer sales or primary market, the property consulting group said: 'The projects that sold well were mostly in the low to mid-tier price range. Sales of new upmarket homes moved at a slower pace in the second quarter as foreign investors held back their purchases due to the weakening of some foreign currencies against the Singapore dollar.'
Based on caveats lodged, HDB upgraders' share of new private home purchases slipped from 37.9 per cent in Q1 to 33.7 per cent in Q2. 'The reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter compared to the first quarter,' it added.
In the resale market, CBRE estimates that some 3,400-3,600 private homes changed hands in Q2, about 15-20 per cent lower than the 4,261 units in Q1. 'Subsales numbered around 500 in Q2, down from 806 in the preceding quarter, as the market became less bullish and sellers were mindful of the stamp duty payable if they sold their property within a year of purchase,' it said. Subsales and resales refer to secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales involve projects with CSC.
NUS's overall SRPI is now 36.1 per cent above the post-financial crisis low in March last year. Over the same period, the growth for the central region has been 41.7 per cent and that for the non-central region, 33.2 per cent.
Despite the stronger increase in the central region, the flash estimate index for May for the location was still 3.7 per cent shy of the pre-financial crisis peak in November 2007. In contrast, for the non-central region, the latest index has already exceeded its respective January 2008 pre-crisis peak by 11.1 per cent. As a result, the overall SRPI flash estimate index for May is 5.5 per cent above its November 2007 high.
Source: Business Times, 30 Jun 2010
CBRE forecasts fewer private homes sales in Q2
The private property market saw some slowing down during the second quarter of the year.
Property consultant CB Richard Ellis (CBRE) forecast that about 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380 units.
Also, in the resale market, CBRE estimated that 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 per cent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered about 500, down from 806 in the previous quarter as the market became less bullish, the report said.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase. In addition, the number of HDB upgraders buying private homes fell.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses, lower than the 37.9 per cent figure of the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market projects being launched in the second quarter. Nevertheless, CBRE said that about 8,300 new homes were sold in the first half of this year. This is more than half or 56.5 per cent of the 14,688 new homes sold for all of last year.
CBRE predicted that overall home prices in the second quarter could reflect a rise of between 2 per cent and 3 per cent on-quarter.
Source: Today, 30 Jun 2010
Property consultant CB Richard Ellis (CBRE) forecast that about 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380 units.
Also, in the resale market, CBRE estimated that 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 per cent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered about 500, down from 806 in the previous quarter as the market became less bullish, the report said.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase. In addition, the number of HDB upgraders buying private homes fell.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses, lower than the 37.9 per cent figure of the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market projects being launched in the second quarter. Nevertheless, CBRE said that about 8,300 new homes were sold in the first half of this year. This is more than half or 56.5 per cent of the 14,688 new homes sold for all of last year.
CBRE predicted that overall home prices in the second quarter could reflect a rise of between 2 per cent and 3 per cent on-quarter.
Source: Today, 30 Jun 2010
Tuesday, June 29, 2010
More signs of slowdown in Singapore property market
There’s been more signs of a slowdown in the private property market here in the second quarter.
Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380.
In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase.
In addition, the number of HDB upgraders buying private homes slipped.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That’s lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter.
Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year.
The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang.
CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter.
Source : Channel News Asia, 29 Jun 2010
Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380.
In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase.
In addition, the number of HDB upgraders buying private homes slipped.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That’s lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter.
Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year.
The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang.
CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter.
Source : Channel News Asia, 29 Jun 2010
Private home price hikes expected to soften in Q2
Increases in private home prices are expected to slow down in the second quarter after climbing 5.6 percent in the first quarter.
Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.
Prices of suburban homes have already surpassed the peak by about 10 percent.
Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.
High-end homes are now just 8 percent off the record prices set in 2008.
And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.
Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.
Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.
With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.
Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.
“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.
“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”
Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.
For the second half of 2010, market watchers expect 1,000 new units to change hands each month.
Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.
Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.
With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.
Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”
The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.
Source: Channel News Asia, 29 Jun 2010
Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.
Prices of suburban homes have already surpassed the peak by about 10 percent.
Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.
High-end homes are now just 8 percent off the record prices set in 2008.
And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.
Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.
Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.
With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.
Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.
“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.
“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”
Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.
For the second half of 2010, market watchers expect 1,000 new units to change hands each month.
Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.
Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.
With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.
Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”
The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.
Source: Channel News Asia, 29 Jun 2010
Home prices 'set for healthy gains'
But high-end market likely to do less well amid fears of oversupply: Report
PRICES of mass market homes, especially Housing Board flats, are set for healthy gains this year, according to a Citigroup report.
But it is far more pessimistic about the high-end market. Citi is bucking an upbeat trend among property consultants by expressing fears of an oversupply of upscale homes.
It said, for example, that one-third of prime District 9 units due for completion in the next 12 to 15 months remain unsold.
However, HDB resale prices, which provide a strong base for the mass private market, are likely to stay firm due largely to the generally low supply since 2003, it said. Citi expects both HDB resale prices and rents, as well as mass market private home prices, to rise 5 per cent to 10 per cent by the end of the year.
'With capital gains from existing Housing Board flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market,' it said.
Mass market private home prices should be capped at $900 to $1,000 per sq ft (psf), though there is a chance they may overshoot, it said.
Considering the high bids and breakeven costs for recent government sites, developers are likely to keep selling private homes at a minimum range of $850 to $1,100 psf and HDB executive condos at closer to $750 psf.
Citi noted that overall resale volume is a hefty 50 per cent off levels in the boom times of mid-2007. Prime apartments are in worse shape than other home types. Prices of high-end homes are still some 10 per cent to 16 per cent off their 2007 peaks, while mass market prices are now almost 10 per cent above that most recent pinnacle.
Citi believes high-end home prices will stay flat this year, unlike some property consultants who expect rises of 10 per cent to as much as 20 per cent this year, given that price levels are below the 2007 peak.
'This is the sector that attracts more foreign buyers who have fewer buying constraints,' said DTZ's head of South-east Asia research Chua Chor Hoon.
Colliers International director for research and advisory Tay Huey Ying said foreign buyers, including permanent residents, comprised over half of total buyers in the first five months of this year.
'Moving on, as the world economy recovers, there could be some diversion of investments from countries which have imposed cooling measures in their respective property markets,' she said.
But Citi said a much-awaited jump in high-end sales has yet to materialise despite the completion of both integrated resorts. The recent rise in rentals, driven by relatively low completion rates in the past two quarters, is not sustainable, it says.
High-end rentals are up an average of 10 per cent from their recent lows but are still some 20 per cent off their peaks. Mass market rentals, on the other hand, are up more than 13 per cent and are just 8 per cent off their last peaks in 2008.
Citi highlighted a jump in home completions, with about 10,000 units to be ready this year - more than anticipated.
In the next two years, more than 11,000 units will be completed a year. And the bulk - or about 80 per cent - of those to be completed over the next 12 to 15 months will be in the central region.
In District 9 alone, about 30 per cent of the new completions are unsold and in Sentosa, 75 per cent of the new units to be completed this year await buyers.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said in the short term, the high-end segment may not boom until the supply imbalance is gradually resolved.
Citi said: 'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
---------------------------------------
THINKING AHEAD
'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
Citigroup on the oversupply in the high-end property sector
Source: Straits Times, 29 Jun 2010
PRICES of mass market homes, especially Housing Board flats, are set for healthy gains this year, according to a Citigroup report.
But it is far more pessimistic about the high-end market. Citi is bucking an upbeat trend among property consultants by expressing fears of an oversupply of upscale homes.
It said, for example, that one-third of prime District 9 units due for completion in the next 12 to 15 months remain unsold.
However, HDB resale prices, which provide a strong base for the mass private market, are likely to stay firm due largely to the generally low supply since 2003, it said. Citi expects both HDB resale prices and rents, as well as mass market private home prices, to rise 5 per cent to 10 per cent by the end of the year.
'With capital gains from existing Housing Board flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market,' it said.
Mass market private home prices should be capped at $900 to $1,000 per sq ft (psf), though there is a chance they may overshoot, it said.
Considering the high bids and breakeven costs for recent government sites, developers are likely to keep selling private homes at a minimum range of $850 to $1,100 psf and HDB executive condos at closer to $750 psf.
Citi noted that overall resale volume is a hefty 50 per cent off levels in the boom times of mid-2007. Prime apartments are in worse shape than other home types. Prices of high-end homes are still some 10 per cent to 16 per cent off their 2007 peaks, while mass market prices are now almost 10 per cent above that most recent pinnacle.
Citi believes high-end home prices will stay flat this year, unlike some property consultants who expect rises of 10 per cent to as much as 20 per cent this year, given that price levels are below the 2007 peak.
'This is the sector that attracts more foreign buyers who have fewer buying constraints,' said DTZ's head of South-east Asia research Chua Chor Hoon.
Colliers International director for research and advisory Tay Huey Ying said foreign buyers, including permanent residents, comprised over half of total buyers in the first five months of this year.
'Moving on, as the world economy recovers, there could be some diversion of investments from countries which have imposed cooling measures in their respective property markets,' she said.
But Citi said a much-awaited jump in high-end sales has yet to materialise despite the completion of both integrated resorts. The recent rise in rentals, driven by relatively low completion rates in the past two quarters, is not sustainable, it says.
High-end rentals are up an average of 10 per cent from their recent lows but are still some 20 per cent off their peaks. Mass market rentals, on the other hand, are up more than 13 per cent and are just 8 per cent off their last peaks in 2008.
Citi highlighted a jump in home completions, with about 10,000 units to be ready this year - more than anticipated.
In the next two years, more than 11,000 units will be completed a year. And the bulk - or about 80 per cent - of those to be completed over the next 12 to 15 months will be in the central region.
In District 9 alone, about 30 per cent of the new completions are unsold and in Sentosa, 75 per cent of the new units to be completed this year await buyers.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said in the short term, the high-end segment may not boom until the supply imbalance is gradually resolved.
Citi said: 'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
---------------------------------------
THINKING AHEAD
'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
Citigroup on the oversupply in the high-end property sector
Source: Straits Times, 29 Jun 2010
Saturday, June 26, 2010
Probably no property bubble here yet: MM
THERE is probably no bubble in Singapore's property market, Minister Mentor Lee Kuan Yew said yesterday.
The sharp price rises that have been seen are 'part of the total liquidity in the whole world system', said Mr Lee, noting that interest rates are low, and foreigners still see properties as affordable.
'Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let's buy it,' he added.
'And apart from landed properties, they can buy into any condos.'
Mr Lee, who was speaking at a dinner hosted by the Association of Banks in Singapore, said that the Government is convinced that there is real underlying demand for residential property.
'So it's probably not a bubble yet,' he added.
Still, he pointed out that the Government has taken measures to address concerns relating to the market overheating, including releasing more land to developers and putting in place more stringent rules for buyers when borrowing from banks to finance property.
'More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we've told the banks to be more prudent and have a higher downpayment,' said Mr Lee.
'These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, 'Compared to what I have to pay in my country, this is cheap'.'
Mr Lee was responding to a question by a Standard Chartered banker who had asked about whether he was worried about property prices here.
The banker had also tacked on a second question: 'Can we expect elections anytime soon?'
To that, Mr Lee replied: 'I am not the Prime Minister, I don't decide. And anyway it's got nothing to do with a property boom.'
Source: Straits Times, 26 Jun 2010
The sharp price rises that have been seen are 'part of the total liquidity in the whole world system', said Mr Lee, noting that interest rates are low, and foreigners still see properties as affordable.
'Even if we cap our excess, people in Hong Kong, Indonesia, will say, compared to what I have to pay, Singapore is cheap, let's buy it,' he added.
'And apart from landed properties, they can buy into any condos.'
Mr Lee, who was speaking at a dinner hosted by the Association of Banks in Singapore, said that the Government is convinced that there is real underlying demand for residential property.
'So it's probably not a bubble yet,' he added.
Still, he pointed out that the Government has taken measures to address concerns relating to the market overheating, including releasing more land to developers and putting in place more stringent rules for buyers when borrowing from banks to finance property.
'More land is being released, to dampen the enthusiasm of everybody rushing for the latest release, and we've told the banks to be more prudent and have a higher downpayment,' said Mr Lee.
'These are the precautions we can take, but it does not stop the Indonesians or the Thais or the Malaysian Chinese or the Filipino Chinese from coming here and saying, 'Compared to what I have to pay in my country, this is cheap'.'
Mr Lee was responding to a question by a Standard Chartered banker who had asked about whether he was worried about property prices here.
The banker had also tacked on a second question: 'Can we expect elections anytime soon?'
To that, Mr Lee replied: 'I am not the Prime Minister, I don't decide. And anyway it's got nothing to do with a property boom.'
Source: Straits Times, 26 Jun 2010
Friday, June 25, 2010
Q2 resale home prices rise: DTZ
Freehold condo units in districts 9, 10 and 11 fetching record prices
PRIME freehold condo units in districts 9, 10 and 11 are fetching record prices in the resale market - more than they went for during the last peak in the fourth quarter of 2007 - says a new report.
Property firm DTZ said yesterday that the average resale price of freehold non-landed homes in the three districts rose 2.6 per cent quarter on quarter to $1,493 per sq ft (psf) in Q2 this year. This is 0.7 per cent higher than the previous record of $1,483 psf in Q4 2007.
But resale prices of more upmarket homes - classified by DTZ as those that sell for more than $2,500 psf - are still 7.6 per cent below the Q4 2007 peak.
The average price of freehold luxury non-landed homes rose 3.5 per cent quarter on quarter in Q2 to $2,588 psf. In Q4 2007, they were selling for $2,800 psf.
Outside the prime districts, prices of freehold non-landed resale homes climbed 2.9 per cent to hit the previous peak of $747 psf last achieved in Q4 2007.
And resale prices of leasehold homes outside the prime districts - that is, suburban mass market homes - rose 4 per cent quarter on quarter to $648 psf.
While prices climbed in all the categories tracked, DTZ said that the rate of increase slowed in Q2 as resistance to high asking prices and uncertainty in the stock market hit buying interest in the property market. The only exception was in the mass market segment, where prices of resale leasehold condos rose more than they did in the previous quarter. The 4 per cent climb in Q2 was higher than the 2.1 per cent increase recorded in Q1.
The comparatively higher prices of new developments and aggressive bids for government sites in suburban areas have had a cumulative effect in raising the prices of homes in the secondary market, DTZ said.
But looking ahead, developers are likely to 'tone down' their land bids in view of the unprecedented high number of suburban sites due to be sold in the second-half 2010 government land sales programme, said DTZ's head of South-east Asia research Chua Chor Hoon. This will keep a check on the prices of mass market homes, she said.
Analysts are still most bullish on the freehold luxury market, as prices there are still significantly lower than during the 2007 peak.
Kim Eng Research analyst Wilson Liew said that China's recent move to allow the yuan to appreciate gradually may spur more purchases of Singapore properties by high net worth Chinese nationals as their purchasing power improves. He said that as an asset class, high-end properties in Singapore are still attractive.
Source: Business Times, 25 Jun 2010
PRIME freehold condo units in districts 9, 10 and 11 are fetching record prices in the resale market - more than they went for during the last peak in the fourth quarter of 2007 - says a new report.
Property firm DTZ said yesterday that the average resale price of freehold non-landed homes in the three districts rose 2.6 per cent quarter on quarter to $1,493 per sq ft (psf) in Q2 this year. This is 0.7 per cent higher than the previous record of $1,483 psf in Q4 2007.
But resale prices of more upmarket homes - classified by DTZ as those that sell for more than $2,500 psf - are still 7.6 per cent below the Q4 2007 peak.
The average price of freehold luxury non-landed homes rose 3.5 per cent quarter on quarter in Q2 to $2,588 psf. In Q4 2007, they were selling for $2,800 psf.
Outside the prime districts, prices of freehold non-landed resale homes climbed 2.9 per cent to hit the previous peak of $747 psf last achieved in Q4 2007.
And resale prices of leasehold homes outside the prime districts - that is, suburban mass market homes - rose 4 per cent quarter on quarter to $648 psf.
While prices climbed in all the categories tracked, DTZ said that the rate of increase slowed in Q2 as resistance to high asking prices and uncertainty in the stock market hit buying interest in the property market. The only exception was in the mass market segment, where prices of resale leasehold condos rose more than they did in the previous quarter. The 4 per cent climb in Q2 was higher than the 2.1 per cent increase recorded in Q1.
The comparatively higher prices of new developments and aggressive bids for government sites in suburban areas have had a cumulative effect in raising the prices of homes in the secondary market, DTZ said.
But looking ahead, developers are likely to 'tone down' their land bids in view of the unprecedented high number of suburban sites due to be sold in the second-half 2010 government land sales programme, said DTZ's head of South-east Asia research Chua Chor Hoon. This will keep a check on the prices of mass market homes, she said.
Analysts are still most bullish on the freehold luxury market, as prices there are still significantly lower than during the 2007 peak.
Kim Eng Research analyst Wilson Liew said that China's recent move to allow the yuan to appreciate gradually may spur more purchases of Singapore properties by high net worth Chinese nationals as their purchasing power improves. He said that as an asset class, high-end properties in Singapore are still attractive.
Source: Business Times, 25 Jun 2010
Thursday, June 24, 2010
S'pore slips to 16th in real estate transparency ranking
Its score remained the same while other markets improved theirs
SINGAPORE has slipped two places to 16th in a ranking of the transparency of major real estate markets worldwide.
The city-state's position in the latest Global Real Estate Transparency Index compiled by Jones Lang LaSalle (JLL) fell as other countries' scores improved, while Singapore's remained the same.
Singapore scored 1.73, which placed it 14th in the previous index. But with the same score this year, Singapore has taken 16th spot, as several European nations including Sweden, Ireland and France improved their scores. A score of one is the best and five is worst.
According to the index, Australia is now the world's most transparent real estate market. In the Asia-Pacific, Australia and New Zealand (fourth globally) are the region's most transparent markets, followed by Singapore and Hong Kong (18th globally).
The greatest improvements in transparency in the region were recorded in China and India.
'The big improvement for China and India has been mainly due to increased data availability and ongoing regulatory changes,' said Jane Murray, JLL's head of research for the Asia-Pacific.
In both markets, a recent boom in real estate contributed to the improvements as public and private sector players took steps to promote transparency, she said. 'International corporate occupiers and investors are increasingly demanding better information on market fundamentals, while government agencies and market regulators have made slow but steady progress on the regulatory and legal front.'
Singapore and Hong Kong are classified as 'transparent' but not 'highly transparent' because there is room for improvement in two areas for both markets, Dr Murray said. Both countries lack investment performance indices, for example, she said.
In light of the global financial crisis, the index assessed - for the first time - the transparency of the real estate debt markets in terms of the breadth and depth of data available on commercial real estate debt.
Factors such as outstanding balances, maturities and defaults, as well as how thoroughly real estate debt on banks' balance sheets is monitored, were considered. Singapore did well in this aspect, scoring high for its regulatory and legal environment.
Alastair Hughes, JLL's chief executive for the Asia-Pacific, said one of the chief concerns for international real estate investors is where to place their capital safely.
The index helps investors and occupiers operating in foreign markets to anticipate challenges, he said. And for governments and industry organisations, the index provides a gauge to help improve transparency in their home markets.
Source: Business Times, 24 Jun 2010
SINGAPORE has slipped two places to 16th in a ranking of the transparency of major real estate markets worldwide.
The city-state's position in the latest Global Real Estate Transparency Index compiled by Jones Lang LaSalle (JLL) fell as other countries' scores improved, while Singapore's remained the same.
Singapore scored 1.73, which placed it 14th in the previous index. But with the same score this year, Singapore has taken 16th spot, as several European nations including Sweden, Ireland and France improved their scores. A score of one is the best and five is worst.
According to the index, Australia is now the world's most transparent real estate market. In the Asia-Pacific, Australia and New Zealand (fourth globally) are the region's most transparent markets, followed by Singapore and Hong Kong (18th globally).
The greatest improvements in transparency in the region were recorded in China and India.
'The big improvement for China and India has been mainly due to increased data availability and ongoing regulatory changes,' said Jane Murray, JLL's head of research for the Asia-Pacific.
In both markets, a recent boom in real estate contributed to the improvements as public and private sector players took steps to promote transparency, she said. 'International corporate occupiers and investors are increasingly demanding better information on market fundamentals, while government agencies and market regulators have made slow but steady progress on the regulatory and legal front.'
Singapore and Hong Kong are classified as 'transparent' but not 'highly transparent' because there is room for improvement in two areas for both markets, Dr Murray said. Both countries lack investment performance indices, for example, she said.
In light of the global financial crisis, the index assessed - for the first time - the transparency of the real estate debt markets in terms of the breadth and depth of data available on commercial real estate debt.
Factors such as outstanding balances, maturities and defaults, as well as how thoroughly real estate debt on banks' balance sheets is monitored, were considered. Singapore did well in this aspect, scoring high for its regulatory and legal environment.
Alastair Hughes, JLL's chief executive for the Asia-Pacific, said one of the chief concerns for international real estate investors is where to place their capital safely.
The index helps investors and occupiers operating in foreign markets to anticipate challenges, he said. And for governments and industry organisations, the index provides a gauge to help improve transparency in their home markets.
Source: Business Times, 24 Jun 2010
S'pore property market 'third most transparent in Asia-Pacific'
SINGAPORE is ranked the third most transparent property market in Asia-Pacific, according to a key industry index.
The league table places Singapore at 16th worldwide, two spots ahead of Hong Kong but behind regional rivals Australia, ranked first, and New Zealand at fourth.
Singapore has slipped two places from the last survey in 2008. Its score has remained unchanged but other countries have moved up the ladder.
'Rising levels of transparency are associated with rising levels of foreign direct investment, a powerful incentive for encouraging the free flow of information and the fair and consistent application of local property law,' said Jones Lang LaSalle, which compiled the index with its unit LaSalle Investment Management.
More transparent market conditions allow for quicker investment deals between one foreign investor and another, it said.
The index, which was started in 1999 and is updated every two years, covers all property sectors, though the bulk comprises commercial real estate.
It assessed 81 markets under five categories - performance measurement, market fundamentals, listed vehicles, legal and regulatory environment and the transaction process.
Jones Lang LaSalle's South-east Asia research head, Dr Chua Yang Liang, said the index showed that Singapore's strength lies in its regulatory and legal environment.
'The transparency of our regulatory framework supported the influx of US$4.7 billion (S$6.4 billion), which is more than half of the total dollar value investments, into the commercial asset market during the peak in 2007,' he said.
Singapore can lift its ranking by improving market performance and the transaction process such as introducing more openness, said Jones Lang LaSalle Asia-Pacific research head Jane Murray.
Dr Chua cited the launch of the National University of Singapore residential price index, an alternative to the Urban Redevelopment Authority service, as a move in the right direction.
He added that recent government moves to increase the level of professionalism and general practices of real estate agents are long overdue.
'As a key vital component in the real economy, the real estate industry needs to strengthen its ethical standards and the eventual regulatory structure if enforced will surely push Singapore further up on the rankings,' said Dr Chua.
In Asia-Pacific, Singapore ranks one place ahead of Hong Kong after new questions on commercial real estate debt - a contributing factor of the financial crisis - were considered.
Hong Kong is 'more laissez-faire' in the regulatory sector and its monitoring of debt is slightly less rigorous than in Singapore, Dr Murray said.
Overall, the index showed a notable slowdown in the progress of real estate transparency over the past two years, suggesting that industry players were focusing on survival rather than market advancement during the financial turmoil.
Source: Straits Times, 24 Jun 2010
The league table places Singapore at 16th worldwide, two spots ahead of Hong Kong but behind regional rivals Australia, ranked first, and New Zealand at fourth.
Singapore has slipped two places from the last survey in 2008. Its score has remained unchanged but other countries have moved up the ladder.
'Rising levels of transparency are associated with rising levels of foreign direct investment, a powerful incentive for encouraging the free flow of information and the fair and consistent application of local property law,' said Jones Lang LaSalle, which compiled the index with its unit LaSalle Investment Management.
More transparent market conditions allow for quicker investment deals between one foreign investor and another, it said.
The index, which was started in 1999 and is updated every two years, covers all property sectors, though the bulk comprises commercial real estate.
It assessed 81 markets under five categories - performance measurement, market fundamentals, listed vehicles, legal and regulatory environment and the transaction process.
Jones Lang LaSalle's South-east Asia research head, Dr Chua Yang Liang, said the index showed that Singapore's strength lies in its regulatory and legal environment.
'The transparency of our regulatory framework supported the influx of US$4.7 billion (S$6.4 billion), which is more than half of the total dollar value investments, into the commercial asset market during the peak in 2007,' he said.
Singapore can lift its ranking by improving market performance and the transaction process such as introducing more openness, said Jones Lang LaSalle Asia-Pacific research head Jane Murray.
Dr Chua cited the launch of the National University of Singapore residential price index, an alternative to the Urban Redevelopment Authority service, as a move in the right direction.
He added that recent government moves to increase the level of professionalism and general practices of real estate agents are long overdue.
'As a key vital component in the real economy, the real estate industry needs to strengthen its ethical standards and the eventual regulatory structure if enforced will surely push Singapore further up on the rankings,' said Dr Chua.
In Asia-Pacific, Singapore ranks one place ahead of Hong Kong after new questions on commercial real estate debt - a contributing factor of the financial crisis - were considered.
Hong Kong is 'more laissez-faire' in the regulatory sector and its monitoring of debt is slightly less rigorous than in Singapore, Dr Murray said.
Overall, the index showed a notable slowdown in the progress of real estate transparency over the past two years, suggesting that industry players were focusing on survival rather than market advancement during the financial turmoil.
Source: Straits Times, 24 Jun 2010
Wednesday, June 23, 2010
Crisis not over: Global panel of property experts
It is important for real estate companies to continue to watch their cashflow, including keeping options open for alternative financing and find new recurring income, said participants at an industry conference yesterday.
They told the Real Estate Investment World Asia 2010 event that they believe the global financial crisis is not over and that it may take 12 to 18 months before the impact of the euro zone crisis is known and only then can economic recovery begin.
“We’re in the middle of Greek tragedy and nobody told us how many acts and scenes it has, so let’s see what the knock-on effect is going to be,” said Mr Peter Van Rossum, chief financial officer of Unibail-Rodamco SE in a panel discussion.
Property developers were among those hardest-hit by the global credit crisis two years ago, which created tougher borrowing conditions and caused loan-to-value covenants to fall. Observers said this shows the need to ensure sufficient liquidity for companies’ operations.
To mitigate cashflow concerns, property players need to diversify into areas such as hospitality to generate recurring income and consider non-traditional forms of funding, said experts.
“We’re looking at other alternative forms of financing, such as bonds and convertible bonds that will ride us through all these ups and downs,” said Mr Thio Gim Hock, chief executive officer and group managing director of Overseas Union Enterprise.
Some developers have, in fact, risen up to the challenge and made headway in raising money using alternative methods.
“We’re looking for equity funding – develop our private equity fund business. Last year, we actually had to float part of one of our subsidiaries in retail for them to continue to have sufficient funds to expand,” said Mr Wen Khai Meng, chief investment officer at CapitaLand.
For now, observers expect better prospects for Asia’s property sector, which will be partly boosted by capital inflows, amid expected currency appreciation in the region.
Source: Today, 23 Jun 2010
They told the Real Estate Investment World Asia 2010 event that they believe the global financial crisis is not over and that it may take 12 to 18 months before the impact of the euro zone crisis is known and only then can economic recovery begin.
“We’re in the middle of Greek tragedy and nobody told us how many acts and scenes it has, so let’s see what the knock-on effect is going to be,” said Mr Peter Van Rossum, chief financial officer of Unibail-Rodamco SE in a panel discussion.
Property developers were among those hardest-hit by the global credit crisis two years ago, which created tougher borrowing conditions and caused loan-to-value covenants to fall. Observers said this shows the need to ensure sufficient liquidity for companies’ operations.
To mitigate cashflow concerns, property players need to diversify into areas such as hospitality to generate recurring income and consider non-traditional forms of funding, said experts.
“We’re looking at other alternative forms of financing, such as bonds and convertible bonds that will ride us through all these ups and downs,” said Mr Thio Gim Hock, chief executive officer and group managing director of Overseas Union Enterprise.
Some developers have, in fact, risen up to the challenge and made headway in raising money using alternative methods.
“We’re looking for equity funding – develop our private equity fund business. Last year, we actually had to float part of one of our subsidiaries in retail for them to continue to have sufficient funds to expand,” said Mr Wen Khai Meng, chief investment officer at CapitaLand.
For now, observers expect better prospects for Asia’s property sector, which will be partly boosted by capital inflows, amid expected currency appreciation in the region.
Source: Today, 23 Jun 2010
Tuesday, June 22, 2010
Real estate players say eye on cashflow important
Real estate industry players have said it is important for companies in the industry to continue to watch their cashflow. This includes keeping options open for alternative financing and finding new recurring income.
They told an industry conference – Real Estate Investment World Asia 2010 – that they believe the global financial crisis is not over and that it may take at least a year before economic recovery is certain.
Property developers were among those hardest hit by the global credit crisis two years ago. The crisis created tougher borrowing conditions and caused loan-to-value covenants to fall.
This shows the need to ensure sufficient liquidity for companies’ operations, observers say. Although the worst of the crisis appears to be over, they warn that the real estate industry may not be out of the woods yet.
Peter Van Rossum, CFO, Unibail-Rodamco SE, said: “I hope this crisis is going to be over soon. The reality though is that there’s still a lot of moving panels. If I look at Europe, particularly the Greek tragedy, we’re in the middle of Greek tragedy and nobody told us how many acts and scenes it has, so let’s see what the knock-on effect is going to be.
“I think if you look at the stock markets, we’ve seen it just over the past week or so have been quite positive. But in the meantime, it just needs a little fragile piece of news to upset the whole balance again.
“I think, let’s face the fact that it takes another year or year-and-a-half before we know enough of all the issues that’s on the table, we know the impact, and then we can start the path to recovery.”
Observers say diversifying into areas such as hospitality is one way for property players to generate recurring income to mitigate cashflow concerns. Another option is to consider non-traditional forms of funding.
Thio Gim Hock, CEO & Group MD, Overseas Union Enterprise, said: “What we have learnt is that right now, perhaps the market has improved, apart from a little hiccup from the European financial situation.
“We’re looking at other alternative forms of financing, either long-term terms of financing that will ride us through all these ups and downs – I’m talking about bonds, convertible bonds, long-term financing – and we’re going to look at these instruments and get them as a back up ready, so that we can ride the rough waves that might come.”
Wen Khai Meng, chief investment officer, CapitaLand, said: “What we’re doing now is we’re looking for equity funding – develop our private equity fund business.
“Last year, we actually had to IPO, float part of one of our subsidiaries in retail in order for them to continue to have sufficient funds to expand.”
For now, observers are expecting better prospects for the Asia’s property sector. This will be partly boosted by capital inflows, amid an expected currency appreciation in the region.
Standard Chartered believes the office and retail space, in particular, will be supported by strong projections for GDP and retail sales. It expects Asian retail sales to maintain a high single digit growth for 2010 and 2011.
Source: Channel News Asia, 22 Jun 2010
They told an industry conference – Real Estate Investment World Asia 2010 – that they believe the global financial crisis is not over and that it may take at least a year before economic recovery is certain.
Property developers were among those hardest hit by the global credit crisis two years ago. The crisis created tougher borrowing conditions and caused loan-to-value covenants to fall.
This shows the need to ensure sufficient liquidity for companies’ operations, observers say. Although the worst of the crisis appears to be over, they warn that the real estate industry may not be out of the woods yet.
Peter Van Rossum, CFO, Unibail-Rodamco SE, said: “I hope this crisis is going to be over soon. The reality though is that there’s still a lot of moving panels. If I look at Europe, particularly the Greek tragedy, we’re in the middle of Greek tragedy and nobody told us how many acts and scenes it has, so let’s see what the knock-on effect is going to be.
“I think if you look at the stock markets, we’ve seen it just over the past week or so have been quite positive. But in the meantime, it just needs a little fragile piece of news to upset the whole balance again.
“I think, let’s face the fact that it takes another year or year-and-a-half before we know enough of all the issues that’s on the table, we know the impact, and then we can start the path to recovery.”
Observers say diversifying into areas such as hospitality is one way for property players to generate recurring income to mitigate cashflow concerns. Another option is to consider non-traditional forms of funding.
Thio Gim Hock, CEO & Group MD, Overseas Union Enterprise, said: “What we have learnt is that right now, perhaps the market has improved, apart from a little hiccup from the European financial situation.
“We’re looking at other alternative forms of financing, either long-term terms of financing that will ride us through all these ups and downs – I’m talking about bonds, convertible bonds, long-term financing – and we’re going to look at these instruments and get them as a back up ready, so that we can ride the rough waves that might come.”
Wen Khai Meng, chief investment officer, CapitaLand, said: “What we’re doing now is we’re looking for equity funding – develop our private equity fund business.
“Last year, we actually had to IPO, float part of one of our subsidiaries in retail in order for them to continue to have sufficient funds to expand.”
For now, observers are expecting better prospects for the Asia’s property sector. This will be partly boosted by capital inflows, amid an expected currency appreciation in the region.
Standard Chartered believes the office and retail space, in particular, will be supported by strong projections for GDP and retail sales. It expects Asian retail sales to maintain a high single digit growth for 2010 and 2011.
Source: Channel News Asia, 22 Jun 2010
Wednesday, June 16, 2010
Private home sales fall
Sales in May less than half that in April
The feverish property market lost some of its sizzle last month, as Europe’s debt crisis and the resulting retreat in global stock prices sent prospective home buyers scurrying to the sidelines, but analysts said underlying sentiment would likely remain firm, supported by Singapore’s strong economic fundamentals and steady demand.
Data released yesterday by the Urban Redevelopment Authority (URA) showed just 1,078 units of new private homes were sold last month, less than half the 2,208 units sold in April.
The slowdown did not surprise analysts, coming as the Singapore stock market fell by 7.5 per cent in May alone.
“In the first five months of 2010, developers sold a total of 7,666 private homes. Such a rapid pace of sales is not sustainable. All it takes is for some event to prick the confidence bubble and the sales volume will deflate,” said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.
Despite the sharp month-on-month volume decline last month, analysts said the number of units stayed healthy at above the 1,000-unit mark since January. They added home prices would continue to rise, albeit at a slower rate.
“Based on the strength of the Singapore economic fundamentals, there are sufficient factors to exert upward pressure on private home prices for the rest of this year, but at a slower pace. For the whole of 2010, the average capital values of private residential properties could increase by 10 to 15 per cent.” Mr Mak said.
But for now, June is likely to continue to be a slow month amid uncertainty in Europe and as many people take time off to enjoy the World Cup.
Dr Chua Yang Liang, head of research of property consultancy Jones Lang LaSalle said: “”Both developers and buyers are expected to hold back their launches and purchases in June on the back of the heightened uncertainty arising from the euro zone debt crisis. As a result, the sales volume is expected to moderate a further 15 to 35 per cent to around 650 to 850 units.”
Data from URA showed a decline in transactions across all segments in May.
Homes located in the city fringe were most popular during the month with 451 transactions, but this pales in comparison with the 1,044 deals done in April.
Sales of new homes in the city dipped to 179 units last month from the 393 units sold the month before. Meanwhile, sales volume of homes in the suburban areas fell to 448 units from 771 units in April.
Developers placed a total of 1,134 units for sale last month, significantly lower than the 2,085 units launched in April.
Source: Today, 16 Jun 2010
The feverish property market lost some of its sizzle last month, as Europe’s debt crisis and the resulting retreat in global stock prices sent prospective home buyers scurrying to the sidelines, but analysts said underlying sentiment would likely remain firm, supported by Singapore’s strong economic fundamentals and steady demand.
Data released yesterday by the Urban Redevelopment Authority (URA) showed just 1,078 units of new private homes were sold last month, less than half the 2,208 units sold in April.
The slowdown did not surprise analysts, coming as the Singapore stock market fell by 7.5 per cent in May alone.
“In the first five months of 2010, developers sold a total of 7,666 private homes. Such a rapid pace of sales is not sustainable. All it takes is for some event to prick the confidence bubble and the sales volume will deflate,” said Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic.
Despite the sharp month-on-month volume decline last month, analysts said the number of units stayed healthy at above the 1,000-unit mark since January. They added home prices would continue to rise, albeit at a slower rate.
“Based on the strength of the Singapore economic fundamentals, there are sufficient factors to exert upward pressure on private home prices for the rest of this year, but at a slower pace. For the whole of 2010, the average capital values of private residential properties could increase by 10 to 15 per cent.” Mr Mak said.
But for now, June is likely to continue to be a slow month amid uncertainty in Europe and as many people take time off to enjoy the World Cup.
Dr Chua Yang Liang, head of research of property consultancy Jones Lang LaSalle said: “”Both developers and buyers are expected to hold back their launches and purchases in June on the back of the heightened uncertainty arising from the euro zone debt crisis. As a result, the sales volume is expected to moderate a further 15 to 35 per cent to around 650 to 850 units.”
Data from URA showed a decline in transactions across all segments in May.
Homes located in the city fringe were most popular during the month with 451 transactions, but this pales in comparison with the 1,044 deals done in April.
Sales of new homes in the city dipped to 179 units last month from the 393 units sold the month before. Meanwhile, sales volume of homes in the suburban areas fell to 448 units from 771 units in April.
Developers placed a total of 1,134 units for sale last month, significantly lower than the 2,085 units launched in April.
Source: Today, 16 Jun 2010
Tuesday, June 15, 2010
Property market cools as 1,078 new homes sold in May
Singapore’s property market cooled significantly in May with just 1,078 units of new private homes sold.
This is about 50 per cent lower than the number of homes sold in April.
Data released Tuesday by the Urban Redevelopment Authority, URA, showed a decline in transactions across all segments.
Homes located in the city fringe were most popular during the month with 451 transactions.
However, this number pales in comparison with the 1,044 deals done in April.
Sales of new homes in the city dipped to 179 units in May, down from the 392 units sold the month before.
While sales volume of homes in the suburban areas fell from 771 units in April to 448 units last month.
Source: Channel News Asia, 15 Jun 2010
This is about 50 per cent lower than the number of homes sold in April.
Data released Tuesday by the Urban Redevelopment Authority, URA, showed a decline in transactions across all segments.
Homes located in the city fringe were most popular during the month with 451 transactions.
However, this number pales in comparison with the 1,044 deals done in April.
Sales of new homes in the city dipped to 179 units in May, down from the 392 units sold the month before.
While sales volume of homes in the suburban areas fell from 771 units in April to 448 units last month.
Source: Channel News Asia, 15 Jun 2010
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