News & Updates

Thursday, 12 April, 2012

Foreign buyers restricted when buying properties
Lim Hng Kiang, Minister for Trade and Industry, gave a reminder that foreigners are not allowed to own HDB or EC units in Singapore.
Additionally, they cannot acquire private landed properties, as only Singapore citizens and permanent residents (PRs) are allowed to do so.
The minister said this in reply to a query by Lina Chiam, Non-Constituency Member of Parliament (NCMP), who asked about the benefits that foreigners may enjoy in buying residential properties, in accordance with the Free Trade Agreements (FTAs) which Singapore had signed.
Lim said that there are only two FTAs where National Treatment is rendered for the ABSD (Additional Buyer's Stamp Duty).
National Treatment is when foreigners enjoy the kind of treatment Singapore citizens are entitled to.
“Under the 'national treatment' obligation of the US-Singapore FTA (USSFTA) and the Singapore-European Free Trade Association FTA (ESFTA), Singapore is obliged to accord investors from the US, Switzerland, Norway, Liechtenstein and Iceland similar treatment as Singaporeans when purchasing residential properties, except where our legislation indicated otherwise at the time the relevant FTAs were signed,” noted Lim in a statement.
But this does not invalidate the restrictions enforced for foreign ownership of local residential property, as stated under the Residential Property Act (Cap. 274), Executive Condominium Housing Scheme Act (Cap. 99A) and Housing and Development Act (Cap. 129).
Lim added that National Treatment helps to promote and facilitate investment flows across countries. In the same manner, local investors in a host country receive equal rights and privileges given to foreigners in Singapore.

Source: Apr 11, 2012 - PropertyGuru.com.sg

Thursday, 12 April, 2012

RESIDENTIAL MARKET

Mass market home prices closing in on city homes
The gap in prices between private homes in the mass market and the core central region is narrowing.
Market watchers said the gap is down substantially to just above 60 per cent in the first quarter of this year.
That’s compared to 108 per cent in the second quarter of 2011.
This is because prices of homes in the mass market have been picking up at a much faster pace.
Analysts expect more than 6,000 new private homes to be sold in the first quarter of this year, mostly in the mass market segment.
In the second quarter of 2011, the median price of homes in the city was about S$1,850 per square foot, while mass market homes went for some S$895 per square foot.
But now, mass market home prices have climbed to about S$1,000 per square foot, with those in the city falling to about S$1,660 per square foot.
Long-term sustainable level is about 50-60 per cent gap in the two markets, the price will have to slow down as buyers moved out from the mass market into the high end.
Analysts said the strength of home prices in the mass market segment is largely supported by the healthy growth in resale prices of public housing flats. HDB resale prices have risen by over 80 per cent in the last few years, but analysts expect them to soften in the next two to three quarters.
Source : Channel NewsAsia – 11 Apr 2012
Housing site in Pasir Ris draws 9 bids
A PLOT of land in Pasir Ris for private homes had attracted nine bidders by the time the tender closed yesterday. With the top bid at the higher end of analysts' expectations, there was no sign that developers' enthusiasm for the suburban residential market has waned.
Elitist Development put in the top bid of $165.9 million, or $472 per sq ft per plot ratio (psf ppr).
Analysts had earlier estimated that prices for the 99-year leasehold plot would be pitched between $360 psf ppr and $470 psf ppr.
The 251,036 sq ft site, at the corner of Elias Road and Pasir Ris Drive 3, is zoned for strata landed housing or condominium/flats, and is expected to host about 345 units.
Source: The Straits Times – 12 April 2012

OFFICE MARKET

Office leasing activity subdued but sales robust
LEASING activity weakened in the office market over the first three months of the year but there was still plenty of sales action.
Leasing demand was dampened by lingering debt woes in the euro zone and slowing growth in China and Japan. These issues have resulted in corporate restructuring and a hiring freeze in some firms while keeping many others - especially the large occupiers in the banking and finance industry - on the sidelines in the first quarter.
The weakening outlook was also mirrored in rents, with levels falling in all micro-markets in the first three months compared with the quarter before.
The steepest drop of 8.8 per cent was lodged in the Grade B segment of Beach Road, while Grade A office space in the Marina and City Hall area registered the smallest dip of 2.3 per cent.
Average monthly gross rents for Grade A space in the Raffles Place and New Downtown market fell 5.3 per cent, following a 4.3 per cent correction in the fourth quarter of last year. This has brought average monthly gross rents for the area to $9.76 per sq ft (psf).
It was a different story for the office sales market, which was thriving in the first quarter with new launches enjoying quick take-up rates.
For instance, all 100 strata-titled office units at PS100 in Peck Seah Street were snapped up at an average price of $3,000 psf during its launch last month.
Beyond the low interest rates and high inflation that kept investors active in the office sales market, the introduction of the extra buyer's stamp duty also increased interest in alternative asset options such as strata-titled office units.

Source: The Straits Times – 12 April 2012

SINGAPORE ECONOMY

Singdollar tipped to rise further
Persistently high inflation over the past two years has taken its toll and economists warn that it will continue for years to come.
Last year, inflation hit a 30-year high of 5.2 per cent, and it continues to hover near the 5 per cent mark this year.
With cost pressures building from within and from external sources, economists are expecting the Monetary Authority of Singapore (MAS), which will release its exchange rate policy statement tomorrow, to continue to allow the Singapore dollar to appreciate.
In particular, rising wages are now being felt in much of the services sector, said OCBC economist Selena Ling. For instance, health-care costs have risen by about 3.4 per cent since the start of the year, well above the average 2.5 per cent rise last year. Likewise, costs of recreational activities, which include going to the movies, alcohol and hobbies, shot up about 3.1 per cent in January and February, eclipsing last year's average rise of 1.4 per cent.
Mr Irvin Seah also noted that the push to reduce dependence on foreign workers by increasing levies is raising business costs - and the prices consumers pay.
What is also worrying is that what imported inflation Singapore does have is unlikely to ease off any time soon, with oil prices likely to remain high over the short term.
Food prices are also unlikely to fall, with rising demand from China and India, made worse by erratic weather patterns affecting harvests, said economists.
Most analysts expect the Singdollar to rise against the greenback over the next few months. It traded at $1.258 against the US dollar yesterday.

Source: The Straits Times – 12 April 2012

Finance sector optimistic over jobs, pay: Report

JOB prospects in the finance sector look bright this year despite economic uncertainty and the pay should be better as well, a new survey has found.
Most senior financial executives polled said staff employed in banking and financial services can expect their salaries to be plumped up by 5.67 per cent while finance and accounting sector workers can expect a 4.71 per cent rise. This is assuming people stay in their current roles.
Positions in demand include regulatory-related roles, internal auditors, insurance underwriters and roles in credit risk.
Three key findings from the survey include the fear of a talent exodus among banking and financial services firms, especially with regard to top staff. This concern is most acute among big firms with over 1,000 employees.
Secondly, employers here take 6.5 weeks - the longest compared with other countries in the region - to find a replacement for a management role. It takes 4.9 weeks in Japan.
The third key finding was that compliance or anti-money laundering roles are the hottest in the finance sector, enjoying the largest year-on-year salary increase of 10 per cent in the last year.
'Companies are beefing up their internal control capabilities,' Mr Hird said. The demand is 'driven by the increase in both national and international regulatory requirements, such as higher levels of corporate governance and transparency,' he added.

Source: The Straits Times – 12 April 2012

Wednesday, 11 April, 2012

RESIDENTIAL MARKET

McDonald's Place sold to Oxley for $150m
The iconic McDonald's Place at King Albert Park has been sold for $150 million to Oxley Holdings, which plans to redevelop it jointly with three other listed companies.
Home to McDonald's Singapore's corporate headquarters, Cold Storage and a popular McDonald's outlet, the two-storey commercial building sits on a 5,534.8 square metre site zoned for commercial and residential use, with a plot ratio of three.
Situated at the junction of Bukit Timah Road and Clementi Road, the site will be walking distance from the Downtown Line's King Albert Park MRT station, which is under construction.
Oxley Holdings intends to redevelop the property jointly with Heeton Holdings, KSH Holdings and Lian Beng Group.
The purchase price of $150 million works out to a price of $2,918 per square foot of net lettable area, based on the current lettable area of 4,776 sq m.
Based on the potential gross floor area of 16,604 sq metres, and including an estimated development charge of $65.8 million, this works out to a land price of $1,207 per square foot per plot ratio.

Source: Business Times – 11 April 2012

OFFICE MARKET

Changi City to merge work, play

SINGAPORE'S largest integrated business park development, Changi City, jointly developed by Ascendas Land (Singapore) and Frasers Centrepoint, the development which spans 4.7 hectares will include three-storey retail mall Changi City Point, a 313-room hotel by Frasers Hospitality and Ascendas' business space tower, ONE@Changi City.
The development's retail component, Changi City Point - which was soft-opened on Nov 4 last year - follows a garden-themed concept and comprises a total net lettable area of 207,000 square feet (sq ft) as well as a 450-seater rooftop arena for performances and other activities.
So far, take up in the mall has been promising with around 96 per cent of the retail space already leased out to tenants such as Cold Storage, Koufu, Gain City, Bagus, Nike, Challenger and Tung Lok Signatures.
On the business front, ONE@Changi City features a total net lettable floor area of 650,000 sq ft straddled across nine storeys, of which 315,000 sq ft has already been snapped up by anchor tenant Credit Suisse.
For now, average rents for the business space range somewhere between $4 to $5 per square foot (psf).
The business space tower and hotel arm (which has yet to be named) are slated for completion sometime in the fourth and third quarter of this year respectively.

Source: Business Times – 11 April 2012

INDUSTRIAL MARKET

Whopping 14 bids for Aljunied industrial site

A 0.63 hectare (ha) industrial site at the junction of Sims Drive and Aljunied Road drew a whopping 14 bids, and a top bid of $43.4 million, or $255.44 per square foot per plot ratio (psf ppr) by Fragrance Biz Space, in spite of the new conditions on strata sub-division for industrial parcels, which came into effect in January.
Assuming Fragrance is awarded the tender, this will be the group's maiden industrial project.
Given that this site is located next to Aljunied MRT, developers will not be allowed to strata sub-divide the development in the first 10 years after the project is completed. For strata sub-divisions after the period, developers must adopt a minimum strata unit size of 1,615 sq ft GFA.
Rental in the area is estimated to be in the range of $280 psf to $350 psf.
The breakeven price for the project should be in the range of $400 psf to $430 psf, said Mr Tan.
The 0.63 ha site has a maximum permissible gross plot ratio of 2.5, and a lease period of 60 years. It is zoned Business 1.

Source: Business Times – 11 April 2012

Friday, 30 March, 2012

RESIDENTIAL MARKET

MCL Land sells 270 Ripple Bay condos
MCL Land yesterday drew crowds at its Ripple Bay condo showflat in Pasir Ris, selling 270 units in the 679-unit project by about 8pm.
The developer had not crunched its numbers by press time but its CEO Koh Teck Chuan estimates that the average price when sales began in the morning was around $855 psf. As sales progressed, MCL upped prices to around $870 psf on average.
'But we have not done a final tally on our average price,' he said.
A good spread of units - one, two and three bedders - have been sold. Buyers are mostly Singaporeans.
Ripple Bay, which is within walking distance of Pasir Ris Beach, is in front of Far East Organization's 473-unit Seastrand, where units are being offered for about $905 psf on average. Far East released the project in June last year and close to 100 units are still available.
At Flora Drive in the Upper Changi area, Frasers Centrepoint has so far found buyers for 58 of the 120 units released at the 429-unit Palm Isles condo. Sales began on Wednesday evening. The average price is $830 psf, lower than $870 psf at which the nearby Hedges Park Condominium is going for. The 501-unit project, which went on the market in April last year, still has over 100 units available for sale.
All four projects are on 99-year leasehold sites.
When contacted, a spokesman for Tripartite Developers, the developer of Hedges Park, said: 'We currently have no change in plans with respect to pricing and additional incentives at Hedges Park. But we will continue to monitor market trends there.'
Similarly, Far East Organization, developer of Seastrand in Pasir Ris, said: 'There's no plan to lower the price and there isn't any special promotion for Seastrand. However, buyers receive a reimbursement for the standard 3 per cent buyer's stamp duty and a furniture voucher equivalent to 2 per cent of the sale price, as is the case for other Far East projects as well.'
Market watchers note that established developers such as Far East and Hong Leong would be loath to cut prices and risk upsetting earlier buyers of the project. However, as a seasoned property market watcher argues: 'If common sense prevails, for a developer that has sufficient profit margin on its project, it may be time to clear the project at a slightly lower price because subsequent Government Land Sales, if they reflect lower prices, will obviously pose competition. The writing is on the wall.'
For example, next to the Ripple Bay project, a Hoi Hup-led consortium bagged a condo plot in October last year for $361 per square foot per plot ratio (psf ppr) - or about 10 per cent lower than the $402 psf ppr which MCL paid for the Ripple Bay site in May 2011. Far East clinched the Seastrand site for $335 psf ppr in September 2010.
Hoi Hup is planning to launch a 376-unit condo, Sea Esta, on its site around June. Because Hoi Hup paid a lower land price, and will probably do its own construction, it will be able to achieve a lower breakeven cost than MCL's Ripple Bay and hence be in a position to price its project lower. Another point to note is that there are two nearby sites on the confirmed list of the GLS programme for first-half 2012.
In all, there are 20 private condo projects which have yet to be launched on 99-year sites sold under the GLS programme since last year.
No doubt, developers launching projects on these sites will have to size up existing and potential competition in the area.
Projects launched previously have units yet to be sold. And more projects will be released in the market. That creates the impetus for realistic pricing to remain competitive and be able to sell well.
Even so, pricing strategies among developers are by no means uniform.
While the two launches this week point to some players at least being more nimble, BT has learnt of a reverse trend at some other developers - of holding or even marginally increasing price by raising the list price and then packaging in various tiers of discounts to appeal to buyer psychology. The net price, however, could be slightly higher than before.
Talk in the market is that one major player started this practice to draw buyers following the introduction of the additional buyer's stamp duty in early December. Its competitors have begun to follow suit.
Really, there are mixed signals in the market. Some developers may want to price more competitively to sell quickly and move on rather than risk being stuck. Others, especially with well-located projects near MRT stations or if they can differentiate themselves with unique concepts, lifestyle or product positioning, are confident of achieving their price while selling at a steady rate.
Meanwhile, all eyes are on the Urban Redevelopment Authority's flash estimate private home price index for the first quarter. The index has moderated for nine consecutive quarters up till Q4 2011. It rose 0.2 per cent in Q4 over the preceding quarter.
'If the price softening which has set in the secondary market spreads to the primary market, that is, developer launches, you will see impact on the index,' said a seasoned market watcher.
Source: Business Times – 30 March 2012
Exec condo site in Punggol attracts healthy interest
IN a sign that developers' interest in executive condominiums (ECs) is still strong, a 99-year leasehold EC site at Punggol Central/Edgefield Plains yesterday received a top bid of $136.7 million, or $319.69 per square foot per plot ratio (psf ppr).
The top bid, which beat nine others, was put up by Chinese firm Qingjian Realty (South Pacific) Group, which in November last year trumped four other developers with its $330 psf ppr bid for a 99-year leasehold residential site along Punggol Central.
That it was a closely-contested tender, with the top three bids in close range of just 4.1 per cent, shows that there is continued keen interest for EC sites and the increasingly popular Punggol address.
The second highest bid of $131.8 million, or $308.23 psf ppr, came from City Developments Limited's Sunmaster Holdings.
A joint bid by BBR Development, BPK Development and Ryobi Kiso Holdings' subsidiary Ryobi Development came in third at $131.37 million, or $307.22 psf ppr.
Based on the land cost of $319.69 psf ppr and the prevailing average selling price of newer EC units located in the area, a new project at the subject site could break even in the region of $630 psf to $640 psf.
EC land prices are clearly trending up. The top bid, at $320 psf ppr is even higher than Prive's land price of $308 psf ppr fetched in June 2010. Prive has the advantage in location being less than 500 metres from Punggol MRT station and bus interchange while the subject site is about 700 metres away.
Based on the land price, the breakeven price would be around $700 psf, which translates to a targeted selling price of between $750 psf and $800 psf.
Prive, which is jointly developed by NTUC Choice Homes and Chip Eng Seng, is the first EC development in Punggol.
In addition to the buoyant demand for EC units, the various plans rolled out by the government for Punggol, including the newly completed 4.2-km waterfront promenade as well as the upcoming park at Punggol Point, contributed to the fervent response for the site.
With the government's relaxation of the EC market such as raising the household income ceiling to $12,000 and allowing second-timers to buy ECs without having to pay a resale levy, demand for ECs is expected to remain healthy for the rest of 2012.
That Punggol has become increasingly popular is clear, with recently launched residential projects selling well, he added.
The 992-unit Watertown condominium in Punggol Central is around 95 per cent sold while the 728-unit Twin Waterfalls executive condominium at Punggol Walk is around 83 per cent sold, at the median prices of around $1,250 psf and $730 psf respectively.
The top bid reflects a breakeven cost of $650 psf to $680 psf, and it is likely that the new project will be priced around $750 psf.
The breakeven price for the site is expected to be in the range of $620 psf to $640 psf.
The subject site has a land area of 142,533 sq ft, and a maximum gross floor area of 427,600 sq ft.

Source: Business Times – 30 March 2012