The red-hot property market in Singapore will come under scrutiny on Monday when Parliament
sits. At least two MPs - Madam Ho Geok Choo (West Coast GRC) and Ms Jessica Tan (East Coast
GRC) - have put in questions on the impact of rising property prices. Madam Ho is worried that the buying frenzy could result in a property bubble. She told The Straits Times yesterday: 'If you look at what is happening in Singapore today, everybody is happily going shopping for property. Nobody seems to have concerns that there might be a risk in just going forward like that. It's very much like what happened in the United States before the sub-prime crisis.' Ms Tan is concerned about how the price spike may affect affordability. With HDB prices also rising, many have asked if the income ceiling for government housing grants could be raised. Now, any household earning more than $8,000 a month does not qualify for a grant when buying a resale flat.
Monday, September 14, 2009
Laguna Park up for collective sale (03/09 – BT)
Laguna Park, a 528-unit ex-HUDC estate in Marine Parade, has just been officially put up for
collective sale. More than 80 per cent of the owners have inked their consent to the collective sale agreement at a reserve price of $1.2 billion. The price works out to $844 per square foot per plot ratio (psf ppr), including an estimated total cost of about $400 million payable to the state for the increase in intensity of the site to the plot ratio of 2.8 and the topping up of the lease term to fresh 99 years. Laguna Park has a land area of about 677,493 sq ft and a gross plot ratio of 2.8. The successful developer would be able to build close to 1.9 million sq ft of gross floor area or some 1,500 apartments with an average size of about 1,200 sq ft. Laguna Park is one of the few known sites that have successfully obtained majority owners' consent under the amended Land Titles (Strata) Act, which came into effect in October 2007.
collective sale. More than 80 per cent of the owners have inked their consent to the collective sale agreement at a reserve price of $1.2 billion. The price works out to $844 per square foot per plot ratio (psf ppr), including an estimated total cost of about $400 million payable to the state for the increase in intensity of the site to the plot ratio of 2.8 and the topping up of the lease term to fresh 99 years. Laguna Park has a land area of about 677,493 sq ft and a gross plot ratio of 2.8. The successful developer would be able to build close to 1.9 million sq ft of gross floor area or some 1,500 apartments with an average size of about 1,200 sq ft. Laguna Park is one of the few known sites that have successfully obtained majority owners' consent under the amended Land Titles (Strata) Act, which came into effect in October 2007.
410 units snapped up at Trevista preview (01/09 – BT)
NTUC Choice Homes has sold 410 of the total 460 units it released for the preview of its Trevista condo in Toa Payoh last week. The co-operative is expected to release more units in the 590-unit project this weekend when it does an official launch, accompanied by an advertising campaign, for the project. Singaporeans picked up 87 per cent of the total 410 units. Permanent residents made up 7 per cent and non-PR foreigners, 6 per cent, of buyers. When sales in the 99-year leasehold condo began on Friday morning for the first batch of 210 units, the average price was $898 per square foot, but with two subsequent batches of additional units released, prices were adjusted marginally upwards, although this also had to do with the newer units being on higher floors and having better orientation. The average price currently is understood to be around $920 psf.
Property run-up may end in 2010: UK group (02/09 – ST)
The run-up in Singapore's private home prices may fizzle out next year, as several obstacles are still impeding global growth momentum. That is the view of London-headquartered Royal Institution of Chartered Surveyors (Rics), which represents and regulates property professionals and surveyors. It issued a report on Monday concluding that the sharp residential market rebound here may peter out. It cited higher unemployment in Singapore as a potential risk factor that could undermine the property rebound here. In contrast, top local developer CapitaLand remains bullish in its outlook for Singapore, and will soon launch a 1,000-unit condo in Gillman Heights and 165 resort-style homes at the former Char Yong Gardens site. CapitaLand's upbeat outlook on the market here was reflected in slides presented by its vice-president of investment Anson Lim at a CapitaLand CEOs forum held yesterday.
Friday, September 11, 2009
Act now to prevent a housing bubble (31/08 – ST)
In January, as the global financial storm lashed Singapore shores, fears took hold that large numbers of cash-strapped home owners might default on their monthly mortgage instalments, as businesses went belly-up and jobs were lost. DBS Bank went out of its way to calm the jitters by offering to resurrect the interest-only payment scheme to allow borrowers to make only interest payments on their home loans, to give them breathing space to sort out their finances. Only months later, in a surprise to many, the tide turned and there was a huge revival in the residential market. The gloom lifted as confidence grew and buyers rushed back to snap up properties - despite the stress that continued to be felt in the corporate sector. The statistics are impressive. In the second quarter, 10,184 HDB resale flats changed hands - up from 6,446 units in the first quarter and 7,763 units in the same quarter last year. This, in turn, triggered a boom in lowerpriced condos, as HDB sellers upgraded to private developments.
More want pricier homes (27/08 – ST)
The property boom is fast spreading to the upper reaches of the market, with more people buying premium-priced homes, according to data from property consultancy DTZ. The firm's analysis of caveats lodged shows that 22 per cent of total private home sales in the second quarter were for homes priced above $1.5 million, compared to 10 per cent in the first quarter. Buyers living in private residences bought 4,651 homes between April and June, more than the 3,710 homes purchased by HDB-based buyers. DTZ said that this showed a spillover of demand from the mass market to the mid- and higher-tier segments. It is a turnaround from the first quarter, when HDB upgraders and first-time buyers outnumbered buyers living in private homes. Seven in 10 buyers of new private homes in the first three months of the year had Housing Board addresses. The DTZ data highlights that 25 per cent of property hunters snapped up homes in the prime 9, 10 and 11 districts in the second quarter, up from 14 per cent in the first quarter. It was the first time in 11/2 years that sales in prime districts exceeded 20 per cent of total sales.
Super-cheap home loans unveiled (19/08 – ST)
Two foreign banks operating in Singapore have just unveiled rock-bottom home loan deals in a bid to secure a bigger slice of the fast-growing mortgage market amid record private home sales. Market observers say it is too soon to say if a full-blown mortgage rates war will erupt - but the latest rates are sure to get the attention of home hunters.One key factor allowing super-cheap mortgages is the fact that a key interbank rate, which influences consumer loan and deposit rates, is tipped to stay at depressed levels well into next year. The rate - the three-month Singapore interbank offered rate (Sibor) - is hovering at 0.68 per cent, near the all-time low of 0.56 per cent back in June 2003. With such cheap funds on hand, HSBC has just launched a mortgage package with an interest rate of Sibor plus 1 per cent throughout the loan term. The other new cheap deal is from a small player, State Bank of India (SBI) Singapore. It is offering a jaw-dropping Sibor plus 0.6 per cent for the first year, Sibor plus 0.8 per cent for the second and Sibor plus 1 per cent for
the third. The package is for completed properties only, and not for buildings under construction. Sibor is very low now as it closely tracks the US Federal Reserve Fed funds target rate, which is near zero.
the third. The package is for completed properties only, and not for buildings under construction. Sibor is very low now as it closely tracks the US Federal Reserve Fed funds target rate, which is near zero.
Mass-market home prices 'at 2007 peak'
Anti-speculative measures, falling rental yields and ballooning supply may drive residential
property prices down by about 20 per cent, says an analyst. RBS Singapore analyst Fera Wirawan warned that prices of some segments of the market have risen to 2007 peaks amid a strong upswing in buying levels. Based on her analysis, prices of mass-market homes, or low-end private properties, are now at peak October 2007 levels, while prices of mid-tier and high-end homes are just 8 per cent and 22 per cent off their peaks respectively. With prices surging 16 per cent to 26 per cent in recent months, the residential property sector may have peaked, Ms Wirawan cautioned. 'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' she said. Average selling prices (ASPs) at recent property launches are 30 per cent to 80 per cent above the ASPs of nearby projects. This is markedly higher than the historical average of 20 per cent.
property prices down by about 20 per cent, says an analyst. RBS Singapore analyst Fera Wirawan warned that prices of some segments of the market have risen to 2007 peaks amid a strong upswing in buying levels. Based on her analysis, prices of mass-market homes, or low-end private properties, are now at peak October 2007 levels, while prices of mid-tier and high-end homes are just 8 per cent and 22 per cent off their peaks respectively. With prices surging 16 per cent to 26 per cent in recent months, the residential property sector may have peaked, Ms Wirawan cautioned. 'The residential sector recovery was initially driven by pent-up demand and cheap capital values, but we now see speculation in all residential segments, particularly the mass segment,' she said. Average selling prices (ASPs) at recent property launches are 30 per cent to 80 per cent above the ASPs of nearby projects. This is markedly higher than the historical average of 20 per cent.
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