Landed housing plot draws top bid of just $77.80 psf

Business Times – 12 Mar 2008

Only one other offer made; poor show seen as sign of uncertain market

IN what is seen as a sign of an uncertain property market, a landed housing parcel in Jurong West drew only two bids, and a low top bid of $11.8 million – or just $77.80 per square foot (psf) – at the close of a government land tender yesterday.

The higher bid, put in by Boon Keng Development, was significantly below what analysts had said the site could fetch.

Cushman & Wakefield managing director Donald Han, for example, reckoned that the plot would fetch $200-$250 psf of land area.

‘The price is really below expectation,’ said Mr Han yesterday. ‘But with the market sentiment being so weak, you can expect wild swings in prices. Developers will be sitting on the sidelines or might not want to bid their best prices.’

The other bid was put in by Sunway Concrete Products, a unit of Malaysian- listed Sunway Holdings. It offered $10.3 million, or $68.1 psf of land area.

Li Hiaw Ho, executive director for research at CB Richard Ellis, said that both bids were ‘relatively conservative’ and reflected the current cautious sentiment in the market.

The 99-year leasehold site on Westwood Avenue has a land area of 151,759 sq ft. Property analysts estimate that some 50-60 landed homes can be built on the site.

‘Nevertheless, based on the highest bid of $78 psf, terrace houses on this site could still be sold for $900,000 to $1 million each,’ Mr Li said. This is slightly higher than recent transactions of intermediate terrace houses in nearby Westwood Park and Westville, which were between $820,000 and $990,000 each.

Potential buyers, Mr Li added, could comprise locals working in the manufacturing firms in Jurong and Tuas, as well as academics at nearby Nanyang Technological University.

Market watchers, however, said that it is possible that the government might not award the site because of the low price.

The price looks especially low when considering other recent government sales of landed housing plots, Mr Han pointed out.

In October, the Urban Redevelopment Authority (URA) auctioned off 12 sub-divided landed housing plots near Sembawang Beach which can be developed into a total of 57 landed homes. The auction fetched a total of $37.09 million, which worked out to about $285 psf of land area on average.

And in January, the government decided not to sell a short-term office site in Aljunied because the sole bid offered too low a price. The decision followed a recent string of lower-than-expected offers for state land.

All eyes on govt land tenders this month

Business Times – 11 Mar 2008

$500m site above Serangoon MRT, 3 suburban housing plots on offer

AMID the current quiet market, all eyes will be on four 99-year leasehold suburban Government Land Sale site tenders that close this month.

They comprise three private residential sites including one for landed housing, and a ‘white’ site above the Serangoon Circle Line MRT station that could potentially be worth more than $500 million.

The action kicks off today, with the closing of a tender for a landed housing parcel in Westwood Avenue, Jurong West, big enough for about 50-60 landed homes.

Cushman & Wakefield managing director Donald Han reckons the 151,759 sq ft plot could fetch about $200-250 psf of land area. The plot is next to the landed housing area at Westville. Those looking for clues on how developers read the suburban mass-market residential sector will have to train their eyes on tender closings for two plots this month, both boasting scenic locations.

One is at West Coast Crescent next to Blue Horizon condo and faces West Coast Park and overlooks the sea. The other is in Yishun, fronting Lower Seletar Reservoir and close to Singapore Orchid Country Club/Golf Course. It is also near Khatib MRT station.

Property consultants polled by BT in January, when the tenders for the two sites were launched, indicated bids of about $200-300 psf per plot ratio (ppr) for the Yishun plot.

Mr Han reckons the winning bid will be closer to $300 psf ppr, reflecting a breakeven cost of about $550-600 psf and a possible average selling price of $700-800 psf for the new condo.

As for the West Coast plot, consultants earlier indicated a wide range of bids – $260-400 psf ppr. Mr Han estimates the plot’s value at the higher end of that range, around $380-400 psf ppr as ‘it is near parks, recreational facilities and the sea’, translating to selling prices of about $850-950 psf for a new condo on the site, on a project-average basis.

He expects the Yishun and West Coast condo sites to attract at least five bids each, while the landed housing plot at Westwood Avenue could draw more bids, about five to eight.

‘Developers may be willing to look at smaller profit margins because these are sure-sell markets, given pent-up demand in the mass market. However, buyers are still price-sensitive,’ he said.

While some analysts and consultants still feel the mass-market will be relatively resilient this year, City Developments executive chairman Kwek Leng Beng recently offered a different perspective.

‘The mass market will do well, but selectively. It’s not going to be what you’ve seen before. . . people queuing up,’ he said, noting that the Housing & Development Board provides a credible alternative to mass- market private housing.

The Serangoon Central site was quietly launched in December by the Land Transport Authority. The 269,180 sq ft plot can be developed into an estimated maximum potential gross floor area (GFA) of about 850,000 sq ft excluding a bus interchange that the successful bidder will have to build. The developer will be reimbursed the cost of building the interchange.

The site can be developed into any combination of commercial, hotel, residential, and sports and recreational use.

Cushman’s Mr Han said that assuming 30-40 per cent of the GFA is for retail use and the rest for residential, the plot could be worth about $400-450 psf ppr, or a total of around $340-380 million.

‘So the breakeven cost would be about $700 psf for the residential component and the developer might be able to achieve selling prices of say $900-1,000 psf on average. The retail component will break even at about $1,200-1,400 psf,’ he reckons.

However, other property insiders say that assuming an all-retail development, which would be the ‘highest and best use’ of the site, land bids could come in closer to the $600-700 psf ppr mark (about $500 million to $600 million in total).

Suburban malls are generally valued at about $1,800-2,000 psf of net lettable area currently,’ one player pointed out.

However, another major player countered that sentiment today is subdued, and said the challenge of securing bank finance for such a big project with a likely total investment of about $1 billion or more will put a dampener on bullish bidding for this site.

The action and market watching continues next month, with at least two interesting offerings at state land tenders – a private condo site at Toa Payoh Lorong2/3, and a 1.56-hectare site in Choa Chu Kang for residential development that comes with the existing Ten Mile Junction mall.

Mixed landed housing site for sale

CHESTNUT VILLE (I and II), a mixed landed site at Dairy Farm Crescent, has been put up for collective sale and the indicative price for the combined plot is $90 million.

This represents a land price of $741 psf over the land area, inclusive of an estimated $1 million development charge.

The development currently comprises 11 townhouses and 34 walk-up maisonette units with a combined land area of about 122,677 sq ft.

Credo Real Estate, which is marketing the site, says that the site is zoned for three-storey mixed landed housing.

This means the site may yield a combination of conventional terrace houses, semi-detached and detached houses; or cluster landed housing with strata terrace houses, strata semi-detached houses and strata bungalows with communal facilities. Credo executive director Tan Hong Boon added that it commissioned a study by an architect and one of the possible schemes allows the site to be developed into 10 strata detached, 22 strata semi-detached and 27 strata terrace houses, together with another four conventional semi-detached houses and two bungalows.

Based on the indicative price of $90 million, the potential developer’s breakeven price for an intermediate strata terrace house and a conventional bungalow should be about $2.1 million and $3.8 million respectively, added Mr Tan.

Credo also pointed out that according to the Land Transport Authority, the planned Bukit Timah MRT Line is slated to include a Chestnut Station and a Hillview Station, both of which could be expected to be close to the site.

Mr Tan also expects good response for the mixed landed housing site as ‘they are not easily available in the market’.

Source: Business Times 6 Mar 08

More landed housing sites up for auction

THE Urban Redevelopment Authority (URA) has launched the second phase of Sembawang Greenvale after auctioning all parcels in Phase One last October.

In the first phase, 12 sub-divided landed housing plots near Sembawang Beach were auctioned for a total of $37.09 million, which works out to about $285 per square foot (psf) of land on average.

Phase Two comprises 11 land parcels for a total of 90 dwellings. Most of these will be terrace houses.

Knight Frank director (research and consultancy) Nicholas Mak says new terrace houses in the area are now selling for $1.7 million to $2 million.

The median unit price for landed housing in District 27, where Sembawang is located, increased 12 per cent quarter-onquarter in Q4 2007, he said. ‘Therefore, in terms of bidding price, we expect the average land price of Greenvale Phase Two will be higher than that of Phase One.’

Mr Mak expects that terrace plots will fetch about $320-380 psf of land, and semi-detached plots about $300-350 psf of land.

Cushman and Wakefield managing director Donald Han believes demand for landed property will stay sound this year. But he also reckons current sentiment – hurt by the US sub-prime crisis – could see potential bidders for Sembawang Greenvale Phase Two discount their offers in the light of rising risks.

As such, he thinks bids could be 5-10 per cent below those received for Phase One.

Mr Han still believes there will be interest in the parcels, especially those that can yield more units, as developers will be able to ‘average down’ construction costs and increase profit margins.

Separately, URA said yesterday it has launched an industrial land parcel at Ubi Avenue 4/Ubi Road 2 for sale by public tender, after a developer committed to bid at least $14 million in early February.

Colliers International managing director Dennis Yeo estimated earlier that bids for the site could come in at $70-80 psf per plot ratio, translating to a breakeven cost of about $230-250 psf.

Source: Business Times 1 Mar 08

2 good class bungalows on Leedon Road up for sale

A PAIR of recently completed Good Class Bungalows at 37 and 39 Leedon Road are being launched by their developer George Lim. His asking price is about $35 million for each bungalow. The plots’ land areas are 22,000 square feet and 21,000 sq ft respectively.

Each five-bedroom, two-storey freehold house has a basement garage for up to five vehicles.

The exteriors are clad in natural sandstone, while inside there is AMX movie-on-demand hardware.

Mr Lim launched his maiden project in 2005 with three Good Class Bungalows built on a 50,000 sq ft site in the Belmont area.

 

Source: Business Times 22 Feb 08

More colonial bungalows up for rent

Demand for these state-owned buildings is strong due to relatively low rentals

ANYONE with a hankering for a home with lots of nature and space, and does not mind living some distance from town might want to take note.

The Singapore Land Authority (SLA) will be leasing out four of these colonial bungalows this month, along with two semi-detached houses.

The properties are in Maida Vale and Brompton Road in Seletar, Gibraltar Crescent in Sembawang and Lornie Road near Bukit Timah.

This comes on the heels of a sizzling response to five similar properties the SLA put on the bidding block last month. They drew 75 bids in all and were rented out for about double the guide rents.

All these form part of the SLA’s stock of 2,360 black-and-white homes – properties ranging from apartments to bungalows dating back to the 1930s and are inherited from British colonial days.

Demand for these state-owned buildings has traditionally been very strong, partly because of relatively low asking rentals.

Monthly guide rents for the latest batch of homes, for example, start at $1,800 for a 1,367 sq ft semidetached house in Brompton Road. They go up to $6,600 for a Gibraltar Crescent bungalow with 7,212 sq ft of built-up area and 16,145 sq ft of land.

Mr Ku Swee Yong, director of business development and marketing at Savills Singapore, thinks the homes can fetch even more.

‘These guide rents are extremely attractive. Normally, you would be able to get at least double the price, if the properties are in good condition,’ he said.

Last month, the SLA rented out three apartments in Clemenceau Avenue North at between $1,856 and $2,500 – double their guide rents of $960 to $1,110. Two more bungalows in Alexandra Road and Dover were let for $20,258 and $15,100, also about twice the guidance.

The guide rents are decided by the SLA’s valuers, who take into account the property’s last rental, location, condition and whether it comes with a swimming pool, air conditioning and furnishings.

All the properties are in move-in condition and are regularly maintained by SLA-appointed managing agents.

The homes, which come either unfurnished or partially furnished, are located in areas such as Sembawang, Alexandra Park, Adams Park, Telok Blangah, Bukit Timah and Woodleigh Park.

The SLA will put another eight properties up for rent next month, including in Bukit Timah and Newton.

Another 11 are in the pipeline between April and June.

Monthly rents range from $400 for a small apartment to more than $20,000 for a black-and-white bungalow.

About 91 per cent of the homes are currently occupied, a rise of about 6 per cent over a few months ago.

Most are let for two years, although tenants are normally allowed to renew their leases when they lapse.

Deirdre Dempster, for instance, is planning to extend her lease at a black-and-white bungalow at Goodwood Hill when it runs out in August. The 40-year-old, who is in marketing, has been living there for four years with her banker husband and two kids.

‘I love it. I wouldn’t trade this house for anything,’ she said. ‘What attracted me was the area and the grounds, and there’s a lot of character and history attached to these properties. I hope they don’t tear them down.’

Interested tenants can bid for this month’s properties via the SLA’s new open bidding system. An open house will be held for the homes, and bids will be accepted for a week after the date of the viewing.

 

Source: The Straits Times 6 Feb 08

Private homes losing speculative froth

Subsale activity slowed in Q4; rising rents defined 2007

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

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

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

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

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

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

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

Yesterday’s data on the private property market by Urban Redevelopment Authority showed that the overall price index for private homes rose 6.8 per cent in Q4 over the preceding quarter, slower than the 8.3 per cent hike in Q3.

For the full year, the index was up 31.2 per cent, three times the 10.2 per cent rise in 2006.

In terms of regions, the price index for non-landed private homes in CCR rose 7.5 per cent in Q4, more measured than the 8.3 per cent gain in Q3.

Price indices for RCR and OCR advanced 7.7 per cent and 7 per cent respectively in Q4, slightly more modestly than in Q3.

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

Developers sold a record 14,811 private homes last year, surpassing the previous high in 2006 by 32.9 per cent.

They launched a total of 14,016 units in 2007, 26.6 per cent above the 2006 figure and also a new high.

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

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

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

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

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

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

 

Source: Business Times 26 Jan 08

Freehold GCB site off Holland Road on sale for $41m

A FREEHOLD good class bungalow (GCB) development site at 11 Ford Avenue has been put up for sale and the indicative price is $41 million.

This works out to about $893 per square foot for the 45,894 square feet site which is off Holland Road.

A single-storey bungalow currently sits on the site, which is being marketed by Colliers International.

Ho Eng Joo, executive director of investment sales at Colliers, says that the buyer of the site is likely to redevelop it, as up to three GCBs of around 15,000 sq ft can be built there. ‘Good class bungalows are in high demand in land scarce Singapore,’ he added.

Mr Ho estimates that at the indicative price of $41 million, and construction cost of between $1.5 million and $2 million for a bungalow, the breakeven price for a single bungalow is about $16 million.

Prices of prime landed property has been increasing.

Recent benchmark transactions include $25.5 million or $1,899 psf for a house in Nassim Road in October 2007.

In August 2007, a conservation bungalow at White House Park sold for $28.8 million or $1,308 psf.

Closer to Ford Avenue, Mr Ho said, recent transactions of GCB land include sites at Ridley Park for around $1,000 and Chatsworth for around $950 psf.

He said that given the strategic location of the site, which is within walking distance of Holland Village and not far from the Orchard/Scotts Road shopping belt, he expects to see keen interest from developers and high net worth individuals.

 

Source: Business Times 15 Jan 08

PROPERTY: Demand for bungalow sites expected to rise

Landed home prices likely to continue last year’s surge and jump by up to 15% this year, say analysts

PROPERTY analysts believe this will be the year for mid- and mass-market properties to shine – but they say demand for landed homes should also remain favourable.

They expect prices of landed homes to climb by 10 per cent or even as much as 15 per cent this year.

That sort of rise may not be spectacular but is still substantial as it comes off a high base last year, when prices of such homes are estimated to have risen 25 per cent to 27 per cent, according to property consultancy Knight Frank.

A year earlier, in 2006, the price climb was just 6.7 per cent.

‘The landed home sector was a laggard compared with non-landed homes,’ says Knight Frank director of research and consultancy Nicholas Mak. ‘It started to pick up last year when people noticed that it was slightly undervalued.’

Good-class bungalows, in particular, attracted strong demand as wealthy homebuyers zeroed in on these large and exclusive houses in prime districts.

But demand for smaller bungalows remains fairly strong too as such properties are limited in supply, says Ms Grace Ng, the deputy managing director of agency and business services at Colliers International.

And what supply there was has dwindled. Many have been redeveloped into semi-detached and terrace houses as a result of the favourable property market conditions of the past two years, she said.

Bungalow sites do not come along often, but there are a few available at this month’s auctions.

Ms Ng said Colliers has a distinctive bungalow that will be put up for sale this month. Located in the Siglap area, the two-storey bungalow has an ‘English cottage’ architectural design and is one of the few bungalows in the area.

The design was inspired by the houses the owner and her late husband saw during their postgraduate years in Britain.

The 4,695 sq ft property – in its original condition – was built in the 1950s and has an indicative price of $3.6 million or $766 per sq ft (psf).

Recent transactions in the same area – district 15 – ranged between $650 psf and $780 psf for two-storey detached houses.

Two large bungalow sites aimed at small developers or investors are also up for auction, at other houses.

One is in Branksome Road, off Tanjong Katong Road. It has a land area of 12,847 sq ft and an indicative value of $900 psf to $950 psf.

Ms Mok Sze Sze, the head of auctions at Jones Lang LaSalle, said this site has the potential to be redeveloped into a conventional landed project or a cluster housing project with six to eight units.

Cluster bungalows in the area are going for about $3.6 million to $4 million each, she said.

Knight Frank too will be auctioning a landed property, at the end of the month: a 14,170 sq ft site in Clacton Road off Meyer Road. It has an indicative value of $1,000 psf to $1,200 psf and can be redeveloped into three bungalows, said the firm’s executive director (auctions), Ms Mary Sai.

Recently, demand for landed homes has also come from those who pocketed lump sums in cash from collective sales, said Mr Mak.

‘Landed homes have always been a different class because foreigners can’t buy them,’ he said.

The market is much smaller than that for condominiums and apartments, which also means it will not be as liquid, said Mr Mak.

In addition, buyers nowadays are not prepared to pay too high a price above valuation, said Ms Ng of Colliers International.

This is due to high construction costs, cautious market sentiment, and the steep price increase over the past two years, she said.

 

Source: The Sunday Times 13 Jan 08

Two residential sites off Mandai Rd up for auction

PROPERTY firm Colliers International yesterday announced the auction of two residential sites off Mandai Road. Both plots have 999-year leases from Oct 16, 1884. The sites are being sold on a nonvacant basis. This means the buyers will be responsible for vacating the tenants.

The two sites are at 20-28 and 43-56 Meng Suan Road. Each is expected to go for about $250 per sq ft (psf), said Colliers auctioneer Grace Ng.

This means the smaller plot at 20-28 Meng Suan Road, which is 21,066 sq ft, will cost about $5.3 million including a development charge (DC). The site is now occupied by a row of nine single-storey terrace houses.

The larger plot at numbers 43-56, which is 31,043 sq ft, will cost about $7.8 million, also including a DC.

The land is occupied by a row of 14 single-storey terrace houses.

‘The successful buyer can consider developing a row of 10 terrace houses on the smaller plot of land of about 1,938 sq ft each for the inter-terrace units and about 2,583 sq ft each for the corner units,’ said Ms Ng. ‘The larger plot of land can accommodate up to nine similar terrace houses, as well as four other semidetached houses of about 2,583 sq ft each. Given the limited supply of land, freehold and 999-year leasehold, this is a rare opportunity for developers and investors to acquire two huge plots.’ And with the government about to release a 30-hectare site at Mandai for nature-themed attractions, the area will become more vibrant, she said.

The auction will be held on Jan 30 at Amara Hotel.

 

Source: Business Times 8 Jan 08

Two landed sites to go on sale with tenancies

Prices should be less than market rate as house owners need to be compensated

TWO sizeable landed residential plots off Mandai Road will be sold via auction later this month – with prices expected to be below the market rate for comparable plots.

The catch: The 23 houses that sit on the land are owned by different owners rather than the two brothers who own the two respective plots.

That means the buyers of the plots will have to negotiate with the owner-tenants of each house separately and compensate them individually.

After that, the buyer can build three-storey landed homes on the 999-year leasehold sites, both sited on Meng Suan Road.

Colliers International, which is conducting the auction on Jan 30, said fairly large landed plots are relatively rare. For instance, the Government will release only two landed sites for sale in the first half of this year, said its deputy managing director for agency and business services and auctioneer, Ms Grace Ng.

The first Meng Suan Road plot has an area of 21,066 sq ft and is occupied by a row of nine single-storey terrace houses. The second is 31,043 sq ft and with a row of 14 single-storey terrace houses.

The father of the two brothers who own the sites sold the houses to individual owners 40 to 50 years ago for less than $5,000 each.

This may sound unusual, but sales with tenancies were quite common in the past, said Ms Ng. The owners of the Meng Suan Road houses have enjoyed a great deal as they pay the land owners ‘ground rent’ of just $20 a month.

Negotiating with these owners may take time, but the buyer will be able to take heart that he is likely to get a good price. ‘We have applied some discount because they are encumbered with existing tenancies,’ said Ms Ng.

The indicative price of the sites is between $250 and $260 per sq ft, inclusive of the development charge. This puts the smaller plot at about $5.3 million and the bigger one at around $7.8 million.

Negotiating with the house owners will be somewhat simplified by the fact that owners of six of the 23 houses are related to one another, said Ms Ng.

Dealing with multiple owners may not be easy, but it is something that boutique development firm Link (THM) Holdings has proven it can handle.

The firm, which began as a fashion business, said yesterday that it had acquired a freehold site in Ban Guan Park, off Holland Road, comprising nine apartments and nine shops, after negotiating with the individual owners since late 2005. It paid $31.1 million for the site of 32,900 sq ft and plans to build 20 semi-detached houses.

The firm said there were several failed collective sale attempts in the past decade.

Its director, Mr Kenny Tan, said the firm then decided to talk to individual owners to address their concerns and to get them to sell individually.

 

Source: The Straits Times 8 Jan 08

YOUR PERSONAL ADVISER: FINANCE

How can landlord reclaim house when tenant fails to pay rent?

Q MY FRIEND’S three-room terrace house in Singapore was rented out to a divorcee and her daughter. The tenant put down a total deposit of $1,200, consisting of one month’s rental of $1,000 and $200 for utility bills.

The tenant last paid rent in April last year. She owes four months’ rent, or $4,000. Before that, she had been late in making payments for several months. Unpaid bills for utilities add up to about $100.

The landlord has chased the tenant for rental payment since June. At first, the tenant gave many excuses and promises, but they all turned out to be false.

Since late July, the tenant has stopped answering the landlord’s calls to her mobile phone and has also not returned any SMSes. She and her daughter were hardly ever at home.

In late July, the landlord locked the front and back gates of the house with extra padlocks but did not enter the house. The tenant’s possessions are still in the house. The tenant did not attempt to enter the house or contact the landlord.

The landlord made a police report that the tenant owed money and could not be contacted. The landlord’s primary goal is to reclaim the house and rent it to someone else. The money owed is secondary.

A notice containing details of the amount owed and of the police report that had been made was posted on the front door of the house. The same notice was circulated to neighbours.

The tenant’s furnishings were bought from a furniture company on instalment.

My questions are:

a) Does the landlord have the right to lock up the front and back gates of the house without entering the house?

b) What are the landlord’s liabilities if he enters the house and then sells the tenant’s possessions to reclaim part of the money owed?

c) What are the landlord’s liabilities if he enters the house, takes photos of the interior of the house with all the tenant’s possessions, for documentation purposes, and then moves the possessions into a storage room?

After that, can the landlord rent out the house to another tenant but keep the storage room for his own use in order to store the previous tenant’s possessions?

d) If the tenant makes a police report that the landlord entered the house and took her possessions, can the police arrest the landlord?

e) Can the furniture company make a claim against the landlord for selling the furnishings that are still being paid for by instalment?

f) What is the best method to evict the tenant in my friend’s case?

A WHEN a tenant fails to pay rent, the landlord may of course sue the tenant for the arrears of rent, just as he could with any other debt due and owing.

The action must be brought within six years of the date that the arrears became due.

However, the landlord has two other specific remedies, namely, distress under the Distress Act and forfeiture of the lease.

Distress is an ancient remedy that is quite similar to seizure and sale – that is, the tenant’s goods are seized and sold, and the rent owing must not exceed 12 months of the tenancy.

Such an action may be brought if the tenant is still in occupation or has his goods or belongings on the property. The procedure starts with the filing of a writ of distress that is addressed to the sheriff. The sheriff will seize the goods, and make an inventory and a valuation. He will also give the tenant a notice of the seizure, informing him of the rent owed and that the goods seized will be sold at a stated place and time.

Such a notice may be pasted in a conspicuous place on the premises. The tenant has five days to pay up from the date of notice or to apply to court for an order to stop the sale.

On the tenant’s application, the court may order that the goods be released unconditionally, direct that an issue be tried and so suspend the writ, or hold that the goods may be sold.

Of course, if no application is made, the goods will be sold and the proceeds applied first to pay the sheriff’s costs and then to satisfy the outstanding rent. The balance, if any, would be returned to the tenant.

Certain items cannot be distrained, such as things in actual use in the hands of the tenant, tools and implements, and his necessary clothes and bedding for himself and his family.

Only movable items may be seized, so fixtures are excluded. It is also common for most hire-purchase companies to expressly provide in the hire-purchase agreement that the hiring shall automatically terminate if the hirer’s landlord takes any steps to levy distress. Therefore, such goods cannot be seized and, if seized, would be released by the court.

Where the tenant has abandoned the premises and there is insufficient property for distress, then if (a) the rent is not less than 75 per cent of the annual value of the property and (b) the rent has been in arrears for at least two months, the landlord may apply to court to enter and take possession of the premises.

The sheriff will paste a notice informing the tenant that possession will be given to the landlord unless the tenant applies within 10 days, or the court orders otherwise, on the application of the tenant or some other interested party.

If the distress action is brought after bankruptcy proceedings have started against the tenant, then only three months of arrears of rent are recoverable against him. The landlord may also file a proof of debt with the Official Assignee against the bankrupt tenant, just as he could with any other unsecured creditor.

The landlord may also apply for forfeiture of the lease, which would effectively bring the lease to an end. This is usually an action for possession, and a well-drafted agreement will usually contain a clause for re-entry in the event of the tenant’s failure to pay rent.

However, the tenant may apply to court before judgment for relief from forfeiture by paying into court all the arrears of rent and costs, in which case the tenant would be able to continue with the lease and not have to enter into a new lease.

Even after judgment for possession, the tenant is still entitled to relief if he pays up the judgment sum with costs within four weeks of the judgment. The law is not explicit about whether relief is still available to the tenant where the landlord has entered into possession peaceably and changed the locks. While the court might still be able to grant relief, it would, however, take into account the lapse of time as it would not be fair to the landlord if the tenant were to appear out of the blue and pay the arrears to reclaim the lease. The tenant’s significantly long absence could well be read as an implied surrender of the lease.

In your friend’s case, it appears that he has entered into possession peaceably and that has effectively brought the lease to an end.

However, your friend should be mindful of the tenant’s right to apply for relief. The tenant’s right to relief is extinguished only if your friend issued and served proceedings for possession, obtained judgment and then entered the premises on the strength of that judgment.

As for the tenant’s goods, it is prudent and best to apply for a court order as the tenant might make all sorts of allegations that his property had not been properly valued or had been sold at an undervalued price.

The police usually treat disputes between landlord and tenant as a commercial matter.

 

Source: The Sunday Times 6 Jan 08

Rents for state-owned homes rise

(SINGAPORE) Now, you too can live like the colonial sahibs of old, as long as you are prepared to make the highest offer for monthly rental in an open bid.

But be warned, rents of homes under the Singapore Land Authority’s (SLA) first bidding exercise held recently, increased by between 40 to 230 per cent over previous rents.

Before the open bidding system, the allocation of homes was done through a balloting exercise or on a first-come-first-serve basis.

But in October and November, SLA piloted the new open bidding system of allocating homes to make the process fairer and more transparent with five homes awarded so far. One of these, a bungalow on a 2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.

On the new system, SLA deputy director of land lease private Teo Cher Hian said: ‘This way, market forces decide the rental that can be fetched for the state properties.’

The new system appears to be popular with 84 bids received for the first five properties. Of these bidders, 64.3 per cent were locals, with companies and foreigners making up 22.6 per cent and 13.1 per cent of the bids respectively.

Mr Teo also said that many of the bids were higher than the guide rents set by SLA.

Although the widely held perception is that these state-owned properties are cheap to rent, SLA says that guide rents are determined by an independent valuer based on the size, condition, location and proposed tenure of each property.

The properties are also let in their existing condition, usually unfurnished with rents starting as low as $400 per month for a small flat. Enhancement of these properties is also not a primary objective as some of these units sit on sites that could eventually be redeveloped.

SLA has a total stock of 2,360 homes comprising landed and non-landed properties, representing about 19 per cent of the total estimated gross floor area of state properties it manages.

SLA’s rental homes have an occupancy rate of about 91 per cent. But existing tenants are usually allowed to directly renew their leases although the rents may be increased.

In its last financial year (April 1, 2006 – March 31, 2007) SLA says that its residential rental revenue was $78 million, up 2.6 per cent or $2 million from the previous year. SLA added that rents increased by an average of 5 per cent in this period with the highest increase of 23 per cent recorded for just one property.

Previously, rents for apartments ranged between $400-$3,800. Terrace, semi-detached and bungalow rents ranged between $600-$3,333, $800- $11,500, and $1,100- $23,222 respectively.

But the impact of the new bidding system to SLA’s rental revenue is, however, not likely to show any immediate significant increase, as so few of these properties actually come up for rent. For the first half 2008, SLA expects only about 36 homes to be made available for rent – upon being vacated – with six homes expected in January followed by seven in February and six in March.

Those interested in bidding for these can submit their bids to SLA at a stipulated time and date. The bidding period will be six days. More details will be available on SLA’s website www.spio.sla.gov.sg from Dec 14.

But do take note that for a bid to qualify, the bidder’s average monthly income has to generally be at least three times the monthly rental bid so only those earning over $60,000 a month need bother looking at those grand old black and white bungalows.

 

Source: Business Times 10 Dec 07

Beach Road could be next prime hot spot

Set for a snazzy makeover, boasts a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor

FORGET the Central Business District. Property investors priced out of prime zones but still hunting for a good buy should look to downtown’s upcoming hot spot – the Beach Road, Ophir-Rochor district.

This hotchpotch of an area – with old shophouses dotting its landscape, juxtaposed with towering modern office blocks – is set for a snazzy makeover, as announced by the Government this week.

Already, property experts have identified strong potential upside for properties in the district.

Minister of State for National Development Grace Fu said it would be ‘an extension of Bugis’, complementing the Marina Bay financial district.

Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.

The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.

One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million – or $1,077 per sq ft (psf) – in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.

The same unit now costs more than $2 million – or $1,539 psf – on the market, said the 61-year-old retiree.

Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.

While Singapore’s property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.

Beach Road already has its own crown jewel in South Beach – an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.

On Thursday, the Government said it would release one more 2.74ha plot – between Rochor and Ophir Roads, surrounding Parkview Square – as a multi-use ‘white site’ next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.

CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.

‘A mini-Raffles City on the white site is likely to do very well,’ added Mr Ku.

Shophouses are now particularly attractive, especially those facing the new plot, he said.

Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.

The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.

Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.

Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.

Still, before that can happen, certain parts of the district have to be ’spruced up’ and polished, added Mr Ku.

Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area’s new trendy image.

Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.

Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.

Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.

While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good ‘trickle-down effect’.

‘This district will remain attractive, especially to us, as it’s a creative hub with lots of knowledge-driven businesses and schools in the vicinity,’ he said. ‘It’s got a good vibe.’

Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was ‘the’ entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.

‘Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,’ he said.

 

Source: The Sunday Times 9 Dec 07

Want to rent this? Make a bid for it

New allocation system for select state-owned homes expected to cut long waiting lists

RENTERS who have long hankered after that state-owned black-and-white colonial bungalow but are put off by the long waiting list can now bid for their dream home.

State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.

Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.

There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.

Renters have said that getting one is like winning the lottery – a tenant is selected either on a first-come, firstserved basis or through a balloting exercise when a property is released.

Under the new scheme, anyone interested in these properties will be invited to view them during open houses.

They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.

The new system will allow these buildings to be secured within a week or so of their being made available.

All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.

An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.

At least 36 houses in popular locations – ranging from terraced and semi-detached houses to bungalows – will be open for bidding in the first half of next year.

Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.

But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.

He said many of his clients faced months, or even years, of waiting for such properties to become available.

‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.

SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.

The price he paid – $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m – is reasonable, he said.

He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.

SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding.

Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.

The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.

Range of properties:

• Flat/Apartment – 1,090 units; rental from $400-$3,800

• Terrace – 340 units; rental from $600-$3,333

• Semi-detached – 390 units; rental from $800-$11,500

• Bungalow – 540 units; rental from $1,100-$23,222

Some of their locations:

• Alexandra Park

• Seletar Airbase

• Telok Blangah

• Scotts Road

• Malcolm Park

• Medway Park

• Goodwood Hill

• Bukit Timah

• Woodleigh Park

  Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.

  The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.

  They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.

Source: The Sunday Times 9 Dec 07

Hot market smokes out solo land sites

19 single-owner plots worth $1.05b sold this year

(SINGAPORE) With the property market running hot, it is not just collective sales that have ballooned. Over the past two years, more residential land sites owned by single owners were sold as well.

So far this year, 19 residential sites owned by single owners and worth some $1.05 billion in all were sold to developers, data provided by property firm CB Richard Ellis (CBRE) shows.

And in 2006, there were 15 single-owner land sales worth a total of $865 million. By comparison, just four singleowner land sales worth $303 million were done in 2005.

Market watchers say a property market that is strong and active will bring out more sellers – both of the en-bloc variety as well as single owners.

‘Collective sales have hogged the limelight of late, but the single-owner sales have also been very active,’ says CBRE executive director Jeremy Lake. ‘If you look at overall residential sales, you will see that they have gone up too. So single owners are just mirroring the overall market.’

Ku Swee Yong, director of marketing and business development at Savills Singapore, says that in the case of those sites owned by associations or clubs, members who were looking to sell might have been able to convince those who were previously not in favour of selling to change their minds, considering the prices that the properties can now fetch.

‘When the price is better, they (those looking to sell) manage to clear the hurdle,’ Mr Ku says.

The 19 sites sold by single owners this year include a few owned by associations, including one sold by Chui Hui Lim Club. The club sold a Keng Lee Road site to Sim Lian Group for some $115.8 million.

CBRE’s data also shows that this year, while there were a few large single-owner sites that were sold, the bulk of the 19 properties were small – with 10 of them going for less than $30 million each.

Market watchers attributed the increased interest in smaller sites to new players in the property market. These smaller developers generally do not have the resources to bid for en-bloc sites that go for hundreds of millions dollars – the province of the likes of CapitaLand, City Developments and foreign property funds.

‘When the market is good, it will attract new entrants,’ says CBRE’s Mr Lake. ‘And you will find some people who will want to get into the market, but might not be able to afford the big sites.’

Sesdaq-listed Tee International is an example of one new entrant which has been snapping up smaller sites. The company, which has a market capitalisation of $41.5 million, has been in the electrical and mechanical engineering business since 1980. But since the start of the year, Tee has been buying a string of freehold terrace houses and apartments with plans to develop them into luxury ’boutique’ homes.

Among its purchases are three single-owner sites, CBRE’s data shows. Tee acquired two single-owner plots in Cairnhill Circle in July – one for $7.7 million and the other for $5.5 million. It also bought a single-owner property in Thomson Road for $6.9 million in January this year.

Similarly, Eastern Holdings, which publishes magazines, also picked up two small single-owner sites in Grove Drive this year – one for $12.5 million and the other for $10.3 million. The company is also relatively small, having a market capitalisation of about $70 million.

Savills’s Mr Ku says that there are also some high net worth individuals who are buying smaller sites, redeveloping them and then selling them – all within a short span of time – to capitalise on the property market.

These wealthy individuals were also adding to the demand for smaller sites, he says.

 

Source: Business Times 22 Nov 07

Sweet collective-sale deal for 15 houses in Balestier

Each owner gets $4m – 2 to 3 times what they would have made if they sold separately

IT TOOK 18 months but the owners of 15 terrace houses in Balestier have pulled off a sweet deal to match some of the collective sales that have been making headlines all year.

They have banded together to sell their properties for $61 million, giving each a payout of about $4 million.

This is two to three times what they would have made for their homes individually and a huge gain for those who bought several years ago.

It is quite a coup given that the deal was trickier than the usual collective sale and the fact that the once roaring en bloc market has cooled considerably since tougher rules were put in place last month.

The quieter market made the sale of the 15 terraces in Jalan Bunga Raya quite an achievement, said Mr Shaun Poh, senior director for investment advisory services and auctions at DTZ Debenham Tie Leung, which marketed the houses.

The mostly two-storey homes are not strata-titled as in a typical condo. This meant every owner had to agree to sell, unlike in a strata development where only 80 per cent of owners have to agree.

While similar deals have been sealed before, getting 15 out of 15 owners to sign the deal ‘was a challenge’, Mr Poh said. ‘If anyone doesn’t sign, that’s it. No deal.’

DTZ worked for about 18 months to collect all the signatures, he said.

The offer proved too sweet to resist for owners such as housewife Virgie Orlino, 47, who was initially reluctant to sell her house, which has been home for about 14 years.

‘We didn’t want to sell, but the rest wanted to sell, so we decided to cooperate,’ she told The Straits Times, adding that the price was ‘not bad’.

For some owners, who bought their homes more than 10 years ago, the payout represents a real windfall.

Retiree Ho Chaw Fu, 70, is ‘very happy with the price’. No wonder: Mr Ho bought his house for $300,000 about 30 years ago.

He may not be alone. Although one or two of the homes – lined up in two rows along a cul-de-sac – appear recently renovated, others look decades-old.

Despite acrimony being the word of the day for many other collective sales, the Balestier terraces deal went quite smoothly, owners said.

One owner, who did not want to be named, said people in the street ‘get along very well’ and were ‘very cooperative’ about the sale. He added that a few were planning to relocate together to another area so they could still be neighbours.

A reason for all this harmony could be the good price the sellers fetched. It works out to $739 per sq ft (psf) of potential gross floor area – a record level for Balestier, said Mr Poh.

The Balestier area has seen keen interest from developers such as City Developments and Soilbuild, which have both picked up projects in the vicinity recently.

The buyers of the terraces are understood to be a Chinese property developer and its Singaporean partner.

They were awarded the properties on the very day the tender closed, which means their bid was fairly strong.

They can build up to 36 storeys on the site, which has a plot ratio of 2.8.

About 56 apartments can be built with an average size of 1,500 sq ft each and may eventually be sold at $1,400 to $1,500 psf.

The developers also get the road itself, which they can keep or use as development land.

A similar deal was sealed last year when owners of some bungalows in Bukit Timah teamed up to sell their properties and developer Simon Cheong bought a group of 16 terrace houses in Cairnhill last year.

 

Source: The Straits Times 21 Nov 07

Fifteen Balestier terrace houses sold for $61m

Buyer pays $739 ppr, a record for freehold residential land in vicinity

A ROW of 15 terrace houses in Jalan Bunga Raya have been sold for $61 million or an all-up unit land price of $739 per sq ft per plot ratio (psf ppr) – a record for freehold residential land in the Balestier/Novena area.

Before the deal, which was brokered by DTZ, the highest residential land price fetched in the area was around $600 psf ppr.

DTZ said the buyer of the 15 houses is a consortium comprising Chinese developers and local partners. All owners of the houses have agreed to the sale.

The 15 homes have a total land area of 24,058 sq ft. Access to the houses is by Jalan Bunga Raya, which can be alienated by the state for about $7 million, boosting the land area to 32,978 sq ft, subject to approval by the Singapore Land Authority.

A development charge of about $263,000 is also payable. The $739 psf ppr unit land price to the developer includes these two payments it will have to make to the state and based on the enlarged plot size.

Under Master Plan 2003, the site has a 2.8 maximum plot ratio – the ratio of maximum potential gross floor area to land area – and a 36-storey height limit. DTZ estimates the plot can be developed into a new condo with about 56 apartments averaging 1,500 sq ft. ‘The breakeven cost is likely to be $1,150-1,200 psf,’ said DTZ senior director, investor advisory services & auction, Shaun Poh.

Separately, DTZ has put up for sale GMG Building, a 12-storey freehold office block in Robinson Road.

The property is being sold by Robinson Land Pte Ltd, which is currently refurbishing the block. Refurbishment work, estimated to cost about $5-6 million, is expected to be completed and the building ready for occupation around the first quarter of 2008.

‘This prime office building will be sold, completely refurbished and with vacant possession, which would allow investors to take advantage of current favourable office rental rates,’ Mr Poh said.

‘It’s also an excellent opportunity for end-users seeking a corporate HQ with naming rights. The property is expected to fetch about $2,600 psf over the total strata area of 54,832 sq ft, working out to a total amount of $142.6 million.’

Robinson Land, whose shareholders include the Buxani Group of Singapore and some overseas investors, bought GMG Building last year for $48 million or $875 psf of strata area.

Refurbishment work, which started recently, will boost the building’s net lettable area (NLA) to 54,895 sq ft, about 5 per cent higher than the previous NLA. There is not much redevelopment.

The refurbished building is being sold through an expression of interest exercise that closes on Dec 5.

 

Source: Business Times 20 Nov 07

No delaying payments, so home hunters turn cautious

Move may have initial dampening effect but experts say it will chase away only speculators

MARKETING manager Simon Loh has put an abrupt halt to his house hunting.

The 38-year-old had been looking for a new place for the last six months, but now that he cannot defer payments until the new apartment is ready, he has had to shelve his plans.

The Urban Redevelopment Authority announced on Friday that buyers of uncompleted private homes and offices will no longer have the option of using a deferred payment scheme.

This allowed home buyers to pay as little as 10 per cent of the purchase price upfront, footing the rest only when the property is ready.

All buyers now will have to use the progressive payment scheme where they pay between 5 per cent and 25 per cent of the purchase price every few months.

Mr Loh, who currently has to pay the bank a monthly mortgage of $1,300 on his condominium unit in Yio Chu Kang, cannot afford to take up another loan to buy a new home in town.

‘I’ll have to drop the idea, but I could have done it with the deferred payment scheme,’ he said.

Other house hunters are also thinking twice.

Sales manager Lawrence Chen, 35, who has been looking for a terrace house since last year, said he has to be ‘more conservative’ now.

Some buyers, though, are not affected by the change, saying they will just have to take up bank loans earlier.

IT manager Daniel Lim, 36, who was at a showflat in Paya Lebar, said: ‘You still have to pay for the property eventually.’

Typically, a buyer who chooses to take the deferred payment route is charged between 3 per cent and 5 per cent more than one under the progressive scheme. Still, property agents say up to 90 per cent of their buyers take up the deferred scheme.

They agree that removing the scheme will achieve the Government’s aim of driving away speculators. But the agents believe low-budget buyers could also be hit.

ERA Singapore assistant vice-president Eugene Lim said: ‘The mass market projects will be most affected because buyers there could need the three years’ construction time to build up their funds.’

But most agents believe the market will remain strong.

Property developers believe the move would have a slight initial dampening effect on sales, chasing away speculators but not buyers.

They are not taking measures, like lowering prices, to counter the new rule.

Singapore-based developer Chip Eng Seng, which will launch CityVista Residences in Peck Hay Road in about two weeks, said: ‘There are many genuine buyers and though they may be more cautious initially, the demand’s still strong.’

 

Source: The Sunday Times 28 Oct 07

SLA puts up six residential sites for auction

THE Singapore Land Authority (SLA) will release six residential sites for sale by auction.

Two are in the Eng Neo Avenue good class bungalow (GCB) area in District 11 – the first GCB sites released by SLA for development. The other four are in Moonbeam Walk, Jalan Insaf, Bedok Close and Somme Road.

The plots are essentially in-fill sites – pockets of state land within established areas.

The assistant chief executive of SLA’s land operations group, Simon Ong, said the sale of the sites ‘will help meet current demand for high-quality residential property and allow individuals to build their dream homes’.

The auction will be conducted by Jones Lang LaSalle (JLL) on Nov 29, and the firm’s director and head of auctions and sales Mok Sze Sze reckons demand will be strong.

A total of 79 GCBs worth $959.4 million changed hands in the first half of the year, compared with 61 GCBs worth $627.9 million transacted in the same period a year earlier. ‘This translates to a 29.5 per cent increase in the number of units transacted and a 52.8 per cent increase in absolute value,’ Mr Mok said.

The GCB sites in Eng Neo Avenue are 29,201 sq ft and 16,689 sq ft. The other four sites are between 3,547 sq ft and 6,971 sq ft.

Douglas Wong, director of PropNex’s luxury home division, Grandeur Homes, thinks the GCB sites could fetch between $800 and $900 psf. This means bids for the smaller site could be around $13 million while the larger site could fetch around $23 million.

Mr Wong says that along with the rest of the market, prices of GCBs have been affected by the US subprime crisis. Nevertheless, new benchmarks for GCBs are still being set, with a house in the Nassim area going for over $1,500 psf.

A check of caveats on the SISV-Realink website also shows that a unit at The Residences at Barker has also been sold in the secondary market for almost $1,600 psf.

Still, as Mr Wong notes, prices are still way below those of luxury condos, which now go for $3,500-$4,000 psf. As he says, in a strange way other property is ’still affordable’.

 

Source: Business Times 26 Oct 07

Reserve site up for sale, sparked by $7.8m bid

Committed sum for 17conservation shophouses comes to just $460K each

With property prices hitting new peaks in recent times, it is rare to see a committed bid of just $7.8 million for a 15,200 sq ft site near the city centre.

Based on the committed bid received by the Urban Redevelopment Authority (URA), each of the 17 two-storey shophouses on this Jalan Sultan site could, theoretically, go for as little as $460,000 a unit.

The committed bid is not the transacted price for the reserve list site as it will now be put up for public tender. Still, it gives an indication of the range of bids that could eventually come in.

The 17 shophouses have been gazetted for conservation and the successful tenderer is required to restore and reconstruct these conservation shophouses in accordance with the tender conditions and the Urban Redevelopment Authority’s Conservation Guidelines for Historic District.

Zoned for commercial use, the shophouses could be used for office or even as hotels.

Colliers International executive director (investment sales) Ho Eng Joo believes the winning bid could be around $14 million or roughly $800,000 a unit. Add to this renovation and restoration costs of about $300,000 per unit and the potential winning bidder could be looking at spending about $1.1 million per unit.

But as Mr Ho notes: ‘The area is changing.’ Highlighting that KeyPoint, formerly known as Jalan Sultan Centre, was sold recently for $1,186 psf of net lettable area, Mr Ho believes the 17 shophouses could give an investor a yield of over 5 per cent if each unit is rented out for at least $5,000 a month.

‘Only the lack of carparking could be an issue,’ he added.

Over in Woodlands, the Singapore Land Authority has released a 172,223 sq ft residential development site at Woodlands Avenue 2/Rosewood Drive and developers could also be looking at a bargain.

Mr Ho reckons the site, which is on the confirmed list of the Government Land Sales programme, could go for between $250 – $280 psf ppr. With a plot ratio of 1.4, the gross floor area could be up to 241,112 sq ft, giving the site a price tag of between $60.2 million and $67.5 million.

The site may not be directly next to an MRT station but Mr Ho believes a future development would have good rental potential as it is close to the Singapore American School.

 

Source: Business Times 24 Oct 07

Property booms, busts make economy vulnerable

SINGAPORE ECONOMIC POLICY CONFERENCE

Bubble cuts private spending, raises reliance on volatile foreign demand

PROPERTY price booms and busts make Singapore’s economic growth more vulnerable to volatile factors and should be prevented, an economist at a think-tank said here yesterday.

While the impact of a spike in property prices on overall GDP growth is ‘quite subdued’, a property price bubble causes private consumption expenditure to shrink, making the economy more dependent on foreign demand and business spending which are much more volatile, said Tilak Abeysinghe.

The deputy director of the Singapore Centre for Applied and Policy Economics (Scape) at the National University of Singapore, was speaking at the inaugural Singapore Economic Policy Conference organised by Scape at Four Seasons Hotel.

His team’s research found that while higher property prices spur construction investment, an accompanying dip in private consumption means overall economic growth does not change much as a direct result of property price inflation.

But the overall effect is still undesirable as it makes the economy far more dependent on business spending and foreign demand for its exports, both of which are more volatile than domestic consumption, he said.

The consumption expenditure share of Singapore’s GDP has fallen from more than two-thirds in 1997 to about 40 per cent today. ‘If consumption expenditure in Singapore falls further, GDP growth will be very vulnerable to external demand and investment demand,’ he said.

Research found that in contrast with economies such as the US, higher housing prices here do not seem to encourage more personal spending.

In Singapore, ‘housing wealth is relatively illiquid,’ he said. ‘You just can’t sell your house and move to a suburban house.’ This means the ‘wealth effect’ of housing price inflation seen in countries such as the US – when people spend more as the value of their homes rise – is much less noticeable in Singapore.

Also, ‘when housing prices go up, mortgage payments also increase, so people have less to spend on consumption,’ he said.

He believes policymakers here should ‘do their best’ to prevent a property price bubble because of its effect on private consumption spending and its tendency to widen the income gap between the rich and poor.

‘It should be possible’ to prevent another bubble from building by identifying the main cause of the recent run-up in property prices – likely to be people buying properties for investment rather than owner-occupiers – and introducing measures to dampen demand from this source, he said.

But he also cautioned against flooding the market with a vast supply of new homes, which could trigger a price crash and set the conditions for a new bubble.

 

Source: Business Times 19 Oct 07

No bubble in property market: NUS study

DESPITE Singapore’s red-hot property prices, no bubble is forming in the property market here, according to a study by National University of Singapore (NUS) economists.

In fact, the rise in home prices is below the market’s long-run ‘equilibrium’ level, based on factors such as income and property supply, preliminary findings of the ongoing study show.

In other words, the pace of housing price rises is still below the level that would be expected based on market fundamentals, according to the study conducted by a team led by Associate Professor Tilak Abeysinghe.

This is unlike the case in the early 1980s and mid-1990s, when property price inflation shot up above its longterm equilibrium levels, the study noted.

Early findings from the study, still a work-in-progress, was presented to a small audience at the Singapore Economic Policy conference yesterday.

House-price inflation is expected to hit 18 per cent this year, before easing to 13.7 per cent next year, and then to 3.2 per cent in 2009 and 3.4 per cent in 2010, the NUS team’s model predicted.

Factors used to determine the equilibrium price level include disposable income per person, housing stock and the new supply of property.

The study also found that it takes a long time for property price inflation to adjust to its long-run equilibrium.

And a rise in property price inflation would lead to a spike in construction investment a year or so down the road, but its effect fades after that.

The study concluded that price bubbles should be avoided, as they affect private consumption as well as income redistribution, among other things.

Prof Abeysinghe is the deputy director of the Singapore Centre for Applied and Policy Economics at the NUS, which organised yesterday’s meet.

The one-day conference also saw speakers examine issues ranging from fertility, migration and labour market trends, to CPF savings and the elderly.

The paper, entitled Singapore’s Property Market And The Macroeconomy, can be viewed at http://nt2.fas.nus.edu.sg/ecs/cent/ESU/conference.htm

 

Source: The Straits Times 19 Oct 07

PROPERTY – Build dream homes on small govt plots

Infill sites to come back on market after over a decade – buyers likely to get cheap land in choice areas

THE idea of building a house on a former septic tank site might seem noxious to some.

But it could mean the chance to build your dream home on that rarest of commodities in Singapore – cheap land.

The Government will release smallish plots – likely to be big enough for just one home each – over the next few months, to meet the sizzling demand for land.

The fine print: The sites might previously have been used for public purposes, so they could have housed parks, gardens, sub-stations, or possibly even septic tanks.

Individual investors and small developers can build homes on these plots, known in the industry as ‘infill sites’. The sites usually have adjacent buildings on either side.

Such plots have not been put on the market in more than a decade, but the booming economy and high demand for land have convinced the Singapore Land Authority (SLA) to resume sales, said its deputy director for land sales, Mr Teo Jing Kok.

Infill sites were introduced in 1990 to ease housing demand. By the time sales stopped in 1993, 20 plots had been snapped up at public tenders amid growing interest.

The lowest price paid for an infill site was $402,000, in 1991. The parcel of open space, near Braddell Road, was more than 9,000 sq ft, so the price worked out to less than $45 per sq ft (psf) of land area – relatively cheap even for those times.

Over the following two years, the popularity of these sites increased sharply. A 5,581 sq ft plot on Ceylon Road, off East Coast Road, drew a whopping 62 bids when it went on sale in 1993. The highest bid was $1.3 million, or just over $230 psf.

All the plots offered in the early 1990s were zoned for building homes, and most now host bungalows or other landed homes.

Several of the plots once housed septic tanks, some were empty spaces, while a site at Mount Sinai was a cul-de-sac.

Buyers in the past were mainly boutique property development firms or individuals who wanted to build their own homes, said the SLA.

The previous sales ’showed that owners are free to create their own types of houses and are generally more satisfied with the outcome’, the agency told The Sunday Times.

‘They are able to exercise control in the interior and exterior designs, as well as the colours, resulting in their ‘dream home’.’

The first sites, sold in 1991, came with 999-year leases. The remaining sites in following years were 99-year leasehold. The upcoming plots are believed to be mainly leasehold as well.

The SLA said it has not finalised the sites to go on sale, but based on the plots offered in the past, they are likely to be in popular residential locations.

The parcels sold in 1991 were mostly in Upper Bukit Timah and Yio Chu Kang.

The year after, the Government released sites in Sixth Avenue and Namly Drive in Bukit Timah. In 1993, plots along Dunearn Road, the East Coast and Mount Sinai went on the market.

Consultants expect a good response for the upcoming sales, as long as the locations are desirable.

‘There is likely to be demand as many homebuyers are now seeking good landed homes and are willing to pay higher prices,’ said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

Recent launches of 99-year leasehold cluster housing, such as MCL Land’s Hillcrest Villas and the latest phase of Far East Organization’s Greenwood project, have been well-received.

However, Mr Mak added that the Government might have to allay concerns from potential buyers about possible ‘leaks from a previous septic tank or remaining electromagnetic waves from a former substation’.

In response, the SLA gave reassurances that the sites it puts up for sale will be safe to build homes on. It said it will obtain the necessary clearances and conduct certified tests of the soil conditions for each site before allowing the site to be offered.

It will also outline the locations of any waterpipes or sewers within a sale site for the benefit of all bidders, the agency said.

As for likely pricing, Mr Mak said landed homes have risen roughly 2.5 times in price since 1990. If the prices of infill sites match this pace, a 10,000 sq ft plot could go for less than $1.5 million – a fairly good deal.

By comparison, each unit at Hillcrest Villas sold for $2.5 million to $3 million. Nearby, the strata bungalows at 8 @ Kings Road are going for about $5.5 million each for 2,000 sq ft of land area.

 

Source: The Sunday Times 14 Oct 07

Mass-market sector rebounded in ‘06: CBRE

Non-landed projects in non-prime areas turn in strong sales volume

MASS-MARKET property sales actually staged a recovery last year, earlier than widely believed, said property consultant CB Richard Ellis (CBRE) yesterday.

In a study of the take-up rates of new non-landed projects in non-prime areas, CBRE found that the mid-tier and mass-market projects turned in strong sales volume in 2006, although prices for these segments only began rising this year.

‘Until now, the market had perceived that these segments trailed the luxury segment in their recovery, and had begun to recover only in early-2007, in terms of volume and price,’ it said.

An analysis of the new units launched last year and the corresponding take-up volumes ’shows otherwise’, it said.

It found that 68 per cent of the new projects launched last year in the West Coast, in districts 5 and 21, were taken up. Similarly, take-up rates for projects in districts 15 and 16 were about 90 per cent – ‘not far’ from the take-up rates of 74 per cent for projects in the prime districts 9 and 10 and 96 per cent for those in the downtown and Sentosa Cove areas.

‘Of course, in terms of pricing, the mass market and mid-tier projects have only begun to inch up in the previous two quarters of 2007,’ said Joseph Tan, executive director for residential property at CBRE.

‘But the strong sales of non-prime projects since a year ago show the return of buying power for upgraders and private homeowners, who, at that time, saw good investment value in the projects, while anticipating the upside in prices later on.’

Since then, the number of projects on the market has increased dramatically.

The number of new units launched in the west has tripled from a year ago, with the launch of One-north Residences, One Rochester, Botannia and The Parc Condominium, it said.

Meanwhile, the number of new units launched in the Newton/Novena area has doubled from 578 units in 2006 to 1,351 units so far this year. Take-up rates have been ‘very healthy’ at 90 per cent, said CBRE.

In districts 15 and 16 in the east, the take-up rate so far this year has been ‘equally strong’ at 85 per cent.

Residential rents have also risen sharply ‘due to the shortage of apartments for lease following the slew of collective sales of existing developments in the past two years’, said CBRE.

After rising 18.7 per cent on average in the first half, rents are expected to increase by another 8-10 per cent in the third quarter.

Rents in the popular areas of Tanjong Rhu, Meyer Road, East Coast, Dunman, Joo Chiat and Siglap have gone up 40.9 per cent since the fourth quarter of 2006, with median rents now at $2.62 per square foot per month.

The next biggest increase in rents were for apartments in the Orchard Road, Grange Road, Tanglin and Bukit Timah areas, where rents have gone up by 37.5 per cent to $3.74 per square foot per month on average.

The residential market is likely to remain active in the final quarter of this year, amid strong growth in the economy, CBRE said.

 

Source: Business Times 29 Sept 07

S’pore property seen as top buy in Asia-Pac

Sentiment strongest in rental apartment, office, hotel/resort, retail sectors: survey

SHANGHAI, Singapore and Tokyo have emerged as the top three most promising Asia-Pacific cities for real estate investment prospects, according to a report from the US-based Urban Land Institute (ULI) and the accountancy firm PricewaterhouseCoopers (PwC).

‘Sentiment was strong among survey participants to either buy or hold all types of properties in Shanghai, Singapore and Tokyo, rather than sell properties, illustrating the cities’ strong popularity with the investment community,’ a news release by PwC and ULI said.

For Singapore, the strongest sentiment for buying property was in the rental apartment sector, followed by the office, hotel/ resort, retail and indus- trial/distribution property.

The report, Emerging Trends in Real Estate Asia Pacific 2008, is the second annual investor survey from ULI and PwC. It shows that Singapore has jumped from fourth to second placing for investment prospect rankings, and from ninth to third spot for development rankings. Singapore is ranked first for city risk ratings.

One respondent in the survey said Singapore was ‘certainly one of the markets in the area that provides a very stable legal and tax environment, and property rights that are beyond question. And it therefore is certainly one of the markets where many, especially Westerners, are very comfortable.’

The report was based on interviews and surveys with more than 190 professionals, including investors, developers, property company representatives, lenders, brokers and consultants.

The survey covered 20 cities. Shanghai was in the top position in the latest 2008 investment prospect ranking, up from second spot in the earlier ranking. Tokyo maintained its third position, while Osaka, which was first in the 2007 ranking, moved down to fourth position. Hong Kong was ranked fifth in the latest survey, moving up six positions.

While Singapore moved from fourth to second spot in investment prospect, sell recommendations increased for office, retail, and hotel/resort from 0 per cent in the 2007 report issued last year to 19 per cent, 13 per cent and 13 per cent respectively in the latest 2008 report.

Buy recommendations for industrial/distribution property increased from 35 per cent to 44 per cent.

The 2008 survey also shows that the growing Asia-Pacific real estate market still offers opportunities for investors and developers next year. Asia-Pac real estate executives’ response remains strong on overall economic and market fundamentals, regardless of interest rate increases.

High levels of equity capital continue to pour into the Asia-Pacific property pool. For 2008, the hotels sector tops the list of real estate performance prospects, followed by the office sector.

PwC’s tax partner in Singapore, David Sandison, said: ‘It’s expected that even greater amounts of capital will be flooding Asia Pacific real estate markets in 2008. The real challenge for investors will lie in finding the right assets against the backdrop of yield compression and scrutiny by regional governments and tax authorities.’

The strongest sentiment for buying in Singapore was for rental apartments, with about 53 per cent of respondents recommending a buy, 34 per cent hold and 13 per cent sell.

For office space, 52 per cent advised buying, 29 per cent hold and 19 per cent sell.

The survey also showed that 48.5 per cent recommended buying hotel & resort property, 38 per cent advised holding, and 13 per cent, selling. For retail property, 45 per cent advised buying, 41 per cent holding and 13 per cent selling.

In the industrial/distri- bution sector, about 44 per cent of respondents recommended buying, 42 per cent holding and 14 per cent, selling.

ULI is a global education and research institute championing responsible leadership in land use to enhance the total environment.

 

Source: Business Times 28 Sept 07

Sentosa Cove puts last site up for sale

Bids of up to $144m are expected for Pearl Island, which can host up to 19 waterfront villas

DEVELOPERS who want a slice of the Sentosa Cove pie will have to act fast – the enclave’s final development site was put on sale yesterday.

Up for grabs is Pearl Island, the last of five islands zoned for landed homes. The 159,740 sq ft site can host up to 19 waterfront villas with private berths.

Property consultancy CB Richard Ellis expects offers of $127 million to $144 million for the plot, which works out to $800 to $900 per sq ft (psf).

Pearl Island was originally packaged with another parcel, Sandy Island, which has since been sold at $617 psf.

The most recent bungalow sale at Sentosa Cove saw seven offers for three individual plots. A new benchmark price was set at $1,527 psf.

Pearl Island is located near the Tanjong Beach and Tanjong Golf Course and has a maximum gross floor area of 127,792 sq ft. The plot is being marketed through an expressions of interest exercise that will close on Oct 25.

Sentosa Cove’s last condominium site, The Pinnacle, was also recently launched for sale in a tender that will close in December. The only land still unsold in the enclave are four seafront bungalow plots for individual buyers.

Pearl Island was not the only plot put on the market yesterday. Four sites were put up for collective sales, ahead of new rules on such sales which are expected to kick in next month.

One estate, Chateau Eliza at Mount Elizabeth, has an indicative price of $115 million to $120 million, said marketing agent Credo Real Estate.

This works out to $2,130 to $2,222 psf per plot ratio (psf ppr) – just shy of the record $2,338 psf ppr paid for The Ardmore in June.

Chateau Eliza sits on a 17,997 sq ft plot with a possible gross floor area of close to 54,000 sq ft. No development charge is payable for the site.

A 36-storey condominium with 20 units of about 2,500 sq ft each can be built on the plot, said Credo.

Meanwhile, property firm Newman & Goh put up two estates for sale: Toho Garden in Yio Chu Kang and Vista Park in South Buona Vista Road.

The owners of freehold Toho Garden are asking $60.8 million, or $580 psf ppr. The 86,881 sq ft site has a 1.4 plot ratio and can host 80 new units.

Vista Park, a 99-year leasehold site, is priced at around $300 million, or $680 psf ppr, including an estimated upgrading premium of $37.3 million. About 300 new units can be built on the 319,248 sq ft plot.

The fourth site put on sale yesterday was a vacant plot in River Valley Road, between River Valley Grove and St Thomas Walk. It is 28,798 sq ft in size, can be built up to 36 storeys and has 80,634 sq ft of gross floor area, said marketing agent Jones Lang LaSalle.

 Sentosa Cove Plot 

Source: The Straits Times 27 Sept 07

The price of luxury

Flush with cash, the high-end residential market is flourishing. Look at what $5 million gets you

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Source: Business Times 27 Sept 07

Sentosa Cove turns sea to gold with $3b land sales

Relaunched Pearl Island could see luxury villas going at hefty prices, market watchers say

(SINGAPORE) The combination of sand, sea and location have worked wonders for Sentosa Cove Pte Ltd (SCPL).

It has raised more than $3 billion selling land parcels in its namesake upscale waterfront housing district since late 2003, market watchers have calculated. And by the time SCPL finishes selling the last few land parcels that remain, the total takings are expected to go way over $4 billion.

By the time it is completed, Sentosa Cove will have about 2,500 homes.

The remaining 99-year leasehold plots that the master planner and developer of Sentosa Cove is now left with include four seafronting bungalow plots; the man-made Pearl Island which can be developed into 19 bungalows (this site is being relaunched today) and a plum condo site, dubbed The Pinnacle Collection at the entrance of Sentosa Cove’s marina basin.

The tender for The Pinnacle Collection was launched earlier this month and closes on Dec 12, with a reserve price set at $963.8 million or $1,600 per square foot per plot ratio. But most market watchers expect the winning bid to be much higher.

As for the 159,742.1 sq ft Pearl Island, CB Richard Ellis executive director Li Hiaw Ho expects it to draw bids of $800 to $900 psf of land area. This is about 30 to 46 per cent above the $617 psf that the next-door Sandy Island fetched during an expression of interest that closed in November last year.

Pearl Island was offered for sale during the same exercise but the site was not awarded by SCPL although it received offers above the reserve price.

Pearl Island, which can accommodate up to 19 luxury waterfront villas with private berths in their backyards, will not be sold to individual buyers seeking a plot. Instead, the entire land parcel must be bought at one go, presumably by developers. ‘This is an opportune time for developers to develop and offer luxury waterway villas in Sentosa Cove to satisfy the pent-up demand,’ said Ms Kemmy Tan, general manager of Sentosa Cove.

CBRE said that assuming land bids of $800-900 psf for Pearl Island, prices for the completed individual bungalow units will likely start from $8 million upwards.

Taking a more bullish view, Savills Singapore director of marketing and business development Ku Swee Yong predicts winning bids for Pearl Island will come in at $1,200 to $1,300 psf, reflecting absolute quantums of $191.7 million to $207.7 million.

The breakeven cost works out to about $13 million per bungalow. ‘This still leaves a profit margin for the developer. After all, the owner of a seafronting completed bungalow at Sentosa Cove with a 9,000 sq ft land area is said to be asking for close to $20 million,’ Mr Ku said.

The expression of interest for Pearl Island closes on October 25. Its award will be based solely on price.

SCPL yesterday also revealed that new benchmarks have been achieved for individual bungalow sites during an expression of interest that closed on Sept 4. A waterway plot fetched $1,247 psf of land area – a new high for such a site – while a fairway facing site achieved $1,527 psf, surpassing even the $1,473 psf that a seafronting bungalow site achieved during an expression of interest that closed in May this year.

 

Source: Business Times 27 Sept 07

Getting the right look

Looking to dress up that brand new home? Here’s a peek at some of the latest trends in furniture design

THE humble sofa is set to get all touchy-feely, judging by the emerging trends from the design capitals of the world.

Furniture designers often take their cue from what is put on show at cutting-edge exhibitions like the International Furniture Fair in Milan. And this year, whether the designs were whimsical or staid, much attention appears to have been put into getting the textures just right.

Mod Living’s director of sales and marketing Kim Foo said: ‘There was a lot of research and development done on manufacturing techniques and combinations of different and new materials for production.’ Putting your finger on the right trend is not just about being avant garde. It is also about good business, as Ms Foo well knows.

For Mod Living, Ms Foo estimates that their customers generally spend about $40,000 to furnish a living and dining room. This may sound like a lot but a good sofa can easily cost upwards of $10,000.

If you are looking to buy your next armchair, you might want to invest in exotic timbers too. Ms Foo expects a return to natural timbers with accentuated wood grains, ‘especially wood species from South Africa’.

A trend that has endured for several seasons now is classical styling with a modern twist, notes Ms Foo. For Mod Living, the Nube Sir armchairs epitomise this fascination. A combination of a traditional Chesterfield-inspired club chair with its typical deep, quilted-leather upholstery and state-of-the-art moulded teak-wood panels, the Nube Sir armchair consists of materials and technology that are as disparate as two ideas can possibly be, yet it somehow makes sense.

Retro designs still maintain their hold on the market as re-launched fabrics and designs from the 1950s and 1960s still prove popular. Examples of this are Moroso’s Print sofa by Marcel Wanders and Pierre Paulin’s Le Chat chair for Artifort, both brought in by Mod Living. Le Chat, designed in 1967, has been re-issued in a vintage fabric designed by Jack Lenor Larsen.

And this mood for visual experimentation is already catching on here. Nanyang Academy of Fine Arts’ (Nafa) head of the school of visual arts, Sabrina Long, who also makes a point of visiting fair shows around the world predicts more cutting edge designs too. ‘There was a lot of exploration into materials and technology,’ she noted of her recent jaunts.

These trends are, of course, nothing if they do not filter down and get accepted by the mainstream. It remains as art otherwise.

But already, touchy-feely designs by local designers are emerging, most recently by Sarafina Han Sisi, also a Nafa alumni whose hand-made ottomans or mini sofas made of PVC balls and covered in yarn take experimentation to an extreme. On Ms Han’s design, it is, ‘the willingness to explore a new material and execution’, that makes it very ‘current’, says Ms Long.

The truly creative, however, do not wait until something appears in a catalogue before recognising it as good taste.

Rather, they go in search of it themselves. And architect Andrew Tan of Seeds Architecture is finding inspiration in casinos. But it is not the obvious ‘casino style’ that appeals but rather the concept of ‘excess’ and the materials and textures that this implies.

Mr Tan also believes rich textures like leather will remain a mainstay in fashionable homes in the form of large sofas, preferably by Fendi. But these could be layered with bold foral prints, not unlike those that appeared on wallpapers not too long ago. ‘But wallpaper is out now,’ he says.

There are limits, though, to excessive excess. Chandeliers made a huge comeback several years ago for its outre glamour. Cheap imitation ones have since flooded the market – the scourge of most trends – and they hardly have the same appeal anymore.

Instead, stick to quality materials, suggests Mr Tan. ‘Swarovski makes chandeliers that are both modern and classic,’ he says. Any designer who can manage that will have a sure hit on their hands.

 

Source: Business Times 27 Sept 07

Dispelling some auction myths

Acquiring properties through an auction is not a taboo, says MARY SAI

WHEN one flips through the property classifieds these days, it not uncommon to see properties advertised for auction. It is also not uncommon for a prospective buyer to immediately get the impression that the property to be auctioned, or the owner, must have some problems, otherwise why auction?

This misconception stems mainly from the days when auctions were the main mode of sale for banks when they repossessed property from owners who defaulted in their loans. In the 1980s and 1990s, most of the property auctions were mortgagees’ auctions. So many people saw them as forced sales.

But today, in a bullish property market, auctioneers are seeing more owners choosing to auction their property. In this article, we try and dispel some of the misconceptions about auctioned property.

Myth No 1: Auctions are fire sales

Contrary to widespread belief, an auction can secure the best price through open competitive bidding. Even the courts recognise an auction sale as an appropriate way to sell a property under dispute. It is deemed that through competitive bidding, a fair open market value can be realised for the seller. An auction sale is not tantamount to a desperate sale. Although the auction sale can be organised within a fortnight, it does not mean that the vendor has to sell in a hurry at bargain basement prices! Similarly, in mortgagee auction sales the bank exercises due diligence and is guided by valuations when they sell repossessed properties. They are genuine sellers, not desperate sellers.

In a recent forced sale of a dilapidated two-storey building at 27 Onan Road, two auctions conducted failed to secure a buyer. However, instead of an expected fire sale in the third round of auction, the property went under the hammer for $610,000 – a whopping 36 per cent increase from the opening price of $450,000.

Another good example was a auction of a bungalow plot at 59 Goodman Road in January this year. Vigorous bidding from more than eight parties saw the property knocked down at a record price of $626 per sq ft while comparable sales then were transacted around $350-$400 psf. Similarly, the recent auction sale of bungalow plots at Sentosa Cove also saw benchmark prices established way above $1,000 psf for their 99-year leasehold titles.

Myth No 2: ‘Challenging’ properties are auctioned

Many people consider the auction route as the last resort for the sale of properties. It would be the mode of sale for ‘challenging’ properties – those with inauspicious numbers like 4, 14 or 44 or with irregularly-shaped sites.

Going through past auction data, we see no anecdotal evidence to show that auction properties carry more inauspicious house numbers or are of inferior quality. In the past year and a half, several investors have picked up gems like good class bungalows in Bukit Timah/Holland; heritage properties at Emerald Hill Road and shophouses fronting main roads like Serangoon Road, Geylang Road, South and North Bridge Roads. These properties have appreciated substantially, with some doubling from the time they were bought at auction.

Recently, there has been a trend of luxury properties put on the auction block, as well as those in developments with en bloc potential. Some of these include apartments in The Beaumont, Stevens Loft and Watten Estate Condo.

Hence, there is no lack of quality properties to buy in the auction market.

Myth No 3: Auctioned properties bring bad luck

This superstitious belief can be traced to the days when auctions were mainly for banks’ foreclosed properties.

People refrained from buying such properties as they feared they would suffer the same fate as the previous owners.

Today, this superstitious view is slowly disappearing with a younger generation of property buyers.

Again, not all auctioned properties are forced sales by banks as more owners are now choosing the auction route on their own accord. They see the many advantages of auction sale and want to leverage it in a bullish property market.

As a matter of fact, buyers who successfully bid for apartments at Leedon Heights, Tulip Gardens and Silver Towers are now laughing all the way to the bank as these developments have just been collectively sold. Good fortune was theirs as a result of their smart purchases at auctions.

Myth No 4: Hungry ghosts

The seventh lunar month has been traditionally the ‘Hungry Ghost Festival’ – an inauspicious period when buyers refrain from buying property. All the more so at auctions.

Generally, businessmen and property buyers who observe Chinese religious rituals during this period, would rather bid for goods that have been ceremoniously blessed by their gods which they believe will bring them good luck – items such as ‘black charcoal’, symbolic sculptures, etc.

However, in the past few years, many property buyers are breaking away from this trend and are buying properties during the Hungry Ghost month, even at auctions. In the latest auction on Aug 16, which fell on the third day of the Hungry Ghost month, a dilapidated two-storey conservation terrace house at Spottiswoode Park was aggressively bid for by six parties from an opening price of $680,00 to an eventual $1.36 million. That’s a 100 per cent increase!

Two other properties were also sold at the same auction and these transactions defy the myth that property auctions are a ‘no-no’ during the Hungry Ghost Festival.

Conclusion

Auctions will go on, be it bullish or bearish markets. With technological advances, improvements such as electronic biddings may complement conventional auctions. At the same time, myths and misconceptions relating to property auctions will be erased over time as people become more familiar with this mode of sale. Having cleared the suspicions and doubts concerning auctions, buyers can safely head to the weekly property auctions and pick up some good buys.

The writer is Knight Frank’s auctions director

 

Source: Business Times 27 Sept 07

Brisbane Devt to release 2nd phase of Illoura

Freehold project has 30 detached, semi- detached houses

AUSTRALIAN property company Brisbane Development is all set to release the second phase of Illoura, its strata landed project in the Holland Road area, after the first 15 units in the development were sold at prices exceeding $5 million apiece.

Illoura consists of a total of 30 detached and semi-detached houses which are being developed on 87,100 sq ft of freehold land in the prestigious Holland Road precinct.

Designed by award-winning SCDA Architects, each home will have two storeys plus attic and basement, with strata areas measuring from 4,180 sq ft to 4,560 sq ft.

‘Illoura represents our first major project in Singapore and the introduction of an exciting new cluster housing concept,’ said Scott Collins, Brisbane Development’s director.

‘It is pleasing to see the high level of interest demonstrated by Singaporean and foreign investors at this early stage of the project’s release.’

Margaret Thean, executive director of property firm DTZ, which is marketing agent for the development, said that the project’s choice location and quality would attract buyers. The project is also expected to provide good rental yields, she said.

Illoura’s design comprises two parallel developments overlooking a central landscaped recreational area including a 25-metre swimming pool, jacuzzis and large timber decks.

Each of the six detached and 24 semi-detached houses at Illoura is designed around a central interlocking courtyard with an open terrace.

A typical house will have four bedrooms with en-suite bathrooms, a large gourmet kitchen, open plan living and dining area, an internal private lift accessing all floors in the home, and two private car parks, the developer said.

 

Source: Business Times 27 Sept 07

The ascent of landed housing

Solid gains await with double-digit price growth and Singapore’s scarcity of land

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

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

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

Prices of landed homes have risen in line with the rest of the market. (See Table 1) From a marginal 0.6 per cent rise in 2004, prices of landed homes grew by 2.4 per cent in 2005, 6.7 per cent in 2006 and 10.1 per cent in the first half of 2007.

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

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

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

An example of this trend is a GCB at Queen Astrid Park that was sold for $12.5 million in April 2006, only to be resold at $16 million in May and then again in December 2006 for $18 million. This is an increase of 44 per cent in seven months. Another GCB at Nassim Road was first sold for $9.8 million in February 2005 only to be sold

another three times for $15 million in August 2006, $18.4 million in December 2006 and $24.2 million in June 2007, an increase of 147 per cent over some 28 months.

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

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

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

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

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

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

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

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

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

Ultimately though, it will be the fundamental reality that landed housing will always be a scarce product in Singapore’s urban landscape that bodes well for this type of housing in the medium to long term.

 

Source: Business Times 27 Sept 07

Sale of Seletar Garden could fetch up to $75m

This works out to $683-$733 psf ppr inclusive of DC for the 73,099 sq ft site

SELETAR Garden, a mixed development at Yio Chu Kang Road, is up for sale by tender with the estimated price of between $70 million and $75 million.

This works out to be $684-$733 per square foot per plot ratio (psf ppr) inclusive of development charge (DC) for the 73,099 sq ft site.

The property is being marketed by PropNex, whose head of investment sales Charles Chua says there is also a possibility of the alienation of three parcels of adjoining remnant state land at an estimated additional $8.3 million.

This will bring the total site area to over 100,000 sq ft and with a possible gross floor area (GFA) of over 140,000 sq ft.

Together with the state land, the site could cost between $555 and $590 psf ppr. Mr Chua believes the site, which is within a 15-minute walk of the Yio Chu Kang MRT offers potential for a boutique serviced-residence or condominium and food-and-beverage centre.

Mr Chua estimates that the current open market value for the residential units at Seletar Garden is between $850 and $850 psf.

Based on the indicative collective sale price, each owner is expected to make a premium of at least 80 per cent over the open market price, Mr Chua said. He estimates that about 40 residential units of between 1,600 and 1,800 psf can be built on the site. The break-even price for the potential new development would be about $750 psf.

 

Source: Business Times 25 Sept 07

Foreigners snap up 87% more landed homes in first half: DTZ

Companies make 265 buys in H1 2007 vs one in H1 2006

(SINGAPORE) Foreigners, including permanent residents, bought 232 landed homes here in the first half of this year, up 87 per cent from the same period last year, according to DTZ Debenham Tie Leung’s analysis of caveats.

But foreign buyers’ share of total caveats lodged for landed homes in H1 2007 was about 7.6 per cent, down slightly from a 7.9 per cent share in the same year-ago period.

Nearly 90 per cent of these foreign buyers in the first six months of this year were Singapore permanent residents.

Malaysians accounted for the biggest share or 23.7 per cent of foreign buyers of landed homes in H1 2007, followed by United Kingdom nationals (18.5 per cent) and Australians (7.8 per cent).

The number of landed homes picked up by Singaporeans in H1 2007 was up 76.3 per cent year-on-year, though Singaporeans’ share of total caveats for landed homes fell to 83.7 per cent in H1 2007 from 92.1 per cent in H1 2006.

The decline was due to a surge in the number of landed homes bought by companies, to 265 in H1 this year from just one in the same period last year.

In all, 265 caveats were lodged by companies for bungalows, semi-detached houses and terrace homes in H1 2007, compared with just one caveat in H1 2006. The companies include both local and foreign corporations, and could possibly reflect the effect of some investors including individuals or small groups of investors who made purchases through companies, market watchers reckon.

‘There have been small developers and contractors buying up stretches of landed houses in places like Telok Kurau and Kembangan, with the aim of tearing them down and redeveloping the site into a small block of apartments,’ says Knight Frank executive director Peter Ow.

DTZ’s analysis, which was based on caveats captured by Urban Redevelopment Authority’s Realis system, also showed that the most popular landed housing districts sought after by foreigners in H1 2007 differed from those pursued by Singaporeans.

The top location for foreigners (including PRs) who bought landed homes during the period was District 10 (which covers areas like Grange Road, Tanglin, Chatsworth, Jervois, Bishopsgate, Holland Road, Swettenham Road and Laurel Wood Avenue), followed by Districts 15, 11 and 19.

District 15 covers Katong, East Coast and the Meyer Road locations; District 11 includes the Bukit Timah and Dunearn vicinity, Gilstead Road and Gentle Drive; and District 19 includes Serangoon Gardens and Lorong Chuan.

Other popular locations included Districts 21 (which covers the Upper Bukit Timah area) and 4 (Sentosa Cove) In contrast, among Singaporean landed home buyers, the most popular district was 19, followed by Districts 15, 10, 16 (part of Bedok and Tanah Merah), 20 (including Sembawang Hills and Upper Thomson) and 28 (which covers locations like Seletar Hills and Mimosa Place).

‘Foreigners seem to be zooming in more on traditional residential property investment locations, such as prime Districts 10 and 11 and the traditionally popular District 15,’ said a market watcher.

Among companies which bought landed homes from January to June this year, District 15 was the most in demand, followed by Districts 19, 10 and 14.

The 232 landed homes that foreigners purchased in the first half was just 11.5 per cent shy of the 262-unit figure for the whole of last year. The record was set in 1999, when foreigners picked up 347 landed homes on the island.

In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.

Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme.

Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.

 

Source: Business Times 25 Sept 07

Foreigners snap up 87% more landed homes in first half: DTZ

Companies make 265 buys in H1 2007 vs one in H1 2006

(SINGAPORE) Foreigners, including permanent residents, bought 232 landed homes here in the first half of this year, up 87 per cent from the same period last year, according to DTZ Debenham Tie Leung’s analysis of caveats.

But foreign buyers’ share of total caveats lodged for landed homes in H1 2007 was about 7.6 per cent, down slightly from a 7.9 per cent share in the same year-ago period.

Nearly 90 per cent of these foreign buyers in the first six months of this year were Singapore permanent residents.

Malaysians accounted for the biggest share or 23.7 per cent of foreign buyers of landed homes in H1 2007, followed by United Kingdom nationals (18.5 per cent) and Australians (7.8 per cent).

The number of landed homes picked up by Singaporeans in H1 2007 was up 76.3 per cent year-on-year, though Singaporeans’ share of total caveats for landed homes fell to 83.7 per cent in H1 2007 from 92.1 per cent in H1 2006.

The decline was due to a surge in the number of landed homes bought by companies, to 265 in H1 this year from just one in the same period last year.

In all, 265 caveats were lodged by companies for bungalows, semi-detached houses and terrace homes in H1 2007, compared with just one caveat in H1 2006. The companies include both local and foreign corporations, and could possibly reflect the effect of some investors including individuals or small groups of investors who made purchases through companies, market watchers reckon.

‘There have been small developers and contractors buying up stretches of landed houses in places like Telok Kurau and Kembangan, with the aim of tearing them down and redeveloping the site into a small block of apartments,’ says Knight Frank executive director Peter Ow.

DTZ’s analysis, which was based on caveats captured by Urban Redevelopment Authority’s Realis system, also showed that the most popular landed housing districts sought after by foreigners in H1 2007 differed from those pursued by Singaporeans.

The top location for foreigners (including PRs) who bought landed homes during the period was District 10 (which covers areas like Grange Road, Tanglin, Chatsworth, Jervois, Bishopsgate, Holland Road, Swettenham Road and Laurel Wood Avenue), followed by Districts 15, 11 and 19.

District 15 covers Katong, East Coast and the Meyer Road locations; District 11 includes the Bukit Timah and Dunearn vicinity, Gilstead Road and Gentle Drive; and District 19 includes Serangoon Gardens and Lorong Chuan.

Other popular locations included Districts 21 (which covers the Upper Bukit Timah area) and 4 (Sentosa Cove) In contrast, among Singaporean landed home buyers, the most popular district was 19, followed by Districts 15, 10, 16 (part of Bedok and Tanah Merah), 20 (including Sembawang Hills and Upper Thomson) and 28 (which covers locations like Seletar Hills and Mimosa Place).

‘Foreigners seem to be zooming in more on traditional residential property investment locations, such as prime Districts 10 and 11 and the traditionally popular District 15,’ said a market watcher.

Among companies which bought landed homes from January to June this year, District 15 was the most in demand, followed by Districts 19, 10 and 14.

The 232 landed homes that foreigners purchased in the first half was just 11.5 per cent shy of the 262-unit figure for the whole of last year. The record was set in 1999, when foreigners picked up 347 landed homes on the island.

In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.

Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme.

Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.

 

Source: Business Times 25 Sept 07

The rant over rent: Landlords strike back

We’re not greedy, we’ve been ’subsidising’ tenants with low rates since 2003, they say

RETIRED doctor S.M. Soon, 62, is one happy landlord.

She collects $16,000 a month from her tenant at Emerald Hill, which means she doesn’t have to use her own funds to top up her monthly mortgage payments.

But things weren’t always so rosy.

From 2002 to last year, the monthly rent from her 5,000 sq ft Peranakan house was $12,000, and she was coughing up $4,000 every month to service the loan and pay for maintenance.

‘Prices are just returning to what they were 10 years ago. For us landlords, it’s not always Sunday,’ said Dr Soon.

Tenants have been crying foul over soaring rents which have shot up by 31.2 per cent over the past year.

Last week, The Sunday Times featured a family whose rent rose from $2,400 to $7,200 when the lease ended this year.

In the end, the family had to move from Jervois Road near the city to the East Coast area, and still pay rent that is twice as much.

But landlords are also keen to debunk their greedy image.

In a letter to The Straits Times’ Forum page last week, Madam Yeo Boon Eng pointed out that expatriates had been enjoying extremely low rents since 2003 and owners were ’subsidising’ tenants before the increase in rents.

She is now charging her tenant $2,100 for a corner terrace house in Yio Chu Kang, up from $1,600 last year.

She said her tenants did not complain or bargain. But if they did, she would have stood her ground and they would have had to look elsewhere.Nine of the 12 landlords who spoke to The Sunday Times said they, too, collected very low rents in the past few years.

The higher prices are not arbitrary, they argued. They simply reflect property prices now and are a function of demand.

It is only recently that landlords are seeing returns on their investments, with rental yields exceeding monthly instalments.

Said Dr Soon: ‘It’s not a matter of raising prices because we’re greedy. We get whatever the property will fetch in the market.

‘I wouldn’t dare ask for $16,000 if the market rent is $10,000.’

Retired lecturer H. Chu, 65, who is renting out three properties in Holland Grove View, Binjai Crescent and Eastwood, said: ‘Landlords are not unreasonable. It’s just that there are too many people at this time who want a place.’

He didn’t even have to raise the rent on his Binjai Crescent bungalow; the tenant offered him $8,500 this year, instead of the $5,600 he was paying.

‘He knows the market,’ he said.

Property agent Andrew Tan, 51, agrees. The only landlords he would call greedy are those with ‘moving targets’.

This year alone, he has dealt with five landlords who kept upping their prices even after letters of intent had been signed by prospective tenants. Among the landlords contacted by The Sunday Times, none admitted to doing this. Most said they try to keep their existing tenants.

Said Dr Soon: ‘It makes sense to keep a good tenant, instead of waiting another month for another tenant to come along and paying commission fees to the agent.’

She said she charged her existing tenant $16,000 when she could have put her property on the market for $20,000.

But no matter how much of a ‘discount’ existing tenants get, they are bound to be unhappy about the sudden rent hikes. And landlords are peeved by the attention the more vociferous tenants get.

‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have gone up drastically. It’s that, in the first place, they went down so much,” said housewife V. Wong, who is in her 50s.

Her 1,800 sq ft apartment at Central Green in Tiong Bahru used to fetch $4,300, which meant she had to chip in about $800 to meet the mortgage payments and taxes. Now she rents it out at $6,800.

Ultimately, the sums have to add up.

Said landlord Ms Y. Tan, an accountant who is in her 60s: ‘Who wants to charge low rents? We’re not running a charity.’

simlinoi@sph.com.sg

Ups and downs

‘When tenants were enjoying low rents, nobody thought about the landlord. It’s not that prices have drastically gone up. It’s that, in the first place, they went down so much.’

HOUSEWIFE V. WONG, on why tenants are unhappy about the sudden rent hikes

 

Source: The Sunday Times 23 Sept 07

85% of MCL Land’s Hillcrest Villas sold in the past fortnight

Average price for the 163-unit cluster terrace homes project is $871 psf

MCL Land has sold 85 per cent of its 163-unit cluster terrace homes development Hillcrest Villas over the past fortnight.

The average price for the 99-year leasehold project in the Dunearn Road area on the former SingTel Academy site is about $871 per square foot (psf) of strata area. Absolute prices range from $2.5 million to $3 million per unit.

This means the listed property group, a subsidiary of Hongkong Land, has sold about 400 homes this year for slightly more than $900 million.

MCL is planning to launch two freehold condos next year with a total of about 360 units in the Holland Hill and Pasir Panjang locations, MCL Land CEO Koh Teck Chuan told BT yesterday.

Hillcrest Villas’ cluster terrace houses will have two storeys plus attic and basement, with a total strata area of about 3,100 sq ft on average per unit. The typical unit has four bedrooms plus another in the basement that can be turned into an entertainment room. The development has shared facilities including swimming pools, a clubhouse and gym.

‘Buyers are all Singaporeans, given the restrictions on foreigners regarding owning landed property. We’ve a good mix of owner occupiers and investors,’ Mr Koh said.

Hillcrest Villas’ location next to Raffles Girls’ Primary School and near Nanyang Primary School is a draw for parents eyeing a place for their children in these schools, market watchers said.

Mr Koh noted that cluster houses at The Teneriffe at Laurel Wood Avenue nearby are fetching monthly rentals of about $14,000. ‘Assuming Hillcrest Villas command the same rental, and based on our average selling price of $2.7 million, the net yield at about 5.6 per cent is pretty attractive,’ he said.

Hillcrest Villas is being marketed by DTZ Debenham Tie Leung.

Earlier this year, MCL Land launched two other condominium projects – the 132-unit Waterfall Gardens at Farrer Road and 129-unit Tierra Vue at St Patrick’s Road on the former Marine Parade Gardens site.

Both freehold projects are fully sold. MCL Land achieved average prices of about $1,500 psf for Waterfall Gardens and $850 psf for Tierra Vue, Mr Koh said.

The group has another two freehold condos that it plans to release next year – one with about 180 units on the Balmeg Court site off Pasir Panjang Road, and a joint venture with Ho Bee on a project with about 180-190 units on the Holland Hill Mansions site.

Meanwhile, Kallang Development yesterday began previewing 48 freehold terrace houses at Sembawang Road under the latest phase of its Springside development.

Intermediate terrace units are priced at about $1.75 million on average and have land areas ranging from 1,617 sq ft to 2,154 sq ft and floor areas of about 3,500 to 3,700 sq ft. Corner units, with plot sizes of 2,400 to 4,800 sq ft and floor areas of 3,500-5,000 sq ft, cost $2.2 million to $3 million. All units are three storeys high and will have attics but no basements.

Another landed development expected to come on the market soon is King’s 8, comprising eight freehold strata bungalows along King’s Road. Each strata bungalow will have its own swimming pool.

 

Source: Business Times 22 Sept 07

Home market will grow even if punters retreat: report

Developers may go for higher volumes, lower margins in mass, mid-segment

(SINGAPORE) Recent events could make the residential property market vulnerable to declines in collective sales and speculative activity.

However, Goldman Sachs believes that other demand drivers such as the increase in resident population will help mitigate the fall in those selling their homes through collective sales and looking for replacement homes.

It reckons there will be little adverse impact from a drop in speculation while foreign buying will be relatively sticky. And the silver lining from the recent market slowdown brought about by the sub-prime mortgage crisis in the US is that it has weakened reasons for the Singapore government to curb price rises, argues a paper by Goldman Sachs Global Investment Research.

‘Going forward, we think all developers will see more of their residential exposure being tied to mid- and mass market projects via new site acquisitions so as to meet expected demand in those segments.

‘We look for achievement of strong selling prices and take-up in forthcoming residential launches to demonstrate the strength of demand in the residential market and drive share price performance of Singapore developers,’ according to the paper, titled ‘Residential market shaken but still good for developers’.

The paper, authored by Goldman Sachs executive director (Asia-Pacific Investment Research) Leslie Yee, says the sharpest increases for Singapore residential property prices are over.

However, the operating environment in Singapore for developers is good, as they can still enjoy fat margins from developing their existing prime district residential landbanks, and reinvesting the money they make from selling such projects into mass/mid market sites where profit margins will be lower but volumes will be high.

‘We see developers achieving margins of about 20 per cent in mid to mass market projects and tapping into opportunities as population increases,’ Mr Yee said. He expects a positive demand picture, with net incremental annual demand of around 19,000 private homes over the next few years.

New demand will come from increases in the resident population, of which an increase in the number of permanent residents is a major driver; increase in the non-resident population; sellers of properties that are the subject of en bloc sales; and Housing and Development Board (HDB) upgraders.

The bank said its demand numbers do not factor in speculative buying. ‘Given the speed and scale of price increases this year, we think a fall in speculative activity benefits the property market in the longer run by reducing pressure for government intervention to cool prices,’ it added.

Goldman Sachs says it is not overly concerned about a decline in en bloc sellers looking for replacement properties arising from a near-term slowdown in collective sales amidst higher development charges and changes in legislation. This is because other components of demand will remain strong.

As for a slowdown in the supply of redevelopment sites if en bloc sales cool off, the paper argues that developers have enough residential projects on hand to execute, and the ability to acquire mid- and mass-market land from state tenders.

Goldman Sachs says it does not expect foreign buying, which has been instrumental in driving up residential property prices here, to dissipate as the factors attracting these buyers to the local property market – including transparency, openness to foreigners, and absence of capital gains tax – still hold.

Also, foreign buyers include permanent residents, whose property purchases here are likely to remain strong provided the momentum of new investments and jobs is maintained.

Goldman Sachs favours GuocoLand and City Developments for their leverage to the Singapore residential sector, accounting for 35 and 38 per cent respectively of their revalued net asset values.

In the mass segment of the private housing market, ‘we see strong domestic economic factors and rising HDB resale prices underpinning price performance’, the paper says.

‘We think the government will be happy to see HDB resale prices rise so that larger segments of the population can enjoy the fruits of Singapore’s success while continuing to ensure affordable housing for citizens through the HDB primary market,’ Goldman Sachs reasons.

 

Source: Business Times 21 Sept 07

Strata landed homes look set to be big trend

AUGUST and September are typically slow months for new property launches, due to the superstition surrounding the Hungry Ghost month.

But developers are not sitting idly by this year. Several launches are in the works for the last months of the year, and one of the big emerging trends appears to be strata-titled landed homes, or cluster housing projects.

Property firm CB Richard Ellis (CBRE), for one, identifies at least 21 such projects in the pipeline.

For the uninitiated, cluster homes look exactly like conventional landed homes. They are usually at least two storeys high and come in a variety of sizes, ranging from terrace houses to bungalows.

The main difference is that cluster homes come with strata titles, as do condominiums, rather than land titles.

In a cluster project, the land is shared by all the owners, explained Mr Li Hiaw Ho, an executive director of CBRE Research.

This has two main implications. First, cluster projects can be sold en bloc as long as the minimum required owner consensus is met. This means an 80 per cent agreement for projects more than 10 years old and 90 per cent for younger estates.

Second, owners of strata houses do not have the flexibility of tearing down and rebuilding their properties.

Owners of conventional landed homes, on the other hand, can make additions and alterations that affect the external appearance of the homes.

Generally, cluster housing projects tend to be more standardised in appearance than the usual landed houses.

Each unit is typically two to three storeys high, and most come with four to six bedrooms, attics or roof terraces, and basements, said Mr Li.

Parking spaces are also a plus in cluster projects, which usually include one or two basement carpark lots for each house.

The built-up area for each house ranges from about 2,500 sq ft for a terrace house to 3,500 to 4,000 sq ft for a detached house, added Mr Li.

The larger bungalows can go up to almost 6,000 sq ft, with roof terraces usually accounting for another 500 sq ft.

Cluster housing is not a new concept in Singapore, having first made an appearance in 1993. But these projects became more mainstream only from 2000 onwards, and have taken off in a big way just recently.

‘More customers are accepting the product now, so developers are also encouraged to build more of these houses,’ said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

He noted that Far East Organization’s Greenwood series of landed homes, one of the more popular landed housing projects in recent years, is planning to release its next phase in a cluster housing style.

Anecdotal evidence from property agents also seems to indicate that foreigners find it easier to get approval to buy strata landed homes than to buy conventional landed homes.

‘Cluster homes are strata-titled, so in such a development, there would be a good balance of voting share rights between foreigners and Singaporeans,’ said one agent. ‘Also, generally, the smaller the property, the easier it is to get approval if you are a foreigner.’

For the individual home buyer, there are several advantages to strata homes that conventional landed housing do not offer.

Among the greatest draws of cluster houses are the communal facilities and security features. Facilities often include at least one swimming pool, jacuzzis, a gym, a clubhouse and barbecue areas.

But these perks come at a cost: Strata home owners have to pay a monthly maintenance fee, much like condominium owners, to maintain these facilities.

Previous estimates by consultancy Colliers International have put these fees at $250 to more than $400 a month, depending on the size of the estate and the facilities available.

Apart from the maintenance cost, cluster homes and landed homes in the same location are usually similarly priced, said CBRE’s Mr Li. ‘The facilities provided in a cluster project will be a trade-off against the loss of the private enjoyment of land.’

For a home buyer who is trying to decide between strata and conventional landed homes, ‘it will ultimately boil down to a question of lifestyle’, said Mr Li.

While some home owners might prefer a landed home with large common areas and some facilities within the compound, others might want to have the land title to their landed property, he added.

 

9sept07_st_stratalandedhomessetnextnewtrend2.pdf 

Source: The Sunday Times 9 Sept 07

DC rates hoisted by as much as 112%

Average rate raised by 58% for non-landed residential use, and 42% for commercial use

(SINGAPORE) The government yesterday announced what is possibly the sharpest hikes in development charge (DC) rates, which are payable for enhancing the use of some sites or building bigger projects on them.

The Ministry of National Development (MND) cited the rise in market values as the reason for the increases.

On average, the DC rate for non-landed residential use was raised by 58 per cent and that for commercial use by 42 per cent. The average DC rate was also increased 23 per cent for hotel use, 11 per cent for landed residential use, and 2 per cent for industrial or warehouse use.

But the escalations were much bigger in certain locations – as high as 112.1 per cent for non-landed residential use in the Everton/Spottiswoode Park vicinity and 104.5 per cent for commercial use in the Maxwell Road/Telok Ayer St and Anson Road areas, based on Jones Lang LaSalle’s analysis.

The latest increases, which take effect today, are in addition to the 40 per cent across-the-board appreciation in DC rates announced on July 18 arising from a change in formula for computing DC.

While yesterday’s increases look steep, they did not surprise most market watchers given the substantial appreciation in land values over the past six months.

As to whether the latest hikes will further slow en bloc sales, which have decelerated lately as developers become more cautious about land-banking amid the stock market rout and credit tightening fears, property agents offered a range of views.

Credo Real Estate’s managing director Karamjit Singh estimates that probably only about 20 to 30 per cent of all collective sale sites have substantial DC components amounting to 10 per cent or more of total land value. ‘For many of these sites with high DC component, the increase may have been anticipated and priced in, so things can move on. For those that haven’t, their progress for an en bloc sale could be affected if owners are unwilling to lower their price expectations.’

Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt too said: ‘Despite the stellar increases in DC rates, the impact of the DC hike on en bloc residential developments remains marginal on most sites, especially freehold sites. Some leasehold sites with substantial DC components, however, may feel the heat.’

CB Richard Ellis executive director Li Hiaw Ho said the hikes will to ‘a small extent, slow down collective sales’.

‘Coupled with homeowners’ expectations of high prices for their properties, developers might not be as aggressive in acquiring sites,’ he added.

Colliers International’s director for research and consultancy Tay Huey Ying said two rounds of DC hikes in July and September, and global credit tightening, will likely lead to more cautious bidding by developers and more realistic price expectations by sellers.

Ms Tay said that increases in land prices may not be as phenomenal in the coming six months compared with the past six months. ‘But demand for development land should stay healthy as the end-market for residential property is expected to remain healthy on the back of strong economic prospects,’ she added.

Analysts noted that in any case, the supply of collective sale sites will slow due to impending changes to en bloc sale rules requiring more safeguards and procedures.

DC is specified according to use groups and is listed by 118 geographical sectors or locations across Singapore.

The 112 per cent hike in non-landed residential DC rates in the Everton/Spottiswoode Park area was attributed by most analysts to the Spottiswoode Apartment and Oakswood Heights collective sales in April and June at $732 psf per plot ratio and $740 psf ppr respectively – more than twice the land value of $307 psf ppr implied by the July ‘07 DC rate for the location.

And the DC rate hikes of 107.5 per cent each in the Newton/Surrey/Lincoln roads and River Valley/Jalan Mutiara areas were attributed to the collective sales of Lincoln Lodge for $1,449 psf ppr, and Bishopswalk for $1,544 psf ppr respectively, which are about three times the $492 psf ppr land value implied by the July ‘07 DC rate for the locations.

The Maxwell Road and Anson Road areas topped the increases for commercial use with gains of 104.5 per cent each, likely due to prices achieved at two recent state tenders for commercial sites at Anson Road. The same two locations also recorded the biggest increases in hotel use rates, at 66.7 per cent each, and again, this was probably due to two hotel sites at Gopeng Street and Tras Street sold by the state at significantly higher land values than implied by July DC rates.

As for industrial DC rates, the highest increase of 15.8 per cent was for the Pasir Panjang/Science Park area, followed by 11.1 per cent hikes in 15 other locations including Henderson Industrial Park, Bukit Merah View, Redhill and Hoy Fatt Rd/Alexandra Road, according to JLL’s analysis.

 

Source: Business Times 1 Sept 07

Good class bungalow sold for record $29m

A GOOD class bungalow at 15 White House Park has become mainland Singapore’s most expensive, after it was sold for a record $1,308 per sq ft (psf) – eight years after the historic property was restored and put on sale.

The 22,000 sq ft conservation bungalow – called Glencaird – was sold to a Singaporean for $28.8 million, Wheelock Properties said in a statement yesterday.

Wheelock has been managing the property for Oroll, a wholly-owned unit of The Wharf (Holdings), which is also owned by Wheelock’s parent, Wheelock and Company.

Glencaird is one of 12 luxury bungalows that make up The Glencaird Residences and the only conservation bungalow in the series.

Oroll developed the bungalows.

The other 11 bungalows have already been sold at an average price of $838 psf.

Before it finally found a buyer, Glencaird – a restored, 105-year- old Victorian bungalow with five bedrooms – had sat empty since its completion in 1999.

‘We received several offers for Glencaird over the years,’ said Mr David Lawrence, Wheelock’s chief executive officer, in the statement.

‘However, we felt they were not reflective of the value, given that this is a very unique conservation piece in an excellent location.’

Prior to Glencaird’s sale, the record for mainland Singapore’s priciest bungalow was held by 63 Dalvey Road – sold in March for $16.45 million, or $1,091 psf.

On Sentosa, the highest price fetched by a bungalow plot is $1,473 psf.

Good class bungalows, Singapore’s most prestigious homes, are now enjoying astronomical asking prices amid the property boom.

 

Source: The Straits Times 30 Aug 07

URA to auction 12 Sembawang sites for landed homes

FOR the first time in six years, the Urban Redevelopment Authority is offering small sub-divided landed housing plots for sale. It will auction 12 on 99-year leasehold tenure at Sembawang Road/Andrews Avenue on Oct 30.

The plots, in Phase 1 of a new landed housing estate called Sembawang Green, can be developed into a total of 57 homes – 42 terrace houses, 14 semi-detached homes and a bungalow. The sale is aimed at encouraging wider participation by smaller developers and even individuals wanting to build dream homes opposite Sembawang Park and near Sembawang Beach. The approach is similar to that taken by URA for Kew Drive in 1993-1994 and Eastwood Park in 1995-1996, both in the Bedok area, and Chuan

Green in 1997-2001. The Sembawang plots range in area from 4,243 sq ft (for a two semi-detached house development), to 43,694 sq ft (for a 23 terrace-home project). All 12 plots can be developed up to three storeys.

Knight Frank director Nicholas Mak expects the terrace plots to fetch $220-250 psf of land area and the semi-detached and bungalow plots around $180-200 psf. These reflect breakeven costs of $870,000 to $930,000 per terrace house, $1.025 million to $1.1 million per semi-D and $1.5-1.6 million per bungalow.

CB Richard Ellis executive director (residential) Joseph Tan expects the terrace plots to fetch $220 to $250 psf of land area, the semi-D plots $240 to $270 psf and the sole bungalow site $260-$300 psf. Based on these bid ranges, the terrace houses could sell for about $1.0-1.1 million, the semi-Ds for $1.4-1.5 million and the bungalow for $2.6-2.8 million, according to Mr Tan.

The plots are next to the established landed housing estates of Straits Garden and Sembawang Straits Estate. URA has already put in infrastructure. A URA spokeswoman said the authority will decide on the number of phases for Sembawang Green and the number of homes in each phase after the auction of the Phase 1 plots.

Source: Business Times 29 Aug 07

Can flat buyer force us to sell after we quit deal?

Q MY BROTHER and mother jointly sold their four-room Housing Board (HDB) flat. But my brother, who has a low IQ, backed out and refused to proceed with the HDB sale procedure on the first appointment. The HDB then postponed the appointment date by a month.

But my brother is still refusing to sell the flat. The buyer has engaged a lawyer and a summons has been issued to my brother, with a copy sent to me.

Could you please advise me on the following:

a) What are the consequences if we do not sell the flat?

b) Can a lawyer be engaged to protect my brother’s interests?

c) Can the buyer ‘force sell’ the flat?

Here is a brief history of my brother. He was admitted to Singapore General Hospital for depression in January this year after he was cheated of all his POSB savings by a close colleague last year. He has not worked since then. My mother has no savings.

A I ASSUME that your mother and brother (‘the sellers’) had granted an Option to Purchase to the buyer who has duly exercised the Option. Once the Option is exercised by the buyer, it becomes an agreement that is binding on both the sellers and the buyer. Your brother will not be able to back out of the terms of the Option on the account of his low IQ unless the following factors can be shown:

• Your brother was of unsound mind at the time of signing the Option to Purchase, to such an extent that he was incapable of understanding what he was doing when he signed the Option; and

•  The buyer knew or ought reasonably to have known of his disability.

  If these two factors can be proved, then your brother may avoid the agreement. Otherwise, the sellers are legally obliged to proceed with the sale according to the terms of the Option.

  The Option would contain a term that subjects the sale to the conditions of the Law Society Conditions of Sale 1999.

  One of the conditions provides that if the sellers fail and/or refuse to proceed with the sale, then the buyer can elect either to obtain a court order to force the sellers to complete the sale or to obtain an order against the sellers for an award of damages in favour of the buyer.

  If the buyer elects to claim damages, the measure of damages payable by the sellers to him will be assessed

by the court. This will comprise mainly the difference between the market value of the flat and the sale price as agreed in the Option, usually calculated at the date when the buyer elects to seek the remedy of damages.

Hence, the sellers are well advised to attend the appointment at HDB. They should immediately inform the buyer of their intention to do so. This will render the writ of summons issued by the buyer premature and redundant. The sellers should certainly engage a lawyer to protect their interests.

In view of their lack of income and savings, they may wish to apply for legal aid at the Legal Aid Bureau at 45 Maxwell Road, #08-12, The URA Centre, East Wing, Singapore 069118. If they qualify for legal aid, the Legal Aid Bureau will assign lawyers to represent them. You may wish to visit their website at http://app.minlaw.gov.sg/lab

Lie Chin Chin

Managing Director

Characterist LLC

(incorporating Lie Kee Pong Partnership)

 

Source: The Sunday Times 19 Aug 07

Hot Spot – Kallang Basin

New condos coupled with the Government’s plans to revitalise the greater Marina Bay area will inject a lot more buzz into the Kallang Basin district. Already, the values of some residential projects in this area have risen. Check them out. Kallang Basin 

 

TANJONG RHU

Residential oasis near the city

TANJONG Rhu is a large upmarket condo belt with views of the Kallang Basin – and even the sea for some units.

The lungs of the area are the many large plots of greenery interspersed between the condos, which are fairly new, big and well-designed. Most sit on 99-year leasehold land rather than freehold.

They are valued for their proximity to the city and the sea. Residents also have easy access to the National Stadium – or the future Kallang sports hub – and several restaurants.

There are no new launches here, though prices have risen in line with the market and new projects in nearby areas, such as Meyer Road and Marina Bay.

In the past year, prices have risen 50 to 60 per cent, to an average of $800 to $1,000 per sq ft (psf) in the first quarter, said CB Richard Ellis (CBRE).

Buyers have shown keen interest in the past year. Last month, at least eight deals were done at Costa Rhu for about $877 psf on average. The 737-unit condo was launched in 1995 at $750 psf on average.

Agents said buyers prefer projects with views of the Kallang Basin, like Pebble Bay.

Rents in the area have also risen. For instance, monthly rents at Pebble Bay are up by nearly 27 per cent, going from $2.29 psf to $2.90 psf in the first quarter, CBRE said, citing data from the Urban Redevelopment Authority.

That means a three-bedroom unit at Pebble Bay will cost about $5,500 a month to lease. Asking rents are even higher, at $6,000 to $8,000 a month, said Savills Research. In general, asking rents for a two- to threebedroom unit in the area come to $4,000 to $6,000 a month, it said.

MEYER ROAD

Cosy community on the urban fringe

THE tranquil Meyer area, tucked away just north of the East Coast Parkway, offers a fairly wide mix of housing choices.

There is a clear delineation between the condominiums and the semi-detached houses on opposite sides of Meyer Road.

But both ends share the purely residential area’s relative peace and quiet.

The area is popular with Indian expatriates, who like it for its proximity to both East Coast Park and the city.

Lifted by new launches, prices in the area hit about $950 to $1,200 per sq ft (psf) on average in the first quarter of the year, up 35 to 50 per cent from a year earlier, said CB Richard Ellis.

The newest project launched for sale this year is CapitaLand’s The Seafront @ Meyer, following the launch of GuocoLand’s The View @ Meyer. Sing Holdings’ Meyer Residence was first marketed more than a year ago.

Some of the older projects – particularly those where owners are keen to attempt collective sales, such as Hawaii Tower – have attracted higher offers.

Deals done this year have averaged about $957 psf at Hawaii Tower and $1,075 psf at The Sovereign, said Savills Research, citing data from the Urban Redevelopment Authority.

Asking rents for a two- to three-bedroom unit in the area average $3,500 to $5,000 a month, Savills said.

But rents can be much higher. At The Sovereign, which has relatively large units, landlords are asking $9,500 to $11,000 a month for the larger 3,300 sq ft units, it said.

GEYLANG

More boutique apartments on the way

GEYLANG needs no introduction to most Singaporeans.

As one of Singapore’s best-known red-light districts, Geylang boasts a vibrant nightlife and a wide array of good food.

In fact, the area is buzzing with activity during the day too. It is dominated by many small budget hotels and is widely known for its casual eateries serving good local fare often well into the night.

Boutique apartments are also popular in the area.

More developments are on the way. Launches early last year included The Arizon and The Midas, followed by the 142-unit Atrium Residences, which is developed by the Novelty Group. All three are being built on freehold plots.

Existing developments include the 99-year leasehold The Alcove, where average prices are at $375 per sq ft (psf), and the freehold Le Crescendo, which has sold for a higher average of $670 psf this year.

At Central Grove, the average transacted price this year is $566,800 and asking rents are between $2,800 and $3,000 a month, said Savills Research.

In the area generally, asking rents for a two- to three-bedroom unit start a little cheaper at an average of $2,000 a month, rising to $3,000 a month, it said.

Home prices here have not risen much in the past year, said Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong.

He added that the developments in this area attract HDB upgraders, particularly those living nearby, on Sims Avenue and Guillemard Road.

KALLANG

Heartland enclave all set to turn swanky

OLD public housing estates are the mainstay of the Kallang area, with basic amenities such as a train station, a community centre and coffee shops adding a true heartland feel.

But changes are in store that will inject an upmarket tone, as the area is near the Kallang Basin, which is set to be rejuvenated.

And just to the south, an upcoming posh 96-unit condo will also jazz things up.

The Riverine by the Park, which Wing Tai started selling in April, saw strong interest and is now fully sold. Located near Kallang Riverside Park, it is close to the city centre.

Asking prices in the sub-sale market have surged to as much as $2,000 per sq ft (psf) for a penthouse unit. Three-room HDB flats in the area have been sold for $160,000 to $215,000. Five-roomers have gone for $257,000 to $468,000.

In the years ahead, the public housing in the area will become more posh, as it will boast the first public waterfront homes just to the north. Five blocks of three- to five-room flats will be built on Bendemeer Road in about three years’ time.

On Boon Keng Road, a private developer will soon build condo-like HDB flats under HDB’s second design, build and sell scheme.

LAVENDER

Evolving estate with a bit of everything

THERE is no escaping the commercial flavour of much of the Lavender area.

Hardware stores, a funeral parlour and industrial sites pepper the area alongside residential estates.

Still, housing is slowly evolving, with older public housing estates near the Lavender MRT Station now mixed with newer condo developments such as Southbank and Citylights.

These two conveniently located condos have seen keen sub-sale interest and rising prices.

Southbank’s 197 residential units were launched nearly a year ago at $600 per sq ft (psf) on average – and prices have since climbed. Asking prices for these condos are near or above $1,000 psf now.

Due to its central location, the HDB flats in the area tend to command a premium. A fairly new five-room HDB flat in Jellicoe Road, near the Lavender MRT Station, for instance, was sold for $470,000 in April.

The area is becoming more attractive and the planned injection of more leisure and sports activities along the river should boost demand for housing, said Savills Singapore director of marketing and business development Ku Swee Yong.

Source: Sunday Times 10 Jun 07

Hot Spot – East Coast Road

 The Sunday Times takes a look at this coveted residential district in the East. Check them out. east-coast-hot-spot.pdf

JOO CHIAT/TELOK KURAU

Steady stream of small projects

THE sleaze of Joo Chiat is often put in the spotlight but beyond the colourful nightspots, the area is a quiet residential zone dominated by low-rise boutique developments and terrace houses.

A sprinkling of amenities such as schools, a medical centre, a park and good food also make this a conducive residential district.

Home prices rose to $600 to $700 per sq ft (psf) on average in the first quarter of the year, up from $450 to $550 psf a year ago, said CBRE.

There has been a steady stream of small apartments launched, with projects like Le Merritt selling for $650 psf this year. Last month, a 1,626 sq ft terrace house went for $1.2 million while a 2,190 sq ft semi-detached home went for $1.51 million.

Sim Lian Land bought Wen Yuan Court, K Gardens and Leyuke Apartments last year, but will launch its new project for sale only next year.

SIGLAP/FRANKEL

Cafes give quiet area some buzz

THE hub of activity in the otherwise homogeneous area of bungalows and semi-detached houses is the Siglap Road and East Coast Road junction.

Siglap Shopping Centre and rows of cafes and eateries give the otherwise quiet area some buzz, upping the area’s hip quotient.

With few new projects, Axis @ Siglap, a 40-unit boutique condo marketed earlier this year, sold out in a matter of weeks at an average price of nearly $800 per sq ft (psf). This was above the range of $600 to $700 psf for most properties in the area, Savills had said.

The strong demand is good news to developers who have bought sites in the area. Sing Holdings and a fund will redevelop Finland Gardens while Frasers Centrepoint will redevelop Flamingo Valley.

Prices for landed homes tend to vary widely, though they have moved up moderately. In May, a 4,700 sq ft bungalow on Siglap Road sold for $1.9 million while a 9,586 sq ft bungalow on the same stretch sold for $5 million.

ST PATRICK’S

Sleepy stretch enjoys new lease of life

IF YOU are looking for some peace and quiet in the East Coast locale, then the St Patrick’s area might be just your cup of tea.

The many boutique apartments, nestled alongside schools including St Patrick’s Secondary School and CHIJ Katong Primary, enjoy a special serenity that even the construction work at Grand Duchess at St Patrick’s and St Patrick’s Loft cannot disrupt.

The sleepy area has seen three launches recently. One was the 37-unit St Patrick’s Loft – marketed late last year at over $600 per sq ft (psf). Then came the fast sell-out of the 121-unit Grand Duchess, which created a stir. This project, which sold at $740 psf on average, further raised the area’s value.

Just a year ago, average levels were at just below $500 psf. Five Grand Duchess sub-sales were done at $700 psf to $900 psf, said CB Richard Ellis (CBRE). MCL Land’s recently sold-out Tierra Vue rode on the success of Grand Duchess and started sales at $800 psf. One 1,270 sq ft unit was said to have been sold at $1,051 psf, a record for the area, said CBRE.

More new projects are expected for the area.

MARINE PARADE

Heart of the district with sea-front housing

MARINE Parade is the heart of the entire East Coast Road district and is a textbook example of how to develop reclaimed land. It brings together a popular shopping mall, schools and sea-front housing all within a linear stretch.

Public housing dominates, though older, large condos such as Mandarin Gardens and Neptune Court also enjoy the sea breeze and East Coast Park is just a stroll away.

It is no wonder the HDB flats here, particularly those with sea views, have always commanded a premium.

And recently, they have benefited further from the robust activity in the private residential market, said CBRE.

Prices of five-room flats hit $358 per sq ft (psf) or some $467,000 on average in the first quarter, up 13.5 per cent from a year ago. This compares with a 7 to 8 per cent rise in prices of three- and four-room flats in the same period.

A four-room flat costs about $334 or some $305,000 on average, up nearly 7 per cent from a year ago.

But when it comes to rental, the four-roomers seem to be the most sought after. Average monthly rents of four-roomers rose by a hefty 47 per cent to $1.47 psf in the first quarter. This compares with a 23 per cent rise to $1.62 psf for three-roomers and a 7 per cent rise to $1.19 psf for five-roomers, said CBRE.

Private home prices in the area have risen by 20 to 40 per cent to $700 to $800 psf over a 12-month period as of the first quarter, said CBRE.

The area’s newest large condo is the 99-year leasehold Cote D’Azur.

KATONG

Oozing old-world charm

RUSTIC shophouses, good food and a strong Peranakan heritage make Katong a real gem in the East Coast area.

The housing developments are mostly low-rise, with shophouses and boutique condominiums the mainstay, although there are quaint colonial houses for lease along Kuo Chuan Avenue.

Apart from the old-world charm, there is 24/7 shopping at Cold Storage in Katong Mall.

There are few new developments, though more may come as there have been several collective sale targets.

Sea Breeze Apartments was sold en bloc and should become an 88-unit project while a 229-unit condo in Jago Close is also expected, said CBRE. Most of the properties here are small and rather old, so interest has not been very strong, with prices done in the past year or so at between $400 and $787 psf, said CBRE.

Developments such as Ceylon Crest and Katong Gardens transacted recently at about $540 to $550 psf on average.

Others such as East Galleria and Bellezza @ Katong go for about $650 psf on average.

AMBER ROAD

Sweeping away the old

A WAVE of collective sales is gradually sweeping old properties out of the area, to make room for high-style condos that will give the street a brand-new look.

This enclave is becoming the hottest on East Coast Road as buyers snap up units at yet-to-be-completed, relatively large condos, jacking up the area’s value.

Prices averaged $850 to $1,000 per sq ft (psf) in the first quarter, up 40 to 45 per cent from $600 to $700 psf a year ago, said consultancy CB Richard Ellis (CBRE).

Condos under construction include Wheelock Properties’ 546-unit The Sea View; MCL Land’s 400-unit The Esta; the 562-unit One Amber from United Industrial Corp and United Overseas Land; and Ho Bee’s 42-unit Vertis.

The three large freehold condos have seen active sub-sales, said CBRE. They are popular for the location, facilities and well-known developers, said a consultant. Recent deals for The Sea View were done near $1,000 psf on average.

Buyers will soon have more choices.

A new project is earmarked for the sites now housing Amber Lodge and Jin Fu Apartments. Voda Land bought these estates en bloc in a private treaty at an undisclosed price and aims to launch Amber Residences in about three months.

It will be an ‘upper mid-market’ condo with 114 units in one 21-storey block, said Savills Singapore.

More condos will come when Far East Organization redevelops Amberville and Rose Garden, which it bought in collective sales last year.

For now, while construction roars ahead, the existence of older estates like Rose Garden makes for a noisy juxtaposition of past and future.

Source: Sunday Times 3 Jun 07

Leases Getting Shorter as Rentals Go Up

WHEN technician Paul Tan wanted to renew the lease for his three-room flat in Tampines, not only did his landlord increase his monthly rental by $100, he also shortened his contract to a one-year term.

The usual three-year option, which tenants used to get, is a thing of the past, the 50-year-old was told. ‘Of course I was disappointed. It’s such a huge hassle to relocate,’ Mr Tan said.

But many whose leases are coming up for renewal are, like Mr Tan, finding out that a one-year lease is becoming the norm in this hot rental property market. This is especially so in the residential market, said Mr Gringo Low, a senior realty adviser at Knight Frank Property Network.

‘Property prices are continually rising and landlords want to ink the best deals. Short-term leases are the way to go for landlords to stay competitive and to constantly update rents.’

Mrs J. Lee is one such landlord. The 56-year-old housewife has decided to shorten the lease period for her 1,000 sq ft two-bedroom apartment in River Valley Road. She used to offer a four-year lease but is currently looking for someone who will accept a one-year deal for $2,000 more a month, after she furnished the apartment.

She said: ‘The rental market is moving forward and I want to make the most out of it.’

Expatriate Guru Vishwanath, who has been renting an apartment at Braddell View for the past four years, is unhappy about the trend.

The 37-year-old programme manager said: ‘There is no logic behind this. It’s unfair of landlords to increase rental rates and shorten leases even if the property market is booming. Each day, I am plagued by worry that my landlord will shorten my lease when it ends in December.’

Retail outlets are also not spared.

Capitol Optical had its lease for all 20 stores in malls like Plaza Singapura, Rivervale Mall and Hougang Mall cut to three years, from the usual 3+3 deal (three years plus the option of renewing for another three).

Mr Steven Goh, from the secretariat of the Association of Shopping Centres (Singapore), said: ‘Demand is high for retail space at good shopping centres. Landlords would rather have options open and not tie themselves down with long leases.’

A spokesman for CapitaLand Retail, which owns and manages 15 shopping malls, said it has tenants on both lease structures (three years and 3+3) to ensure vibrancy in the malls.

Ms Stephanie Ho, general manager of Asia Malls, which manages shopping centres such as Century Square, Liang Court and Hougang Mall said the terms of lease offered to each tenant depend on the type of terms and the type of trade.

Office space, though, is not affected. Major developers in the Central Business District are not following this trend and are staying with standard lease terms of about two to three years.

Property agents expect this trend to last until the integrated resorts open, starting 2009.

As for Mr Tan, he has decided not to renew his lease. ‘The lease is too short for me and I have to worry constantly about not having a roof over my head 12 months later,’ he said with a sigh.

Source: The Straits Times 12 Jun 07

Prices for Sentosa bungalow land hit new high

LAND prices for bungalows have hit a new high of $1,472 psf at Sentosa Cove, beating the $1,308 psf price set in November 2006.

Four seafront bungalow plots were released for sale in March and all have been sold. Apart from the top price, a spokesman for Sentosa Cove Pte Ltd (SCPL) said the average selling price was $1,300 psf.

SCPL also said that it has sold 87.3 per cent of its total land area, and 79 per cent of the number of units available. “There are currently 32 bungalows left – only a handful of seafront bungalow land parcels are left,” SCPL added.

The news follows SCPL’s announcement yesterday that it has launched the second last condominium site at Sentosa Cove for sale.

Called the Beachfront Collection, the 113,797 sq ft site overlooks Sentosa’s Tanjong Beach and has a maximum gross floor area of 149,074 sq ft. SCPL estimates that up to 88 luxury sized units can be built.

Donald Han, managing director of Cushman & Wakefield Singapore said he expects record prices of $1,400-1,600 per square foot per plot ratio (psf ppr) to be set for the site.

‘Being the only beachfront condo site, developers are likely to build a resort-like development and will put a substantial premium on to the land price bid,’ he said.

Mr Han estimates that the break-even price will be slightly under $2,000 psf ppr and that the successful bidder must sell completed units at around $2,200 psf.

Mr Han also believes Lippo’s new residential development next to One Degree 15 will be sold for about $2,200 psf when it is launched.

Already, prices on the secondary market for developments on Sentosa Cove are rising. According to data analysed by CB Richard Ellis (CBRE), caveats lodged in the first five months of 2007 reveal that subsales of units at The Azure, The Oceanfront and The Coast are averaging $1,570 psf, $1,730 psf and $1,785 psf respectively.

The Coast was launched in October 2006 at about $1,600 psf. Li Hiaw Ho, executive director at CBRE Research, said the consultancy expects the Beachfront Collection to fetch between $160 million and $186 million. The size of the site could make it slightly less attractive.

Mr Li highlighted that while previous sites like The Seaview Collection can be developed into an eightstorey condominium with 200 units, the Beachfront Collection can only be developed into four-storey condominium of 88 units.

After Beachfront Collection, the last condo site at Sentosa Cove is expected to be launched around the end of this year.

 Source: Business Times 12 Jun 07

Upswing in GCB land prices Expected to Continue

Bungalow at 63 Dalvey Road changed hands at $1,091 psf

RECORD prices have been achieved in several Good Class Bungalow (GCB) areas this year – a trend expected to continue as well-heeled investors move to snap up limited supply.

A freehold bungalow on 15,075 sq ft of land at 63 Dalvey Road was sold for $1,091 per square foot of land area, or $16.45 million, in March.

And the seller, Star District Development, is said to be asking $1,458 psf for the bungalow next door at 61 Dalvey Road, which sits on 15,081 sq ft of land.

Star District is controlled by low-profile Singaporeans currently based in Hong Kong.

The $1,091 psf fetched for 63 Dalvey Road is the highest unit price for a GCB since at least since 2000, industry observers say.

At Jervois Hill, Hong Leong Group is said to have recently sold seven GCB land parcels to a single buyer at prices of up to $800 psf, almost double the $408 psf at which it started selling the plots more than a year ago. Hong Leong is believed to have sold all 19 freehold plots.

The buyer who bought the seven plots is believed to be Vincent Tan Kim Yong, the chairman and chief executive of locally listed Advanced Integrated Manufacturing Corp. He is understood to have bought some of the plots jointly with his wife Teo Siew Ling.

He did not respond to BT’s calls yesterday.

The seven plots total more than 100,000 sq ft of land and changed hands for a total of more than $80 million.

Interestingly, some of those selling GCBs at benchmark prices have not exactly reaped huge profits, and possibly after long holding periods since they may have bought the properties at the height of the previous boom in 1996-97.

Star District waited a decade before selling 63 Dalvey Road for $1,091 psf of land area, having bought the property in April 1997 for $13.9 million or $922 psf.

Star District also picked up 61 Dalvey Road, for which it now wants almost $1,500 psf, at the same psf price around the same time.

In February this year, Star District sold 21 White House Park, which is adjacent to 61 Dalvey Road, for $14.35 million or $951 psf – only slightly more than the $14.2 million or $941 psf it paid for the property in July 1997.

Jones Lang LaSalle brokered the sales of 63 Dalvey Road and 21 White House Park and is still offering 61 Dalvey Road.

The firm yesterday launched a GCB at 35 Leedon Road on land of 43,927 sq ft. A two-storey colonial bungalow now occupies the plot, which can be subdivided for development into two GCBs. The indicative price is $39.5 million, or about $900 psf.

JLL is also marketing 17 Camden Park, which has a colonial bungalow on it, at an indicative price of $24.35 million or $800 psf.

The firm said that given the limited supply of GCBs, the real estate revival and new benchmarks set this year, expectations of GCB owners have gone up.

The 26 GCB transactions in the first quarter of this year totalled almost $292 million and reflect an average price of $577 psf, up 15 per cent from the $503 psf average for last year’s 128 deals totalling some $1.3 billion , JLL said.

Market watchers recall that as early as October 2003, GCBs were the first residential property segment to enjoy a recovery in transaction activity.

Buyers of these upmarket homes are typically captains of industry and CEOs, who are usually among the first to sense an improvement in the economy.

Looking ahead, JLL’s regional director and head of investments Lui Seng Fatt expects GCBs to continue to set new price benchmarks this year and beyond because of their scarcity value, especially for larger plots, and strong demand from high net worth investors.

GCBs were traditionally the creme de la creme of luxury housing – at least as far as prices go – until Sentosa Cove came along.

Bungalow plots in the upscale waterfront housing district have fetched land prices above $1,400 psf despite having only 99-year leasehold tenure, compared with typical freehold tenure for GCBs on the main island.

 Source: Business Times 12 Jun 07