Serangoon Garden bungalow up for auction

A freehold bungalow at 14 Brighton Crescent in the Serangoon Garden area will go under the hammer at a auction later this month.

The property is understood to have been put up for sale by the estate of the late Raffles Girls’ School principal Noel Evelyn Norris, who died earlier this year.

The indicative price for the rectangular site is S$7.7 million or around S$890 per square foot (psf) on the land area of 8,666 square feet.

On site is a single-storey detached house. Under Master Plan 2014, the site is zoned for “two-storey mixed landed” use.

The site can be subdivided to accommodate either two bungalows of about 4,333 sq ft each or three terrace houses of some 2,000-3,000 sq ft each.

Both configurations would appeal to owner occupiers seeking a huge space for multi-generation households and/or immediate relatives to live next to one another and yet enjoy privacy.

Moreover, the freehold tenure of the property would boost its appeal to developers.

The auction will be held on Sept 24 at The Amara Hotel in Tanjong Pagar.

Another property that will go under the hammer at the same auction will be a two-bedder of 1,109 sq ft on the 12th floor of One Shenton. It is being offered for sale by its owner, with an indicative price of S$2.03 million or S$1,830 psf. One Shenton is on a site with about 90 years’ balance lease. The project received Temporary Occupation Permit (TOP) about two years ago.

Buyers were found for four properties – three residential properties and an industrial unit – at its auction last month. The 1,614-sq-ft factory unit, on the fourth level of The Spire in Bukit Batok Crescent, fetched S$650,000, or S$403 psf. The unit was put up for sale at the auction by its owner, as was a two-bedroom apartment with private enclosed space at the first level of UE Square in the River Valley area. It sold at nearly S$1.57 million, or S$1,400 psf. The property has 929-year leasehold tenure from Jan 1, 1953.

The other two properties that transacted at that auction were put up for sale by mortgagees (or lenders).

A two-level apartment at Orchard Scotts on Anthony Road was sold for S$3.3 million. This translates to S$1,565 psf based on its strata area of 2,109 sq ft. Located on the ninth floor, the unit has three bedrooms plus a study room. The project is on a site with a balance lease term of 86 years.

The other mortgagee sale property that found a new owner Aug 27 auction was a freehold, three-storey corner terrace house at Eng Kong Drive in the Toh Tuck area. It changed hands at S$3 million. The property is on 2,827 sq ft of land area and has five bedrooms and a maid’s room.

Mortgagee sales have gained momentum since the second quarter of this year.

Agents expect the number of properties put up for auction by mortgagees or lenders to rise because of difficulty that financially stretched borrowers face in securing buyers for their properties since the implementation of the total debt servicing ratio (TDSR) framework in June last year. As a result, financial institutions have had to repossess more properties and put them up for auction.

Source: Business Times – 11 September 2014

Resale prices of condos up a tad in August

Resale prices of non-landed private homes rose a slight 0.4 per cent in August, compared to July, but analysts say this cannot be construed as a turnaround in price performance. They pin it instead on some pent-up revival in buyers’ interest, among other factors.

This was according to flash data released by the Singapore Real Estate Exchange (SRX) on Monday.

August’s price gain was surprisingly led by properties in the city area and city fringe, which reported increases of 4.8 per cent and 1.5 per cent, respectively. In contrast, resale prices in the suburbs fell 1.1 per cent.

This may go against the conventional thinking that high-end homes would be the most affected by cooling measures and loan curbs, but this was simply because their prices have already fallen drastically in previous months and there was no way to go but up.

Buyers are finding high-end properties more affordable than before, but they are still very much concerned about weak leasing interest for high-end homes as companies tighten expatriates’ housing allowances.

This price increase in August is unlikely to be repeated in the following months . . . This is a pent-up investors’ interest that is expected to be short-lived. There is still ample unsold developer stock and lacklustre leasing demand.

Another explanation is that the figures were tilted by the greater number of transactions in the prime District 11 (Novena, Newton, Thomson) and the fact that their median “transaction over X-value” (TOX) were very positive, meaning that buyers paid higher than the properties’ estimated market value.

This masked the fewer transactions in Districts 9 (Orchard Road, River Valley) and 10 (Bukit Timah, Holland, Balmoral) where units changed hands below market value.

The minor recovery in the overall SRX price index and those of the core central region (city area) and rest of central region (city fringe) in August does not signal that the private residential price trend has reached the bottom. As some buyers wait on the sideline for prices to soften before they re-enter the market, it would result in a self-fulfilling prophecy of prices falling further.

Proof that the market remained quiet in August (also the hungry ghost month, during which it is considered inauspicious to buy property) lay in the flat resale volume. An estimated 418 non-landed private homes were resold in August, versus 417 in July.

On the leasing front, rental volume rose 3.6 per cent, with about 3,539 units rented in August. But rental prices continued to fall for the seventh straight month, slipping 0.6 per cent in August, led by the city area and suburbs which fell 2 per cent and 1.1 per cent, respectively. In contrast, rental prices in the city fringe rose a marginal 0.4 per cent.

ERA Realty key executive officer Eugene Lim said this shows that there is still demand for rented property but landlords have to price their rentals more realistically in what is now a tenant’s market.

“With more projects being completed, there is an increase in the competition for tenants. Landlords have to be realistic about rents to secure tenants quickly; and very often, it would mean lowering the rent to attract or keep good quality tenants.”

The weak rental market feeds into the cycle, further deterring buyers from purchasing private property for investment, he added.

Analysts continue to expect an overall drop of 4-8 per cent in the next 12 months, led by city-area condominiums.

Source: Business Times – 9 September 2014

Marina Bay taking on residential tone

The appeal of living near the Central Business District (CBD) will get a major test next weekend with the launch of the 1,042-unit Marina One Residences.

The area, best known as a fast-growing office centre, is shaping up as a significant residential precinct as well.

And while rents in the vicinity have fallen over the past year, investors may find the area a good buy now that cooling measures have restrained overly high prices, consultants say.

Marina One Residences – with one-, two-, three- and four-bedders – is part of the larger Marina One development, also including Marina One offices and The Heart, a retail podium set around a 65,000 sq ft park.

Developer M+S said it is looking to price Marina One at an average of $2,600 per sq ft (psf).

“We believe that there will always be discerning buyers who will seize a good investment opportunity as long as a development offers quality attributes – even through the peaks and troughs of the market,” said M+S chief operating officer Kemmy Tan.

Marina One Residences is one of the rare CBD residential developments with a freehold title.

Given current market conditions, its initial selling price may crowd out a considerable group of potential buyers… (But) in the longer term, Marina One will likely see more active deals due to its advantageous location and good designs, which are highly valued by busy owners and tenants.

Nearby project V on Shenton, launched in August 2012, sold 354 of 510 units as at the end of July.

In the past year, average resale prices in the area ranged from $1,945 psf at three-year-old One Shenton to $2,694 psf at one-year-old Marina Bay Suites.

On average, resale prices fell by about 8 per cent in the past year. A major reason for the fall is weakening leasing demand by expatriates. (They) have more or less decentralised to the city fringes to save on accommodation costs, as most companies have been strict in their housing allowances.

However, investors, especially those owning small units in the area, can expect keen leasing interest from mid- to senior-level expats who may still want a conveniently located property.

With cooling measures such as the total debt servicing ratio (TDSR) framework, buyers may now find properties here at attractive prices, which could “allow them to have a share of future price appreciation or recovery.

Prior to the TDSR, however, most locality upsides and rejuvenation plans were quickly priced in by owners and developers.

In the past year, average rents in the area ranged from $4.40 psf a month at Marina Bay Suites to $8.10 psf a month at three-year-old The Clift.

While rents have fallen by an average of 6 per cent over the past year, this is in line with weakening leasing conditions islandwide, especially rents of high-end residential properties.

But the investment outlook is promising beyond the short term.

Better infrastructure is expected in the next few years, such as the Thomson-East Coast Line which will be linked to Marina Bay MRT station.

The precinct’s unique setting and high accessibility will appeal to people working in the CBD who have tight daily schedules. Barring any major deterioration in the global economy, the rental market should also see good support in tandem with the maturation of adjacent office properties.

Source: The Straits Times – 6 September 2014

Return To Seller

Buyers of executive condominiums (ECs) are backing out of their purchases more than buyers of private properties, new data analysis shows.

Only a handful of ECs are on the market, compared with scores of private condos.

But units from just eight EC projects made up about 30 per cent of the 277 units returned to developers in the first seven months of the year.

The figures are based on an analysis of monthly data from property portal Square Foot Research.

ECs are a hybrid of public and private housing, sold with Housing Board restrictions.

At Skypark Residences, an EC in Sembawang, for instance, 22 units were returned – the highest number among the projects.

Forestville in Woodlands was next with 18. In Punggol, 14 units were given up at Ecopolitan while Waterwoods had 12 units returned. The Sea Horizon EC project in Pasir Ris had 10 units returned.

Consultants suggested that one reason could be that prices of ECs have risen to record levels, and that a lower mortgage servicing ratio (MSR) introduced last year limited the monthly housing payments at 30 per cent of the buyer’s gross monthly income.

The substantial (number of) units returned could be due to impulse buying, and buyers finding that they cannot secure a sufficient loan under the new MSR cap, or that the prices worked out to be in excess of their affordability.

Weak market sentiment could also mean buyers expect property prices to correct further, and some might have decided to give up their units for other opportunities.

Another possibility is that some buyers did not meet the eligibility criteria set by HDB. For instance, EC buyers cannot have a combined gross monthly income of more than $12,000, and must have lived in their HDB flat for at least five years, if they are not first-time buyers.

But some returns could simply be because of cancelled marriage plans, since buyers must form a family unit to buy an EC unit.

The penalty for returning a unit to developers who bought EC land after Dec 9 is 5 per cent of the property’s price, after the sales agreement has been exercised. For all other EC projects, the penalty is 20 per cent of the unit’s price tag. If the sales agreement has not been exercised, the penalty is typically about 1.25 per cent of the purchase price.

However, the number of EC units returned to developers is not alarming against the 3,337 EC units launched last year. No EC project was launched in the first seven months of the year.

The demand for ECs is still high, as they are much more affordable than private homes. As the number of sales transactions increases, the likelihood of units being returned also increases.

Source: The Straits Times – 6 September 2014

Sim Lian tops bids for EC site, beating market expectations

The latest state tender for an executive condominium (EC) site in Choa Chu Kang Drive shows that developers would still make a beeline for attractive sites.

Located about 550 metres from Choa Chu Kang MRT Station and Bus Interchange and Lot One Shoppers’ Mall, the 1.9-hectare plot drew eight bids, with the highest at S$361.08 psf ppr from Sim Lian Land – slightly above market expectations.

Some market watcher had expected the site to draw 5-6 bids with the winning bid at S$320-350 psf ppr. However, he added: “I see a mix of both caution and optimism. The optimism is in the top bid being higher than expected; the caution is the top bid being pretty close to the S$357 psf ppr average price for the two adjacent Choa Chu Kang Grove EC plots sold in February – despite the latest site being more attractive.”

The pair of Choa Chu Kang Grove sites are about 1.1 km from Choa Chu Kang MRT Station.

At the latest tender in Choa Chu Kang Drive, Sim Lian’s bid was just 2.2 per cent above the next highest, $353.21 psf ppr, from a consortium comprising Hoi Hup Realty, Sunway Developments and Oriental Worldwide Investments.

The number of bids and close winning margin indicate the healthy interest in the EC market, despite current market conditions.

City Developments Limited (CDL) unit Verwood Holdings teamed up with TID Residential to bid nearly S$343 psf ppr, the third highest. Back in March 2011, CDL had paid S$321 psf ppr for the next-door plot, on which it is developing The Rainforest EC project.

Also bidding at Thursday’s tender were Nanshan Group Singapore (S$337 psf ppr) and Qingjian Realty (S$331.08 psf ppr). A partnership of Evia Real Estate (6), Ho Lee Group, CNH Investment, OKP Land and Lian Soon Holdings offered S$311.46 psf ppr while MCL Land priced the site at S$305.17 psf ppr . This was significantly lower than the S$357 psf ppr average price that it had paid earlier this year for the pair of Choa Chu Kang Grove plots, in a much inferior location. MCL plans to amalgate the plots and build a project of over 1,300 units.

The lowest bid at Thursday’s tender – from Koh Brothers unit KBD Ventures – was S$280.21 psf ppr.

The strong turnout of eight bidders along with the higher-than-expected top bid of S$361 psf ppr constrasts with the lacklustre performance seen two months ago for an EC site in Sembawang Avenue, about 550 metres from Sembawang MRT Station.

That site drew just four bids and its winning bid of S$320 psf ppr was the lowest price for an EC site since November 2012.

ECs are a public-private housing hybrid with initial buyer eligibility and resale conditions that are fully lifted 10 years after the completion of the project.

Demand for ECs has softened following the December 2013 introduction of a mortgage service ratio (MSR) cap for EC purchases from developers.

Nevertheless, pent-up demand for this housing type is expected for the five EC project launches slated by year-end.

This is because no new EC projects have been launched in nearly a year, following regulations announced in January 2013 stipulating that developers would be allowed to sell units in EC projects only 15 months from the date of award of the site, or after completion of foundation works, whichever is earlier. Given that mass-market condo prices have started to soften, most analysts would expect prices of EC units to follow suit.

Market watchers reckon that based on the top bid for the Choa Chu Kang Drive site, the breakeven cost could be around S$700-720 psf. This still leaves the bidder with some cushion for a potential price softening from current levels. In the first half of this year, developers’ sales of EC units averaged around S$790 psf going by caveats data.

When contacted, a Sim Lian spokesman said that the group expects to launch a project on the site in early 2016, given current rules. “We’re looking at a project of 500-plus units. This is an attractive location, near the MRT station, a fairly big suburban mall and other amenities.”

Developers who pay high prices for EC sites may raise the proportion of smaller-sized units – for instance, by building more two-bedders instead of three-bedroom units, in order to keep the price quantum within reach of buyers’ MSR cap.

Source: Business Times – 5 September 2014


Marina One condo to launch at S$2,600 psf

Luxury condo Marina One Residences is set to launch in mid-September at an average asking price of S$2,600 per square foot – a level that market watchers deem challenging given current market conditions.

It is part of the Marina South integrated project developed by M+S Pte Ltd, a joint venture between Temasek Holdings and Malaysian sovereign wealth fund Khazanah Nasional following a historic land swop between the two countries involving KTM railway land.

Four firms – ERA, CBRE, Knight Frank and DTZ – have been appointed to market the residential units, while commercial leasing for the office and retail spaces will be handled by CBRE and Cushman & Wakefield.

Only one out of the two 34-storey residential blocks in the 1,042-unit condo will be released for sale initially, said M+S. The launch date is yet to be fixed but the sales gallery will be open from Sept 13 to Oct 12.
According to M+S, the company does not come under qualifying certificate (QC) rules, which require a developer with foreign shareholders or directors to finish building a residential project within five years and sell the units within two years of completion. At another of its integrated projects – Duo in Bugis – 63 units of the 660-unit Duo Residences remain unsold.

But while market watchers have said that there is no hurry for the developer to sell all the units, some felt that the pricing strategy for Marina One Residences could be more aggressive given the substantial stock of unsold units in the prime districts of 9, 10 and 11.

An M+S spokesman explained, however, that the indicative pricing “takes into account Marina One’s integrated offering of prime residential, office and retail space in the prime Marina Bay district and its connectivity to four MRT lines”.

At another Marina Bay project, V on Shenton, units were sold this year at a median price of S$2,118.5 psf by United Industrial Corporation. V on Shenton still has 158 unsold units since its launch in August 2012.

Meanwhile, resale units at Marina Bay Suites were transacted at a higher median price of S$2,753.5 psf this year, according to caveats lodged. As at end-June, there are still some 19 unsold units though the project was launched in December 2009.

Market conditions are more challenging now with a shrunken pool of potential buyers after borrowing limits were changed under the total debt servicing ratio (TDSR) framework, and the large number of unsold units in competing projects nearby.

In addition, the vacant plots of land between Marina One and the sea to its south could be released in future government land sales for office and residential developments.

Given the TDSR borrowing limits, consultants are expecting more interest in smaller units than larger ones.

According to the condo plan, some 44 per cent of the units at Marina One Residences will be one bedders sized 657-775 sq ft and 28 per cent will be two-bedders measuring 969-1,130 sq ft.

One appeal of the condo is its location at the “upper echelon of the central business district location” compared to Tanjong Pagar, making it a more prestigious address for expatriates.

But investors who buy bigger units may find it harder to lease out because expatriates will be on continual reduced housing allowances and senior expatriates (who are seconded here with their family) may not necessarily opt for it.

The Grade A office and retail spaces at Marina One and Duo will come onstream in 2017.

UEM Sunrise is partnering Mapletree Investments to manage Marina One, which will have 140,000 sq ft in net lettable area (NLA) for retail space and 1.88 million sq ft in NLA for office space.

Separately, Temasek is in a tie-up with CapitaLand and Iskandar Waterfront Holdings to develop a S$3.2 billion township in Iskandar’s Danga Bay in Malaysia.

Source: Business Times – 30 August 2014

DC rates for non-landed residential use dip on weaker home prices

The authorities have trimmed development charge rates for non-landed residential use by an average of 1.6 per cent from Monday. This is not surprising given the weakening in non-landed private home prices, say analysts.

Landed residential DC rates were left untouched as were the rates for industrial use. For commercial use, DC rates were raised 1.9 per cent on average.

DC rates – which are payable for enhancing the use of some sites or building bigger projects on them – will go up by an average of 9 per cent each for two use groups: one which includes hotels and hospitals, and the other, places of worship and civic and community institutions.

The increase in the latter use-group is thought to have been supported by prices attained in the sale of sites by the state for temples and churches in locations such as Sengkang, Woodlands and Punggol.

As for the 9 per cent average hike in hotel DC rates: Hotel values have remained fairly inflated in the past six months and that could have led Chief Valuer to raise DC rates. But this is slower compared to the previous hotel use DC rate hike of 13 per cent six months ago.

DC rates are revised on March 1 and Sept 1 and stated according to use-groups across 118 geographical sectors. The Ministry of National Development (MND), in consultation with the Chief Valuer, revises DC rates based on current market values.

The new rates are effective from Sept 1 to Feb 28.
The drop in the average DC rate for non-landed residential use is the first since March 2012, an analysis shows.

MND said on Friday that non-landed residential DC rates will fall between 2.8 per cent and 5 per cent in 55 geographical sectors, with no change in the remaining 63 sectors.

The 5 per cent fall is in Sector 72- Prince Charles Crescent, Alexandra Road and Tanglin Road – and Sector 86 – Telok Blangah Heights, Telok Blangah Drive, Henderson Road, Depot Road, and Alexandra Road.

The drop in Sector 72 is probably due to the winning bid by a UOL-Kheng Leong tie-up for Prince Charles Crescent Parcel B at a state tender in April being 14.5 per cent lower than what a Wing Tai-led consortium had paid in 2012 for the next-door Parcel A, said market watchers.

For the commercial use-group, DC rates will go up 5-11 per cent in 26 sectors, with no changes in the rest. The top hike applies to Sector 59 only (which includes Balestier Road).

The sale of strata commercial units at Balestier Towers in July is thought to have provided evidence for the hike.

As knock-on effects, the neighbouring sectors of 58, 60, 61 and 62 saw 8-10 per cent increases.

Sector 115, which includes Woodlands, saw a 10 per cent hike, supported by the recent sale of the Woodlands Square office site, again producing a knock-on effect for the nearby Sectors 113 and 114.

DC rates for hotel use were raised by 7-10 per cent in 116 sectors. Among the sectors that saw the 10 per cent hike was Sector 51, which includes Beach Road. The sale of 700 Beach Road as a hotel redevelopment site is thought to have been used as supporting evidence.

For the use-group covering places of worship and civic and community institutions, rates were hiked in all sectors – by 8-11 per cent. Among the sectors that saw the top-end rise were 106 (which includes the Fernvale locale in Sengkang), 115 (which includes Woodlands) and 100 (including Punggol).

A 30-year leasehold plot in Fernvale Link designated for Chinese temple development was sold in July at 185 per cent above the land value implied by the then-prevailing March 1, 2014 DC rate.

Commenting on the government’s decision to leave industrial use DC rates untouched in all sectors, there was mixed evidence at industrial state land tenders over the past half year – with some sites fetching prices below imputed land values based on the prevailing DC rates at the time, while other plots changed hands at above the respective DC rate-implied land value for the respective locations.

Moreover, JTC Corp has trimmed its posted land rents and land premiums by some 5 per cent for the current period starting July 1, 2014, amid mixed manfacturing performance and a softening industrial property market.

Perhaps the lack of clarity in the direction of land prices in the industrial property market has prompted the government to monitor the market for a while longer before making any changes to DC rates for industrial use.

Source: Business Times – 30 August 2014