SGHOUSING.COM 新加坡房地产网

Now seeking $210m, they could make 80-90% premium over market prices

The owners of Airview Towers are now looking at $210 million for the collective sale of their homes - 50 per cent more than the figure indicated in June last year.

Airview Tower

The 100-unit development which is situated at St Thomas Walk in the River Valley area had been put on the market through an expression-of-interest exercise eight months ago with an indicative price of between $135 million and $142 million, or $750-$800 per square foot per plot ratio (psf ppr).

Tang Wei Leng, director of investment advisory services at DTZ Debenham Tie Leung, which is handling the tender, said the reserve price for Airview Towers was met during the earlier expression-of-interest exercise, but as the required 80 per cent of owners had not agreed to the sale the offer was not legally binding.

This time, 80 per cent of the owners have agreed to a collective sale, and if the reserve price is met the owners are legally bound to sell, she said.

The 63,264-square-foot site has a plot ratio of 2.8 and can yield 118 new units of about 1,350 square feet each.

Working on an estimated launch price of $2,000 per sq ft, that translates to a land price of $1,100-$1,200 psf ppr or about $210 million.

The breakeven price for a new project is expected to be about $1,800 psf.

The owners could make an 80-90 per cent premium over recent market prices.

Pre-launching a collective sale by an expression-of-interest exercise could be an effective strategy by homeowners to get the highest price, but Ms Tang said: ‘Developers are more likely to make offers on sites that are sale-ready.’

This sentiment is shared by Colliers International director (investment sales) Ho Eng Joo.

Colliers is marketing Fairways Condominium at Telok Blangah and is currently going through an expression-of-interest exercise as 80 per cent of owners have not agreed to a collective sale yet.

About 70 per cent of owners have given their consent to the sale, and Mr Ho reckons this is the minimum before even considering an expression-of-interest exercise.

‘If a development has only 50 per cent consent, developers will also feel that it is a bit far-fetched to do a collective sale.’

The 146,532-sq-ft Fairways site has a plot ratio of 2.1, and Mr Ho says the land value has an indicative price of $232 million, or $750 psf ppr, inclusive of development charge and the cost of the amalgamation of a 8,288-sq-ft plot of state land.

More than 80 per cent of owners at Spottiswoode Apartment, off Neil Road, have decided on a collective sale and the indicative price for the 38,878-sq-ft site is $73.2 million to $77.2 million. This works out to about $673-$710 psf ppr.

The site has a plot ratio of 2.8 and a height restriction of 36 storeys.

Suzie Mok, deputy director (asset management) at United Premas, which is handling the sale, says 103 apartments of about 1,000 sq ft can be built.

Adis Villas at Mount Sophia is also up for collective sale, having received at least 80 per cent consent from owners.

The sale is being handled by Boswell Property Consultant/Katherine Woo & Associates and the indicative price for the 20,491-sq-ft site is between $600-$890 psf ppr.

The site has a plot ratio of 2.1 with a height restriction of 10 storeys.

There is also an option to convert the ground floor into commercial space.

Source : Business Times - 27 Feb 2007

But sale falls through because… Seller owers $20k in fees

He wanted to buy a condo unit for his daughter before prices went up further.

He thought he had clinched a deal after paying the option fee of more than $6,000.

But he didn’t get the flat - or his money back - because the seller had failed to pay the maintenance fees.

Businessman John Lim, 65, wanted to buy a three-bedroom unit at the Pasir View Park condo in Pasir Panjang.

Property agent Eve Ooi handled the $660,000 transaction for him.

Mr Lim paid a 1 per cent option fee of $6,600 to the seller last August.

An option fee is money paid by a buyer to a seller to ‘book’ the place.

Then Mr Lim’s lawyer told him the sale could not go through.

ARREARS

This was because the owner, Mr Victor Ooi, still owed his management corporation over $20,000 in unpaid maintenance fees.

The managing agent of the condo, when contacted, confirmed this.

Mr Lim then asked the owner to return his option fee. But Mr Ooi had used the money to pay part of his overdue mortgage payments to a bank.

An angry Mr Lim stormed into the agent’s office to demand an explanation.

The agent, who is the sister of the property seller, told The New Paper that she did not know about her brother’s financial woes.

She said she was doing him a favour and was not paid a commission for the sale.

Mr Lim said: ‘When I finally met the agent and her brother, both of them apologised to me.

‘The seller said he had some financial problems and didn’t expect the sale to fall through. But who’s going to pay me back my money?’ The bank, which had first charge on the property, put up the unit for auction and it was sold for over $700,000 last month.

This happened after Mr Ooi failed to make his monthly mortgage payments to the bank for five months.

Mr Lim attended the auction, but didn’t buy the unit as the final price was above his budget.

Mr Ooi, 51, told The New Paper that he is trying to work out an instalment plan to repay Mr Lim’s option fee.

He paid more than $900,000 for the unit in 1992. His outstanding bank loan was about $630,000.

Mr Ooi said he was retrenched from a managerial position a few years ago and could not pay the maintenance fees.

He thought that when he sold the place, he could clear the bank loan and use some of the remaining money to pay the maintenance fee arrears.

But there was a problem. Whatever he would get after paying the bank would have to go into his CPF account. And this is what happened after the auction.

Mr Ooi said he was left with no money to repay Mr Lim, who has since taken legal action against him.

Mr Ooi said that Mr Lim has a right to be angry. But he said: ‘All the proceeds from the sale goes to my CPF, which I can’t withdraw. So, what can I do now?

‘If I were him, I’ll be angry too. But I didn’t plan for this to happen.

‘I’ll try to pay him back somehow.’

GROUNDWORK

Eager home-buyers should do some groundwork before putting down any money, said Mr Eugene Lim, assistant vice-president of real estate company ERA.

‘You can ask your lawyer to find out if the property is ‘clean’, that no one else has a charge on it,’ he said.

More cautious buyers can even talk to the neighbours or the security guards to find out more about the unit.

The property agent should also check on the financial background of the seller, said Mr Daniel Chua, a partner at Land+ DC Realty.

He usually does a bankruptcy search on the seller before he lists a property for sale. If the seller is bankrupt, the option fee will go to the Official Assignee, not the seller.

Added Mr Chua: ‘And if you know the seller has financial problems or you’re handling a negative equity sale, the agent should tell the seller that he’ll hold the option fee in trust, and hand it over to the bank once the option is exercised.’

Management council can block sale

Have you been paying your monthly maintenance fees?

Well, if you run up too big a debt, the management council of your condo can lodge a charge on your property to block its sale until the debt is settled, said lawyer Roy Yeo.

The amount would usually be in the thousands before the MC will do such a thing, said Mr Yeo.

He added: ‘In every condo transaction, the buyer’s lawyer will find out from the managing agent of the property if there’s any outstanding maintenance fees.

‘The agent will then issue a certificate to the lawyer which states the outstanding amount to be paid.’

The seller has to settle this amount before the sale can proceed.

In the event of a mortgagee-sale, the bank which has the first charge has to pay the maintenance fees before the property can be put up for sale.

Source : The New Paper - 27 Feb 2007

Trend appears to be island-wide and for all apartment sizes, but resale prices stay flat

Rents for HDB flats have surged in the past 12 months, driven by spillover demand as rents for private housing have climbed.

Rental For HDB Flats

Figures compiled by property agency ERA for BT show that public housing resale prices have stayed flat.

But on the rental side it’s a different story. Increases range from 8.3 per cent for an executive flat at Jurong East to as much as 44.4 per cent for a four-room flat at Tampines.

The trend seems to be island-wide - and for all apartment sizes. Rent for a three-room flat at Toa Payoh, for instance, has climbed 33 per cent to $1,200 a month, from $900 a year earlier. Similarly, the rent for an executive flat at Pasir Ris is now $1,300, versus $1,000 in Q1 last year.

ERA is not the only agency to report the trend. Dennis Wee Properties says HDB rents have climbed 10-15 per cent in the past year. And the rise has been greater for flats close to amenities or services, such as nearness to an MRT station or town centre.

The rise is not limited to towns closer to the central district, such as Toa Payoh and Ang Mo Kio. Rents in outlying areas such as Pasir Ris and Woodlands have also gone up.

Market watchers say this is because renters of HDB flats are less likely to care about distance to the Central Business District and Orchard Road. Instead they look for good transport connections - often placing a high value on a nearby MRT station.

Agents attribute the increase in HDB rents to a filtering-down of rent rises in the private market.

‘Actually, this is a new trend,’ said ERA assistant vice-president Eugene Lim. ‘For a very long time the HDB rental market has been very stable. But now, with rents for private property increasing, those with a smaller budget might look at HDB flats instead, when in the past they might have rented condo apartments.’

Dennis Wee Properties director Chris Koh also said the climb in HDB rents is recent. They went up 5-10 per cent in the first six months of 2006 and the rate of increase picked up to 10-15 per cent in the second half of the year, he said. ‘The gap has widened between HDB rents and private property rents, making HDB rents look more attractive by comparison. Because of the increased demand, prices are going up. It’s basic demand and supply.’

According to Savills Singapore, rents for private homes have climbed 18.5 per cent in the past year. And rents for mass market homes alone - a segment that HDB flats could substitute for - have risen 19.5 per cent. The rise in HDB rents is despite more whole flats being available for sub-letting.

Data from HDB show that as of January this year, 12,700 flats were approved for whole sub-letting, versus 10,700 a year earlier.

The rent increase means demand has grown even more than supply, said ERA’s Mr Lim. He attributes this mainly to an increase in the number of expatriates with lower housing allowances or employed on local terms.

‘There is a new kind of expat today - with a lower budget,’ he said. ‘They often come here on local terms, which means rent is included in their basic salary. These expats are trying to maximise their salary.’

But expat HDB renters are not typical, Mr Lim said. ‘They could be Malaysians coming here to work or even students who are here to study, looking for HDB flats near their campuses.’

Dennis Wee’s Mr Koh cites a couple of examples - two IT professionals and three nurses from the Philippines getting together to rent flats.

But although HDB rents have risen, resale flat values are expected only to edge up this year. This is because the two markets are very different, notes Mr Lim. Rented HDB units cater mainly to foreigners, while HDB flat buyers are Singaporean.

The HDB resale price index released last month shows prices rose just 2 per cent in full-year 2006. And the number of resale flats transacted fell below 30,000 for the first time in a decade.

Source : Business Times - 27 Feb 2007

Simon Cheong, the newly elected president of Real Estate Developers Association of Singapore, yesterday painted a buoyant outlook for all sectors of the local property market.

‘We now have all the cylinders firing away at the same time. We’re going through a major structural change. The integrated resorts will be a big boost for tourism,’ he said.

‘And we’re seeing a lot of momentum in terms of financial institutions expanding in Singapore. Environmentally, we’re probably one of the cleanest cities in the world - a great place to live, work and play.’

Providing another boost to the market is the latest cut in corporate income tax, he said, adding that ‘we’ll be able to attract a lot of investments here’.

‘This augurs very well for all sectors - offices, tourism, housing accommodation,’ Mr Cheong told reporters on the sidelines of Redas’s Chinese New Year celebrations yesterday.

He does not think that the redevelopment of collective sale sites - which over the past two years have been predominantly in the prime locations, including the Orchard Road area - will create an oversupply of high-end homes.

‘I don’t foresee a big oversupply situation at the moment because in the next 12 months, you’ll see a lot of en bloc buildings coming down physically.

‘And that’s a very powerful message. It takes three months to bring a building down, but it takes three years to put it back up . . . The only thing that is going to happen is that (high-end residential) prices are going to go up.’

Mr Cheong, who is also chairman and CEO of listed SC Global Developments, pointed out too that the Singapore economy will be different by the time the new projects are completed on these collective sales sites.

At most, the luxury housing market could take a breather - although Mr Cheong does not see this happening in the next three years - before moving up again.

Assuming Singapore’s population grows from the current 4.5 million to 6.5 million in the next 10-15 years, there will be a shortage of homes, Redas officials claimed.

Mr Cheong argued that ‘it’s also logical’ to expect the price recovery to filter down to the lower tiers of the residential property market this year, including the mass market.

This will occur as those who are priced out of the high-end market go to the outskirts.

Also, those who have sold their homes in prime districts through en bloc sales and who don’t find their sales proceeds enough to buy replacement homes in the same areas may choose to buy their next property in a secondary location.

Mr Cheong said that property speculation - which he estimated at ‘no more than 10 per cent’ of home buyers in the high end market - is not a big cause of concern.

He also said that there’s ‘adequate margin to absorb an increase in sand cost’ as sand cost makes up about 1-2 per cent of total construction cost. He was alluding to the Indonesian ban on sand export to Singapore.

The new Redas president also paid tribute to his predecessor - Pontiac Land chairman Kwee Liong Keng. Mr Kwee has just completed his second two-year term and over the years, served five terms in all in the top post at the developers’ body.

‘He is not only a man of many talents, his affable nature has won him high regards and love of many, both as a friend and as a business associate. His gracious manner and humility have won the hearts of those who work with him,’ Mr Cheong said in a toast to Mr Kwee.

Source : Business Times - 27 Feb 2007

Combined balloting/walk-in scheme to begin in April

The Housing and Development Board will replace its walk-in selection (WIS) system for unsold flats with a combined balloting/walk-in sales system, starting in April.

Under the new system, HDB will group its stock of unsold four-room and bigger flats into three sectors.

Sector A takes in towns and estates in the north and west zones, sector B is the north-east zone and Sector C covers mature residential areas.

Unsold flats in each sector will be launched for sale once every two months on the 10th day of even months.

The first exercise - for flats in Sector A - starts in April. This will be followed by sector B on June 11 (because June 10 is a Sunday) and sector C on Aug 10. Then it is back to Sector A on Oct 10.

A detailed list of flats and prices will be available on HDB InfoWEB and at HDB Hub. Would-be buyers can submit applications to HDB during the initial one-week application period.

A computer ballot will determine the order of selection. All applicants will be given an appointment to book a flat, subject to availability, when their turn is due.

Applicants who apply after the initial one-week period will be given appointments after the last balloted position. And after all appointments have been processed, remaining flats will be available for booking on a walk-in basis.

HDB said that at the end of the fifth month, unsold flats will be withdrawn so they can be relaunched a month later.

To facilitate the switch to the new system, flats currently available for sale under WIS will be withdrawn by March 15.

Source : Business Times - 27 Feb 2007