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Private property prices grew more slowly at 6.8% in the last quarter of 2007, compared to the previous three months, according to the latest data from the Urban Redevelopment Authority (URA).

Analysts attributed this to the uncertainty in the financial markets and measures taken to curb speculation in the property sector.

Still, for the whole year, private property prices were up by 31% - now just 6% shy of the all-time peak in 1996.

As for HDB resale prices, they climbed 17.5% last year.

The supply of new private residential properties in the fourth quarter was down by 45% compared to the preceding three months.

The number of units sold dipped to just 1,397 - the lowest 4th quarter sales since 2003.

Property consultants said worries that the financial market upheaval might spill over to the real economy made buyers more cautious.

“There are still genuine buyers out there and they have the deep pockets… and they maintaining the prices. What is removed is the volume. The speculative demand has been narrowed because of the removal of deferred payment,” said Dr Chua Yang Liang, head of Research & Consultancy, Jones Lang LaSalle.

The pace of rent hikes also slowed to 6.8% in the last quarter, with rentals in the fringe of prime districts and the suburban areas growing faster than those in the central area.

Overall, housing rents were up by 41.2% for the full year.

Said Nicholas Mak, director of Consultancy & Research at Knight Frank: “The prime districts actually had the slowest rate of rental increase in the fourth quarter, partly because rentals has already gone up quite high and the base is relatively higher than the rest of the island.

“Going forward, we’re going to see the rest of the market catching up,… for example in the suburban areas. This is partly supported by the rising rentals in the HDB rental market as well.”

As for office rentals, they soared 56.1% in 2007, going up by 8% in both the 3rd and 4th quarters.

“There is still some healthy demand for office space, as long as the economy is growing at a healthy rate, but there are also some tenants who are showing some resistance to further rates increase,” said Mak.

“There are also some office space users who might want to revise what they need, in light of what might be happening in their head office, that is if those head offices are affected by the sub-prime crisis,” he added.

The price of industrial properties climbed 22.7% while shops cost 13.2% more on average.

Source : ChannelNewsAsia - 25 Jan 2008

The Ascott Group has reported an 8 percent increase in full-year earnings, in line with market forecasts.

Net profit came in at S$177.3 million.

The jump was due to an increase in rental rates as well as higher portfolio gains from asset divestment and revaluation.

The owner-cum-operator of serviced residences said it is looking to further grow its portfolio in the next two years.

The Ascott Group now has 20,618 units worldwide, crossing its 20,000 target in December.

It aims to add another 5,000 more units by 2010 - pushing its portfolio up to 25,000.

Over the past year, Ascott said it saw strong revenue growth, both in new as well as its more established markets.

Chong Kee Hiong, Deputy CEO, Finance and Investment, The Ascott Group, said, “Europe has been a great contributor, contributing about close to 50 percent of our revenue. And the growth has been very good, more than 10 percent in all the regions within Europe. And over than above that, Singapore grew well (with) double digit growth as well as Philippines.”

Net portfolio gains, including revaluation, came in at S$154.6 million.

Net gains from the divestment of properties came in at S$112.8 million, while revaluation gains from the Ascott Residence’s Trust’s properties was S$41.8 million.

Ascott opened nearly 1,500 units in nine properties last year, mostly in China.

It is looking to expand its footprint even more - with an eye on cities attracting strong foreign investment.

Mr Chong said, “What is most important to us is grow in cities where it makes economic sense for us and grow it well. In Asia, we are looking at China, India and Vietnam, In Europe we’re looking at the established cities like Paris, London.”

Ascott on Friday announced that it was pumping in more than S$170 million to grow its presence in Australia.

It is developing Citadines Melbourne on Bourke, a new serviced residence in Melbourne.

CapitaLand - which owns 66.5 percent of Ascott - has announced plans to take the serviced residence operator private.

Ascott plans to release a circular to shareholders later next month after all the details of CapitaLand’s offer comes next week.

For the whole year, Ascott is proposing a dividend of 6 cents per share, which includes a first and final dividend of 1.2 cents and a bonus dividend of 4.8 cents.

Source : ChannelNewsAsia - 25 Jan 2008

Property prices are expected to rise around ten to 15 per cent around the 100 new MRT stations to be built, analysts said.

The government announced Friday that it would pump S$20 billion to double the rail network by 2020.

Properties are going to be hot around the new 100 stations, with malls and public facilities expected to draw crowds to the stations.

Property consultants are forecasting price increases of ten to 15 per cent.

But with the new MRT lines to be completed only by 2020, they said the impact on the property market will not kick in until the next five to ten years.

Savills’ director of corporate business and residential Ku Swee Yong said, “Generally, properties that are (within) 200 metres of an MRT station do trade at what about ten to 15% premium over properties that are less accessible but still within the same neighbour hood. It is too early to speculate because the government hasn’t announced exactly where the line is going to pass through.”

The rail plans include pushing forward opening dates for announced projects and extending existing lines. Two new lines will also be built, the first in the Thomson area, which goes up as far north as Woodlands, and the second along the East Coast, starting from Marina Bay.

Property analysts said properties along the Eastern Region Line will see the largest benefit as MRT coverage will be extended to those areas for the first time.

But until the new lines are fully operational, analysts said residents living near the new lines may experience inconvenience because of the construction works and government land acquisitions involved in the projects.

Source : ChannelNewsAsia - 25 Jan 2008

HDB resale prices have gone up by a better-than-expected 17.5 per cent in 2007, the fastest rate since prices soared by 25 per cent in 1996, latest official figures by the Housing Development Board (HDB) showed.

Most homes in Singapore have appreciated to the highest levels since 1996. The price of a three-room HDB flat was an average of S$197,000 in the last quarter while a five-room flat in Marine Parade fetches an average of S$598,000.

Islandwide, the median price for an HDB flat was S$340,000.

Cash above valuation has also risen to an average of S$22,000, up from S$17,000 in the third quarter.

Knight Frank’s director for consultancy and research Nicholas Mak said, “It basically means that transacted prices are actually growing at a faster rate than the valuation. The effect can be quite positive for the private property market because it means that sellers of HDB flats will have more cash in hand for the down payment of their purchases of private properties. So that could lead to an increase in the demand for private properties.”

Rental prices have also gone up by S$100 a month for flats with four rooms or more. For instance, executive flats in Bishan are being let out for as much as S$2,200 a month.

Analysts said this is clearly a spillover-effect from the private property market.

Rents of private homes went up by 41.2 per cent in 2007. The increase in rents and sales prices, however, slowed to 6.8 per cent in the last quarter.

“In terms of prices of private homes, we realised areas that actually had the best performance in the fourth quarter (was) actually the fringe areas - just outside the prime districts of 9, 10 and 11, such as District 5 and in the Tanjong Rhu area. The reason is… I think there are some buyers who find that prices in the prime districts (have) already gone to quite a high level and they’re looking for homes that are near to the cities but just somewhere in the more-affordable areas.”

Analysts agreed that sales price and rent increases of both HDB and private properties are likely to be more subdued in the first quarter of 2008.

Jones Lang LaSalle’s head of research and consultancy Dr Chua Yang Liang said, “With the overhanging sub-prime issue that we’re not certain at this moment, what the impact is, I think it’d be a more cautionary leasing market in 2008.”

Prices of private properties went up by an expected 31.5 per cent last year.

Source : ChannelNewsAsia - 25 Jan 2008

High cash over valuation provides ‘filter-up’ demand for private homes

More Housing Development Board flats in prime locations are now being sold for more than half-a-million dollars each, and the trend is pushing up the asking prices for mass market condominiums and adding to demand for entry-level private homes.

Data compiled by property firm ERA showed that 269 HDB flats were sold for $500,000 or more in the fourth quarter of 2007 - a 69 per cent increase over the 159 flats sold for more than $500,000 each in the previous quarter.

While most of such flats in the fourth quarter of 2007 went for between $500,000 and $599,999, 50 were sold at $600,000 to $699,999.

And 12 changed hands at $700,000 or higher.

Anecdotal evidence also suggests that larger HDB flats in Singapore’s central locations are fetching more money than before.

For instance, a 21st-storey executive flat along Mei Ling Street in Queenstown sold for a record $890,000 earlier this month.

Last November, another executive flat along the same street went for a then-record $780,000.

The sellers of such flats will now have the capacity to buy entry-level private homes, said ERA assistant vice-president Eugene Lim.

New homeowners could also look at private homes for their first property purchases, rather than at resale HDB flats in the more central parts of Singapore.

‘HDB flats provide the support for entry-level types of private housing,’ said Mr Lim.

‘If HDB prices keep moving up, people will begin to look at private properties.’

CB Richard Ellis executive director Joseph Tan pointed out that the recent surge in HDB prices has narrowed the price gap between public housing and private homes.

Many of the pricier flats are being sold for high amounts of cash-over-valuation (COV), which means that sellers will have cash on hand to make the downpayment when they purchase private properties.

‘The HDB sellers now have greater purchasing power, especially with the high COVs, which can be used for downpayments on private properties,’ said Nicholas Mak, director of research and consultancy at Knight Frank.

HDB statistics show that the median COV for executive flats in Bukit Timah rose to $137,500 in the third quarter of 2007.

In Marine Parade, the COV for five-room flats hit $84,000 in the same quarter.

The massive growth in COV for larger flats in central districts can largely be attributed to homeowners that have sold their properties through en bloc sales and are now moving into HDB flats.

But the reverse also applies now, analysts said. Sellers of these flats are starting to upgrade to mass market private homes with spare money fetched from the high COVs of their old flats.

Property agents told BT that sellers of HDB flats with cash on hand are looking mostly at mass market condominiums in the resale market as they need replacement properties to move into.

New mass market homes, by contrast, are not as popular.

But eventually, this ‘filter-up’ demand will cause mass market property prices to climb, analysts said, which could once again put private homes out of reach of HDB upgraders.

Property agents also report that sellers of mass market private homes are upping their asking prices as they see HDB prices in prime locations head skywards.

‘Sellers are seeing five-room and executive HDB flats fetching $700,000,’ said one property agent.

‘So they think, I can ask for $1 million for my four-room private home.’

The agent said that at least two sellers of mass market homes that he is representing have recently upped their asking prices, even though the new prices are not ‘realistic’, in his opinion.

Knight Frank’s Mr Mak agreed. ‘Word gets around that HDB prices are going up, and quite quickly, sellers (of mass market private homes) start upping their asking prices.’

Source : Business Times - 25 Jan 2008