SGHOUSING.COM 新加坡房地产网

Larger developers can still hold out, but some may be more open to slightly lower offers.

SENTIMENT in the property market is lacklustre, showflats are quiet and developers are delaying launches. So there is a chance that prices will head down, right?

Wrong. While stock market volatility and fears of a United States recession have sent many property buyers to the sidelines, developers have not lost their nerve yet.

Prices for post-Chinese New Year launches are unlikely to head south over the next three months, consultants said.

‘Major developers are financially strong, so buyers can’t expect price cuts at launches,’ said Knight Frank director of research and consultancy Nicholas Mak.

Even if the stock market suffers, the property market tends to lag behind by two to three quarters. Usually, property prices fall only when there’s a recession or general weakness in the labour market, said Mr Mak. Singapore is not facing either of those scenarios and they are not expected to arise, he added.

But individual sellers and some smaller developers could find themselves over a barrel in the months to come if buyers stay home.

Developers certainly have an ample supply of projects for launch, having picked up a slew of sites during the boom times in the past two years.

While many can delay launches, those with 99-year leasehold sites might not be able to hold out for long, said a developer.

Still, even if developers are unwilling to cut prices, they could be more willing to negotiate in today’s more subdued market.

‘Officially, their prices might remain at the levels seen last year, but they could be more open to serious but slightly lower offers,’ said Savills Residential director Ku Swee Yong. However, he does not expect them to budge by more than 5 per cent.

And there are still buyers out there looking for homes. Take the situation at the 618-unit Farrer Court. Owners there will receive their collective sale proceeds early next month and not all would have bought a home yet.

Time for homebuyers to do their homework

FIGURES from the Urban Redevelopment Authority (URA) show that private home prices shot up 31.2 per cent last year - way up from 10.2 per cent in 2006 and very close to the spurt seen in the 1996 peak year.

High-end property prices have far exceeded the 1996 peak while mid-tier homes are on a par, noted one market watcher.

Mass market property is a different story. Prices are still below the last peak and good buys could pop up, Mr Ku said.

This segment remains supported by HDB resale flat prices, which rose 17.5 per cent last year, the fastest growth seen since prices shot up by 25 per cent in 1996.

Buyers need to do their homework and look for properties in ‘good’ locations, with easy access to public transport. They could consider fairly new, completed condominiums near an MRT station, said Mr Ku.

They might even look at suburban landed homes, said Mr Ku, who feels those in the Upper Thomson Road to Mandai Road stretch are still undervalued.

As for new mass market launches, the 99-year leasehold Waterfront Waves in Bedok Reservoir has done fairly well. Eighty of the 148 units have been sold. Prices remain at $690 to $870 per sq ft.

‘I think buyers are slowly gaining the upper hand - if they do not already have it,’ said Chesterton International’s head of research and consultancy, Mr Colin Tan. ‘For every buyer, there are many sellers right now. But their expectations are different, there is still a wide gap in between and no sales are taking place.’

Nevertheless, if the stand-off lasts longer than expected, some developers and sellers could panic and slash prices so as to draw in buyers, said market watchers.

These are likely to be the very small developers or new entrants facing a credit crunch, they said.

‘Singapore’s property market is still bullish. The external factors affecting it are actually good because they have stopped the market from overheating,’ said a seasoned property investor.

‘Developers were selling at tomorrow’s prices. Now, they might have to ask for today’s prices.’

Source : Sunday Times - 3 Feb 2008

SIX hundred and ninety.

That is the extra number of Vietnamese sandwiches that Baguette, a sandwich store in Raffles City, has to sell a month to adjust to an increase in rent.

Indeed, food and beverage (F&B) outlets have not been spared by recent retail rental hikes of as much as 40 per cent per sq ft (psf) in Raffles Place.

Some businesses have had to relocate as a result.

Mr Wei Chan, business development manager of Baguette, says the store, whose lease is up in May, is facing a 65 per cent spike in rent. His outlet offers no seating so there is a limit to the number of customers he can attract and makes ’selling 690 more sandwiches a month a near-impossible task’.

He is considering shifting to a larger outlet with seating in Capital Square where the rent psf is lower.

Rising rents also affected Eurasian restaurant Quentin’s, previously in East Coast Road.

Chef-owner Quentin Pereira shifted to a much larger unit in the Eurasian Association in Ceylon Road in December last year because the rent is almost 40 per cent less.

Explaining the rent increase, Mr Donald Han, managing director of property consultant Cushman & Wakefield, says: ‘In the last two years, the Singapore economy grew at its fastest pace, above 7 per cent per annum since it was in the doldrums in 2003. The boom resulted in new retail tenants and F&B concepts jostling for limited retail space.’

According to Mr Charles Chua, PropNex Realty’s head of commercial department, rents for a Raffles Place ground-level shop have increased by some 40 per cent, from $18 to $35 psf, and basement shops by some 35 per cent, from $12 to 25 psf.

He says the rental hike in areas outside Orchard Road is more manageable, about 3 to 5 per cent year-on-year on average.

Local sandwich chain Cedele, which has three outlets in Raffles Place, had to bear the brunt of rental hikes of between 18 and 50 per cent when the leases of some of its 13 outlets were up for renewal last year.

The chain chose to remain in these locations to retain customers. But its executive director Yeap Cheng Guat says: ‘This rent increment is becoming more difficult to absorb as we cannot pass this to our customers.

‘If rental continues to escalate at this non-sustainable and unrealistic rate, we will have no alternative but to consider relocating.’

Mr Han says rents are expected to climb 5 to 8 per cent this year though successful and established malls are likely to ask 10 to 15 per cent more.

He adds that the rental market might ‘adjust itself to offer more value to F&B tenants’ in the next two years, given the addition of some 3 million sq ft of retail space with the opening of three malls in Orchard Road, as well as the Marina Bay Sands shopping mall.

Consumers LifeStyle interviewed say they will still patronise their favourite eateries even if they relocate.

Civil servant Julia d’Silva, 55, a fan of Quentin’s, says: ‘No matter where it moves, I will follow because it’s the only restaurant here serving good Eurasian food.’

Source : Sunday Times - 3 Feb 2008

Two former barracks redeveloped as hostels to meet housing crunch caused by surge in number of foreigners here.

WHEN rent for engineering student Wu He Kun and his three friends got too high, they turned to a former army camp instead.

From paying $1,600 a month for a three-room flat in Commonwealth, the four China students now shell out just $1,000 a month for a two-room hostel in the former Singapore Civil Defence Force camp in Jalan Bahar.

The housing crunch in Singapore, due to a boom in the number of foreigners living here, has caused the Singapore Land Authority to open up two former military barracks in the last six months to be used as hostels. The number of foreigners here went up from 798,000 in 2005 to 875,500 in 2006.

Highlighting his problem, Mr Wu, 24, said: ‘I viewed so many flats online but the rents were all more than what they offer here,’ he said.

Property developers are also seeing the potential in making money from such alternative homes.

Last week, five hostel operators made bids for the former Ulu Pandan camp and the winning company, E M Services, won only after a bid which was 60 per cent above the valuation.

E M Services, which bid $122,725 of monthly rent, is planning to pump $5 million to transform the camp into a full-facility student hostel. The lease is renewable on terms till 2017.

When the Ulu Pandan hostel starts operations in June, these two former camps will house up to 1,800 foreign students in total.

For the Jalan Bahar site, Jian Yu Construction spent $7 million to spruce up the place including repainting and landscape works.

There are 360 units each between 420 and 500 sq ft, with a kitchen, toilet and living room. The rent ranges from $700 to $1,100.

The hostel opened last July and now houses close to 900 foreign students.

Vietnamese student Tho Nguyen, 16, is now paying $500 for a unit he shares with two others. The Informatics student has been here since last September.

‘I like the fresh air and open space here,’ he said. ‘This is something I don’t get back home.’

The third camp tenanted out was the old police hostel in Cantonment which was converted into Pearl’s Hill Hostel in 2004.

Vita Group pumped in $1.5 million on renovations, alterations, retrofitting and furniture to turn the old building into a hostel.

With its central location, 85 per cent of its 142 units were snapped up by foreign students in the first six months of operation.

Bangladeshi trainee doctor Fetama Yasmin, 39, pays $650 monthly for a room she shares with another. She works at the Singapore General Hospital nearby.

‘Sometimes, I even take a 20-minute walk to work and save on transport,’ she said.

Fresh air a bonus

‘I like the fresh air and open space here. This is something I don’t get back home.’VIETNAMESE STUDENT THO NGUYEN, on the unit he rents at the former SCDF camp in Jalan Bahar.

Source : Sunday Times - 3 Feb 2008

Twice as costly, but residents still want to return

FIRST you sell your apartment in an en-bloc sale. Then you wait for a new condo to come up on the same spot and buy a unit in it.

FIRST you sell your apartment in an en-bloc sale.

Then you wait for a new condo to come up on the same spot and buy a unit in it.

That is what some have been doing at an estate on Bedok Reservoir Road.

The good thing for them: Their new home will be in a location they know and love.

The not-so-good thing: Prices have soared.

According to a spokesman for Frasers Centrepoint Homes, one of the developers for Waterfront Waves, there are at least five former owners who have bought a total of six units there.

Since the launch, 80 of the 148 units have been sold.

The spokesman said: ‘Former residents return as they feel a sense of belonging in the neighbourhood after living there for years.’

She said owners from the old estate, Waterfront View, were given a day for an exclusive preview and to select units ahead of invited guests. But she added that there would be no discounts for former owners.

These residents will have to pay around twice the sum they got from their en-bloc sale, if they choose to buy a similar-size apartment.

Depending on size and location, the new apartments cost $690 to $870 psf.

Said 71-year-old businessman OhBin Cheng, a former resident who visited the Waterfront Waves showroom two weeks ago: ‘The timing was terrible. We went en bloc before the property boom when property prices were still low.

‘Then, when we got the money for the collective sale and wanted to buy, housing prices started soaring.’

TWICE THE PRICE, HALF THE SIZE

Not content to live in a smaller apartment, Mr Oh, who got $660,000 for his 1,600 sqft Waterfront View apartment, decided to buy an HDB flat in Tampines for the time being.

Because Mr Oh is fond of his old estate, he hopes to buy a two-bedroom unit about half the size of his old apartment, which, he said, costs almost $700,000.

He said: ‘I hope prices will drop so that I can come back here to live.’

Another resident, a 54-year-old retiree who declined to be named, also found himself paying more, just to live in the same estate.

He made a down payment for a 1,600 sq ft, four-bedroom unit, which costs $1.27 million, more than twice the $630,000 he received for his old unit.

But unlike other former residents, he is not complaining.

He said: ‘I am glad that they released the East Wing first, which is where my former block, 736, used to be.

‘What’s even better, this time, my view of the reservoir is not blocked. I’m looking forward to watching all the water activities.

‘Where else can you get a unit so near the water, except at Sentosa or Marina Bay, where it is so expensive?’

EAGER TO RETURN

Indeed, so eager was he to return that he was among the first few to visit the showroom.

For now, his family is living in another condominium just two streets away. He had bought a unit there earlier.

But he will have to sell that apartment to pay for his new home when it is ready in three years’ time.

‘Still, I’m happy with my purchase, I can get back many of the memories from living there,’ he said.

Some property agents The New Paper on Sunday spoke to, however, felt that most residents would welcome a change, and prefer not to return to new developments on the sites of their en-bloc sale estates.

Property agent Andrew Lin, 28, said: ‘It’s not really common for former residents to return. Most of them settle down well in their new homes.

‘The only reason for them to return would be if there was any additional discount given to them by the developer.’
 
Source : News Paper - 3 Feb 2008

Launch delays, construction bottlenecks may lead to lower home completions than thought .

With private residential rents shooting up 41 per cent last year, one big question is on the minds of property market watchers.

They are now busy trying to figure out just how many private homes will be completed in the next few years - as that will be a key factor affecting how private residential rents will move.

For each of 2006 and 2007, some 6,500-plus private homes received their Temporary Occupation Permit (TOP), meaning that the properties were completed and ready for occupation. This is lower than in preceding years as developers were more cautious in the 2003 to 2004 period due to weak demand for private homes then.

‘As a result, developers initiated fewer projects and bought fewer Government Land Sale sites during the period,’ an Urban Redevelopment Authority (URA) spokeswoman said in response to BT’s queries.

Going forward, about 8,300-plus private homes are slated for completion this year, 13,400-plus units next year and around 18,500 units in 2010 - going by URA estimates as at end-Q4 2007, which were based on the latest quarterly update of completion dates declared by developers for their projects.

However, the actual number of private home completions in 2009 and 2010 may be much smaller because of construction capacity bottlenecks and developers delaying new launches, property consultants and analysts suggest.

Jones Lang LaSalle’s head of research (South-east Asia) Chua Yang Liang says: ‘One factor is whether developers decide to delay launching new projects, given current soft market conditions, especially in the high-end segment, where there may be oversupply concerns. If developers delay project launches, chances are they will also delay the start of their construction.’

The second factor is the bottleneck in construction capacity. This, in turn, will push back TOP dates of projects.

Dr Chua suggests a closer look at URA’s latest numbers as at end-2007, which split the estimates for the number of private homes completed into two groups - based on whether they are in projects which are already under construction or in planned projects.

The 13,493 units slated for completion in 2009, for instance, comprise 11,026 units already under construction as at end-2007 and 2,467 planned units. Dr Chua argues it is almost a certainty that the 11,026 units already under construction will be completed in 2009.

For the units that are being built, ‘there’s no turning back barring unforeseen construction delays. As for those under planning, developers may have some free-play to delay their construction or the tight construction sector may lead to a delay in their completion dates. So there’s for certain at least 11,026 units that will be completed in 2009′, he adds.

For 2010, Dr Chua estimates that between 9,000 and 11,000 new private homes will receive TOP, lower than the headline estimate of 18,509 indicated in the latest official stats. ‘Everyone will be monitoring the official completion estimates quite closely, quarter to quarter,’ he says.

Dr Chua expects URA’s overall private residential rental index to increase by 12-15 per cent this year, after surging 41.2 per cent in 2007.

Knight Frank managing director Tan Tiong Cheng expects private home rents to rise by about 20 per cent this year - roughly half the pace for last year, given that many private residential projects are likely to be completed only in late 2008 and 2009.

Lehman Brothers in a research report dated Jan 28 also projects private residential rents will by rise by 20 per cent this year and stay flat in 2009.

Citigroup in a Jan 25 report noted that the 8,364-unit TOP forecast for 2008 contained in URA’s latest data as at end-Q4 2007 was 51 per cent higher than the 5,541 units forecast for completion in 2008 in URA’s end-Q3 2007 data.

‘With actual demolitions of en bloc developments still impending in the next 9-12 months, net supply will remain low. Construction capacity bottlenecks with competing infrastructure projects may cause completions to be lower than expected,’ Citi Investment Research said.

The net stock of private homes increased by just 1,448 units last year - the smallest rise in at least 12 years.

Property consultants say that this was caused by a combination of a relatively low number of homes that received TOP in 2007 as well as demolition of properties that have been sold by en bloc sales in the past two years.

Source : Business Times - 2 Feb 2008