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They include executive condos as well as older private apartments in suburban locations.

THE property market has quietened considerably this year, but prices have yet to fall.

Nevertheless, if you have a modest budget of about $600,000 for a home, your choices are not just confined to HDB flats.

Some fairly new executive condominiums as well as older private condos or apartments are within reach, if you look hard enough.

These are typically 99-year leasehold properties in suburban locations such as Woodlands, Choa Chu Kang and Jurong.

Some city-fringe locations such as Geylang, where the red-light district is nestled, or small apartments in places such as Upper East Coast Road, may also offer some bargains. Landed homes, however, will require a bigger budget. So will new condo launches, unless you do not mind tiny studio apartments.

New versus Old

BUYERS tend to prefer buying new properties directly from developers, rather than old ones. They are drawn by the slick marketing promotions put out by developers and pay a premium for their new homes. But new properties may not be worth buying when you have a tight budget.

‘In 2006, all the record prices were achieved by new launches,’ said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘Units at Ardmore Park, an older development which is in a very good location and is well-maintained, were transacted at much lower prices than those in new high-end condos in not-so-good locations.’

It is the same in suburban locations, as buyers pay more for what is new, he said.

The 99-year leasehold apartments at the 636-unit Maysprings in the Bukit Panjang area are mostly going for $650,000 and below. A year ago, they went for $500,000 and below.

The 17-year-old, 616-unit Orchid Park Condominium in Yishun, which faces Lower Seletar Reservoir, also had some units that went for around $600,000.

At the West Bay Condominium, a 936 sq ft unit was sold for $585,000 in January, while a bigger 1,216 sq ft unit went for $650,000.

Studio apartments, which can range from around 500 sq ft to 600 sq ft, can be bought for $600,000 or less. The only problem is that there are not many of them in suburban projects, Mr Mak pointed out.

Private versus HDB

NOW that HDB prices have risen and there is overwhelming demand for new HDB flats, buyers may do well to consider private homes if they can afford them.

‘There will be growing demand for mass market properties as Singapore continues to create jobs,’ said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong. The opening of the two integrated resorts alone will create a significant number of entry-level jobs, he said.

‘Our unemployment rate is at a 10-year low, which means that we will need foreigners for some of these jobs,’ he said.

‘As long as rental values remain strong, capital values should also trend up.’

For those buyers who may one day want to rent out their homes, a private property could be a better choice than an HDB flat.

First of all, not everybody can buy an HDB flat. Also, there are leasing restrictions.

Yields may be higher for some HDB flats than private homes, but a private condo unit may be easier to rent out as condos usually come with amenities and security, property consultants said.

On average, net rental yields for private homes across Singapore are at 3.6 per cent, said Mr Mak.

Government data shows that the median rental rate in the fourth quarter of last year for Maysprings was $2.38 per sq ft a month. For a 904 sq ft unit at Maysprings, the rent would work out to $2,151 a month, or a 5.2 per cent gross yield.

The median rate was $2.09 psf for Orchid Park Condominium and $2.98 psf for West Bay Condominium.

Using this rate, the rent at West Bay Condominium would work out to $2,789 a month for a 936 sq ft unit.

Whether you are buying a property to live in or to rent out, know that you have a fair number of choices even if your budget is only $600,000.

Source : Sunday Times - 17 Feb 2008

Developers not keen to release high-end projects in shaky market, say analysts

DEVELOPERS’ housing sales figures for January reflect a change in strategy to focus more on mass market projects.

Despite the still lacklustre figures for overall developer launches and sales last month, an analysis by Knight Frank shows the number of private homes (excluding executive condominiums) launched and sold in January in the Outside Central Region (covering traditional mass-market/suburban locations) rose 190 per cent and 123 per cent respectively from December 2007.

In contrast, launches and sales in the Core Central Region and Rest of Central Region fell in January, compared to December.

Given the dearth of activity in high-end locations, the Core Central Region suffered the biggest drop in median prices for units transacted during the month, with the figure halving to $1,623 per square foot in January, from $3,200 psf the previous month.

Elsewhere, median prices held steady, edging up 1.6 per cent to $1,053 psf in the Rest of Central Region and $811 psf in the Outside Central Region. The median prices include private homes as well as ECs.

Property consultants expect developers to continue to push out mass market projects, since demand fundamentals are stronger in this segment than the high-end sector, where buying traditionally emanates more from speculators.

‘Despite the more dismal global economic outlook, the employment rate in Singapore is still high and this will continue to support demand for mass market homes,’ says Colliers International director of research and consultancy Tay Huey Ying.

‘As for high- end/luxurious projects, developers are quite cautious and not so prepared to release them amid the current, uncertain market conditions. They will want to wait for better conditions before they launch these projects,’ she said.

Monthly data from the Urban Redevelopment Authority (URA) show developers sold a total 316 private homes (excluding ECs) in January, up slightly from 305 units in December, which was the lowest figure since URA began publishing developers’ monthly sales figures and prices in June 2007.

However, Colliers’ Ms Tay says that stripping out the bulk sale of 97 units at Goodwood Residence in December, the January sales figure was roughly a 52 per cent improvement from December.

January volume was boosted by the launch of new projects like Waterfront Waves at Bedok, which sold 79 units during the month, and Wilkie 80, which saw 50 units sold.

‘We observed that luxury prices remained firm despite a decline in sales volume. In the prime districts, units in Grange Infinite, Helios Residences, Hilltops and Scotts Square were sold at median prices between nearly $3,300 psf and $3,700 psf.

‘At Sentosa Cove, units in Marina Collection and Turquoise were sold at above $2,650 psf,’ says CB Richard Ellis executive director Li Hiaw Ho.

However, Knight Frank director (consultancy & research) Nicholas Mak points out that the number of homes priced above $4,000 psf sold by developers has fallen from 72 units last July to five units in December.

In January, there was not a single primary market transaction in this price range.

Colliers’ analysis shows the highest priced home sold in January was a $3,671 psf unit at Scotts Square, compared with $5,146 psf in December achieved at The Ritz-Carlton Residences, and the record $5,600 psf achieved for a unit at The Orchard Residences last October.

The number of new private homes (excluding ECs) developers launched in January sank to a low of 410 units, about 8 per cent less than the 446 units in December and about a fifth of the high of 1,885 units in August last year.

Property consultants suggest developer sales in February may be lower than those in January because of the Chinese New Year.

‘However, developers are likely to maintain prices at current levels as they monitor the market situation,’ CBRE’s Mr Li says.

Source : Business Times - 16 Feb 2008

It says its 6.2% stake is long-term investment, not trading position.

OCBC Bank has rejected the respective takeover bids for The Straits Trading Company (STC) by the Lee family’s Knowledge Two Investment and the Tan family’s The Cairns.

‘The 6.2 per cent stake in STC held by OCBC represents a long-term investment, not a trading position, notwithstanding that it is classified, for accounting purposes, as ‘available for sale’,’ it said yesterday in its first response to the takeover battle for STC.

Knowledge Two raised its offer on Thursday to $6.55 per STC share, in response to The Cairns’s renewed offer of $6.50 per share on Jan 28. It had similarly pipped its rival’s initial offer of $5.70 early last month with a bid of $5.76.

Quipped a Lee insider, don’t forget ‘OCBC stands for only can borrow coins’.

The Cairns is a privately held investment firm controlled by family members of the late Tan Chin Tuan who was chairman and managing director of OCBC for two decades. Mr Tan had been a faithful employee of the Lee family who founded OCBC and he had been instrumental in acquiring a stable of companies and properties for them.

OCBC said that it has held the STC shares as a long-term investment for many years, and the investment has yielded attractive returns. Over the three-year period ended Dec 31, 2007, STC shares achieved a ‘total shareholders’ return’ (income from dividends plus capital gains) of about 40.7 per cent per annum, it said.

The bank noted that it had not sold any STC shares for many years, other than about 27 million shares in 2006 to comply with regulatory requirements.

It also pointed out that the combined stake of 33.4 per cent held by OCBC group, Great Eastern Holdings group and the Lee group of companies represents the single largest block of shares in STC.

‘If the three substantial shareholders all wish to realise their investments, such a sizeable single largest block could command a significant control premium from strategic buyers.’

Besides control premium, OCBC also sees the potential for the three to ‘exercise their influence’ on STC directors to continue or accelerate the unlocking of value for the benefit of all STC shareholders.

‘The financials of the STC group suggest that there exists significant room for leverage and accordingly some values to be unlocked from a more efficient capital structure.’

OCBC intends to seek board representation on STC and request that a financial adviser be appointed, after the close of offer, to recommend ways to unlock and enhance shareholders’ value.

OCBC noted that Knowledge Two has indicated that it would take similar steps to further unlock value in STC for the benefit of shareholders. ‘Knowledge Two’s intended efforts are aligned with those of OCBC.’

The bank closed its statement yesterday by saying that should there be any further development, it would further evaluate and decide accordingly.

Source : Business Times - 16 Feb 2008

Latest housing and retail sales data both show increased cautiousness led to a pullback in buying. But while sales of cars and other big-ticket items are likely to pick up in the coming months on the back of rising incomes, the slow take-up rates in property sales will likely continue to bleed into the next two to three months.

According to the Urban Redevelopment Authority, the number of new private homes sold in January remained unchanged from 328 in December, while developers launched 410 units, down from 492 in December.

“Investor demand has clearly dried up,” said Mr Colin Tan, head of consultancy and research, Chesterton International. “It’s related to the stock market. It’s very volatile, one day up, next day down. So, I think the tremendous amount of uncertainty with respect to the global economic outlook is obviously causing investors to stay away from buying property at this time.”

Smaller developments, especially those outside the central areas, saw demand, said Mr Tan - citing the sale of 79 units at Waterfront Waves at Bedok Reservoir Road. Most of the units sold last month were from outside the central region (170) and cost below $1,000 per square foot.

The modest start to the year is likely to prevail, said property consultants.

“The low numbers would probably continue for the next one or two months, certainly for the first quarter of this year, until the dust settles and we get a clearer picture of how the sub-prime problem has affected bank earnings,” said Mr Donald Han, managing director of property consultancy Cushman and Wakefield.

That cautious outlook also holds true for the retail sector, even as festive shopping led to a 2.5 per cent year-on-year gain in sales in December, which reverses a 0.3-per-cent decline in November, Department of Statistics data show.

But motor vehicle sales contracted for the third straight month in December, dropping 12.5 per cent year on year.

“This possibly reflects an increased cautiousness with regards the future or that potential car owners are very sensitive to certificate of entitlement costs and petrol prices,” HSBC economist Prakriti Sofat said. Oil prices breached US$100 a barrel last month, increasing fuel and transport costs for consumers.

Source : Weekend Today - 16 Feb 2008

There are more signs that Singapore’s property market is slowing down.

Latest numbers from the Urban Redevelopment Authority (URA) show that developers launched just 410 new housing units in January - that is 16 percent less than the number of units launched in December, which was also a quieter month.

Industry watchers said market sentiments have cooled due to the sub-prime crisis and global economic slowdown.

In fact, private home sales in Singapore were at a standstill in January, with developers selling 328 private homes last month.

A unit at Scotts Square at Scotts Road commanded the highest price of S$3,671 per square foot.

At the lowest end, 12 units at La Casa in Woodlands Drive fetched between S$537 and S$601 per square foot.

While last year’s property boom is not expected to be repeated, analysts do expect the market to pick up again in the second quarter.

Source : ChannelNewsAsia - 15 Feb 2008