Two new projects attracting S'pore buyers
Business Times: Fri, Dec 23
WHILE most residential developers mull over whether or not to release new projects following the introduction of the additional buyer's stamp duty on Dec 8, the developers of at least two new projects - The Hillier in the Hillview area and The Nautical in Sembawang - have gone ahead with previews. Both are 99-year leasehold projects.
Some 50-plus units have been sold at The Nautical at an average price of about $860 per square foot since its preview began last weekend.
Over at Hillview Avenue, Far East Organization is said to have collected more than 100 cheques for Soho-style apartments at The Hillier since it began previewing the project last Friday. The buyers are mostly Singaporeans.
The average price achieved is $1,150 psf, after absorption of the standard 3 per cent buyer's stamp duty and provision of a furniture voucher. The apartments, ranging from about 500 square feet to 800-plus sq ft, come with a flexible floor plan and a 3.4-metre ceiling height, in line with Far East's recently launched Soho brand offering 'strategic locale, excellent connectivity and flexible space'. The brand is inspired by New York City's trendy Soho neighbourhood.
BT understands that Far East collected cheques post-dated to Jan 1 (which is when options will be granted to buyers) - perhaps to ring in a nice start for business in the 2012 financial year.
The Hillier, near the upcoming Hillview MRT Station on the Downtown Line, will be a mixed-use development with 528 Soho apartments sitting on a two-storey retail and lifestyle podium, hillV2. Far East will retain the retail component, where well-known New York grocer Dean & DeLuca will have an outlet.
Over at Jalan Sendudok in Sembawang, Hao Yuan Investment, controlled by mainland China parties, is said to have issued options for about 50-plus units for The Nautical condo. The developer is understood to be deciding when to hold an official launch of the project, which will be accompanied by the start of an advertising campaign.
The average price of about $860 psf for the five-storey project, which will have 435 apartments, is after a 5 per cent early-bird discount.
Prices of a typical unit without private enclosed space or roof terrace will be in the $850-880 psf range on average.
The Nautical comprises one, two, three and four-bedroom units and penthouses (including 32 dual- key units). Absolute prices start from about $409,000 for a 420 sq ft one-bedder. The highest-priced unit, at slightly over $1.5 million, is a 1,916 sq ft penthouse.
Buyers of the 50-plus units are mostly HDB upgraders, comprising predominantly Singaporeans.
CBRE, GPS and PropNex are marketing agents for The Nautical.
The project's development is managed by MCC Land, a unit of Chinese state-owned enterprise Metallurgical Corporation of China or MCC Group. MCC Land is also the developer of Canberra Residences, which is next to The Nautical. The 320-unit Canberra Residences, which was released in January at an average price of around $830 psf, is about 90 per cent sold. Both condo projects are on 99-year sites and are five storeys high.
SLP International managing director Peter Ow described The Hillier's sales as 'good' given the current subdued buying mood following the introduction of the additional buyer's stamp duty (ABSD). 'The attractions are the project's commercial component as well as the proximity to Hillview MRT Station.'
The government rolled out the ABSD to moderate investment demand for private residential property to reduce the risks associated with property market volatility. It has set the duty at a higher rate for foreign buyers to temper the huge pool of external liquidity that had been making its way into the island's property sector and pushing up prices.
Foreigners and companies buying any private residential property now pay an ABSD of 10 per cent of the purchase price or market value, whichever is higher. A 3 per cent ABSD will apply to permanent residents buying their second and subsequent homes here and Singaporeans buying their third and subsequent residential property.
» Prices of resale HDB flats seen correcting
Business Times: Fri, Dec 23
(SINGAPORE) While HDB resale prices are expected to remain stable in 2012, with marginal softening of the COVs (cash-over-valuation), leading to an overall price correction of between 1 and 5 per cent, sales volumes could fall slightly as buyers assess their options beyond the resale market.
Mohamed Ismail, chief executive of PropNex Realty, feels that the overall price of HDB resale homes will see a 1 to 2 per cent correction.
'Overall, we believe that HDB resale prices will remain, with marginal softening of the COVs only in the second half of 2012,' he added.
According to Lee Sze Teck, senior manager of research and consultancy at Dennis Wee Group (DWG), HDB resale flat prices could correct by up to 5 per cent.
ERA Realty Network's key executive officer Eugene Lim, on the other hand, countered that resale prices are likely to rise by between 5 and 6 per cent for the first half of 2012, on account that there is still a supply crunch in the resale HDB market.
'So far, much has been said that Singapore's economic growth may slow down or even run into a recession should the global situation deteriorate. Whilst the threat remains, things have not yet turned bad,' he added.
Beyond the historical under-supply of HDB flats in the 2001 to 2010 decade, some of the key reasons for the supply crunch lie in policies that have been effected in recent times.
As part of the cooling measures implemented in August last year, it was mandated that resale flat buyers who are private property owners had to dispose of their private homes within six months of purchasing their HDB resale unit.
In addition, the Minimum Occupation Period (MOP) of non-subsidised flats was increased from three to five years.
This means that HDB upgraders might be reluctant to sell their HDB flats because it may be more difficult for them to buy a HDB flat in the future, said DWG's Mr Lee. These upgraders will be looking to rent out their HDB flats, resulting in less supply of resale flats.
ERA's Mr Lim added: 'We are likely to see around 24,000 to 25,000 resale transactions for 2011. This is possibly the lowest ever recorded. Over the last five years, the average is around 30,000 a year.'
'Though the DBSS programme is put on hold, we are expecting executive condominium (EC) launches to be stepped up in 2012; and this may affect the resale market demand for 2012,' he said.
Indeed, with the 25,000 new BTO flats slated to be released in 2012, the success rate of getting a new home for first-time buyers is going to be higher, pointed out Propnex's Mr Ismail.
'The increase in the income ceiling for homebuyers of ECs and BTOs would encourage more to buy BTOs. As such the HDB resale sales volume is likely to drop,' he said.
In August, the monthly household income ceiling was raised from $8,000 to $10,000 for applicants of new HDB flats; ECs had a new raised income ceiling of $12,000.
'This would have diverted demand away from the resale market as many buyers would now be able to qualify for new flats as their income fell within the raised ceiling,' added Credo Real Estate executive director Ong Teck Hui.
Png Poh Soon, head of research at Knight Frank Singapore, added: 'Supply in the form of BTO and ECs are likely to be a key threat to the resale market.
'BTO buyers with budget constraints will evaluate the options of buying new and paying at a more attractive level for their homes. Homebuyers who are considering upgrade options may consider ECs as more ECs are planned in 2012 and the recent ABSD (additional buyer's stamp duty) does not apply to them.'
Sigrid Zialcita, managing director for research services in Asia Pacific for Cushman & Wakefield, agreed to a certain extent: 'The larger supply of BTO flats as well as the raising of the income ceiling will go some way in reining in COV, but the effect is unlikely to be immediate . . . Mature estates have well-established amenities and older flats have a larger floor area, so the attitudes to buying a BTO flat would need some time to catch on.'
That being said, transaction volumes for resale flats might dip, in light of the new cooling measures.
While the HDB market is relatively insulated from the ABSD measures announced earlier this month - given that most buyers are first-timers or owner- occupiers rather than investors or foreigners - consultants acknowledge that buyers may take a wait-and- see approach.
'If private market prices come down, and buyers think they can afford to go into the private market, this will have an impact on the resale market,' said DWG's Mr Lee.
'If economic conditions take a turn for the worse and monthly sales figures (in the developers' sales market) drop below 1,000 units, prices could slip up to 10 per cent in 2012 . . . this will also affect the HDB resale market and prices in the HDB resale market could ease by up to 5 per cent,' he added.
'Lastly, construction costs could pick up in 2012 and beyond. The large amount of BTO flats sold in 2011, shorter construction period for BTO flats and the reduction in project completion to five years for private residential sites means that there will be competition for construction resources and that could drive up costs,' warns Mr Lee.
'The expected slowdown in the property market and possible increase in construction costs could be a double whammy for the property market in 2012.'