Real estate investment sales showing signs of strengthening: CBRE
March 26, 2010
SINGAPORE : Property consultancy CB Richard Ellis (CBRE) on Wednesday said activity in the real estate investment sales market has started to strengthen with the recovery of the Singapore economy.
In the first three months of the year, sales of residential Government Land Sale sites have come up to nearly S$935 million.
Activity in the commercial sector, as well as the industrial sector, also picked up.
CBRE said that in light of the improved climate, total investment sales have amounted to S$4.4 billion in the first quarter so far.
That is some 16 times more than the S$274 million in the same period last year.
The private investment sales market has so far accounted for 77.2 per cent of the quarter’s total investment sales, while investment sales in the public sector have contributed the remaining 22.8 per cent.
The commercial investment market has also been active, chalking up 24.5 per cent of total investment sales in the quarter with S$1.08 billion to date.
In the industrial sector, CBRE said there have been 26 known transactions so far during the quarter - making up 26.3 per cent of total investment sales.
CBRE’s Executive Director of Investment Properties, Jeremy Lake, said that compared to a year ago, this year’s prospects in the investment sales market are positive and more than S$15 billion worth of investment sales could be transacted during the year.
He added that while most of the major investment sales transactions last year were dominated by Asian investors, there is now a diverse pool of buyers.
Source: Channelnewsasia.com
Luxury home prices set to rebound this year, developers to replenish land banks
March 26, 2010
SINGAPORE : Those looking to buy into high-end living will have more options, with the launch of “The Residences at W Singapore” at Sentosa Cove this weekend.
With luxury homes touted to be star performers of 2010, market watchers expect developers to roll out more of them in coming months.
This could run down their land bank and drive up collective sales later in the year.
The launch of “The Residences at W Singapore” at Sentosa Cove suggests that developers are gearing up for a rebounding luxury property segment.
City Developments has priced its residential units there at S$2,500 to S$3,000 per square foot, at the high end of recent high end launches.
With demand returning for the high end luxury market, developer City Developments said it is looking to grow its presence in the segment.
“We had a very strong proportion of luxurious apartment during the 2006-07 period and subsequently we were concentrating quite a bit on the middle class and the upgraders. But now we are coming back to the luxury category. In fact, the prices here are about 20-25% below the 2007 peak, and we believe the sentiments are very positive now,” said Chia Ngiang Hong, group GM at City Developments.
Mass and mid-tier property values are now about 5-8 per cent above the peaks of 2008.
And analysts said the high end is likely to catch up this year, mostly when the second integrated resort, Marina Bay Sands, is open for business.
Analysts said developers are likely to grow their presence in the luxury market to capitalise on rising prices.
“By and large, we are seeing a trickling effect of take-up… Probably (by) the second half of this year… we’ll see the major luxury market starts to get sold out and developers will start to look at replenishing the land bank process,” said Donald Han, marketing director at Cushman & Wakefield.
Market watchers, however, said residential rental prices will need to pick up first in order for prices of luxury residential property values to rise.
According to Cushman & Wakefield, rental prices have already started picking up in selected areas by 5-10 per cent so far this year.
Macquarie has raised its target price for City Developments to $9.44 and its earnings per share estimate for this year by 50 per cent, citing increased selling prices for new project launches.
But Macquarie has kept its “underperform” rating on City developments, saying higher property prices could mean more cooling measures from the authorities.
Source: Channelnewsasia.com
Private home sales down 19% on-month to 1,196 units in Feb
March 16, 2010
SINGAPORE: Private home sales kept up their momentum in February, with 1,196 units changing hands.
This is down by some 280 units or 19 per cent from January, where the spike in transaction volumes prompted the government to introduce more anti-speculative measures.
But February’s figure is still above market expectations. Analysts had earlier projected sales to range between 800 and 1,000 units.
Analysts said demand for new homes remains strong, despite more government measures to cool the market last month.
Data released by the Urban Redevelopment Authority (URA) showed that new private homes in the city continue to be popular.
The Altez at Tanjong Pagar was a star performer last month, with 150 units sold at a median price of over S$1,800 per square foot. Another project that did well was Waterscape at Cavenagh Road with 82 units transacted.
All in, new homes in the prime district accounted for 521 units of total sales.
Mass market projects were also popular, with over 560 deals done in February.
“We’ve seen demand in that area - outside core central region - increase on a month-on-month basis of about 31 per cent, so that is quite an unexpected phenomenon. A large part of the demand came from The Estuary and that’s about over 300 units sold out of 400 units being launched,” said Chua Yang Liang, head of Research (Southeast Asia) at Jones Lang LaSalle.
Market watchers said the buying sentiment remains strong despite the anti-speculative measures introduced by the government recently.
They said that is because home buyers are still confident about the economic prospects of Singapore, job security and the positive spin offs from the new two integrated resorts.
Some analysts said March could see sales volumes above 1,000 units. That could bring first quarter sales to about 4,000 units. This is on the back of brisk take-up for new projects like The Vision at West Coast and upcoming launches at Sentosa Cove.
Higher-value projects could also lift home prices ahead.
Tay Huey Ying, director of Research & Advisory at Colliers International, said “Of late, we have seen how people continue to snap up properties even at record prices.
“I think if this continues to persist, we could potentially be looking at a property bubble forming because home prices appear to be running ahead of economic fundamentals. And I think the government should continue more demand side measures.”
These includes fine tuning current measures or introducing a capital gains tax.
Last month, developers placed 1,161 units for sale. And analysts said more could be on the way because of strong demand and to pre-empt more market cooling measures.
Source: Channel NewsAsia - Private home sales down 19% on-month to 1,196 units in Feb - channelnewsasia.com
Asian property prices expected to continue to rise despite govt measures
March 3, 2010
SINGAPORE : Recent measures to cool the property market in China, Hong Kong and Singapore are seen as the right moves to temper speculation and rapidly rising prices.
Still, industry watchers said that prices will have room to move upwards over the next two years.
This is because interest rates in Hong Kong continue to be low, and high-end property prices in Singapore are still below their peak.
Private home prices in Singapore rose by 24 per cent in the second half of last year, causing the government to step in.
Over in Hong Kong, the government also announced measures to avoid an asset bubble - after property prices rose by some 30 per cent last year.
The Chinese government is also doing its part to cool its red-hot property sector by tightening credit.
Analysts said these moves will limit price growth this year, but overall, they still expect prices to move upwards, even if at a slower pace.
Donald Han, managing director, Cushman & Wakefield, said: “With the introduction of these measures, and the fact that the government is keeping a lookout on the market, they may continue to intervene.
“We would expect the market currently to come down to between 8-15 per cent, depending on what market you are in in Asia Pacific. So it would probably come down by a few percentage points in terms of price increases.”
Analysts note that Singapore’s high-end residential market remains below 2008 peaks by some 20 per cent.
Meanwhile - they also say, the measures are only aimed at moderating the price increases.
Karamjit Singh, managing director, Credo Real Estate, said: “The measures that were announced by the Singapore government on February 19 do not address the root cause of the problem yet. The root cause of the problem is a short-term supply crunch at the lower end of the market, but it definitely helps mitigate the risk of bubbles being formed in the future.”
Experts said the factors set to drive prices higher this year are investors searching for higher yields, continuing hot money inflows and continuing low interest rates causing lower borrowing costs for buyers.
Source: Channelnewsasia.com