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
A more nuanced, fairer property tax
February 26, 2010
SINGAPORE: From next year, if the flat or private property you live in and own has an annual value of S$65,000, you will pay up to S$240 less in property taxes.
The new progressive property tax system, announced on Monday to the surprise of many, will see owner-occupiers exempted from tax on the first S$6,000 of the annual value - that is, the estimated rent - of their homes.
The trade-off? The S$25-to-S$150 in GST rebates, which owners of properties with lower annual values have been enjoying since 1994, will be scrapped.
The more nuanced tax system for owner-occupied residential properties will benefit all Singaporeans except the ultra-rich - those living in properties with over S$77,000 annual value. They comprise only 0.4 per cent of all owner-occupied homes in Singapore, and only 3 per cent of private owner-occupied homes here, said Finance Minister Tharman Shanmugaratnam, who also noted that the change would cost the Government S$230 million initially.
Currently, all owner-occupied residences are taxed a flat rate of 4 per cent, while investment residential properties are taxed at 10 per cent.
This “does tax the wealthy more than others”, said Mr Shanmugaratnam, but there was “scope” for a more progressive system.
One reason for the rethink: HDB homes have been appreciating in value over the years, meaning a growing tax bill for flat-owners, and while rebates over the years - the latest being in January - have helped mitigate this increase, “we need a longer-term solution that provides a fair and balanced system for all property owners”, said the Finance Minister.
Homes with an annual value of about S$80,000, therefore, will see a tax increase of “slightly less than S$100″ a year.
“However, our property tax rates, even for the high-end, will remain lower than in most international cities,” Mr Shanmugaratnam stressed.
“That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike.”
Binjai Park resident Mr Philip Goh, 61, said that as a retiree, “anything helps”. His semi-detached house’s annual value is about S$31,000, and he forked out S$1,250 in property tax last year.
The change in tax structure will have minimal impact on the property market, analysts believe, given the tiny minority that will be negatively affected.
Those likely to be taxed “slightly more” were the luxury properties priced above S$4 million in prime districts, said real estate lecturer Nicholas Mak of Ngee Ann Polytechnic. And as taxes for non-owner-occupied residential properties remain at 10 per cent, he added, there should be no impact on those who buy for investment.
Nonetheless, as annual values continue to go up, “the question is whether the Government will increase the upper limit of the annual value bracket where the property tax is 4 per cent”, said Mr Mak.
Does this signal that the Government might go further down the path of taxing the rich more, something it has argued against overdoing? NUS Business School Associate Professor Ho Yew Kee: “What the Government probably thinks is that the extremely asset-rich … have to carry a little bit of burden, and contribute a bit more. 0, 4, 6 per cent is trivial - if I have an S$8-million house, I’d pay S$2,000 more in property tax a year. It’s not a lot.”
Source: Channelnewsasia.com
Real estate developers to bring forward property launches
February 26, 2010
SINGAPORE : Singaporeans can look forward to more property launches. The Real Estate Developers’ Association of Singapore (REDAS) on Thursday announced that its members will be bringing forward property launches.
REDAS added that its efforts are only limited by the land available and hence the long-term solution to a stable market is still adequate supply.
The association celebrated the Lunar New Year, riding on an upbeat mood.
Joining in its Spring Festival was Finance Minister Tharman Shanmugaratnam, and the association shared with him its views on his recent Budget Statement.
Simon Cheong, president, Real Estate Developers’ Association of Singapore, said: “REDAS was hoping for more cash in our ang pows (red packets) from you, Minister. But when we opened the ang pow, we were disappointed there was not much inside for developers.
“Nonetheless, we are happy with your long-term productivity ang pow, as what is good for Singapore’s economy in the long run must also be good for the Singapore property market. It is what REDAS calls a deferred payment ang pow.”
REDAS said that its members are surprised with the speed with which Singapore’s property market has recovered. But they added that they are prepared to live with the current problems rather than the problems faced by the property market last year.
However, in the interest of a stable property market, REDAS said its members are committed to a fast-track supply to satisfy demand. This would also minimise excessive speculation in the property market.
Mr Cheong said: “Given the unexpected return of an active property market, developers over the next few months would also be actively bidding for more land to position for the future supply.
“As such, REDAS, unlike the situation in the preceding 12 months, is now looking forward to more sites in the confirmed list for developers to replenish their land bank.”
Just last week, the government introduced two more measures to cool the property market and pre-empt a bubble from forming in the private homes sector.
Source: channelnewsasia.com - Real estate developers to bring forward property launches
Measures to cool property market needed to avoid drastic measures
February 24, 2010
SINGAPORE : There may be no property bubble yet, but Prime Minister Lee Hsien Loong on Sunday said recent moves to curb speculation were necessary to avoid more drastic action later on.
Packed showrooms and fast-rising prices have become a concern for authorities, who introduced new measures on Friday to cool the property market before things got out of hand.
A Seller’s Stamp Duty is imposed on all residential properties sold within one year of purchase, while loans from financial institutions are capped at 80 per cent.
At a Lunar New Year dinner at Teck Ghee in his constituency of Ang Mo Kio, Mr Lee said that while the government cannot control property prices, it can ensure prices remain affordable.
Mr Lee said: “Please take good care of it. Do not think of selling it prematurely, or making a quick buck. Because if you sell it and you can’t find another house to stay or you do not have a nest egg for your old age, that is big trouble.”
Mr Lee said that one’s home is a long-term investment, whether as a buffer against old age, or to be passed on to one’s children or grandchildren.
But this brought him to another concern - that Singaporeans are not reproducing enough.
Mr Lee noted that Singapore’s low birth rate is a reflection of fundamental changes taking place across Asia.
The Total Fertility Rate fell to 1.23 last year - with the rate among Chinese Singaporeans even lower at 1.09.
In China for instance, some young adults even advertise for make-believe girlfriends and boyfriends to hold off family pressure over the Lunar New Year.
Mr Lee said: “It is amusing but it is also sad. I am relieved that I have not heard of any reports of boyfriends or girlfriends for rent in Singapore. I hope it does not happen. But I know that young people do feel some pressure.”
Mr Lee added that some social pressure may be useful, but it is family support that will give young Singaporeans a nudge in the right direction.
Source: Channelnewsasia.com
Home buyers still flock to showrooms despite new property measures
February 24, 2010
SINGAPORE: New measures kicked in on Saturday to curb speculation in the property market.
A Seller’s Stamp Duty will be imposed on all residential properties bought on Saturday and sold within one year, while housing loans from financial institutions will be capped at 80 percent of property value.
Are they taking the buzz out of the property market? Not yet - at least not for those who are buying for the long-term.
It was business as usual at one property showroom on Saturday, as a steady stream of visitors checked out the units available.
Sales of units at the Altez condominium - located just opposite Tanjong Pagar MRT station - are moving fast.
One woman in her 30s snapped up four units - two to stay in and two to rent out.
The condominium’s developer said they could still sell an entire floor of units within an hour.
Some home buyers said the reduction in the home loan limit did not make much of a difference.
Home buyer Raphael Tan said: “The banks have been very strict, anyway. So I think we will still be on track for our financing.”
And those who are buying for the long-term are not worried about the new Seller’s Stamp Duty.
Doris Chia, another home buyer, said: “Although it’s quite pricey now, I think this is a good location and for long-term investment.”
Analysts expect developers to launch more high-end properties in the first half of this year.
These properties typically sell at S$2,000 per square foot and attract buyers and investors who are less price-sensitive.
Donald Han, managing director of Cushman and Wakefield, said: “A lot of the high-end investors are typically not bound by any limitation. They don’t go for maximum loan-to-value ratio. In some cases, they just go for 40 to 50% of loan-to-value ratio. In some cases, they even buy on a cash basis.”
Analysts said the mood to buy won’t change much as the measures are meant to flush out speculators, who make up a small percentage of the market.
Meanwhile, Senior Minister of State for National Development Grace Fu said that now is the time to introduce measures to control the private property market.
She said the authorities have been studying the property market closely and that it is best to introduce the measures before the property bubble forms.
“We would think that it may deter speculative buying and we want our investors to basically be on the more solid ground when they invest in properties. It should not deter genuine buyers who have the financial resources to hold the property.”
Source: Channelnewsasia.com
Government announces 2 measures to cool property market
February 24, 2010
SINGAPORE: The Government has introduced two new measures to cool the property market and pre-empt a bubble from forming in the private homes sector. They come into effect Saturday.
The Ministry of National Development said this will help ensure a stable and sustainable property market, and to curtail the HDB resale market where prices tend to track private property movements.
From Saturday, it will be more difficult and expensive for speculators to own and flip properties. A Seller’s Stamp Duty will be imposed on all residential properties and residential land bought after Friday, and sold within one year from the date of purchase.
The housing loan limit will also be capped at 80 per cent - down from the current 90 per cent.
This new loan limit will apply to all housing loans granted by financial institutions for private homes, executive condominiums, HUDC flats and HDB flats, including those sold under the Design, Build and Sell Scheme. But loans granted by the Housing and Development Board (HDB) for flats, will still have a cap of 90 per cent.
Last September, the Government introduced anti-speculative measures to cool the private homes market. While these helped initially, there were signs the market was heating up again.
The new measures come as demand for private homes continues to soar. The number of units sold by developers in January was three times more than December. It was also the highest monthly total since September last year.
The Ministry said the objective of these measures is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner occupation or longer term investment.
Market watchers said the measures are easiest to implement, without causing the market to come to a standstill.
Eugene Lim, associate director, ERA Asia Pacific said: “We are recovering. The economy is recovering and the market is picking up so what they want to do is to make sure the property market is moving up in tune together with the economy and not faster than the economic recovery.”
Analysts added that the prices and volume of private property homes are unlikely to be significantly impacted.
Donald Han, managing director, Cushman & Wakefield said: “It has got a fairly minimal impact to the market, mainly because a lot of investors from our records are buying for the medium term, at least for a period of two to three years.
“Some investors will probably stand by the sidelines and see how sales progress into February and March. It will take some wind out of the market; potentially it could be around 10-15 per cent in terms of the numbers of new home sales taken out of the equation.”
The Real Estate Developers’ Association of Singapore said the reduced mortgage cap is unlikely to have significant impact on genuine buyers and investors, as lending institutions have already been more prudent in the aftermath of the global financial crisis.
Source: Channelnewsasia.com
77% who used housing agents saw “bad service” of some sort: survey
January 26, 2010
SINGAPORE: A survey has found that almost eight in 10 people who used housing agents here encountered “bad service” of some sort.
The survey by Ngee Ann Polytechnic found that 77 per cent of respondents said they met with bad service from their agents.
Some of the respondents’ top grouses were that their agents failed to negotiate a good price, that they gave the wrong advice and that they were late for appointments.
Other less common bad service complaints include aggressive property agents, negligent agents and agents who were dishonest or unfamiliar with the transaction procedures.
Generally, however, respondents were content about their agents’ services, with 65 per cent being either satisfied or very satisfied.
At the same time, 73 per cent of those surveyed felt that accreditation of the profession is necessary.
In addition, 97 per cent of those who indicated that accreditation is necessary for every agent also wanted some form of government intervention.
1,041 people took part in the survey. - 938LIVE/vm
Source: channelnewsasia.com - 77% who used housing agents saw bad service of some sort survey