Monday, September 16, 2013

Property market set for 2016 supply avalanche

The Business Times - August 12, 2013
SSD scheme may work against govt's intention, say market players

[SINGAPORE] With previously locked-up homes getting ready to hit the market, it is timely to relook the sellers stamp duty (SSD), to prevent a head-on collision with the record number of private homes that are expected to make it to the market in 2016, say market observers.

According to data provided by Orange Tee, a total of 33,555 units are expected to make it to the market in 2016, compared with the 15,503 units that are available this year.

Of this, 27,181 units will originate from newly launched projects while the remaining 6,374 units will be from the stash of previously locked-up units, assuming that owners choose to hold onto their properties and not incur any SSD.

This follows enhancements to the SSD scheme in 2011, which saw the holding period raised from three to four years, and rates increased steeply up to 16 per cent.

Specifically, properties bought from Jan 14, 2011 and sold within the first year of purchase, will be hit with an SSD of 16 per cent versus 3 per cent previously. Properties sold in their second and third year respectively will be levied with a 12 per cent and 8 per cent SSD respectively (from 2 per cent and one per cent previously). A 4 per cent SSD will be levied on properties sold in the fourth year (that is, properties held for more than three years but below four years).

While the sheer quantum of units waiting in the wings looks intimidating, it is important to view them in the context of other factors including market conditions, economic prospects, interest rate movements, and the rental market, said property veteran Donald Han.

"Also, assuming that measures remain as they are, if you sell your property and decide to enter the market again, you will be hit by the Additional Buyer's Stamp Duty (ABSD), and that will have a considerable impact on decision making," pointed out Mr Han.

"The resale market is quiet at the moment, but not entirely because demand has softened. One reason that the secondary market has nose-dived is that sellers are thinking: if I sell now, I won't be able to buy at a competitive rate because of the ABSD. Plus, the rental market is strong, and they know they are sitting on healthy capital gains, so why should they sell?

"So the decision-making process (will include questions like) - can I rent out my unit? Can my yields counter any potential increase in interest rates? How many units am I holding? If I have only one other unit and I sell that, when I re-enter the market, I will be hit by the ABSD."

Ironically, while intended as a targeted measure to cool the property market, and, specifically, dissuade investors who were looking to make a quick buck, the policy has reduced the number of resale homes available in the market in the short term.

"Our research shows that out of the 19,874 estimated completions in 2015, 31.8 per cent (6,313) are not available for sale in the open market due to SSD," said Christine Li, research head of Orange Tee.

The actual number could be about 10 to 20 per cent higher because caveats data is typically lower than the actual number of units sold by developers, she added.

"When buyers do not have enough choices in the secondary market, the primary market will still be the main source of buying interest and this could potentially push up demand for private residential properties despite record completions in the pipeline," said Ms Li.

"The SSD could then work against the government's intention to have a sustained price growth for residential properties in line with economic fundamentals."

It could also potentially weigh down the rental market given that units not available for sale at the time of attaining their temporary occupation permit (TOP) might go into the rental market.

Mr Han agreed. "I think the biggest problem in 2016, or even next year, is that it might take longer to find tenants. That long waiting game might inspire some people to take profit and sell."

According to Mr Han, rental demand averaged 42,000 per year over the past few years. This was however, while the economy was fairly strong. With an economic slowdown in view, and potential oversupply, some adjustments to the rental market in the form of lower rents might be seen, he said.

It is for these reasons that it is timely to relook the SSD scheme, said Ms Li.

While retaining the 16 per cent SSD for properties sold within one year, it might be timely to replace the SSD with a capital gains tax for properties sold after a year as this will allow flexibility in disposing of units, she said.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Collective sales of private homes slowed down 13% in Q2

Channelnewsasia.com  |  POSTED: 09 Sep 2013 9:32 PM

The collective sales or en bloc sales market for private residential properties saw a slowdown of 13 per cent in the second quarter compared to the first three months of the year.

SINGAPORE: The collective sales or en bloc sales market for private residential properties saw a slowdown of 13 per cent in the second quarter (Q2) compared to the first three months of the year.

The collective sales market in Q2 remained lukewarm as only four small sites were sold for a total of S$215.4 million. This is compared to the three deals worth S$247.8 million done in the first quarter.

Analysts said this is due to cooling measures such as the Additional Buyer's Stamp Duty (ABSD) that kicked off in January.

Going forward, analysts expect sales to slow down further.

This could be due to the Total Debt Servicing Ratio (TDSR) which could further dampen the en bloc market, said Savills Singapore’s senior director of research & consultancy, Alan Cheong.


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Sentosa villa comes with serious flaws, says owner

Sep 16, 2013 - PropertyGuru.com.sg

The exclusive residential enclave of Sentosa Cove has been rocked again by another complaint of shoddy construction work, this time at YTL Group’s Sandy Island.

Just last week, it was reported that Ho Bee was being sued by homeowners at The Coast at Sentosa Cove, for defects such as staircase flooding and termite infestations. 

Thio Keng They, the owner of a villa at Sandy Island, claimed that the two-storey five-bedroom property he acquired for about S$14 million had some “serious” defects, media reports said.

He revealed that when he took possession of the 8,000 sq ft bungalow in March 2012, it had water leakage in the living area, most of the rooms, “gourmet kitchen” and basement garage. There were also defects on bathroom doors and scratches on glass panes and the timber floor.

“I bought the house as I was told by the salesman that it was of top quality and it was a nice development. What I discovered is that it was not so,” said property investor Thio, who also served as former Deputy Managing Director at Malaysia Dairy Industries.

“I was surprised and have never seen anything like this in terms of the scale and extent of the defects. I'm more aggrieved by the substantial defects such as the water ingress and bathroom doors,” he added.

He raised these concerns to YTL, which offered to pay between S$110,000 and S$130,000 for enhancement works and S$20,000 to fix the defects in December. However, he refused the offer saying it wasn’t enough.

“YTL wants to do the repairs but if they use the same people, same materials and same methods, the problems will reappear,” Thio said.

Meanhwhile, YTL said that it had promptly responded to Thio's complaints.

“To the fullest extent possible, we have sought to accommodate Mr Thio's requests even though we considered many, if not all to be non-contractual...However, Mr Thio had imposed various conditions on us before he would allow us to access the premises,” said a YTL spokesman.

“We stress that we have always remained ready, willing and able to resolve all genuine defects.”

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

CapitaLand to cut prices at new condo

Sep 16, 2013 - PropertyGuru.com.sg

In a bid to keep pricing affordable, CapitaLand's latest condominium project in Bishan will be priced lower than its nearby Sky Habitat, media reports said.

Although the showflat for the yet-to-be-named project with 694 units opened on Saturday, sales bookings will only start a few weeks later. Units in the first phase are expected to be priced from S$1,380 psf to S$1,550 psf.

The developer declined to reveal the number or type of units to be released, or their average psf price, explaining that such details will be revealed closer to the date of bookings.

“But we intend to price the new development competitively,” it said.

In April last year, Sky Habitat sold 131 units at an average price of S$1,583 psf, based on data from the Urban Redevelopment Authority (URA). Sales at the 99-year leasehold condo began during that month.

To date, around 172 homes in the 509-unit Sky Habitat have been sold at S$1,589 psf on average.


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Massive rise in August private home sales

Sep 16, 2013 - PropertyGuru.com.sg

Sales of new private homes for the month of August shot up to 742 units, a 54 percent increase compared to the previous month.

Year-on-year, this was still 52 percent lower than in August 2012.

Including executive condominiums (ECs), transaction volumes last month reached 1,468 units, an almost 150 percent rise from the 593 units sold previously.

Developers were also busy launching 1,819 homes compared to just 557 in July, a hike of more than 200 percent.

Notably, 892 ECs were launched in August of which 726 units were sold, a take-up rate of 81 percent.

In the first eight months of 2013, 13,887 new homes were sold, 24 percent down from the 18,295 units transacted during the same period last year.

As usual, the suburban areas reported the most sales with 1,271 transactions, followed by the city-fringe with 109 units and 88 units in the city centre.

Meanwhile, three new launches saw healthy sales in August.

Ecopolitan, a 512-unit EC project sold 335 units at a median price of S$793 psf. Another EC Lush Acres moved 311 units at S$790 psf. The 380-unit project is more than 80 percent sold. The Tembusu condo found buyers for 218 units at S$1,547 psf.


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Thursday, May 16, 2013

Marina Bay set to get even livelier


The Straits Times  |  16 May 2013
More growth in store with new homes, offices and shops: Analysts

MARINA Bay is already a flourishing neighbourhood, with hundreds of its own residents and many thousands more people streaming in each day to work and play.

But the area is still very much a work in progress, said analysts, with more homes, offices and shops set to be built there over the next few years.

Several empty plots are also yet to be developed.

Analysts and major tenants were reflecting on the area's progress as the Marina Bay Financial Centre (MBFC) was officially launched yesterday.

At the launch, Prime Minister Lee Hsien Loong hailed the latest addition to the Marina Bay skyline.

He noted that the project added 3 million square feet of prime office space to the Central Business District - more than twice the office space at Raffles Place.

It also set a new standard for green buildings.

With its luxury apartments and restaurants, the centre also offered a unique work, live and play environment, he said.

"There are beautiful apartments overlooking the Bay - a marvellous place to catch National Day fireworks.

"Our new downtown is steadily taking shape," he added.

Other projects that are in the pipeline include the 221- unit Marina Bay Suites residential project, expected to be completed later this year, and Marina One, the mixed development by Temasek Holdings and Malaysia's Khazanah Nasional, which is projected to be ready in 2017.

These and other developments will bring even more life to Marina Bay soon, said property consultancy CBRE's executive director of office services, Mr Moray Armstrong.

"The future success of commercial development in Marina Bay looks assured with impressive upcoming developments such as Asia Square's Tower 2, which incorporates the Westin Hotel, V on Shenton scheduled to be completed in mid-2016 and Marina One," said Mr Armstrong.

"At around 1.8 million sq ft, the latter project represents the largest office development currently being undertaken in the city."

He added that the offices at Marina Bay are not only big, but have also set a new standard for the commercial market here.

"In bringing on line world- class buildings, the developers have made a telling contribution to raising the quality of Singapore's office stock. This has undoubtedly enhanced the city's ability to attract new corporate headquarters," he said.

German financial group Allianz, for example, inked a deal to lease 90,000 sq ft in Asia Square Tower 2 last year.

Asia Square Tower 1 is already home to companies such as Citi, Google and Julius Baer.

Tenants at MBFC include Standard Chartered, Nomura and DBS Bank.

StanChart Singapore's chief executive Ray Ferguson said the area has blossomed in the past couple of years.

"Now, employees of global financial institutions such as ourselves enjoy the whole variety of lifestyle amenities in Marina Bay, including recreation, shopping, dining, cultural events and entertainment."

Knight Frank's head of research, Ms Alice Tan, noted that this is really just the beginning for the Marina Bay area.

"There is still a white site in the area that is available for development, and several other plots that the Government has yet to make available," she said.

"All these new land plots will slowly morph the area, so that in the long term, the whole Central Business District can be further expanded, complementing the future Tanjong Pagar waterfront city."


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Banyan Tree may spin off S-E Asia hotels into Reit


The Straits Times  |  16 May 2013
RESORTS group Banyan Tree may spin off its hotels in South- east Asia into a real estate investment trust (Reit) after the hospitality Reit industry matures further, said executive chairman Ho Kwon Ping yesterday.

RESORTS group Banyan Tree may spin off its hotels in South- east Asia into a real estate investment trust (Reit) after the hospitality Reit industry matures further, said executive chairman Ho Kwon Ping yesterday.

"What we think is going to happen in a few years' time is that there will be appetite for a Reit of our kind, which will be hotels that would not necessarily be in Singapore or Hong Kong but diversified and within the region," said Mr Ho, speaking on the sidelines of the firm's first-quarter results briefing at Fullerton Hotel.

"That's what we're looking towards... (these) are the type of assets we have."

He said Banyan Tree's sale and leaseback of the Angsana Velavaru resort in the Maldives to CDL Hospitality Trusts (CDLHT) in January signalled the growth of more South-east Asian hospitality Reits that include resorts.

"There's increasing appetite for a higher risk exposure now," noted Mr Ho, adding that Banyan made the deal with CDLHT as it wanted to see how large the investment appetite was for a "much more emerging-market" hospitality Reit.

The $86.8 million sale of the Maldives resort boosted Banyan Tree's first-quarter earnings. Net profit for the three months to March 31 climbed 19 per cent to $14.2 million on the back of a 17 per cent increase in revenue to $96.9 million year on year.

The company said this was due to a strong showing from its hotel investments, particularly those in Thailand. Turnover from the segment jumped 30 per cent to $70.1 million in the first quarter compared with the same period last year.

This offset a 43 per cent drop in property sales revenue to $3.6 million from the preceding year.

Banyan sold 58 homes, worth $15.4 million in all, in its Laguna Shores project in Phuket in the quarter. The company has sold 125 of the 229 units in the development's $58 million first phase.

Earnings per share rose from 1.58 cents to 1.87 cents for the quarter; net asset value per share came in at 77 cents, up from 72 cents as at Dec 31.

Laguna Shores is the first development under a new brand that Banyan Tree will launch in the middle of this year. Mr Ho told The Straits Times in an interview at the firm's Upper Bukit Timah premises last week that the brand aims to capture the rise of a "younger, more lifestyle-oriented" middle class. He said he wanted to "dispel the notion that Banyan Tree will only do luxury".

Laguna Shores has one- and two-bedders of 40 sq m to 88 sq m and costing 4.2 million baht (S$175,000) to 10.2 million baht.

Most of the buyers are couples in their mid-30s to 40s, with Singaporeans making up a percentage "in the mid-teens".

Mr Ho was upbeat about the Thai property market, saying real estate was less volatile than tourism. Laguna Shores' $28 million second phase with 105 homes will make its Singapore debut this weekend at The Fairmont Singapore.

*****************Background Story *****************

POTENTIAL APPETITE

What we think is going to happen in a few years' time is that there will be appetite for a Reit of our kind, which will be hotels that would not necessarily be in Singapore or Hong Kong but diversified and within the region.

- Banyan Tree executive chairman Ho Kwon Ping


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)

Tampines housing site for sale


The Straits Times  |  16 May 2013
A RESIDENTIAL site in Tampines that can yield 530 units was put up for sale by the Government yesterday.

A RESIDENTIAL site in Tampines that can yield 530 units was put up for sale by the Government yesterday.

The 17,103 sq m plot is part of the confirmed list of the Government Land Sales (GLS) programme, and has a lease of 99 years.

Four other plots - in Toa Payoh Lorong 6, Prince Charles Crescent, Siglap Road and Geylang East Avenue 1 - were also released for application on the reserve list.

Together, the five plots can yield 2,725 units, and were released as part of the GLS programme for the first half of the year.

Analysts say interest in the Tampines site (Parcel B) at Tampines Avenue 10 is expected to be moderate because of its distance - 2.2km - from the Tampines MRT station, and the neighbourhood already has an ample supply of land.

"On top of Q Bay Residences, with 153 units unsold as of last month, there are at least another six land sites not yet launched in the same cluster," said Knight Frank associate director and research head Alice Tan.

The six sites include Parcels C and D, which are also along Tampines Avenue 10 and are already available for sale on the reserve list.

The Tampines site put up for sale yesterday is expected to draw a top bid of $226 million to $243 million, or $440 psf ppr to $470 psf ppr, said SLP International head of research Nicholas Mak.

However, bidding interest is expected to be stronger for the other sites released on the reserve list.

"There is a lack of new residential condominium launches in three of these sites, namely the ones in Toa Payoh, Siglap Road and Geylang East Avenue 1," said Mr Mak.

R'ST research director Ong Kah Seng said the Toa Payoh land parcel is located in a mature, prime, public housing estate with few private residential developments. This offers developers an opportunity to build modern private homes among the older public flats. Mr Ong expects the site to be triggered in the second half of this year, with intense bidding interest from developers looking to scale down their projects from the high-end residential market to well-located projects in the suburbs.

Analysts said the land parcel in Siglap is a plum site, as developers have a rare opportunity to stock up land in the East Coast area without going through the lengthier collective sale process.

The site is near the popular Victoria School and East Coast Park, which will draw strong buying interest in any residential project developed there, said Ms Tan.

The tender for Parcel B at Tampines Avenue 10 will close at noon on July 2.


Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Director
Email: asianprimeproperties@gmail.com
AsianPrime Properties Pte Ltd (L3010623G)