14 June 2009
Bishan East residents get S$1.3m Harmony Park
By Shaffiq Alkhatib/ Valarie Tan, Channel NewsAsia

SINGAPORE: Residents in central Singapore now have a new place to smell the roses.

The S$1.3 million Harmony Park @ Bishan East has several features - a garden maze, an inline skating court and two barbecue pits.

Mayor of the Central District, Zainudin Nordin, said the park is designed for both the young and old.

He said: "There are areas that are suitable for the elderly, for families, for the younger generation - for people who have interesting passions like skateboarding. And when you look at the other area, there are exercise corners to promote healthy living."

The park stretches some 25,000 square metres - equivalent to about four football fields.

15 June 2009
Sales of new private homes up 37% on-month in May
By Irene Chan/ Ng Baoying, Channel NewsAsia

SINGAPORE: Sales of uncompleted private homes climbed 37 per cent on-month in May as improving market sentiments and optimism of an economic recovery spurred more home buyers to snap up properties.

A total of 1,668 units were sold last month, up from 1,214 in April, bringing the total number of units sold in 2009 to 5,526. This is more than the 4,435 units sold for the whole of last year. But it remains lower than the market peak of 14,811 sold in 2007.

Home sales in the mid-tier market picked up pace in May. The developments that sold the most units last month were Martin Place, The Wharf, The Arte and The Mezzo.

These four projects, which are in the prime districts and the city fringe areas, made up more than 30 per cent of the sales.

The median price for these developments ranged between S$903 and S$1,423 per square foot.

Deputy managing director of agency and business services, Colliers International, Grace Ng, said: "There are more properties sold above S$1,000 per square foot. For example, in the month of April, the percentage of properties sold above S$1,000 per square foot is about 28 per cent. In May, this crept up to 29 per cent.

"It seems like physical property prices have corrected more in these categories. In the core central region, property prices corrected over 15 per cent. In the outside central region, it contracted about 16, 17 per cent."

Sales of mid-tier and mass-market developments remained strong.

Projects that had a median price of less than S$900 per square foot made up 45.9 per cent of the total units sold.

Analysts say the buoyant sales could be credited to the upswing in the stock markets.

Associate director of ERA Asia Pacific, Eugene Lim, said: "The current rally is predominantly driven by the upswing in the stock market. Over the past months, we saw the stock market rally, not only in Singapore, but across Asia. This improved sentiments among investors and this is probably the main reason behind people buying units today."

Most analysts say it is uncertain if the coming months will see similar sales, but they expect at least 1,000 sales a month.

Ng said: "We expect that the number of units sold will still be above 1,000 in the month of June and the next few months. But whether it is sustainable will depend on a few factors -- like whether there is a sustained recovery in the property market, whether there are clear signs of declining exports, and whether the developer will increase prices."

And should the momentum persist, analysts say the total number of units sold this year may exceed 10,000.

Lim said: "With the current momentum, we do expect to see more launches coming up. So buyers will have more choice. We will see the momentum continuing unless the market changes for the worse."

And analysts say prices are unlikely to increase much despite strong sales. This is because developers are more focused on clearing stock, rather than making high profits in the current environment.

Lim said: "The main agenda of developers today is to clear stock. And they will be very focused on pricing it competitively to move units rather than go for high profits."

Developers launched a total of 1,161 units in May, up seven per cent compared to April.

17 Jun, 2009
Developers rush to catch buying wave
Push factors: Concerns that interest will fizzle out, Hungry Ghost month
By Joyce Teo

HOME hunters can expect a wider choice as property developers look to bring forward project launches in a bid to ride a strong wave of home-buying.

They have been encouraged by a stunning surge in private home sales; figures this week show May sales at 1,668 units - the highest level since August 2007.

Sentiment has improved significantly in recent months, in line with stock market rises, while the sale prices of new homes appear to have crept up from the lows they sank to earlier this year.

But there are increasing concerns this buying wave may not be sustainable. Some analysts argue that the pace of the upswing is too fast and too furious, given that rents are falling amid the weak economy and that a plentiful supply of new homes is coming onstream.

And with the stock market taking a breather, there are worries this will hurt demand. Consultants say some buyers had bought property with the money they made from stocks.

Also, the heat has been confined mostly to certain property launches. HSR Property Group executive director Eric Cheng said the action in the resale market is largely in mass market properties.

Given this, developers with launch- ready projects are likely to be keen to get sales under way quickly. Apart from rushing to get sales permits in order to catch the buying wave, developers would also want to launch before the Hungry Ghost month, said Mr Cheng.

Hungry Ghost month - the 7th month of the lunar calendar - starts on Aug 20 this year. Superstitious buyers may not want to buy a home during this period.

This weekend, SingBuilders will be launching 26-unit Spring @ Langsat near the Eunos MRT station at an average price of $820 psf. A preview last month saw nine units sold at prices ranging from $822 psf to $1,010 psf.

Propnex, which is marketing the project, said the launch decision was made just last week. 'Market sentiment is good. This is the best time in eight months to launch,' said its chief executive Mohamed Ismail.

This weekend will also see the launch of the freehold Parc Seabreeze in Marine Parade. Agents have advertised it at prices of $1,200 psf to $1,400 psf.

Far East Organization is also expected to launch the freehold 280-unit Vista Residences in Jalan Datoh soon.

A classified ad gives the special preview date as June 24 and the price at $980 to $1,200 psf. It is near The Arte - launched at $880 psf in March and sold at a median price of $933 psf in May.

Soft marketing has started for the the 437-unit Waterfront Key project in Bedok Reservoir, the 388-unit Oasis@Elias in Pasir Ris and Frasers Centrepoint Homes' 330-unit leasehold project near the Woodleigh MRT station.

Waterfront Key is the second of four condos to be built by Far East and Frasers Centrepoint on the former Waterfront View estate site. The first, Waterfront Waves, was relaunched in the first quarter at a reduced average price of $600 psf, down from $800 psf early last year.

To capitalise on the better mood, Wing Tai recently soft launched Belle Vue Residences at Oxley Walk while Allgreen Properties started a special preview for the freehold 152-unit One Devonshire near Killiney Road last week.

DMG Research said in a report yesterday that it expects the sales momentum to persist for the next six to nine months.

Already, the strong sales momentum has reignited interest among developers in buying sites. DTZ Debenham Tie Leung (SEA) yesterday put up two sites for tender - the first two official distressed sales sites - to take advantage of the improved sentiment.

'There's been a trending up of take-up rate so this is a window of opportunity for developers to launch their projects,' said its senior director for investment advisory services Shuan Poh.

DTZ was appointed by the receiver and manager of Consult Asia to sell the two sites. One is at the corner of Changi Road and Still Road and the other in Balestier Road. 'There are developers who sold their projects very well recently and are eagerly looking for more mass and mid-market sites to launch or to invest in. If they want to rush the Changi site, they can take as little as three to four months to get everything ready for launch,' said Mr Poh.

17 Jun, 2009
OCBC rolls out better sales services
Home loan data now easier to understand and staff training has been enhanced
By Francis Chan

HOMEBUYERS can now expect better and clearer information from OCBC Bank when they apply for a housing loan.

The bank announced yesterday that it has enhanced the way it markets mortgages in the light of recent scrutiny of financial institutions and their sales tactics.

Key changes include boosting the certification standards of staff, especially mortgage specialists, and providing easy-to-understand information so customers can make better-informed decisions.

Mr Gregory Chan, OCBC head of secured lending, said last year's events have changed the banking landscape, especially the way financial institutions market their products and services. 'While OCBC Bank had successfully avoided selling toxic products, we have taken it upon ourselves to review the marketing strategies and processes for all our products and services and understand how we can instil greater customer confidence and trust,' said Mr Chan.

The enhancements are part of a review of the way loan and investment products are sold, which started last September after the collapse of United States investment bank Lehman Brothers. Thousands of retail investors here suffered huge losses and many complained that they were mis-sold investment products linked to the US bank.

The outcry led to a shake-up initiated by the Monetary Authority of Singapore to weed out shoddy and aggressive merchants in the financial services sector.

In March, the MAS released a draft consultation paper on what is acceptable practice and what crosses the line into mis-selling and deception. Key findings of the White Paper are expected to be released from the second half of the year, industry sources said.

In the meantime, many financial institutions have initiated reviews of sales processes and staff behaviour.

OCBC is believed to be the first local bank to introduce a new blueprint on how it deals with bank customers, starting with its home loans. Only staff who have completed a stringent in-house certification course will be permitted to advise clients on home financing options.

Customers will also need to undergo a thorough financial needs analysis by an OCBC mortgage specialist before a loan application is accepted.

After this analysis, the customer will receive a summary giving details of key information such as the interest rates, payment schedules and proposed loan structures to help them decide.

Mr Chan believes the enhancements will help customers better understand the financial impact of their decision instead of just appealing to them with lower interest for loans. 'The idea is guidance and transparency...rates alone don't tell you the whole story,' he added.

Mr Chan said OCBC will soon introduce other enhancements in the 'highly-watched' investment products space. These will include changes to its sales compensation structure that are expected to be in line with MAS recommendations.

* The changes

All OCBC mortgage specialists will have to undergo intensive training and be tested before being certified to advise customers on home loans.

Using the new OCBC mortgage blueprint, home loan customers will be guided through a thorough financial needs analysis.

A customised summary with details and key information on the proposed loan structure will be given to investors to help them make better-informed decisions.

16 June 2009
S'pore could see first en bloc sale in a year by year-end
By Ng Baoying, Channel NewsAsia

SINGAPORE : Singapore has seen a drought of en bloc sales lasting more than a year. But analysts said that could change by the end of this year.

They believe that with developers experiencing lower inventories, and government land sales still depressed, en bloc sales could present a more attractive option.

More than 5,500 private homes have been sold in the primary market this year - already more than the total amount sold in 2008.

Should the momentum persist, analysts project that more than 10,000 units will be sold this year, compared to the market peak of 14,811 units sold in 2007.

Analysts said this has helped draw down developers' inventories.

Christina Sim, director, Investment, Cushman & Wakefield, said: "Once I think a developer sells more than 50 per cent of the development, they are basically on the home stretch already. So whatever they make on the rest of the units is basically profits. I think in terms of this, their cash flow position is a lot better."

Karamjit Singh, managing director, Credo Real Estate, said: "Fundamentally, en blocs take place when the market is on an uptrend, when there is enough confidence in the market, and developers wish to step up their acquisitions or redevelopment sites.

"At this stage, the market seems to be turning its corner. There seems to be a resurgence, or confidence back in the market. Quite a few developers have begun to clear substantial inventories to a point where they are very confident in the market tomorrow and day after. And (they) are beginning to buy land today, or at least making enquiries about what is available to buy."

Site sales were also at a significantly low level last year.

Mr Singh said: "Developers refrain from buying any redevelopment sites, whether from government, en bloc, private market. That market began to move early this year with few developers acquiring from one another and from individual sellers. That momentum is slowly gaining and it is quite strong at this stage."

And supply isn't as forthcoming as before.

Mr Singh said: "This is likely to lead to price rises in redevelopment sites, which is the basic raw material for developer to buy so as to be able to do business. As land prices rise, it would lead to a situation where en blocs become viable once again. We are helping quite a number of our en bloc clients re-evaluate the potential of their projects. And we believe that towards the end of this year or early next year, quite a number will materialise once again."

So developers are likely to look to collective sale sites. Credo is handling about five developments which are restarting, or planning a collective sale. It is also currently marketing some developments, including Laguna Park. Cushman & Wakefield is currently marketing Meyer Place.

Valuations for that project were done during the peak in 2007. But it has since come down almost 30 per cent.

Ms Sim said: "Land value for Meyer Place was actually set at the peak in 2007, and those days, East Coast high-end properties were going at about S$1,800 per square foot up to S$2,200 per square foot. So those were the prices that were set. However, the good thing is that we are maybe about 30 or 20 per cent short of this level. Hopefully, the market will recover by the third, fourth quarter."

She also said: "I expect they would have to scale down, and a few whom I have spoken to have already said that in the event that a lesser offer comes in, lesser than what the reserve price was, there is always a good chance that (they) can call for an AGM and get the 80 per cent consensus to sign again, and agree to sell at a lower price than the reserve price."

Owners were previously looking for a premium of about 50 per cent. But Cushman & Wakefield said 30 per cent now will be a very good deal.

Overall, analysts said projects that stand a higher chance of being sold en bloc are smaller ones, in specific locations.

Mr Singh said: "They seem to favour suburban and mid market. Prime, I am sure quite a number of them will be interested in very high-end."

Ms Sim said: "Well located smaller plots in good residential areas, Meyer Road, Bukit Timah. They will all still have that kind of demand. I think the plots that are maybe below the S$100 million mark, they are still quite affordable by small, medium-sized developers."

She is hoping for at least one en bloc sale this year, to get the ball rolling.

Credo, on the other hand, is more optimistic and expects more than 10 sales by year-end.

But not all agree with this view. Real estate company ERA Asia Pacific said developers should have banked enough land over the past three years.

Eugene Lim, associate director, ERA Asia Pacific, said: "A lot have not been launched yet. What's launched now are those bought even earlier. We expect the en bloc scene to probably be low key for now."

Grace Ng, deputy managing director, Agency and Business Services, Colliers International, said; "They are watching the market carefully. A lot of developers have been keeping en bloc sites and renting properties to wait for market to recover. I think they will tread grounds carefully."

Today, the gestation period from planning to actual marketing of the site takes at least six months, and can stretch to two years.

That is because of new legislation to ensure en bloc sales processes are conducted transparently.

Previously, getting to the marketing phase could take as little as three months.

A resident in Laguna Park said they were looking for a premium of up to 80 per cent when the idea was mooted in the second half of 2007.

And while she is willing to consider a slightly lower price, she added that a sale is not necessarily urgent.

She said: "If it does not happen, I suppose we will wait for another opportunity. Because you know you can get the 80 per cent, there will always be a second time."

June 18, 2009
Top-end bungalows going, going, gone
7 good class bungalows sold in April and May, more deals in the works
By UMA SHANKARI

(SINGAPORE) The most prestigious segment of Singapore's residential property sector has picked up over the past two months.

Seven good class bungalows (GCBs) were sold in April and May - up from just two transactions in Q1 2009 - according to Savills Singapore's analysis of caveats captured by URA Realis.

The numbers are for bungalows with the minimum plot size of 1,400 square metres (about 15,069 square feet) stipulated for GCBs in the 39 GCB areas (GCBAs) here gazetted by the Urban Redevelopment Authority (URA). However, if bungalows with land areas below 1,400 sq m are also included, the April-May period saw 10 caveats - again significantly higher than the three caveats lodged in Q1.

'The higher GCB sales in April and May reflect the general improvement in investment sentiment on the back of the stockmarket rally. Some GCB buyers could also be savvy investors who made money in the stock market. Going ahead, they may feel that there's more upside than downside for GCB prices,' says Savills' director for prestige homes Steven Ming.

The biggest GCB transaction in May (and also so far this year) was the $30 million sale of 2A Ridley Park, which has 27,233 sq ft land area. The price works out to $1,101 per square foot (psf) of land area - also the highest on a unit land price basis in 2009.

At least one other transaction has been done at above $1,000 psf recently, although it has yet to be reflected in caveats: 1 Cluny Hill, which was sold for $16.2 million or $1,081 psf based on its 14,985 sq ft plot size. Forbes Property Realty Network brokered the deal.

Douglas Wong, director, luxury homes at CB Richard Ellis, notes that GCB investors in Singapore often own two or more such properties - one for their own residence and the rest for investment. 'With the recent increase in activity, they may consider it opportune to liquidate some of their GCB holdings and get some cash back to plough into other investments or their business,' he said.

Compared with just three GCB transactions in Q1, Mr Wong expects some 14-17 deals in Q2. 'Assuming the stock market is able to hold up till the end of 2009, we estimate that some 38-45 GCBs could be sold for the whole of 2009, amounting to a total quantum of some $700-800 million,' he added. This would not be far off from the $827 million from the sale of 51 GCBs last year.

Other notable GCB transactions in May include a property at Jervois Road that sold for $13 million ($862 psf), and another bungalow at Binjai Rise that was sold for $19.8 million ($871 psf) to international action star Jet Li.

The highest ever psf price attained for a bungalow in a GCB area is $1,899 psf for 32H Nassim Road in October 2007. But the area of that plot is 13,423 sq ft, less than the minimum GCB plot size. That's why the GCB benchmark is generally considered $1,308 psf - the price obtained for 15 White House Park, with 22,012 sq ft land area, in August 2007.

Activity in the landed housing market first started picking up this time around in the 'low-end' segment - meaning terraced and semi-detached houses - about three months ago, said Michael French, MD of Asia Premier Property Consultants.

'We have not seen such buying levels in the market for a long time,' he said.

The activity then filtered up to smaller bungalows of about 4,000-8,000 sq ft. Then, about four weeks ago, demand for GCBs took off, with several large deals being concluded in May.

More big GCB deals are on the cards. BreadTalk founder and chairman George Quek is looking to sell his 2 Swettenham Road GCB and the price tag could be as high as $33 million, or $991 psf. Mr Quek bought the property, with 33,293 sq ft land area, with his wife last year for $27 million or $811 psf. He has appointed Newsman Realty to handle the sale, and the firm's managing director, KH Tan, hopes to get $33 million for the 1960s bungalow.

The property will be sold through a closed tender on June 30. Mr Tan has pre-selected 30 prospective buyers whom he intends to invite to view the property and to participate in the bidding exercise. Part of the proceeds from the sale will be donated to charity.

18 Jun, 2009
Jet Li buys $20m bungalow in Bukit Timah
Actor's new Binjai Rise home was once owned by FJ Benjamin founder
By Joyce Teo

MARTIAL arts movie star Jet Li and his wife, former actress Nina Li Chi, have bought a sprawling bungalow in Bukit Timah for $19.8 million.

The freehold property is a 22,723 sq ft good class bungalow (GCB) in Binjai Rise - a house with past links to another global celebrity, football star David Beckham.

GCBs are a prestigious class of bungalows in limited supply here, found only in gazetted prime residential areas such as Nassim Road and Ridley Park. They have a minimum land area of 15,000 sq ft.

Li, 46, who is taking a break from acting to focus on charity work, launched the Jet Li One Foundation Project in April last year jointly with the Red Cross Society of China to raise funds for victims of natural disasters worldwide.

The Beijing-born actor, whose Chinese name is Lianjie, then set up a branch of One Foundation in Singapore last year.

In 2007, he had moved his wife and two younger daughters to Singapore. He is now understood to be a Singapore citizen, according to the Business Times, which broke news of the sale yesterday.

The two younger daughters - he has two other teenage daughters from an earlier marriage - attend the Singapore American School.

Li, who previously lived in Los Angeles, has starred in numerous Hollywood and Chinese movies. Recent releases include The Mummy: Tomb Of The Dragon Emperor (2008) and Fearless (2006).

His first Hollywood leading role was in the hip hop, gongfu film Romeo Must Die.

A check yesterday showed that Li's GCB deal was sealed in the middle of last month. The seller had suffered a loss of $1.2 million on the deal.

The seller, who has a pre-school childcare business, had bought the property in the fast-rising market of early 2007 for $21 million, or $924 per sq ft (psf). The sale price to Li works out to $871 psf.

Market sources said the previous owner had bought it from the founder of luxury goods retailer FJ Benjamin, Mr Frank Benjamin, who had lived there for many years. He now lives in the high-rise condominium Ardmore Park.

In 2001, Mr Benjamin hosted a party at this Binjai Rise house, where two models claimed in media reports to have met football star David Beckham and later had separate trysts with him. The football star did not comment on the allegations.

Market observers said the price that Li paid for the GCB is fair. With prices rising amid improved property market sentiment, the value of the Binjai Rise GCB could even be a bit higher now, said one.

Li's purchase and the 2007 deal are the only occasions the bungalow has changed hands since 1995 - the period when records are available.

Foreigners cannot easily buy a GCB or any other landed home here as the Government restricts foreign ownership of residential property.

Permanent residents are permitted to buy landed property, but only with permission from the Government. Foreigners who take out Singapore citizenship may also buy landed property.

The exception to the restrictions is the gated residential enclave of Sentosa Cove, where ownership rules were eased to allow foreigners who are not PRs to buy landed homes or land plots, though permission is still needed.

Other Asian movie stars living in Singapore include Chinese actress Gong Li, who is married to a Singaporean. She became a Singapore citizen late last year.

Another famous gongfu star, Jackie Chan, also owns properties here, though he is not based here.