Singapore Government Property Measures – negative in the near term, positive over mid- to long-term

The Singapore government announced the following measures to ensure a stable and sustainable property market:

a) Reinstatement of the confirmed list sites and replenishment of the reserve list sites for the 1H10 government land sales programme (GLS).

b) Removal of the Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL) with effect from 14 Sep 09, except for projects where the units have already been offered for sale under IAS prior to 14 Sep 09.

c) Non-extension of the Jan 09 Budget assistance measures for the property market upon expiration.

Pre-emptive demand side measure to support stable and sustainable recovery. While the supply side initiatives as part of the GLS programme and the withdrawal of the budget assistance measures were largely anticipated, the demand side measure on the removal of IAS has been introduced sooner than anticipated. Even though the level of speculation as measured by the subsales as a percentage of total sales at 10.9% is not excessive, we believe that the government has decided to preemptively introduce the demand side measure earlier taking cues from the previous property boom when the supply side initiatives had been less effective in curbing speculation compared to the demand side measure on the removal of the deferred payment scheme (DPS).

We believe that the intention of the government’s latest measures is to support a stable and sustainable recovery in the property market and the authorities would refrain from draconian measures that would destabilise the sector. The strong rebound in the property sector ahead of the recovery in the economy has led the government to undertake preemptive measures to stabilize the sector and curb speculative bubbles from building up.

Channel checks indicate low direct impact from removal of IAS scheme but expect property market sentiments to dampen in the near term. The IAS scheme is much less susceptible to speculation compared with the DPS scheme (scrapped in Oct 07) as the banks are involved right from the beginning in the sales process, ensuring that the loans are extended only to creditworthy buyers.

Based on our discussions with the developers, the units sold under the IAS scheme account for 20-30% of the total units sold with the lower end of the range in the mass market segment. Our channel checks also indicated that the proportion of the units sold under the IAS has been declining as developers charge a higher premium for such sales. This is indicative of a rise in genuine demand. However, it is the anticipation of other potential demand side measures that is expected to dampen the property market sentiment. These could include measures such as higher cash downpayment requirements and lower loan-to-value for second property purchases.

Underlying demand-supply dynamics remain favourable. The supply of the Housing and Development Board (HDB) flats has fallen to below 10,000 units p.a. since 2003, a far cry from the supply of 36,000 new HDB homes in 1998. The tight supply in the public housing segment, which accounts for 78% of the total housing stock and the segment's narrow price differential with the private mass market segment support the overall private residential market. Also, we forecast that the average demand of around 6,500 units in the mass-market and mid-tier segments over the next three years is expected to outpace the supply. The private mass market and mid-tier segments constitute nearly 80% of the private housing market.

While the risk of other potential demand side measures by the government will have a negative near-term impact, dampening the pace of recovery, we remain positive over the mid- to long-term prospects as the current recovery in the property market has been supported by the strong underlying demandsupply dynamics, low interest rate environment and high liquidity flows that are expected to remain favourable.

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There the fierce bidding goes again on Government Land Sales

Fierce bidding increases possibility of Confirmed List re-instatement, maintain OVERWEIGHT. The overwhelming 13 bids received for the Dakota Crescent site suggests that developers’ inventories are in dire need of replenishment after strong sales YTD. We believe this also reflects a sustainable sales momentum for mass and mid projects. Looking ahead, we expect the two already-triggered GLS sites (Yio Chu Kang and Serangoon) to draw similar demand, especially from developers who missed out during the past two tenders. More importantly, we believe this has all but confirmed the re-instatement of the Confirmed List next year. We reiterate our inclination towards landbank-rich developers who will be sheltered from overpaying for land given their adequate inventory at present to ride on the residential sales momentum. Amongst the big-cap developers, we like CityDev, while Wing Tai is our preferred proxy to the mid-cap space.

UOL emerged as the highest bidder for the GLS site along Dakota Crescent. While its bid of S$508 psf is within our estimates of S$450 – 500 psf, we note that this is almost close to the S$524 psf which Ho Bee and NTUC Choice Homes paid for a nearby site in Jun 07 (property peaked in 4Q07). The 185,000 sf site (GFA of 650,000 sf) could yield 550 units. We estimate a breakeven price of S$910 psf and selling prices of S$1,000 – 1,100, implying PBT margins of 10 – 20%. While this price range represents a premium over nearby Dakota Residences’ current S$850 – 950 psf, we reckon developers are attracted by: (1) proximity to upcoming Singapore Sports Hub, Marina Bay IR and CBD, as well as (2) accessibility through Dakota MRT Station in 2010. Further, we note that this is the only pure residential site on URA’s reserved list which is located close to the IR.

Competition was intense with 13 bidders, six of which missed out on the previous awarded site along Chestnut Avenue, i.e. Allgreen, F & N, Ho Bee and Sim Lian. More notably, bid prices were evidently more aggressive, with seven developers bidding at least twice the minimum bid as compared to Chestnut Avenue’s two. We attribute this largely to their fast-diminishing landbank, as well as knowledge of the high level of competition for land at present. Meanwhile, this could re-invigorate buying interest in nearby 348-unit Dakota Residences.


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Singapore Property Sector - A Positive Message

National Development Minister Mah Bow Tan said there was “every likelihood” the government would reintroduce the confirmed list of land sites that was suspended last October. The question, as the Minister put it is: “how much to put on the list”.

This is the only logical and systematic thing one would expect this government to do after the hectic home sales since February, exceeding 1000 units a month.

What’s important is the positive “message” from the Minister. Our take on the subject:

- if the intention is merely to satisfy the strong demand, the government could easily transfer sites from the reserved (triggered only if developers commit to bid) to the confirmed list.

- The fact that the confirmed list is the option chosen is likely to reflect the government’s view that demand is sustainable.

It is also worth noting the Minister’s confidence in HDB resale prices continuing to rise. This is really surprising considering how the HDB has for years now, got a grip over the supply of public housing, with schemes like Build- To-Order”.


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Singapore Residential Property – New record for monthly sales volume

Urban Redevelopment Authority’s (URA) monthly developer sales statistics data for the month of July indicates that the number of units launched for the month has increased by 76% mom to 2,878 units, while the number of units sold increased 51.6% mom to 2,767 units.

New record for the monthly sales volume. The July sales volume is the highest monthly sales volume ever witnessed bringing the total number of units sold YTD to 10,139 units which is nearly three times the number of units sold during the same period last year. The price levels have increased by around 4-5% mom. We believe that the fulfillment of pent up demand, low interest rates, easing of bank lending and return of foreign participation especially Indonesians, Malaysians and Chinese nationals to be the key drivers behind the consistent increase in the developer sales volume in the recent months.

Strong demand for projects in the Mass market segment. Mass market segment witnessed the maximum number of developer sale volume during July with 1502 units representing around 54.3% of the entire units sold and around 2.5 times the number of units sold in the previous month. Mass market sales volume were mainly boosted by the sales of The Gale which managed to sell 294 units in the month of July at median price levels of S$700 psf and Meadows @ Pierce which sold around 286 units this month at a median price of S$919 psf.

Mid-tier and High end segment not left far behind. Though the sales in the high end segment (-2.3% mom to 514 units) and mid tier segment (-13.4% mom to 751 units) eased a bit, the number of units sold above S$1,000 psf mark still noted a 60% mom increase in July. Nassim Park residencies managed to sell 4 units during the month of July at median price levels of S$3275. during July but the take up remained good at 135%.

Seasonal effects to kick in next month. Looking forward, we expect the developer sales to slow down during months of August and September due to seasonality effects (ghost month).Sales should return back to normal levels during the fourth quarter. However, the successful sales at the launches during early August would help support the sales volumes.

The recent successful launches include Optima @TanahMerah which sold its entire units within four days at ASP of around S$850 psf, Viva which has sold nearly 85% of launched units at an ASP of S$1,500 psf, Centro Residences that sold 80% of launched units at ASP of S$1100 psf at new benchmark price levels and more recently, Madison Residences that is about 60% sold at an ASP of S$1,700 psf.

Government unlikely to take drastic measures. The recent spurt in sales has raised concerns that government might step in and take actions to prevent the heating up of the property market, but with economy still on the road to recovery and with Sub-sale levels at around 10% in 2Q09 we don’t expect any drastic measures to be taken by the government as it could hamper the growth in the economy. We expect the government to undertake more supply side initiatives such as reinstating the Land sales program of confirmed sites to inject more supply in the mass and mid tier segments. However, the impact from the supply side initiatives should be low due to the favorable demand supply dynamics in the mass and mid market segments.

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Nautica Lake Suites at Sunway Integrated Resort

Nautica Lake Suites is a luxury condominium & duplexes development (only 249 units) at Sunway South Quay with well-planned town planning, management, maintenance & community enrichments. In the heart of Sunway Integrated Resort City, located in the central of gravity of Petaling Jaya, greater Kuala Lumpur.

For investment packages:
- zero interest during construction
- legal & documentation fees
- free 10 nights stay at Sunway Pyramid Tower Hotel
- positive cashflow projected.

The official launch of Nautica
Venue: Sir Henry Keppel 2, Grand Hyatt Singapore
Date: Sat 12 and Sun 13 Sept 2009
Time: 1030am to 7pm.


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CapitaLand new project The Interlace at the former Gillman Heights site

Gillman Heights development plan unveiled. Last Friday, CapitaLand (CapLand) unveiled the design for its upcoming residential project at the former Gillman Heights site. The project, named The Interlace, consists of 31 blocks housing 1,040 units and the unique design of this project aims to achieve privacy and spaciousness for buyers. This project is expected to be launched next month. The estimated construction cost for the project is between S$250psf and S$270psf and this is below our earlier expectations of S$300psf-S$350psf. Based on this new estimate, our new estimated breakeven cost for the project is between S$695psf and S$720psf (previously S$760psf-S$830psf).

Featuring 1,040 apartments on a 99-year leasehold land of 871,884 square feet, The Interlace will have units that range in size between 807 sq ft for two bedroom apartments and 4,306 sq ft for "super penthouses". CapitaLand president and chief executive Liew Mun Leong declined to disclose how much the units will cost, but said the firm is trying hard to price them under $1,000 psf, as reported in Todays.

The sale of Gillman Heights was approved by the Strata Titles Board in late 2007, but minority owners have fought the sale at every turn, appealing STB's decision at the High Court, and when this failed, to the Court of Appeal. It has been given the final green light, after Singapore's highest court dismissed a last-ditch plea by minority owners to overturn the sale. This marks the end of the two-year en-bloc saga which began when buyers CapitaLand, Hotel Properties and two private funds inked a $548 million deal to buy the 607-unit, 99-year leasehold estate in Alexandra Road in 2007.


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Online search for long-term and short-term stay in Singapore

You might rent out a master bedroom for 1000 SG$/month in the conventional way. But you could as well charge 100 SG$ for a single night and earn up to 3000 SG$/month!

You are a homeowner and consider renting out a room on long-term or short-term basis, this website is for you. They make it easy and simple for you to rent out your place, be it long-term or short-term rentals.

roomsDB.net helps you to do exactly this. They accept short term bookings of your room on your behalf, manage the availability of your room and inform you via email and sms about new bookings.

Your offer will be online for a whole month. If you featured your offer, it will be online for the featured period + an additional month. They do not charge any kind of commission, hence regular offers are indeed completely free. However, the paid-for featured offers enjoy a much higher priority than regular offers.

If you are agent, don't worry, there are a so many agents who already successfully use roomsDB.net to boost their business.


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Residential Trevista sales momentum unfazed in the Hungary Ghost month

The residential sales momentum is expected to remain strong with the successful launch of Trevista project bucking the trend of traditionally slow sales in the Hungary Ghost month. Over 85% of the 400 units launched have been sold at an ASP of S$925 psf in just three days. We expect sales momentum and price levels to firm up further on the back of improving liquidity conditions and easy financing options.

Trevista
NTUC Chioce Homes
Junction of Lorong2 and Lorong3
Outer Core Region (OCR).
99 Year old Lease Hold
Total Units 590 units, launched 400 units. Studio : 19 units (465sft), 1+study : 25 units (690sft) ,2-bedroom : 117 (860 - 926sft) 2+study : 19 (1,012sft) ,3-bedroom : 298 (1,100 - 1,280sft) ,4-bedroom : 112 (1,560 - 1,730sft)

Estimated TOP date 31 Dec 2012
Launch date Aug 28th
Takeup >85% of launched units
Avg Price (S$psf) S$925psf
Expected yield 3.25 - 3.5%

Features: 3 minutes walk to Braddell MRT station & 5 minutes walk to HDB Hub/Toa Payoh MRT. Close proximity to Pei Chun Public School, CHIJ (Toa Payoh), St Andrew's Village, Catholic Junior College and renowned international schools. Panoramic view of MacRitchie Reservoir and city skyline.

Due to the strong response for the initial 210 units launched on Friday NTUC choice homes released a second batch of 190 units on Saturday. The demand was stronger for smaller units with all the units in the 1BR and 1BR+study completely sold out. There are few units available in the 2BR, 3BR and 4BR units. Until 3 Sept, NTUC Choice Homes has sold 410 of the total 460 units it released for the preview of its Trevista condo in Toa Payoh last week.

The average price currently is understood to be around $920 psf. Singaporeans picked up 87 per cent of the total 410 units. Permanent residents made up 7 per cent and non-PR foreigners, 6 per cent, of buyers. The majority of PRs and non-PR foreigners were from China; some were also from Indonesia and Malaysia; there were also a few Swiss nationals, an NTUC Choice Homes spokeswoman said.

About 80 per cent of buyers purchased on the normal progress payment scheme. The remaining 20 per cent who opted for interest absorption scheme are being charged a 2 per cent price premium, the Choice Homes spokeswoman said. Can find out more at AsiaOne.


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A New Development Launch By Oxley - BLISS LOFT@Kim Keat

Bliss Loft at No 25 Kim Keat Close. It is a 14-Storey Freehold Development totalling all in 48 units comprise of 1 bedroom, 2 bedroom & Penthouses. Beautifully designed facade with only 3 units per level in a excellent centralised location..

Novena MRT is just minutes away by walk where daily travelling is so much hassle-free. Good food is readily available nearby the famous Whampoa Food Centre and the individual Food shops around.

As of current information, the estimated Preview Price is approx S$ 1100 – S$1200 per square feet. The VIP Preview is schedule tentatively on 11 Semptember at 10 am. Booking Queue starts now based on first-come-first-book basis.

Expected TOP: Approx 4th Quarter 2013.


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CDL New Launch "HUNDRED TREES" @ West Coast - Tenure 999 Years

We have a RARE Development coming up @ West Coast – Hundred Trees By City Development Limited. Formerly known as the “Hong Leong Gardens”.

Project Information:

Property Name: Hundred Trees
Property Tenure: 956 Years from 1928
Property Facade: 6 Blocks of 12-Storey Residential Development totalling 396 units. Full Condominium facilities
Land Size: 266,953 square feet
Property Address: No 4 West Coast Drive
Unit type: 1bedroom 474 sq ft 22 units

2bedroom 764-775 sq ft 66 units
2+study 883 sq ft 84 units
3bedroom 1119 sq ft 70 units
3+study 1270 sq ft 80 units
4bedroom 1442 sq ft 68 units
PentHouses 3143-3348 sq ft 6 units only

VIP Preview Launch will likely be end of Sept 2009 OR earlier. Most of all, we are advised tentatively that the VIP Preview Launch Price would be indicatively $930 - $980 psf!! Hundred Trees unit sale will likely be First-Come-First-Book Basis.


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