Singapore Property News Upfront 16

Another record for Enbloc sales. Just wonder how high buyers can afford...
An Ardmore Park condominium has just smashed the record for the most expensive collective sale in Singapore - less than a week since the last record was set. The Ardmore, a 24-unit freehold property off Orchard Road, was bought by high-end developer SC Global for $262 million, some $40 million above the initial asking price.

This works out to an eyebrow-raising $2,338 per sq ft per plot ratio (psf ppr), including a $16.6 million development charge. It far surpasses the last record of $1,788 psf ppr set by Char Yong Gardens in Cairnhill last Tuesday. The Ardmore has also become the first condo here to cross the $2,000 psf ppr mark in a collective sale. Other nearby estates making similar attempts include Grangeford Apartments at Leonie Hill and Elizabeth Heights and Trendale Tower in the Cairnhill area.

With this sale, each owner of The Ardmore - which has mainly three-bedroom units of 1,991 sq ft in size - stands to get about $11 million on average. No units have been transacted in the past two years, and the single unit that changed hands in 2005 went for $904 psf. The coveted condo was said to have attracted five other bids from big-name property developers in a public tender that closed last Tuesday. All the bids were close, a sign that developers remain bullish on the highest end of the property market despite the recent sharp run up in prices.

Home prices rose 4.8 per cent in the first quarter, after rising 10.2 per cent last year. In the same periods, prices in prime districts shot up 7.3 per cent and 25.4 per cent, respectively. The Ardmore sits on the last site with redevelopment potential in Ardmore Park, one of Singapore’s choicest residential districts. Most of the nearby condos are either fairly new or already sold for redevelopment.

SC Global’s winning offer for The Ardmore means it will have to sell units in the new project at more than $3,300 psf, and likely closer to $4,000 psf, said property experts. Mr Lui Seng Fatt, regional and head of investments at Jones Lang LaSalle, believes these prices are ‘doable’. ‘Ardmore is among the best addresses in Singapore,’ he said. ‘The price that SC Global is paying for this site is certainly no surprise.’ Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the breakeven price for the project could go up to $3,200 psf ppr. He said 45 to 50 new units of about 2,000 sq ft each could be built.

The 42,565 sq ft plot can host a new 36-storey development with a total floor area of 119,181 sq ft, SC Global said yesterday. Chairman and chief executive officer Simon Cheong said the group intends to build a high-end luxury condo. ‘The Ardmore Park address is well-established in the international community as an upmarket residential enclave,’ he said in a statement.

This purchase brings SC Global’s total bill for collective sales since last year to about $1 billion. Last year, it spent $648 million on Paterson Tower, Hilltops Apartments and some terrace houses in Cairnhill. The Ardmore sale is the latest in a string of record-breaking collective sales and comes a day after the Government said it is keeping an eye on fast-rising home prices.

Although Minister of National Development Mah Bow Tan said buyers of ‘multimillion-dollar’ homes in the central regions ‘can take care of themselves’, he added that it was important to ensure that ‘prices do not overshoot’. Last week, the Government released a slew of new residential sites, mainly in suburban areas, in what is being seen as a move to steady the market.

Source: The Straits Times, 18 June 2007
Posted by Property Wizkid

Enbloc Sales - Gain or Loss - It's your choice!
The recent rise in property prices has sparked a massive furore to jump on the bandwagon in collective sales. My estate in the East Coast is no exception in this spate of money-making ventures and the experience has left a sour taste in the palate. While many stand to benefit from such sales where prices are inflated due to demand, those with no alternative housing are left at a loss. Many of the latter fail to acknowledge the difficulties of finding a new house that matches up to the old spacious unit, complete with convenient locality and scenic surroundings, even with the big money one makes from the collective sale. Many of these home owners end up regretting that they ever signed the agreement, some pray the sale will fall through.

Certainly, as a business transaction, the gains are tremendous. However, on hindsight, many realise too late that there are limited options with what settlement they receive, and later, sentimentality sets in. Internal conflicts arise when sales committees fail to deliver essential information to residents, and to some, the coercion into signing almost amounts to forced eviction, since one has little choice when many others have already been lured into the transaction.

People need to realise that while property prices rise to a seller’s benefit, they also rise to the dismay of potential buyers. The latter usually include the people who take part in a profit-making collective sale in the first place. Sales committees need to ensure proper consultation and be understanding with residents to prevent internal conflicts. Potential sellers should also do their own research into alternative housing in the event of making a sale, so they will not regret such a major decision in future. - Liana Tang (Miss)

Source: The Straits Times, 18 June 2007
Posted by Property Wizkid

The Government peeps in to ensure it's ok
People panicking that they may have missed the boat in the surging property market had some reassurance from the Government yesterday. Minister for National Development Mah Bow Tan said the housing sector was being closely monitored to ensure there was sufficient supply and if demand went up, new housing sites would be released.

Asking Singaporeans not to panic, he said there was sufficient supply of housing in the next two to four years. ‘Don’t feel that you have missed the boat because there are quite a lot of boats coming along,’ he said. Home prices shot up by 10 per cent last year and are expected to rise by another 12 per cent this year.

Analysts see the Government’s release of 15 new sites for development last Thursday as a move to cool down the market. The release brings the total number of residential sites on sale in the second half of this year to 41. This is the largest number since 1997. Asked about the land release, Mr Mah said that since the take-up rate for new buildings had been ‘very strong’ in the past year, the Government decided to release more development land.

But he also said that it was important that the Government struck a balance, as an oversupply or shortage was undesirable. ‘It is very important for us to make sure that the prices do not overshoot or race ahead of the real growth in the economy. ‘I think it is not sustainable in the long run and, of course, it is also not good for our competitiveness if prices and rentals go up too fast.’ The minister said there was also no danger that the heat from the private property market would filter down to HDB public housing.

Referring to the record sale prices fetched by two five-room HDB units last week, he said they were exceptional cases because of their good locations and views. ‘The broader market is really quite steady. There is an increase but this increase is in line with the increase in the strength of the economy. I’m quite comfortable with the pricing in the broader market at the moment.’ He added that the sheer number and variety of HDB flats up for sale also helped to keep prices stable and there was no need for buyers to feel that they were being priced out of the market. ‘If you can’t buy an executive flat, buy a five-room. If you can’t afford central area, go to the suburbs. If you can’t afford Tampines, go to Woodlands or Yishun,’ he said.

Asked why most of the residential sites released on Thursday are mostly in the suburbs, such as Bishan and Sembawang, Mr Mah said the central areas were not a worry as collective sales will release new developments in these areas. While ‘it’s not the Government’s job to add more supply in these areas’’, he said it was important for the Government to ensure there was sufficient supply of housing in the suburbs. ‘I’m not talking about the multi- million-dollar apartments in the central area. I think those people can take care of themselves.’

Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid

Hot spot: Cairnhill
Constantly evolving landscape. In the Cairnhill area, the old is juxtaposed against the new, with the latest Cairnhill Crest just across the road from a much older The Cairnhill. But this picture is far from complete. The area is fast evolving with developments such as Hilltops Apartments still under construction, older boutique condominiums like Silver Towers about to be redeveloped and properties like Orchard Scotts completed recently.

The theme of the area is one of constant change, reinforced by the frequent heavy traffic in the surrounding areas. The attrition, development and movement are all set against the backdrop of the bustling main shopping belt of Orchard Road. The area also presents interesting contradictions in the form of high-end, trendy apartments such as The Light contrasting with the smaller one- and two-bedroom units of the Vida along Peck Hay Road.

Freehold units at Scotts 28 and The Light have been commanding prices of $1,978 per sq ft (psf) and $1,700 psf respectively on average, according to Savills Singapore. Mr Ku Swee Yong, Savills Singapore marketing and business development director, said that the benchmark had been set by Helios Residences, located next to The Light at Cairnhill Circle, which had been priced at between $2,500 psf and $3,000 psf. ‘The Edge has been going for up to $1,500 psf as well, which was pulled up when The Light sold well.’

Rumour has it that there will be a hotel-branded residence coming up along Cairnhill Road. And while negotiations with a five-star hotel are understood to be ongoing, the development is widely expected to push up prices when it comes on line, said Mr Ku. Meanwhile, the flagging sales of the one- and two-bedroom units of the Vida on Peck Hay Road have been attributed to the lack of interest in small units in the area.

Hot spot: Balmoral
Scenic spot with bungalows, condos. The Goodwood Hill loop at Balmoral offers a glimpse back in time. Large colonial bungalows painted simply in monotones are nestled in lush greenery, giving the area a peaceful, nostalgic feel, with a tinge of faded grandeur. Beyond the bungalows, low-rise condominium developments such as Casa Rosita and Balmoral Heights are also a defining feature, adding much needed variety to the area.

According to Savills, the average price per sq ft (psf) in the area is $1,460, with average asking rentals for two- to three-bedrooms ranging between $6,000 and $8,000. City Developments’ The Solitaire, a 59-unit freehold development priced at $1,950 psf, sold out after it was launched in April.

Other recent benchmarks in the area include Eden Spring in Balmoral Road which sold at $1,004 psf per plot ratio (ppr) last month to TG Development, and One Balmoral - sold to Hong Leong Group in March for $1,188 psf ppr.

Savills Singapore director of marketing and business development Ku Swee Yong highlighted Belmond Green as a property to look out for. ‘It’s a large piece of land overlooking nice landed properties at the back. ‘When Naga Court and Casa Rosita along Bukit Timah Road launch at an expected $2,000 psf, this will see prices along Balmoral going up as well,’ he said.

Casa Rosita was acquired by GuocoLand in a collective sale acquisition in April last year for $280 million. And Mr Ku believes that it is another development buyers looking for a scenic home could consider. ‘It actually overlooks the bungalows on Goodwood Hill and we understand that it will be developed with a small footprint and large grounds.’ No indication has been given as to when it will be launched.

Hot spot: Cavenagh
Peaceful cloister in heart of town. Aptly named Monk’s Hill for its serenity and quietude, this area is almost a temple of peace next to busy Newton Circus with its throng of diners and downtown traffic. The tranquillity is further enhanced - except perhaps when school’s out - by Monk’s Hill Secondary School and a madrasah (religious school) nearby.

The apartments and terrace houses, a mainstay at Monk’s Hill, are gnarled with age, but the rustic charm of old-school architecture and a monochrome palette give the area a soothing appeal. Also a lure is the great food at the famed Newton Hawker Centre a stone’s throw away. However, having the Istana close by on the other side of Cavenagh Road has limited the possibilities for developments in the vicinity.

For example, condominiums lining that stretch of road, such as Cavenagh Court and the Townhouse Apartments, have height restrictions and are also prevented from having clear windows on the side facing the Istana. As a result, the area has not proved to be as attractive as might be expected, though it is located next to the prime Orchard Road district. Of note is the collective sale potential of the 99-year-old Townhouse Apartments, which has seen its average price per sq ft hovering at $420, said Savills.

An interesting characteristic of the area is the presence of several black-and-white bungalows around Monk’s Hill Road, which have made it a hit with expatriates. But hardly any transactions of these Premas-run units have been recorded because of their conservation status.

Hot spot: Chancery
Mature estate on verge of change. Take a cheerful mix of bungalows, boutique apartments and yet-to-be-built condominiums such as Newton One, and you have Gilstead, a mature residential area hinting at changes to come. Newer gems such as Newton 18 and Gilstead 38 sprinkle the area, but the larger, slightly older developments such as Chancery Court and Jade Gardens define the location.

Clusters of bungalows and semi-detached houses are also popular, although these tend to be older. The Residences @ Evelyn has set the tone for the area with its $1,418 per sq ft (psf) average price and largest number of transactions, said Savills Singapore director of marketing and business development Ku Swee Yong.

Most of the developments are upmarket so he believes the best buys are condominiums with better facilities such as sizeable swimming pools. ‘These include Residences @ Evelyn, Park Infinia and Amaryllis Ville,’ Mr Ku said.

He added that the average psf price in the area was $1,250, with average asking rents for two- to three-bedroom units ranging from $6,000 to $8,000. One of the higher-end developments is the freehold Setia Residences, which was launched four years ago.

With an average price of $1,654 psf, a standard 3,348 sq ft unit in the project commands upwards of $5.4 million, with the asking rental ranging between $15,000 and $18,000. Some of the new launches include Newton Suites and Buckley 18, both freehold projects. They have recorded average prices of $1,203 psf and $1,420 psf respectively this year. Mr Ku noted that the Gilstead Road condos further away from Dunearn Road offered a peaceful environment coupled with the convenience of being a stone’s throw from the Newton MRT Station.

Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid

Agents revival - back to action!
The prospect of making big bucks in the property boom has lured former estate agents back into the game. Experts reckon that about 15 per cent of agents recruited by big firms recently comprise old hands ready to have another go at it. Dennis Wee Properties has taken on about 750 agents with about 100 of those returnees.

Said director Chris Koh: ‘When the housing market is less vibrant, competition forces some agents out and they leave to take up more stable jobs. ‘With the current rosy pro- perty market, ex-agents are returning. Now, everyone wants to become an agent.’ Returnees account for about 50 out of the 250 new hires each month at HSR Property Group.

At PropNex, returnees number about 20 of the 220 agents recruited each month. PropNex’s chief executive, Mr Mohamad Ismail, said these former agents want another shot at financial success. Mr Ryan Tan, 39, is one of them. The 39-year-old O-level holder quit the real estate business nine years ago and started selling insurance. But he gave that up two months ago to join PropNex, where he says he now draws between $10,000 and $15,000 a month.

‘The only mistake I made was not to have rejoined the business earlier,’ said Mr Tan, who closes at least one deal a week. In the grim days of 1998, he took several months to close just one deal. Ms Lucy Tan is another ex-agent who has returned to the property fray. The 46-year-old HSR representative quit in 2002 after six years in the business when her income dropped to $5,000 a month.

She stopped working to look after her ill brother but is back with a vengeance, making about $20,000 a month. She is rewarding herself within the next few months with a new car. Said Ms Tan, who rejoined the business last year: ‘It was worth it coming back. This job pays well and allows you to manage your time too. I hope to earn even more over time.’

For Ms Joyce Lau, 29, it is all a matter of timing. She spent two & half years working as a flight attendant after quitting the business. She returned in 2005 just when the market was picking up. ‘Leaving when times are bad and returning when times are good is the best way to maximise earnings,’ said Ms Lau, who earns about $25,000 a month at ERA.

The battle-scarred returnees are also well aware that the boom will not last forever. Having lived through the last downturn, Mr Tan, a father of two young children, said: ‘Times are good now, but concentrating too much on real estate might mean a big fall if the market collapses.’
His back-up plan: Selling insurance policies on the side and ensuring his wife draws a fixed income. She now earns $25,000 a month.

For more read, check out http://www.propertybingo.com/News.aspx?newsid=42

Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid

Conveyancing has never been better since 1996
The workload for conveyancing lawyers has gone through the roof as the hot property market runs them off their feet. Cases have more than doubled at some law firms, with no end in sight. But young lawyers are shying away from conveyancing, convinced it is long on boredom and short on glamour and cash. Whatever the truth of that, it is not helping the current crop shift the mountain of work piling up.

Mr Norman Ho of Rodyk & Davidson said his firm has handled 25 collective sales this year compared with just 12 for the whole of last year. ‘We’ve always been busy, but we’re definitely a lot busier these days,’ he said. Mr Mark Chua of Tito Isaac and Co gets up to 50 conveyancing cases a month compared with about 20 before. It all adds up to long hours and burnt weekends.
Mr Cedric Tay of De Souza Tay and Goh said he has been doing 12-hour shifts and spends weekends at the office: ‘I’ve been sacrificing a lot of personal time and have fat hope of observing regular hours.’

The Law Society does not keep track of the number of conveyancing lawyers, but most general practice firms have at least one or two conveyancers as the area is a bread-and-butter field.
Industry insiders estimate there has been only a 5 to 10 per cent increase in the number of conveyancers in the past two years - a sharp contrast to 30 to 40 per cent increases in fields such as corporate work.

National University of Singapore law dean Tan Cheng Han is not surprised: ‘Leaving aside last year and this year, real estate work was in the doldrums and there will naturally be some caution in choosing it as a field.’ It was the Asian financial crisis a decade ago that stopped the property market in its tracks and drove many conveyancing lawyers to other areas.

Young lawyers perceive conveyancing as poorly paid and boring. The first perception stems from moves in 2003 to replace fixed conveyance fees with guideline fees. That had the effect of shrinking a lawyer’s commission. In the past, he could earn about $6,000 in a million-dollar deal; now, it is less than half that.

A Law Society spokesman pointed out the starting pay is the same as for other lawyers - more than $4,000. But conveyancers admit that in the long run they earn far less than those in corporate work and litigation. Mr Tay earned $400,000 a year in corporate work but switched to conveyancing in 1990 and now pulls in less than $200,000. Conveyancing is seen as stodgy as it involves loads of paperwork and almost no court appearances. New law graduate Tang Hui Jing, doing her pupillage in commercial litigation, said: ‘Mention conveyancing to any law student and you’ll see looks of boredom.’

But Miss Tan Shi Jie, 25, who joined Rodyk & Davidson as a conveyancer last year, disagrees. ‘There’s a lot of adrenaline involved when handling corporate deals and tight deadlines.’ Law Society president Philip Jeyaretnam is confident more will enter the field: ‘Now that the property market is active, there are a lot of major deals that involve real estate aspects, so you will see first- and second-year lawyers wanting to become real estate lawyers.’

Source: The Sunday Times, 17 June 2007
Posted by Property Wizkid

Suburban Condos gets hot
After years of being the poor cousin in the private home sector, the mass market condominium is back with a vengeance. It has been a long time coming with all the attention of developers seemingly on building pricey high-end homes in prime sites over the past couple of years.

But Thursday’s release of a slew of suburban sites - from Pasir Ris to Woodlands - should spark renewed interest by developers in the mass market sector, where prices are already rising. The expected flow of new mass market housing should nip any looming supply crunch in the bud, property consultants said.

Colliers International director of investment sales Ho Eng Joo said the release of so much suburban land ‘is to prevent any surge in mass market prices’. Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, believes buyers will not have it all their own way. ‘Demand for suburban sites will be good because there has been a lack of affordable mass market launches in the past year.’

The strong response to and some relatively high bids for a recent tender for a suburban Dakota Crescent site show there is demand for non-prime plots. Thursday’s release was part of a huge land sales programme for the second half of the year, with 20 residential sites, including those rolled over from the previous programme, up for grabs.

Some sites are on the confirmed list - that means they will be put up for sale at a scheduled date regardless of whether developers have shown interest. The Government also sells sites on the market-friendly reserve list, which are put up for sale only after developers indicate interest. There is a wide range of suburban sites - new hotspots like Tiong Bahru, central areas such as Ang Mo Kio and Bishan and outlying areas such as Woodlands.

Consultants said some of the reserve list sites are far more attractive than those on the confirmed list, and so those are likely to be triggered for sale. The hottest site on the reserve list is the 0.89ha plot in Tiong Bahru, which can accommodate about 395 mid-tier homes. Consultants said it was in a coveted location given that units at The Metropolitan next door sold well at an initial average price of $780 per sq ft (psf) with values rising further due to sub-sales. A new condominium on the site could sell for as high as $1,000 psf, said consultants.

The large condominium sites in Bishan and Toa Payoh - which can accommodate about 535 units each - could probably fetch prices of $700 psf to $800 psf, they said. A new condominium of about 555 units in Simon Road next to Kovan MRT Station could sell for $600 psf to $700 psf while the Boon Lay plot for about 685 units should attract good demand as well, they said. ‘The Boon Lay site could sell for about $600 psf. It is in between NUS and NTU and may see demand from expatriates working in the high-value industries in the west,’ said Savills Singapore director of marketing and business development Ku Swee Yong, referring to the National University of Singapore and Nanyang Technological University.

He also reckons there could be some demand from expatriates for a new condominium in Woodlands, where the Singapore American School and the Singapore Sports School are also located. Generally, though, consultants are less enthusiastic about the confirmed list sites in Elias Road, Choa Chu Kang Road and Woodlands. That is good news for home buyers who like those locations because it will mean lower bids and lower end-prices of possibly between $500 psf and $600 psf. The expected flow of new mass market housing should nip any looming supply crunch in the bud, say property consultants.

Source: The Straits Times, 16 June 2007
Posted by Property Wizkid