Singapore has emerged as the world's 'hottest' property market this year, with Japan and China also among the top favourites of real estate investors, an international consultancy said on Thursday. Capital values of prime property in the city-state soared 50 per cent in the first six months of 2007, Jones Lang LaSalle said in a press statement.
Globally, the value of property bought or sold for investment totalled a record US$382 billion in the first half, up 16.6 per cent from the year before, it said. Global real estate investment expanded for the 16th consecutive quarter, with the Americas, Europe and the Asia Pacific seeing record volumes, it added.
Property investment in the Asia Pacific jumped 12 per cent to US$55 billion, mainly bolstered by cross-border investments, the consultancy said. 'Japan, China and Singapore represented the strongest real estate markets in the region,' it said. 'Singapore became 2007's hottest global market, with prime capital values increasing by 50 per cent (in the first half) fueled by astounding rental growth and yield compression.' Singapore's property market is heating up after years of weakness following a regional financial crisis in 1997.
A strong domestic economy and efforts by the island-nation to raise its competitiveness, including a decision to build two massive integrated resorts, have helped perk up the property market. Stuart Crow, head of Asia capital markets at Jones Lang LaSalle, said Asia remains attractive to investors due to its strong economies, improved liquidity through real estate investment trusts and better transparency. 'Cross border investment is at an all-time high, yet is likely to increase further in the next 12 months, particularly in the most sought after markets of Japan, Singapore, India and China,' he said.
In the Americas, total investment was up 32 per cent to US$170.7 billion and investment in Europe climbed 4.0 per cent to US$156.6 billion, with the UK, Germany and France accounting for more than two thirds of the volume, it said. -- AFP
Source: The Business Times, 19 July 2007
Posted by Property Wizkid
Government up the development charges to stem the En Bloc sales fever
Tax payable to enhance use of sites to be raised from 50% to 70%
The Government sprung a surprise on property developers yesterday by dramatically ramping up a tax payable to enhance the use of a site. The move triggered a selldown of property shares on the Singapore Exchange. Developers pay the tax - called a development charge - if they want to enhance the value of a site by building a bigger project, for example.
The rise in the land's value was taxed at 50 per cent, but will now be levied at 70 per cent, similar to what it was in 1985. The same rate will also apply to fees paid to rewind a site's lease back to 99 years. For example, a site that rises in value by $2 million will now be taxed $1.4 million, compared to $1 million previously.
Its broader effect will be to make certain sites more costly, and perhaps take some heat out of a roaring property market that has seen record prices across many housing types. Analyst David Lum from Daiwa Institute of Research said the move is 'another piece of evidence that the Government might be a little uncomfortable with the rapid appreciation in certain segments of the market'.
An immediate casualty could be the buoyant en bloc market, which has seen developers pay huge sums for estates over the past 12 months. And by stemming en bloc sales, which reduce housing stock in the short-term, the hike may even take pressure off rents. Developers will have to recrunch their numbers now - and hopeful owners might have to lower expectations of a bumper en bloc bonanza.
Sing Holdings said yesterday that with the change, it expects the land cost for acquiring Hillcourt Apartments to rise by about 1.2 per cent - from $1,444 per sq ft of potential gross floor area to $1,461. 'The rate revision will add a few percentage points to the total costs of some developments,' said a Savills Singapore director, Mr Ku Swee Yong, who felt the impact on developers will not be great.
Knight Frank's head of research and consultancy, Mr Nicholas Mak, agreed: 'There was a knee-jerk reaction, but it's not going to derail the property boom.' Still, property shares took a hit yesterday. Giants such as CapitaLand and City Developments fell by around 2 per cent or more, while the sector index plunged 2.7 per cent. The rate rise is a double whammy for some firms. Development charges are reviewed every six months, with new rates due on Sept 1.
These charges are designed to mirror property values and are almost certain to rise, given the surging market, thus adding more costs to developers over and above yesterday's rise.
Yesterday's change took immediate effect. It will hit developments that have yet to receive provisional permission to enhance land value, or those granted an extension to their provisional permission from yesterday. This means developers which have done deals over the past two to three months could be hit, said Credo Real Estate managing director Karamjit Singh.
Source: The Straits Times, 19 July 2007
Posted by Property Wizkid
How are the HDB flats doing?
The long dormant public housing market has bounced back with a vengeance, although some areas remain sluggish. New figures from property agencies show that prices of flats sold in Queenstown, for example, shot up by 11.8 per cent on average in the second quarter over the first quarter. Another hot spot was the Kallang/Whampoa area, which was in second place with a 10.2 per cent rise.
As many as eight Housing and Development Board (HDB) estates registered quarterly price rises of 5 per cent or more on average. Prices in Ang Mo Kio, Serangoon and Marine Parade grew by about 7 to 9 per cent. One 116 sq m sea-view flat in Marine Parade sold at a record of $695,000 for the area.
Property agency PropNex's chief executive Mohamed Ismail said the strong upswing in prices was not surprising as many buyers, cash-rich from recent collective sales, were paying premium prices for HDB flats in prime locations, or with good views. Other estates such as Clementi, Bukit Merah, Jurong East and Bishan also posted a healthy growth of about 4 to 6 per cent.
One executive flat in Queenstown sold for $628,000, well above the average of $559,000 for the area.
These figures were released to The Straits Times yesterday by two of the largest property agencies ERA Singapore and PropNex. Both claimed to have a 30 to 40 per cent share of the HDB market. The agencies say they give a clearer picture of recent HDB price movements.
This follows HDB's unexpected move on Monday to disclose average resale prices and the average cash-over-valuation (COV) - the sum paid over market valuation - of flats by region on its website.
Property experts expressed misgivings over the HDB figures, which were grouped according to five clusters of towns, instead of individual towns. 'The figures may not be the true reflection of what the current market is willing to pay for specific estates,' said Mr Ismail. For example, the overall average COV for the West region is $7,400, but in Clementi, the current average market price is $20,000 over valuation, he said.
The property agencies' figures show that some areas are still sluggish. One group of estates, which includes Bedok, the Central area and Geylang, had slower growth at about 1 to 3 per cent. Prices at other towns such as Bukit Batok, Pasir Ris and Yishun hardly moved. Mr Ismail said this was probably because the 'excitement and price awakening' of the second quarter had not reached the outskirts yet. He expects prices in most HDB towns to move upwards in the third quarter.
One effect of the new statistics released from the agencies and HDB is that they serve as a reality check for sellers currently demanding unreasonably high prices due to 'headline' sales reported in some areas recently, analysts say. A five-room flat in Bukit Merah, for example, sold for a mind-boggling $720,000 recently. But the average price for such flats is far lower at $467,000.
ERA assistant vice-president Eugene Lim said sales volumes could have been higher if not for flat-owners looking to 'catch on the initial euphoria'. Buyers and sellers are now beginning to digest the deluge of information. But 'it will take a few weeks for the dust to settle', and for the market to see the real effects, said Mr Lim. An HDB spokesman said yesterday that it is monitoring the market very closely, and will assess the need to provide such data on a regular basis.
Source: The Straits Times, 19 July 2007
Posted by Property Wizkid
What's the hype on Condos built on columns?
The upcoming Frasers Centrepoint Homes condo Soleil@Sinaran is the latest to reflect the trend for soaring buildings raised high on columns. Architects 61, which also designed The Cosmopolitan in the River Valley area, said that by elevating the 417-unit Soleil@Sinaran, 'the privacy of the units is enhanced to greater heights'.
Considerations in the design of Soleil@Sinaran included a high plot ratio of 3.5, a height restriction of about 40 storeys and high-density living. The architects also felt that adjacent mid-rise private flats and Novena Square commercial development had large footprints and, therefore, views were minimised. Architects 61 said: 'Privacy of the lowest level of units is further enhanced by locating it as high from the ground as possible.'
Like The Cosmopolitan - and many other new condominiums - Soleil@Sinaran will rise from above street level. But will columns be the only thing visible from street level? Asked about the impact on the streetscape from buildings raised on columns, the Urban Redevelopment Authority said: 'Generally, in certain areas within the city centre, urban design guidelines are put in place where the context requires buildings to relate to the street and their surrounding developments.'In the case of The Cosmopolitan, it is located in a residential area where the relation of the building to the street is not as critical. Hence the guidelines do not specifically require the building to do so.'
For Soleil@Sinaran, raising the building has allowed Architects 61 to free more space for landscaping that will include lagoons, pool lounges, entertainment pavilions with spa alcoves and spa pavilions to create a 'green podium'. 'The landscaping extends into the depth of the tower footprint,' the architects said. 'Trees grown within the covered first-storey terrace provide a human scale to the tower rising above, 'dissolving' the boundary between the inside and the outside. It is this landscaped podium that provides the human scale at street level.' Soleil@Sinaran is expected to be launched mid-August. Prices have not be fixed yet.
Source: The Business Times, 19 July 2007
Posted by Property Wizkid
Napier tags $4k-$4.5k psf for its 46 units. Any takers?
Two new projects have been put on the market - 8napier on the former Eng Lok Mansion site near Botanic Gardens, and The Rochester in the one-north precinct.
Prices at the 46-unit 8napier range from $4,000 to $4,500 per sq ft for apartments, and for now, the plan is to limit sales to just 10 to 12 apartments in the freehold development. 'We may sell another dozen or so apartments when our showflat is ready on site in a few months' time. But we plan to keep the rest of the project, including the six penthouses, for sale after the project is completed, which will probably be around end-2009,' Mark Wee, director of Napier Properties, said when contacted by BT yesterday.The company, controlled by Mr Wee and former Parkway boss Tony Tan, is currently previewing the project at its office on the 21st floor of Ngee Ann City Tower A.
The 10-storey 8napier has 40 apartments (either three- or four-bedder units) and six penthouses. All the penthouses are duplex units, ranging in size from more than 4,000 sq ft to nearly 6,000 sq ft. They are expected to be sold by auction. The smallest three-bedder apartment in the project is just over 2,000 sq ft and is priced at about $8 million. 'All the units come fully loaded with top-notch lighting, sound system and kitchen equipment, bathroom fittings and the like, so that our buyers do not have to do any renovations as we are fitting the units to the highest standard currently available in the Singapore market. This should minimise the hassle of moving in,' Mr Wee said. He declined to say how many units have been sold so far but buyers are understood to be a mix of foreigners and Singaporeans.
United Engineers is believed to have priced The Rochester apartments in the $1,000 to $1,200 per sq ft range. UE could not provide the average price yesterday when contacted by BT. The 99-year leasehold project is opposite One North Residences, which was sold earlier this year at an average price of around $900-950 per sq ft, market watchers said.
The Rochester has a total of 368 residential units, including eight penthouses, in a 36-storey block. The project is part of a mixed development that also includes a 100,000 sq ft mall and hotel. The entire project is slated for completion around 2009-10. The residential component comprises one, two, and three-bedroom apartments and penthouses. Some of the one-bedders are duplexes. UE began selling the units yesterday, according to its spokesman.
Source: The Business Times, 17 July 2007
Posted by Property Wizkid
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