Source : Business Times - 26 Apr 2008
SINGAPORE’S top two developers are expected to report strong core earnings from apartment sales thanks to a three-year property boom, but slower sales since late last year will hit full-year results in 2008.
Private home prices in the city-state jumped 31 per cent in 2007 for the largest increase in eight years, but growth slowed for a second consecutive quarter in January-March as volumes slumped to the lowest since the Sars epidemic in 2003.
Government moves to cool the market, by ending a scheme that allowed delayed payments, coupled with the impact of a global economic slowdown, are expected to hit top developers CapitaLand and City Developments.
This week, Singapore’s third-biggest developer Keppel Land by market value, reported a 3.5 per cent fall in quarterly net profit as new property launches were hurt by the US sub-prime mortgage crisis.
‘Volumes have dwindled down to a trickle as the halt of the deferred payment scheme coincided with the sub-prime issue,’ said Kim Eng property analyst Wilson Liew, who has cut annual forecasts for Singapore developers by 15-18 percent to reflect lower sales.
For the first quarter, CapitaLand, South-east Asia’s largest developer by market value, is expected to report a 59 per cent drop in net profit in the absence of divestment and revaluation gains, analysts said.
Divestment gains, coupled with the sale of an office building and the sale of units in its Ascott Residence Trust, had lifted results five-fold in the first quarter of 2007.
‘CapitaLand will probably continue to book some revaluation gains this year, but most of the increments would already have been booked in 2007,’ Mr Liew said.
CapitaLand’s aggressive moves to grow in overseas markets such as China and India are expected to help it weather a slowdown in Singapore’s property sector. Overseas operations contributed 40 per cent to CapitaLand’s profits in 2007.
City Developments, Singapore’s second-biggest developer, is expected to report a 63 per cent jump in first-quarter net profit, boosted by strong sales of its luxury apartments in the last two years.
‘CityDev is best poised to ride out the current downturn in the property sector and will be a key mover upon the first signs of a market recovery,’ said DBS Vickers analyst Lock Mun Yee, adding that the developer had a large landbank and deep pockets to delay launches until conditions improved. — Reuters
Monday, April 28, 2008
Property market sentiment softens
Source : Today - 26 Apr 2008
Supply of homes, vacancy rates up, but buyers discouraged by high prices
THE lacklustre property market seen in the first quarter of this year is likely to persist, with developers expected to launch more projects in the months ahead, increasing the supply of new homes even as buyers stay away.
The prices of homes in both the private and public sectors rose at a much slower pace in the first quarter while the volume of transactions remained thin.
Private home prices rose 3.7 per cent in the first quarter, according to the Urban Redevelopment Authority (URA), lower than its earlier estimate of 4.2 per cent and well below the 6.8-per-cent rise in the previous quarter.
Developers sold 762 private residential units in the quarter, the lowest number of transactions since Sars-stricken 2003.
The URA data released on Friday for the full three months were an update from its April 1 estimates, which were based on transactions in the first 10 weeks of the quarter.
“This is quite a marked difference and it shows that in the last two weeks of the quarter, there has been some evidence of price cutting in the market,” said Mr Donald Han, managing director of real estate firm Cushman and Wakefield.
The vacancy rate for completed private residential units rose 6.3 per cent, up from 5.6 per cent in the previous quarter, the URA data showed. With more supply in the market, there is added pressure to reduce prices.
“If the vacancies continue rising at this rate, the market will definitely turn this year. Prices will peak for sure,” said Mr Colin Tan, head of consultancy and research at Chesterton International.
Among the projects to be launched in the coming months are the Marina Bay Suites and Duchess Royale on Duchess Avenue. They add on to developments such as The Verte at Telok Kurau and Waterfront Waves at Bedok Reservoir Road that were launched in the first quarter.
Foreigners — who have been a key catalyst in the 30-per-cent jump in private home prices last year — are increasingly being discouraged by high asking prices.
This is especially so amid the continued uncertainty over the United States economy and the fallout from the sub-prime mortgage crisis.
Kuwait Finance House, which last December took an option to buy 97 units of the luxurious Goodwood Residence condominium for $818 million from Guocoland, has decided not to go through with the purchase.
The lacklustre real estate market in Singapore and the region has affected the performance of listed property firms.
Keppel Land reported a 7.6-per-cent fall in property sales to $273.1 million in the first three months of the year due to the increasingly cautious sentiment.
Mr Ku Swee Yong, a director at property consultancy Savills, said that until global stock markets show clear signs of a recovery, investors would remain wary of putting their money in real estate. He noted that banks here had not been selling many home loans this year.
“Other parts of consumer expenditure are still going strong, it’s just that property is taking the brunt of it,” said Mr Ku.
For the office sector, rentals increased at a slower rate of 7.3 per cent, down from 10.9 per cent in the previous quarter.
The URA said there was a total supply of 16 million sq ft in gross floor area of office space at the end of the first quarter.
Since last July, the Government has made available land on short-term leases for transitional office sites to meet the high demand for such space.
Mr Han said that the pace of office rental increase would continue to moderate for the rest of the year.
Mr Nicholas Mak, a director from Knight Frank, said that despite this moderation in pace, rentals will still rise by 15 to 20 per cent this year as “demand for office space is still healthy”.
Resale transactions for HDB flats down down 6%
The public housing market is also showing nascent signs of waning.
The number of resale transactions of Housing and Development Board (HDB)flats fell 6 per cent to 6,360 in the first quarter of the year from 6,750 in the previous quarter. Meanwhile, the HDB Resale Price Index rose 3.7 per cent from the previous quarter, down from 5.7 per cent in the fourth quarter of last year.
“HDB flat buyers were resisting the rise in resale prices,” said assistant vice-president of property agency ERA Eugene Lim.
The median cash-over-valuation (COV) for resale transactions was $21,000 in the first quarter, slightly lower than the previous quarter’s $22,000. The COV is the difference between the actual transacted price of the flat and its valuation. It cannot be paid from a loan or from savings in the Central Provident Fund.
“We saw the resale market hitting resistance level in the fourth quarter last year as HDB flat buyers do not have or are not willing to part with so much cash. This resistance carried through to the first quarter,” said Mr Lim.
“Very often, the deal cannot be closed or takes much longer to close because of unrealistic sellers demanding high COV,” he added.
Also, with more new flats coming on stream, some demand will be removed from the resale market. Buyers who can afford to wait up to three years for the completion of the flats may prefer to buy new flats directly from the HDB as this often involves a very small or no immediate cash outlay.
Supply of homes, vacancy rates up, but buyers discouraged by high prices
THE lacklustre property market seen in the first quarter of this year is likely to persist, with developers expected to launch more projects in the months ahead, increasing the supply of new homes even as buyers stay away.
The prices of homes in both the private and public sectors rose at a much slower pace in the first quarter while the volume of transactions remained thin.
Private home prices rose 3.7 per cent in the first quarter, according to the Urban Redevelopment Authority (URA), lower than its earlier estimate of 4.2 per cent and well below the 6.8-per-cent rise in the previous quarter.
Developers sold 762 private residential units in the quarter, the lowest number of transactions since Sars-stricken 2003.
The URA data released on Friday for the full three months were an update from its April 1 estimates, which were based on transactions in the first 10 weeks of the quarter.
“This is quite a marked difference and it shows that in the last two weeks of the quarter, there has been some evidence of price cutting in the market,” said Mr Donald Han, managing director of real estate firm Cushman and Wakefield.
The vacancy rate for completed private residential units rose 6.3 per cent, up from 5.6 per cent in the previous quarter, the URA data showed. With more supply in the market, there is added pressure to reduce prices.
“If the vacancies continue rising at this rate, the market will definitely turn this year. Prices will peak for sure,” said Mr Colin Tan, head of consultancy and research at Chesterton International.
Among the projects to be launched in the coming months are the Marina Bay Suites and Duchess Royale on Duchess Avenue. They add on to developments such as The Verte at Telok Kurau and Waterfront Waves at Bedok Reservoir Road that were launched in the first quarter.
Foreigners — who have been a key catalyst in the 30-per-cent jump in private home prices last year — are increasingly being discouraged by high asking prices.
This is especially so amid the continued uncertainty over the United States economy and the fallout from the sub-prime mortgage crisis.
Kuwait Finance House, which last December took an option to buy 97 units of the luxurious Goodwood Residence condominium for $818 million from Guocoland, has decided not to go through with the purchase.
The lacklustre real estate market in Singapore and the region has affected the performance of listed property firms.
Keppel Land reported a 7.6-per-cent fall in property sales to $273.1 million in the first three months of the year due to the increasingly cautious sentiment.
Mr Ku Swee Yong, a director at property consultancy Savills, said that until global stock markets show clear signs of a recovery, investors would remain wary of putting their money in real estate. He noted that banks here had not been selling many home loans this year.
“Other parts of consumer expenditure are still going strong, it’s just that property is taking the brunt of it,” said Mr Ku.
For the office sector, rentals increased at a slower rate of 7.3 per cent, down from 10.9 per cent in the previous quarter.
The URA said there was a total supply of 16 million sq ft in gross floor area of office space at the end of the first quarter.
Since last July, the Government has made available land on short-term leases for transitional office sites to meet the high demand for such space.
Mr Han said that the pace of office rental increase would continue to moderate for the rest of the year.
Mr Nicholas Mak, a director from Knight Frank, said that despite this moderation in pace, rentals will still rise by 15 to 20 per cent this year as “demand for office space is still healthy”.
Resale transactions for HDB flats down down 6%
The public housing market is also showing nascent signs of waning.
The number of resale transactions of Housing and Development Board (HDB)flats fell 6 per cent to 6,360 in the first quarter of the year from 6,750 in the previous quarter. Meanwhile, the HDB Resale Price Index rose 3.7 per cent from the previous quarter, down from 5.7 per cent in the fourth quarter of last year.
“HDB flat buyers were resisting the rise in resale prices,” said assistant vice-president of property agency ERA Eugene Lim.
The median cash-over-valuation (COV) for resale transactions was $21,000 in the first quarter, slightly lower than the previous quarter’s $22,000. The COV is the difference between the actual transacted price of the flat and its valuation. It cannot be paid from a loan or from savings in the Central Provident Fund.
“We saw the resale market hitting resistance level in the fourth quarter last year as HDB flat buyers do not have or are not willing to part with so much cash. This resistance carried through to the first quarter,” said Mr Lim.
“Very often, the deal cannot be closed or takes much longer to close because of unrealistic sellers demanding high COV,” he added.
Also, with more new flats coming on stream, some demand will be removed from the resale market. Buyers who can afford to wait up to three years for the completion of the flats may prefer to buy new flats directly from the HDB as this often involves a very small or no immediate cash outlay.
Residential sector seen taking hit
Source : Business Times - 22 Apr 2008
Prices expected to fall further, with the high-end most at risk due to a lack of foreigner interest, reports UMA SHANKARI
RESIDENTIAL markets across Asia are expected to take a hit in the wake of the credit crunch in the US. While the residential sectors in key Asian cities are forecast to continue to grow strongly, as they have since the start of 2007, equity bull markets were the main contributing factor to well-received launches last year, industry sources say. ‘Without the sentiment that has pushed up capital values and rents of residential property across the region, there will obviously be some slackening,’ a market player says.
However, the fundamentals of the region - including Singapore - are strong, which means residential markets should not take too hard a beating, analysts point out.
‘The story of real estate in Asia is one of continuing investment - particularly by foreigners. Occupier demand remains in place, and with limited supply in most developing cities, the future looks fine,’ property firm Cushman & Wakefield (C&W) says in a recent report.
The report notes, however, that Hong Kong and Singapore are the two cities expected to be most affected by the credit crunch and global economic slowdown
In Singapore, the impact on the residential market is already being felt, with slowing sales and price cuts.
The number of new homes sold in the first quarter of 2008 was 787, or about half the 1,449 sold in the previous quarter, official data shows.
DTZ Debenham Tie Leung, for one, points out that the numbers represent the second-lowest quarter of developer sales since Sars-hit Q1 2003.
The lacklustre performance is expected to continue, say property analysts.
‘The current market sentiment is likely to continue into the second quarter,’ says Li Hiaw Ho, executive director for research at CB Richard Ellis (CBRE).
Nicholas Mak, director of research and consultancy at Knight Frank, agrees. ‘Sales are expected to stay thin in the coming few months due to the continuing uncertainty about the US economic outlook and financial market problems. Home-buyers, especially in the mass-market segment, are expected to remain cautious until there is a sustained recovery in financial markets and economic conditions, which would spill over to the property market.’
Interestingly, news has emerged that some developers are starting to cut their prices - a sure sign of weakening market sentiment.
A recent media report says property heavyweight Far East Organization has achieved encouraging sales for three 99-year leasehold suburban projects - after it trimmed their prices 3-5 per cent after the Chinese New Year.
‘If the credit crisis or economic slowdown deepens, launches and take-up would remain subdued and prices are likely to ease,’ according to DTZ. ‘Some smaller developers have lowered prices to dispose of their units and this may spread as the residential property market is largely affected by sentiments.’
UBS Investment Research notes similarly that it expects mass-market projects to be launched at lower-than-expected prices. Sentosa Cove prices have also fallen - 13-20 per cent in Q1 2008, potentially wiping out the profit of Sentosa sites bought by SC Global and Ho Bee, UBS notes.
‘We expect the negative news to motivate sellers to close the wide bid-ask spreads and home prices to fall further, with high-end prices most at risk due to a lack of foreigner interest,’ UBS analyst Regina Lim says in a recent note.
Her research team has downgraded its residential price forecasts for 2008 and 2009 by as much as 20 per cent - expecting prices in prime and mid-range segments to fall 20 per cent and 10 per cent respectively. Mass-market prices are expected to hold steady.
Rent increases for private residential property are also likely to moderate due to budget constraints and the slower influx of expatriates, analysts say.
And residential investment sales also fell hard in Q1 2008, data from property firm Colliers International shows.
‘Investment sales value dipped some 35.7 per cent in Q1 2008 to $2.27 billion, from $3.54 billion in the preceding quarter,’ the firm says.
Colliers notes, in particular, that the residential collective sales market virtually ground to a halt in Q1, with just one deal - that of Ban Guan Park for $31.1 million or $871 per square foot per plot ratio. This was a big slide from $1.16 billion sealed in Q4 2007 from 10 collective sale sites, and a dramatic plunge from 41 collective sale transactions totalling some $6.53 billion sealed during the peak in Q2 2007.
Despite all the negative news, there seems to be some optimism. DBS Group Research, for example, recently upgraded its call on the Singapore property sector from ‘neutral’ to ‘overweight’.
But many are taking a wait-and-see approach to the market, including the residential segment.
‘We believe Singapore’s property secular uptrend is still intact, thanks to its ongoing efforts to transform itself into a globalised city-state,’ says DBS Vickers Securities analyst Lock Mun Yee.
‘However, in the near term, spillover uncertainties from the credit crunch and talks of a possible US recession have affected sentiment.’
According to Margaret Thean, DTZ’s executive director for residential: ‘It is still too early to gauge the residential sector performance as this is just the first quarter.’
Prices expected to fall further, with the high-end most at risk due to a lack of foreigner interest, reports UMA SHANKARI
RESIDENTIAL markets across Asia are expected to take a hit in the wake of the credit crunch in the US. While the residential sectors in key Asian cities are forecast to continue to grow strongly, as they have since the start of 2007, equity bull markets were the main contributing factor to well-received launches last year, industry sources say. ‘Without the sentiment that has pushed up capital values and rents of residential property across the region, there will obviously be some slackening,’ a market player says.
However, the fundamentals of the region - including Singapore - are strong, which means residential markets should not take too hard a beating, analysts point out.
‘The story of real estate in Asia is one of continuing investment - particularly by foreigners. Occupier demand remains in place, and with limited supply in most developing cities, the future looks fine,’ property firm Cushman & Wakefield (C&W) says in a recent report.
The report notes, however, that Hong Kong and Singapore are the two cities expected to be most affected by the credit crunch and global economic slowdown
In Singapore, the impact on the residential market is already being felt, with slowing sales and price cuts.
The number of new homes sold in the first quarter of 2008 was 787, or about half the 1,449 sold in the previous quarter, official data shows.
DTZ Debenham Tie Leung, for one, points out that the numbers represent the second-lowest quarter of developer sales since Sars-hit Q1 2003.
The lacklustre performance is expected to continue, say property analysts.
‘The current market sentiment is likely to continue into the second quarter,’ says Li Hiaw Ho, executive director for research at CB Richard Ellis (CBRE).
Nicholas Mak, director of research and consultancy at Knight Frank, agrees. ‘Sales are expected to stay thin in the coming few months due to the continuing uncertainty about the US economic outlook and financial market problems. Home-buyers, especially in the mass-market segment, are expected to remain cautious until there is a sustained recovery in financial markets and economic conditions, which would spill over to the property market.’
Interestingly, news has emerged that some developers are starting to cut their prices - a sure sign of weakening market sentiment.
A recent media report says property heavyweight Far East Organization has achieved encouraging sales for three 99-year leasehold suburban projects - after it trimmed their prices 3-5 per cent after the Chinese New Year.
‘If the credit crisis or economic slowdown deepens, launches and take-up would remain subdued and prices are likely to ease,’ according to DTZ. ‘Some smaller developers have lowered prices to dispose of their units and this may spread as the residential property market is largely affected by sentiments.’
UBS Investment Research notes similarly that it expects mass-market projects to be launched at lower-than-expected prices. Sentosa Cove prices have also fallen - 13-20 per cent in Q1 2008, potentially wiping out the profit of Sentosa sites bought by SC Global and Ho Bee, UBS notes.
‘We expect the negative news to motivate sellers to close the wide bid-ask spreads and home prices to fall further, with high-end prices most at risk due to a lack of foreigner interest,’ UBS analyst Regina Lim says in a recent note.
Her research team has downgraded its residential price forecasts for 2008 and 2009 by as much as 20 per cent - expecting prices in prime and mid-range segments to fall 20 per cent and 10 per cent respectively. Mass-market prices are expected to hold steady.
Rent increases for private residential property are also likely to moderate due to budget constraints and the slower influx of expatriates, analysts say.
And residential investment sales also fell hard in Q1 2008, data from property firm Colliers International shows.
‘Investment sales value dipped some 35.7 per cent in Q1 2008 to $2.27 billion, from $3.54 billion in the preceding quarter,’ the firm says.
Colliers notes, in particular, that the residential collective sales market virtually ground to a halt in Q1, with just one deal - that of Ban Guan Park for $31.1 million or $871 per square foot per plot ratio. This was a big slide from $1.16 billion sealed in Q4 2007 from 10 collective sale sites, and a dramatic plunge from 41 collective sale transactions totalling some $6.53 billion sealed during the peak in Q2 2007.
Despite all the negative news, there seems to be some optimism. DBS Group Research, for example, recently upgraded its call on the Singapore property sector from ‘neutral’ to ‘overweight’.
But many are taking a wait-and-see approach to the market, including the residential segment.
‘We believe Singapore’s property secular uptrend is still intact, thanks to its ongoing efforts to transform itself into a globalised city-state,’ says DBS Vickers Securities analyst Lock Mun Yee.
‘However, in the near term, spillover uncertainties from the credit crunch and talks of a possible US recession have affected sentiment.’
According to Margaret Thean, DTZ’s executive director for residential: ‘It is still too early to gauge the residential sector performance as this is just the first quarter.’
Majority owners at Airview Towers win appeal
Source : Business Times - 25 Apr 2008
THE Court of Appeal has overturned the ruling by the High Court and Strata Titles Board (STB) on the collective sale of Airview Towers, paving the way for mainboard-listed Bukit Sembawang Estates to acquire the property for $202 million.
Located at St Thomas Walk, Airview Towers became the subject of a civil appeal after a sole resident, Ken Lee, objected to the collective sale, arguing that the minimum 80 per cent approval rate needed was not met in time.
This was because during the process of the collective sale, a few owners had sold their units and their successors had apparently not signed the documents agreeing to the en bloc sale at the date of application.
Although STB and the High Court had ruled in Mr Lee’s favour, the Court of Appeal rejected their decision, based on a different interpretation of the reference period during which the minimum approval should be obtained.
The Court of Appeal also ruled that when previous flat-owners signed in favour of the en bloc sale during the permitted period, they also bound their property successors in title.
The group of majority owners in favour of the collective sale was represented by Harry Elias Partnership. The collective sale of the freehold property is expected to rake in about $2 million for each of the 100 owners.
Bukit Sembawang Estates plans to build a 36-storey condominium at the site.
Shares of Bukit Sembawang Estates were unchanged at $9.50 yesterday.
THE Court of Appeal has overturned the ruling by the High Court and Strata Titles Board (STB) on the collective sale of Airview Towers, paving the way for mainboard-listed Bukit Sembawang Estates to acquire the property for $202 million.
Located at St Thomas Walk, Airview Towers became the subject of a civil appeal after a sole resident, Ken Lee, objected to the collective sale, arguing that the minimum 80 per cent approval rate needed was not met in time.
This was because during the process of the collective sale, a few owners had sold their units and their successors had apparently not signed the documents agreeing to the en bloc sale at the date of application.
Although STB and the High Court had ruled in Mr Lee’s favour, the Court of Appeal rejected their decision, based on a different interpretation of the reference period during which the minimum approval should be obtained.
The Court of Appeal also ruled that when previous flat-owners signed in favour of the en bloc sale during the permitted period, they also bound their property successors in title.
The group of majority owners in favour of the collective sale was represented by Harry Elias Partnership. The collective sale of the freehold property is expected to rake in about $2 million for each of the 100 owners.
Bukit Sembawang Estates plans to build a 36-storey condominium at the site.
Shares of Bukit Sembawang Estates were unchanged at $9.50 yesterday.
Airview Towers en bloc case back to Strata board
Source : Straits Times - 25 Apr 2008
THE $202 million collective sale of Airview Towers may now be back on after the Court of Appeal yesterday overturned a High Court decision to axe the sale.
The case now goes back to the Strata Titles Board (STB), which will decide whether to approve the sale.
The Court of Appeal found that the 80 per cent requirement for a collective sale to go through was not necessary at the point of application with the STB.
Owners can apply for an STB order as long as the 80 per cent approval of owners is achieved within the set 12-month period for collecting signatures.
The STB and the High Court had rejected the sale of the River Valley area condominium to Bukit Sembawang Estates. They interpreted the law to mean that the 80 per cent requirement was necessary as at the date of application with the STB over the sale.
The Court of Appeal also found that the collective sale agreement bound all owners, including new ones who might have purchased a unit from a majority owner during the collective sale process.
The original owners, in signing up for a collective sale, signed for themselves and future buyers. Part of the dispute centred on two flats the owners sold after signing up for the sale.
The 100-unit estate had one objector, Mr Ken Lee, who was unrepresented. He was ordered to pay costs at the STB, High Court and Court of Appeal levels.
THE $202 million collective sale of Airview Towers may now be back on after the Court of Appeal yesterday overturned a High Court decision to axe the sale.
The case now goes back to the Strata Titles Board (STB), which will decide whether to approve the sale.
The Court of Appeal found that the 80 per cent requirement for a collective sale to go through was not necessary at the point of application with the STB.
Owners can apply for an STB order as long as the 80 per cent approval of owners is achieved within the set 12-month period for collecting signatures.
The STB and the High Court had rejected the sale of the River Valley area condominium to Bukit Sembawang Estates. They interpreted the law to mean that the 80 per cent requirement was necessary as at the date of application with the STB over the sale.
The Court of Appeal also found that the collective sale agreement bound all owners, including new ones who might have purchased a unit from a majority owner during the collective sale process.
The original owners, in signing up for a collective sale, signed for themselves and future buyers. Part of the dispute centred on two flats the owners sold after signing up for the sale.
The 100-unit estate had one objector, Mr Ken Lee, who was unrepresented. He was ordered to pay costs at the STB, High Court and Court of Appeal levels.
Sharp drop in Q1 new home sales
Source : Today - 18 Apr 2008
But don’t expect prices to fall, say analysts
IN another sign of a lull in the private residential property market, developers managed to sell only 795 new homes in the first three months of this year — a hefty 46 per cent decline from the fourth quarter of last year.
“This was the second lowest quarter of developer sales since the Sars-stricken quarter” in the first three months of 2003, said DTZ Research in the real estate consultancy’s first-quarter Singapore Property Market Report released yesterday.
“Developers and buyers are taking a wait-and-see attitude and some are holding back launches,” said DTZ in the report.
According to the Urban Redevelopment Authority (URA), developers launched 1,395 units in the first quarter this year, 291 fewer than the 1,686 in the previous quarter.
But even with the dwindling activity in the first quarter, most developers — especially the larger ones — are in no hurry to cut prices. “Developers were still able to put up with lacklustre sales, bolstered by the revenue surge during the past two years,” noted DTZ.
The bigger and more established developers are likely to hold out until the market regains its firm footing — unless a darker cloud of prolonged gloom descends in the form of a deepening United States sub-prime mortgage crisis or regional uncertainties, said Mr Donald Han, managing director of real estate firm Cushman and Wakefield.
Currently, a generally optimistic outlook for Singapore’s economy continues to prop up the property market. In fact, larger developers may even hold out for as long as two years until the Temporary Occupation Permits are obtained for their projects.
And even then, they may choose to rent out instead of selling the new apartments. Indeed, monthly rents of prime apartments have risen between 2.1 and 2.5 per cent quarter-on-quarter, noted the DTZ report.
However, some smaller developers subject to tighter bank credit, may yield to pressure to cut prices.
“Some developers may have taken out loans pegged to higher interest rates so they may price their property lower to clear stock,” said Mr Han.
Earlier this month, estimates from the URA showed that the rise in home prices had been moderating, with prices up 4.2 per cent in the first three months, down from the 6.8 per cent growth in the previous quarter. Overall, there were only about 2,000 private residential transactions in January and February this year, down sharply from the 5,200 deals recorded over the same period last year.
The number of private home transactions has fallen in part due to the cooling of en bloc sales, which stood at a “standstill” in the first quarter, noted real estate firm Colliers International.
There was just one collective deal — that of Ban Guan Park at Holland Road with a price tag of $31.1 million.
At the peak of en bloc fever in the second quarter of last year, there were 41 collective sales worth a total of about $6.5 billion, which supplied the market with potential buyers.
While the residential sector is cooling down, other segments of the property market such as office, industrial and retail are going strong. This has kept overall property investment sales at $8.4 billion in the first quarter this year, just 1 per cent above the previous quarter, according to the DTZ report.
But don’t expect prices to fall, say analysts
IN another sign of a lull in the private residential property market, developers managed to sell only 795 new homes in the first three months of this year — a hefty 46 per cent decline from the fourth quarter of last year.
“This was the second lowest quarter of developer sales since the Sars-stricken quarter” in the first three months of 2003, said DTZ Research in the real estate consultancy’s first-quarter Singapore Property Market Report released yesterday.
“Developers and buyers are taking a wait-and-see attitude and some are holding back launches,” said DTZ in the report.
According to the Urban Redevelopment Authority (URA), developers launched 1,395 units in the first quarter this year, 291 fewer than the 1,686 in the previous quarter.
But even with the dwindling activity in the first quarter, most developers — especially the larger ones — are in no hurry to cut prices. “Developers were still able to put up with lacklustre sales, bolstered by the revenue surge during the past two years,” noted DTZ.
The bigger and more established developers are likely to hold out until the market regains its firm footing — unless a darker cloud of prolonged gloom descends in the form of a deepening United States sub-prime mortgage crisis or regional uncertainties, said Mr Donald Han, managing director of real estate firm Cushman and Wakefield.
Currently, a generally optimistic outlook for Singapore’s economy continues to prop up the property market. In fact, larger developers may even hold out for as long as two years until the Temporary Occupation Permits are obtained for their projects.
And even then, they may choose to rent out instead of selling the new apartments. Indeed, monthly rents of prime apartments have risen between 2.1 and 2.5 per cent quarter-on-quarter, noted the DTZ report.
However, some smaller developers subject to tighter bank credit, may yield to pressure to cut prices.
“Some developers may have taken out loans pegged to higher interest rates so they may price their property lower to clear stock,” said Mr Han.
Earlier this month, estimates from the URA showed that the rise in home prices had been moderating, with prices up 4.2 per cent in the first three months, down from the 6.8 per cent growth in the previous quarter. Overall, there were only about 2,000 private residential transactions in January and February this year, down sharply from the 5,200 deals recorded over the same period last year.
The number of private home transactions has fallen in part due to the cooling of en bloc sales, which stood at a “standstill” in the first quarter, noted real estate firm Colliers International.
There was just one collective deal — that of Ban Guan Park at Holland Road with a price tag of $31.1 million.
At the peak of en bloc fever in the second quarter of last year, there were 41 collective sales worth a total of about $6.5 billion, which supplied the market with potential buyers.
While the residential sector is cooling down, other segments of the property market such as office, industrial and retail are going strong. This has kept overall property investment sales at $8.4 billion in the first quarter this year, just 1 per cent above the previous quarter, according to the DTZ report.
Regent Garden owners ordered to complete en bloc sale to Allgreen
Source : Straits Times - 17 Apr 2008
OWNERS at Regent Garden must complete the collective sale of their condominium after the High Court handed down a landmark decision in favour of developer Allgreen Properties yesterday.
The $34 million sale, which the Strata Titles Board (STB) threw out in late January, must be finalised by May 16.
The decision ends one of the more unusual collective sale disputes.
Initially, 25 owners signed off on the sale in April last year, but they later tried to overturn the deal, claiming, among other things, that the condo was undervalued.
Although the owners had opted for a fixed $34 million price, they were unhappy that a development charge payable by Allgreen turned out to be much lower than expected.
There were six dissenting owners in April, however. They later withdrew their objections, but the case still went to the STB.
The STB usually assesses a sale if there are objections. In this case, however, the sale was now unanimous. Yet, it said it was still required to examine the case, whether objections were filed or not, to satisfy itself that the sale was made in good faith. It axed the deal in January, ruling that it had not been done in good faith.
Allgreen had already asked the High Court for an order to get the majority owners to complete the sale. It argued that the STB had no need to even examine the sale, as all owners had agreed to sell.
The court agreed, ruling that allegations of mistake and breach of contract were without merit and that the STB’s decision to halt the sale of the West Coast Road estate was irrelevant. It also ordered the 25 owners to pay Allgreen’s costs.
The developer said in a statement last night that the 25 owners who signed the deal had subsequently asked Allgreen to raise its sale price. It refused.
‘Allgreen had entered into a solemn contract. It was not prepared on account of the baseless allegations to renegotiate the price,’ it said.
The developer also described the decision as a ‘victory for the sanctity of contract’ and sent a ’strong message’ that owners would be held to their bargain.
Allgreen was represented by senior counsel Davinder Singh, while the 25 majority owners were represented by senior counsel Molly Lim.
OWNERS at Regent Garden must complete the collective sale of their condominium after the High Court handed down a landmark decision in favour of developer Allgreen Properties yesterday.
The $34 million sale, which the Strata Titles Board (STB) threw out in late January, must be finalised by May 16.
The decision ends one of the more unusual collective sale disputes.
Initially, 25 owners signed off on the sale in April last year, but they later tried to overturn the deal, claiming, among other things, that the condo was undervalued.
Although the owners had opted for a fixed $34 million price, they were unhappy that a development charge payable by Allgreen turned out to be much lower than expected.
There were six dissenting owners in April, however. They later withdrew their objections, but the case still went to the STB.
The STB usually assesses a sale if there are objections. In this case, however, the sale was now unanimous. Yet, it said it was still required to examine the case, whether objections were filed or not, to satisfy itself that the sale was made in good faith. It axed the deal in January, ruling that it had not been done in good faith.
Allgreen had already asked the High Court for an order to get the majority owners to complete the sale. It argued that the STB had no need to even examine the sale, as all owners had agreed to sell.
The court agreed, ruling that allegations of mistake and breach of contract were without merit and that the STB’s decision to halt the sale of the West Coast Road estate was irrelevant. It also ordered the 25 owners to pay Allgreen’s costs.
The developer said in a statement last night that the 25 owners who signed the deal had subsequently asked Allgreen to raise its sale price. It refused.
‘Allgreen had entered into a solemn contract. It was not prepared on account of the baseless allegations to renegotiate the price,’ it said.
The developer also described the decision as a ‘victory for the sanctity of contract’ and sent a ’strong message’ that owners would be held to their bargain.
Allgreen was represented by senior counsel Davinder Singh, while the 25 majority owners were represented by senior counsel Molly Lim.
Court directs Regent Garden sale to Allgreen to proceed
Source : Business Times - 17 Apr 2008
THE stop-start en bloc sale of Regent Garden, a 31-unit West Coast Road condominium, to Allgreen Properties looks set to finally go through after the High Court yesterday directed the majority owners to complete the agreement.
The court also ruled that the Strata Titles Board’s decision in January to reject the deal was irrelevant and ordered the majority owners to pay costs to Allgreen, the developer.
The agreement with Allgreen, originally signed in April last year, was first delayed when six owners out of the 31 held out.
When the dissenting six finally agreed to sell out by November, the majority owners, who together own 25 units and over 80 per cent of the share value in Regent Garden, did an about turn and tried to abort the deal, arguing that the $34 million sale price was too low partly because of a wrongly estimated $7.2 million development charge.
They wanted the High Court to void the agreement, or alternatively, to award damages or an addition to the sale price.
Allgreen, represented by Davinder Singh of Drew & Napier LLC, itself went to the High Court in mid-January to ask for an order requiring the majority owners to complete the sale deal. The six minority owners joined in the proceedings as well.
But on Jan 30, the Strata Titles Board ruled the sale had not been done in good faith because Regent Garden’s valuation was wrong and well below the market price.
Yesterday, Allgreen said in a statement that ‘the decision by the High Court is a victory for the sanctity of contract and is a strong message that owners will be held to their bargain’.
‘The court’s decision is very good news for the entire industry,’ said Allgreen.
The majority owners were represented by Molly Lim of Wong Tan & Molly Lim LLC.
THE stop-start en bloc sale of Regent Garden, a 31-unit West Coast Road condominium, to Allgreen Properties looks set to finally go through after the High Court yesterday directed the majority owners to complete the agreement.
The court also ruled that the Strata Titles Board’s decision in January to reject the deal was irrelevant and ordered the majority owners to pay costs to Allgreen, the developer.
The agreement with Allgreen, originally signed in April last year, was first delayed when six owners out of the 31 held out.
When the dissenting six finally agreed to sell out by November, the majority owners, who together own 25 units and over 80 per cent of the share value in Regent Garden, did an about turn and tried to abort the deal, arguing that the $34 million sale price was too low partly because of a wrongly estimated $7.2 million development charge.
They wanted the High Court to void the agreement, or alternatively, to award damages or an addition to the sale price.
Allgreen, represented by Davinder Singh of Drew & Napier LLC, itself went to the High Court in mid-January to ask for an order requiring the majority owners to complete the sale deal. The six minority owners joined in the proceedings as well.
But on Jan 30, the Strata Titles Board ruled the sale had not been done in good faith because Regent Garden’s valuation was wrong and well below the market price.
Yesterday, Allgreen said in a statement that ‘the decision by the High Court is a victory for the sanctity of contract and is a strong message that owners will be held to their bargain’.
‘The court’s decision is very good news for the entire industry,’ said Allgreen.
The majority owners were represented by Molly Lim of Wong Tan & Molly Lim LLC.
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