A tale of New versus Resale

You may have already seen these reports in the ST today.

There seem to be no let up in momentum for recent property launches, especially for new developments with “smallish” units. However, it will be interesting to see what the rental situation be like once all these “shoe-box” apartments come onto the market in the next 2 – 3years.

The resale market, on the other hand, seemed to have lost steam somewhat.

Given a choice, the wife and I will prefer Resale versus New anytime. This is especially so with the still “crazy” prices for new launches these days. With Resale (especially older, completed developments), you stand a much better chance of getting:

• Larger units at “saner” asking prices.
• Better layouts with spacious living/dining area and much bigger bedrooms.
• Generally no bay windows/planter boxes/PES that eat into your living space.
• And more importantly, you do not have base your buying decision solely on the showflat or worse, just a floor-plan, which can go horribly wrong sometimes.

But that’s just us talking…

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Well, we tried…

Our attempt to restart our showflat visit failed miserably this morning.

The wife and I had 2 hours to spare before our Boxing Day lunch. So we decided to try the sales gallery of d’Leedon but it was closed (Come to think of it, is the showflat opened to the public yet? That’s a ginormous sales gallery, by the way!).

We then drove down Bukit Timah to The Glyndebourne, and that was closed too. Our search along Newton and Balestier proved futile as well, so we ended up visiting a development of a somewhat different sort… (little/no en-bloc potential here, as the owners are unlikely to sell out)

Looks like the next review will have to wait till next week.

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Just in case your thinking about the $2.4 million Pine Grove unit…

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If you have been reading the Straits Times’ Classified over the past few weeks, you might have come across several adverts on units for sale at Pine Grove. These are probably owners who are trying to cash out after the en-bloc announcement.

For those who have been following the local property market news (or our blog), you will know that Pine Grove is going en-bloc with a reserve price of $1.7 billion. This could work out to between $2.1 million and $2.75 million per unit, depending on the size of the apartment and the development charge.

The wife and I are particularly amused by this advert:

Assuming owner of a 1700+sqft unit (which we understand is the larger unit type in the development) will eventually get $2.7 million when en-bloc happens, you are asking someone to splash out about $2.4 million now in the hope of getting $2.7 million later. And if the en-bloc fails (again), the unit will probably revert back to the current market price of $1.5+ million (or lower, depending on market condition then). So we are looking at a possible upside of $300K versus a massive downside of $900K.

Good investment?! We’ll let you consider the maths…

Granted that a seller is entited to quote whatever price he desires. But then again, one should not assume that the rest of the world is… well… intelligently-challenged.

Smiley Face

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Season greetings!

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Capital values for landed homes rising faster than apartments/condos

The BT today reported that the average capital values of landed homes in Singapore have risen at a faster clip than those of private apartments/condos in the 4th quarter as well as the whole of this year. This is according to latest figures from DTZ.

DTZ’s analysis referred only to resale landed and non-landed homes, that is, properties that had already obtained Certificate of Statutory Completion.

The average capital value of prime resale freehold landed homes stood at $1,693psf on land area in Q4 2010, up 5.1% from the previous quarter, taking the full-year increase to 17%. For suburban freehold landed houses, the average capital value increased 4.3% quarter on quarter to $993psf in Q4, resulting in a full-year appreciation of 15.5%.

In the non-landed segment, the average capital value for 99-year suburban condos remained unchanged at $660psf on strata area in Q4 2010, taking the appreciation for the whole of 2010 to 8%.

The average price of prime freehold condos increased 0.4% quarter on quarter to $1,520psf in Q4, also reflecting an 8% full-year price gain.

DTZ said prices in these two segments are hitting resistance, having risen by about 18% and 36% since their respective Q1 2009 troughs following the global financial crisis. The latest capital values are also above the respective Q4 2007 peak levels, it noted.

On the other hand, the Q4 2010 average capital value of freehold luxury condos (above 2,500sqft) in the prime districts was $2,630psf, about 6% shy of the Q4 2007 peak of $2,800psf. The latest Q4 figure was unchanged from the preceding three months while the full-year 2010 increase was 9.6%.

Ms Chua Chor Hoon, DTZ’s Southeast Asia research head, predicts that resale prices of 99-year suburban condos are likely to remain flattish next year while those of prime freehold condos could rise by up to 55 if there is more buying from foreigners due to the clampdown on property purchases in their home countries.

She expects prices of landed homes to continue to outperform those of apartments and condos due to their relative scarcity appeal.

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Private Residential Units Sold (Nov 2010)

The following data is courtesy of Urban Redevelopment Authorities (URA).

The list includes projects that the wife and I have reviewed to date.

URA (Nov 2010) http://d1.scribdassets.com/ScribdViewer.swf?document_id=45739016&access_key=key-28qd06e7d24boty8dkbs&page=1&viewMode=list

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Live Connected @The Tennery

This from an email flyer that the wife and I received from Far East Organization on the impending launch of their new project – The Tennery :

A new trans-urban development is coming up at The Tennery, breathing new life and a refreshing cosmopolitan chic into the locale. At the junction where Upper Bukit Timah Road meets Woodlands Road, this new 16-storey project offers hip urban living, amenities and connectivity within a single address.

The Tennery has 338 stylish SOHO apartments above a three storey retail podium Junction 10, which houses the Ten Mile Junction LRT station. These city-style SOHO apartments ranging in size from 619 – 950sqft come with high ceilings allowing owners to creatively transform their living spaces to suit multiple uses. Full recreational facilities are located on the roof of the retail podium, giving residents prominent views of the surroundings.

Across the road, the Bukit Panjang MRT and LRT stations, together with the future integrated Bukit Panjang bus interchange with commercial facilities, will be seamlessly connected by 2015. By then, the Downtown Line 2 will be operational and it will allow speedy transfer and enhanced connectivity to the rest of the island. Prominent interchanges on this line include Little India MRT station (north-east line), Newton MRT station (north-south line), Bugis MRT station (east-west line) and Botanic Gardens MRT station (circle line).

For residents of The Tennery, travelling to the Jurong Lake District is also just a few LRT and MRT stations away. Under the 2008 Master Plan, the Jurong Lake District is earmarked as the biggest lakeside destination for business and leisure in the West. The planned growth of this area will generate demand for housing and this will auger well for the leasing potential of The Tennery.

Given this fantastic connectivity, residents at The Tennery will enjoy a luxurious lifestyle of unparalleled convenience.

So, another one of those “smallish units” project to look forward to… *yawn*

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En Bloc News: Serene House sold for $99 million

According to a CNA report today, the tender for Serene House has been awarded to luxury-home developer Shelford Properties for $99 million.

A total of seven bids were received for the residential freehold site.

Marketing agent Colliers International said there were major and mid-tier property players who bid for the site.

The winning bid of $99 million translates to $1,400 per square foot per plot ratio.

Serene House is a four-storey walk-up residence located at Jalan Serene, with a land area of 40,000 square feet and a gross plot ratio of 1.4.

It has 24 units and is near the landed housing enclave in Bukit Timah.

The owners of the units at Serene House will each receive about $4.1 million from the sale.

The wife and I did a quick check and found that the last caveat lodged for Serene House was in June 2010 – a 1,550sqft unit sold for $537,500. Talk about missing the boat!

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Private home sales up in November

Private home sales in November rebounded about 80 percent on-month to hit 1,909 units – the second highest in 11 months. This is according to a CNA report today.

That brings the total number of homes sold so far this year, to 15,025, surpassing the 2007 sales record of 14,811 units.

The surge in November sales comes just three months after the government introduced its latest round of measures to cool the property market.

Lakefront Residences in Jurong was the most popular property selling over 437 units at $1,075 per square foot last month.

Coming in second was Waterview in Tampines, which sold 376 units at $903 per square foot, while Spottiswoode Residences followed with 258 units sold at $1,853 per square foot.

This buying fever in November caught many analysts by surprise.

Tay Huey Ying, Director (Research and Advisory), Colliers International, said: “It just goes to show or prove that a lot of investors are still viewing property as a safe place to park their wealth in spite of the high exposure to policy risks.

And I think another driving factor for November’s high sales volume could also be foreign purchases, diverted from the HDB resale market, as well as from Hong Kong and China, in light of their recent property curbs.

With high sales volume, with feverish buying fever, there is bound to be some upward pressure on prices although the ramped up government land sales programme could put a check on the rate of price growth.

If what is driving the November sales happens to be foreign purchases, who may not be too bothered about potential launches, potential supply, then I think it does warrant certain further measures to cool the buying fever.”

Industry watchers say the government may end up introducing another harsher set of cooling measures, such as a tax on profits from property sales in the next few months.

Colin Tan, Head (Research and Consultancy), Chesterton Suntec International, said: “What’s going to happen if the buying doesn’t stop and while we may not feel the impact now, but the consequences may come maybe a year or two later and it can be pretty adverse.

We’ll have a lot of units up for rental, then the rentals could collapse especially when there’s a lot vested buying.

The worse is of course when rentals come down, and holding cost go up as well, so that will reduce the yield and when yield is miserable, some investors may opt to sell or are forced to sell and that may start a domino effect.”

Analysts say the latest figures also show that properties with strong branding and good locations remain the most attractive.

Although the November statistics came as a surprise, many believe the number for December will come back down as developers launch fewer properties over Christmas and New Year.

For the month of December, property watchers expect between 800 and 1,300 units to be sold.
 
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It’s that time of the year… to pay your property tax!

Most of you should have received a copy of below with your property tax returns.

However, just in case you chucked it as trash without realizing and would like the info.

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