Property Market Sentiments

[chialc]

"Property agents were also advised to be more cautious when dealing with clients, as there have been lawsuits brought by disgruntled buyers and tenants."

Hi Cory,
Instead of hear-say, just check out from CEA website for real cases.

Of course, these featured cases are convicted case studies, many more gone under-radar.

CEA - Case Studies

[greengiraffe]

Property developers missing in action

Some veteran players seem fazed by rising land prices and market cycles
Published on May 24, 2014 1:24 AM


NTUC Choice Homes, which developed this 590-unit project, Trevista, in Toa Payoh Lorong 3, has not tabled any bids for land since its $97.4 million offer in May 2011 for a public housing site in Pasir Ris Central, a bid that it lost. -- ST PHOTO: DESMOND WEE

By Cheryl Ong

A NUMBER of property developers seem to have fallen off the radar, with hardly any land bids or new projects in recent years.

Some are longstanding market players but rising land prices and market cycles have led to fewer land acquisitions and projects. Other developers were dragged under by the financial crisis.

Take NTUC Choice Homes, for example. It was set up in 1995 to build affordable housing and has developed 15 projects with 6,944 units. It focused on private and executive condos, as well as Design, Build and Sell Scheme flats.

"In the past few years, land prices in Singapore have not moderated much," said its spokesman.

"There have been few opportunities to develop the affordable and quality housing that our customers expect."

It submitted its last land bid in May 2011, for a public housing site at Pasir Ris Central at $97.4 million - a bid that it lost.

Its portfolio includes the 590-unit Trevista in Toa Payoh Lorong 3 and the 348-unit Dakota Residences in Dakota Crescent. Its only upcoming project is the 315-unit Belysa in Elias Road, to be ready in October.

Mr Donald Han, managing director of Chesterton Singapore, said that the cooperative's moderate risk profile means that it could start replenishing its landbanks when land prices start to correct.

Other developers, which seem to become active only when the market bottoms out, include Lippo Group and Ho Bee Land.

Lippo bought DBS Towers One and Two at Shenton Way for $870 million in August 2010 and 78 Shenton Way for $151 million in August 2004. Ho Bee forked out $411 million for a commercial site next to Buona Vista MRT station, which it has developed into two 1.08 million sq ft office towers named The Metropolis.

"These are the early movers who read the market well, tend to take risks and generate the highest returns," said Mr Han. "When the market nears its peak, these developers and consortiums then drop off, and are replaced by the more gung-ho ones."

Some, however, have fallen off the radar entirely, thanks to stiffer competition or financial woes.

These were boutique developers active in the 80s and 90s, when land was less costly. Freehold land could be under $100 million, and developers enjoyed margins above 20 per cent, he noted.

Some examples include Indonesia-focused Sinarmas Land - previously known as Asia Food & Properties - and Raffles Medical Group's Esquire Land, which made their mark developing properties in the prime city districts.

Waterbank Properties, the property arm of former transport group DelGro Corp, fell into debt during the Asian financial crisis. There were few takers for its Waterdale project's 141 units in 1998.

DelGro quit the property business in September that year.

It certainly did not help that developers' profit margins were squeezed after the global financial crisis, experts said.

That led Property Enterprises Development, the local unit of Hong Kong tycoon Li Ka Shing's Cheung Kong group, to pull out and focus on its home turf, as mainland Chinese buyers were pouring in, said Mr Han.

But some developers, such as City Developments, UOL Group, Keppel Land, Singapore Land, CapitaLand, Frasers Centrepoint and Far East Organization, will remain "evergreen".

"Some developers who are listed must show a steady flow of projects, otherwise there will be certain quarters when they report revenue plunges or zero profits," explained Century 21 chief executive Ku Swee Yong.

ocheryl@sph.com.sg

Background story

Playing the market

OFF THE RADAR

Sinarmas Land, previously known as Asia Food & Properties
Esquire Land, Raffles Medical Group

INACTIVE

NTUC Choice Homes
Lippo
Ho Bee

EVERGREEN

City Developments
UOL Group
Keppel Land
Singapore Land
CapitaLand
Frasers Centrepoint
Far East Organization

[greengiraffe]

HOT SPOT
Skywoods condo in Dairy Farm sees slow sales
Published on May 24, 2014 1:25 AM


Only 78 units in the Skywoods condo in Dairy Farm Heights have been sold since its launch last September, with its pricing of about $1,250 to $1,300 per square foot as a possible reason. -- ST PHOTO: NG SOR LUAN

By Rachael Boon

THE upcoming Skywoods condo in Dairy Farm Heights is having a hard time shifting units as it battles the slowing real estate market and tough competition from other properties in the area.

Sales at the 99-year leasehold project being developed by TA Corporation, Hock Lian Seng Holdings, King Wan Corp and Far East Distillers have been lacklustre.

Units were launched at about $1,250 per square foot (psf) in September last year with only around 78 sales recorded so far at the 420-unit estate.

Eight units were sold in April at a median price of about $1,336 psf, according to Urban Redevelopment Authority data.

The leafy area houses the Dairy Farm Nature Park, with The Rail Mall in Upper Bukit Timah as the main amenity.

Residents in nearby Chestnut and Cashew areas can also head to Bukit Panjang Plaza.

R'ST Research director Ong Kah Seng said: "Pricing at some $1,250 to $1,300 psf might have exceeded the total debt servicing ratio (TDSR) limits of many keen buyers."

He added that it was about time to consider reducing selling prices slightly to move sales as "this is still a good area with strong longer-term price upsides".

But it does not have the field to itself with older, freehold or 999-year leasehold properties with spacious ground nearby such as the Dairy Farm Estate, Hazel Park Condominium with 696 apartments and the 148-unit Cashew Park Condominium.

Dairy Farm Estate in Dairy Farm Road was built in the late 1980s, noted Chesterton Singapore research head Elaine Chow.

She added: "This stretch (of road) is favoured by nature lovers who enjoy the lush greenery right at the doorstep of the nature reserve. It is therefore not surprising to find only four transactions in the past year for the existing residential development there."

The most recent transaction at the 477-unit Dairy Farm Estate was a 1,948 sq ft apartment that sold for $1,042 psf in November last year.

Mr Ong said resale activity has been fairly consistent in the area, with figures for the second half of last year bumped up by good resale interest for the newer 429-unit Tree House, which was completed last year.

Each quarter in 2013 saw between 17 and 30 transactions, while the first quarter this year recorded 11 transactions.

Besides the older condos, the area's new developments include the 496-unit Foresque Residences and the 512-unit Kingsford Hillview Peak.

Ms Chow noted that new launches in the Dairy Farm and the nearby Hillview and Chestnut areas are priced around $1,200 to $1,300 psf while older developments sold at $900 to $1,100 psf.

Mr Ong said rents are still considered affordable, equivalent to typical suburban areas of about $2 to $2.50 psf per month, due partly to the age of the condos and the absence of an MRT station, although Cashew MRT on the Downtown Line 2 is under construction.

Mr Ong is upbeat about the impact the new station will have: "This may support the decision of junior expatriates, foreign working professionals to decentralise to the area to save on accommodation costs. However, prices of properties here have to be pegged at competitive levels to allow investors to reap returns more easily."

rachaelb@sph.com.sg

[Contrarian]

Landlord's Nightmare - Be it Condo or HDB


OVER the last few years, there have been reports of home owners purportedly leasing their properties to tourists, in violation of the six-month minimum subletting rule ("More renting out homes as 'hotels' "; April 29).

These incidents appear to be facilitated through portals such as Airbnb and Roomorama.

Increasingly, we are seeing a new breed of short-term tenants - medical tourists.

The Balestier area where I live is highly favoured by such tourists from the Middle East, presumably because of the medical hub in the Novena area and the proximity to various amenities and places of worship.

In my residential development, residents were alarmed to learn that more than 12 per cent of the units had been leased through a Singapore-incorporated company to Middle Eastern medical tourists, who typically arrive with large families and domestic helpers.

The Immigration & Checkpoints Authority's website states that visitors seeking medical treatment here may not extend their stay for more than 89 days from the date of entry into Singapore.

Consequently, medical tourists cannot possibly satisfy the six-month rental requirement.

Although residents in my estate value the diversity of our neighbourhood, we have little tolerance for illegal transient tenants who cause inconvenience and nuisance to us.

With the high concentration of patients from the Middle East, we are also concerned about the Middle East respiratory syndrome.

We have been reporting the cases to the Urban Redevelopment Authority (URA) since January, and our managing agent has provided all available information to facilitate investigations. But to date, no enforcement action appears to have been taken.

The URA cited reasons such as the lack of direct evidence of infringement and impracticality of obtaining information from the landlords.

We are puzzled as the Planning Act empowers it to require information from any property owner, occupier or tenant.

We hope the URA will invoke its powers and apply greater urgency in its investigations and enforcement actions.

It did suggest that owners institute by-laws to deter short-term accommodation operators from using units within our development. In fact, a group of owners has submitted a detailed proposal to our council for the implementation of such by-laws and to improve security and screening.

Unfortunately, the council is controlled by the property developer, which also owns a majority of the strata units in the development and displays little interest in engaging residents on this issue.

I urge the authorities promoting Singapore as a medical tourism hub to work with the agencies responsible for building the infrastructure to support the growing number of medical tourists.

- See more at: http://www.straitstimes.com/premium/foru...m428Q.dpuf

[greengiraffe]

http://www.businesstimes.com.sg/premium/...y-20140610

PUBLISHED JUNE 10, 2014
Dark condos shine light on rising vacancy
Suburban areas worst hit; softening rentals seen

BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

As dusk descends upon the Singapore skyline, the excess capacity building up in the private housing market is evident. Dark patches in some condominium developments completed six to 12 months ago, or even longer, point to significant vacancy - PHOTO: REUTERS
application/pdf iCONCompleted units vs vacancy rates
[SINGAPORE] As dusk descends upon the Singapore skyline, the excess capacity building up in the private housing market is evident. Dark patches in some condominium developments completed six to 12 months ago, or even longer, point to significant vacancy.
Analysts cite a host of factors, including strong investment demand for real estate after the global crisis, escalation in private home completions of late, and slower expatriate inflow. Vacancies are set to climb and rents fall in general. Suburban locations, where most of the supply is, will be the worst hit.
"If increasingly there are a lot of empty units," says Lee Lay Keng, DTZ regional head (SEA) research, "it could indicate we're not making the best use of our limited land resources."
After the global crisis, investors sought refuge in trusty assets such as real estate. Fuelled by the low interest rate environment, some took to hoarding property at new launches and are hence not bothered whether they can find a tenant after taking possession of their units, say observers. Some high net worth foreign buyers treat their Singapore property as a holiday home and leave it unoccupied most of the time.
But there are others who leave units vacant because they are not able to find tenants. As Ms Lee notes: "Competition for tenants is increasingly intense, with both demand and supply factors at work. On the demand side, changes in labour policies have slowed down the flow of foreign professionals into Singapore while on the supply side, there is a higher-than-average number of private home completions."
JLL national director Ong Teck Hui highlights that "those who bought for rental returns would find themselves in a more competitive leasing market today, where units in mediocre locations would be more difficult to lease and therefore remain vacant for a longer duration, especially during this period of strong supply".
Ku Swee Yong, CEO of Century 21, explains that those who acquired private homes, say in 2010, would already be sitting on profits. "If they bought for capital gains, they may prefer to keep their unit empty rather than rent it out because it is quite usual for a fresh tenant to have a clause in the lease agreement protecting them from viewings by the landlord in the first six or even 12 months."
R'ST Research director Ong Kah Seng says that, due to low rents, some owners have left their units empty, especially the cash-rich set who did not take any housing loan for their purchase. "A vacant unit may deteriorate faster but leasing it out at a low rent may not be feasible since it will incur high maintenance costs. High-end properties have the finest finishes, so maintenance and repair costs may be hefty. Selected fit-outs and finishings such as tiles may be of limited collection and difficult to replace if it is damaged by the tenant."
Developers left with unsold units, especially in the slow high-end segment, also contribute to vacancies as these projects are completed. Other factors may also be at play in specific projects. But the overall trend of rising vacancies and softening rents is clear amid climbing private home completions since last year.
The 13,150 private homes that received TOP last year was 27.3 per cent above the previous year's 10,329 and 40 per cent above the past 10-year average of 9,395. The figure for Q1 this year was 4,114 and the full-year tally is expected to hit 17,138, based on estimates submitted by developers to the Urban Redevelopment Authority. Thereafter, completions are slated to climb further to 21,738 next year and 26,252 in 2016 before easing the following year.
URA figures show that the pool of vacant private homes has risen to 19,284 at end-Q1 2014 from 18,003 at end-Q4 2013 and 14,532 at end-Q1 2013. The islandwide vacancy rate rose to 6.6 per cent at end-Q1 this year from 6.2 per cent a quarter earlier and 5.2 per cent at end-Q1 2013.
CBRE executive director (residential) Joseph Tan says that the latest quarter's increase could be due partly to families that had yet to move to the new homes that were completed in Q1.
Rising vacancies have been accompanied by softening rentals. For the first time since Q3 2009, URA's private home rental index contracted in Q4 last year. The index dipped 0.5 per cent quarter-on-quarter, followed by a further 0.7 per cent drop in Q1.
CBRE predicts a 5-8 per cent drop in rents generally this year. JLL predicts a 4-8 per cent decline; Century 21's Mr Ku reckons competition for tenants will drive rents down by 8-10 per cent, followed by a further drop of up to 25 per cent in 2015.
Against the backdrop of the large supply, says DTZ's Ms Lee, some landlords could become more flexible on their rents, particularly after the removal of the vacancy tax refund with effect from Jan 1, 2014. "Landlords now have to pay property tax on their vacant units and some may accept a lower rent and have the unit rented out instead of leaving it empty."
This could create downward pressure on rents.
JLL's Mr Ong predicts the vacancy rate could be around 7-9 per cent at end-2014.
Mr Ku reckons vacancy will head towards 7.5-8 per cent mid to late next year, adding that price drops are likely to be limited to 5-10 per cent per year - assuming the economy is fine.
Competition for tenants is likely to be more intense in suburban projects, as the bulk of completions last year as well as the potential supply pipeline are in Outside Central Region (OCR). URA's Q1 rental index for non-landed private homes in OCR was down 2.3 per cent from a year ago. This compares with a decline of 0.3 per cent for Core Central Region (CCR) and a rise of one per cent in Rest of Central Region (RCR).
Of the 67,507 homes under construction at end-Q1, about 59 per cent were in OCR, 22 per cent in RCR and 19 per cent in CCR. Four years earlier, of the slightly over 36,000 units under construction, the respective shares were 30, 36 and 34 per cent, notes JLL's Mr Ong. "The heavy buying in OCR in the past few years has resulted in units under construction in this submarket surging 270 per cent over the past four years. While it is true that a high proportion of purchases in OCR is for owner-occupation, the level of investment purchases in the past few years has also been substantial.
"Based on rental contracts registered last year, OCR's share of the leasing market was about 31 per cent. Hence, the disproportionate oncoming supply may be expected to impact on this submarket more significantly."
Ms Lee, too, expects a bigger impact on rents and vacancy rates in the suburbs, "although rental demand will still be supported by budget-conscious foreign professionals as the rental quantum for suburban condos is lower than city-fringe or prime condos".

[greengiraffe]

http://www.businesstimes.com.sg/premium/...o-20140610

PUBLISHED JUNE 10, 2014
Tips on dealing with that empty condo

A new property left vacant deteriorates faster: Century 21 CEO
BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

One reason some investors are keeping their units in newly completed projects empty is that they intend to sell the property to realise the nice capital appreciation they may be sitting on - PHOTO: SPH
[SINGAPORE] "When we bring potential tenants for viewings these days, we have to look at double the number of properties compared with, say, two years ago," said Century 21 chief executive Ku Swee Yong.
"There are lots of choices from newly completed projects. And as long-term expats move to newer condos, older properties are also coming to the market for tenants. So vacancies are also rising."
One reason some investors are keeping their units in newly completed projects empty is that they intend to sell the property to realise the nice capital appreciation they may be sitting on.
In that case, it may be easier to keep the unit vacant in the interim, since this will facilitate viewings for potential buyers. Also, potential buyers keen on occupying the unit may not like a property with an ongoing lease that has some way to run.

[greengiraffe]

http://en.wikipedia.org/wiki/Sentosa

The name Sentosa translates as "peace and tranquility" in Malay (derived from Santosha in Sanskrit). Sentosa was once known as Pulau Belakang Mati (Chinese: 绝后岛),[2][3] which in Malay means the "Island (pulau) of Death (mati) from Behind (belakang)".

http://www.businesstimes.com.sg/premium/...s-20140628

PUBLISHED JUNE 28, 2014
Sentosa condos feel the blues
BYLEE MEIXIAN
leemx@sph.com.sg @LeeMeixianBT

Singapore
ABOUT two in five Sentosa condominium units have resold at a loss in the past year, symptomatic of the plight of luxury homes here, as financing restrictions put off buyers, industry watchers say.
Since May last year, 31 units have changed hands at six Sentosa projects: Marina Collection, Seascape, The Azure, The Berth, The Coast and The Oceanfront, according to data compiled by STProperty.sg from URA Realis.
The profitability findings is in line with data gathered by HSR Research which shows resale prices at the plush Sentosa district falling 25 per cent to about $1,800 psf in the first five months of this year, compared to around $2,400 psf over the Jan-May 2013 period.
That said, the price movements tend to be volatile, given the single-digit number of transactions each month. There were just five transactions altogether this year, and none in the months of February, March and May.
Of the 31 transactions in the past year, profitability analysis could not be done for seven because caveats, which include information on purchase prices, were not lodged for the units. Profitability is calculated by subtracting purchase prices from selling prices. Of the remaining 24 transactions, 10 resold at a loss.
Among the loss-making transactions, four were units at The Berth, the debut project at the Cove which was launched in 2004 and completed in 2006. Three units made losses at The Oceanfront, two at the Coast, and one at the Azure.
Two in particular made seven-digit losses. A 2,982 sq ft unit at The Oceanfront sold for $5.65 million ($1,895 psf) in November last year, after it was purchased in April 2008 for $7.2 million ($2,415 psf) - a $1.55 million loss.
Another 2,820 sq ft unit at The Coast sold for $4.8 million ($1,702 psf) in January this year, two years after it was purchased at $6 million ($2,128 psf). This was a $1.2 million loss.
SLP International executive director Nicholas Mak suggests that this could be due to owners struggling to find tenants for their units amid the weak leasing market. Some may also not be able to secure high enough rental rates to service their loans. (Most Sentosa homes are bought not for own occupation, but as investment.) "So they may find it a better option to just liquidate," he said, adding that the location is also not the most convenient for expats to commute to the mainland for work.
Another industry watcher added that buyers who bought units at $2,100 psf and above appear to have "overpaid". Those who profited from their resale deals mostly bought in at lower psf prices; a handful even got their units at $800, $900-plus psf back in 2006.
Meanwhile, several Sentosa Cove units are also up for sale at auction houses here. A 2,777-sq-ft unit at Turquoise condo, put up for sale by a lender at a Colliers' auction this week, yielded no bids, despite having reduced its opening price to $4 million from its previous $5 million.
Two Sentosa homes are up for auction by DTZ, both by lenders, one at Turquoise and another at Marina Collection. Another four are for sale by private treaty (akin to private negotiations) by JLL - two at Turquoise and two at Marina Collection.
Typically, banks repossess homes and put them up for auction as part of a repayment structure when delinquent mortgagors (borrowers) are unable to find buyers and dispose of their properties themselves.
JLL's head of auction and sales, Mok Sze Sze, said: "The owners of the two Turquoise units bought them at $7 million each, which is quite difficult to match in the current market.
"Auctioning is a good method to garner all interested parties in a room to competitively bid. Potentially, the owner can also expect to get the optimum price because it's a competitive method of sale."
Meanwhile, some Sentosa condos such as Cape Royale and The Residences at W have made strategic decisions to lease out their unlaunched units instead, given current soft condo prices on the Cove.
Roaring sales in the waterfront enclave back in 2006-2008 were hit by the financial crisis and had hardly recovered when the private housing market succumbed to successive rounds of cooling measures from 2009. The way Mr Mak sees it: "For property prices anywhere, what goes up will also come down."

[yenyenpark]

hmmm... suddenly looks like everyone no money to buy properties.. when it's the properties no need money 2 years ago..

[chialc88]

hmmm... suddenly looks like everyone no money to buy properties.. when it's the properties no need money 2 years ago..

Yen,
May be because its a buyer market.

Most people are waiting for the price to crash.

Some of them had been holding cash for a few years already.

To them, TDSR has min impact.
They are very patient and willing to dive in when the price/location is right.

Q1. When the price is right, will they dive in and buy or they will contemplating how low/far the price will drop?

Q2. When the cooling measures is removed, how fast will the price bounced back?

LC






Earth day - save the world everyday.

[brattzz]

Fire-sale not started yet leh, prices are still high lah... US will lead the interest rate hikes in 2015/16!