Jun 16, 2010
Sales of new private homes cool down
But prices are holding and sales figures are still considered healthy
By Joyce Teo
THE triple whammy of a jittery stock market, the euro debt crisis and high prices put the brakes on the private home market last month.
New sales hit 1,078 units - about half of April's near-record 2,208 units and the lowest monthly level seen this year.
But prices have held up from April and the sales numbers, while substantially down, are considered a good showing.
Analysts believe the market is now in a holding pattern, with developers ready to increase the pace of launches once demand picks up again, perhaps after the school holidays, World Cup and an uptick in Europe's fortunes.
What has changed, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak, is that 'the exuberance is giving way to a more rational buying pattern'.
Last month's figures brought total sales in the first five months of the year to 7,666 units, already more than half the 14,688 units sold in last year's hot market. The record was set in 2007 with 14,811 units sold. Developers launched 1,134 units last month, down from 2,085 in April, according to Urban Redevelopment Authority data yesterday.
Colliers International research and advisory director Tay Huey Ying said the healthy level of launches and sales despite global uncertainties show the strength of underlying demand.
Still, buyer resistance towards higher-priced units continued into last month from April, she said. Nearly 80 per cent of non-landed private residential sales last month were priced at $1,500 per sq ft (psf) and below, she noted.
Not surprisingly, the high-end sector was quiet last month, with only 179 units sold, the lowest level this year.
Mid-tier projects on the city fringes garnered the highest sales last month, but the top seller was a mass market project, the 1,145-unit The Minton in Hougang. This new launch sold 204 units at a median price of $849 psf. Other projects all had sales of below 100 units each.
Casa Aerata in Geylang - which had mostly one- and two-bedders from just 388 sq ft to 603 sq ft - sold all 78 units at a median price of $939 psf.
Another suburban launch last month, the 393-unit Flamingo Valley in Siglap Road, sold 46 units at a median price of $1,259 psf. The 536-unit The Cascadia in Bukit Timah Road sold 72 units at a median price of $1,464 psf.
This month will be quieter than last month, with sales tipped to reach 650 to 800 units as buyers turn their attention to the World Cup and the problems in Europe. Other prospective buyers may be overseas for the school holidays.
That will prompt developers to stay selective in their project launches, releasing units in smaller batches, said Ms Tay.
But the slowdown is likely to be temporary, according to Knight Frank chairman Tan Tiong Cheng. 'The property market is holding well. July sales would be a better indication of the market as everybody is taking a breather now,' he said.
CB Richard Ellis executive director, residential, Mr Joseph Tan, said last month's prices have more or less been maintained at April levels and are expected to hold up this month. Knight Frank's Mr Tan also sees stable values ahead, adding that developers are unlikely to push for higher prices in new launches due to the substantial amount of impending land sales.
The Government will be releasing a record amount of land in the second half of this year. Most experts expect new home sales to hit 12,000 to 14,000 units for the year.
joyceteo@sph.com.sg
Wednesday, June 16, 2010
ST : Punggol EC site draws cautious response
Jun 16, 2010
Punggol EC site draws cautious response
Of five bidders, NTUC Choice Homes' joint venture puts in highest offer of $308 psf ppr
By Joyce Teo
FIVE bidders made a play for an executive condominium (EC) site near Punggol MRT station, with the highest offer within market expectations.
The cautious response is in contrast to recent tenders which attracted a high number of offers or bumper bids from developers keen to get their hands on land, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
A joint venture between NTUC Choice Homes Co-operative and Chip Eng Seng lodged the top bid of $223.7 million or $308 per sq ft per plot ratio (psf ppr) for the Punggol site.
NTUC Choice Homes yesterday said it plans to develop the 99-year leasehold site at the junction of Punggol Field and Punggol Road into a 17-storey, 600-unit project with full condo facilities. It said it will sell the EC at the prevailing market prices and stated that it is 'committed to provide affordable housing' as the project's breakeven price is around $600 psf.
The site has a gross floor area of 726,477 sq ft and will be the first EC to be offered in Punggol.
NTUC Choice Homes will hold a 60 per cent interest through its subsidiary Choicehomes Investments while Chip Eng Seng unit CEL Development will hold 40 per cent.
Their winning bid is about 50 per cent higher than the trigger bid of $147.7 million and about 4 per cent above the second highest bid of $296.3 psf ppr from Hoi Hup Realty and Sunway Developments.
China-based Qindao Construction was next with $280.5 psf ppr.
The Punggol site is the fourth EC tender this year. The previous three had attracted seven to 11 bids.
CBRE Research director Leonard Tay estimated a breakeven price of $580 to $600 psf and a possible $650 psf selling price.
Mr Mak expects a selling price of $700 to $740 psf, assuming the breakeven level is at $610 to $640 psf.
In the resale market, units in Park Green, The Rivervale and The Florida were sold at $500 to $620 psf between January and last month, Mr Tay noted.
Besides new families, HDB residents from Punggol New Town will find the EC an attractive upgrade option, he said.
Median prices of HDB five-room and executive resale flats in the area were at $430,000 and $497,500, respectively, in the first quarter of this year, he said.
joyceteo@sph.com.sg
Punggol EC site draws cautious response
Of five bidders, NTUC Choice Homes' joint venture puts in highest offer of $308 psf ppr
By Joyce Teo
FIVE bidders made a play for an executive condominium (EC) site near Punggol MRT station, with the highest offer within market expectations.
The cautious response is in contrast to recent tenders which attracted a high number of offers or bumper bids from developers keen to get their hands on land, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
A joint venture between NTUC Choice Homes Co-operative and Chip Eng Seng lodged the top bid of $223.7 million or $308 per sq ft per plot ratio (psf ppr) for the Punggol site.
NTUC Choice Homes yesterday said it plans to develop the 99-year leasehold site at the junction of Punggol Field and Punggol Road into a 17-storey, 600-unit project with full condo facilities. It said it will sell the EC at the prevailing market prices and stated that it is 'committed to provide affordable housing' as the project's breakeven price is around $600 psf.
The site has a gross floor area of 726,477 sq ft and will be the first EC to be offered in Punggol.
NTUC Choice Homes will hold a 60 per cent interest through its subsidiary Choicehomes Investments while Chip Eng Seng unit CEL Development will hold 40 per cent.
Their winning bid is about 50 per cent higher than the trigger bid of $147.7 million and about 4 per cent above the second highest bid of $296.3 psf ppr from Hoi Hup Realty and Sunway Developments.
China-based Qindao Construction was next with $280.5 psf ppr.
The Punggol site is the fourth EC tender this year. The previous three had attracted seven to 11 bids.
CBRE Research director Leonard Tay estimated a breakeven price of $580 to $600 psf and a possible $650 psf selling price.
Mr Mak expects a selling price of $700 to $740 psf, assuming the breakeven level is at $610 to $640 psf.
In the resale market, units in Park Green, The Rivervale and The Florida were sold at $500 to $620 psf between January and last month, Mr Tay noted.
Besides new families, HDB residents from Punggol New Town will find the EC an attractive upgrade option, he said.
Median prices of HDB five-room and executive resale flats in the area were at $430,000 and $497,500, respectively, in the first quarter of this year, he said.
joyceteo@sph.com.sg
ST : Guidebook, certification for builders to go green
Jun 16, 2010
Guidebook, certification for builders to go green
By Grace Chua
CONSTRUCTING a building requires a lot of raw materials, water and energy - producing up to 10 per cent of the building's total carbon emissions over its lifetime.
To get the multibillion-dollar construction industry in Singapore to cut back on energy, recycle more and be more environmentally friendly, the authorities and trade groups have put together new incentives.
Yesterday, the Building and Construction Authority (BCA) launched its Green And Gracious Builder Guide, which lists ways to recycle materials, save energy and keep the peace with residents and communities near construction sites.
Joining the push is the Singapore Contractors Association Limited (Scal) and Singapore Environment Council, which have put together a certification scheme for contractors employing eco-friendly practices - a kind of green label for the construction industry.
The scheme aims to give Singapore's 3,000 to 4,000 small and medium-sized contractors the resources and know-how to cut waste, noise, energy use and pollution, said Scal president Andrew Khng.
This differs from existing green building programmes such as the Green Mark certification, which looks at a building's environmental impact over time but may not account for the impact of its construction.
Both the guide and the scheme were launched at a conference on sustainable green practices for Asean contractors yesterday. Ms Grace Fu, Senior Minister of State for National Development and Education, who was the guest of honour, said: 'As buildings worldwide consume about 40 per cent of all raw materials, the building sector has an important role in ensuring that our future developments are not only economically, but also environmentally sustainable.'
At least 21 companies here, winners of the BCA's Green and Gracious Builder Award last year and this year, are putting sustainable practices in place.
For example, no bar of steel or plank of timber goes to waste at Gammon Construction's worksites. Its sites even have small, medium and large generators to match the demand for power. In the day, when power demand is high, the largest generator kicks in, but at night, when power demand is lower, the smallest generator is used.
While the measures might push a project's upfront costs up by 15 per cent, these costs are easily recouped from energy savings and other savings over the project's two- or three-year lifetime, said Gammon executive director Jon Button.
Guidebook, certification for builders to go green
By Grace Chua
CONSTRUCTING a building requires a lot of raw materials, water and energy - producing up to 10 per cent of the building's total carbon emissions over its lifetime.
To get the multibillion-dollar construction industry in Singapore to cut back on energy, recycle more and be more environmentally friendly, the authorities and trade groups have put together new incentives.
Yesterday, the Building and Construction Authority (BCA) launched its Green And Gracious Builder Guide, which lists ways to recycle materials, save energy and keep the peace with residents and communities near construction sites.
Joining the push is the Singapore Contractors Association Limited (Scal) and Singapore Environment Council, which have put together a certification scheme for contractors employing eco-friendly practices - a kind of green label for the construction industry.
The scheme aims to give Singapore's 3,000 to 4,000 small and medium-sized contractors the resources and know-how to cut waste, noise, energy use and pollution, said Scal president Andrew Khng.
This differs from existing green building programmes such as the Green Mark certification, which looks at a building's environmental impact over time but may not account for the impact of its construction.
Both the guide and the scheme were launched at a conference on sustainable green practices for Asean contractors yesterday. Ms Grace Fu, Senior Minister of State for National Development and Education, who was the guest of honour, said: 'As buildings worldwide consume about 40 per cent of all raw materials, the building sector has an important role in ensuring that our future developments are not only economically, but also environmentally sustainable.'
At least 21 companies here, winners of the BCA's Green and Gracious Builder Award last year and this year, are putting sustainable practices in place.
For example, no bar of steel or plank of timber goes to waste at Gammon Construction's worksites. Its sites even have small, medium and large generators to match the demand for power. In the day, when power demand is high, the largest generator kicks in, but at night, when power demand is lower, the smallest generator is used.
While the measures might push a project's upfront costs up by 15 per cent, these costs are easily recouped from energy savings and other savings over the project's two- or three-year lifetime, said Gammon executive director Jon Button.
BT : Bank regulator warns of growing property credit risks
Business Times - 16 Jun 2010
Bank regulator warns of growing property credit risks
Banks told to report on risk exposure by end-June in bid to avert more bad loans
(HONG KONG) China's banking regulator said it sees growing credit risks in the nation's real-estate industry and warned of increasing pressure from non-performing loans.
Risks associated with home mortgages are growing and a 'chain effect' may reappear in real-estate development loans, the China Banking Regulatory Commission (CBRC) said in its annual report published on its website yesterday.
The regulator has told banks to report on risk exposure by the end of June to help prevent a credit boom from leading to more bad loans. Property-price gains spurred concerns that a record 9.59 trillion yuan (S$2 trillion) of loans extended last year to combat the effects of the global financial crisis may be causing asset bubbles.
China is 'closely monitoring the growth in the volume and the quality of mortgage loans, but we don't think it has reached an alarming level,' said Kelvin Lau, a Hong Kong-based economist at Standard Chartered. 'There are still many tools the central government can use to tackle the problem if things get out of control.'
Credit risks in some industries that have seen a surge in investment may 'emerge soon' as restructuring efforts intensify, the regulator said in the report. The rise in investment exacerbated the problem of excess capacity and over- development, it said.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, has dropped 22 per cent this year. Markets in China are closed from June 14 to 16 for a holiday.
'Coming through the global financial crisis, China's banking sector has stepped onto a new level,' CBRC chairman Liu Mingkang said in the report. 'We remain cool-headed about the weaknesses to be addressed and fixed.'
CBRC's report comes as Agricultural Bank of China Ltd, the country's largest by number of customers, prepares to sell shares in Shanghai and Hong Kong in what could be the world's largest initial public offering.
Agricultural Bank may raise at least US$23 billion from the total offering, people with knowledge of the matter said last week. The IPO will likely surpass the US$22 billion sale in 2006 by Industrial & Commercial Bank of China Ltd.
China, the world's fastest-growing major economy, expanded 11.9 per cent in the first quarter from a year earlier. Measures to cool the real-estate market have included a ban on loans for third-home purchases and raising mortgage rates and down-payment requirements for second-home purchases.
Property prices in the country rose 12.4 per cent in May, the second-fastest pace on record, showing little sign yet that the government crackdown on speculation will work to avert an asset-price bubble.
Some banks in China have transferred loans off their balance sheets in an effort to circumvent regulatory requirements and capital and loan-loss provisioning, the CBRC said in the report.
Banks still assume the risks related to loan management and recovery even though the loans are not booked on their balance sheets, it said. As a result, rising risks associated with banks' activities in transferring their exposures off the balance sheet need 'close supervisory attention.'
The watchdog said concerns about bank lending to local government financing vehicles 'weighs high' on its supervisory agenda as some banks have accumulated 'large' exposures to them.
Local governments in China have been raising funds through the vehicles to circumvent regulations that prevent them from borrowing directly. A crackdown on such loans could trigger a 'gigantic wave' of bad debts as projects are left without funding, Northwestern University Professor Victor Shih said in March.
China ordered local governments to ensure repayment of debts by their financing units and concentrate on completing projects already under way. Financing units that fund only public projects and rely on fiscal income to repay debt should stop spending, the State Council said earlier this month. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Boom's shadow: Unabated property price gains have spurred concerns that record loans may be causing asset bubbles. Some banks have transferred loans off their balance sheets to circumvent regulatory requirements and capital and loan-loss provisioning, the CBRC said
Bank regulator warns of growing property credit risks
Banks told to report on risk exposure by end-June in bid to avert more bad loans
(HONG KONG) China's banking regulator said it sees growing credit risks in the nation's real-estate industry and warned of increasing pressure from non-performing loans.
Risks associated with home mortgages are growing and a 'chain effect' may reappear in real-estate development loans, the China Banking Regulatory Commission (CBRC) said in its annual report published on its website yesterday.
The regulator has told banks to report on risk exposure by the end of June to help prevent a credit boom from leading to more bad loans. Property-price gains spurred concerns that a record 9.59 trillion yuan (S$2 trillion) of loans extended last year to combat the effects of the global financial crisis may be causing asset bubbles.
China is 'closely monitoring the growth in the volume and the quality of mortgage loans, but we don't think it has reached an alarming level,' said Kelvin Lau, a Hong Kong-based economist at Standard Chartered. 'There are still many tools the central government can use to tackle the problem if things get out of control.'
Credit risks in some industries that have seen a surge in investment may 'emerge soon' as restructuring efforts intensify, the regulator said in the report. The rise in investment exacerbated the problem of excess capacity and over- development, it said.
The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, has dropped 22 per cent this year. Markets in China are closed from June 14 to 16 for a holiday.
'Coming through the global financial crisis, China's banking sector has stepped onto a new level,' CBRC chairman Liu Mingkang said in the report. 'We remain cool-headed about the weaknesses to be addressed and fixed.'
CBRC's report comes as Agricultural Bank of China Ltd, the country's largest by number of customers, prepares to sell shares in Shanghai and Hong Kong in what could be the world's largest initial public offering.
Agricultural Bank may raise at least US$23 billion from the total offering, people with knowledge of the matter said last week. The IPO will likely surpass the US$22 billion sale in 2006 by Industrial & Commercial Bank of China Ltd.
China, the world's fastest-growing major economy, expanded 11.9 per cent in the first quarter from a year earlier. Measures to cool the real-estate market have included a ban on loans for third-home purchases and raising mortgage rates and down-payment requirements for second-home purchases.
Property prices in the country rose 12.4 per cent in May, the second-fastest pace on record, showing little sign yet that the government crackdown on speculation will work to avert an asset-price bubble.
Some banks in China have transferred loans off their balance sheets in an effort to circumvent regulatory requirements and capital and loan-loss provisioning, the CBRC said in the report.
Banks still assume the risks related to loan management and recovery even though the loans are not booked on their balance sheets, it said. As a result, rising risks associated with banks' activities in transferring their exposures off the balance sheet need 'close supervisory attention.'
The watchdog said concerns about bank lending to local government financing vehicles 'weighs high' on its supervisory agenda as some banks have accumulated 'large' exposures to them.
Local governments in China have been raising funds through the vehicles to circumvent regulations that prevent them from borrowing directly. A crackdown on such loans could trigger a 'gigantic wave' of bad debts as projects are left without funding, Northwestern University Professor Victor Shih said in March.
China ordered local governments to ensure repayment of debts by their financing units and concentrate on completing projects already under way. Financing units that fund only public projects and rely on fiscal income to repay debt should stop spending, the State Council said earlier this month. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Boom's shadow: Unabated property price gains have spurred concerns that record loans may be causing asset bubbles. Some banks have transferred loans off their balance sheets to circumvent regulatory requirements and capital and loan-loss provisioning, the CBRC said
BT : Chip Eng Seng and partner plan EC project
Business Times - 16 Jun 2010
Chip Eng Seng and partner plan EC project
The developers put in highest bid for Punggol site
By UMA SHANKARI
NTUC Choice Homes and Chip Eng Seng intend to build a 600-unit executive condominium (EC) on a land parcel in Punggol sold by the state.
The developers' joint bid of $223.7 million, or $308 per square foot per plot ratio (psf ppr), trumped four others at the close of the government tender yesterday.
If awarded the 99-year leasehold site, the companies plan to build a 17-storey, 600-unit residential project with full condominium facilities.
It will be the first EC development in Punggol. EC units are initially sold with eligibility and ownership restrictions similar to HDB's public housing flats, but will be converted to private housing after 10 years.
The break-even price is estimated at around $600 psf and flats will be sold at the 'prevailing market price', the companies said.
NTUC Choice Homes will take a 60 per cent stake in the project while Chip Eng Seng will hold the remaining 40 per cent. The two companies have jointly developed three projects to date - condos at Upper East Coast (Riviera Residences) and Ang Mo Kio (Grandeur 8) as well as an EC at Bishan called Bishan Loft.
'We are excited because this will be the first executive condo in Punggol,' Chip Eng Seng group chief executive Raymond Chia told BT. 'We are also delighted to partner NTUC Choice Homes again and emerge together as the top bidders for this site.'
The top bid of $308 psf ppr is within expectations and units in the upcoming project could possibly sell at about $650 psf, said CBRE Research director Leonard Tay.
CBRE's data shows that in the resale market, units in Park Green, The Rivervale and The Florida fetched $500-$620 psf between January and May 2010.
But while the top bid was within expectations, the large land supply promised for the second half 2010 government land sales programme is beginning to have an impact, analysts noted. This is the fourth EC site to be sold by the government this year.
'The number of bidders in the four EC land tenders have slowly declined from 11 bidders in the tender that closed on March 4 to the present five bidders, as the developers' appetite for land is gradually being satisfied,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
NTUC Choice Homes' and Chip Eng Seng's bid was just 4 per cent higher than the second highest bid of $215.2 million or $296 psf ppr from Hoi Hup Realty and Sunway Developments. The top bid was also 28 per cent higher than the lowest bid of $174.4 million or $240 psf ppr from Frasers Centrepoint.
The EC plot at the corner of Punggol Field and Punggol Road was launched for sale earlier this year after an unnamed developer agreed to bid at least $147.7 million or $203 psf ppr for it.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Chip Eng Seng and partner plan EC project
The developers put in highest bid for Punggol site
By UMA SHANKARI
NTUC Choice Homes and Chip Eng Seng intend to build a 600-unit executive condominium (EC) on a land parcel in Punggol sold by the state.
The developers' joint bid of $223.7 million, or $308 per square foot per plot ratio (psf ppr), trumped four others at the close of the government tender yesterday.
If awarded the 99-year leasehold site, the companies plan to build a 17-storey, 600-unit residential project with full condominium facilities.
It will be the first EC development in Punggol. EC units are initially sold with eligibility and ownership restrictions similar to HDB's public housing flats, but will be converted to private housing after 10 years.
The break-even price is estimated at around $600 psf and flats will be sold at the 'prevailing market price', the companies said.
NTUC Choice Homes will take a 60 per cent stake in the project while Chip Eng Seng will hold the remaining 40 per cent. The two companies have jointly developed three projects to date - condos at Upper East Coast (Riviera Residences) and Ang Mo Kio (Grandeur 8) as well as an EC at Bishan called Bishan Loft.
'We are excited because this will be the first executive condo in Punggol,' Chip Eng Seng group chief executive Raymond Chia told BT. 'We are also delighted to partner NTUC Choice Homes again and emerge together as the top bidders for this site.'
The top bid of $308 psf ppr is within expectations and units in the upcoming project could possibly sell at about $650 psf, said CBRE Research director Leonard Tay.
CBRE's data shows that in the resale market, units in Park Green, The Rivervale and The Florida fetched $500-$620 psf between January and May 2010.
But while the top bid was within expectations, the large land supply promised for the second half 2010 government land sales programme is beginning to have an impact, analysts noted. This is the fourth EC site to be sold by the government this year.
'The number of bidders in the four EC land tenders have slowly declined from 11 bidders in the tender that closed on March 4 to the present five bidders, as the developers' appetite for land is gradually being satisfied,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
NTUC Choice Homes' and Chip Eng Seng's bid was just 4 per cent higher than the second highest bid of $215.2 million or $296 psf ppr from Hoi Hup Realty and Sunway Developments. The top bid was also 28 per cent higher than the lowest bid of $174.4 million or $240 psf ppr from Frasers Centrepoint.
The EC plot at the corner of Punggol Field and Punggol Road was launched for sale earlier this year after an unnamed developer agreed to bid at least $147.7 million or $203 psf ppr for it.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Developers and buyers headed for a stalemate
Business Times - 16 Jun 2010
Developers and buyers headed for a stalemate
Big drop in May sales could signal the start of a slowdown, with neither side in any hurry to transact
By KALPANA RASHIWALA
(SINGAPORE) Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April. This could mark the start of a period of slower sales as developers weigh their options and buyers bide their time.
The two parties could have a standoff for a little while, predicts DTZ executive director (consulting) Ong Choon Fah. 'There's no great push factor to launch projects in June when you weigh the pros and cons. Potential buyers may also hold back purchases as they may not sense a great urgency to buy.'
Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'Developers will try their best to maintain prices; so what if they delay launches for a couple of months? After all, most of them have strong balance sheets and the Singapore economy seems to be continuing to perform well.'
Market watchers were not alarmed by the steep drop in May developer sales. For one, the 1,533-unit average monthly sales figure for the first five months of 2010 is above the 1,224 unit average monthly sales volume for the whole of 2009, which was a boom year, observes CB Richard Ellis executive director (residential) Joseph Tan.
Jones Lang LaSalle's South-east Asia and Singapore research head Chua Yang Liang also points out that 'compared with the collapse of Lehman Brothers in Q3 2008, the impact of the eurozone debt crisis on the Singapore residential market has been less destabilising thus far.'
During the dark days between September 2008 and January 2009, developers sold only between 108 and 376 units per month.
Some property consultants are predicting this month's sales will be under 1,000 units. Including the latest May number, developers have sold 7,666 units in the first five months of 2010.
Even assuming slower sales in June and the second half, consultants predict developers will end 2010 with total sales of 12,000-15,000 units. Primary market sales for the whole of 2009 totalled 14,688 private homes.
Developers launched 1,134 private homes in May, down from 2,085 units in April.
A confluence of factors - the June school holidays, the World Cup, the brewing economic crisis in Europe, and the onset of the Hungry Ghosts Month in August - may cause developers to go a bit slower on property launches in the near future, some property consultants suggest.
Also, potential buyers may not see great urgency to commit as the bumper Government Land Sales Programme for the second half of this year means they will have a greater choice of projects to consider in the near future.
'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.
Colliers International analysis also showed buyers' resistance towards higher-priced units continuing in May. The proportion of units priced above $1,000 psf has fallen from 69.2 per cent of developers' sales in March to 66.1 per cent in April and 55.5 per cent in May.
The firm's director Tay Huey Ying also noted that the most expensive transaction in May at $3,641 psf for a unit at Orchard View is significantly lower than the most expensive primary market transaction in April at $4,207 psf for a unit at The Orchard Residences.
For May, the Rest of the Central Region made up the bulk or 41.8 per cent of homes sold by developers. This was contributed by projects such as the newly-launched Casa Aerata at Lorong 26 Geylang, The Cascadia in Bukit Timah Road as well as continued sales in projects released earlier such as Waterbank at Dakota (52 units) and The Interlace (44 units).
Last month's top seller was Kheng Leong's The Minton in Hougang with 204 units sold at a median price of $849 psf, followed by Casa Aerata with all 78 units sold in the project, comprising mostly one- and two-bedroom units, at a median price of $939 psf, observed CB Richard Ellis executive director Joseph Tan. The Cascadia saw 72 units transacted in the primary market at $1,464 psf median price.
Waterbank at Dakota and Tree House in Chestnut Avenue, which were launched in April, saw sales of 52 units each at median prices of $1,092 psf and $831 psf respectively.
BT's count showed that a total of over 50 units were returned to developers in May.
DTZ's Mrs Ong says that even as developers hold off launches in June, they will watch the market very carefully especially bids at upcoming state land tenders.
'If winning bids ease, developers will have pricing flexibility for their end unit prices. If land prices remain buoyant or even surge further, developers may think they have some respite from pressure to moderate their prices,' she added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Developers and buyers headed for a stalemate
Big drop in May sales could signal the start of a slowdown, with neither side in any hurry to transact
By KALPANA RASHIWALA
(SINGAPORE) Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April. This could mark the start of a period of slower sales as developers weigh their options and buyers bide their time.
The two parties could have a standoff for a little while, predicts DTZ executive director (consulting) Ong Choon Fah. 'There's no great push factor to launch projects in June when you weigh the pros and cons. Potential buyers may also hold back purchases as they may not sense a great urgency to buy.'
Agreeing, Knight Frank chairman Tan Tiong Cheng said: 'Developers will try their best to maintain prices; so what if they delay launches for a couple of months? After all, most of them have strong balance sheets and the Singapore economy seems to be continuing to perform well.'
Market watchers were not alarmed by the steep drop in May developer sales. For one, the 1,533-unit average monthly sales figure for the first five months of 2010 is above the 1,224 unit average monthly sales volume for the whole of 2009, which was a boom year, observes CB Richard Ellis executive director (residential) Joseph Tan.
Jones Lang LaSalle's South-east Asia and Singapore research head Chua Yang Liang also points out that 'compared with the collapse of Lehman Brothers in Q3 2008, the impact of the eurozone debt crisis on the Singapore residential market has been less destabilising thus far.'
During the dark days between September 2008 and January 2009, developers sold only between 108 and 376 units per month.
Some property consultants are predicting this month's sales will be under 1,000 units. Including the latest May number, developers have sold 7,666 units in the first five months of 2010.
Even assuming slower sales in June and the second half, consultants predict developers will end 2010 with total sales of 12,000-15,000 units. Primary market sales for the whole of 2009 totalled 14,688 private homes.
Developers launched 1,134 private homes in May, down from 2,085 units in April.
A confluence of factors - the June school holidays, the World Cup, the brewing economic crisis in Europe, and the onset of the Hungry Ghosts Month in August - may cause developers to go a bit slower on property launches in the near future, some property consultants suggest.
Also, potential buyers may not see great urgency to commit as the bumper Government Land Sales Programme for the second half of this year means they will have a greater choice of projects to consider in the near future.
'Over the next couple of months, sales could be around 900-1,300 units per month until more positive signs appear to entice buyers back into the market. It also depends on the projects that will be launched and their pricing levels. Already, there's resistance to high prices, particularly in the suburban areas,' says DTZ South-east Asia research head Chua Chor Hoon.
Colliers International analysis also showed buyers' resistance towards higher-priced units continuing in May. The proportion of units priced above $1,000 psf has fallen from 69.2 per cent of developers' sales in March to 66.1 per cent in April and 55.5 per cent in May.
The firm's director Tay Huey Ying also noted that the most expensive transaction in May at $3,641 psf for a unit at Orchard View is significantly lower than the most expensive primary market transaction in April at $4,207 psf for a unit at The Orchard Residences.
For May, the Rest of the Central Region made up the bulk or 41.8 per cent of homes sold by developers. This was contributed by projects such as the newly-launched Casa Aerata at Lorong 26 Geylang, The Cascadia in Bukit Timah Road as well as continued sales in projects released earlier such as Waterbank at Dakota (52 units) and The Interlace (44 units).
Last month's top seller was Kheng Leong's The Minton in Hougang with 204 units sold at a median price of $849 psf, followed by Casa Aerata with all 78 units sold in the project, comprising mostly one- and two-bedroom units, at a median price of $939 psf, observed CB Richard Ellis executive director Joseph Tan. The Cascadia saw 72 units transacted in the primary market at $1,464 psf median price.
Waterbank at Dakota and Tree House in Chestnut Avenue, which were launched in April, saw sales of 52 units each at median prices of $1,092 psf and $831 psf respectively.
BT's count showed that a total of over 50 units were returned to developers in May.
DTZ's Mrs Ong says that even as developers hold off launches in June, they will watch the market very carefully especially bids at upcoming state land tenders.
'If winning bids ease, developers will have pricing flexibility for their end unit prices. If land prices remain buoyant or even surge further, developers may think they have some respite from pressure to moderate their prices,' she added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : China likely to avoid US-style housing crash
Business Times - 16 Jun 2010
China likely to avoid US-style housing crash
Jeremy Grantham praises its moves to rein in asset bubbles
(SYDNEY) Jeremy Grantham, who correctly predicted US stocks would lose money in the past decade, said China's 'experimental' approach to reining in asset bubbles may help it avoid a US-style housing market crash.
China's lawmakers have raised down payment requirements and mortgage rates and restricted loans for multiple-home buyers as they seek to dampen record property price gains. US Federal Reserve chairman Ben Bernanke said in January the central bank's low interest rates didn't cause the past decade's housing bubble and that better regulation would have been more effective in limiting the boom.
'Bernanke for example has not admitted that asset class bubbles matter at all, but the Chinese know they do,' Mr Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co, said at a media briefing in Sydney yesterday. China is 'adventurous in trying new things, and they're really quite aware of potential dangers'.
China's banking regulator said yesterday it sees growing credit risks in the nation's real-estate industry and warned of increasing pressure from non-performing loans. The nation's property prices rose 12.4 per cent in May from a year earlier, the second-fastest pace on record.
An S&P/Case Shiller index of house prices in 20 US cities fell 33 per cent from its peak in July 2006 to April 2009.
While China does have a housing bubble, it's not as significant as the US's because fewer people own expensive houses and they had to pay larger deposits on them, Mr Grantham said. There isn't a stock market bubble in China, he added.
Mr Grantham, whose firm managed US$106.3 billion at March 31 according to its website, is best-known for his bearish calls on US stocks. In 2000, he accurately predicted that US stocks would lose money in the coming decade. The Standard & Poor's 500 index lost one per cent a year in the 10 years ended Dec 31, 2009. In March 2009, he recommended investors get back into stocks, just as equity prices reached a 12-year low.
The S&P 500 rose nearly 80 per cent between its low on March 9 2009 and April 23 this year. The index fell 0.2 per cent to close at 1,089.63 yesterday in New York.
Mr Grantham, who estimates the fair value of the S&P 500 is 875, said in a quarterly newsletter posted on GMO's website in April that the market's rally was 'excessive' and was fuelled more by the Fed's monetary policy than by the rebound in the economy, which is facing 'seven lean years'. Keeping benchmark lending rates near record lows for too long may be a 'disaster waiting to happen', he said.
Mr Bernanke 'may lead us for the third time in 12 years off yet another cliff by keeping rates so low for so long that speculators make hay', he said.
GMO is buying 'high quality blue chip' stocks, betting they'll outperform more speculative companies in the next seven years, Mr Grantham said. Its picks for its Quality Fund don't include financial stocks, he noted.
'Financial crises are a rhythm of our capitalist system and with Bernanke and Greenspan around, they have become even more embedded,' he said.
Some of China's measures to control bubbles won't work, while others will work too well and need to be pulled back, according to Mr Grantham, 71. 'China is more experimental and that's what life's all about as far as I'm concerned,' he said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
China likely to avoid US-style housing crash
Jeremy Grantham praises its moves to rein in asset bubbles
(SYDNEY) Jeremy Grantham, who correctly predicted US stocks would lose money in the past decade, said China's 'experimental' approach to reining in asset bubbles may help it avoid a US-style housing market crash.
China's lawmakers have raised down payment requirements and mortgage rates and restricted loans for multiple-home buyers as they seek to dampen record property price gains. US Federal Reserve chairman Ben Bernanke said in January the central bank's low interest rates didn't cause the past decade's housing bubble and that better regulation would have been more effective in limiting the boom.
'Bernanke for example has not admitted that asset class bubbles matter at all, but the Chinese know they do,' Mr Grantham, chief investment strategist at Grantham Mayo Van Otterloo & Co, said at a media briefing in Sydney yesterday. China is 'adventurous in trying new things, and they're really quite aware of potential dangers'.
China's banking regulator said yesterday it sees growing credit risks in the nation's real-estate industry and warned of increasing pressure from non-performing loans. The nation's property prices rose 12.4 per cent in May from a year earlier, the second-fastest pace on record.
An S&P/Case Shiller index of house prices in 20 US cities fell 33 per cent from its peak in July 2006 to April 2009.
While China does have a housing bubble, it's not as significant as the US's because fewer people own expensive houses and they had to pay larger deposits on them, Mr Grantham said. There isn't a stock market bubble in China, he added.
Mr Grantham, whose firm managed US$106.3 billion at March 31 according to its website, is best-known for his bearish calls on US stocks. In 2000, he accurately predicted that US stocks would lose money in the coming decade. The Standard & Poor's 500 index lost one per cent a year in the 10 years ended Dec 31, 2009. In March 2009, he recommended investors get back into stocks, just as equity prices reached a 12-year low.
The S&P 500 rose nearly 80 per cent between its low on March 9 2009 and April 23 this year. The index fell 0.2 per cent to close at 1,089.63 yesterday in New York.
Mr Grantham, who estimates the fair value of the S&P 500 is 875, said in a quarterly newsletter posted on GMO's website in April that the market's rally was 'excessive' and was fuelled more by the Fed's monetary policy than by the rebound in the economy, which is facing 'seven lean years'. Keeping benchmark lending rates near record lows for too long may be a 'disaster waiting to happen', he said.
Mr Bernanke 'may lead us for the third time in 12 years off yet another cliff by keeping rates so low for so long that speculators make hay', he said.
GMO is buying 'high quality blue chip' stocks, betting they'll outperform more speculative companies in the next seven years, Mr Grantham said. Its picks for its Quality Fund don't include financial stocks, he noted.
'Financial crises are a rhythm of our capitalist system and with Bernanke and Greenspan around, they have become even more embedded,' he said.
Some of China's measures to control bubbles won't work, while others will work too well and need to be pulled back, according to Mr Grantham, 71. 'China is more experimental and that's what life's all about as far as I'm concerned,' he said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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