Singapore residential market expected to recover this year
Jan 4, 2010 - PropertyGuru.com.sg
2010 will see a recovery of the residential market in Singapore, said Chief Executive Lim Ee Seng of Frasers Centrepoint.
“We expected 2009 to be a very bad year for us but it turned out to be a good year,” said Managing Director Lim Yew Soon of EL Development.
Dr. Chua Yang Liang, Jones Lang LaSalle's head of South-east Asia research, agreed: “It's been a remarkable year - with transaction and pricing outperforming expectations, driven by latent demand, low interest rates and primed by lower pricing.”
Prices and sales of new private homes picked up significantly from April. It was a turnaround from Q1, when sellers were cutting prices just to offload their homes.
At the start of the year, as the private homes market swung hastily from hopelessness to 'unwarranted enthusiasm' by mid-2009, this year turned out to be a 'record-breaking' one, said Chua Chor Hoon, DTZ head of research for South-east Asia.
Record monthly and quarterly highs were achieved from sales and launches of new private homes, while some new launches outside the city area sold at record prices, Ms. Chua said.
Landed home resale located in prime districts also reach record prices, while home prices in resale mass market rebounded within two quarters to hit the 2007 peak levels, added Ms. Chua.
Tuesday, January 5, 2010
Strong demand for The Shore Residences
Strong demand for The Shore Residences
Dec 31, 2009
Property developer Far East Organization said its newest project, The Shore Residences, saw strong demand since the start of its preview two weeks ago.
The 408-unit The Shore Residences is located in the Katong area.
The property developer said more than 70 units were sold and interested buyers have also registered for the units, which will have its official launch on January 21 next year.
Among the units, the one- and two-room units were the most popular.
Far East said that almost all of the 84 one-room units, with a price of $658,000 each, were sold out.
The two-room units, which make up the majority of the residential units, are about $1.1 million each.
The Shore Residences is expected to be fully launched in 2015.
Dec 31, 2009
Property developer Far East Organization said its newest project, The Shore Residences, saw strong demand since the start of its preview two weeks ago.
The 408-unit The Shore Residences is located in the Katong area.
The property developer said more than 70 units were sold and interested buyers have also registered for the units, which will have its official launch on January 21 next year.
Among the units, the one- and two-room units were the most popular.
Far East said that almost all of the 84 one-room units, with a price of $658,000 each, were sold out.
The two-room units, which make up the majority of the residential units, are about $1.1 million each.
The Shore Residences is expected to be fully launched in 2015.
Report reveals the UK's most expensive places to purchase property
Report reveals the UK's most expensive places to purchase property
Dec 31, 2009 - PropertyGuru.com.sg
Chelsea and Kensington in London are the most expensive places in the UK to purchase real estate, with half of the most expensive residential area in the borough.
The average price for a real estate property in the Wycombe Square is about £5.4 million.
Overall, five out of the nine regions of Wales and England have an average home cost of over £1 million, according to the new report by Halifax.
Moles Hill in Leatherhead is the most expensive street outside the capital, with an average real estate property costing about £2.6 million. This is followed by Leys Road, also located in Leatherhead, and Woodlands Road West in Virginia Water, both offering £2.5 million for an average property.
Park Lane in Altrincham and Withinlee Road in Macclesfield are the most costly streets outside of southern England, with each property costing around £1.2 million.
Druidstone Road in Cardiff, on the other hand, has the most expensive residential street within Wales, at £621,000 per property.
Halifax’s housing economist, Nitesh Patel, said that it is not a surprise that most of the highly expensive residential streets are located in the Royal Borough of Chelsea and Kensington, with over half of the 30 highly expensive London streets in the borough.
“Kensington and Chelsea has long had a global appeal but the fall in the value of sterling has helped to attract foreign buyers over the past year despite the worldwide economic recession,” Patel said. “Across most regions, the survey shows that the most expensive streets are tightly clustered within the same area.”
In Edinburgh, the most expensive street is the Warriston Crescent, a row of luxury townhouses next to the Water of Leith, with each property costing about £960,671, according to the separate report of the Bank of Scotland.
Edinburg has six of the ten most expensive streets in Scotland.
The Drumsheugh Gardens is the second in the list, with housing prices fetching to £883,254, followed by Merchiston Gardens, where property prices reaching £672,856.
Additionally, the most expensive street outside Edinburgh is the Morningfield Road, which is located in the west end of Aberdeen, with average property reaching £592,297.
Glasgow’s most expensive street is the Royal Gardens, at £571,500 per average property while Victoria Park Gardens South in Broomhill, has an average property price of £523,429.
Dec 31, 2009 - PropertyGuru.com.sg
Chelsea and Kensington in London are the most expensive places in the UK to purchase real estate, with half of the most expensive residential area in the borough.
The average price for a real estate property in the Wycombe Square is about £5.4 million.
Overall, five out of the nine regions of Wales and England have an average home cost of over £1 million, according to the new report by Halifax.
Moles Hill in Leatherhead is the most expensive street outside the capital, with an average real estate property costing about £2.6 million. This is followed by Leys Road, also located in Leatherhead, and Woodlands Road West in Virginia Water, both offering £2.5 million for an average property.
Park Lane in Altrincham and Withinlee Road in Macclesfield are the most costly streets outside of southern England, with each property costing around £1.2 million.
Druidstone Road in Cardiff, on the other hand, has the most expensive residential street within Wales, at £621,000 per property.
Halifax’s housing economist, Nitesh Patel, said that it is not a surprise that most of the highly expensive residential streets are located in the Royal Borough of Chelsea and Kensington, with over half of the 30 highly expensive London streets in the borough.
“Kensington and Chelsea has long had a global appeal but the fall in the value of sterling has helped to attract foreign buyers over the past year despite the worldwide economic recession,” Patel said. “Across most regions, the survey shows that the most expensive streets are tightly clustered within the same area.”
In Edinburgh, the most expensive street is the Warriston Crescent, a row of luxury townhouses next to the Water of Leith, with each property costing about £960,671, according to the separate report of the Bank of Scotland.
Edinburg has six of the ten most expensive streets in Scotland.
The Drumsheugh Gardens is the second in the list, with housing prices fetching to £883,254, followed by Merchiston Gardens, where property prices reaching £672,856.
Additionally, the most expensive street outside Edinburgh is the Morningfield Road, which is located in the west end of Aberdeen, with average property reaching £592,297.
Glasgow’s most expensive street is the Royal Gardens, at £571,500 per average property while Victoria Park Gardens South in Broomhill, has an average property price of £523,429.
Japan Land appoints new managing director
Japan Land appoints new managing director
Dec 31, 2009 - PropertyGuru.com.sg
Japan Land, a Mainboard-listed property investment company, said last Wednesday that it has appointed Leow Tet Sin as the new managing director and member of the company’s nominating committee, effective from December 23.
The recent appointment settles a conflict of interest issue that has overwhelmed the company since November, when Sin Boon Ann, a member of parliament for Tampines and Japan Land's independent director and lawyer, resigned from the board.
Mr. Sin vacated the board of directors, claiming that he is not satisfied that the company has enough control of Japan Asia Land Limited, its operating subsidiary.
The spotlight was also directed on a possible conflict of interest as Mitsutoshi Ono, one of the former managing directors of Japan Land, was at the same time the president of Japan Asia Land, the firm's subsidiary.
Mr. Ono has resigned as managing director and presently does not sit on the company's board of directors.
With Mr. Leow’s appointment, the company affirmed that there are no changes to the composition of the other Board Committees.
Dec 31, 2009 - PropertyGuru.com.sg
Japan Land, a Mainboard-listed property investment company, said last Wednesday that it has appointed Leow Tet Sin as the new managing director and member of the company’s nominating committee, effective from December 23.
The recent appointment settles a conflict of interest issue that has overwhelmed the company since November, when Sin Boon Ann, a member of parliament for Tampines and Japan Land's independent director and lawyer, resigned from the board.
Mr. Sin vacated the board of directors, claiming that he is not satisfied that the company has enough control of Japan Asia Land Limited, its operating subsidiary.
The spotlight was also directed on a possible conflict of interest as Mitsutoshi Ono, one of the former managing directors of Japan Land, was at the same time the president of Japan Asia Land, the firm's subsidiary.
Mr. Ono has resigned as managing director and presently does not sit on the company's board of directors.
With Mr. Leow’s appointment, the company affirmed that there are no changes to the composition of the other Board Committees.
Greenlodge Condo up for en bloc sale, with $135m asking price
Greenlodge Condo up for en bloc sale, with $135m asking price
Dec 31, 2009 - PropertyGuru.com.sg
Owners at Greenlodge Condominium in Toh Tuck Road launched its freehold estate for en bloc sale. This was prompted by the improving property market.
They are asking for $135 million for the site, which translates to $683 per square foot per plot ratio (psf ppr), including the development charge.
The 14,000-sq-ft freehold land currently comprises 80 units.
Newman & Goh, the marketing agent of Greenlodge Condo, believes that the site can be potentially redeveloped to 211 units of boutique apartments at an average size of 1,000 sq ft.
Newman & Goh expects to fetch no less than $1250 per sq ft for this new development project.
The collective tender for the site will close on January 13, 2010.
Dec 31, 2009 - PropertyGuru.com.sg
Owners at Greenlodge Condominium in Toh Tuck Road launched its freehold estate for en bloc sale. This was prompted by the improving property market.
They are asking for $135 million for the site, which translates to $683 per square foot per plot ratio (psf ppr), including the development charge.
The 14,000-sq-ft freehold land currently comprises 80 units.
Newman & Goh, the marketing agent of Greenlodge Condo, believes that the site can be potentially redeveloped to 211 units of boutique apartments at an average size of 1,000 sq ft.
Newman & Goh expects to fetch no less than $1250 per sq ft for this new development project.
The collective tender for the site will close on January 13, 2010.
Government to launch 10 sites for tender in H1 2010
Government to launch 10 sites for tender in H1 2010
Dec 31, 2009 - PropertyGuru.com.sg
The government announced that its industrial land sales programme will put 10 sites, including two on the confirmed list, up for tender in the first half of 2010.
Sites on the confirmed list will be launched for tender regardless of developers' interest.
The two sites on the confirmed list include a new site at Ubi Road 1 and a site at Tampines Industrial Avenue 4, which was formerly on the government’s reserve list.
The two confirmed sites have a total of 8.39 hectares site area.
The remaining sites are on the reserve list.
These sites will be launched for sale only after a developer commits to bid at or above the minimum price.
Only the Pioneer Road North site is new to the list.
The rest of the seven sites will be carried over from the reserve list in 2009. These include the Yishun Ave 6, Woodlands Ave 12, Toh Tuck Ave. and Serangoon North Ave 4.
Eight sites included on the reserve list have a total of 13.46 hectares site area.
Due to the uncertain market outlook in October 2008, the confirmed list was suspended then.
However, with the stronger demand seen this year, National Development Minister Mah Bow Tan announced in September 2009 that the confirmed list will be reinstated in the Government Land Sales (GLS) Programme for H1 2010.
Dec 31, 2009 - PropertyGuru.com.sg
The government announced that its industrial land sales programme will put 10 sites, including two on the confirmed list, up for tender in the first half of 2010.
Sites on the confirmed list will be launched for tender regardless of developers' interest.
The two sites on the confirmed list include a new site at Ubi Road 1 and a site at Tampines Industrial Avenue 4, which was formerly on the government’s reserve list.
The two confirmed sites have a total of 8.39 hectares site area.
The remaining sites are on the reserve list.
These sites will be launched for sale only after a developer commits to bid at or above the minimum price.
Only the Pioneer Road North site is new to the list.
The rest of the seven sites will be carried over from the reserve list in 2009. These include the Yishun Ave 6, Woodlands Ave 12, Toh Tuck Ave. and Serangoon North Ave 4.
Eight sites included on the reserve list have a total of 13.46 hectares site area.
Due to the uncertain market outlook in October 2008, the confirmed list was suspended then.
However, with the stronger demand seen this year, National Development Minister Mah Bow Tan announced in September 2009 that the confirmed list will be reinstated in the Government Land Sales (GLS) Programme for H1 2010.
ST : HDB prices hit new high
Jan 4, 2010
HDB prices hit new high
By Jessica Cheam
HDB resale flat prices rose about 8 per cent for 2009. -- ST PHOTO: STEPAHNIE YEOW
PRICES of Housing Board resale flats continued its relentless climb, rising 3.8 per cent in the fourth quarter of last year to hit a fresh record.
The Resale Price Index (RPI) hit 150.7 in the fourth quarter, up from 145.2 in the third quarter, according to flash estimate released by the HDB on Monday.
This means HDB resale flat prices rose about 8 per cent for 2009. Analysts say this is due to the nascent economic recovery and strong demand for resale flats.
HDB said on Monday it will continue to launch more build-to-order flats in 2010 'if there is sustained demand for new flats',.
It will ensure that there is an adequate supply of flats to meet prevailing housing needs, it said.
About 1,300 new flats will be launched for sale tomorrow in Choa Chu Kang and Hougang.
Full public housing data for the fourth quarter will be released on Jan 22.
HDB prices hit new high
By Jessica Cheam
HDB resale flat prices rose about 8 per cent for 2009. -- ST PHOTO: STEPAHNIE YEOW
PRICES of Housing Board resale flats continued its relentless climb, rising 3.8 per cent in the fourth quarter of last year to hit a fresh record.
The Resale Price Index (RPI) hit 150.7 in the fourth quarter, up from 145.2 in the third quarter, according to flash estimate released by the HDB on Monday.
This means HDB resale flat prices rose about 8 per cent for 2009. Analysts say this is due to the nascent economic recovery and strong demand for resale flats.
HDB said on Monday it will continue to launch more build-to-order flats in 2010 'if there is sustained demand for new flats',.
It will ensure that there is an adequate supply of flats to meet prevailing housing needs, it said.
About 1,300 new flats will be launched for sale tomorrow in Choa Chu Kang and Hougang.
Full public housing data for the fourth quarter will be released on Jan 22.
Wednesday, December 30, 2009
Terrace homes comprise the lion’s share of landed homes
Terrace homes comprise the lion’s share of landed homes
Dec 30, 2009 - PropertyGuru.com.sg
Prices of landed homes continue to escalate this year in the five most renowned districts despite the setting in of price fatigue for apartments and condominiums.
Credo Real Estate’s caveats analysis, which covered a period of four years from the time when residential property commenced into the market in 2006, presents that terrace house prices were the most resilient over the last four years, increasing by more than 50 percent in some areas.
More than semi-detached bungalows and houses, the average price of terrace houses per square foot has risen time after time between 2006 and 2009 in the five most popular districts.
District 19 is the most in demand landed housing location, followed by Districts 15, 28, 20 and 10.
The study conducted by Credo does not include Sentosa Cove (Singapore’s much exclusive landed housing locations) and the Good Class Bungalow Areas (GCBAs), and strata landed homes. The latter are usually built more intensively than conventional landed housing. They are hybrid housing structure with shared condo-type facilities like tennis courts and swimming pool.
While prices of terrace homes have fared relatively better compared to bungalows and semi-Ds, landed home prices in general have also appreciated steadily between 2006 and 2009 in the five districts. “For most districts and sub-classifications of landed, we are at the all-time peak in terms of prices,” said Karamjit Singh, managing director for Credo.
In most instances, price gains were attained in 2008 amid the general property slump.
Such resilience was attributed by agents to the relatively limited supply and stock of landed homes.
“There's a very strong desire on the part of many Singaporean households to upgrade to landed property, which is regarded as an emotionally satisfying form of housing to own because you actually own something very tangible on the ground rather than in the air,” said Mr. Singh.
The promotion of the government for larger families - with three or more children - has also driven more parents to consider having bigger homes with no less than four bedrooms.
“Many times you'll find terrace houses offer better value than large apartments and condos. A 2,000 sq ft 4-plus-1, brand-new freehold condo in Katong might costs $2.4 million. But you can probably buy an intermediate terrace for about $2 million and have a bigger gross floor area of 2,500 sq ft, with saleable area inclusive of car porches possibly exceeding 3,000 sq ft. And you could have as many as five bedrooms,” Mr. Singh said.
Terrace homes form the bulk of landed housing stock in Singapore, accounting for the lion's share or almost 60 percent of the total 1,552 caveats lodged this year for landed homes in the five hot spots.
Dec 30, 2009 - PropertyGuru.com.sg
Prices of landed homes continue to escalate this year in the five most renowned districts despite the setting in of price fatigue for apartments and condominiums.
Credo Real Estate’s caveats analysis, which covered a period of four years from the time when residential property commenced into the market in 2006, presents that terrace house prices were the most resilient over the last four years, increasing by more than 50 percent in some areas.
More than semi-detached bungalows and houses, the average price of terrace houses per square foot has risen time after time between 2006 and 2009 in the five most popular districts.
District 19 is the most in demand landed housing location, followed by Districts 15, 28, 20 and 10.
The study conducted by Credo does not include Sentosa Cove (Singapore’s much exclusive landed housing locations) and the Good Class Bungalow Areas (GCBAs), and strata landed homes. The latter are usually built more intensively than conventional landed housing. They are hybrid housing structure with shared condo-type facilities like tennis courts and swimming pool.
While prices of terrace homes have fared relatively better compared to bungalows and semi-Ds, landed home prices in general have also appreciated steadily between 2006 and 2009 in the five districts. “For most districts and sub-classifications of landed, we are at the all-time peak in terms of prices,” said Karamjit Singh, managing director for Credo.
In most instances, price gains were attained in 2008 amid the general property slump.
Such resilience was attributed by agents to the relatively limited supply and stock of landed homes.
“There's a very strong desire on the part of many Singaporean households to upgrade to landed property, which is regarded as an emotionally satisfying form of housing to own because you actually own something very tangible on the ground rather than in the air,” said Mr. Singh.
The promotion of the government for larger families - with three or more children - has also driven more parents to consider having bigger homes with no less than four bedrooms.
“Many times you'll find terrace houses offer better value than large apartments and condos. A 2,000 sq ft 4-plus-1, brand-new freehold condo in Katong might costs $2.4 million. But you can probably buy an intermediate terrace for about $2 million and have a bigger gross floor area of 2,500 sq ft, with saleable area inclusive of car porches possibly exceeding 3,000 sq ft. And you could have as many as five bedrooms,” Mr. Singh said.
Terrace homes form the bulk of landed housing stock in Singapore, accounting for the lion's share or almost 60 percent of the total 1,552 caveats lodged this year for landed homes in the five hot spots.
S’pore government promises affordable homes despite housing price increases
S’pore government promises affordable homes despite housing price increases
Dec 30, 2009 - PropertyGuru.com.sg
It has been a tough ride for the property market in Singapore this year, plummeting in the first quarter before accounting a good rebound.
Market experts said that the housing market will more likely continue to rise in 2010, spurred by economic recovery, as well as the opening of Singapore’s integrated resorts (IRs).
The sharp turnaround of the property sector was something that no one has predicted.
Singapore welcomes the year in the midst of economic recession, and the output was bleak. But as the stock market responded in March, the output has improved.
Several market watchers said that repressed demand over the last year and the "herd instinct" triggered the buying frenzy.
National Development Minister Mah Bow Tan noted that it was an exceptional period.
"Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard...I did not expect the prices to go up. But the point is, are we able to respond to this change. And the answer is yes," the Minister said.
The fear of property bubbles drove the government to introduce several measures such as removing easy financing schemes to cool down the private homes sector, and taking out interest absorption scheme and interest only loan to temper the exuberance of the market.
Eugene Lim, associate director for ERA Asia Pacific, said, "The market will probably stabilise for now. But I would say that when the IR opens, and when more international investors do come into Singapore, we may expect another run. Especially now, in the recent one, two months, we have noticed a pick up in high-end properties priced above S$2,000 per square foot."
Although housing prices are expected to rise in 2010, Minister Mah said the government is monitoring the situation and will take necessary action. For instance, the Minister said that more land will be released to property developers if needed. He also promised that HDB will have more Build-To-Order projects intended particularly for first-time homebuyers.
But he said that calls for the government to intervene in housing prices is not a good solution.
"The whole question is, do we peg HDB flats to the market, or whether we follow another system. And that other system is what some countries use.”
"In other words, I sell you a flat at fixed price, when you sell the flat, you have to sell it back to me also at a fixed price. In other words, you are not allowed to profit from the flat. There you can keep flat prices fixed."
Dec 30, 2009 - PropertyGuru.com.sg
It has been a tough ride for the property market in Singapore this year, plummeting in the first quarter before accounting a good rebound.
Market experts said that the housing market will more likely continue to rise in 2010, spurred by economic recovery, as well as the opening of Singapore’s integrated resorts (IRs).
The sharp turnaround of the property sector was something that no one has predicted.
Singapore welcomes the year in the midst of economic recession, and the output was bleak. But as the stock market responded in March, the output has improved.
Several market watchers said that repressed demand over the last year and the "herd instinct" triggered the buying frenzy.
National Development Minister Mah Bow Tan noted that it was an exceptional period.
"Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard...I did not expect the prices to go up. But the point is, are we able to respond to this change. And the answer is yes," the Minister said.
The fear of property bubbles drove the government to introduce several measures such as removing easy financing schemes to cool down the private homes sector, and taking out interest absorption scheme and interest only loan to temper the exuberance of the market.
Eugene Lim, associate director for ERA Asia Pacific, said, "The market will probably stabilise for now. But I would say that when the IR opens, and when more international investors do come into Singapore, we may expect another run. Especially now, in the recent one, two months, we have noticed a pick up in high-end properties priced above S$2,000 per square foot."
Although housing prices are expected to rise in 2010, Minister Mah said the government is monitoring the situation and will take necessary action. For instance, the Minister said that more land will be released to property developers if needed. He also promised that HDB will have more Build-To-Order projects intended particularly for first-time homebuyers.
But he said that calls for the government to intervene in housing prices is not a good solution.
"The whole question is, do we peg HDB flats to the market, or whether we follow another system. And that other system is what some countries use.”
"In other words, I sell you a flat at fixed price, when you sell the flat, you have to sell it back to me also at a fixed price. In other words, you are not allowed to profit from the flat. There you can keep flat prices fixed."
STI to breach 3,000 in H1 2010, say market watchers
STI to breach 3,000 in H1 2010, say market watchers
Dec 30, 2009 - PropertyGuru.com.sg
Singapore’s Straits Times Index (STI) managed to end the year higher by 60 percent, despite weak response in the first three months, with various sectors being lifted by stimulus measures and pent-up liquidity from market players waiting to enter the market.
Terence Wong, senior vice president and co-head of research at DMG & Partners Securities, said: "Another thing that stuck out obviously, was the big great run that we saw since the second week of March.”
"In fact the STI has gone up over 90 per cent since that period of time, and I believe that has been one of the most impressive runs in recent memory."
"One of the sectors that I like is hospitality. I think 2010 is the Year of Visit Singapore, and there are a lot of things that are happening, chief of which would be the opening of the IRs (integrated resorts).”
"I think with the improvement in the global and regional economies, there will be a return of the tourism dollar," he added.
Vice president of SIAS Research, Roger Tan, said: "We saw good news coming from the property sector, especially the mass market sector, and that encouraged the property sector to thrive a little bit.”
"Then we also saw the banks coming back, and the oil and gas sector, because of the expectation that in 2010 and 2011, we could see higher demand from oil."
Looking forward next year, experts said that there are rooms for industries to pull ahead, including hospitality and property counters, with exposures to several cities in China.
"The Chinese government has to continue with its urbanisation, has to continue encouraging the urbanisation rate,” Mr. Tan said. "So a lot more attention will be paid down to second- and third-tier city development, away from the first-tier cities which have already benefited from the last ten years of development."
Most market watchers expect the STI to breach 3,000 in the first half of 2010. However, a slower second half is also expected due to the uncertainty behind the economic recovery in the US.
Dec 30, 2009 - PropertyGuru.com.sg
Singapore’s Straits Times Index (STI) managed to end the year higher by 60 percent, despite weak response in the first three months, with various sectors being lifted by stimulus measures and pent-up liquidity from market players waiting to enter the market.
Terence Wong, senior vice president and co-head of research at DMG & Partners Securities, said: "Another thing that stuck out obviously, was the big great run that we saw since the second week of March.”
"In fact the STI has gone up over 90 per cent since that period of time, and I believe that has been one of the most impressive runs in recent memory."
"One of the sectors that I like is hospitality. I think 2010 is the Year of Visit Singapore, and there are a lot of things that are happening, chief of which would be the opening of the IRs (integrated resorts).”
"I think with the improvement in the global and regional economies, there will be a return of the tourism dollar," he added.
Vice president of SIAS Research, Roger Tan, said: "We saw good news coming from the property sector, especially the mass market sector, and that encouraged the property sector to thrive a little bit.”
"Then we also saw the banks coming back, and the oil and gas sector, because of the expectation that in 2010 and 2011, we could see higher demand from oil."
Looking forward next year, experts said that there are rooms for industries to pull ahead, including hospitality and property counters, with exposures to several cities in China.
"The Chinese government has to continue with its urbanisation, has to continue encouraging the urbanisation rate,” Mr. Tan said. "So a lot more attention will be paid down to second- and third-tier city development, away from the first-tier cities which have already benefited from the last ten years of development."
Most market watchers expect the STI to breach 3,000 in the first half of 2010. However, a slower second half is also expected due to the uncertainty behind the economic recovery in the US.
Luxury property in Phuket recorded THB 1.1 Billion sales
Luxury property in Phuket recorded THB 1.1 Billion sales
Dec 30, 2009 - PropertyGuru.com.sg
Phuket Luxury property market accounted for transactions worth THB 1.1 billion from July to November this year, according to a market research done by C9 Hotelworks. The resale sector made up the 50 percent of the total sales.
According to C9’s managing director, Bill Barnett, “this year has seen the absence of new high end product which has propelled the secondary segment, while off plan product remains sluggish.”
“The failure to launch new projects is a key constraining factor limiting volume in the marketplace. Despite demonstrated sales of a number of ‘super’ high end villas from THB 165 – 330 million, developers remain on the sideline more out of negative risk concern then fundamentals,” he added.
Market data shows that a rising numbers of early buyers in developments are now cashing out at significant profit levels, thus, driving up pricing point for several existing products. Geographically, ‘Millionaires Mile’ in Kamala experienced the highest level of activity.
Without the important new product entering the supply market, H2 2009 saw a growing volume of premium lots acquired by buyers who committed to develop their own luxury residences.
Bill Barnett noted, “Traditionally the period of December to April remains peak sales season, and feedback in the past few weeks has seen sales traction. Ultimately the market desperately requires new launches to stimulate broader interest if there is to be a return to stabilized trading.”
Dec 30, 2009 - PropertyGuru.com.sg
Phuket Luxury property market accounted for transactions worth THB 1.1 billion from July to November this year, according to a market research done by C9 Hotelworks. The resale sector made up the 50 percent of the total sales.
According to C9’s managing director, Bill Barnett, “this year has seen the absence of new high end product which has propelled the secondary segment, while off plan product remains sluggish.”
“The failure to launch new projects is a key constraining factor limiting volume in the marketplace. Despite demonstrated sales of a number of ‘super’ high end villas from THB 165 – 330 million, developers remain on the sideline more out of negative risk concern then fundamentals,” he added.
Market data shows that a rising numbers of early buyers in developments are now cashing out at significant profit levels, thus, driving up pricing point for several existing products. Geographically, ‘Millionaires Mile’ in Kamala experienced the highest level of activity.
Without the important new product entering the supply market, H2 2009 saw a growing volume of premium lots acquired by buyers who committed to develop their own luxury residences.
Bill Barnett noted, “Traditionally the period of December to April remains peak sales season, and feedback in the past few weeks has seen sales traction. Ultimately the market desperately requires new launches to stimulate broader interest if there is to be a return to stabilized trading.”
Yuexiu Property acquires land plot in China for $112 million
Yuexiu Property acquires land plot in China for $112 million
Dec 30, 2009 - PropertyGuru.com.sg
Singapore Developer Yuexiu Property said yesterday that one of its units purchased land plot in China worth 544 million yuan or about 112 million Singapore dollars.
It said that 95 percent of its owned subsidiary acquired the land plot located in Zhongshan City in Guangdong province, China through a public land auction last week.
The said land has a site area of about 167,000 square metres with a total permissible gross floor area of about 418,000 square metres.
The property firm said the land was approved for commercial and residential use. About 84 percent of the space will be used for residential property, while the remaining 16 percent of the permissible gross floor area account for commercial use.
Yuexiu said that the acquisition of the Zhongshan site signifies an important move toward the company’s strategy of improving its real estate business.
Dec 30, 2009 - PropertyGuru.com.sg
Singapore Developer Yuexiu Property said yesterday that one of its units purchased land plot in China worth 544 million yuan or about 112 million Singapore dollars.
It said that 95 percent of its owned subsidiary acquired the land plot located in Zhongshan City in Guangdong province, China through a public land auction last week.
The said land has a site area of about 167,000 square metres with a total permissible gross floor area of about 418,000 square metres.
The property firm said the land was approved for commercial and residential use. About 84 percent of the space will be used for residential property, while the remaining 16 percent of the permissible gross floor area account for commercial use.
Yuexiu said that the acquisition of the Zhongshan site signifies an important move toward the company’s strategy of improving its real estate business.
Asian markets ended mixed during holiday trade
Asian markets ended mixed during holiday trade
Dec 30, 2009
The stock market in Asia ended narrowly mixed in a dwindling holiday trade last Tuesday, after Wall Street posted subdued gains.
The dollar was fairly higher against the yen and euro. Australian shares led the region, its resource-heavy market powered by more solid prices for gold, oil and other commodities in recent days.
Across much of the region, trade was thin and sluggish, with many investors out for the holidays and reluctant to place bets toward the end of a year marked by remarkable gains in stocks worldwide.
The Nikkei 225 stock in Japan rose 0.1 percent or 6.97 points, to 10,641.20. Hang Seng in Hong Kong fell 0.1 percent or 12.99 points, to 21,467.23.
Kospi in South Korea dropped 1.3 percent to 1,663.47, and the Shanghai index in China lost 0.3 percent to 3,177.82.
Elsewhere, the key index in Australia rose 1.1 percent to 4,845.1. Sensex in India gained 0.2 percent and Singapore's market advanced 0.2 percent.
The Dow Jones industrial in the US rose 0.3 percent or 26.98 points, to 10,547.08 in Monday. The Dow transportation fell 0.6 percent or 24.37 points, to 4,163.49.
The Standard & Poor's 500 index added 0.1 percent or 1.3 points, to 1,127.78, and the Nasdaq composite index increased 0.2 percent or 5.39 points, to 2,291.08.
In Asia, oil prices hung below $79 per barrel, with benchmark crude for February delivery down by 11 cents to $78.66. The contract settled up 72 cents at $78.77 on Monday after soaring above $79, as the extended cold snap in the US spurred an end-of-year rally in energy futures.
Dec 30, 2009
The stock market in Asia ended narrowly mixed in a dwindling holiday trade last Tuesday, after Wall Street posted subdued gains.
The dollar was fairly higher against the yen and euro. Australian shares led the region, its resource-heavy market powered by more solid prices for gold, oil and other commodities in recent days.
Across much of the region, trade was thin and sluggish, with many investors out for the holidays and reluctant to place bets toward the end of a year marked by remarkable gains in stocks worldwide.
The Nikkei 225 stock in Japan rose 0.1 percent or 6.97 points, to 10,641.20. Hang Seng in Hong Kong fell 0.1 percent or 12.99 points, to 21,467.23.
Kospi in South Korea dropped 1.3 percent to 1,663.47, and the Shanghai index in China lost 0.3 percent to 3,177.82.
Elsewhere, the key index in Australia rose 1.1 percent to 4,845.1. Sensex in India gained 0.2 percent and Singapore's market advanced 0.2 percent.
The Dow Jones industrial in the US rose 0.3 percent or 26.98 points, to 10,547.08 in Monday. The Dow transportation fell 0.6 percent or 24.37 points, to 4,163.49.
The Standard & Poor's 500 index added 0.1 percent or 1.3 points, to 1,127.78, and the Nasdaq composite index increased 0.2 percent or 5.39 points, to 2,291.08.
In Asia, oil prices hung below $79 per barrel, with benchmark crude for February delivery down by 11 cents to $78.66. The contract settled up 72 cents at $78.77 on Monday after soaring above $79, as the extended cold snap in the US spurred an end-of-year rally in energy futures.
Tuesday, December 29, 2009
Market ignores CapitaLand, SIA losses
Market ignores CapitaLand, SIA losses
Dec 31, 2009 - PropertyGuru.com.sg
Even though ‘big hitters’ such as CapitaLand and Singapore Airlines posted quarterly losses and warned of difficult days in the future, the Strait Times Index (STI) romped to 2,636 points high for over ten months.
Yesterday, the second biggest airline in the world by market capitalisation posted a loss of $307 million for the quarterly period from April to June. The incurred loss was mainly due to the combination of the global economic decline, the fuel hedging losses and the outbreak of Influenza A.
It was the company’s second time to post a quarterly loss. From April to June 2003, it dropped into red to the amount of $312 million at the height of the Sars pandemic.
However, today, unlike the fiscal year 2003 and 2004, the company was threatened that the full year could be in the red. If that happens, this year would be its first loss-making year ever since it was first established in 1972.
On the other hand, the biggest property developer in South-east Asia, CapitaLand, also posted its first quarter loss as of 2003, noting write-downs on investments.
CapitaLand pictured a dark outlook for the full year once its net loss of $156.9 million for the period of April to June increases.
According to Chairman Richard Hu, “Although some stability has been restored in the financial markets, the outlook for 2009 remains uncertain”.
CapitaLand noted that excluding impairments and revaluations, the company earned a net profit of $124 million for the quarter.
Three big banks are going to report their quarterly results next week. They will surely be closely watched to determine the levels of free-based income trends and non-performing loans.
Others like the SembCorp will supply denotations of the latest trend in world infrastructure expenditures. As the market tries to hold its hopes on the recovery, major companies like CapitaLand and SIA seems to doubt the forward indicators.
In the case of SIA, though signs of small sequential improvements can be seen, premium seat sales remain under pressure. Premium seats also account for 40 percent of the income of the airline.
For this year, the International Air Transport Association (IATA) anticipates the market to post losses of about US$9 billion.
Carriers from the Asia-Pacific experienced a 14.5 percent yearly decline in passenger demand in June, twice the world passenger traffic decline of 7.2 percent.
For the property division, repressed demand has released a new craze of buying by upgraders. Due to this, the prices of new residential property have increased by 5 to 7 percent every month.
Most developers will surely enjoy the spoils of unloading inventory. However, like what CIMB said, strong household balance sheets and loosening of the credit market have aided to carry dealings.
According to the research house, the following leg of the growth in the demand has to come from key improvements in the economy. It can still be seen whether the increasing demand in 2010 to 2011 will be enough to get the supply balanced to strike the market.
However, the liquidity that flows in the Singapore market has promoted the STI by a walloping 81 percent as of March.
Dec 31, 2009 - PropertyGuru.com.sg
Even though ‘big hitters’ such as CapitaLand and Singapore Airlines posted quarterly losses and warned of difficult days in the future, the Strait Times Index (STI) romped to 2,636 points high for over ten months.
Yesterday, the second biggest airline in the world by market capitalisation posted a loss of $307 million for the quarterly period from April to June. The incurred loss was mainly due to the combination of the global economic decline, the fuel hedging losses and the outbreak of Influenza A.
It was the company’s second time to post a quarterly loss. From April to June 2003, it dropped into red to the amount of $312 million at the height of the Sars pandemic.
However, today, unlike the fiscal year 2003 and 2004, the company was threatened that the full year could be in the red. If that happens, this year would be its first loss-making year ever since it was first established in 1972.
On the other hand, the biggest property developer in South-east Asia, CapitaLand, also posted its first quarter loss as of 2003, noting write-downs on investments.
CapitaLand pictured a dark outlook for the full year once its net loss of $156.9 million for the period of April to June increases.
According to Chairman Richard Hu, “Although some stability has been restored in the financial markets, the outlook for 2009 remains uncertain”.
CapitaLand noted that excluding impairments and revaluations, the company earned a net profit of $124 million for the quarter.
Three big banks are going to report their quarterly results next week. They will surely be closely watched to determine the levels of free-based income trends and non-performing loans.
Others like the SembCorp will supply denotations of the latest trend in world infrastructure expenditures. As the market tries to hold its hopes on the recovery, major companies like CapitaLand and SIA seems to doubt the forward indicators.
In the case of SIA, though signs of small sequential improvements can be seen, premium seat sales remain under pressure. Premium seats also account for 40 percent of the income of the airline.
For this year, the International Air Transport Association (IATA) anticipates the market to post losses of about US$9 billion.
Carriers from the Asia-Pacific experienced a 14.5 percent yearly decline in passenger demand in June, twice the world passenger traffic decline of 7.2 percent.
For the property division, repressed demand has released a new craze of buying by upgraders. Due to this, the prices of new residential property have increased by 5 to 7 percent every month.
Most developers will surely enjoy the spoils of unloading inventory. However, like what CIMB said, strong household balance sheets and loosening of the credit market have aided to carry dealings.
According to the research house, the following leg of the growth in the demand has to come from key improvements in the economy. It can still be seen whether the increasing demand in 2010 to 2011 will be enough to get the supply balanced to strike the market.
However, the liquidity that flows in the Singapore market has promoted the STI by a walloping 81 percent as of March.
Overwhelming response for BTO flats in Dawson
Overwhelming response for BTO flats in Dawson
Dec 29, 2009 - PropertyGuru.com.sg
Homebuyers who applied for BTO flats at Dawson in Queenstown are experiencing stiff competition.
Application for the flats ended yesterday, and about 1,718 premium flats were six-times oversubscribed.
Units at Skyterrace@Dawson and SkyVille@Dawson are public flats, with premium designs and finishes. These projects are comprised of studio-type units, as well as three- to five-room flats.
A total of 9,865 individuals applied for its 1,718 units.
The five-room flats, which cost around $500,000, proved to be the most popular. About 200 flats were offered but over 2,000 applicants were competing for them.
The four-room flats also saw high demand. 1,100 such flats were offered, but more than 6,000 applications were received.
One analyst said that the demand for the newest project was fuelled by "sandwich class" individuals, who were willing to pay more for public housing.
Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic said, "They may wish to buy private properties but because of the escalating prices of entry-level private properties, these people may be looking to buy more premium types of HDB flats."
Paired units, which were being offered for the first time, also proved to get good response. Over 300 applications have been received for the 70 units being offered.
Applicants will know the result, as well as their queue number by February next year.
For those unsuccessful applicants, HDB said that they can still look forward to more Build-To-Oder (BTO) projects in 2010. In fact, HDB is prepared to launch one BTO project every month, if demand for these flats continues to increase.
Dec 29, 2009 - PropertyGuru.com.sg
Homebuyers who applied for BTO flats at Dawson in Queenstown are experiencing stiff competition.
Application for the flats ended yesterday, and about 1,718 premium flats were six-times oversubscribed.
Units at Skyterrace@Dawson and SkyVille@Dawson are public flats, with premium designs and finishes. These projects are comprised of studio-type units, as well as three- to five-room flats.
A total of 9,865 individuals applied for its 1,718 units.
The five-room flats, which cost around $500,000, proved to be the most popular. About 200 flats were offered but over 2,000 applicants were competing for them.
The four-room flats also saw high demand. 1,100 such flats were offered, but more than 6,000 applications were received.
One analyst said that the demand for the newest project was fuelled by "sandwich class" individuals, who were willing to pay more for public housing.
Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic said, "They may wish to buy private properties but because of the escalating prices of entry-level private properties, these people may be looking to buy more premium types of HDB flats."
Paired units, which were being offered for the first time, also proved to get good response. Over 300 applications have been received for the 70 units being offered.
Applicants will know the result, as well as their queue number by February next year.
For those unsuccessful applicants, HDB said that they can still look forward to more Build-To-Oder (BTO) projects in 2010. In fact, HDB is prepared to launch one BTO project every month, if demand for these flats continues to increase.
Residential site in Sengkang to be launched for public tender
Residential site in Sengkang to be launched for public tender
Dec 29, 2009 - PropertyGuru.com.sg
The Housing Development Board (HDB) has received an application from a property developer to launch a residential site located at Sengkang West Avenue for public tender.
The parcel of land is under HDB's Reserve List System.
Under the Reserve List System, a site will only be put up for public tender if the government receives an application from a developer at or above the minimum price that is acceptable to them.
In this case, the Sengkang site is being offered at a minimum price of $70 million.
HDB will launch the site for tender in two weeks' time.
A 99-year leasehold condominium development is being planned for the 183,000-sq-ft site.
Dec 29, 2009 - PropertyGuru.com.sg
The Housing Development Board (HDB) has received an application from a property developer to launch a residential site located at Sengkang West Avenue for public tender.
The parcel of land is under HDB's Reserve List System.
Under the Reserve List System, a site will only be put up for public tender if the government receives an application from a developer at or above the minimum price that is acceptable to them.
In this case, the Sengkang site is being offered at a minimum price of $70 million.
HDB will launch the site for tender in two weeks' time.
A 99-year leasehold condominium development is being planned for the 183,000-sq-ft site.
Keppel Land pays $180 million for site in China
Keppel Land pays $180 million for site in China
Dec 29, 2009 - PropertyGuru.com.sg
Keppel Land has purchased a site located in northeast China through its wholly-owned subsidiary, Da Di Investment, for $180 million.
A residential township is being planned on the 30-hectare parcel of land, which is in Shenyang. It will comprise some commercial developments and around 6,000 homes. This project will target the upper-middle class.
The progressive launch of the initial phase of 1,200 high-quality apartments will start from the second half of 2011.
The waterfront project is the second township being developed by Keppel Land in Shenyang. It will increase the pipeline of the developer to over 30,000 homes throughout China.
Dec 29, 2009 - PropertyGuru.com.sg
Keppel Land has purchased a site located in northeast China through its wholly-owned subsidiary, Da Di Investment, for $180 million.
A residential township is being planned on the 30-hectare parcel of land, which is in Shenyang. It will comprise some commercial developments and around 6,000 homes. This project will target the upper-middle class.
The progressive launch of the initial phase of 1,200 high-quality apartments will start from the second half of 2011.
The waterfront project is the second township being developed by Keppel Land in Shenyang. It will increase the pipeline of the developer to over 30,000 homes throughout China.
Housing prices in the UK drop 1.9%
Housing prices in the UK drop 1.9%
Dec 29, 2009 - PropertyGuru.com.sg
Year-on-year housing prices in England and Wales dropped 1.9 percent in December, the smallest annual decline since May this year, according to property data company Hometrack.
But the monthly result of housing price increases suffered a slowdown of 0.1 percent in December, compared to 0.2 percent in November. Hometrack predicts that prices will drop one percent further in 2010.
Mortgage lenders Halifax and Nationwide also report that prices have already increased by 2 percent in the year to November.
“Unexpectedly buoyant demand and a chronic lack of housing for sale were the key drivers of the housing market in 2009,” said Hometrack’s director of research, Richard Donnell. “While a scarcity of housing for sale is set to remain an important feature of the market in 2010, it is the prospects for demand that will dictate the outlook for prices in the next 12 months.”
Several real estate agents surveyed by Hometrack reported that registration from interested homebuyers this year has increased 41 percent, while supply of property rose by only 7 percent.
Hometrack said this pattern will likely continue into 2010, with home sales equivalent to the average household moving once every 25 years, leading to a volatile price.
However, a possible increase in the unemployment rate and the growing concern about tax increases, as well as spending cuts after the June elections were likely to limit the demand.
“Against the backdrop of low sales volumes, equity-rich households could continue to put upward pressure on prices in localised markets in 2010. Yet a sustainable and broad-based recovery in the housing market needs a broader base of buyers,” Mr. Donnell said.
Dec 29, 2009 - PropertyGuru.com.sg
Year-on-year housing prices in England and Wales dropped 1.9 percent in December, the smallest annual decline since May this year, according to property data company Hometrack.
But the monthly result of housing price increases suffered a slowdown of 0.1 percent in December, compared to 0.2 percent in November. Hometrack predicts that prices will drop one percent further in 2010.
Mortgage lenders Halifax and Nationwide also report that prices have already increased by 2 percent in the year to November.
“Unexpectedly buoyant demand and a chronic lack of housing for sale were the key drivers of the housing market in 2009,” said Hometrack’s director of research, Richard Donnell. “While a scarcity of housing for sale is set to remain an important feature of the market in 2010, it is the prospects for demand that will dictate the outlook for prices in the next 12 months.”
Several real estate agents surveyed by Hometrack reported that registration from interested homebuyers this year has increased 41 percent, while supply of property rose by only 7 percent.
Hometrack said this pattern will likely continue into 2010, with home sales equivalent to the average household moving once every 25 years, leading to a volatile price.
However, a possible increase in the unemployment rate and the growing concern about tax increases, as well as spending cuts after the June elections were likely to limit the demand.
“Against the backdrop of low sales volumes, equity-rich households could continue to put upward pressure on prices in localised markets in 2010. Yet a sustainable and broad-based recovery in the housing market needs a broader base of buyers,” Mr. Donnell said.
DTZ Research sees more property deals worth above $100 million
DTZ Research sees more property deals worth above $100 million
Dec 29, 2009 - PropertyGuru.com.sg
DTZ Research, a global property adviser, said that the last quarter of the financial year saw a rising trend of larger property deals in the Singapore market.
The value of property deals transacted in the last quarter were larger compared to the trend of small deals over the past three quarters of the year.
There were eight transactions, each worth more than $100 million, which made up 77 percent of the $2.5 billion total value transacted in Q4 2009. This is substantially larger than the 48 percent in Q3 and none in Q1 and Q2.
Investments made in Q3 and Q4 composed the 83 percent of the $5.9 billion total investment value in 2009.
The residential sector was the leading performer in 2009, accounting for 50 percent of the overall transaction value. The sector also tallied 56 percent or $1.4 billion of the total investment sales in Q4, with deals like the en bloc sale of Dragon Mansion.
The retail sector was the second top performing sector, contributing 16 percent to the full year transaction value. The sale of Clementi Mall in November for $541.9 million is one of the big deals in this segment.
Looking forward, DTZ Research expects 2010 to be a more active year due to the improving market sentiment.
With more activity coming from the government land sales programme, the residential sector will continuously dominate the property market next year.
Dec 29, 2009 - PropertyGuru.com.sg
DTZ Research, a global property adviser, said that the last quarter of the financial year saw a rising trend of larger property deals in the Singapore market.
The value of property deals transacted in the last quarter were larger compared to the trend of small deals over the past three quarters of the year.
There were eight transactions, each worth more than $100 million, which made up 77 percent of the $2.5 billion total value transacted in Q4 2009. This is substantially larger than the 48 percent in Q3 and none in Q1 and Q2.
Investments made in Q3 and Q4 composed the 83 percent of the $5.9 billion total investment value in 2009.
The residential sector was the leading performer in 2009, accounting for 50 percent of the overall transaction value. The sector also tallied 56 percent or $1.4 billion of the total investment sales in Q4, with deals like the en bloc sale of Dragon Mansion.
The retail sector was the second top performing sector, contributing 16 percent to the full year transaction value. The sale of Clementi Mall in November for $541.9 million is one of the big deals in this segment.
Looking forward, DTZ Research expects 2010 to be a more active year due to the improving market sentiment.
With more activity coming from the government land sales programme, the residential sector will continuously dominate the property market next year.
HK sells land plots lower than the expected prices
HK sells land plots lower than the expected prices
Dec 29, 2009 - PropertyGuru.com.sg
The Hong Kong government sold two residential land plots at prices below market expectations in its first major land auction in two years, pressuring the stock market and property companies' shares.
However, the land plots were sold at lower-than-expected prices due to its location and it did not reflect the overall fundamental of HK’s property market, which faced a threat of bubbles forming, said analysts.
The result of the auction prompted HK’s Hang Seng index, which had been increasing before the start, ending 0.17 percent lower.
Also, the property sub-index, which had been outperforming before the auction start, fall 0.7 percent.
“The price came at the low end of expectations. The reason could be because the two plots of land are quite huge,” said Adrian Ngan, an analyst from CCB (China Construction Bank) International.
The first land plot was sold for HK$5.15 billion (US$660 million), while the second plot went for HK$5.25 billion. Both were below the expected market price of HK$5.45 billion.
Property Developer Sino Land won the first, as well as the second site, through a joint bid with K Wah International.
“The final price was reasonable. We're so grateful that other developers did not compete with us as they know we have a few plots of land nearby. We are really very happy,” said Sino Land chairman Robert Ng.
Each plot has a total of 720,000 sq ft gross floor area and is located in the Tai Po district in northern Hong Kong. The opening bid for the sites were HK$3.6 billion
“For this auction, you have to take the result with a grain of salt because you have to recognise that it is not that attractive to anyone else other than Sino Land,” said one analyst, who declined to be identified.
Analysts and experts highlighted Hong Kong, as well as China and Singapore, as a market where possible asset bubbles are forming, with the government trying to ease up prices through careful measures.
Before the Monday’s auction, HK government only sold small land parcels this year and did not have any major land sale for the past two years.
Dec 29, 2009 - PropertyGuru.com.sg
The Hong Kong government sold two residential land plots at prices below market expectations in its first major land auction in two years, pressuring the stock market and property companies' shares.
However, the land plots were sold at lower-than-expected prices due to its location and it did not reflect the overall fundamental of HK’s property market, which faced a threat of bubbles forming, said analysts.
The result of the auction prompted HK’s Hang Seng index, which had been increasing before the start, ending 0.17 percent lower.
Also, the property sub-index, which had been outperforming before the auction start, fall 0.7 percent.
“The price came at the low end of expectations. The reason could be because the two plots of land are quite huge,” said Adrian Ngan, an analyst from CCB (China Construction Bank) International.
The first land plot was sold for HK$5.15 billion (US$660 million), while the second plot went for HK$5.25 billion. Both were below the expected market price of HK$5.45 billion.
Property Developer Sino Land won the first, as well as the second site, through a joint bid with K Wah International.
“The final price was reasonable. We're so grateful that other developers did not compete with us as they know we have a few plots of land nearby. We are really very happy,” said Sino Land chairman Robert Ng.
Each plot has a total of 720,000 sq ft gross floor area and is located in the Tai Po district in northern Hong Kong. The opening bid for the sites were HK$3.6 billion
“For this auction, you have to take the result with a grain of salt because you have to recognise that it is not that attractive to anyone else other than Sino Land,” said one analyst, who declined to be identified.
Analysts and experts highlighted Hong Kong, as well as China and Singapore, as a market where possible asset bubbles are forming, with the government trying to ease up prices through careful measures.
Before the Monday’s auction, HK government only sold small land parcels this year and did not have any major land sale for the past two years.
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