Bungalow market astir with several changing hands

Several big-ticket bungalow deals have been sealed recently including a few in Good Class Bungalow Areas (GCBAs).
A 999-year leasehold bungalow at Yarwood Avenue in the Rifle Range/ Dunearn roads area has changed hands for $19.5 million or $1,198 per square foot (psf) on land area of 16,278 sq ft. On site is a two-storey bungalow spruced up a couple of years ago.
The property, with a built-up area of about 9,500 sq ft, has three large bedrooms and a swimming pool.
Market watchers say this is the third property to be transacted since last year at this Yarwood Avenue cul de sac. A bigger bungalow on land area of 69,546 sq ft was sold in April last year for $59.5 million (or $856 psf) while another changed hands at slightly above $15.6 million or $968 psf in March 2011.
At Oriole Crescent, near Greenwood Avenue, a bungalow has fetched $18.2 million – or $1,726 psf on freehold land area of 10,546 sq ft. On site is a two-storey house said to be over 20 years old. It is leased out at a monthly rental of $18,000 until end-July 2014.
Talk in the market is that an option was granted recently for a bungalow on Camden Park. The price is understood to be $25 million, or $1,659 psf on land area of 15,070 sq ft. The property, said to have been rebuilt about four years ago, features a pool and gym in addition to six bedrooms.
Last month, a seasoned bungalow investor sold his GCB at Binjai Park for $32.9 million or $1,471 psf. On the 22,360 sq ft site is a new two-storey property, completed late last year, boasting seven en-suite bedrooms. The built-up area is about 17,000 sq ft.
A stone’s throw away from Farrer Road MRT Station, a small freehold bungalow at Woollerton Drive was transacted a few weeks ago at nearly $12.6 million or $1,570 psf on land area of 7,987 sq ft. It has five bedrooms.
Typically GCBs have a minimum land area of 1,400 square metres (15,069 sq ft). However, when GCB Areas were gazetted in 1980, they included some slightly smaller existing sites. These are still considered GCBs as they would be bound by the other GCB planning rules if they were to be redeveloped. For instance, such plots cannot be further sub-divided and they cannot be built more than two storeys high (plus an attic and a basement).
Outside GCB Areas, other recent bungalow deals include a two-storey property at Trevose Crescent, in the Dunearn/Whitley roads vicinity, which changed hands at $13.7 million or $1,788 psf on land area of 7,662 sq ft. The property, completed six years ago, has four bedrooms and a roof terrace. The basement houses a home theatre and pool room.
GCB buyers these days are mostly Singaporeans seeking a property for their own occupation.
The number of bungalow deals in GCB Areas doubled from nine in Q1 this year to 18 in Q2, with the value of transactions rising from $224 million to $359 million.
Source: Business Times – 24 August 2012

3 residential sites put up for tender

THREE residential sites – two for private flats and one for an executive condominium – were launched for sale by public tender yesterday.
The plots – in Tanah Merah, Redhill and Woodlands – are all on 99-year leases and could yield about 1,600 units in total.
The 31,881.6 sq m site in New Upper Changi Road was one of two in the area that residents had petitioned the Government to keep undeveloped.
The other site is at the junction of New Upper Changi Road and Bedok South Avenue 3 and is on the reserve list of the government land sales programme.
It will be put up for sale if a developer makes an acceptable minimum bid.
Property experts expect some of the bigger developers to bid for the New Upper Changi Road site, which is near Tanah Merah MRT station and is able to accommodate about 540 units.
Competitive bidding is expected for the plot, especially from developers who failed to clinch a nearby site sold earlier this month.
Experts expect between five and 12 bidders, with the top offer coming in at between $550 and $700 per sq ft per plot ratio (psf ppr).
A condo site in Prince Charles Crescent in Redhill, also launched by the URA, can yield about 590 units on its 23,785.4 sq m.
It was triggered for sale after a developer agreed to bid at least $390 million.
Experts tip moderate interest of between six and 12 bidders with a top offer ranging from $720 to $950 psf ppr.
Bids are likely to be cautious, given the performance of projects in the central region, for instance. The quantum of the bid will limit it to bigger developers only.
The Housing Board has launched a 16,505 sq m site at the junction of Woodlands Avenue 6 and Woodlands Drive 16, earmarked for an exec condo of about 465 units.
The highest bid – from three to seven developers – could come in at between $300 and $350 psf ppr, experts said.
Source: The Straits Times – 24 August 2012

Parking crunch at new condos

THE growth of public transport and a chronic lack of space are prompting developers to cut back on the number of carpark spaces in private condominiums.

Many new condos now typically provide one space per dwelling unit – meeting the minimum requirement stipulated by the Land Transport Authority – while those for visitors are being chopped altogether.

“Owners have the flexibility to provide more parking spaces, over and above this requirement to cater to their development’s needs,” said its spokesman.

But certain projects in the city and Marina Bay and those close to MRT stations can have fewer carpark spaces than the prescribed minimum, and providing visitor spaces is not mandatory.

Experts say the high cost of land has led to developers looking to maximise their gross floor area on homes rather than on parking.

Some recently launched condos highlight the trend. The 473-unit Seastrand in Pasir Ris has 473 spaces, excluding four handicap ones; there are 892 spaces at the 892-unit The Palette, including 10 handicap ones.

Take the Arc at Tampines, an executive condominium with 574 units. It has a seven-storey carpark with 574 parking spaces.

Consultants believe home buyers may not realise the parking crunch until they move in.

Chris International director Chris Koh said the lack of ample parking will be a challenge for owners with more than one car. Visitors may also be frustrated when told they cannot park in the condo.

Older developments built on larger plots are typically more generous. For instance, the 1,000-unit Mandarin Gardens condo in Siglap Road has 500 spaces for visitors or for owners with second cars, Mr Koh added.

ERA Realty Network senior marketing manager Andrew Phee said owner-occupiers are often the ones concerned about parking while investment buyers are less worried, “as they feel most tenants do not drive, have one car at most or rely on public transport instead”.

Condos like Kembangan Suites and Attitude @ Kim Yam have mechanised carparks – drivers drop off their cars to be parked under a computerised system – but Mr Phee said many buyers see this as inconvenient and often opt for projects with normal parking.

Developers say that locality – the proximity of an MRT station, for example – and the profile of buyers and their lifestyle are considered when deciding on providing parking spaces.

A City Developments spokesman said that at most of its projects, especially the larger ones, the parking spaces are usually not fully used. There are also sufficient visitor spaces.

“Usually, the number of spaces available for visitors can vary between 5 and 10 per cent of the total parking spaces,” he added.

Human resource manager Alexia Tng, 29, said the number of carpark spaces is not a major concern as she is looking for a project near an MRT station. “My fiance and I are not planning to buy a car yet so our key criteria are affordability and location.”
Source: Straits Times, 23 Aug 2012

Red hot demand for new 99-year leasehold private homes

About three in four private residential projects launched in the past year are 99-year leasehold developments, according to some property analysts.

Demand for these units has been strong, and market watchers said home buyers should be aware of what they are buying into, as the capital value of leasehold properties depreciates progressively as the development ages.

Experts said the price premium for a freehold property could be as high as 40 per cent.

Demand for many new 99-year leasehold private homes has been red hot, partly driven by the large number of such projects in the market.

They account for about 77 per cent of new private homes placed for sale between June 2011 and June 2012, according to SLP International Property Consultants.

Analysts said there’s also a mindset change among some home buyers now and they are highly mobile when it comes to housing.

For instance, some buyers may take a short-term view on their home purchase, opting to move to another property after five to 10 years, so it doesn’t matter if the project is freehold or not.

For investors, market watchers said new leasehold units offer a better rental yield at 3.5 to 4.2 per cent, compared to about 2.5 to 3.5 per cent for freehold homes.

But those looking at wealth preservation or handing down their homes to their children will be better off with a freehold property.

Ku Swee Yong, CEO, International Property Advisor, said: “99-year leasehold is always considered with a little bit of discount. The theoretical treatment of a 99-year leasehold land should be a depreciation of about 1 per cent per year.

“So if you were to buy a property at S$1,000 psf, each year its value should depreciate by S$10 psf.”

Nicholas Mak, executive director, SLP International Property Consultants, said: “For freehold properties, when the property is more than 20 years old and is ageing, and it is time for re-development perhaps through collective sale, the value of the land in a way is a bit more preserved because the developer would not need to pay the government a land premium to top-up the lease.”

Analysts said a freehold property also commands a price premium over a comparable leasehold project.

This price premium could vary between 10 and 40 per cent.

Mr Mak said: “Let’s say we have two identical projects… and the only difference is their land tenure – one freehold, the other a 99-year leasehold. The freehold will be priced higher than leasehold projects, anywhere from 10 to 30 per cent or even as much as 40 per cent.”

Leasehold or freehold, comments gathered on Channel NewsAsia’s Facebook page are mixed.

But most agree that location is still the most important factor.

Source : Channel NewsAsia – 22 Aug 2012

Property market keeps afloat: JLL report

The Asia Pacific property market remains resilient due to strong investment volumes, even on the back of uncertainties in the global economy, according to Jones Lang LaSalle’s (JLL) Asia Pacific Property Digest (APPD) for Q2 2012. Despite this, the slowdown in leasing activity hints that the region “is not completely immune.” Strong direct commercial property investment market in Q2 was highlighted by a 26 percent year-on-year increase in volumes to US$26 billion (S$32.55 billion). As stronger investment volumes came in, capital values also increased across most major markets. On the contrary, office leasing activity dipped by about 10 percent in Q2 this year compared to 2011, mainly due to “corporate caution and the flow-on effects of ongoing economic uncertainty.” Dr Jane Murray, Head of Research Asia Pacific at JLL, noted, “The Asia Pacific property markets are holding up relatively well given the global economic backdrop. Leasing activity levels should continue to trend moderately lower than last year’s record levels, while we expect investors will continue to search out opportunities, particularly in prime locations.” That said, JLL expects capital values and rents “to grow in most markets, albeit at a slower rate than 2011.” Jeremy Sheldon, Managing Director for Markets Asia Pacific at JLL, said, “There has been a decline in the established financial markets, however we are seeing strong demand in key South East Asian markets, and certain cities in China. While this pattern is likely to continue through to the remainder of the year, we are optimistic that leasing will remain largely stable.” As for Singapore, Chua Yang Liang, Head of Research South East Asia at JLL, said the country “remains at the cusp of this shift and given cost savings as the modus operandi for most firms together with tighter immigration, the Singapore residential leasing market is likely to face further downside pressure.”
Source: PropertyGuru.com.sg, 22 Aug 2012

6 Reasons Why You Should Invest In Property

Buying property can be one of the most rewarding investments you can make. Not only does it serve its purpose as a place to live in, to work from, it is a great investment that can make you more financially secure many years down the road. Here are 6 reasons why you should definitely invest in property.

Provides a Home and Workplace
The first investment property one should acquire should always be your own home. Unless you are staying with your parents and happen to be the only child, you should always make preparation for the eventuality you would have to move out and get a place of your own. Getting an own home is also often a priority for getting married and starting a family. For those with your own small business or home business, you can consider investing in a Small Office Home Office (SOHO) unit. SOHOs are built in a way that your office and home are separated but just a doorstep away. It provides the convenience of working near home and still allows the separation for you to not bring work home. Good SOHO designs also allow for visitors to visit your office section like an office building, but blocks off the residential section for complete privacy for the residents.

Acts as a Saving Tool
If you do not own a home, you would have to rent and that would make the landlord rich by giving your hard earned money to the landlord every month as rental. You should always pay yourself first and that’s to pay yourself rent for staying in the house. You will save a lot of money by paying instalment for a housing loan as opposed to paying rental. Firstly, you will save money on the differential between the instalment and the rental; rental is higher than instalment in most cases. Secondly, you will save money on the principal portion of the instalment as that money goes towards reducing your loan instead. The only true cost for owning a home is the interest charges on your bank loan and of course the opportunity cost of not investing the money is other assets. The capital appreciation of the property and the reduction of loan will increase your net asset values faster than you can imagine.

Rental for Passive Income
If you already have a house, should you buy another one? Absolutely! That’s assuming you have the savings and the income capacity to pay the instalments for another house. You can then rent out the house and become a landlord! The tenants will now work for you as they are paying you rental to make you richer. If you took out a loan for 30 years and you manage to get a tenant to pay your instalment for you, the house becomes yours for free in 30 years! Furthermore, if you manage to lock in a rental rate above your instalment, you also get positive cash flow from your property.

Hedge against Inflation
All things kept constant, barring an economic downturn, property values will go up in the long term. That’s because properties are known as a good hedge against inflation. The combination of lower supply of land, increased demand through population increase, rising construction costs all will push property prices up. Inflation is generally at an average of 2-3% per year; as such one would expect property prices to go up in the same proportion. This is only applicable to long term as in the short term; there are many factors which can cause the property prices to spike up and down compared to the actual value. Never Become Zero in Value
Unlike investments in stocks and businesses, a property cannot become zero in value. Properties are physical assets which sit on land; as such there will always be a value to it. Stocks and businesses however, can become bankrupt and the real risk of losing everything is there. While there may be short term fluctuations in value, the long term potential of property is always upwards as described above. There are some exceptions, where once sought after properties become desolate, infested with criminals and gangsters, the property prices will become very depressed and may never recover.

Leveraged Investment
Property investment is the only investment where the bank is willing to lend up to 90% of the purchase value. Reason is simple, banks also recognize the long term value of properties and getting a housing loan may be the only way for most people to acquire a home when they most need it. The leverage helps to magnify the returns of both rental and capital appreciation on capital invested. For example, if you bought a property of $500k with 20% down payment and the property appreciates by 10%, you have already made a 50% return on your investment! ($50k increase based on $100k down payment). The flip side is if you speculate in properties, the leverage will work against you in a downturn and can cause massive losses.
Source: http://www.investinpassiveincome.com/6-reasons-why-you-should-invest-in-property/ by Calvin Yeo

Wing Tai sees correction in S’pore’s property market

Property developer Wing Tai foresees a growing possibility of a correction in Singapore’s property market. This as the firm announced its fourth quarter (Q4) earnings on Tuesday. Wing Tai’s Q4 net profit slipped 16 per cent to S$140.5 million. This is despite its revenue jumping 88 per cent to S$202.2 million. The company said its lower Q4 profit was due to a change in accounting standards, which do not recognise profits from uncompleted units. Full-year profit declined 35 per cent year-on-year to S$242.2 million, while turnover dropped 17 per cent to S$624.9 million. A total dividend of seven cents per share was also declared. Despite the weaker performance, analysts Channel NewsAsia spoke to said the developer’s earnings were above expectations. The dividend was also a surprise as Maybank Kim Eng’s analyst Wilson Liew was expecting dividends to be five cents per share. At the results briefing, Wing Tai said it is targetting to launch its latest freehold residential development with 337 residential units with one commercial unit next year. Formerly zoned for industrial use, the developer has successfully applied to change the use of its former headquarters to residential. Located at Tampines Road near Kovan MRT station, Wing Tai said this latest project which sits on land acquired in the 1960s would help capture any potential uptick in the property market. But the property developer believes the market is set for a correction ahead. Chairman of Wing Tai Holdings, Cheng Wai Keung, said: “A number of you have been asking why have we not been tendering for URA projects and we have not been active in the market for quite some time. “I would still maintain that the correction will be coming and the way I look at it, is that if there is a cycle, if you take away that 2008 temporary drop, you smooth out the curve, it is actually the eighth or ninth year of the rise in this cycle.” Source : Channel NewsAsia – 21 Aug 2012

Core Central Region home sales jump 80% in July

Private home sales in the month of July for Singapore’s Core Central Region (CCR) jumped by almost 80 percent month-on-month to reach 253 units. Data from the Urban Redevelopment Authority (URA) showed that figures were boosted by robust sales at the 510-unit V On Shenton. Comprising of one 53-storey tower, the 99-year leasehold condo development along Shenton Way sold 144 units at a median price of S$2,061 psf last month. Absolute prices start from just under a million dollars for a 441 sq ft city-facing studio on the 17th floor. Buyers are believed to be mostly Singaporeans, with the rest coming from Indonesia, China and India. Commenting on the sales trends, Tejaswi Chunduri, Regional Analyst at PropertyGuru, said: “As the market prepares for the upcoming Ghost Month, all segments have seen a jump in sales. A notable rise was recorded in the CCR which saw home sales peak at 253. In fact, July’s home sales in the CCR were the highest in the last 15 months, only after April 2011’s sales volume of 306.” “This reinforces the fact that location is the most important factor when considering property investment. This also indicates a return in developer-investor confidence as investors are on the lookout for strategically located projects,” she added. Source : PropertyGuru – 16 Aug 2012

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