May SRPI: A tale of two newspapers...

It was a rather interesting contrast we found today while reading separate reports about the May SRPI: The Straits Times has painted a rosy picture by reporting that prices of shoebox units (500sqft or smaller) have moved up by 0.9% in May after dipping 0.8% the month before. But things aren't as perky with The Business Times, which reported that the sub-index for small units (up to 506sqft) islandwide has dipped 0.1% between December last year and May this year.

Maybe shoebox buyers are just more adverse to apartments between 500 to 506sqft you think...?!

BUT SERIOUSLY, the wife and I wonder if the price dip for shoebox/small units will continue to exacerbate as more and more such unit surfaces onto the market....

.

Braddell View to petition for reduce privatisation fee...

So one of the MPs' many obligations these days is to help HUDC owners to get a lower fee for privatisation, so that they can make a bigger killing when they go en bloc?

If the folks at Braddell View are unwilling to fork out the stipulated amount of money to privatise, they should just stay with their "semi-privatise" status. It is not as if  privatisation will bring substantial change to the way they live their lives...except for the ability to put their estate for collective sale, of course. Oh wait, that IS a substantial change to the way they live their lives... potentially.

Having said that, we wonder if Mr Nair (which happens to be the MP for our area as well) will also help us reduce the amount needed to top-up the lease of our estate. Hmm...

.

Singapore Private Property Outlook 2H2012

The good folks at Maybank Kim Eng have produced a report giving their take on the Singapore private property market outlook for the second half of 2012.

And in the spirit of things, the wife and I have gazed into our somewhat hazy crystal ball and these are what we saw:

·         To better exploit cater to demands for low quantum but tiny homes, developers will roll-out a new category of apartment termed "matchbox" units. These will be between 50 to 150sqft in size but at an affordable price of less than $500K.

·         Greece will exit Euro 2012 and thereafter, the Eurozone. Spain and Italy likely to follow.

·         Germany will win Euro 2012 but even the King of Europe is helpless to prevent the continual Eurozone crisis.

·         A new law will be enacted which requires developers to demonstrate that areas such as planter boxes and air-con ledges are indeed "liveable" before these can be marketed as part of the total area of an apartment. Representatives from developer of new projects must live in these areas for a week to prove their "liveability".

·         A new department within URA will be set up to handle the anticipated flood of complaints from shoebox/matchbox owners whose apartment values are set to plummet due to excess supply. This is despite previous government warnings and the fact that most buyers made their purchases with their eyes wide open.

Tongue in cheek? We hope so...

Click on the link below to read the Maybank Kim Eng report:
http://www.scribd.com/doc/97494735/Singapore-Property-Outlook-2H2012#fullscreen
.

Enbloc News: Kemaman View sold for $45.5 million!

Kemaman View, a freehold residential development located off Balestier Road, was sold en bloc for $45.5 million on Monday.

The sale translated to $935psf ppr for the 17,388sqft site.

The buyer is privately-owned developer Aylesbury Private Limited, who outbid two other entities to clinch the deal.

The development's marketing agent HSR Investment Sales said the owners of each apartment unit could potentially receive approximately $1.5 million as part of the deal.

This represents a premium of about 30% over the resale price if each unit was sold individually.

Kemaman View, which was completed in 1995, comprises a total of 30 apartment units, each about 1,300sqft in size.

The site is zoned for residential use with a gross plot ratio of 2.8 and a maximum height of up to 36 storeys, subject to approval.

No development charge is expected to be payable.

Source: Channel News Asia

Click on the link below to read our previous post on this collective sale:
http://www.sgproptalk.blogspot.sg/2012/04/enbloc-news-kemaman-view.html

.

New private home sales down 31% in May 2012!

New private home sales in Singapore fell 31.6% in May following strong sales in the first four months of the year.

According to data released on Friday by the Urban Redevelopment Authority, 1,702 new private residential units, excluding executive condominiums (ECs), were sold in May, down from April's record 2,487 units sold.

URA said 1,205 new homes were sold in the suburbs, or Outside Central Region, in May.

Meanwhile, 362 new homes were sold in the city fringes, or Rest of Central Region (RCR), and 135 units were sold in the city, or Core Central Region (CCR).

Including ECs, 2,057 units of new homes were sold in May.

Source: Channel News Asia

Thanks to MS for alerting us about the news flash.

So is this just a blip or a sign of things to come...?

.

2H2012 GLS: No let-up in sites for new homes...

The Singapore government will continue to inject new supply of land for residential development in the second half of the year to meet strong demand for private homes.

In a joint statement, the National Development Ministry and the Urban Redevelopment Authority said the new sites can yield some 14,200 private homes, including 3,100 executive condominium (EC) units.

The Government Land Sales Programme for the second half of the year will comprise 15 Confirmed List sites and 24 Reserve List sites.

Under the Reserve List system, a site will only be put up for tender if the developer's minimum bid price is acceptable to the government.

The two agencies said that 13 of the sites on the Confirmed List are for residential development and can potentially yield 7,100 units, comparable to the supply made available in the first half of the year.

This, to ensure there is adequate supply to meet private housing demand.

Majority of the private residential sites are located in the suburban areas or at the city fringe.

As of first quarter this year, 38,000 units of private homes, including 1,800 EC units are still unsold, according to the statement.

Source: Channel News Asia

With the deluge of new sites that will be offered and backlog of unsold private homes that are already in the pipeline, it be interesting to see how long prices will hold, especially if the EU economies continue to falter...

.

Next en-bloc wave: Mixed-use developments?

En-bloc property sales have lost its shine so far this year.

A total of nine en-bloc properties have been successfully transacted this year to date.

This compares to 29 transactions in the same period last year.

Although developers have turned cautious as cooling measures and requirements to build and sell out all the new units in five years start to bite, experts said interest in mixed-use en-bloc developments - especially those in the outer regions - is fast picking up.

The fad in property collective sales has turned towards mixed-use properties.

These are developments that have both residential units as well as space for commercial use.

Analysts said such mixed developments like Novena Ville are gaining traction among developers.

En-bloc sale specialists Credo Real Estate said mixed-use en-bloc property sales have seen a 10 to 15% rise over the past year.

Karamjit Singh, managing director of Credo Real Estate, said: "There is also another hybrid segment of the market, involving mixed use where the developer can explore options including having some retail component, commercial component.

"That is beginning to get some traction nowadays because it opens up opportunities for developers to create new products, to capitalise on changing investment patterns and also changing lifestyles."

The declining interest in en bloc transactions is partly due to the high asking prices from sellers.

Norman Ho, partner at Rodyk & Davidson, said: "It is quite different talking about en bloc 15 years ago and today, because en bloc today...the value of the property has gone up and replacement cost has become a lot higher, so increasingly owners do not want to participate anymore.

"Because today you see the incremental value in en bloc is only 50% as compared to the early days where it was 300%. There were other issues (also) such as if it is a residential en bloc, developers buying it have to pay additional stamp duty. So it is quite difficult to get through an en bloc these days.

"Also, the laws have changed that states that lawyers must witness signatures, so increasingly it is more difficult to do en bloc. However, en bloc is one of the very few avenues to have freehold land, as compared to government tender. So there will always be interest in en bloc."

Demand for mixed developments in suburban areas has risen in recent years, with more than 600 shop units sold last year, more than double the 300 units sold in 2009.

Some analysts said the yields for commercial markets ranged from 4% to 6% while residential properties, depending on the location and market conditions, can be as low as 2% and as high as 3.5% to 4%.

Source: Channel News Asia

.

Enbloc News: Sophia Mansions

Sophia Mansions, a 19-unit residential development located along Adis Road, has been launched for sale by tender.

The 20-year-old development in District 9 sits on a freehold site with a land area of approximately 17,545sqft.

The marketing agent of the property Credo Real Estate said the sellers are expecting offers in the region of $42.5 million to $45 million.

This works out to land rates of approximately $1,160 to $1,228psf ppr at a gross plot ratio of 2.1, inclusive of development charge.

Credo said the site which sits on a high ground can be redeveloped into a boutique development of up to six-storey high with the option of a basement car park.

The potential gross floor area of about 36,840sqft may accommodate some 35 apartments with an average size of 1,000sqft depending on layout and configuration.

Credo's executive director Ms Yong Choon Fah said: "New launches in this area generally see a strong take up rate due to its strategic locality and proximity to Orchard Road and the Central Business District area."

She added that new developments in the area such as "Parc Sophia is fully sold and Sophia Residence which is just down the road is 99% sold."

If successful, each owner of the two-bedroom apartment will fetch an average of $1.92 million to $2.03 million.

Meanwhile, owners of the three-bedroom apartments will get an average of $2.56 million to $2.71 million each.

The tender closes on June 27, 2012.

Source: Channel News Asia

.

High-density living = urban lifestyle in shoebox?

Below is a letter published in today's Sunday Times:

Last Sunday’s commentaries by writer John Lui (“Shoebox flats = Inhuman? Where’s the logic?”) and editor Warren Fernandez (“Can we cope with 8 million on the island?”) touched on issues which are related: the size of our living space and the social implications of a growing population.

Does high-density living mean an urban lifestyle in shoebox apartments?

In 1965, when I was five, my father earned $80 a month as an electrician, and my mother was a seamstress.

We lived in a rented Housing Board “no-room flat” which offered a living area, a kitchen and a bathroom.

Our kitchen had a foldable table and chairs, while our living area had a bed and a small wardrobe with a mirror on one of its doors.

Whenever my mother needed to cook in the kitchen, we had to fold away the table, and I would do my homework on her Singer sewing machine.

A stack of carton boxes in one corner of our flat functioned as our mobile storage space.

At night, I would sleep with my mother, and my father would usually sleep on the floor, next to all the unsewn clothes.

I seldom had toys, not because we could not afford them, but because there was no space to store them.

As I grew older, my parents decided that such a small living space was not ideal for any child to grow up in. So we moved.

Today, shoebox apartments are being built and promoted by developers, who say they see the need and demand for a modern urban lifestyle. Actually, the motivation is purely profit-driven. Shoebox units point the way to higher revenues for developers who want to maximize their margins.

Back in 1960s, we had a choice to upgrade our then-urban lifestyle by not renting such a small flat.

But today, many people choose to live in tiny shoebox flats.

When someone decides to buy a shoebox apartment, he will need to take a loan that will tie him down for the next 15 to 20 years.

Try getting out of this lifestyle when it’s time to have children.

Ben Liew

==============================================================

Ben's letter brought back some old memories. I too spent the early years of my life living in a “no-room flat” in Lengkok Bahru. It housed 5 adults (my parents, my grandparents and my uncle) and a kid (me), so you can imagine that it was quite a squeeze back then. My parents and I spent the nights sleeping on the floor as the flat could only accommodate one bed, which was occupied by my grandparents. Thus it was a huge relief when we finally got the keys to our brand new 3-room HDB flat in Stirling Road!
.

And speaking of Watercolours in Pasir Ris....

The wife and I must admit we do not know much about the selection/purchase process for Executive Condominiums (ECs).

But here is what we are perplexed about:  For a project that is supposedly more than two times oversubscribed, why were only 91 of the 416 units sold during the first day of booking? Wouldn't people who have been selected to buy be all rushing to pick the best units once the doors of sales gallery are opened, or is this not how things work with ECs??

We will be most grateful if someone can enlighten us on this.

.