Property Spotlight: Tanah Merah vicinity (Part 2)

Soon is concerned that, based on the three new parcels sold this year (including eCO), there will be about 1,900 new homes coming up over the next few years in the neighborhood around the Tanah Merah MRT station. In addition, more supply is in the pipeline. For instance, next to eCO is another land parcel (Parcel B), located at the junction of New Upper Changi Road and Bedok South Avenue 3, that is earmarked for a 595-unit residential project sitting on the Reserve List of the government land sales programme. Adjacent to it, where the Tanah Merah MRT station is located, is a parcel designated for "future development".

Even though prices have been stable, and the take-up rate at new launches have been healthy, Soon is concerned that there could be an oversupply in the next few years when these new condos are completed.

David See, senior associate director of OrangeTee, who specializes in marketing units in District 16, is more sanguine. He reckons that, based on the bid prices by the developers, the new projects will be launched at higher prices.

For instance, the 343,171sqft Land Parcel A, located on New Upper Changi Road and Bedok Road, was put up for sale in August and won by Keppel Land last month with a bid of $434.55 million($791psf ppr). The price for the 99-year leasehold site paid by KeppelLand was just 7.1% higher than the second-highest bidder, a joint venture between Fragrance Group and World Class Land.

Incidentally, in August, Fragrance and World Class Land won the tender for a smaller parcel of around 150,700sqft across New Upper Changi Road, with a bid of $285.22 million ($676psf ppr). It is estimated that the new condo, called Urban Vista, will have 550 units, and it is expected to be launched in the coming months.
 

Keppel Land's bid price of $791psf ppr was a record price paid for a residential development land parcel in the suburbs, and is at a 48% premium to the price the Far East-Frasers Centrepoint-Seikisui House consortium paid for eCO's site in February.

Following the close of the tender for the site on New Upper Changi Roadon Oct 16, Joseph Tan, CBRE's executive director of residential services, commented: " The 11 bids garnered for the site and the quantum of the bids show that developers are confident that this residential project will be well received when launched."

Tan estimates Keppel Land's breakeven at $1,200psf, with the selling price of the new project pegged around $1,400psf, which is slightly higher than the average $1,300psf achieved at eCO so far. Keppel Landintends to develop a residential project with about 700 units on the site, with sizes ranging from 500 to 1,400sqft.

Source: THE EDGE SINGAPORE

Property Spotlight: Tanah Merah vicinity (Part 1)

The District 16 neighbourhood in the vicinity of Tanah Merah MRT station has seen a surge in activity, owing partly to the sale of three government land parcels and the launch of eCOon Bedok South Avenue 3.

The developers of eCO are a consortium made up of Far East Organization, Frasers Centrepoint and Sekisui House, which won the 308,330sqft, 99-year leasehold site with a bid of $345.9 million ($534psf ppr) in February. The consortium launched eCO in late September and, as at Nov 6, 547 units of the 620 released in the project had been sold at an average price of $1,300psf. eCO comprises a mix of five residential types, with 244 condo units, 237 suites, 220 SOHOs, 17 lofts and 34 townhouses.

The take-up in eCO has been strong, and prices achieved have also set new benchmarks for the area. Based on caveats lodged between Oct 19 and 25, transaction prices had ranged from $1,172 to $1,491psf.

Most potential buyers of eCOhad initially compared the project with Optima @Tanah Merah, which was completed earlier this year and is adjacent to Fragrance and World Class Land's Urban Vista. The 297-unit Optima was launched for sale in 2009, and most of the units were snapped up within three days at an average of $810psf. The project is developed by TID, a joint venture between Mitsui Fudosan and Hong Leong Group. In recent sub-sales done in October, prices of units ranged from $1,027 to $1,350psf.

Most recently, on Oct 23, an 850sqft, two-bedroom apartment on the sixth floor changed hands for $1.1 million ($1,294psf). The previous owner had paid $748,000 ($880psf) for the unit at launch and had enjoyed a price gain of 47% over the last three years. A similar-sized unit on the 11th floor was sold for $1.02 million ($1,199psf), compared with the original purchase price of $804,800 ($946psf).

Meanwhile, two larger units at Optimawere also transacted recently in the secondary market. According to Dan Soon, associate branch manager of PropNex Realty, which brokered the sale of the units, sellers are pegging their asking price to those achieved at eCO. For instance, Soon had brokered the recent sale of a 1,259sqft three-bedroom unit on the sixth floor of one of the blocks at Optima for $1.7 million ($1,350psf). The original owner paid $1.04 million ($828psf) for the unit three years ago, thus seeing a capital appreciation of 63%. The other one sold was a slightly smaller three-bedroom unit of 1,195sqft located on the third floor of another block. It went for $1.5 million ($1,255psf). The previous owner purchased it for $955,200 ($799psf) in 2009, so his capital appreciation was 57%.

"Increasingly, more young couples are looking for small units below $1.2 million in the East,"  observes Soon. The area has also attracted more expatriates, as it is near Changi Business Park, where banks such as Citi, DBS, Standard Chartered and Credit Suisse have their global support and backroom services. The Singapore University of Technology and Design coming up near Changi Business Parkis also a draw. With amenities such as the upcoming Bedok Mall, the new Changi City Point mall and the proximity to MRT station, the area has become a more desirable neighbourhood to live in, adds Soon, with cheaper rents relative to the CBD.

Older condos in District 16 have also seen their prices being driven up by the new launches. PropNex's Soon observes, however, that there have been fewer transactions in these older developments, as many owners are reluctant to sell. "Once they sell their unit, it is difficult for them to find a replacement property in the same neighbourhood, as the newer units cost more and are generally more compact in size,"  he says. Besides, most of them are owner-occupiers, so there are also few units for rent in the older condos.

Most of these older condos are trading in the $1,000psf range or lower. For instance, at the eight-year-old Tanamera Crest, a 288-unit, 99-year leasehold condominium developed by CapitaLand, a 1,173sqft three-bedroom unit on the 10th floor changed hands at $1.09 million ($927psf) on Oct 19. It last changed hands in February 2010, for $735,000 ($626psf). Prior to that, it was sold for $460,000 ($392psf) in 2006. The original buyer paid $593,800 ($506psf) for the unit in late 2001.

At the 1,038-unit The Bayshore, developed by Far East Organization 13 years ago, a 1,184sqft three-bedroom unit on the 10th floor was sold for $1.16 million ($980psf). Also, a 1,012sqft two-bedroom unit on the 28th floor of another block was sold for $1.1 million ($1,087psf).

 

{To be continued...}

Source: THEEDGE SINGAPORE

New project sales status: eCO & Sky Green

According to a Channel News Asia report, 515 units out of the 603 units released at eCO condominium project have been sold within a month. They were launched for sale on September 22.

The 748-unit development, located at Bedok South is a joint venture between Far East Organization, Frasers Centrepoint and Sekisui House.

The developers said all 240 two- and three-bedroom condominium units have been sold out.

Meanwhile, about half of the SOHO and suite units were snapped up, mostly by buyers aged 30 to 49 years.

In a joint statement released on Tuesday, the developers added that over 90% of the buyers were Singaporeans or Singapore Permanent Residents.

And majority of the buyers are living in the Bedok, Chai Chee, Marine Parade, and East Coast districts.

Prices for units at eCo start from $810,000 for a one-bedroom suite.

The project is estimated to be completed in 2017.

And in a separate report, Sky Green condominium, located along MacPherson Road, has seen strong buying demand.

About 80% of the 176 units available at the freehold development have been sold during its soft launch, according to the consortium behind the project.

The consortium comprises Heeton Holdings, KSH Holdings, TEE International and Zap Piling.

In a statement, the consortium said the units were sold at an average price of $1,502psf and the buyers were mainly Singaporeans.

The official launch of the development will take place next weekend.

Sky Green is expected to be completed in 2016.


Below are the project details for Sky Green for those who are interested:

Project:                    SKY GREEN
District:                   13
Address:                  570 MacPherson Road
Tenure:                   Freehold
Site Area:               66,928sqft
No. of Units:          176
Expected T.O.P:    2016

Unit Type                         Floor Area (sqft)
1-Bedroom                           441 - 624
1+Study                                474 - 721
2-Bedroom                           614 - 990
3-Bedroom                        1,152 - 1,163
4-Bedroom (dual key)             1,496
3-Bedroom (penthouse)    2,207 & 2,293
4-Bedroom (penthouse)          2,906

Business as usual despite new housing loan restrictions!

According to reports, more than 300 units have been sold at Allgreen Properties' 920-unit Riversails, with at least 20 homes sold over the weekend. Prices of the larger units average slightly over $800psf while the one-bedroom units average $1,000psf.

The larger units (three-bedrooms and above) at the 99-year project have been doing well, with quite a few sold to upgraders. Three out of the five stacks of one-bedroom units launched have been sold.

Over at Sky Miltonia, 67% of units at this 420-unit have found buyers. The developer is offering an 18% discount and throwing in the option for buyers of certain units to upgrade their flooring to marble.

The 748-unit eCO in Bedok South has thrown in an additional 2% furniture voucher in addition to an array of discounts offered.

According to our central bank, the average tenure for new residental property loans jumped from 25 years to 29 over the last three years. Over 45% of the new home loans have tenures exceeding 30 years.

Lower initial monthly repayments from long loan tenures and low interest rates may cause borrowers to overestimate their loan servicing ability, says MAS (The Monestary Authority of Singapore).

Our blog posting on the new housing loan restrictions have generated a fair amount of discussion between our readers (which the wife and I are extremely pleased, as it is another small indication that  people actually read our blog). A few have expressed the opinion that the new restrictions will have little to no impact on demand. But if it is indeed true that over 45% of the current new home loans are more than 30 years, we believe that the "penalty" imposed on loan tenures that exceed 30 years will have a significant effect on demand going forward. Already units at new launches are not flying off the shelves as they used to be just a couple of months ago.

While we cannot claim to be a representative sample, the new restrictions have effectively put us out of the market for a second property - the longest tenure that the wife and I can qualify for a new housing loan is about 20 years, else we be hit with the new LTV ratio of 40% of the property value should we decide to extend the loan period beyond the retirement age of 65 years.

And we are pretty sure that we are not alone in this predicament.

Having said that, the fear of potential (especially younger, first-time) buyers being lulled into complacency by the combination of lower initial monthly repayment with a longer loan tenure and low interest rates are very real indeed. We were once guilty of such back in our early days of property venture, and it took a bout of rising interest rates to jolt us back to reality...