Monthly Archives: April 2011

Resale flat prices increase, but COV premiums drop 9% in Q1

Posted on 25 Apr 2011 | Comments Off on Resale flat prices increase, but COV premiums drop 9% in Q1

The price of resale flats went up in the first quarter of 2011, but Cash-Over-Valuation premiums fell to S$21,000 – a 9 per cent drop from the previous quarter, according to data from the HDB.

Observers attribute the lower COV premiums to the government’s cooling measures which took effect in the first quarter of this year.

Going forward, analysts have mixed views on the outlook for COV premiums.

“Currently the COVs have come to a point where it is not going any much lower. Based on our PropNex data, the COV for the month of April has already gone up to a median at S$23,000, which is where we were starting prior to the first quarter,” said PropNex CEO Mohamed Ismail.

For the first quarter of 2011, the price of resale flats rose 1.6 per cent.

This is higher than the 2.5 per cent increase in the previous quarter.

Meanwhile, median sublet rents in Q1 remained relatively stable with increases from 1-room and 5-room flats and decreases from 2-room flats.

Subletting transactions rose by 8 per cent to 6,365 cases.

Some analysts believe COV premiums will likely continue to fall as a result of new supply coming on stream.

Separately, HDB said it will launch another 3,185 flats in Hougang, Sembawang, Sengkang and Punggol for sale under the April 2011 Build-to-Order BTO exercise.

This will bring the total supply of new BTO flats this year to 22,000, compared to the 16,000 BTO flats that were offered last year.

“I think the fact that there’s going to be 22,000 new HDB dwellings up in the marketplace, and the government’s ramping up in terms of its development missionary to develop more HDB properties…will mean vendors cannot hold on to their COV asking prices,” said Mr Donald Han, vice chairman of Cushman and Wakefield.

Despite the supply of new flats, Mr Han believes there could be a one to two per cent uptake in HDB resale prices in the next one or two quarters.

Mr Ismail also thinks the resale prices will trend up, as new supply of BTO flats are not a perfect substitute for the resale units.

Source : CNA – 25 Apr 2011

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Market for luxury homes muted

Posted on 25 Apr 2011 | Comments Off on Market for luxury homes muted

The luxury residential property sector should be performing quite consistently this year but luxury residential property prices look unlikely to climb to pre-crisis levels anytime soon, according to market-watchers.

“Current prices for luxury residential property prices per square feet (psf) are in the S$2,500 to S$4,500 range,” said Mr Liang Thow Ming, executive director and head of residential services at Credo Property Services. “This is still some way off the record high of S$5,000 psf registered in 2007.”

Mr Liang’s pick for the star performer this year would be the mid-market segment, where he expects “a higher percentage increase in overall prices”.

He feels that the demand for luxury residential property – “which is more dependent on foreign buyers than any other segment” – is “unlikely to pick up substantially due to the geo-political situation in the world”.

Another reason could be the fact that en bloc sellers are “setting certain high expectations” in terms of prices, he said, adding that land supply for luxury residential developments in the Core Central Region (CCR) is very much dependent on collective sales.

Higher asking prices and the limited supply of land could put a damper on the number of luxury developments to be rolled out.

Similarly, market-watchers like UOB KayHian’s Mr Vikrant Pandey are not bullish, despite the shift in buying interest toward the CCR and the Rest of Central Region (RCR) for last month, as indicated by figures from the Urban Redevelopment Authority (URA).

The latter’s flash estimates showed that private home sales last month increased 25 per cent to 1,386.

Mr Pandey explains that the surge last month could be a temporary one – “a result of pent-up demand from February as buyers had held back on their property purchases due to the Chinese New Year”.

“While the month-on-month sales have picked up, the year-on-year volumes remain weak, indicating that measures are slowly but steadily taking effect,” he added.

“Market sentiment is cautious,” said Mr Danny Low, chief operating officer and executive director of Heeton Holdings. Heeton, along with KSH Holdings and TEE International, last week launched The Boutiq, a luxury residential development on the site of the former Mitre Hotel at Kiliney Road.

To date, The Boutiq has sold 39 units of the 52 units launched in Phase One at an average price of S$2,350 psf – a result that Mr Low said met expectations.

He added that he “hopes the European and United States markets will recover in speed, so that investors will come back”.

Goldman Sachs is slightly more optimistic about the luxury sector. In a recent research note on the Singapore property sector, analysts Paul Lian and June Zhu wrote: “Luxury is seeing renewed interest, mainly from foreign buyers.”

“16 units (versus only one unit in February) were sold above S$3,000 psf,” it said. “Of note, one unit at Scotts Square was sold at S$4,334 psf and one unit at Boulevard Vue fetched S$4,308 psf.”

Other luxury residential developments to be launched this year include Heeton’s iLiv@Grange and City Development’s Jean Nouvel Residences at Anderson Road, and Buckley 9 & 11.

Source : Today – 25 Apr 2011

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