Tag Archives: NTUC Choice Homes

Property players vanishing from market

With hardly any new projects or land bids in recent years, some developers have disappeared from the scene due to financial woes and tougher competition, media reports revealed.

These boutique developers, such as Raffles Medical Group’s Esquire Land and Indonesia-oriented Sinarmas Land, were active in the 1980s and 90s, when freehold land costs less than $100 million and profit margins exceeded 20 percent, said Chesterton Singapore’s Managing Director Donald Han.

Another example is Waterbank Properties, former transport group DelGro Corp’s property division, which left the property industry in September 1998.

On the other hand, some property players are only active when the market hits rock-bottom, such as Ho Bee Land and Lippo Group. “These are the early movers who read the market well, tend to take risks and generate the highest returns,” Han explained. “When the market nears its peak, these developers and consortiums then drop off, and are replaced by the more gung-ho ones.”

NTUC Choice Homes went into a hiatus after it submitted a losing bid of $97.4 million for an HDB housing site at Pasir Ris Central in May 2011.

“In the past few years, land prices in Singapore have not moderated much,” said its spokesman. As a result, opportunities to develop affordable and quality houses were scarce.

Since its founding in 1995, the company has built 15 projects with 6,944 units, including the Dakota Residences and Trevista. Its new development, the 315-unit Belysa is expected to be completed by October.

Nevertheless, NTUC Choice Homes has a moderate risk profile, meaning it could start acquiring landbanks when prices fall, noted Han.

In contrast, some developers are active all year round such as CapitaLand, UOL Group, Keppel Land, Singapore Land, City Developments, Frasers Centrepoint and Far East Organization.

Ku Swee Yong, Chief Executive at Century 21, added, “Some developers who are listed must show a steady flow of projects, otherwise there will be certain quarters when they report revenue plunges or zero profits.”

Source : PropertyGuru


Executive condos return to the spotlight

Executive condos (EC), a hybrid of private and public housing, are now returning to the spotlight.

On 26 May, the government launched the 11th EC site since 2010, a plot in Punggol that can house around 720 homes.

Meanwhile, Chip Eng Seng and NTUC Choice Homes recorded rapid first-day sales for their Belysa project in the Pasir Ris / Elias Road area. Of the 315 units, 147, comprising three- and four-bedroom units, have been sold at around S$670 psf each.

“There is a big market for EC units priced between S$600,000 and S$700,000,” said Joseph Tan, CB Richard Ellis (CBRE) Executive Director (Residential), adding that the price gap between 99-year leasehold suburban private condos and EC projects has widened once again.

Mr. Tan noted that the typical price gap was around 25 to 30 percent when ECs were launched in 1996. This gap narrowed over the years due to weak suburban condo prices, which resulted in dwindling demand for ECs.

However, the sharp recovery of 99-year mass market condo prices has reinforced the demand for ECs.

“Today, 99-year mass market condos which are not near an MRT station could be priced around S$900 to S$950 psf on average, while an EC project in a similar location would be around S$650 to S$700 psf,” Mr. Tan said.

Most analysts expect the monthly household income ceiling for ECs to be increased from S$10,000 to S$12,000 or above, assuming the government proceeds to raise the ceiling for those purchasing new Build-To-Order (BTO) flats from the HDB from S$8,000 to S$10,000, pending a review.

“That will create more realistically-priced alternatives for the sandwich class and siphon off some demand from 99-year mass-market private condos,” said Mr Tan.

Many real estate analysts anticipate top bids for the recent EC site at Punggol Way / Punggol Field to be within the S$300 psf to S$350 psf ppr range and the average selling price to be approximately S$700 psf to S$750 psf.

Ong Teck Hui, Credo Real Estate Executive Director, noted that some EC developers may be more careful about bidding for the site if they are concerned that the income ceiling for EC buyers will be unchanged while that for HDB BTO flats will increase. Consequently, more people will qualify for HDB flats and this will lower demand for ECs.

Source : PropertyGuru – 26 May 2011