Property Investment | Lush Dream Home

Tag Archives: Property Investment

Merchant Sq, Katong bungalows up for sale

Posted on 1 Sep 2009 | Comments Off

MERCHANT Square in the Clemenceau Avenue area and four freehold strata bungalows at Bournemouth Road in the Katong locale are among the latest offerings in the property investment sales market.

The guide price for Merchant Square is about $48 million – or 34 per cent lower than the $73 million sought for the property in February last year.

Its owner, carpet manufacturer Jackson Carpet, did not get its asking price then for the property, which comprises offices, some shop space and 76 car park lots.

BT understands that the latest price reflects a net property yield of close to 4 per cent, based on Merchant Square’s current passing income.

The latest $48 million guide price is about $955 per square foot, based on Merchant Square’s 50,262 sq ft net lettable area. This compares with about $1,450 psf, based on last year’s $73 million price tag.

Merchant Square was completed in 1996 and is on a site with a remaining lease of about 83 years. It comprises a four-storey office tower, two blocks of shophouses, and a couple of basement levels for carpark lots. CB Richard Ellis is marketing Merchant Square through an expression of interest exercise that closes on Oct 6. Continue reading →

Comments Off on Merchant Sq, Katong bungalows up for sale

Posted in Developers, Landed Property, Property Market / Real Estate

Tagged Bournemouth Road, Developers, Land Sales, Merchant Sq, Merchant Square, Property Investment

Why 1996 was used as a reference point

Posted on 29 Aug 2009 | Comments Off

I REFER to Wednesday’s letter, ‘Affordability of homes: Let’s do the comparisons right’. When it comes to the appropriate base year of comparison, there is always room for debate. Using 1996 as a reference point is in response to a question of whether the current property rally
represents a bubble. Looking at affordability during the bubble years would
help to answer this question, and it is in this context that the comparison
should be viewed.There are also various definitions of income. The
measure referenced in the original article (’Homes more affordable as incomes rise’, Aug 22) was based on average annual wage, computed from the average monthly earnings of individuals compiled by the Department of Statistics.

This is based on earnings of Central Provident Fund contributors obtained from the CPF Board administrative records, and includes all remuneration received before deductions of employee’s CPF contributions and personal income tax. This
measure of income differs from median household incomes which, apart fromgrowth in individual wages, is also affected by the number of working members per household.Using this measure, average wage growth had outpaced growth in average condominium prices in nine of the past 11 years. The average condo price, as a multiple of annual wage, was close to the 10-year average which excludes the bubble peaks) as of June. This simple measure of affordability does not take into account current low interest rates, or the probability that the average condo buyer is likely to have a higher-than-average income – both of which would have increased affordability.
Our studies also showed that households have seen a significant increase in
their financial assets since the start of the decade, which would have also
improved overall affordability from a stock (as opposed to just a flow)
perspective.Comments in the original article should not be misconstrued
as implying that prices can continue rising indefinitely.

Indeed, as
indicated, there is uncertainty about whether current demand will be
sufficiently sustained to absorb the considerable pipeline of new supply in the coming years, especially if interest rates rise, or when prices rise to the
point where they become substantially less affordable.

Source : Straits Times – 29 Aug 2009