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Good performances of recent launches indicate pent-up demand

Indications the local property market is finally turning the corner are piling up but analysts are waiting for more evidence before calling it.

The latest sign of a resurgence in new private home sales was a Hougang executive condominium (EC) selling out in just seven hours last weekend. It was the first time since 2014 the market has witnessed such a feat. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

However, experts are looking for more indications that falling prices have finally bottomed out and are on their way up.

Rising market optimism - driven by a recent tweak in certain cooling measures, a healthy stock market and still-low interest rates - has helped to spur new home sales.

But despite the increase in sales, analysts say it is premature to declare that the market is out of the woods as the recovery is not broad-based.

Mr Nicholas Mak, head of research and consultancy at ZACD Group, noted: "Typically, in a boom market, prices, rentals and sales volume will all increase. We have not seen that yet."

Mr Wong Xian Yang , head of research and consultancy at OrangeTee, added: "The good performances of recent launches indicate that there is pent-up demand. (But) prices have stubbornly continued to decline.
"So it might be too soon to say that the market has finally turned a corner."

Estimates show home values dipped by 0.3 per cent from the first to second quarter this year. Prices have sunk about 11 per cent since a peak in the third quarter of 2013.

As prices have moderated, sales have climbed. More than 6,500 new private homes (excluding ECs) have been sold in the first half-year, up markedly by 72 per cent from the 3,814 homes sold a year ago.

Analysts expect the brisk buying activity to continue but noted that not every project will be a sell-out.

Hundred Palms Residences EC in Hougang shifted all 531 units at an average of $836 per square foot (psf) within seven hours of their launch on Saturday.

Mr Mak noted: "The sales at Hundred Palms are due to its location - there haven't been any ECs in that area. I won't say the whole property market has turned around. One swallow doesn't make a summer."

The last time a new project sold out in a day was in January 2014 at The Hillford, a mixed development which was marketed as a "retirement resort".

Another project, Martin Modern - a luxury condo in Martin Place - sold about 90 out of 450 units over the weekend at a price range of $2,009 psf to more than $2,500 psf.

Given the brisk sales from these projects, all eyes will be on Qingjian Realty's 516-unit Le Quest in Bukit Batok West - going on sale on Aug 5.

International Property Advisor chief executive Ku Swee Yong said: "New launches are selling well mainly because of marketing hype. If the property market was so hot, why are we not getting lots of viewings for resale homes? "

Analysts also note that leasing remains challenging and vacancies are still high.

However, other trends could support the market recovery.

These include the fervour in land bidding by developers in both public land tenders and the collective sale market.

Announcements on two site tenders are expected this week: for privatised HUDC estate Serangoon Ville, put on collective sale for $400 million to $430 million, and the public land tender for a private residential site in Serangoon North Avenue 1, closing tomorrow.

Given the bullish prices paid for development sites recently and more positive sentiment, analysts expect home prices could start to inch up next year, after a 15-quarter losing streak since the fourth quarter of 2013.

Ms Tricia Song, research head at Colliers International Singapore, said: "We expect private home prices to be relatively flat in the second half of 2017 and anticipate a pick-up from the beginning of 2018, to maybe approximately +3 per cent for the full year 2018."

The Urban Redevelopment Authority is expected to release the second-quarter final property market statistics this week.

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Condo rents inch up

At first glance, there was good news for landlords, with private condo rents rising 0.5 per cent from May to June. That reversed the revised 0.6 per cent decline from April to May, but they are down 3.2 per cent from June last year, according to SRX Property estimates yesterday.

International Property Advisor chief executive Ku Swee Yong said: "The increase could be a blip. We still see more property completions adding to the leasing market, and owners are still having difficulty getting tenants."

The rent increases last month were led by the city fringe, where rents rose 1.4 per cent from May. Executive condo owners may sublet their unit after fulfilling the MOP. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

They increased 0.5 per cent in the suburbs, but those in prime condos in the core central region posted a 0.4 per cent drop last month.

Fewer signed leases also point to the fragile market. There were 4,250 condo units leased last month, down 8.8 per cent on the 4,661 rented in May.

HDB rents slipped 0.6 per cent from May to June, after rising by a revised 0.8 per cent from April to May. SRX said rents were down by 4 per cent from June last year.

There were 1,704 HDB units leased in June, a fall of 5.5 per cent from 1,804 in May.

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Executive Condominiums (ECs) turned out to be best sellers

At first glance, there was good news for landlords, with private condo rents rising 0.5 per cent from May to June. That reversed the revised 0.6 per cent decline from April to May, but they are down 3.2 per cent from June last year, according to SRX Property estimates yesterday.

International Property Advisor chief executive Ku Swee Yong said: "The increase could be a blip. We still see more property completions adding to the leasing market, and owners are still having difficulty getting tenants."

The rent increases last month were led by the city fringe, where rents rose 1.4 per cent from May. Executive condo owners may sublet their unit after fulfilling the MOP. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

They increased 0.5 per cent in the suburbs, but those in prime condos in the core central region posted a 0.4 per cent drop last month.

Fewer signed leases also point to the fragile market. There were 4,250 condo units leased last month, down 8.8 per cent on the 4,661 rented in May.

HDB rents slipped 0.6 per cent from May to June, after rising by a revised 0.8 per cent from April to May. SRX said rents were down by 4 per cent from June last year.

There were 1,704 HDB units leased in June, a fall of 5.5 per cent from 1,804 in May.

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Upward pressure on prices?

WITH three collective property sales sealed in a week, analysts at DBS Vickers Securities believe the signs are there for an upswing in Singapore real estate prices.

Analysts Rachel Tan and Derek Tan have an overweight stance for developers. They see City Developments (CDL) and UOL as key beneficiaries to any price increase given their existing unsold stock and potentially better margins for recently land-banked projects. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences ECfloor plans and Rivercove Residences EC details will be available shortly.

At 10:38am, CDL was trading around S$10.94 a share, up 5 Singapore cents. UOL was at S$7.05 a share, up 1 Singapore cent.

"Looking at the way these en blocs and land bids are transacted, we believe that developers seem to be pricing in a price recovery in 2018 in their bids, implying the bullish sentiment towards land-banking good quality sites in Singapore. This could imply upward pressure on prices in the medium term,'' the two analysts wrote in a report entitled "Hidden pot of gold for privatised HUDC homeowners".

On Thursday, Hongkong Land's unit MCL Land clinched Eunosville - a former HUDC estate site - through a collective sale at S$765.78 million. It was the third collective sale in a week, following last Thursday's S$101.5 million sale of Goh & Goh Building and the S$575 million sale of Rio Casa, a privatised HUDC estate in Hougang. This brings the total en bloc sales to four, or slightly over S$1.5 billion, since the beginning of 2017.

The analysts also noted that the transacted prices of Eunosville and Rio Casa were higher than what owners were reportedly asking for.

JLL's regional director for capital markets in Singapore, Tan Hong Boon, had earlier estimated 25 to 30 projects that have elected sales committees looking at collective sales. For the whole of last year, there were only three collectives sales.

The DBS analysts said any signs of over-zealousness from developers looking to land-bank in Singapore could see the authorities raising the number of available land sites or raising the number of confirmed sites in the pipeline.

"This will, in our view, signal the government readiness to tackle any unintended "bubble" that could form in Singapore land prices if such aggressive bids continue on. We believe to see such signals as early as in the 2H17 Government land sales (GLS) program."

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Changes to support property counters

SINGAPORE — Shares of developers surged on Friday on the Singapore Exchange after the Government eased some housing market cooling measures and loan curbs, with analysts saying the changes will support property counters that have been weighed down by a three-year losing streak in home prices.

Shares of Singapore’s largest listed developer CapitaLand jumped as much as 6.2 per cent to a high of S$3.79 each before closing at S$3.70, or a 3.6 per cent gain on the day. Upcoming executive condolaunches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

City Developments shares soared to a high of S$10.59, or a 10.2 per cent rise, before ending with a 5.6 per cent gain at S$10.15.

UOL shares rose as much as 7.9 per cent to S$7.14 before closing at S$6.92, or a 4.5 per cent gain.

Together, the three property counters helped the Straits Times Index close 0.5 per cent higher at 3,133.35, taking the benchmark’s year-to-date gain to 8.8 per cent.

“The stealth move should lead to a scramble to re-rate property developers back to book value on optimism that property prices have bottomed and will start to rise from here,” said Mr Alan Richardson, at

Samsung Asset Management Co. The announcement took the market by surprise after the Budget speech last month did not mention property easing measures, he added.

Others were less exuberant. The measures are an “incremental positive” amid an abundance of housing supply coming to market coupled with a weak demand outlook, said Mr Joshua Crabb, head of Asian equities at a unit of Old Mutual.

For homes purchased from today onwards, the owner will not have to pay Seller’s Stamp Duty (SSD) if he or she sells the property more than three years from purchase, down from four years previously, the Government said. The SSD rates will also be lowered by 4 percentage points for each tier — to 4 per cent for properties sold in the third year; 8 per cent for those sold in the second year; and 12 per cent for those sold within the first year.

Rules on the Total Debt Servicing Ratio framework will also be relaxed, reflecting feedback from some borrowers that the measure limited flexibility to borrow against the value of their properties and raise cash, the Government said.

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Pick up in private home sales in all market segments

SINGAPORE: Demand for new private residential homes has improved in the first half of 2017 as compared to the same period last year, largely driven by the perception that the market is bottoming out, according to analysts.

The Urban Redevelopment Authority’s (URA) second quarter figures for the year showed the sale of new private residential units, excluding executive condominiums (ECs), rose by about 64 per cent in the first half of this year, as compared to the first half of 2016. The number of new units sold in the first half of 2017 was 6,039, as compared to 3,675 units in the first half of 2016. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

New project launches and showroom flats this year have also attracted huge crowds and strong sales figures.

Most recently, the 450-unit luxury home project Martin Modern sold more units than its initial target during the first launch. It had sold 89 units when it planned to launch “between 50-60 units”, the property’s developer GuocoLand said.

While not all new developments launched this year may have received similar demand, market observers say they have noticed a pick up in private home sales in all market segments - the Outside Central Region, Rest of Central Region, and Core Central Region – as compared to last year.

This is due to several reasons, with one being the belief that the “market is bottoming out soon”, said Mr Ong Teck Hui, the national director of research and consultancy at Jones Lang LaSalle.

Many buyers are drawn to the “fairly attractive prices” today, he said, because prices have fallen for the past 15 quarters and they “hope to take advantage before the market turns around”.

He said that the market could remain active in 2018, as demand has been pent up since 2013.

"BUYING BECAUSE ECONOMY IS BAD"

Alan Cheong, the senior director of research and consultancy at Savills, said investors are turning to residential property as a way to cope amid an uncertain economy.

"This may sound counter-intuitive, (but) people are buying because the economy is bad,” Mr Cheong said. “People are buying now because they have lost a little bit of faith in what are alternative investments, and so they are putting their faith in brick and mortar.”

Bullish bids for government land and attractive offers for collective sale sites this year are also among the reasons that analysts believe have led many buyers to believe that prices will increase next year.

According to a Cushman & Wakefield report, between January and May this year, developers paid 29 per cent more on average for residential plots over comparable sites sold in the past five years. Comparatively, the average premium was only 13 per cent in the second half of 2016.

But as public sentiment continues to improve, the market watchers expect upcoming launches for the rest of 2017 to continue to do well.

Last year, about 7,972 private residential developments, excluding ECs, were sold in the primary sales market, and Mr Cheong predicts that number to hit between 11,000 to 12,000 this year.

He said he expects the positive buying sentiment to continue into 2018, but does not think that sales will increase beyond 2017.

“It all depends on the government land sales programme next year, and also the collective sales sites – when they get launched in 2018. If some get deferred to 2019, and if we don’t have new supply, then primary sales numbers will also come down,” he said.

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More en bloc sales likely to take place?

SINGAPORE: The residential en bloc market seems to be picking up steam this year.

With the sale of Serangoon Ville along Serangoon North Avenue 1 for S$499 million, the number of en bloc deals completed this year has increased to six, bringing the total value of such deals in 2017 to S$2.0 billion, a huge jump from the S$1.17 billion in 2016 and S$380 million in 2015. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

There are good reasons to believe that this is just the start of another en bloc frenzy, given the number of developments currently on the en bloc market and strong interest from developers.

Yet, supply-side factors, in particular, the collective sale mechanism behind an en bloc negotiation, are essential ingredients for a successful sale. If not managed properly, any arising dispute among a property's owners can scuttle a deal, and go some way to temper confidence in the en bloc market.

COMMON INTERESTS

In an en bloc sale, motivated by common economic interests, owners of either strata units in private non-landed residential developments or houses on contiguous land plots come together to jointly sell redevelopment rights of their land to a shared purchaser.

While the latter case is rare, owners living next to each other in landed developments might find common interest in jointly selling their properties when the price is right.

This was the case for eight owners who sold their terrace houses along Marne Road collectively for S$41.76 million in 2012, at a per square foot (PSF) price of almost $3,000.

Home owners can reap a windfall by selling their properties collectively in these cases, because their existing property can be redeveloped into new, higher density residential developments. In 1995, five bungalows along Walshe Road was sold jointly for a cool $1,520 PSF, double the price of what each would fetch if they were sold individually.

En bloc deals can be a lucrative affair for property developers and home owners in land-scarce Singapore. To date, 6,032 housing units have been involved in en bloc sales, with an aggregate transaction value of more than S$43.34 billion recorded since the first sale in 1994.

En bloc sales activities have been concentrated in prime residential areas, especially in the city-fringe, where demand for housing is traditionally strong. In these areas, there is also a ready supply of under-developed land with old, low-density buildings and low realised plot ratios, which are potential targets for en bloc redevelopment.

Although some say developers are likely to prefer smaller plots, the data tells us that appetite for large plots of land is growing. Despite the small number of en bloc sales in last three years, these en bloc sales are comparatively larger, both in term of total value and unit size.

The average deal size in this period ranges between S$194.8 million in 2016 and S$380.0 million in 2015, which is significantly larger compared to the en bloc deals during the last peak in the housing market from 2006 to 2007, where the average deal size was around S$90 million.

A few large en bloc deals, which include Raintree Gardens (175 units, S$334 million), Shunfu Ville (358 units, S$638 million), Rio Casa (286 units, S$575 million) and Eunosville (330 units, S$766 million) contribute to this larger average deal size.

BARGAINING, HAGGLING, BRAWLING

Because there is much money to be made, one can also expect a fair amount of bargaining, haggling and even brawling to take place. En bloc sales require the collective support from a majority of owners, who must agree to jointly sell their properties and share the sale proceeds, based on an agreed method of apportionment.

Based on the Singapore Land Title (Strata) Act, an en bloc sale can only proceed if 90 per cent of owners by the total area in a development that is less than 10 years old, or 80 per cent of owners in a development that is 10 years old or older, agree to sell.

This in itself is already an improvement from the previous legislation prior to 2007 that required a unanimous resolution supported by every owner of a strata development to effect an en bloc sale.

This stringent requirement had caused significant tensions between neighbours because minority dissenting owners, who sometimes consisted of just one owner in some cases, could veto an en bloc sale simply by refusing to sell their unit. The 64-unit Eng Kong Mansion was one of the earliest case, where two uncooperative owners of one unit vetoed the en bloc sale decision of the other 63 owners.

Then there is the issue of the sale price. A high reserve price that entices owners to sign onto a collective sale agreement may turn away potential buyers.

On the other hand, a lower reserve price that entices developers to invest time and money to study the profitability of an en bloc sale, can foster competition that drives the sale price up, if owners are sufficiently persuaded to sign on the dotted line.

But often owners have their own price thresholds that must be crossed before they can agree to an en bloc sale.

COMPLEX, CONSENSUS-SEEKING PROCESS

An en bloc sale can be a long-drawn, and sometimes, complex consensus-seeking process. Differences in the en bloc decision, if unresolved, can harm relations among neighbours and create tremendous tensions for people who see each other almost every day and share the same amenities and facilities.

Some owners may harbour acrimony and hatred against others, who they see as standing in their way to realising a huge potential windfall.

For some dissenting owners, many of whom are older residents who may attach great sentiment value to homes that they have lived in for many years, no amount of compensation can make up for the loss of familiar surroundings and the social networks they have established. In old, large developments, this problem can be acute.

In mixed-use developments, commercial property owners can have significant bargaining power vis-à-vis weaker residential property owners. These include owners of big shops or restaurants who own and bear the expenses of commercial facilities in the development such as escalators, loading bays and cargo lifts or have large gross floor areas.

Through their controlling share value, they can have great sway over the details of such en bloc deals, including the method of apportionment and the minimum price.

In navigating these dynamics, some level of behind-the-scenes bargaining by authorised agents and shadowy horse-trading can work but it is often difficult to compensate the losers without taking too much away from the winners’ profit pots or running the risk of agents being accused of acting in bad faith.

Monetary inducement can be an attractive carrot to entice dissenting owner to join an en bloc deal, as was the case in the course of the en bloc negotiations surrounding Harbour View Gardens in 2013.

Yet, even after the sale goes through, some cases can end up embroiled for years in legal dispute and in the case of Gilstead Court, get called off, when dissenting owners who have strong legal grounds to contest the sale file lawsuits.

BUT MORE SUCCESSFUL EN BLOC SALES EXPECTED

In a rapidly urbanised city, en bloc sites provide an alternative source of supply of private residential land for developers and allow for the recycling of land plots populated by dilapidated houses.

More en bloc sales are likely to take place in the coming years, when Singapore’s living areas become more urbanised, and demand for housing in matured housing estates or city-fringe increase. Properties located near MRT stations and public amenities like schools and shopping malls, in particular, are likely to face pressures of being sold en bloc.

We can expect the number of en bloc sales to reach nine to 10 for the full year of 2017, with a total sale value of between S$2.5 and S$4.0 billion, based on the list of hopefuls and their tender exercise periods. Potential en bloc sites that have been put on the market in the past year are aplenty. The list includes Tampines Court, Florence Regency, Villa D’Este, among others.

However, an en bloc sale may take six months to a few years for completion. In the recent Shunfu Ville en bloc case, disputes brought up by a few objecting owners were only resolved by the Court of Appeal four years after the formation of an en bloc committee.

So the success of private en bloc sales is not just dependent on demand-side factors like location and marketing timing. It is also a delicate management of supply-side complications, requiring delicate human intervention to bridge gaps and reach compromises between consenting and dissenting owners.

Such factors are arguably the most important ones that ultimately determine whether a development can clinch an en bloc deal and see through the sale.

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New EC promises smart-living technologies for residents

Smart technologies, such as facial recognition devices for access to gyms or mobile apps to book facilities or even control appliances are now must-have features in new condominiums.

Future residents at Clement Canopy, launched on Saturday, will use a mobile app that integrates smart technology for their home and common areas in the estate.

Other developments such as Qingjian Realty's iNz Residence executive condominium in Choa Chu Kang and Fantasia Investment's 6 Derbyshire also promise smart-living technologies for residents. Upcoming executive condo launches include Anchorvale Lane EC, 
Rivercove EC while existing ones include Parc Life EC , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

Smart home concepts are not new.

Qingjian Realty's Visionaire, launched last year, was one of the first few projects to feature smart-home technologies.
Mr Li Jun, executive director of Qingjian Realty, said the features have been well-received, with about 80 per cent of buyers opting for smart homes.

He said: "At an industry level, we are quite heartened that developers have subsequently introduced smart home packages.

"This will ultimately benefit the buyers, as the industry evolves to better serve their needs."

Such innovations should be integrated with smarter communities and digital payments, said Mr Andrew Tan, director of business development and sales at Smart Gateway, who is behind 6 Derbyshire's app.

The app, named LifeUp, allows residents to book facilities and make payments for maintenance fees, as well as control appliances within the home.

The freehold development at Novena also has car plate recognition systems and facial recognition devices for residents to access facilities like the gym.

Mr Tan said that his firm has been approached by other condominiums.

"LifeUp connects residents, MCST (the condo's managing body) and managing agents in an entire ecosystem, creating unprecedented cost savings and productivity gains to the business," he added.

Smart technology has not been limited to private homes.

In 2015, the first "smart" Build-to-Order project was launched in Punggol and would be ready by 2020. These Housing Board flats will come with extra power and data points to support the smart systems.

Last April, the Yuhua neighbourhood in Jurong East became the first HDB estate to roll out smart home packages to over 3,000 households.

The technologies include a utilities management system which helps households monitor energy and water usage through a mobile app and an elderly monitoring system that consists of motion sensors and alerting capabilities.

Mr Desmond Sim, CBRE's head of Research, Singapore and South East Asia, thinks that developers have recognised that they have to provide smart features to remain competitive.

He said: "For homebuyers, (such features) won't be a compelling reason to buy, but it's a good-to-have. The price and location of a development is still the biggest factor."

Qingjian's Mr Li said: "In three to four years, Singapore would be a smart nation... Home owners would naturally expect to go home, at the end of the day, to a smart home."

iNz Residence, Choa Chu Kang

In a collaboration with Singtel, all units in this 497-unit executive condominium development will be ready-fitted with 1 Gbps fibre broadband.

Singtel will also provide free Internet for a year to residents and provide Wi-Fi services in common areas such as the gym and poolside.

Residents can also choose from various packages to include different smart appliances, including washing machines, lighting and air-conditioners, that can be controlled remotely through an app.

Grandeur Park, Tanah Merah

All main doors of this 720-unit development are equipped with state-of-the-art Yale biometric digital lock sets which can be remotely controlled via mobile devices.

All units also come complete with motion detector cameras.

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Pent-up demand from buyers

SINGAPORE (BLOOMBERG) - Developers' hunger for land is adding to signs that Singapore's housing market is making a comeback after three years of price declines.

As new home sales surge after an easing of property restrictions in mid-March, developers are becoming more aggressive in bidding at land auctions. On average, they have paid a 29 per cent premium, the highest level in at least five years, according to broker Cushman & Wakefield, which makes comparisons with the past prices of similar properties. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

"Sentiment has changed," said Mr Christopher Tang, chief executive officer of developer Frasers Centrepoint. "The general sense is that the market has bottomed out and like many of the developers in Singapore we are a bit landbank-starved - we are keen to build our land bank."

A land auction last month attracted a record 24 bidders, amid swelling demand from Chinese and Malaysian developers. Home buyers are snapping up units at developments like the Seaside Residences condominium, east of the city. New home sales more than doubled in April from a year earlier, a report on Monday showed (May 15), after a surge in March to the highest level in nearly four years.

While the signs are positive, the scale of any comeback may be limited by government efforts to avoid any renewed overheating of a market that peaked in 2013. While the government tweaked its cooling measures in March, boosting buyer sentiment, it left most of the restrictions in place.

Singapore's efforts contrast with Hong Kong's failure to tame a market where home prices keep hitting records. Singapore's home prices fell 3 per cent last year and have dropped for 14 straight quarters, the longest slide since the data were first published in 1975. The city's next quarterly property-price numbers are due June 15.

"There has been a considerable lift in market sentiment," said Mr Desmond Sim, head of research for Singapore and South East Asia for CBRE Group. "Buyers are more prepared to make a purchase, in view of prices possibly bottoming."

Mr Sim also cited "pent-up demand" from buyers as developers refrained from launching projects in the final few months of 2016. Developers have since plowed back into the market, offering a total of 1,616 units in March, the most since May 2014, according to Cushman & Wakefield.

Among developers, the number of bidders per land tender increased to 13.3 in the first four months of this year from 8.3 in the second half of 2005, according to Cushman & Wakefield. Winning bidders at recent land sales included China Construction (South Pacific) Development Co and Malaysia's SP Setia International Pte.

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More en bloc sales likely to take place?

SINGAPORE: The residential en bloc market seems to be picking up steam this year.

With the sale of Serangoon Ville along Serangoon North Avenue 1 for S$499 million, the number of en bloc deals completed this year has increased to six, bringing the total value of such deals in 2017 to S$2.0 billion, a huge jump from the S$1.17 billion in 2016 and S$380 million in 2015. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences EC while existing ones include Parc LifeEC, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

There are good reasons to believe that this is just the start of another en bloc frenzy, given the number of developments currently on the en bloc market and strong interest from developers.

Yet, supply-side factors, in particular, the collective sale mechanism behind an en bloc negotiation, are essential ingredients for a successful sale. If not managed properly, any arising dispute among a property's owners can scuttle a deal, and go some way to temper confidence in the en bloc market.

COMMON INTERESTS

In an en bloc sale, motivated by common economic interests, owners of either strata units in private non-landed residential developments or houses on contiguous land plots come together to jointly sell redevelopment rights of their land to a shared purchaser.

While the latter case is rare, owners living next to each other in landed developments might find common interest in jointly selling their properties when the price is right.

This was the case for eight owners who sold their terrace houses along Marne Road collectively for S$41.76 million in 2012, at a per square foot (PSF) price of almost $3,000.

Home owners can reap a windfall by selling their properties collectively in these cases, because their existing property can be redeveloped into new, higher density residential developments. In 1995, five bungalows along Walshe Road was sold jointly for a cool $1,520 PSF, double the price of what each would fetch if they were sold individually.

En bloc deals can be a lucrative affair for property developers and home owners in land-scarce Singapore. To date, 6,032 housing units have been involved in en bloc sales, with an aggregate transaction value of more than S$43.34 billion recorded since the first sale in 1994.

En bloc sales activities have been concentrated in prime residential areas, especially in the city-fringe, where demand for housing is traditionally strong. In these areas, there is also a ready supply of under-developed land with old, low-density buildings and low realised plot ratios, which are potential targets for en bloc redevelopment.

Although some say developers are likely to prefer smaller plots, the data tells us that appetite for large plots of land is growing. Despite the small number of en bloc sales in last three years, these en bloc sales are comparatively larger, both in term of total value and unit size.

The average deal size in this period ranges between S$194.8 million in 2016 and S$380.0 million in 2015, which is significantly larger compared to the en bloc deals during the last peak in the housing market from 2006 to 2007, where the average deal size was around S$90 million.

A few large en bloc deals, which include Raintree Gardens (175 units, S$334 million), Shunfu Ville (358 units, S$638 million), Rio Casa (286 units, S$575 million) and Eunosville (330 units, S$766 million) contribute to this larger average deal size.

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New EC promises smart-living technologies for residents

Smart technologies, such as facial recognition devices for access to gyms or mobile apps to book facilities or even control appliances are now must-have features in new condominiums.

Future residents at Clement Canopy, launched on Saturday, will use a mobile app that integrates smart technology for their home and common areas in the estate.

Other developments such as Qingjian Realty's iNz Residence executive condominium in Choa Chu Kang and Fantasia Investment's 6 Derbyshire also promise smart-living technologies for residents. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life EC , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

Smart home concepts are not new.

Qingjian Realty's Visionaire, launched last year, was one of the first few projects to feature smart-home technologies.
Mr Li Jun, executive director of Qingjian Realty, said the features have been well-received, with about 80 per cent of buyers opting for smart homes.

He said: "At an industry level, we are quite heartened that developers have subsequently introduced smart home packages.

"This will ultimately benefit the buyers, as the industry evolves to better serve their needs."

Such innovations should be integrated with smarter communities and digital payments, said Mr Andrew Tan, director of business development and sales at Smart Gateway, who is behind 6 Derbyshire's app.

The app, named LifeUp, allows residents to book facilities and make payments for maintenance fees, as well as control appliances within the home.

The freehold development at Novena also has car plate recognition systems and facial recognition devices for residents to access facilities like the gym.

Mr Tan said that his firm has been approached by other condominiums.

"LifeUp connects residents, MCST (the condo's managing body) and managing agents in an entire ecosystem, creating unprecedented cost savings and productivity gains to the business," he added.

Smart technology has not been limited to private homes.

In 2015, the first "smart" Build-to-Order project was launched in Punggol and would be ready by 2020. These Housing Board flats will come with extra power and data points to support the smart systems.

Last April, the Yuhua neighbourhood in Jurong East became the first HDB estate to roll out smart home packages to over 3,000 households.

The technologies include a utilities management system which helps households monitor energy and water usage through a mobile app and an elderly monitoring system that consists of motion sensors and alerting capabilities.

Mr Desmond Sim, CBRE's head of Research, Singapore and South East Asia, thinks that developers have recognised that they have to provide smart features to remain competitive.

He said: "For homebuyers, (such features) won't be a compelling reason to buy, but it's a good-to-have. The price and location of a development is still the biggest factor."

Qingjian's Mr Li said: "In three to four years, Singapore would be a smart nation... Home owners would naturally expect to go home, at the end of the day, to a smart home."

iNz Residence, Choa Chu Kang

In a collaboration with Singtel, all units in this 497-unit executive condominium development will be ready-fitted with 1 Gbps fibre broadband.

Singtel will also provide free Internet for a year to residents and provide Wi-Fi services in common areas such as the gym and poolside.

Residents can also choose from various packages to include different smart appliances, including washing machines, lighting and air-conditioners, that can be controlled remotely through an app.

Grandeur Park, Tanah Merah

All main doors of this 720-unit development are equipped with state-of-the-art Yale biometric digital lock sets which can be remotely controlled via mobile devices.

All units also come complete with motion detector cameras.

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Pent-up demand from buyers

SINGAPORE (BLOOMBERG) - Developers' hunger for land is adding to signs that Singapore's housing market is making a comeback after three years of price declines.

As new home sales surge after an easing of property restrictions in mid-March, developers are becoming more aggressive in bidding at land auctions. On average, they have paid a 29 per cent premium, the highest level in at least five years, according to broker Cushman & Wakefield, which makes comparisons with the past prices of similar properties. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

"Sentiment has changed," said Mr Christopher Tang, chief executive officer of developer Frasers Centrepoint. "The general sense is that the market has bottomed out and like many of the developers in Singapore we are a bit landbank-starved - we are keen to build our land bank."

A land auction last month attracted a record 24 bidders, amid swelling demand from Chinese and Malaysian developers. Home buyers are snapping up units at developments like the Seaside Residences condominium, east of the city. New home sales more than doubled in April from a year earlier, a report on Monday showed (May 15), after a surge in March to the highest level in nearly four years.

While the signs are positive, the scale of any comeback may be limited by government efforts to avoid any renewed overheating of a market that peaked in 2013. While the government tweaked its cooling measures in March, boosting buyer sentiment, it left most of the restrictions in place.

Singapore's efforts contrast with Hong Kong's failure to tame a market where home prices keep hitting records. Singapore's home prices fell 3 per cent last year and have dropped for 14 straight quarters, the longest slide since the data were first published in 1975. The city's next quarterly property-price numbers are due June 15.

"There has been a considerable lift in market sentiment," said Mr Desmond Sim, head of research for Singapore and South East Asia for CBRE Group. "Buyers are more prepared to make a purchase, in view of prices possibly bottoming."

Mr Sim also cited "pent-up demand" from buyers as developers refrained from launching projects in the final few months of 2016. Developers have since plowed back into the market, offering a total of 1,616 units in March, the most since May 2014, according to Cushman & Wakefield.

Among developers, the number of bidders per land tender increased to 13.3 in the first four months of this year from 8.3 in the second half of 2005, according to Cushman & Wakefield. Winning bidders at recent land sales included China Construction (South Pacific) Development Co and Malaysia's SP Setia International Pte.

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Developer optimistic about response for new project

Chinese developer Qingjian Realty will open its first mixed-use development, condominium Le Quest in Bukit Batok West, for preview this weekend.

The average selling price for private homes at the 516-unit project is about $1,280 per sq ft, the developer said yesterday. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove ECwhile existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

It will also have over 6,000 sq m of retail space on the ground floor with about 30 per cent of the space already leased.

"We think this is a fair price. It is the first mixed development in the area... looking at the market now, we are optimistic about response for the project," said Ms Yen Chong, deputy general manager at Qingjian Realty (South Pacific) Group.

Le Quest will be launched for sale on Aug 5. The homes will be spread across five 12-storey blocks. There are 132 studio and one-bedroom units with sizes ranging from 431 sq ft to 614 sq ft.

Indicative prices for the studios start from $588,000, with one-bedders at $648,000, Qingjian Realty said yesterday.

Two-bedroom units, which span 592 to 829 sq ft, will cost at least $758,000.

Prices for the 192 three-bedders (818 to 1,206 sq ft) will start from $990,000, and $1.38 million for the 48 four-bedroom apartments (1,130 to 1,528 sq ft).

Some analysts told The Straits Times that the prices seem to be on the high side.

"The average selling price is a bit rich for the neighbourhood and it is not near the MRT station," said International Property Advisor chief executive Ku Swee Yong.

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New Bayshore district at East Coast

Home hunters could soon get a shot at new Housing Board flats with coveted sea views along Singapore's East Coast.

The Government is looking into creating a new Bayshore district, which includes 6,000 HDB flats - a huge change for the overwhelmingly private estate area located on reclaimed land. Another 6,500 units will be set aside as private homes. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life, Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

If they materialise, these Bayshore flats would be the first HDB homes built along the East Coast since the old-generation Marine Parade flats constructed in the 1970s, some of which have fetched more than $900,000 on the resale market in recent months.

The potential development is detailed in tender documents put up by the Urban Redevelopment Authority (URA) and which were reported by Lianhe Zaobao yesterday, calling for consultancy firms to develop a master plan for the plot.

The Bayshore district spanning 60 ha is surrounded by Bayshore Road, the East Coast Parkway, Bedok Camp and Upper East Coast Road.

With parts of it currently occupied by a forest, it is about two-thirds the size of Bidadari.

The plot is located between two MRT stations on the upcoming Thomson-East Coast Line (TEL) - Bayshore and Bedok South - and is expected to have facilities and services such as schools, shops and an integrated transport hub.

The tender will be conducted in two phases and the appointed firm will submit its final proposal in December this year, URA said in the documents.

But a URA spokesman told The Straits Times that parts of the area will be used for the construction of the TEL for several years, and that "implementation will not be in the near future". The two stations are expected to open by 2024.

Rather, the invitation to private sector consultants is meant to generate "new ideas for (Bayshore) to be developed into a future public and private housing precinct that supports car-lite living, with a strong sense of community and environmental sustainability", the URA spokesman added.

"The number of public and private housing units has been projected as 6,000 public units and 6,500 private units, and is still under study."

Some observers,such as consultancy International Property Advisor's chief executive Ku Swee Yong, are concerned that the increase in population in the area would put a strain on its transport networks and amenities.

The total of 12,500 residential units translates to 42,375 people, going by Singapore's average household size of 3.39 persons.

"A more acceptable number would be about 1,000 units to keep the idyllic atmosphere of the area, and not pose a problem for the already burdened Changi Hospital in Simei," Mr Ku said.

National University of Singapore urban planning expert Steven Choo welcomed the development, as a new HDB town with its "thoughtful design and technological advances" could increase the property value of landed property in Upper East Coast Road.

But he was surprised to hear about the development, given that the Government announced last October that it was looking into ways to mitigate the "lottery effect" of public housing in prime locations.

For instance, some owners of [email protected] flats in Cantonment Road made nearly up to $500,000 when they sold their assets after the five-year minimum occupation period ended in 2014.

But for student and Upper East Coast resident Bryan Lee, 19, the HDB flats would make the hope of living near his parents in the future more achievable.

He said: "This is a good location, very peaceful and near the park. But, more importantly, I hope to get this place if I get married, so that I can be near my parents and take care of them."

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Palatable quantum key driver for healthy home sales

SINGAPORE - Sales of private homes by developers in Singapore fell 57.3 per cent in December from a month earlier, dropping to the weakest levels in 10 months, government data showed on Monday. Data compiled by the Urban Redevelopment Authority showed developers sold 367 units last month, compared with 860 units in November. That was the weakest since 303 units in February 2016. The level of sales fell 4.4 per cent from a year earlier, from 384 units sold in December 2015.

“Palatable quantum for both first-time owners and investors have been the key driver for healthy home sales over the past 24 months … Quantum play and quality of projects should remain the key demand driver in 2017,” said Mr Desmond Sim, head of CBRE Research in Singapore and South-east Asia. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove Residences EC while existing ones include Parc Life EC , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.
Multiple cooling measures and loan curbs since 2009 have had the intended effect of bringing housing prices down, with values softening further in the last three months of 2016 to take the longest falling streak on record to 13 consecutive quarters, flash estimates by the URA showed earlier this month. From the recent peak in the third quarter of 2013, prices have fallen 11.2 per cent.

Last year’s annual increase came despite a weak showing in December, when sales plunged 57.3 per cent month-on-month to 367 units due to the seasonal year-end lull, the lowest since February’s 303 units. Compared to the same period a year ago, last month’s figure was 4.4 per cent lower.

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More HUDC estates to start en bloc process

Two privatised HUDC estates are gunning for collective sales in the wake of lucrative sales of two other properties of this type - Rio Casa and Eunosville - in recent weeks.

The 560-unit Tampines Court will likely launch its tender in July, while 336-unit Florence Regency in Hougang is in the early stages of the sales process. Upcoming executive condo launches include Rivercove EC while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC.

The Straits Times understands that Tampines Court owners are seeking at least $960 million for the large Tampines Street 11 site, spanning over 702,000 sq ft.

Nearly 82 per cent of owners had agreed to the sale as of Thursday, going by a Facebook page on the collective sale. This figure is, however, not official yet as residents may rescind the agreement in a five-day cooling-off period.

For properties to be sold en bloc, the consent of at least 80 per cent of the owners must be obtained before a sale tender can be called.

Built in the 1980s and privatised in 2002, Tampines Court has 14 blocks, with 432 maisonettes and 128 apartments. This is its third bid for a collective sale after its $405 million first try was dismissed by the Strata Titles Board in 2008.

Then around 2011, it failed to obtain the level of approval that was needed from residents.
"We expect more HUDC estates to start the en bloc process, due to recent successful sales," noted OrangeTee head of research and consultancy Wong Xian Yang.

Rio Casa in Hougang sold last month for $575 million and Eunosville in Sims Avenue sold for $765 million in a deal finalised this week. Both were done above the owners' asking prices.

Analysts say the recent bumper deals may tempt home owners to push up their asking prices for future en bloc tenders.

"Too high an asking price may dissuade many developers from participating. Land prices are expected to rise, but I do not think we will see an accelerated rise in en bloc values," Mr Wong added.

Another privatised HUDC project, Florence Regency in Hougang Avenue 2, will also start its collective sale process soon. It is the first attempt for the development, with about 71 years left on the lease, marketing agent JLL said.

"An extraordinary general meeting to start the signing process would likely be in July," noted JLL regional director of capital markets Tan Hong Boon. Florence Regency is on a plot of about 389,000 sq ft.

Since the 1970s, 18 projects were built under the HUDC or Housing and Urban Development Company scheme. All have since been privatised and nine have been sold, including Shunfu Ville and Raintree Gardens last year.

HUDC sites are said to appeal to developers owing to their location in mature estates. "More importantly, the sites have more potential to be further intensified, given their layout and the size of units," said Dr Lee Nai Jia, head of South-east Asia research at consultancy Edmund Tie and Company.

However, plots that are too big may put off some bidders, owing to rules requiring developers to build and sell all units within a stipulated time frame or face hefty charges.

Dr Lee said the "optimal size" for a project to have a go at a collective sale is about 300 to 500 units.

Developers' appetite for en bloc sites also hinges on the number of sites on offer in the upcoming government land sales programme.

"If the increase is moderate, it is unlikely to mitigate the demand for sites from developers and collective sale sites would fill the gaps," JLL's Mr Tan added.

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The district of gardens and water

Roads prioritised for public transport, fewer delivery trucks on roads during peak hours, and wide spaces set aside for bicycles and personal mobility devices. This is the car-lite vision for the 360ha Jurong Lake District painted by Minister for National Development Lawrence Wong at the launch of its master plan exhibition yesterday. This will benefit nearby EC residents such as those from Inz Residence EC. Upcoming executive condo launches include Rivercove Residences while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC.

The target is for more than 80 per cent of all trips to and from the district to be made with public transport, he said.

This is an increase from the current national public transport mode share of 66 per cent.

Mr Wong added: "Eighty per cent is truly a stretched target. It is an aspiration, but we hope with all these plans, we can achieve this."

Other public transport-friendly initiatives include having every developmentnear a bus stop or an MRT station.

The network will also be improved, with seamless linkages across different nodes.

For example, there will be connections between the High-Speed Rail (HSR) terminus and MRT stations in the district, such as the existing North-South and East-West lines, as well as the upcoming Jurong Regional and Cross Island lines.

Consolidation is another way that will lead to a "change in the paradigm of mobility".

The Urban Redevelopment Authority will build at least four consolidated underground carparks located not more than 400m from every development.

It also plans to develop off-site logistic centres so that companies can consolidate their goods deliveries before entering the district.

This could reduce the volume of freight vehicles on the roads by at least 65 per cent.

Jurong Lake District, designated as the second Central Business District, will provide 100,000 jobs, Mr Wong said.

The "district of gardens and water" will also be a place to live, with 20,000 new homes and attractive recreational and leisure options nearby, he added.

With 16ha of new parks and open spaces, there will be over 100ha of extensive greenery and open spaces in the district.

"Even the space above the HSR terminus will be designed as a central linear park leading to the waterfront," he said.

Energy-friendly infrastructure innovations include: a common services tunnel to house water pipes; telecommunications and power cables to minimise road disruptions; a pneumatic waste collection system to reduce vehicle movements; and a cooling system to pipe cool air directly to homes to save energy.

The plans for Jurong Lake District, which will take 15 to 20 years to develop, were generally well-received by residents and transport experts.

Safe Cycling Task Force president Steven Lim thinks that apart from building the right infrastructure, it is important for pedestrians, motorists and cyclists to cooperate.

He added: "Ultimately, it is about getting everyone to share the roads graciously."

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Is the optimism in the property market justified?

ON the morning of July 11, 15 developers converged on the 10th storey of the URA Centre to submit bids for a government land site at Woodleigh Lane.

By 8pm, the results were out: a consortium led by Chip Eng Seng, a mid-sized developer, won with the highest bid of S$701 million. The price jolted the market; it was almost 40 per cent above the price per square foot paid for a nearby site at Raintree Gardens just 10 months ago. But the winner was not alone. Real estate heavyweights - CapitaLand, City Developments and Keppel Land - all submitted bids less than 3 per cent shy of its offer. Upcoming executive condo launches include Rivercove Residences while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

Since local authorities revised seller stamp duties in March this year, green shoots have vigorously sprouted in Singapore's property market. In addition to fast-rising land bids and en-bloc activity, sales volumes are also up and share prices of developers have rallied.

Yet, doubts about the optimism remain. Officially, Singapore property prices are still in a bear market. The URA housing price index declined 0.1 per cent in the second quarter of 2017. Weak rents, economic uncertainties and rising interest rates also weigh on the prospects of a property recovery.

Is the optimism in the Singapore property market justified?

We believe it is, for three reasons.

First, residential rents will begin to recover next year. From 2014 to 2017, the increase in home completions exceeded the needs of Singapore's population growth, driving vacancy rates up by three percentage points from 5 per cent to 8 per cent. As a result, rents fell 13 per cent over the period.

This situation will reverse in 2018. Due to fewer launches in recent years, the annual rate of housing completions will decline by around 40 per cent over 2018 to 2020. This falls below the needs of population growth based on the government's projections, which will reduce vacancy rates and drive a rebound in rents.

Second, two major fears of real estate bears today - the risk of a recession and rising rates - are overwrought. With the global economy charting a reflationary path, the risk of a recession in Singapore over the near- to medium- term is low.

The Chinese government has shown considerable success in engineering a soft landing for its economy. In the major developed economies - the United States, EU and Japan - signs of higher growth are being sustained by fundamental improvements in the labour market and strengthening household demand.

Rate hikes act as a critical countercheck to potential overheating, but central banks are understandably cautious about removing the punch bowl too early given the painstaking efforts taken to nurse the burgeoning recovery.

With this in mind, the pace of rate hikes from the US Federal Reserve is expected to be measured, rising slowly from 1.25 per cent currently to 3 per cent in 2019. From historical analysis, the Singapore property market will take this in its stride.

Third, a rising trend of collective sales reinforces fundamentals. While the market usually debates whether aggressive purchases by developers are backed by fundamentals, the fact is that en-blocs themselves exert powerful trickle-down effects on demand and supply.

After an en-bloc transaction, the process to vacate the original estate and complete the redevelopment typically takes four to seven years. Over this period, the physical stock of homes available for occupancy in Singapore is reduced. In the initial years of a rising collective sales cycle, more homes are taken out of the physical stock by en-bloc transactions than those added back in, exerting downward pressure on vacancy rates and boosting residential rents.

At the same time, those who sold their homes to developers through an en-bloc often enter the property market ra[[pidly to re-establish their exposure, flush with new cash and borrowing headroom. Many also help fund home purchases for younger family members who may be subject to less stamp duties. This adds buyers into the market and increases demand.

In addition, developers typically launch new units for sale after one to two years.

While there are usually more units in the redevelopment than in the original estate, they will be sold at significantly higher prices per square foot, which tend to drive up property valuations in the area. Looking back at history, it is no surprise that en-blocs had similarly risen sharply at the turning points of the last two property cycles in 2004-2005 and 2009-2010.

In 2017 to date, total collective sales in Singapore have hit S$3.1 billion, already far surpassing the S$1 billion in 2016.

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ECs were the driving force behind sales

SINGAPORE: Sales of private homes last month fell 57.3 per cent from the previous month in the traditionally quiet year-end period, even as 2016 saw a continued uptick in sales, according to data released by the Urban Redevelopment Authority (URA) on Monday.

Excluding executive condominiums (ECs), developers sold 367 new units in December, down from the 860 units sold in November. Year-on-year, the number of new units excluding ECs sold last month was 4.4 per cent lower than the 384 units sold in December 2015. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include
Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

Including ECs, 580 new units were sold last month, down from 1,110 units the previous month. However, this was 14.2 per cent higher than the 508 units sold the same month a year before.
The month-on-month decline in sales comes as developers scaled back new launches during the traditionally quiet year-end period. Excluding ECs, only 90 units were launched in December, compared to the 1,363 units launched in November.

2016 SALES HIGHEST IN 3 YEARS

However, yearly sales continued to climb steadily, with the total number of new homes sold in 2016 reaching its highest in three years.

A total of 12,408 new private homes - including executive condominiums (ECs) - were sold last year, a 21.7 per cent increase from the 10,199 units sold the previous year. In 2014, 9,026 units were sold.

ECs were the driving force behind sales in 2016, real estate company PropNex said. Excluding ECs, there were 8,364 new units sold last year - slightly higher than the 7,625 units sold in 2015 and 7,437 units sold in 2014.

Sales in the core central region also saw a spike of 67.2 per cent, from 431 units in 2015 to 721 last year. PropNex's chief executive officer, Ismail Gafoor, said current price points of units in the region were 20 to 25 per cent cheaper compared to previous peaks for some developments.

He added that this was due to aggressive marketing by developers to avoid paying the extension fee if they fail to sell all their units within two years of obtaining a temporary occupation permit after completing a project.

Mr Ismail predicted that new private home sales would remain similar this year. "Unfortunately due to the global uncertainty, political situation as well as the impending interest rate hikes, I think 2017 will witness a similar volume of transactions in the tune of 12,000 to 13,000. Therefore, I'm not expecting a repeat of another 20 per cent increment come 2017."

CBRE Singapore gave a similar outlook, but added that favourable prices and good quality projects would continue to drive demand in 2017, as they have over the past two years.

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Transaction volume rose for second straight month

SINGAPORE — Activity in the Housing and Development Board (HDB) resale market continued to pick up in August, with the number of transactions surging from a month earlier as prices rose, showed flash estimates from SRX Property on Thursday.

A total of 1,957 resale HDB flats were sold last month, as transaction volume rose for the second straight month. The volume was 9.6 per cent higher than July’s and up 3 per cent from August a year earlier, showed the SRX Property report. Upcoming executive condo launches include Anchorvale Lane EC, Rivercove EC while existing ones include Parc Life , Signature at Yishun, Brownstone EC, Visionaire EC, Inz Residence, The Criterion EC and Northwave EC, The Terrace EC, The Vales EC, Hundred Palms Residences EC, Sol Acres EC and The Bellewoods EC. Rivercove Residences floor plans and Rivercove Residences EC details will be available shortly.

Resale HDB prices recorded an uptick of 0.1 per cent, ending a four-month falling streak. Year-on-year, HDB resale prices have decreased by 0.7 per cent from August last year, and are down 12.1 per cent since the peak in April 2013, said SRX Property.
Analysts said the pick-up in volume may be attributed to some buyers closing deals ahead of the Hungry Ghost month, typically seen by many to be an inauspicious time to make home purchases.

Based on the lunar calendar, the Hungry Ghost festival spans Aug 22 to Sep 19.

Mr Nicholas Mak, head of the Research & Consultancy Department at integrated asset manager ZACD, said: “A possible reason for the increase is that some buyers may be rushing to seal the transaction before the start of the Ghost month.” He added that the number of deals was within the six-month range of transaction volumes, which ranged from 1,753 to 1,985 flats.

Mr Mak said the marginal increase in HDB resale prices from the previous month pointed to the continuing stabilisation of the market.

According to the SRX flash estimates, the overall median Transaction-Over-X-Value (TOX) — an indicative measure of how much a buyer is underpaying or overpaying for a unit — was zero in August, compared with negative S$1,100 a month earlier.

Among the towns with more than 10 HDB resale transactions last month, Serangoon was the best-performing with a median TOX of S$11,000. Hougang was the worst, with a median TOX of negative S$7,000.

International Property Advisor chief executive Ku Swee Yong pointed to a two-tier market forming even while overall sentiment improves.

“Flats in the outlying areas such as Yishun and Sembawang remain under price pressure as homeowners upgrade to more central areas, which in some cases have been seeing record-setting million-dollar transactions,” he said.

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