Oct 21, 2007
2,000 high-end homes may be launched soon About 30 new condos may be launched by early next year, at least half of them in Orchard, Bukit Timah and Holland
By Fiona Chan, Property Reporter
SALES of new homes took a dive last month, but they might pick up soon as developers prepare to launch a string of projects over the next few months.
Almost 30 new condominiums could come on the market by early next year, said property consultancy Knight Frank.
'Market sentiments are gradually picking up following the United States sub-prime crisis, and launches could also increase in tandem,' said Mr Nicholas Mak, Knight Frank's director of research and consultancy.
He estimates that more than half of the launches will be in the prime districts of 9, 10 and 11 - Orchard, Holland, Bukit Timah and Newton - as well as in luxury enclave Sentosa Cove.
If all these projects are launched as planned, about 2,000 high-end homes could flood the market over the next six months, added Mr Mak. Broadly speaking, these are properties that will cost at least $2,000 per sq ft (psf), with a three-bedroom unit going for at least $2.5 million, he said.
'We are definitely counting on foreigners to come in and help absorb these homes, so we don't end up with an oversupply problem in the top tier,' he said. Residential areas likely to be in the spotlight include Bukit Timah, Thomson, Holland Village and East Coast. This is because prices in these areas have not moved as much as those in areas such as River Valley, Newton and Orchard.
Colliers International also predicted benchmark prices for two upcoming projects: the Ritz-Carlton Residences in Cairnhill and the development on the former Asia Hotel site. Prices at these projects could hit $4,500 psf on average, said Mr Vincent Chong, Colliers' residential sales director.
Mr Mak believes there will be few launches in the closely-watched mass-market segment until the middle of next year because developers started acquiring sites only recently.
'Most launches will come in nine to 18 months' time, and they are likely to be priced on the high side at $800 to $900 psf,' he said. 'Until then, most activity will be in the resale market, where a lack of new launches could push prices up significantly.'
Showing posts with label BusinessTimes. Show all posts
Showing posts with label BusinessTimes. Show all posts
Sunday, October 21, 2007
Friday, October 19, 2007
Business Times: Sites in Jurong, Holland, Orchard up for sale
October 18, 2007
Sites in Jurong, Holland, Orchard up for sale2 prime freehold sites could fetch $670-$700m each in collective sales
By KALPANA RASHIWALA
THREE sites for residential development were launched for tender yesterday - a 99-year leasehold, traditional suburban mass-market housing plot next to Lakeside MRT Station in the Jurong area, as well as two freehold, prime district sites offered through the collective sales of Villa delle Rose off Holland Road and Elizabeth Towers at Mount Elizabeth.
Villa delle Rose, with a land area of 297,132 sq ft, has a guide price of $700 million, which reflects a unit land price of $1,758 psf of potential gross floor area, inclusive of an estimated $31 million development charge. The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey maximum height under Master Plan 2003.
Its marketing agent CB Richard Ellis conducted an expression of interest for the property which ended in August and is said to have received offers of up to slightly over $1,600 psf per plot ratio (psf ppr). The EOI exercise had been launched before approval from majority owners was secured, which CBRE recently obtained.
CBRE executive director Jeremy Lake said in a news release yesterday that 'a few parties have approached us with keen interest, but the owners would like a transparent public tender to achieve the best results'.
Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. All but a handful of units are rented out, CBRE said.
Over in the Orchard Road area, Elizabeth Towers' owners are looking at $673 million for their 54,318 sq ft site. This works out to $2,666 psf ppr. No development charge is payable. Planning approval has been obtained from the Urban Redevelopment Authority to build up to a plot ratio of 4.647, translating to a maximum gross floor area of 252,416 sq ft.
In Jurong, URA has launched the tender for a 2.2-hectare site flanked by Lakeside MRT Station and LakeHolmz condo. Property consultants reckon the site can be developed into around 680 apartments averaging 1,200 sq ft.
CBRE executive director Li Hiaw Ho estimates the site to be worth about $300 psf ppr, translating to a breakeven cost for a new condo at about $650 psf and an average selling price of about $700-750 psf.
Knight Frank, which predicts the site will draw between four and eight bids, estimates the site's land price at $325-$375 psf ppr, or a breakeven cost of around $650-$720 psf.
The firm's managing director, Tan Tiong Cheng, said developers will take into account the fact that the 'Jurong area has traditionally been a slower-moving market compared with other suburban/mass market locations'.
CBRE said that units in The Lakeshore condo a short distance away from the latest site are currently being marketed by its developer at around $800 psf.
In the subsale market, Lakeshore units have been sold recently at $650-750 psf, while apartments at The Centris one MRT station away have been changing hands at about $600-650 psf.
The Lakeholmz, a completed development, has been seeing sales in the $550-600 psf range, according to CBRE research.
Sites in Jurong, Holland, Orchard up for sale2 prime freehold sites could fetch $670-$700m each in collective sales
By KALPANA RASHIWALA
THREE sites for residential development were launched for tender yesterday - a 99-year leasehold, traditional suburban mass-market housing plot next to Lakeside MRT Station in the Jurong area, as well as two freehold, prime district sites offered through the collective sales of Villa delle Rose off Holland Road and Elizabeth Towers at Mount Elizabeth.
Villa delle Rose, with a land area of 297,132 sq ft, has a guide price of $700 million, which reflects a unit land price of $1,758 psf of potential gross floor area, inclusive of an estimated $31 million development charge. The site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a four-storey maximum height under Master Plan 2003.
Its marketing agent CB Richard Ellis conducted an expression of interest for the property which ended in August and is said to have received offers of up to slightly over $1,600 psf per plot ratio (psf ppr). The EOI exercise had been launched before approval from majority owners was secured, which CBRE recently obtained.
CBRE executive director Jeremy Lake said in a news release yesterday that 'a few parties have approached us with keen interest, but the owners would like a transparent public tender to achieve the best results'.
Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. All but a handful of units are rented out, CBRE said.
Over in the Orchard Road area, Elizabeth Towers' owners are looking at $673 million for their 54,318 sq ft site. This works out to $2,666 psf ppr. No development charge is payable. Planning approval has been obtained from the Urban Redevelopment Authority to build up to a plot ratio of 4.647, translating to a maximum gross floor area of 252,416 sq ft.
In Jurong, URA has launched the tender for a 2.2-hectare site flanked by Lakeside MRT Station and LakeHolmz condo. Property consultants reckon the site can be developed into around 680 apartments averaging 1,200 sq ft.
CBRE executive director Li Hiaw Ho estimates the site to be worth about $300 psf ppr, translating to a breakeven cost for a new condo at about $650 psf and an average selling price of about $700-750 psf.
Knight Frank, which predicts the site will draw between four and eight bids, estimates the site's land price at $325-$375 psf ppr, or a breakeven cost of around $650-$720 psf.
The firm's managing director, Tan Tiong Cheng, said developers will take into account the fact that the 'Jurong area has traditionally been a slower-moving market compared with other suburban/mass market locations'.
CBRE said that units in The Lakeshore condo a short distance away from the latest site are currently being marketed by its developer at around $800 psf.
In the subsale market, Lakeshore units have been sold recently at $650-750 psf, while apartments at The Centris one MRT station away have been changing hands at about $600-650 psf.
The Lakeholmz, a completed development, has been seeing sales in the $550-600 psf range, according to CBRE research.
Business Times: HDB expects stock of unsold flats to drop to 2,200 b
October 18, 2007
HDB expects stock of unsold flats to drop to 2,200 units by year-end
By ARTHUR SIM
THE stock of unsold Housing and Development Board (HDB) flats, which stood at about 10,000 three years ago, is now down to 3,500, and the board expects the stock to fall to 2,200 units by the end of the year.
Speaking at a press conference to release the HDB Annual Report 06/07 on Tuesday, HDB CEO Tay Kim Poh said: 'Positive growth has resulted in strong demand for HDB flats.'
Indeed, according to the figures in the latest annual report, demand appears to have outstripped supply.
For the financial year ended March 31, HDB sold 5,712 new flats, down from 10,100 flats in the previous year, a drop of over 40 per cent. But the number of flats completed in the year was also down, to just 1,764, a decline of nearly 60 per cent from the 4,378 flats of the 2005-06 period, perhaps explaining the recent spike of 6.5 per cent in HDB's Resale Price Index (flash estimate) for open market flats.
As at March 31, 14,212 flats were under construction, compared to 12,571 in the previous year. These flats have already been launched, and Mr Tay said: 'BTO (Built-to-Order) subscription is also very high.'
HDB's latest bi-monthly balloting/walk-in sale exercise also suggests that demand is high, with the 489 flats offered now almost 10 times oversubscribed. Four thousand and eight hundred online applications have been received so far.
New supply of about 6,000 flats from BTO exercises and the Design, Build and Sell Scheme is expected over the next six months but managing supply and demand will be a challenge.
HDB said that a projected 6,300 flats will be completed in FY07-08, followed by 1,700 in FY08-09, 4,000 in FY09-10, and 13,000 in FY10-11.
Savills Singapore director (marketing and business development) Ku Swee Yong said: 'Assuming about 5,000 to 7,000 flats are completed between 2008 and 2009, we are at best even on supply and demand.'
Mr Ku said improved economic conditions and population growth could have some impact on this balance.
It is, of course, difficult to predict future demand. A case in point would be the backlog of 10,000 unsold flats just three years ago.
Knight Frank director (research and consultancy) Nicholas Mak said that in the past, HDB built flats 'speculatively', hence the backlog. But, with the current practice of BTO exercises, the building programme has become more 'market responsive'.For now, any unsatisfied demand will have to be supplied by the resale market. 'The resale market is very big and has great capacity to increase demand,' added Mr Mak, but he also cautioned: 'If the economy and job market continues to expand, we can expect demand for new flats to spill over into the resale market and this could impact prices.'
While resale prices have gone up, the HDB said that the number of resale applications actually fell 7 per cent in FY06-07. This could be because HDB buyers are still very price sensitive.
HSR Property Group senior vice-president Donald Yeo said that he does not believe a supply crunch is imminent because many potential buyers already own HDB flats. Based on feedback from HSR property agents, Mr Yeo said that about eight out of 10 buyers already own flats, so even if there is a desire to buy a new flat - regardless of whether it is to upgrade or downgrade - there is no dire need to.'
Buyers who find resale prices too high are also prepared to wait for new flats rather than buy from the resale market,' he added.
HDB expects stock of unsold flats to drop to 2,200 units by year-end
By ARTHUR SIM
THE stock of unsold Housing and Development Board (HDB) flats, which stood at about 10,000 three years ago, is now down to 3,500, and the board expects the stock to fall to 2,200 units by the end of the year.
Speaking at a press conference to release the HDB Annual Report 06/07 on Tuesday, HDB CEO Tay Kim Poh said: 'Positive growth has resulted in strong demand for HDB flats.'
Indeed, according to the figures in the latest annual report, demand appears to have outstripped supply.
For the financial year ended March 31, HDB sold 5,712 new flats, down from 10,100 flats in the previous year, a drop of over 40 per cent. But the number of flats completed in the year was also down, to just 1,764, a decline of nearly 60 per cent from the 4,378 flats of the 2005-06 period, perhaps explaining the recent spike of 6.5 per cent in HDB's Resale Price Index (flash estimate) for open market flats.
As at March 31, 14,212 flats were under construction, compared to 12,571 in the previous year. These flats have already been launched, and Mr Tay said: 'BTO (Built-to-Order) subscription is also very high.'
HDB's latest bi-monthly balloting/walk-in sale exercise also suggests that demand is high, with the 489 flats offered now almost 10 times oversubscribed. Four thousand and eight hundred online applications have been received so far.
New supply of about 6,000 flats from BTO exercises and the Design, Build and Sell Scheme is expected over the next six months but managing supply and demand will be a challenge.
HDB said that a projected 6,300 flats will be completed in FY07-08, followed by 1,700 in FY08-09, 4,000 in FY09-10, and 13,000 in FY10-11.
Savills Singapore director (marketing and business development) Ku Swee Yong said: 'Assuming about 5,000 to 7,000 flats are completed between 2008 and 2009, we are at best even on supply and demand.'
Mr Ku said improved economic conditions and population growth could have some impact on this balance.
It is, of course, difficult to predict future demand. A case in point would be the backlog of 10,000 unsold flats just three years ago.
Knight Frank director (research and consultancy) Nicholas Mak said that in the past, HDB built flats 'speculatively', hence the backlog. But, with the current practice of BTO exercises, the building programme has become more 'market responsive'.For now, any unsatisfied demand will have to be supplied by the resale market. 'The resale market is very big and has great capacity to increase demand,' added Mr Mak, but he also cautioned: 'If the economy and job market continues to expand, we can expect demand for new flats to spill over into the resale market and this could impact prices.'
While resale prices have gone up, the HDB said that the number of resale applications actually fell 7 per cent in FY06-07. This could be because HDB buyers are still very price sensitive.
HSR Property Group senior vice-president Donald Yeo said that he does not believe a supply crunch is imminent because many potential buyers already own HDB flats. Based on feedback from HSR property agents, Mr Yeo said that about eight out of 10 buyers already own flats, so even if there is a desire to buy a new flat - regardless of whether it is to upgrade or downgrade - there is no dire need to.'
Buyers who find resale prices too high are also prepared to wait for new flats rather than buy from the resale market,' he added.
Business Times: Economy's solid growth to spill into 2008: NTU
October 18, 2007
Economy's solid growth to spill into 2008: NTU
It cites uptick in world electronics demand, sizzling construction activity
By LYNETTE KHOO
THANKS to the sustained health of the global economy, an uptick in world electronics demand and sizzling construction activity here, the rosy picture for Singapore's economy will persist into next year, Nanyang Technological University economists said yesterday.
Singapore's gross domestic product is expected to grow 8.3 per cent this year and 7.5 per cent in 2008, the Econometric Modelling Unit (EMU) of the Economic Growth Centre at NTU said in its bi-annual forecast for the economy.'
The expected growth in 2008 is due to external demand conditions, mainly the world economy is expected to remain healthy, China and India are expected to drive growth in Asia and the aggressive policies of the Federal Reserve with regard to the sub-prime mortgage market in the US would likely contain the credit squeeze in the US,' said NTU Associate Professor Joseph Alba.
Based on leading indicators for the electronics cluster, the upturn in global electronics demand will likely gather pace in 2008, while construction activity amid buoyant property prices and spillover effects from the building of the two integrated resorts here will provide further stimulus, he added.
The forecasts were made barring additional risks in the Middle East that could cause oil prices to spike further, but assumed high oil prices of US$80 a barrel.
Assoc Prof Choy Keen Meng, who has been spearheading the macro-economic forecasts since 2001, said the impact of oil price spikes on economic growth is not discernable as there are offsetting factors.
'Historically, the impact of oil price increases on the Singapore economy has been ambiguous,' said Assoc Prof Choy.
For the fourth quarter of this year, EMU expects Singapore's economy to grow 8.6 per cent after the government's advance estimates showed the economy growing 9.4 per cent in Q3.
Giving a sectoral breakdown, Assoc Prof Alba said growth in manufacturing, hotels and restaurants, transport and storage and information and communications is expected to accelerate in 2008 from 2007. But sectors like construction and financial services could see slightly slower growth in 2008 given the high base of comparison in 2007.
EMU also projects that one-off impact of the two percentage-point hike in the Goods and Services Tax will likely blow over by 2008, with the Consumer Price Index (CPI) to be 2.6 per cent in Q4, 1.6 per cent for the whole year and 2.4 per cent in 2008.
This falls within the official CPI forecast by the Monetary Authority of Singapore of 1.5-2 per cent for 2007 and 2-3 per cent for 2008.
The buoyant economic outlook is expected to put more pressure on inflation as labour costs increase, EMU said, but added that these wage pressures may moderate in 2008 as productivity growth accelerates or employment is allowed to grow through Singapore's flexible foreign labour policy.
It estimates that job creation will reach a record of 200,000 this year, after an all-time high of 176,000 last year. EMU's projected job creation would take the unemployment rate to 2.3 per cent for 2007 and 2 per cent for 2008 - the lowest level in a decade.
Economy's solid growth to spill into 2008: NTU
It cites uptick in world electronics demand, sizzling construction activity
By LYNETTE KHOO
THANKS to the sustained health of the global economy, an uptick in world electronics demand and sizzling construction activity here, the rosy picture for Singapore's economy will persist into next year, Nanyang Technological University economists said yesterday.
Singapore's gross domestic product is expected to grow 8.3 per cent this year and 7.5 per cent in 2008, the Econometric Modelling Unit (EMU) of the Economic Growth Centre at NTU said in its bi-annual forecast for the economy.'
The expected growth in 2008 is due to external demand conditions, mainly the world economy is expected to remain healthy, China and India are expected to drive growth in Asia and the aggressive policies of the Federal Reserve with regard to the sub-prime mortgage market in the US would likely contain the credit squeeze in the US,' said NTU Associate Professor Joseph Alba.
Based on leading indicators for the electronics cluster, the upturn in global electronics demand will likely gather pace in 2008, while construction activity amid buoyant property prices and spillover effects from the building of the two integrated resorts here will provide further stimulus, he added.
The forecasts were made barring additional risks in the Middle East that could cause oil prices to spike further, but assumed high oil prices of US$80 a barrel.
Assoc Prof Choy Keen Meng, who has been spearheading the macro-economic forecasts since 2001, said the impact of oil price spikes on economic growth is not discernable as there are offsetting factors.
'Historically, the impact of oil price increases on the Singapore economy has been ambiguous,' said Assoc Prof Choy.
For the fourth quarter of this year, EMU expects Singapore's economy to grow 8.6 per cent after the government's advance estimates showed the economy growing 9.4 per cent in Q3.
Giving a sectoral breakdown, Assoc Prof Alba said growth in manufacturing, hotels and restaurants, transport and storage and information and communications is expected to accelerate in 2008 from 2007. But sectors like construction and financial services could see slightly slower growth in 2008 given the high base of comparison in 2007.
EMU also projects that one-off impact of the two percentage-point hike in the Goods and Services Tax will likely blow over by 2008, with the Consumer Price Index (CPI) to be 2.6 per cent in Q4, 1.6 per cent for the whole year and 2.4 per cent in 2008.
This falls within the official CPI forecast by the Monetary Authority of Singapore of 1.5-2 per cent for 2007 and 2-3 per cent for 2008.
The buoyant economic outlook is expected to put more pressure on inflation as labour costs increase, EMU said, but added that these wage pressures may moderate in 2008 as productivity growth accelerates or employment is allowed to grow through Singapore's flexible foreign labour policy.
It estimates that job creation will reach a record of 200,000 this year, after an all-time high of 176,000 last year. EMU's projected job creation would take the unemployment rate to 2.3 per cent for 2007 and 2 per cent for 2008 - the lowest level in a decade.
Business Times: MAS ups pace of Sing $ appreciation, citing price pressures
MAS ups pace of Sing $ appreciation, citing price pressuresCurrency hits 10-year-high against US$ as news of new stance trickles in
By LARRY WEE
(SINGAPORE) The Monetary Authority of Singapore (MAS) surprised currency markets with a decision to ‘increase slightly’ the pace of annual appreciation for the trade-weighted Singapore dollar in its semi-annual Monetary Policy Statement yesterday - while keeping unchanged its overall stance of a modest and gradual appreciation.
Explaining the decision, MAS in a statement said: ‘Domestic price pressures are expected to persist due to heightened supply constraints, while externally, oil, food and other commodity prices will remain firm into next year.’
A stronger currency would help contain price increases by lowering the cost of imports.
Traders reported that the US dollar slid to a fresh 10-year low of S$1.4620 when the news of MAS’ stance hit the market at the start of currency trading yesterday morning, but it was able to make a slight comeback thereafter to end the day at S$1.4645 - possibly aided by some intervention, traders speculated.
That said, the news also prompted currency strategists to lower their end-2007 and 2008 forecasts for the US dollar yesterday.
In its latest statement yesterday, MAS raised its inflation forecast for 2008 to 2-3 per cent, with the recent Goods and Services Tax (GST) hike expected to raise headline consumer price inflation (CPI) to 3.5 per cent in the first half of 2008. This is up from the 1.5-2 per cent inflation pace that MAS now expects for the local economy in 2007 as a whole - which in turn was raised from the more modest 0.5-1.5 per cent rise in prices predicted in its April 2007 statement.
For overall GDP growth, the republic is also expected to out-do April’s 4.5-6.5 per cent forecast, to grow at the upper end of a revised 7-8 per cent pace this year.
In announcing its decision yesterday, MAS revealed that besides upping its appreciation pace slightly, there would be no re-centring of its policy band, or its width - both of which are undisclosed by the local central bank.
Since the early 1980s, the local central bank has fine-tuned the value of the S$NEER as the main tool of its monetary policy, given the very open nature of the local economy.
Private sector models have estimated that since MAS first implemented its current stance for a modest and gradual appreciation of the S$NEER in April 2004, this has translated into an annual appreciation pace of something like 1.5-2.5 per cent per annum, within plus/minus bands of up to 2.5 per cent around its changing central value.
With MAS’ decision to ‘increase slightly the slope of the S$NEER policy band’ announced yesterday, that annual appreciation pace of 1.5-2.5 per cent could now have been raised to something like 2-3 per cent, suggest MAS watchers here.
Jimmy Koh, head of economic and treasury research at UOB, suggests an appreciation pace of 2.5 per cent into 2008, while JPMorgan’s head of Asia forex research Claudio Piron estimates the pace has risen now from 2.25 to 2.75 per cent per annum.
And, suggested OCBC currency strategist Emmanuel Ng yesterday: ‘Our initial take is that the slope steepening, as opposed to the other alternative of re-centring the band higher at pre-announcement levels, represents a more hawkish policy signal. Over the medium term, this suggests greater latitude for S$NEER appreciation if the need so arises compared to a band re-centring.’
Mr Koh explained his upward-revised 2.5 per cent appreciation pace for the S$NEER based on MAS’ higher inflation forecast: ‘If inflation is now expected to rise 2-3 per cent in 2008, this would seem to suggest that the S$NEER appreciation path will also increase from the previous estimate of 2 per cent to 2.5 per cent or so.’
He has accordingly revised his year-end targets for the US dollar lower this year and next - to S$1.47 and S$1.44 respectively, compared to S$1.48 and S$1.46 before MAS announcement yesterday.
He explained: ‘It appears to us that China may have also upped its appreciation pace for the yuan more recently, to something like 5-7 per cent per annum, and we expect Asian units to become more willing to take over the bigger share of appreciation versus the US dollar in 2008 - taking over from 2007’s top gainers like the euro, Australian dollar and Canadian dollar.’
Mr Piron, who estimates a slightly faster pace of 2.75 per cent, now expects the US currency to finish the year at S$1.46, down from S$1.48 before the MAS decision.
But, he cautioned that this may not have any large impact in the short-term: ‘Note that an additional half-a-per-cent increase in the slope translates into an additional 0.13 basis points per day on a 360 day count basis.
‘Indeed, the MAS is suspected by some participants to have slowed Sing appreciation this morning near the USD/SGD 1.4640-50 level, which according to our MAS S$NEER reading at the time was 130 basis points on the strong side of the policy band and close to (our estimated) 150 basis point upper limit.’
By LARRY WEE
(SINGAPORE) The Monetary Authority of Singapore (MAS) surprised currency markets with a decision to ‘increase slightly’ the pace of annual appreciation for the trade-weighted Singapore dollar in its semi-annual Monetary Policy Statement yesterday - while keeping unchanged its overall stance of a modest and gradual appreciation.
Explaining the decision, MAS in a statement said: ‘Domestic price pressures are expected to persist due to heightened supply constraints, while externally, oil, food and other commodity prices will remain firm into next year.’
A stronger currency would help contain price increases by lowering the cost of imports.
Traders reported that the US dollar slid to a fresh 10-year low of S$1.4620 when the news of MAS’ stance hit the market at the start of currency trading yesterday morning, but it was able to make a slight comeback thereafter to end the day at S$1.4645 - possibly aided by some intervention, traders speculated.
That said, the news also prompted currency strategists to lower their end-2007 and 2008 forecasts for the US dollar yesterday.
In its latest statement yesterday, MAS raised its inflation forecast for 2008 to 2-3 per cent, with the recent Goods and Services Tax (GST) hike expected to raise headline consumer price inflation (CPI) to 3.5 per cent in the first half of 2008. This is up from the 1.5-2 per cent inflation pace that MAS now expects for the local economy in 2007 as a whole - which in turn was raised from the more modest 0.5-1.5 per cent rise in prices predicted in its April 2007 statement.
For overall GDP growth, the republic is also expected to out-do April’s 4.5-6.5 per cent forecast, to grow at the upper end of a revised 7-8 per cent pace this year.
In announcing its decision yesterday, MAS revealed that besides upping its appreciation pace slightly, there would be no re-centring of its policy band, or its width - both of which are undisclosed by the local central bank.
Since the early 1980s, the local central bank has fine-tuned the value of the S$NEER as the main tool of its monetary policy, given the very open nature of the local economy.
Private sector models have estimated that since MAS first implemented its current stance for a modest and gradual appreciation of the S$NEER in April 2004, this has translated into an annual appreciation pace of something like 1.5-2.5 per cent per annum, within plus/minus bands of up to 2.5 per cent around its changing central value.
With MAS’ decision to ‘increase slightly the slope of the S$NEER policy band’ announced yesterday, that annual appreciation pace of 1.5-2.5 per cent could now have been raised to something like 2-3 per cent, suggest MAS watchers here.
Jimmy Koh, head of economic and treasury research at UOB, suggests an appreciation pace of 2.5 per cent into 2008, while JPMorgan’s head of Asia forex research Claudio Piron estimates the pace has risen now from 2.25 to 2.75 per cent per annum.
And, suggested OCBC currency strategist Emmanuel Ng yesterday: ‘Our initial take is that the slope steepening, as opposed to the other alternative of re-centring the band higher at pre-announcement levels, represents a more hawkish policy signal. Over the medium term, this suggests greater latitude for S$NEER appreciation if the need so arises compared to a band re-centring.’
Mr Koh explained his upward-revised 2.5 per cent appreciation pace for the S$NEER based on MAS’ higher inflation forecast: ‘If inflation is now expected to rise 2-3 per cent in 2008, this would seem to suggest that the S$NEER appreciation path will also increase from the previous estimate of 2 per cent to 2.5 per cent or so.’
He has accordingly revised his year-end targets for the US dollar lower this year and next - to S$1.47 and S$1.44 respectively, compared to S$1.48 and S$1.46 before MAS announcement yesterday.
He explained: ‘It appears to us that China may have also upped its appreciation pace for the yuan more recently, to something like 5-7 per cent per annum, and we expect Asian units to become more willing to take over the bigger share of appreciation versus the US dollar in 2008 - taking over from 2007’s top gainers like the euro, Australian dollar and Canadian dollar.’
Mr Piron, who estimates a slightly faster pace of 2.75 per cent, now expects the US currency to finish the year at S$1.46, down from S$1.48 before the MAS decision.
But, he cautioned that this may not have any large impact in the short-term: ‘Note that an additional half-a-per-cent increase in the slope translates into an additional 0.13 basis points per day on a 360 day count basis.
‘Indeed, the MAS is suspected by some participants to have slowed Sing appreciation this morning near the USD/SGD 1.4640-50 level, which according to our MAS S$NEER reading at the time was 130 basis points on the strong side of the policy band and close to (our estimated) 150 basis point upper limit.’
Business Times: Wealthy group growing fastest in S'pore
October 17, 2007
Wealthy group growing fastest in S'pore
By VIKRAM KHANNA IN SEOUL
SINGAPORE is home to the fastest-growing population of high net worth individuals (HNWIs) in the Asia-Pacific, according to a report by Merrill Lynch and Capgemini.
The 2007 Asia Pacific Wealth Report - released yesterday at the World Knowledge Forum, organised by the Maeil business newspaper, in Seoul - shows the number of HNWIs in Singapore rose 21.2 per cent last year to about 67,000.
India and Indonesia were the second and third-fastest growing markets for HNWIs, at 20.5 and 16 per cent respectively.
Overall, the number of HNWIs in the Asia-Pacific region grew 8.5 per cent this year to about 2.6 million.
Of the world's 10 fastest-growing HNWI markets last year, five were in the Asia-Pacific - Singapore, India, Indonesia, South Korea and Hong Kong.
HNWIs are defined as people with more than US$1 million in financial holdings excluding their primary residence. The report estimates overall HNWI wealth was about US$8.42 trillion at the end of last year.
In terms of the distribution of this wealth by market, Japan was the clear leader, accounting for 44 per cent or US$3.7 trillion, followed by China with 21 per cent or US$1.7 trillion. Singapore was the sixth-largest market, with HNWI wealth totalling US$320 billion last year.
Looking ahead, the report projects that Asia-Pacific HNWI wealth will grow about 8 per cent a year for the next three years to a staggering US$12.7 trillion by 2011.
In terms of investment behaviour, Asia-Pacific HNWI investors show certain characteristics, according to the report. In particular, they tend to prefer tangible assets - real estate and cash - to other investment classes.
They also invest most of their assets in the region. For instance, Singapore HNWIs allocated 52 per cent to the Asia-Pacific. However, in the future, Merrill Lynch and Capgemini reckon Asian HNWI investors will seek greater diversification, both by geography and investment classes.
Specifically, they foresee HNWIs seeking to invest in markets outside Asia and North America, and allocating a greater proportion of their wealth to fixed income and alternative investments such as structured products, private equity and hedge funds, as well as 'passion investments' such as wine and art.
Wealthy group growing fastest in S'pore
By VIKRAM KHANNA IN SEOUL
SINGAPORE is home to the fastest-growing population of high net worth individuals (HNWIs) in the Asia-Pacific, according to a report by Merrill Lynch and Capgemini.
The 2007 Asia Pacific Wealth Report - released yesterday at the World Knowledge Forum, organised by the Maeil business newspaper, in Seoul - shows the number of HNWIs in Singapore rose 21.2 per cent last year to about 67,000.
India and Indonesia were the second and third-fastest growing markets for HNWIs, at 20.5 and 16 per cent respectively.
Overall, the number of HNWIs in the Asia-Pacific region grew 8.5 per cent this year to about 2.6 million.
Of the world's 10 fastest-growing HNWI markets last year, five were in the Asia-Pacific - Singapore, India, Indonesia, South Korea and Hong Kong.
HNWIs are defined as people with more than US$1 million in financial holdings excluding their primary residence. The report estimates overall HNWI wealth was about US$8.42 trillion at the end of last year.
In terms of the distribution of this wealth by market, Japan was the clear leader, accounting for 44 per cent or US$3.7 trillion, followed by China with 21 per cent or US$1.7 trillion. Singapore was the sixth-largest market, with HNWI wealth totalling US$320 billion last year.
Looking ahead, the report projects that Asia-Pacific HNWI wealth will grow about 8 per cent a year for the next three years to a staggering US$12.7 trillion by 2011.
In terms of investment behaviour, Asia-Pacific HNWI investors show certain characteristics, according to the report. In particular, they tend to prefer tangible assets - real estate and cash - to other investment classes.
They also invest most of their assets in the region. For instance, Singapore HNWIs allocated 52 per cent to the Asia-Pacific. However, in the future, Merrill Lynch and Capgemini reckon Asian HNWI investors will seek greater diversification, both by geography and investment classes.
Specifically, they foresee HNWIs seeking to invest in markets outside Asia and North America, and allocating a greater proportion of their wealth to fixed income and alternative investments such as structured products, private equity and hedge funds, as well as 'passion investments' such as wine and art.
Wednesday, October 17, 2007
Business Times: A sprinkling of new benchmark home prices
October 16, 2007
A sprinkling of new benchmark home pricesThese include deals at Sentosa Cove, science hub one-north, Boon Lay
By UMA SHANKARI
(SINGAPORE) Several new units sold by developers set record prices in various parts of Singapore last month, despite the overall lacklustre market, latest figures show.
Data released by the Urban Redevelopment Authority (URA) yesterday show that just 529 homes were sold in September, down from 1,731 in August and 1,381 in July.
However, despite the low volume, several of the units sold set new benchmarks in various parts of Singapore - including Sentosa Cove, science hub one-north and Boon Lay - analysts said.
They indicated that the high prices fetched, although only in some cases, show there is a strong, ‘genuine’ demand for new homes, despite September’s low take-up of new homes.
‘Even though the market is quiet, you still see these kinds of prices, which means that there are many serious buyers out there,’ said Savills Singapore’s director of marketing and business development, Ku Swee Yong.
A unit in Ho Bee’s Turquoise at Sentosa Cove was sold for $2,772 per square foot (psf), which analysts said is likely to be a new benchmark for Sentosa.
And over in the Newton area, a unit in Three Buckley went for $2,888 psf, a record for the area. In fact, all 11 units were sold at a median price of $2,853 psf, which is itself a new benchmark for the location, said Li Hiaw Ho, executive director of CBRE Research.
New benchmarks were also set in the suburbs.
In the west, a unit at United Engineers’ The Rochester went for $1,577 psf, a new record for the one-north vicinity. And near Upper Bukit Timah, a unit in Far East Organization’s Gardenvista on Dunearn Road sold for $1,449 psf. Mr Ku said that both prices were new highs in their respective areas.
Elsewhere, a unit in The Beacon Edge at Tembeling Road was sold at $1,327 psf while a unit of Vetro at Mar Thoma Road was sold for $1,044 psf. Both were new levels achieved at their respective locations, CBRE said.
But perhaps most unexpectedly, a unit in Far East Organization’s The Lakeshore in Boon Lay Way went for $1,080 psf - taking most property analysts by surprise, as the project in the far western part of Singapore has been on the market for more than two years.
A sprinkling of new benchmark home pricesThese include deals at Sentosa Cove, science hub one-north, Boon Lay
By UMA SHANKARI
(SINGAPORE) Several new units sold by developers set record prices in various parts of Singapore last month, despite the overall lacklustre market, latest figures show.
Data released by the Urban Redevelopment Authority (URA) yesterday show that just 529 homes were sold in September, down from 1,731 in August and 1,381 in July.
However, despite the low volume, several of the units sold set new benchmarks in various parts of Singapore - including Sentosa Cove, science hub one-north and Boon Lay - analysts said.
They indicated that the high prices fetched, although only in some cases, show there is a strong, ‘genuine’ demand for new homes, despite September’s low take-up of new homes.
‘Even though the market is quiet, you still see these kinds of prices, which means that there are many serious buyers out there,’ said Savills Singapore’s director of marketing and business development, Ku Swee Yong.
A unit in Ho Bee’s Turquoise at Sentosa Cove was sold for $2,772 per square foot (psf), which analysts said is likely to be a new benchmark for Sentosa.
And over in the Newton area, a unit in Three Buckley went for $2,888 psf, a record for the area. In fact, all 11 units were sold at a median price of $2,853 psf, which is itself a new benchmark for the location, said Li Hiaw Ho, executive director of CBRE Research.
New benchmarks were also set in the suburbs.
In the west, a unit at United Engineers’ The Rochester went for $1,577 psf, a new record for the one-north vicinity. And near Upper Bukit Timah, a unit in Far East Organization’s Gardenvista on Dunearn Road sold for $1,449 psf. Mr Ku said that both prices were new highs in their respective areas.
Elsewhere, a unit in The Beacon Edge at Tembeling Road was sold at $1,327 psf while a unit of Vetro at Mar Thoma Road was sold for $1,044 psf. Both were new levels achieved at their respective locations, CBRE said.
But perhaps most unexpectedly, a unit in Far East Organization’s The Lakeshore in Boon Lay Way went for $1,080 psf - taking most property analysts by surprise, as the project in the far western part of Singapore has been on the market for more than two years.
BT : The Estoril put up for collective sale at $208m
Business Times - 16 Oct 2007
The Estoril put up for collective sale at $208m No DC payable; price works out to about $1,536 psf per plot ratio
By ARTHUR SIM
The Estoril: CBRE estimates that a developer can build about 75 unitsassuming an average size of 1,800 sq ft each.
THE Estoril on Holland Road has been put up for collective sale, and the indicative price is $208 million.
This works out to about $1,536 per square foot per plot ratio (psf ppr) for the 84,600 square feet site.
Marketed by CB Richard Ellis (CBRE), its executive director of investment,Jeremy Lake, said that no development charge (DC) is payable due to the high development baseline.
He also said that developers would not incur DC to build the additional 10per cent gross floor area allowable for the provision of balconies.
Currently, there are 40 three-bedroom units and four penthouses on the site.
Based on the indicative price, the three-bedroom units will receive $4.32million each and the penthouses, $8.69 million or $8.78 million.CBRE estimates that the developer can build about 75 units assuming an average size of 1,800 sq ft each. The estimated breakeven is around $2,000-$2,050 psf.
In July, Tulip Garden, also in the Holland Road area, was sold for $516 million or about $1,018 psf ppr.
A recent CBRE report did note that a 'cautious mood' is being felt in theprivate land sales market due to the global credit tightening, the higherprice tags as well as the two rounds of revision to DC rates. Only 24 sitesworth a total of $1.96 billion were sold in the third quarter of 2007compared with 51 sites (worth $6.92 billion) in the previous quarter.
Separately, Colliers International noted that for the first time in at leastthe last two years, the residential sector did not take the top spot ininvestment sales in the third quarter.
In its report, Colliers noted that total sales of residential investmentproperties dived to $2.9 billion or 21.4 per cent of total sales.'This reflects a significant 68.3 per cent drop from last quarter's record$9 billion which accounted for 82.7 per cent of total investment sales in Q2'07,' it reported. 'The trend, where developers continued to land bank atrecord high prices in the previous quarters, was evidently not repeated inthis quarter.'
Attention was shifted to bulk purchases of strata residential units,including those at Costa Del Sol, Reflections at Keppel Bay and M21.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
The Estoril put up for collective sale at $208m No DC payable; price works out to about $1,536 psf per plot ratio
By ARTHUR SIM
The Estoril: CBRE estimates that a developer can build about 75 unitsassuming an average size of 1,800 sq ft each.
THE Estoril on Holland Road has been put up for collective sale, and the indicative price is $208 million.
This works out to about $1,536 per square foot per plot ratio (psf ppr) for the 84,600 square feet site.
Marketed by CB Richard Ellis (CBRE), its executive director of investment,Jeremy Lake, said that no development charge (DC) is payable due to the high development baseline.
He also said that developers would not incur DC to build the additional 10per cent gross floor area allowable for the provision of balconies.
Currently, there are 40 three-bedroom units and four penthouses on the site.
Based on the indicative price, the three-bedroom units will receive $4.32million each and the penthouses, $8.69 million or $8.78 million.CBRE estimates that the developer can build about 75 units assuming an average size of 1,800 sq ft each. The estimated breakeven is around $2,000-$2,050 psf.
In July, Tulip Garden, also in the Holland Road area, was sold for $516 million or about $1,018 psf ppr.
A recent CBRE report did note that a 'cautious mood' is being felt in theprivate land sales market due to the global credit tightening, the higherprice tags as well as the two rounds of revision to DC rates. Only 24 sitesworth a total of $1.96 billion were sold in the third quarter of 2007compared with 51 sites (worth $6.92 billion) in the previous quarter.
Separately, Colliers International noted that for the first time in at leastthe last two years, the residential sector did not take the top spot ininvestment sales in the third quarter.
In its report, Colliers noted that total sales of residential investmentproperties dived to $2.9 billion or 21.4 per cent of total sales.'This reflects a significant 68.3 per cent drop from last quarter's record$9 billion which accounted for 82.7 per cent of total investment sales in Q2'07,' it reported. 'The trend, where developers continued to land bank atrecord high prices in the previous quarters, was evidently not repeated inthis quarter.'
Attention was shifted to bulk purchases of strata residential units,including those at Costa Del Sol, Reflections at Keppel Bay and M21.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Business Times: Sim Lian top bidder for Toa Payoh site
October 17, 2007
Sim Lian top bidder for Toa Payoh site.
Its $38.23m bid for 99-year leasehold commercial site beats eight others
By KALPANA RASHIWALA
SIM Lian Development Pte Ltd yesterday put in the top bid of $38.23 million, or $847.54 per square foot per plot ratio (psf ppr), for a 99-year leasehold commercial site next to HDB Hub in Toa Payoh.
The company, which is not part of the listed Sim Lian Group, plans to develop a largely office project with ground-floor retail space, Sim Lian Development director Ken Kuik said when contacted by BT yesterday.
'Our all-in investment could come in at about $55-57 million, with a breakeven cost of about $1,500 psf of net lettable area. We're looking at a net yield of over 5 per cent when the project is completed in, say, two years' time,' Mr Kuik said.
'That's on the assumption that the average gross monthly office rent in the location could climb to about $8 psf by the time the project is completed. The retail space may fetch around $15 to $20 psf a month,' he added.
The development, which could be around 10 to 15 storeys, will have about 37,000 square feet net lettable area.
Sim Lian Development plans to hold the development for long-term investment. The company is a private vehicle of the Kuik family that controls listed Sim Lian Group.
The tender for the 15,035-sq-ft site at Lorong 6 Toa Payoh attracted nine bids. Sim Lian pipped the second-highest offer of $37.34 million by Hersing Corporation by just 2.4 per cent. The other bidders were United Engineers Developments ($36.10 million), HSR International Realtors ($35.54 million), Evan Lim & Co unit EL Development ($23 million), Mr Sia Kong Wah ($20 million), Superbowl F&B Pte Ltd ($19.3 million), MV Land ($18.18 million) and Eng Wah Organisation unit Wah Pho with a bid of just $1.29 million, or $28.70 psf ppr.
Hersing Corporation, which narrowly missed out being the top bidder, had a scheme for an eight-storey complex for the site, not unlike Sim Lian's, comprising ground-floor retail and offices above. 'The offices might have been partly for our own use with the rest, along with the retail space, to be rented out,' Hersing director Janice Chng said.
Hersing holds the master franchise for ERA for 18 countries in Asia-Pacific. The group's other businesses include providing self-storage facilities in Singapore under the Storhub banner.
Sim Lian top bidder for Toa Payoh site.
Its $38.23m bid for 99-year leasehold commercial site beats eight others
By KALPANA RASHIWALA
SIM Lian Development Pte Ltd yesterday put in the top bid of $38.23 million, or $847.54 per square foot per plot ratio (psf ppr), for a 99-year leasehold commercial site next to HDB Hub in Toa Payoh.
The company, which is not part of the listed Sim Lian Group, plans to develop a largely office project with ground-floor retail space, Sim Lian Development director Ken Kuik said when contacted by BT yesterday.
'Our all-in investment could come in at about $55-57 million, with a breakeven cost of about $1,500 psf of net lettable area. We're looking at a net yield of over 5 per cent when the project is completed in, say, two years' time,' Mr Kuik said.
'That's on the assumption that the average gross monthly office rent in the location could climb to about $8 psf by the time the project is completed. The retail space may fetch around $15 to $20 psf a month,' he added.
The development, which could be around 10 to 15 storeys, will have about 37,000 square feet net lettable area.
Sim Lian Development plans to hold the development for long-term investment. The company is a private vehicle of the Kuik family that controls listed Sim Lian Group.
The tender for the 15,035-sq-ft site at Lorong 6 Toa Payoh attracted nine bids. Sim Lian pipped the second-highest offer of $37.34 million by Hersing Corporation by just 2.4 per cent. The other bidders were United Engineers Developments ($36.10 million), HSR International Realtors ($35.54 million), Evan Lim & Co unit EL Development ($23 million), Mr Sia Kong Wah ($20 million), Superbowl F&B Pte Ltd ($19.3 million), MV Land ($18.18 million) and Eng Wah Organisation unit Wah Pho with a bid of just $1.29 million, or $28.70 psf ppr.
Hersing Corporation, which narrowly missed out being the top bidder, had a scheme for an eight-storey complex for the site, not unlike Sim Lian's, comprising ground-floor retail and offices above. 'The offices might have been partly for our own use with the rest, along with the retail space, to be rented out,' Hersing director Janice Chng said.
Hersing holds the master franchise for ERA for 18 countries in Asia-Pacific. The group's other businesses include providing self-storage facilities in Singapore under the Storhub banner.
Saturday, October 13, 2007
BT : $5,600 psf for penthouse new high in property price here
Business Times - 12 Oct 2007 $
5,600 psf for penthouse new high in property price here 53rd-storey Orchard Residences unit fetches over $28m By KALPANA RASHIWALA
Orchard Residences: About 73 per cent of the total 175 units in the condoare said to have been sold
A NEW record property price for Singapore has been set, even though fewersales are being made in high-end residential projects since the time of theUS sub-prime mortgage crisis.
CapitaLand and Sun Hung Kai Properties are said to have sold earlier thisweek a penthouse on the 53rd storey of The Orchard Residences for about$5,600 per square foot (psf), or over $28 million. This surpasses theprevious benchmark of $5,500 psf set in August when a 54th storey penthousefetched about $27.8 million.
This means that all four penthouses in the 99-year leasehold development are now sold.The developers are said to have sold about 73 per cent of the total 175units in the condo. The buyer of the final penthouse sold this week isbelieved to be a foreigner. The 5,048 sq ft unit has five bedrooms, a studyand a family room.
A stone's throw away, Wheelock Properties (Singapore) is said to have soldmore than 30 apartments at its freehold Scotts Square since the officiallaunch of the project on Sept 28.
The developer is said to have largely maintained its average price at aroundthe $4,000 psf mark from its preview in July, when it sold about half of theproject's 338 apartments.
Over in Sentosa Cove, Ho Bee has sold 38 of the 50 units it has released sofar in its 91-unit condo, Turquoise, since late September. The units havebeen sold at prices ranging from nearly $2,500 psf to $2,770 psf.
The average price is about $2,600 psf, Ho Bee Investment executive directorOng Chong Hua said when contacted by BT yesterday. Buyers of the 38 units -which include four penthouses - were an equal mix of foreigners andSingaporeans, he said.
Apartments at the 99-year leasehold Turquoise typically cost around $5.3million for a three-bedroom unit, $6.4 million for a four-bedder and around$9.3 million for a penthouse.
DTZ Debenham Tie Leung executive director (residential) Margaret Thean acknowledges that buyers, both local and foreign, have been more cautiousafter the stock market setback at the time of the US sub-prime mortgage crisis.'But we still see activity going on. For the high-end projects, we've notnoticed any withdrawal of liquidity. The only difference is that prospective buyers are more cautious, doing more calculations and being more selectivein their choice of investment before making a commitment,' she said.Market watchers also say that the recovery in the stock market in recentweeks has led to a return of confidence in the property market, as seen in apick-up in subsales activity lately.
Over in the Seletar Hills area, Tong Eng Brothers unit Fairview Developmentsis launching two landed developments. One is the freehold 8 @Stratton, comprising eight cluster semi-detached houses priced at $1.98million to $2.2 million.
The houses have built-up areas ranging from 3,595 sq ft to 3,649 sq ft andstrata areas of 4,930 sq ft to 5,145 sq ft. The second project is Nim Green,a collection of just three terrace houses - a corner unit with an askingprice of $2.5 million and two intermediate units with a price tag of about$2 million.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Business Times: Average capital value of luxury apartments tops '97
October 13, 2007 Average capital value of luxury apartments tops '97 peak by 59%
By KALPANA RASHIWALA
THE average capital value of luxury apartments in Singapore has risen 43.5 per cent in the first nine months of this year since the fourth quarter of 2006. At $2,827 psf, the Q3 2007 average luxury apartment cap value has surpassed 1997's peak level by 59 per cent, according to a report by Colliers International issued yesterday.
In the leasing market, average monthly gross rents of luxury apartments were up 27.9 per cent in the first nine months of the year. The increase was at a faster clip in the third quarter of this year, with a quarter-on-quarter gain of 10.2 per cent to $6.86 per square foot a month. This was higher than earlier rises of 7.9 per cent and 7.6 per cent in Q2 and Q1.
'The supply crunch, coupled with strong demand, continued to contribute to escalating rental growth, a growing concern among the expatriate population in the Republic and the government,' Colliers noted.
The average cap value of luxury apartments rose 13.3 per cent in Q3 over the preceding quarter to $2,827 psf.
The property consultancy firm predicts that average capital values and monthly gross rents of luxury apartments will rise by up to 10 per cent in the final quarter of the year. But it acknowledged the downside risks in the coming months, including the negative spillover from the US housing market and potential negative oil supply shocks.
'Nevertheless, the strong economic and demand fundamentals in the Singapore market, coupled with the continuing commitment of the government to maintain Singapore's attractiveness as a stable market for investments, should lend support to the private residential property market amid cautious sentiments,' the report added.
Colliers also highlighted the government's assurance that it would continue to monitor the market and ensure that prices do not run ahead because of a shortage of supply.
Earlier this month, the Urban Redevelopment Authority said that it was reviewing the Government Land Sales programme for the first half of next year and that the government would make available more sites for private residential development through the GLS programme next year if the demand continues to remain strong.
By KALPANA RASHIWALA
THE average capital value of luxury apartments in Singapore has risen 43.5 per cent in the first nine months of this year since the fourth quarter of 2006. At $2,827 psf, the Q3 2007 average luxury apartment cap value has surpassed 1997's peak level by 59 per cent, according to a report by Colliers International issued yesterday.
In the leasing market, average monthly gross rents of luxury apartments were up 27.9 per cent in the first nine months of the year. The increase was at a faster clip in the third quarter of this year, with a quarter-on-quarter gain of 10.2 per cent to $6.86 per square foot a month. This was higher than earlier rises of 7.9 per cent and 7.6 per cent in Q2 and Q1.
'The supply crunch, coupled with strong demand, continued to contribute to escalating rental growth, a growing concern among the expatriate population in the Republic and the government,' Colliers noted.
The average cap value of luxury apartments rose 13.3 per cent in Q3 over the preceding quarter to $2,827 psf.
The property consultancy firm predicts that average capital values and monthly gross rents of luxury apartments will rise by up to 10 per cent in the final quarter of the year. But it acknowledged the downside risks in the coming months, including the negative spillover from the US housing market and potential negative oil supply shocks.
'Nevertheless, the strong economic and demand fundamentals in the Singapore market, coupled with the continuing commitment of the government to maintain Singapore's attractiveness as a stable market for investments, should lend support to the private residential property market amid cautious sentiments,' the report added.
Colliers also highlighted the government's assurance that it would continue to monitor the market and ensure that prices do not run ahead because of a shortage of supply.
Earlier this month, the Urban Redevelopment Authority said that it was reviewing the Government Land Sales programme for the first half of next year and that the government would make available more sites for private residential development through the GLS programme next year if the demand continues to remain strong.
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