Friday, December 19, 2008
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Urban Redevelopment Authority's (URA) monthly real estate data also revealed that the number of launch-ready units hit 6,512 units in November, a marginal rise over October but an increase of 3,840 units from a year ago.
Rosewood Suites in Woodlands by EL Development (ELD) sold 42 units in November, the most units sold, followed by Newton Edge (34 units) and RV Suites (19 units).
ELD is a unit of local builder Evan Lim & Co. Managing director Lim Yew Soon said that the pricing - at an average of $580 psf - 'may be on the low side' but added, 'We expect construction costs to come down next year so we took a bit of a risk with a lower margin'.
Still, Mr Lim conceded that, 'the price may not be sustainable in the long run', and ELD could begin to raise prices.
He also believes that a price war among developers is not likely because most developers bought sites at about the same price. 'And unless a developer goes bust, there is no reason for them to sell at a loss,' he added.
PropNex CEO Mohamed Ismail said that prices for existing developments in the same area such as Casablanca are going for between $500-$550 psf. He said that Rosewood Suites is 'extremely attractive in today's market' especially considering that new public housing flats are about $300 psf with Design, Build and Sell Scheme (DBSS) flats at about $450 psf.
PropNex was the marketing agent for Rosewood Suites and Mr Ismail added that most of the buyers were HDB upgraders.
Already, Knight Frank notes that the lowest priced non-landed unit sold in November was in Rosewood Suites at $512 psf while the highest priced non-landed unit is Orchard Scotts, which sold for $2,006 psf (The highest-priced unit sold in Orchard Scotts was $2,407 psf).
Both Newton Edge and RV Suites are in the core central region (CCR) and Colliers International director for research and advisory Tay Huey Ying noted that more than half the 382 units launched were in the CCR.
She added: 'Developers have been stepping up launches of prime properties since August 2008, in a reversal of the first half's trend where developers tended to hold back launches of prime properties. This could be an indication of weakening holding power amongst smallish and mid-tier developers with prime development sites.'
Ms Tay believes developers are likely to continue with the current launch momentum and could launch some 450-500 new units in December 2008, bringing the total launch volume for 2008 to some 6,500 units, less than half of last year's launch volume of more than 14,000 units.
Ms Tay expects developers' sale volume to hover between 150-200 units. This would bring sales volume for the year to less than 4,500 units, or less than a third of last year's volume of more than 14,000 units.
Other developments that registered better sales in November were Evania at Upper Paya Lebar Road and a landed housing project at Andrews Terrace.
CBRE Research executive director Li Hiaw Ho said: 'Price remains a critical factor to move sales, as seen by the good response to these projects.' He also said that prices for units in Evania have apparently been reduced from above $800 psf when it was first launched in March to $610 psf-$650 psf.
'Buyers will remain very cautious even if some re-pricing sets in,' he added. 'Since the economic drag is expected to persist into 2009, developers may be increasingly open to considering creative marketing tactics and soft discounts to attract buyers,' Nicholas Mak added.
Knight Frank director (research and consultancy) Nicholas Mak expects home-buying sentiments and launch activity to remain subdued until after the Chinese New Year in January.
DTZ executive director Ong Choon Fah also reckons the market is seeking 'clarity' on the economy and could wait for the January Budget measures before moving.
Extract:BT,16 Dec 2008
May also want to read:
Newton Edge: Buyers' Review
Launch of Rosewood Suite at $580 psf
Spore Property History 1960-2008
HDB Resale Price Index 1990-2008: Graph & Chart
Private Property Sales increases in November: Rosewood Suites and Newton Edge sold most
The launch of new developments helped pull up developer sales to 192 units in November, up from just 112 units in October. The number of units launched by developers increased from 159 units in October to 382 units in November.Launch-ready units hit 6,512 units in November
Urban Redevelopment Authority's (URA) monthly real estate data also revealed that the number of launch-ready units hit 6,512 units in November, a marginal rise over October but an increase of 3,840 units from a year ago.
Rosewood Suites and Newton Edge sold most
Rosewood Suites in Woodlands by EL Development (ELD) sold 42 units in November, the most units sold, followed by Newton Edge (34 units) and RV Suites (19 units).
ELD is a unit of local builder Evan Lim & Co. Managing director Lim Yew Soon said that the pricing - at an average of $580 psf - 'may be on the low side' but added, 'We expect construction costs to come down next year so we took a bit of a risk with a lower margin'.
Developer says may raise price and price war not likely
Still, Mr Lim conceded that, 'the price may not be sustainable in the long run', and ELD could begin to raise prices.
He also believes that a price war among developers is not likely because most developers bought sites at about the same price. 'And unless a developer goes bust, there is no reason for them to sell at a loss,' he added.
Rosewood Suites' Prices extremely attractive: Property Agents
PropNex CEO Mohamed Ismail said that prices for existing developments in the same area such as Casablanca are going for between $500-$550 psf. He said that Rosewood Suites is 'extremely attractive in today's market' especially considering that new public housing flats are about $300 psf with Design, Build and Sell Scheme (DBSS) flats at about $450 psf.
PropNex was the marketing agent for Rosewood Suites and Mr Ismail added that most of the buyers were HDB upgraders.
Already, Knight Frank notes that the lowest priced non-landed unit sold in November was in Rosewood Suites at $512 psf while the highest priced non-landed unit is Orchard Scotts, which sold for $2,006 psf (The highest-priced unit sold in Orchard Scotts was $2,407 psf).
Rosewood Suites and Newton Edge both in Central Core Region
Both Newton Edge and RV Suites are in the core central region (CCR) and Colliers International director for research and advisory Tay Huey Ying noted that more than half the 382 units launched were in the CCR.
Launch of Prime Properties may indicate small developers' weak holding power
She added: 'Developers have been stepping up launches of prime properties since August 2008, in a reversal of the first half's trend where developers tended to hold back launches of prime properties. This could be an indication of weakening holding power amongst smallish and mid-tier developers with prime development sites.'
Launch momemtum expected to continue
Ms Tay believes developers are likely to continue with the current launch momentum and could launch some 450-500 new units in December 2008, bringing the total launch volume for 2008 to some 6,500 units, less than half of last year's launch volume of more than 14,000 units.
Ms Tay expects developers' sale volume to hover between 150-200 units. This would bring sales volume for the year to less than 4,500 units, or less than a third of last year's volume of more than 14,000 units.
Other developments that registered better sales in November were Evania at Upper Paya Lebar Road and a landed housing project at Andrews Terrace.
Price remains a critical factor to move sales
CBRE Research executive director Li Hiaw Ho said: 'Price remains a critical factor to move sales, as seen by the good response to these projects.' He also said that prices for units in Evania have apparently been reduced from above $800 psf when it was first launched in March to $610 psf-$650 psf.
'Buyers will remain very cautious even if some re-pricing sets in,' he added. 'Since the economic drag is expected to persist into 2009, developers may be increasingly open to considering creative marketing tactics and soft discounts to attract buyers,' Nicholas Mak added.
Home-buying sentiments to remain subdued to Jan after Chinese New Year
Knight Frank director (research and consultancy) Nicholas Mak expects home-buying sentiments and launch activity to remain subdued until after the Chinese New Year in January.
DTZ executive director Ong Choon Fah also reckons the market is seeking 'clarity' on the economy and could wait for the January Budget measures before moving.
Extract:BT,16 Dec 2008
May also want to read:
Newton Edge: Buyers' Review
Launch of Rosewood Suite at $580 psf
Spore Property History 1960-2008
HDB Resale Price Index 1990-2008: Graph & Chart
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7 comments:
More launches -> more supply -> more downward price pressure. Hooray!
Always talk tough... say they got cash hoard, can withold launches.
I call their bluff.
Why must developers cut their own pay? Why asking prices dropping? Why launching more units in Oct despite worsening economy?
I say because they are feeling the pain. I say when the pain becomes great enough, when they become desperate, they will eat humble pie. You cannot keep cutting off your nose to spite your face. See who can last longer.
It is funny to read all these denial from PropNex and developers in the past several days that the property market here is holding up. Of course they're holding up after selling units at such ridiculous price last year. They can hold on to their launches and projects for as long as they want.
But eventually they have to release them. Mind them, esp. the developers, that they are property developers and it'll be funny that they're sitting there not building new houses and not selling anything. Where will their money come from? Do they have a money-tree somewhere hidden? I doubt. It is definite that they'll run out of steam and holding power. Unless they're aiming to retrench most of their staff and maintain this holding power.
Face it Propnex or ELD (which by the way looks like quite a small developer...good luck facilitating your short-term bank loan next year), etc. Singapore property market is going down just like HK and China. Living in denial will end up like Bernake when he said back in 2005 and 2006 that property market and property financing structure is safe and sound. Look what's happening now.
Unless Singapore is N Korea, then we have nothing to worry about. Unfortunately we are one of the most globalized economy. Tough luck, we are already getting the impact and will get more next year. Even if construction cost will go up like what ELD said, they've to sell at a loss to get money flowing or else they might as well close shop.
By the way, banks are not lending that much now. So, buyers are affected to. Yes, you can argue we are good at savings unlike the Americans. So are we willing to spend all our savings to get a place that cost a bomb and go bankrupt? Retrenchment is looming too. I bet companies here are just waiting to see what January budget can offer before dropping the axe.
This time both buyers and sellers are getting it. Interesting to see what'll happen next to these developers and agents.
Also read about HK developers in self-denial. It's typical. Sad thing is some buyers are actually sold into such "threats" - we'll raise the price soon; we'll cut the supply etc..
I am an ordinary wage earner who does not have much savings. i do not qualify to buy HDB as I am not married. I am looking to buy cheap private property and Geylang seems to offer some options.
Unfortunately as I have spoken to the banks they are very unwilling to lend even though I have been in the same job for 10 years.
They say there is no resale value, properties deteriorate very quickly ad most are tenanted for yields and there is no incentive to mainatin in good order. Also neighbours will likely be hookers and gangsters, that's why it is so cheap compared to elsewhere.
Other than Geylang, where can I get reasonably affordable property as I am bachelor and really have no options.
I cannot waste my money on rent forever and I am so tired to be cornered and have no options.
Dear Anonymous,
What if you do get married one day? Geylang is not family-friendly. It's also not easy to sell away property there. Do explore studio apts in less prime areas (e.g. D2X). I think you may be able to find something within your budget.
Banks really said that? My take is that they are coming up with creative excuses not to lend. Looks like they're really afraid of getting burnt like American banks...or they are already in trouble? Hmm...
You can buy a resale HDB if you are above 35 - best choice actually.
http://www.hdb.gov.sg/fi10/fi10201p.nsf/WPDis/Buying%20A%20Resale%20FlatEligibility%20Scheme%20-%20Single%20Singapore%20Citizen%20Scheme?OpenDocument
If you are just a ordinary wage earner with little savings, it is quite risky to buy private property at current prices. There are 500sqft new studios going for 4XX-5XXk which are still pretty pigeon-hole rip-offs.
At the 2004-2005 property lows, a 800-900 sqft apartment(non-condo) is going for 300-350k in Geylang area.(350-400psf) That is the value of that area - while the upper Lorongs (larger than L28) generally have better value and more family-friendly environments. Some Lorongs are actually quite quaint with a laid-back setting hard to find in Singapore.
Banks will definitely not lend at the current asking prices(450-650psf) since prices are set to fall and areas like this have no holding power.
As a general guideline, the official designated red-light district is from Lorong 4-28, if I am not wrong. Some of the other odd lorongs are now over-crowed housing for foreign workers.Remember that not all Lorongs are created the same and populated with the same denizens. Spend some nights (very important, must be nights!!) walking there to get a feel of which are the "safe" lorongs unless you have a fetish with whores and hoodlums and blanga neighbours.
Else you can try the north and very east areas. Older private apartments are also an option. Generally, do as much research as you can now since banks will not lend anyway until prices comes down to a realistic level.
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