NEWS & VIEWS

Screen Shot 2016 05 01 at 10.43.21 pm NEWS & VIEWS

 

An Update by ERA Research

26 April 2016

RESIDENTIAL MARKET

More launches in the offing as residential market picks up

More launches are in the works in the coming months as the residential market continues to show signs of waking from its slumber.

Two projects where sales started last weekend had decent take-ups while bookings for an executive condominium begin this weekend.

“Buyers have all along been very interested in property despite the measures, but they are very selective,” said ERA Realty key executive officer Eugene Lim. “Project attributes and pricing are important, and developers are likely to price attractively.”

New launches last weekend included The Visionaire Executive Condominium (EC) by Qingjian Realty. The project in Canberra Link sold 158 of 632 units at an average price of $811 per sq ft (psf).

The Sturdee Residences in Jalan Besar, by Sustained Land, sold 122 of 305 units at an average price of $1,550 psf at its preview. It will be officially launched on Saturday. Most of the units sold were one to two bedders while three of eight penthouses have been taken. Two of these were 1,830 sq ft units that went for $3.2 million each.

This weekend, Frasers Centrepoint and Keong Hong Holdings will launch Parc Life EC, for which they have received over 700 e-applications. The 660-unit Sembawang Crescent project is priced from $770 to $800 per sq ft (psf).

The show gallery for Gem Residences by Evia Real Estate, Gamuda and Maxdin is opening this weekend as well. Bookings for the 578-unit project in Toa Payoh start end-May with average prices at about $1,480 psf.

Pre-sales for Stars of Kovan by Cheung Kong Property are also expected to start next month. Condo prices at the mixed-use project, which has 390 condo units, five strata terraces and 46 shops, are about $1,550 to $1,600 psf.

The Urban Redevelopment Authority has reminded developers to comply with the new rules for showflats.

The rules, which came into effect on July 20, govern maps, plans, models and show units.

For example, disclaimer notes regarding the accuracy of the site plan, unit models or unit floor plan are not allowed.

All door frames, cupboards, cabinets and wardrobes in the actual unit must be installed in the show flat, among other rules.

Adapted from: The Straits Times, 26 April 2016

25% of Qingjian’s EC units sold at weekend launch

Qingjian Realty (South Pacific) Group sold 25 per cent or 158 units of its executive condominium project in Sembawang, The Visionaire, during the first weekend of launch.

Those with “smart home” package were sold at an average of S$811 per square foot (psf). Close to 70 per cent of the buyers opted for the package, while the rest who opted out were given price cuts of S$6,500 to S$8,000 depending on the unit size. More than 60 per cent of the buyers were first-timers.

Qingjian Realty general manager Li Jun said that such a high take-up rate for the “smart home” package among price-sensitive executive condominium (EC) buyers show the readiness of Singaporeans to adopt “smart” living.

“With our partnerships with the systems integrators and technology companies already in place, we will ride on these synergies to reach out to our other homeowners who may also want to be early adopters of ‘smart’ living,” he said.

The group will start rolling out “smart home” packages for homeowners at all its condominium and executive condominium projects that have received temporary occupancy permit (TOP), including Riversound Residence and River Isles, as well as for current launches including Bellewaters and Bellewoods. They will also be available at upcoming launches.

Qingjian had earlier received an astounding 859 number of e-applications, however. Commenting on the conversion rate and sales, Mr Li said these were “satisfactory and within expectations” in view of current market conditions.

He felt that this is also comparable to Brownstone, an adjacent 638-unit project by City Developments that sold some 185 units or about 29 per cent during its weekend launch.

Mr Li believes that some potential buyers are adopting a wait-and-see approach given the looming launch of another EC project in Sembawang, Parc Life by Frasers Centrepoint Limited (FCL) and Keong Hong Holdings.

Adapted from: The Business Times, 26 April 2016

HDB flats more affordable despite shorter loan tenures

Despite the shortening of maximum loan tenures, housing affordability — as measured by the Housing and Development Board (HDB) — has improved over the last three years, with first-time buyers of new flats in non-mature estates last year using less than a fifth of their monthly income on average to repay their housing loans.

The debt-servicing ratio (DSR) — which looks at the proportion of monthly income used to pay off a mortgage — has fallen from 24 per cent in 2013 and 22 per cent in 2014, to 19 per cent last year, a HDB spokesperson said in response to TODAY’s queries.

HDB attributed the falling DSR to new flat prices being kept stable and the enhancement of housing grants, such as the Special CPF Housing Grant. Experts TODAY spoke to noted other factors, including rising wages due to a tight labour market. They reiterated that more data need to be made available – including the DSR for various income groups and flat types — in order to provide a more comprehensive and accurate picture of housing affordability.

Internationally, a DSR of between 30 and 35 per cent is considered affordable. The HDB’s spokesperson noted that a ratio of less than a quarter means that households with regular Central Provident Fund (CPF) contributions “should be able to service most, if not all, of their loan instalments using CPF”.

Over the past three years, eight out of 10 first-time buyers of new flats in non-mature estates serviced their monthly instalment entirely using their CPF savings, without any cash outlay. In 2013, the maximum loan tenure for HDB loans were reduced from 30 years to 25 years to encourage financial prudence.

On the falling DSR, ERA key executive officer Eugene Lim pointed to the Government’s de-linking of resale and Build-To-Order prices — a policy in place since 2011. He suggested that the DSR be kept around 20 per cent as “anything above that will be a strain if we take into account other (household) debts”.

Agreeing that new flats have become more affordable, National University of Singapore economics don Tilak Abeysinghe said the falling DSR could be attributed to rising income levels and more subsidies from the Government. Official statistics showed that median monthly household income from work grew 3.8 per cent per annum in real terms — from S$6,342 to S$8,666 — between 2010 and last year.

Still, the costs of new flats in non-mature estates vary according to location. For example, in the BTO exercise in November last year, the price of a three-room unit at Seng Kang started from S$89,000 while a similar flat type cost at least S$103,000 in Punggol. The falling DSR could be partly because a larger proportion of units were offered in recent years in less expensive locations. Also, buyers could be borrowing less and opting for higher downpayments, or they could be buying smaller units instead due to the economic uncertainty.

Institute of Policy Studies senior research fellow Christopher Gee said more data – including the DSR in previous years, as well as the ratio for different income groups and flat types – would be useful to determine housing affordability. In 2008 and 2010, the DSR was 21 per cent and 23 per cent, respectively. “The HDB (also) needs to be cognisant possibly of potentially unmet demand and not just the applicants that (it has),” he said. For instance, to encourage people to marry earlier, the HDB has to consider whether current prices are affordable to the target groups who have yet to apply for flats, he said.

There were also suggestions to look at the proportion of monthly income used for mortgage payments in the context of other household expenses such as education and transport. Noting the need for Singapore to set its own DSR benchmark, Assoc Prof Tilak said: “When you take 30 per cent of the income for example (to repay housing loan) and you are left with 70 per cent, is that enough to buy other things?”

Adapted from: TODAY, 26 April 2016

Arrested China exec said to be buyer of Sentosa villa

Zhang Min, the Chinese businesswoman involved in the Ezubao ponzi scandal, is believed to have been the buyer of a S$23.8 million bungalow along Lakeshore View in Sentosa Cove, the purchase of which has not been completed.

Sources as well as documents viewed by The Business Times suggest that the deal, which had been entered into last October, did not go through.

Zhang is understood to have been uncontactable when the completion date for the property’s purchase fell due earlier this year. Shortly thereafter news broke that a person bearing the same name had been arrested in the Ezubao scandal in China.

Zhang had been granted an option for the bungalow’s purchase in October last year; she exercised the option later in the same month and lodged a caveat on the property in November.

In early February this year, she withdrew the caveat. This was shortly after news broke of her arrest in China.

Market watchers reckon that Zhang would have paid a 5 per cent deposit of the purchase price, that is, S$1.19 million – which would have been forfeited when she did not complete the transaction.

The bungalow in question, which fronts the Serapong Golf Course and overlooks the sea, is now back on the market. It is owned by three siblings from a Hong Kong family, two of whom are British citizens and the third, a Singapore citizen.

The S$23.8 million price it was to have been sold for, translates to S$2,775 per square foot (psf) on the land area of 8,576 sq ft. The property is on a site with a balance lease term of 89 years at the time that the deal was entered into last October.

Ezubao was one of China’s biggest Internet peer-to-peer (P2P) lenders. Launched in July 2004, the platform had collected over 50 billion yuan (S$10.8 billion) from an estimated 900,000 investors.

In late January this year, the official news agency Xinhua reported executives at Ezubao’s parent company, Yucheng Group, as saying that it was a “complete Ponzi scheme” that used monies raised from investors to support a lavish lifestyle. Among the gifts that Yucheng chairman Ding Ning gave to Zhang, who was its president, were a S$20 million Singapore villa, a US$1.8 million (S$2.5 million) pink diamond ring, luxury limousines and watches and more than US$83 million in cash, Xinhua had reported.

The company is reported to have fabricated most of the projects on its website and paid old debts with money from new investors.

When Ezubao’s fraud was uncovered late last year, executives buried 80 bags of documents in a six-metre hole on the outskirts of Hefei in Anhui province, where the company originated from.

Back to Lakeshore View on Sentosa Cove, interestingly, just six houses from the bungalow in question, another property was bought in 2013 for S$26 million or S$2,922 psf by Zhu Xingliang, whom The Edge has identified as the founder of Shenzhen-listed interior design and construction firm Suzhou Gold Mantis Construction Decoration Co. Ltd. In January 2014, he was reported to have been arrested. He was implicated in the investigation of Nanjing mayor Ji Jianye, who was removed from office in a graft probe in October 2013.

News of the more recent, S$23.8 million or S$2,775 psf transaction along Lakeshore View in Q4 last year, had boosted sentiment, given its relatively high psf price despite the general lack of transactions in the waterfront housing district.

Adapted from: The Business Times, 26 April 2016

RETAIL MARKET

100 AM mall in Tanjong Pagar to be new home for Parco

Amara Holdings’ shopping mall in Tanjong Pagar, 100 AM, will soon be home to Parco, after the group inked a lease agreement with the Singapore subsidiary of the Japanese department store operator.

Parco (Singapore) Pte Ltd agreed to take up some 14,000 square feet of food and beverage (F&B) space at the mall. It plans to open a new restaurant zone named “itadakimasu by Parco”, housing a variety of Japanese cuisines, in the last quarter of 2016.

An Amara spokeswoman said that the company was tweaking the tenant mix at 100 AM in response to the changing retail landscape with a rejuvenation of concepts to engage shoppers. The addition of Parco increases the mall’s F&B net lettable area (NLA) by 6 per cent.

100 AM is located at 100 Tras Street and within walking distance from the Tanjong Pagar MRT station. Its retail podium covering 126,000 sq ft NLA is about 97 per cent occupied.

Amara chief executive officer Albert Teo said: “This new F&B concept ‘itadakimasu by Parco’ is a strategic fit and ties in well with 100 AM, which appeals to modern, inner city urban dwellers with high purchasing power. We are confident that this unique dining concept by Parco will be a strong draw for shoppers and residents alike.”

Shigeyoshi Sato, chief executive of Parco (Singapore) Pte Ltd, said that 100 AM was a strategic choice for Parco’s new “itadakimasu by Parco” concept in Singapore given its location, surrounded by new developments such as the Tanjong Pagar Centre and the future Tanjong Pagar port area development.

“The area also has a mixture of residential developments and hotels within walking distance. Our restaurant mix will be a boost to the large working population and residents in the vicinity,” Mr Sato said.

Parco had in 2014 vacated its 83,000 sq ft premises at Millenia Walk where it first introduced the Japanese restaurant zone under the “itadakimasu” concept. It used to manage Bugis Junction until it sold its stake in 2005, and was the appointed retail manager for the Clarke Quay Central mall between 2006 and 2009.

In Japan, Parco Co Ltd operates 19 domestic stores. It is opening a new annex store in Sendai this year and is planning to open a new store in Ueno in Tokyo next year.

Adapted from: The Business Times, 26 April 2016

*ERA News & Views is for ERA’s internal circulation and educational use only. Commercial copying, hiring, lending is strictly prohibited.*


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