Archive

Posts Tagged ‘Residential property’

Private home subsales rise 10.6% in Q2

THE number of private homes sold in the subsale market, which is often used as a proxy of speculative activity, rose 10.6 per cent quarter on quarter to 712 units in the second quarter of this year, but this pace of increase was slower than a nearly 27 per cent jump reflected in the 4,562 new private homes sold by developers, according to Savills’ analysis.

‘With speculators weeded out from the market after the higher seller’s stamp duty (SSD) rates introduced in January, more genuine home buyers now have direct access to choice units from developers in the primary market. So the supply chain has become more efficient with the ‘middlemen’ or speculators cut out’, said Savills Singapore research head Alan Cheong.

‘The full impact of the January 2011 anti-speculation measures will need time to work their way through the system since the SSD would affect only those who bought a private home from Jan 14 and sell it within four years of purchase,’ he added.

The SSD rates are 16, 12, 8 and 4 per cent respectively for those who sell their properties in the first, second, third and fourth year of purchase respectively.

Those who had, a few years earlier, picked up private homes which are now still under construction, would generally still find it worthwhile to divest them, given the recovery in property values since the global financial crisis, say property consultants. This is expected to continue to contribute to a steady stream of subsale activity.

‘This will especially be the case for projects which are close to or have just been completed since buying interest in such developments is typically higher among those who would like to purchase a property that they can move into or rent out immediately,’ says Ong Choon Fah, DTZ’s COO and head of consulting and research, SE Asia.

Resales, which are also secondary-market transactions but involve projects with CSC, rose 17.5 per cent quarter on quarter to 4,144 units in Q2 2011, shows Savills’ analysis of caveats captured by URA Realis.

The subsale and resale figures were based on caveats lodged (excluding en bloc sales) while new home sales by developers were based on developers’ submissions to Urban Redevelopment Authority’s surveys. The latest Q2 developer sales figure was compiled as the sum of monthly sales from April to June 2011; however, the final tally to be released by URA today may be lower as it will take into account units returned by buyers.

Savills’ analysis covered landed and non-landed properties, excluding executive condos, which are a hybrid of public and private housing.

Date: 22 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Slow going for en bloc sales, especially those above $100m

Home owners keen to sell their property through an en bloc sale were less likely to be successful in the first half of this year as compared with the whole of 2010, with estates going for $100 million and above the most difficult to sell.

Data published by property consultancy firm Credo Real Estate showed that plots put up for sale enjoyed a 51 per cent successful selling rate from January to June this year, as compared with 65 per cent for the whole of 2010.

Dragging down the overall selling rate were bigger sites, with more put up for sale this year to tepid interest.

According to Credo, 26 sites valued at $100 million and above were available for sale in the first half of this year, compared with 11 for the whole of last year.

Of the 26 sites, just six – valued from $100 million to less than $300 million – were sold, while none of those priced above $300 million were picked up. This translates to a success rate of 23.1 per cent.

Last year, three of the 11 sites valued at $100 million and above were sold, putting the success rate at 27.3 per cent.

In contrast, plots valued at below $50 million enjoyed an 87 per cent success rate for the first half this year, higher than the 76 per cent garnered by sites put up for sale from January to December last year.

The different reception that big and small collective sale sites saw stem from the uncertain property market environment, and the higher supply of land available under the Government Land Sales (GLS) programme, said Credo’s deputy managing director Tan Hong Boon.

With the Singapore government intent on keeping property prices in check, developers are keen to see quicker turnaround times, especially for mega sites, he said. And collective sales – unlike plots sold under the GLS programme which are also large in size – generally take a longer time to change hands.

‘For collective sales, you need to factor in the 3-4 months that it takes for the strata title board to give the sale order’, for instance, said Mr Tan. Then there is the six-month period where the developer has to allow residents to stay rent-free before it can begin to redevelop the land.

Date: 22 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

HK billionaire helps fund UK social housing

Billionaire Cheng Yu-tung and two fellow Hong Kong investors, faced with soaring real-estate prices in their own country, are helping the UK plug a gap in funding for low-income housing after gaining control of a London-based property manager.

Mr Cheng’s Chow Tai Fook Enterprises Ltd, developer Sammy Lee and businessman Peter Fung last month paid £30 million (S$58.7 million) for 61 per cent of Pinnacle Regeneration Group Ltd, manager of 22,000 homes in the UK cuts in social housing are part of the British government’s plan to trim a record deficit with the biggest spending reductions since World War II.

‘There is a big opportunity for investors directly coming to the fore because of the cutback in funding,’ said James Coghill, a real-estate investment adviser at Savills Plc. ‘Social housing providers are seeking other funds and need to become more commercial.’

A change in UK law last year enabled investors to profit for the first time from social housing in Britain, where there’s a waiting list of 1.8 million households. With property prices at home skyrocketing, Hong Kong investors are putting money into UK real estate ranging from subsidised housing and office buildings to luxury properties and infrastructure.

Home prices in Hong Kong have risen more than 70 per cent since the beginning of 2009 on record-low mortgage rates and an influx of buyers from mainland China. The Hong Kong government imposed restrictions to curb rising values, such as increasing the required down-payments.

‘The Hong Kong market is very hot,’ said Mr Lee, 53, who also developed a 200-apartment complex in London’s affluent Knightsbridge neighbourhood that opened in 2005. ‘We’ve got to diversify and the first port is London.’

Social housing in the UK, typically provided by local governments and non-profit associations, is rented out at below-market levels with the state subsidising the rest. Pinnacle plans to spend as much as £500 million on UK housing projects over the next three to four years, chief executive officer Perry Lloyd said.

The closely held company is working with the London borough of Lambeth to create almost 1,000 homes in a jointly funded project with the council. Pinnacle will manage the properties, half of which are social housing. Mr Lloyd said that the Hong Kong group’s investment of £30 million may only be the start.

‘We’re a key into a door – this is the price of the key and gives the option for further investment,’ he said in an interview in London.

Date: 21 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Dubai still in housing glut, prices to drop another 10%: poll

Dubai’s housing market still has nearly a third too much supply and prices will plummet by another 10 per cent, deepening a three-year rout to nearly 60 per cent from its peak, a Reuters poll showed yesterday.

Rents and prices in Dubai’s once-booming property market have been in a free fall over the last few years, pummelled by the global financial crisis, ensuing global slowdown and the Gulf state’s own debt crisis.

Residential property prices in Dubai, which boasts of the world’s tallest building and man-made islands in the shape of palms, will fall 58 per cent from a peak in the third quarter of 2008 according to the median estimate of 11 banks, investment firms and research institutions.

‘Despite increasing transaction volumes and improvement in economic activities, property prices in Dubai are expected to be under pressure due to oversupply,’ said Sajeer Babu, an analyst at National Bank of Abu Dhabi.

The findings matched those of a Reuters poll in April which showed that existing supply and additional new units would push Dubai’s house prices down by 10 per cent.

Global markets were rattled in 2009 when Dubai announced a US$25 billion debt restructuring of conglomerate Dubai World. A real estate collapse followed, putting an end to a historic building spree in Dubai.

Confidence has not recovered yet. Respondents in the Reuters poll saw zero chance of Dubai’s residential property market recovering in 2011. They gave just a 25 per cent chance of recovery in 2012 and only 50 per cent in 2013.

Only one respondent said house prices in Dubai have already reached a bottom. Three said they expected prices to reach a trough in 2011, while others said 2012 or later.

In percentage terms, the Dubai housing market crash is set to be nearly double the size of the fall in the US, which is down by about a third from its peak.

Date: 21 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Mont’ Kiara to be showcased at SGX Centre

Malaysia Property Inc (MPI) has entered into a six-month tenancy agreement with Ireka Corporation Bhd, a leading property developer listed on the Main Board of Bursa Malaysia.

MPI is a non-profit government agency under the purview of the Economic Planning Unit.

From now till Nov 31, Ireka will showcase its latest residential resort-themed development, Seni Mont’ Kiara, at the mezzanine floor of MPI Singapore’s gallery at SGX Centre on Shenton Way.

Mont’ Kiara, a popular expatriate enclave is known for its strong residential community and surrounding international schools.

The prestigious development is already being hailed as the new benchmark for luxury living in Kuala Lumpur.

The residential resort Seni Mont’ Kiara comprises two 40-storey tower blocks and two 12-storey low-rise blocks perched on an 8.8-acre ridge, offering residents unobstructed, panoramic views of Kuala Lumpur’s skyline.

Ireka president and chief executive officer Lai Voon Hon said ‘Mont’ Kiara owners have a passion for the very best that life offers.

‘They have the means to live anywhere in the world, and many of them do. The fact that they consider Mont’ Kiara to be an absolute paradise and have chosen Seni Mont’ Kiara for their primary or vacation residence speaks volumes about the location, the development and the prized lifestyle associated with it,’ he said when announcing the tie-up here yesterday.

Date: 21 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Rich Chinese send Vancouver’s real estate prices soaring

Its quality of life is routinely ranked among the best in the world, but that’s only one reason Vancouver real estate prices are red hot.

Wealthy Chinese anxious to raise their families in the West are bidding up the city’s limited number of properties in fashionable West Vancouver, sending prices in the city soaring more than 50 per cent in the past three years.

Last year, Canada issued 1,600 visas to Chinese investors looking to move to British Columbia.

Su Yi Bin, a trader by profession, is looking to buy a 450-square-metre house in the area for his family and ready to pay as much as C$4.3 million (S$5.5 million).

Mr Su splits his time between Vancouver and Shanghai. While he’s in China, he wants his family to be comfortable as they adapt to their new country.

‘For my child, growing up and going to school here will allow him to integrate fully into the world, into an international lifestyle,’ he said. ‘That’s just not possible in China.’

While prices in Vancouver have risen 54 per cent in the past three years, they jumped 13 per cent last year alone.

Vancouver real estate agent Clarence Debelle sees the Chinese influx in his business. In just five months, he has seen his Chinese clientele jump from two to 40 potential buyers.

‘We do not have that many homes available for sale in West Vancouver, and the Chinese buyers are buying an awful lot of them. So I feel the prices will continue to rise,’ he said.

Faced with this market assault, Cam Good has opened two apartment showrooms similar to those in Hong Kong and Beijing.

Mr Good credits the interest in Vancouver properties to the restrictions on real estate purchases in China – in some large cities including Beijing people are generally restricted to no more than two properties.

Seventy square metres for half a million dollars in Vancouver might look expensive, even with with a view of the sea. But to be able to own property outright is not possible in China, he said, where houses are leased for a maximum of 70 years.

Date: 21 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Home sales fall in June

Sales of previously owned US homes unexpectedly declined in June to a seven- month low as the industry struggled to overcome rising unemployment and foreclosures.

Purchases dropped 0.8 per cent to a 4.77 million pace, data from the National Association of Realtors (NAR) showed yesterday. The median projection in a Bloomberg News survey called for a gain to 4.9 million. Inventories increased, more contracts were cancelled and 30 per cent of transactions last month were of distressed dwellings, the figures showed.

‘People can’t sell their homes for enough to either trade up or trade down,’ Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. ‘We’ll be stuck in the same mode as we are today.’

Stricter lending rules, unemployment above 9 per cent and delays in processing foreclosures mean that it may take years to reduce the number of distressed properties on the market even as all-cash purchases have recently helped buoy demand.

Federal Reserve chairman Ben Bernanke last week said that the decline in confidence and lack of job growth that are impeding consumer spending are also keeping real estate ‘depressed’.

Of all purchases, cash transactions accounted for about 29 per cent, NAR chief economist Lawrence Yun said in a news conference yesterday as the figures were released. The Realtors group began tracking the monthly figure in August 2008, and the share on a yearly basis before that was around 10 per cent, Mr Yun has said.

The number of cancelled contracts to buy previously owned homes jumped to 16 per cent in June from 4 per cent a month earlier. Mr Yun said that the rise was a ‘mystery’ that the group will look into by surveying realtors around the country. They have been running in the 9-10 per cent range in the past year.

Distressed sales, which comprise foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for about the same share of the total in June than in recent months.
The median sales price rose 0.8 per cent last month from June 2010 to US$184,300.

Date: 21 July 2011 | For the full report, please visit http://www.businesstimes.com.sg

Follow

Get every new post delivered to your Inbox.