Saturday, June 30, 2012

LIVING LARGE: Bigger homes making a comeback after shoebox craze

Straits Times: Sat, Jun 30
LARGER-SIZED homes seem to be making a comeback, with upgraders leading the charge, amid tentative signs that the craze for shoebox units may be subsiding.

New figures from property consultancy CBRE show the median size of all new non-landed homes sold rose to 79 sq m in the second quarter, well up from 65 sq m in the three months before.

The market share of tiny shoebox units of 50 sq m or less sold also fell from a peak of 28 per cent to 23 per cent in the same period. Still, this second-quarter figure remains higher than the 20 per cent for the whole of last year.

While it is too early to say interest in smaller homes is definitely fizzling out, experts say cooling measures such as the additional buyers' stamp duty and sellers' stamp duty of up to 16 per cent might have put a dampener on investor demand for shoebox units.

These units have been popular among investors owing to their affordable price point - typically less than $1 million.

Mr Joseph Tan, CBRE's executive director (residential), noted some correlation between upgraders and their interest in larger homes. But whether the fresh figures signify a definite reversal of the popularity of compact units remains to be seen, he added.

Anecdotally, however, the firm has noticed stronger interest in the larger units of some private suburban and executive condominium projects. One example is exec condo project One Canberra in Yishun where the larger units are all sold out, he said.

'(But) the interest in small units will always be there, especially if the current trend of reducing average family size persists and home owners continue to look for affordable smaller apartments,' he added.

'It also depends on developers' supply and pricing strategy; if prices are kept at an affordable quantum, investors will continue to view this as an attractive form of investment in view of the prevailing financial crisis.'

Some home buyers continue to snap up shoebox units. Parc Rosewood in Woodlands has moved at least 309 units of 50 sq m or less this year, CBRE data shows.

Guillemard Edge in Geylang sold another 114 small units while Casa Cambio in Lim Tua Tow Road found 96 buyers.

EL Development managing director Lim Yew Soon said owner- occupiers typically prefer larger units.

'When we launched our design, build and sell scheme project Trivelis in Clementi last year, the five-room flats sold out very quickly,' he said.

'This is a clear indication that when it's for 'own stay', buyers want it as big as possible, especially in this low interest rate environment. They don't mind taking out a bigger loan,' he added.

ERA Realty key executive officer Eugene Lim said buyers might be increasingly attracted to the value proposition of larger homes.

He said the per sq ft price of small homes can be up to 15 per cent to 20 per cent higher than that of larger ones even within the same project.

'The shoebox market seems to be taking a breather as people are more cautious now due to what is being said,' he added.

For instance, National Development Minister Khaw Boon Wan last month said the Government is monitoring the trend of shoebox units and would consider additional regulations, if necessary.

The bumper supply of completed shoebox units expected over the next few years has also been highlighted in recent reports.

PropNex chief executive Mohamed Ismail agreed that as the shoebox market is still a relatively untested one, buyers who are taking a medium- to long-term perspective due to the sellers' stamp duty might prefer to park their cash in larger homes instead.

New rules introduced last November that set minimum plot sizes for apartment blocks and restricted the number of flats that can be built on certain sites could also have bumped up median sizes of homes, he noted.

For example, in Telok Kurau where there has been a rapid proliferation of small apartments, the gross floor area on sites there is divided by 100 sq m to determine the maximum number of homes that can be built.

This could have resulted in fewer homes coming up on land parcels there...
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Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

Friday, June 29, 2012

Private resale home prices continue inching upwards

Straits Times: Fri, Jun 29
PRICES of private resale homes nudged higher again in May, maintaining a trend of recent months.

Overall, prices gained 1.5 per cent last month, buoyed by price rises of homes islandwide.

High-end homes in the central area inched up 0.8 per cent while mass market ones rose a stronger 2.2 per cent.

Prices of tiny shoebox units - about 500 sq ft or smaller - moved up 0.9 per cent in May, after dipping 0.8 per cent the month before.

The flash figures released yesterday in the Singapore Residential Price Index were compiled by the National University of Singapore's Institute of Real Estate Studies.

The monthly report measures a basket of non-landed completed private units and condominiums. It excludes executive condos, a public-private housing hybrid.

Property consultant Ong Kah Seng said that the overall price increase is 'within expectations', as sales activity and interest in resale homes have kept up since a pick-up emerged in March.

The R'ST Research director noted that the 2.2 per cent rise for non-central homes is partly a result of limited choices from fewer condo launches in May.

Another factor is improved buyer interest in homes which are attractively priced, like those below $1,000 psf, Mr Ong said...
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Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

Prices of suburban condos above 506 sq ft most resilient

Business Times: Fri, Jun 29
[SINGAPORE] Prices of completed apartments above 506 sq ft in the Non-Central Region or suburban areas have been the most resilient year to date (up to May) followed by small units islandwide. Big apartments in the Central Region have fared the worst, show data from NUS.

Based on NUS's Singapore Residential Price Index (SRPI) series, which tracks prices of completed apartments and condos, the sub-index for the Non-Central Region (excluding small units) rose 1.9 per cent between December last year and May this year.

Over the same period, the sub-index for small units (up to 506 sq ft) islandwide dipped 0.1 per cent, while the sub-index for the Central Region (excluding small units) slipped an even bigger 2 per cent. Central Region is defined as Districts 1-4 (which include the financial district and Sentosa Cove) and the traditional prime residential districts of 9, 10 and 11.

The pattern is similar to trends in the past two years. In 2011, the Non-Central Region sub-index (excluding small units) rose 11.3 per cent, higher than a 10.6 per cent increase for small units islandwide and 5.1 per cent hike for Central Region (excluding small units)

In 2010, the three indices posted gains of 14.9 per cent, 13.8 per cent and 7.7 per cent respectively.

"The index movements pretty much reflect what we've been seeing in the market in the past few years," says DTZ's SE Asia chief operating officer Ong Choon Fah.

"In suburban locations, because developers have been launching new projects at prices higher than those of existing, completed projects in the vicinity, it has an effect on prices of the completed properties as well."

Even so, analysts note that there is usually still a price gap between new launch and resale prices, which means that buyers, especially owner occupiers, still see value in completed suburban condos, says SLP International managing director Peter Ow.

Mrs Ong notes that in addition to owner occupiers, there is demand for completed suburban apartments from investors. "Rents have held up well. Many younger expats on smaller housing budgets are opting to lease suburban condos and even HDB flats," she adds.

In contrast, big units in the Central Region tend to be more pricey and cater mostly to high net worth Singaporean investors and foreigners. "Some of them could be affected by various cooling measures as well as the global economic situation. They may also be attracted to other property markets such as London," says Mrs Ong.

Meanwhile, shoebox apartments continue to be popular, with their more affordable lump sum investment size.

NUS's May 2012 flash estimates released yesterday show that the overall SRPI increased 1.5 per cent in May over the preceding month. This is double the 0.7 per cent month-on-month hike in April. The sub-index for small apartments islandwide posted a 0.9 per cent month-on-month rise in May, against a drop of 0.8 per cent in April.

The sub-indices for the Central Region and Non-Central Region, both excluding small units, were up 0.8 per cent and 2.2 per cent respectively month on month for May.

In April, the Central Region sub-index rose 1.5 per cent while that for the Non-Central Region was unchanged from the preceding month.

The SRPI series, minted by NUS's Institute of Real Estate Studies, tracks prices of completed private apartments and condos (excluding executive condos).

R'ST Research's caveats analysis shows a pick-up in resale volumes of private apartments/condos above 506 sq ft in recent months, in both the Central and Non-Central regions - compared with January, when volumes dived following the introduction of the additional buyer's stamp duty in December.

The figures hovered around 700 units or more per month in the Non-Central Region between March and May, compared with 192 in January and 345 units in February. However, the 683 caveats in May are down 12.2 per cent from April's 778. In the Central Region, 259 caveats were lodged in May, nearly 5 per cent higher than April's 247 units. The 200-plus caveats lodged per month between March and May are up from the January and February numbers of 50 and 119 respectively...
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Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)