Posted by goldenpeace on 20-May-2009
Brokerage DBS Vickers said the Singapore private property market could pick up this year.
In a research report, the firm said the prices of mass market private homes are likely to rise by the second half of this year if demand continues to hold.
Mid-tier private residential homes, meanwhile, could see price stability towards the later part of the year.
However, DBS Vickers added that the high-end segment will remain subdued for at least the next few months.
The brokerage noted that developers have launched more new homes for sale in April, with buyers eyeing a wide variety of projects in different locations.
Last Friday, data released by the Urban Redevelopment Authority showed that private home sales for April remained strong, with some 1,200 units sold.
Source : CNA – 18 May 2009
Wednesday, May 20, 2009
Monday, May 18, 2009
More property launches on buying interest
Posted by goldenpeace on 18-May-2009
DEVELOPERS are riding the wave of buying interest to launch more units.
CapitaLand yesterday released 100 two and three-bedroom units at The Wharf Residence, a 999-year leasehold condominium near Mohamed Sultan Road which comprises 173 apartments and 13 shophouses.
The group sold 85 units – mostly two-bedders – at an average price of between $1,300 and $1,600 per square foot (psf).
Sizes of two-bedroom units start at 1,012 sq ft. Assuming a price of $1,300 psf, one would cost about $1.32 million.
Some of the 100 units released yesterday were the remainder from an earlier launch.
According to Urban Redevelopment Authority (URA) records, CapitaLand introduced 80 units to the market in July last year and sold 24 until September that year at median prices above $1,500 psf.
The Wharf Residence is expected to receive its temporary occupation permit in 2013.
CapitaLand is offering buyers a package deal of stamp duty absorption and interest absorption.
BT understands that those who do not take up this package may get to pay up to 8 per cent less.
CapitaLand could make more units available today as the launch stretches into the weekend.
The release of more units at The Wharf Residence comes as activity in the higher end of the property market is starting to stir. According to URA’s April statistics, buyers snapped up 64 units out of 75 launched at Bukit Sembawang Estates’ Verdure at Holland Road. The median price of the transactions was $1,416 psf.
‘Sentiment is better now,’ said Knight Frank executive director (residential) Peter Ow. Some buyers feel that property prices have dropped enough, he added.
And even if prices have not bottomed, they believe that there is probably ‘no harm in going in now, rather than letting money sit in the bank’. Some buyers are also worried about missing out on a real estate recovery, he said.
Separately, Frasers Centrepoint mentioned at its results briefing last week that it will launch its Woodleigh project in July or August this year. Prices will be at a level that ‘the market will accept’, said its chief executive, Lim Ee Seng.
The company’s Caspian at Lakeside has seen strong take-up since its launch in February. Of the 712 units in the development, 611 had been sold as at May 7, Frasers Centrepoint said.
Source : Business Times – 16 May 2009
DEVELOPERS are riding the wave of buying interest to launch more units.
CapitaLand yesterday released 100 two and three-bedroom units at The Wharf Residence, a 999-year leasehold condominium near Mohamed Sultan Road which comprises 173 apartments and 13 shophouses.
The group sold 85 units – mostly two-bedders – at an average price of between $1,300 and $1,600 per square foot (psf).
Sizes of two-bedroom units start at 1,012 sq ft. Assuming a price of $1,300 psf, one would cost about $1.32 million.
Some of the 100 units released yesterday were the remainder from an earlier launch.
According to Urban Redevelopment Authority (URA) records, CapitaLand introduced 80 units to the market in July last year and sold 24 until September that year at median prices above $1,500 psf.
The Wharf Residence is expected to receive its temporary occupation permit in 2013.
CapitaLand is offering buyers a package deal of stamp duty absorption and interest absorption.
BT understands that those who do not take up this package may get to pay up to 8 per cent less.
CapitaLand could make more units available today as the launch stretches into the weekend.
The release of more units at The Wharf Residence comes as activity in the higher end of the property market is starting to stir. According to URA’s April statistics, buyers snapped up 64 units out of 75 launched at Bukit Sembawang Estates’ Verdure at Holland Road. The median price of the transactions was $1,416 psf.
‘Sentiment is better now,’ said Knight Frank executive director (residential) Peter Ow. Some buyers feel that property prices have dropped enough, he added.
And even if prices have not bottomed, they believe that there is probably ‘no harm in going in now, rather than letting money sit in the bank’. Some buyers are also worried about missing out on a real estate recovery, he said.
Separately, Frasers Centrepoint mentioned at its results briefing last week that it will launch its Woodleigh project in July or August this year. Prices will be at a level that ‘the market will accept’, said its chief executive, Lim Ee Seng.
The company’s Caspian at Lakeside has seen strong take-up since its launch in February. Of the 712 units in the development, 611 had been sold as at May 7, Frasers Centrepoint said.
Source : Business Times – 16 May 2009
Wednesday, May 13, 2009
Prices creep up after property's long dive
Posted by goldenpeace on 13-May-2009
Some developers have quietly started raising prices a notch as they test waters after strong sales volumes seen in the first quarter.
Price adjustments are often made by reducing discount levels. On a project average basis, the effective prices for some developments may have gone up between 2 and 5 per cent compared with levels earlier this year, according to developers and property consultants.
‘Developers aren’t raising prices overnight. Prices are being adjusted only after clear buying momentum has set in for a project. If you look at the first and last units sold in the project, the price difference could be, say, 10 per cent; but if you look on a project average basis, the price increase would be less than 5 per cent,’ says Knight Frank chairman Tan Tiong Cheng.
The recent stock market rally has generated its share of positive sentiment. Even so, property agents say that prices of only the better-selling units have been raised in some projects, while the others have seen more widespread rises. ‘Developers are careful; if they push up prices too fast, potential buyers may start looking at other projects,’ one agent said.
The recent price adjustments have to be viewed against the significant price declines before that, seasoned players point out. For instance, Q1 2009 prices of mass-market condos were about 10 per cent off the peak levels in late 2007/early 2008, while for luxury condos, the price decline was steeper, at around 30-40 per cent.
DTZ executive director Ong Choon Fah says that developers started to inch up prices in April and May from Q1 levels. ‘In the secondary market, sellers have been more aggressive; some are asking about 5 to 10 per cent more than in Q1,’ she added.
Property giant Far East Organization’s residential projects such as the Mi Casa condo in Choa Chu Kang, The Lakeshore in Jurong, Hillview Regency in Bukit Batok, Floridian at Bukit Timah Road (non-premium units), and Vida at Peck Hay Road are among those that have seen slight price gains lately.
Rival City Developments is also said to have incrementally raised prices for The Arte at Thomson as sales progressed briskly. The developer has sold more than 250 units since it previewed the mid-end project in March.
BT understands that prices of the remaining 80-plus units have been adjusted upwards slightly this week. The average price is now about $900 psf and the freehold project includes a mix of two-, three- and four-bedroom units.
Bukit Sembawang is also said to have introduced a single-digit per cent price hike for later units (apartments) at The Verdure at Holland Road after the initial batch of units were sold.
UOL Group and Kheng Leong are also understood to have upped prices selectively – for better-selling units – at The Double Bay Residences in Simei.
A major developer said: ‘Demand is better now. People are prepared to come to the negotiating table and not baulk at prices, compared with last year when it was very difficult to even get buyers to sit down. I think there’s a sense that the worst is over.’
He says that the quantum of price appreciation that a developer can achieve in the current market will hinge on a project’s location, the nature of the development and the profile of its buyers. ‘For instance, for a prime district project with a lot of small units costing $1-2 million each, you can adjust prices a bit more, especially if you have a fair number of foreign buyers,’ according to the developer. ‘Mainland Chinese buyers are more optimistic, and can accept price hikes better as they have seen an upturn in their own property market,’ he added.
Mr Tan says that there’s currently a ’sweet spot’ in the Singapore market for projects priced below $1,000 psf and on a lump-sum basis costing $1 million to $1.2 million per unit (for three-bedroom units) and $800,000 and below (for two-bedroom units). Their prices can take a sub-10 per cent increase without affordability being seriously dented.
Mr Tan argues that a small price increase will not generally price buyers out of the market or send them to the sidelines again – ‘especially if they think the worst is over and don’t want to miss the boat’.
‘Even if the view is that we’re not at the bottom yet, there seems to be a greater sense of price stability now. The thinking now is that if prices drop a further 5 or 10 per cent, can I live with it? Three months ago, there seemed to be no bottom,’ Mr Tan recalls.
Agreeing, CB Richard Ellis executive director (residential) Joseph Tan says: ‘Once people are more confident, they can accept the fact that price may be higher, but in an improving situation. If I believe the market has bottomed, the closer I buy to the bottom, the better it is for me. That sort of thinking is also being fuelled by the stock market rally; traditionally the residential property market lags the stock market by three to six months.’
Source : Business Times – 13 May 2009
Some developers have quietly started raising prices a notch as they test waters after strong sales volumes seen in the first quarter.
Price adjustments are often made by reducing discount levels. On a project average basis, the effective prices for some developments may have gone up between 2 and 5 per cent compared with levels earlier this year, according to developers and property consultants.
‘Developers aren’t raising prices overnight. Prices are being adjusted only after clear buying momentum has set in for a project. If you look at the first and last units sold in the project, the price difference could be, say, 10 per cent; but if you look on a project average basis, the price increase would be less than 5 per cent,’ says Knight Frank chairman Tan Tiong Cheng.
The recent stock market rally has generated its share of positive sentiment. Even so, property agents say that prices of only the better-selling units have been raised in some projects, while the others have seen more widespread rises. ‘Developers are careful; if they push up prices too fast, potential buyers may start looking at other projects,’ one agent said.
The recent price adjustments have to be viewed against the significant price declines before that, seasoned players point out. For instance, Q1 2009 prices of mass-market condos were about 10 per cent off the peak levels in late 2007/early 2008, while for luxury condos, the price decline was steeper, at around 30-40 per cent.
DTZ executive director Ong Choon Fah says that developers started to inch up prices in April and May from Q1 levels. ‘In the secondary market, sellers have been more aggressive; some are asking about 5 to 10 per cent more than in Q1,’ she added.
Property giant Far East Organization’s residential projects such as the Mi Casa condo in Choa Chu Kang, The Lakeshore in Jurong, Hillview Regency in Bukit Batok, Floridian at Bukit Timah Road (non-premium units), and Vida at Peck Hay Road are among those that have seen slight price gains lately.
Rival City Developments is also said to have incrementally raised prices for The Arte at Thomson as sales progressed briskly. The developer has sold more than 250 units since it previewed the mid-end project in March.
BT understands that prices of the remaining 80-plus units have been adjusted upwards slightly this week. The average price is now about $900 psf and the freehold project includes a mix of two-, three- and four-bedroom units.
Bukit Sembawang is also said to have introduced a single-digit per cent price hike for later units (apartments) at The Verdure at Holland Road after the initial batch of units were sold.
UOL Group and Kheng Leong are also understood to have upped prices selectively – for better-selling units – at The Double Bay Residences in Simei.
A major developer said: ‘Demand is better now. People are prepared to come to the negotiating table and not baulk at prices, compared with last year when it was very difficult to even get buyers to sit down. I think there’s a sense that the worst is over.’
He says that the quantum of price appreciation that a developer can achieve in the current market will hinge on a project’s location, the nature of the development and the profile of its buyers. ‘For instance, for a prime district project with a lot of small units costing $1-2 million each, you can adjust prices a bit more, especially if you have a fair number of foreign buyers,’ according to the developer. ‘Mainland Chinese buyers are more optimistic, and can accept price hikes better as they have seen an upturn in their own property market,’ he added.
Mr Tan says that there’s currently a ’sweet spot’ in the Singapore market for projects priced below $1,000 psf and on a lump-sum basis costing $1 million to $1.2 million per unit (for three-bedroom units) and $800,000 and below (for two-bedroom units). Their prices can take a sub-10 per cent increase without affordability being seriously dented.
Mr Tan argues that a small price increase will not generally price buyers out of the market or send them to the sidelines again – ‘especially if they think the worst is over and don’t want to miss the boat’.
‘Even if the view is that we’re not at the bottom yet, there seems to be a greater sense of price stability now. The thinking now is that if prices drop a further 5 or 10 per cent, can I live with it? Three months ago, there seemed to be no bottom,’ Mr Tan recalls.
Agreeing, CB Richard Ellis executive director (residential) Joseph Tan says: ‘Once people are more confident, they can accept the fact that price may be higher, but in an improving situation. If I believe the market has bottomed, the closer I buy to the bottom, the better it is for me. That sort of thinking is also being fuelled by the stock market rally; traditionally the residential property market lags the stock market by three to six months.’
Source : Business Times – 13 May 2009
Sunday, May 10, 2009
Payment collected for 98% of sold RiverGate units
Posted by goldenpeace on 10-May-2009
PAYMENT has been collected for 98 per cent of the 542 condo units sold at CapitaLand’s RiverGate project since Temporary Occupation Permit (TOP) was obtained in March, the developer said yesterday.
Payment collection for the remaining 2 per cent, or 11 sold units, is ongoing, and the buyers have been served notice to pay up. The 11 units were ‘all sold separately to individual buyers under the deferred payment scheme (DPS)’, a CapitaLand spokeswoman said.
More than 90 per cent of the 542 RiverGate units sold were under DPS, she added. CapitaLand developed the 545-unit freehold condo in the Robertson Quay area through a 50:50 joint venture with Hwa Hong Corporation.
Asked what CapitaLand will do regarding the 11 buyers that have not paid up, the spokeswoman said: ‘For genuine homebuyers who may face difficulties meeting the payment obligations, we will address these on a case-by-case basis. We will see how we can lend our assistance within the constraints of the obligations under the securitisation structure.’
The progress payments and deferred payment receivables for sold units were securitised through special purpose vehicle Okeanos Investment Corporation, which in January 2007 issued US$477 million ($731 million) of floating rate notes due 2011.
With the proceeds collected for RiverGate so far, the US$477 million of notes are expected to be fully redeemed by the expected maturity date in June 2009, CapitaLand said in a statement yesterday.
RiverGate buyers who opted for DPS paid 20 per cent of the apartments’ price when booking them. Upon obtaining TOP, a further 65 per cent of the price is payable, with the balance of 15 per cent to be paid once the development obtains a Certificate of Statutory Completion and legal completion status from the authorities.
The 43-storey freehold project was launched in phases, with the initial phase in 2005 priced at $1,080 per square foot on average, and the final phase in 2006 priced at $1,600 psf on average. Units in the project have recently changed hands at about $1,200-1,380 psf.
Among those who bought RiverGate units from the developers is property fund manager Ferrell, which acquired 100 units in two tranches – 80 around Chinese New Year in 2005 and 20 later that year.
RiverGate is the first residential project in Singapore to be accorded landmark status by the Urban Redevelopment Authority in recognition of its strategic location and cutting-edge architectural design, CapitaLand pointed out yesterday.
‘At 43 storeys, the development towers above the predominantly 10-storey buildings in the vicinity,’ it said. ‘Against this urban landscape, the majority of RiverGate’s apartments enjoy views of the river and the business district city-scape.’
Source : Business Times – 8 May 2009
PAYMENT has been collected for 98 per cent of the 542 condo units sold at CapitaLand’s RiverGate project since Temporary Occupation Permit (TOP) was obtained in March, the developer said yesterday.
Payment collection for the remaining 2 per cent, or 11 sold units, is ongoing, and the buyers have been served notice to pay up. The 11 units were ‘all sold separately to individual buyers under the deferred payment scheme (DPS)’, a CapitaLand spokeswoman said.
More than 90 per cent of the 542 RiverGate units sold were under DPS, she added. CapitaLand developed the 545-unit freehold condo in the Robertson Quay area through a 50:50 joint venture with Hwa Hong Corporation.
Asked what CapitaLand will do regarding the 11 buyers that have not paid up, the spokeswoman said: ‘For genuine homebuyers who may face difficulties meeting the payment obligations, we will address these on a case-by-case basis. We will see how we can lend our assistance within the constraints of the obligations under the securitisation structure.’
The progress payments and deferred payment receivables for sold units were securitised through special purpose vehicle Okeanos Investment Corporation, which in January 2007 issued US$477 million ($731 million) of floating rate notes due 2011.
With the proceeds collected for RiverGate so far, the US$477 million of notes are expected to be fully redeemed by the expected maturity date in June 2009, CapitaLand said in a statement yesterday.
RiverGate buyers who opted for DPS paid 20 per cent of the apartments’ price when booking them. Upon obtaining TOP, a further 65 per cent of the price is payable, with the balance of 15 per cent to be paid once the development obtains a Certificate of Statutory Completion and legal completion status from the authorities.
The 43-storey freehold project was launched in phases, with the initial phase in 2005 priced at $1,080 per square foot on average, and the final phase in 2006 priced at $1,600 psf on average. Units in the project have recently changed hands at about $1,200-1,380 psf.
Among those who bought RiverGate units from the developers is property fund manager Ferrell, which acquired 100 units in two tranches – 80 around Chinese New Year in 2005 and 20 later that year.
RiverGate is the first residential project in Singapore to be accorded landmark status by the Urban Redevelopment Authority in recognition of its strategic location and cutting-edge architectural design, CapitaLand pointed out yesterday.
‘At 43 storeys, the development towers above the predominantly 10-storey buildings in the vicinity,’ it said. ‘Against this urban landscape, the majority of RiverGate’s apartments enjoy views of the river and the business district city-scape.’
Source : Business Times – 8 May 2009
Thursday, May 7, 2009
Will property recover faster than expected?
Posted by goldenpeace on 07-May-2009
MARKET turning points are very hard to spot. A recent example was the March 9 market bottom. Then, the world seemed a bleak place: we were in for a prolonged depression; banks were going to fail; many companies were going bankrupt and millions were going to lose their jobs and stay unemployed for years. That period also coincided with a spate of bad news from the Chinese companies listed in Singapore - the so-called S-chips. The cash wasn’t in the banks. The founders were losing control over their companies because they’d pledged their shares to financial institutions. Profit was overstated, and the companies’ status as going concerns was in question. One by one, the S-chips were getting suspended.
Under the never-ending onslaught of bad news, many investors threw in the towel and cashed out. By February, cash sitting on the sidelines was at its highest in more than 10 years. Government statistics showed that the amount of deposits of non-bank customers with domestic banking units and deposits with finance companies was equivalent to 99 per cent of the aggregate market value of all the stocks listed on the Singapore Exchange (SGX). The previous peak was in 2002, when the cash/market cap ratio was 91 per cent.
History has shown that such a high level of cash holdings portends strong upside in the equities market. The rebound did eventually come - almost out of the blue - and took many by surprise. The recovery - fuelled by sightings of ‘green shoots’ in the economy - has lasted eight weeks and equity prices have gained more than 40 per cent. But through it all, many analysts and fund managers still doubt the sustainability of the recovery.
So what do we make of the projections of most property consultants that private residential property will slump by 25-35 per cent this year? The forecasts suggest more downside for the rest of the year given that prices fell ‘only’ 14.1 per cent in the first quarter. But like the pundits in the stock market, there is a possibility that these consultants too will miss the market turning point. For one, the stock market leads the property market by 4-8 months. If the stock market remains buoyant, then there is a probability that the property market too will stabilise. And, as noted earlier, there is a lot of cash waiting to get into the market.
Already, there are signs that US real estate - the source of the current global financial crisis - is recovering. According to The New York Times, Sacramento (among the first US cities to fall victim to the real estate collapse) has seen investors and first-time buyers out in force competing for bargain-price foreclosures. Sales are up 45 per cent from last year, and the vast backlog of inventory has diminished. Progress is also visible in other hard-hit areas.
If so, one shouldn’t be too quick to dismiss the hope that the US property slump, just like the stockmarket slump, may end sooner than the doomsters think.
Source : Business Times - 7 May 2009
MARKET turning points are very hard to spot. A recent example was the March 9 market bottom. Then, the world seemed a bleak place: we were in for a prolonged depression; banks were going to fail; many companies were going bankrupt and millions were going to lose their jobs and stay unemployed for years. That period also coincided with a spate of bad news from the Chinese companies listed in Singapore - the so-called S-chips. The cash wasn’t in the banks. The founders were losing control over their companies because they’d pledged their shares to financial institutions. Profit was overstated, and the companies’ status as going concerns was in question. One by one, the S-chips were getting suspended.
Under the never-ending onslaught of bad news, many investors threw in the towel and cashed out. By February, cash sitting on the sidelines was at its highest in more than 10 years. Government statistics showed that the amount of deposits of non-bank customers with domestic banking units and deposits with finance companies was equivalent to 99 per cent of the aggregate market value of all the stocks listed on the Singapore Exchange (SGX). The previous peak was in 2002, when the cash/market cap ratio was 91 per cent.
History has shown that such a high level of cash holdings portends strong upside in the equities market. The rebound did eventually come - almost out of the blue - and took many by surprise. The recovery - fuelled by sightings of ‘green shoots’ in the economy - has lasted eight weeks and equity prices have gained more than 40 per cent. But through it all, many analysts and fund managers still doubt the sustainability of the recovery.
So what do we make of the projections of most property consultants that private residential property will slump by 25-35 per cent this year? The forecasts suggest more downside for the rest of the year given that prices fell ‘only’ 14.1 per cent in the first quarter. But like the pundits in the stock market, there is a possibility that these consultants too will miss the market turning point. For one, the stock market leads the property market by 4-8 months. If the stock market remains buoyant, then there is a probability that the property market too will stabilise. And, as noted earlier, there is a lot of cash waiting to get into the market.
Already, there are signs that US real estate - the source of the current global financial crisis - is recovering. According to The New York Times, Sacramento (among the first US cities to fall victim to the real estate collapse) has seen investors and first-time buyers out in force competing for bargain-price foreclosures. Sales are up 45 per cent from last year, and the vast backlog of inventory has diminished. Progress is also visible in other hard-hit areas.
If so, one shouldn’t be too quick to dismiss the hope that the US property slump, just like the stockmarket slump, may end sooner than the doomsters think.
Source : Business Times - 7 May 2009
Tuesday, May 5, 2009
Preview - Belle Vue Residences
Project Name: Belle Vue Residences
Development Type: Condominium with Full Facilities except no Tennis Court
Location: 15/17/19/21/23/25/27/31/33 Oxley Walk
District: 09
Tenure: Freehold
Expected TOP: End 2011
Total: 176 units in 9 Blocks of 5-Storey Building
Unit Mix: 4 units per floor with Private Lift access
Preview Block 15 ~ 2-Bedroom Villas approximate 1,400 sq ft & 2,300 sq ft
~ 3-Bedroom Villas approximate 1,800 sq ft to 3,500 sq ft
~ 4-Bedroom Waterfront Villas approximate 2,200 sq ft to 3,900 sq ft
Amenities: Near Dhoby Ghaut MRT and Plaza Singapura, short distance to Orchard
Inspired by Nature
Belle Vue Residences is designed to parallel nature's exquisite simplicity. Its' organically-shaped unit layout, offers a new living arrangement and horizontal spatial experience. The branching pattern creates more wall surfaces, making possible for more windows, giving each apartment a unique set of views and allowing residents to enjoy an abundance of natural light and better ventilation.
A Harmonious Landscape
Belle Vue Residences is also as much about transcending trends, forsaking conventional ideas and creative innovative living spaces. The landscaping is an active interplay of nature and architecture.
Located on high sprawling ground of almost 248,000 square feet, all apartments are imaginatively configured and set in a sensitively-cultivated environment of lush landscapes, pathways, tropical gardens, water features and a host of recreational facilities creating Singapore's most livable urban oasis.
Development Type: Condominium with Full Facilities except no Tennis Court
Location: 15/17/19/21/23/25/27/31/33 Oxley Walk
District: 09
Tenure: Freehold
Expected TOP: End 2011
Total: 176 units in 9 Blocks of 5-Storey Building
Unit Mix: 4 units per floor with Private Lift access
Preview Block 15 ~ 2-Bedroom Villas approximate 1,400 sq ft & 2,300 sq ft
~ 3-Bedroom Villas approximate 1,800 sq ft to 3,500 sq ft
~ 4-Bedroom Waterfront Villas approximate 2,200 sq ft to 3,900 sq ft
Amenities: Near Dhoby Ghaut MRT and Plaza Singapura, short distance to Orchard
Inspired by Nature
Belle Vue Residences is designed to parallel nature's exquisite simplicity. Its' organically-shaped unit layout, offers a new living arrangement and horizontal spatial experience. The branching pattern creates more wall surfaces, making possible for more windows, giving each apartment a unique set of views and allowing residents to enjoy an abundance of natural light and better ventilation.
A Harmonious Landscape
Belle Vue Residences is also as much about transcending trends, forsaking conventional ideas and creative innovative living spaces. The landscaping is an active interplay of nature and architecture.
Located on high sprawling ground of almost 248,000 square feet, all apartments are imaginatively configured and set in a sensitively-cultivated environment of lush landscapes, pathways, tropical gardens, water features and a host of recreational facilities creating Singapore's most livable urban oasis.
Friday, May 1, 2009
Developers meet valuers in search for common ground
Posted by goldenpeace on 01-May-2009
Developers last week held a meeting with valuers amid recent complaints in some quarters that conservative valuations have derailed some home sale deals as potential buyers could not secure the required loan quantum from banks.
BT understands that the valuers disagreed with the developers that their valuations had been too conservative, and that it was the banks that were just not lending.
‘Generally, if there are transactions, we’ll match (with valuations). It’s the banks that are more cautious about lending to certain profiles of borrowers like investors, especially if they are foreigners,’ a valuer told BT.
The valuers also raised issues that they had been facing in recent months, such as a dearth of comparable transactions, and explained the methods that they use to arrive at valuations in such situations.
‘We explained that some banks require valuers to look at three comparable transactions, and how we generally do not take into account outlier transactions that may perhaps reflect ‘depressed’ prices,’ another valuer said.
Sources say that the meeting was amicable, drawing more than 20 valuers and heads of property consulting groups and the executive committee members of the Real Estate Developers Association of Singapore led by its president, Simon Cheong.
When contacted, a Redas spokesman said: ‘We wanted to better understand issues that valuers may have in their day-to-day valuation and what else the profession may need from developers to enable them to give (as) updated and relevant (a) valuation as possible.
‘The discussions were general in nature and discrepancies in valuations in some instances were highlighted and analysed. Valuers shared with us some of the constraints they are facing such as the lack of or insufficient comparable sales data and other issues.
‘The session was fruitful as it helped us understand one another better and we agreed to look into areas where communication and interaction could be improved upon.’
A property consultant told BT that he found it odd that the same banks that were willing to give a 75 per cent or 80 per cent loan on a high-end residential unit when it was priced at $2,000 psf (thus assuming an exposure for about $1,500 to $1,600 psf) are now reluctant to give even 50 or 60 per cent loan when the property is going for a much lower price of $1,200 psf (which works out to $600-720 psf exposure for the bank).
‘It’s particularly difficult for foreign buyers, even PRs in some instances, to get loans for investment properties. Banks are more willing to lend to Singaporeans buying residential properties for owner occupation.
‘Some of the bigger banks should take the lead and be more proactive in lending to property buyers, not just for entry-level but also luxury homes, given that spot prices have already come off about 40 per cent.’
Agreeing, another valuer said: ‘We provide the valuations. It’s up to the banks whether they want to lend, and how much. It’s a commercial decision for them.’
Giving his take on the challenges facing the profession, a senior valuer said: ‘We have to be as level headed as possible and (assign) a sensible value. Valuers play a very important role in the financial system and economy, as we’re marking everybody’s asset values.’
This was the first time Redas has met valuers as a group, at least in recent years, and this follows its maiden meeting in November with analysts in stockbroking research houses covering the sector.
Redas also holds regular dialogues with government agencies such as Urban Redevelopment Authority, and Building and Construction Authority. ‘Such dialogues provide learning opportunities for Redas and promote better understanding across the industry leading to a healthy property market,’ the association’s spokesman added.
Source : Business Times - 29 Apr 2009
Developers last week held a meeting with valuers amid recent complaints in some quarters that conservative valuations have derailed some home sale deals as potential buyers could not secure the required loan quantum from banks.
BT understands that the valuers disagreed with the developers that their valuations had been too conservative, and that it was the banks that were just not lending.
‘Generally, if there are transactions, we’ll match (with valuations). It’s the banks that are more cautious about lending to certain profiles of borrowers like investors, especially if they are foreigners,’ a valuer told BT.
The valuers also raised issues that they had been facing in recent months, such as a dearth of comparable transactions, and explained the methods that they use to arrive at valuations in such situations.
‘We explained that some banks require valuers to look at three comparable transactions, and how we generally do not take into account outlier transactions that may perhaps reflect ‘depressed’ prices,’ another valuer said.
Sources say that the meeting was amicable, drawing more than 20 valuers and heads of property consulting groups and the executive committee members of the Real Estate Developers Association of Singapore led by its president, Simon Cheong.
When contacted, a Redas spokesman said: ‘We wanted to better understand issues that valuers may have in their day-to-day valuation and what else the profession may need from developers to enable them to give (as) updated and relevant (a) valuation as possible.
‘The discussions were general in nature and discrepancies in valuations in some instances were highlighted and analysed. Valuers shared with us some of the constraints they are facing such as the lack of or insufficient comparable sales data and other issues.
‘The session was fruitful as it helped us understand one another better and we agreed to look into areas where communication and interaction could be improved upon.’
A property consultant told BT that he found it odd that the same banks that were willing to give a 75 per cent or 80 per cent loan on a high-end residential unit when it was priced at $2,000 psf (thus assuming an exposure for about $1,500 to $1,600 psf) are now reluctant to give even 50 or 60 per cent loan when the property is going for a much lower price of $1,200 psf (which works out to $600-720 psf exposure for the bank).
‘It’s particularly difficult for foreign buyers, even PRs in some instances, to get loans for investment properties. Banks are more willing to lend to Singaporeans buying residential properties for owner occupation.
‘Some of the bigger banks should take the lead and be more proactive in lending to property buyers, not just for entry-level but also luxury homes, given that spot prices have already come off about 40 per cent.’
Agreeing, another valuer said: ‘We provide the valuations. It’s up to the banks whether they want to lend, and how much. It’s a commercial decision for them.’
Giving his take on the challenges facing the profession, a senior valuer said: ‘We have to be as level headed as possible and (assign) a sensible value. Valuers play a very important role in the financial system and economy, as we’re marking everybody’s asset values.’
This was the first time Redas has met valuers as a group, at least in recent years, and this follows its maiden meeting in November with analysts in stockbroking research houses covering the sector.
Redas also holds regular dialogues with government agencies such as Urban Redevelopment Authority, and Building and Construction Authority. ‘Such dialogues provide learning opportunities for Redas and promote better understanding across the industry leading to a healthy property market,’ the association’s spokesman added.
Source : Business Times - 29 Apr 2009
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