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mr funny
24-11-10, 00:42
http://www.todayonline.com/Business/Property/EDC101119-0000048/Landed-property-fever?

Landed property fever?

Judging from present trends, the landed segment appears to be headed for new highs

by Ong TeckHui

05:55 AM Nov 19, 2010


Six weeks ago, this paper featured my article, Quest for landed property picks up. In it, I touched on the growing scarcity of landed properties in Singapore and its impact on demand and prices.

We observed how landed property prices outperformed non-landed prices during this market upturn. Landed home prices rose 43.2 per cent, compared to 37 per cent for non-landed ones between the middle of last year and the middle of this year, according to the Urban Redevelopment Authority's (URA) residential property price index. Since that article was published, several events have occurred that make it worthwhile to pursue the landed story further.



Landed homes outperform by an even wider margin

When the URA released the third-quarter real estate statistics on Oct 22, all eyes were on the residential price index to see how the market might have been affected by the Aug 30 cooling measures.

As expected, overall prices of private residential properties increased at a slower pace of 2.9 per cent in 3Q2010, compared to 5.3 per cent in the previous quarter.

Closer scrutiny revealed a divergence in the price increases between non-landed and landed homes.

While the rate of price increase for non-landed homes slowed to 1.6 per cent in 3Q2010 from 5 per cent in 2Q2010, that for landed homes bucked the trend by picking up. Landed prices rose 6.2 per cent in 2Q2010 but surged 7.7 per cent in the third quarter. Five quarters of a rising market have pushed landed prices up by 54 per cent but only 39 per cent for non-landed.

The table above compares price changes between landed and non-landed homes, as well as between the different types of landed homes and in different regions from 2Q2009 to 3Q2010.

While all types of landed property have surpassed non-landed in price performance, it is the detached category that impressed with an overall price increase of 58.3 per cent.

Even more surprising is the 63.9-per-cent price increase for detached houses in the north-east region. Although non-landed prices lagged with a 39.1-per-cent increase for the five quarters, those in the rest of central region enjoyed a creditable increase of 49.8 per cent.

On Oct 28, the URA conducted an auction to sell 14 land parcels for landed property development in Sembawang Greenvale Phase 3. These parcels would generate 115 landed units, the majority of which will be terrace houses.

What surprised many was the bullish bidding at the auction.

At the close of the auction, the URA raked in $134.55 million for a total site area of 246,327 sq ft, working out to $546 psf on average.

By contrast, phases 1 and 2 were sold in Oct 2007 and April 2008 at significantly lower average land prices of $285 psf and $223 psf, respectively. What drove demand for these 99-year leasehold land parcels?



Landed Sandwich Class?

For some upgraders to landed property, the price gap between their existing homes and freehold landed homes may be too much of a stretch financially. The more affordable 99-year leasehold landed home bridges the gap, as prices for such properties are about 20 to 25 per cent lower than freehold ones.

Over the years, a critical mass of 99-year landed homes has grown into an established market. In the first three quarters of this year, 17 per cent of all landed property transactions were for 99-year leasehold homes.

Compared to freehold property, the values of 99-year landed homes appreciate slower but their affordability continues to attract buyers.



New benchmarks raise price expectations

Under the present market conditions, 99-year terrace and semi-detached houses on the secondary market in suburban locations generally command $600 to $800 psf, while the $1,000 psf threshold is crossed mainly in the prime districts.

For example, a 3,000-sq-ft semi-detached house in Kingsville (102 years lease from 1996) sold for $3.9 million, or $1,300 psf, while a 3,423-sq-ft terrace house at The Greenwood (103 years from 2008) sold for $3.44 million, or $1,005 psf.

However, Sembawang Greenvale, an outlying location in the north, has also seen new 99-year leasehold houses selling for more than $1,000 psf.

A 1,668-sq-ft terrace house (99 years from 2008) transacted at close to $1.8 million, or $1,070 psf , while another with 1,808 sq ft fetched $1.82 million, or $1,006 psf. Numerous other similar properties in that area have commanded above $900 psf.

Such bullish pricing has contributed to enthusiastic bidding for the Sembawang Greenvale land parcels and the market can expect new units to be just as optimistically priced when they are launched.

At land prices of between $443psf to $640psf in Sembawang Greenvale, the target sale price for a typical 99-year terrace house would be around $2 million, or $1,200 psf, which would be a new benchmark for this market segment.

Judging from present trends, it appears that the landed segment of the property market is headed for new highs.



The writer is executive director, Research and Consultancy at Credo Real Estate.

Localite
24-11-10, 20:52
In land scarce Singapore when you increase the population and invite HNWI definitely the landed property prices will rise. Very hard to curb this genuine demand. Most of the buyers never took 80-90% loans even before the curbs. Cost of A&A or reno for landed tend to be high and given this uncertainity most buyers set aside a big chunk of "buffer funds" before taking the loan. For older properties buyers may only take 50% loan while they work out their home design.

Also given the low interest rate environment and lack of trust in the stock market (to park with big sums of money) there is the flight back to real assets like property.

Also many of these HNWI compare Singapore to HK and find our landed property dirt cheap. A good 5000 sqft house could cost a billion HK$, believe it or not.

proud owner
24-11-10, 20:57
In land scarce Singapore when you increase the population and invite HNWI definitely the landed property prices will rise. Very hard to curb this genuine demand. Most of the buyers never took 80-90% loans even before the curbs. Cost of A&A or reno for landed tend to be high and given this uncertainity most buyers set aside a big chunk of "buffer funds" before taking the loan. For older properties buyers may only take 50% loan while they work out their home design.

Also given the low interest rate environment and lack of trust in the stock market (to park with big sums of money) there is the flight back to real assets like property.

Also many of these HNWI compare Singapore to HK and find our landed property dirt cheap. A good 5000 sqft house could cost a billion HK$, believe it or not.

depending on location lah

my friend bought 2 plot of land in HK .. much bigger and much cheaper than spore ... then again the location is like 45 mins drive to the city ... very country feel type of place

Localite
24-11-10, 21:13
depending on location lah

my friend bought 2 plot of land in HK .. much bigger and much cheaper than spore ... then again the location is like 45 mins drive to the city ... very country feel type of place

You have to compare that to Sembawang 99 LH then.....

Prime landed property is almost non existent in HK. Compared to here we have relatively lots and lots. Which will have to change over the next decade and the prices have no choice but to escalate up. No way SG and HK can be this disimilar. Similar size, population, HNWI. Not same but similar. But the availability of prime landed ppty is totally different. Apartments are still comparable, even though higher priced to Singapore, but you look at landed it is virtually non existent in HK.

When foreigners like Jet Li buy a Bukit Timah GCB for 20 mil they cannot get anything for that price in prime area in HK.

proud owner
24-11-10, 21:18
You have to compare that to Sembawang 99 LH then.....

Prime landed property is almost non existent in HK. Compared to here we have relatively lots and lots. Which will have to change over the next decade and the prices have no choice but to escalate up. No way SG and HK can be this disimilar. Similar size, population, HNWI. Not same but similar. But the availability of prime landed ppty is totally different. Apartments are still comparable, even though higher priced to Singapore, but you look at landed it is virtually non existent in HK.

When foreigners like Jet Li buy a Bukit Timah GCB for 20 mil they cannot get anything for that price in prime area in HK.


true

the landed my friend bought is close to some kumpung area ..but a new highway has been built and he saw the opportunity and potential and bought 2 plot there ..

devilplate
24-11-10, 21:30
true

the landed my friend bought is close to some kumpung area ..but a new highway has been built and he saw the opportunity and potential and bought 2 plot there ..

its like punggol having the new KPE?

proud owner
24-11-10, 23:49
its like punggol having the new KPE?


the feel is more like upp thonsom rd ...the stretch near Springleaf .. not ulu like punggol

kingkong1984
26-11-10, 13:02
Economy doing well.. QE coming... FH is the way to go.. it will go up and up.

Localite
27-11-10, 16:18
QE2 will roll in over the coming months. Money has to soaked up somehow by something. Intent of Fed I think is to lower the USD and that will make US more competitive and create jobs.

Liquidity flood into Asia is a by product.

Landed property segment is like a rich man's gambling arena. More you rush in more prices go up.

Did you read the article about 2,500 GCBs in Singapore owned by 1,000 people? What does this tell you. Rich man's gambling. Else why would 1 man buy 2 or 3 GCBs? Not for the yield. He / she buys it because he thinks given the shortage prices will escalate. And that is right, and more people think like this the more it will go up.

What does it matter if prices are above intrinsic value, if there is money chasing land then prices will go up.

proud owner
28-11-10, 01:34
QE2 will roll in over the coming months. Money has to soaked up somehow by something. Intent of Fed I think is to lower the USD and that will make US more competitive and create jobs.

Liquidity flood into Asia is a by product.

Landed property segment is like a rich man's gambling arena. More you rush in more prices go up.

Did you read the article about 2,500 GCBs in Singapore owned by 1,000 people? What does this tell you. Rich man's gambling. Else why would 1 man buy 2 or 3 GCBs? Not for the yield. He / she buys it because he thinks given the shortage prices will escalate. And that is right, and more people think like this the more it will go up.

What does it matter if prices are above intrinsic value, if there is money chasing land then prices will go up.



can someone please explain to me

QE2 effect

If you earn USD, spend USD ...does it matter if it is strong or weak ?

similarly , for layman ... you work in Singapore, you earn SGD, you spend SGD ... we know SGD is getting stronger ( becos USD is weakening)...does it matter ?

are you getting a PAY RISE becos SGD is stronger ? or do you end up paying more for the same item than before US QE ?

i feel it affects only the big companies in spore that has businness with USA ..

as an individual working, living in Spore, earning and spending SGD.. it really doesnt affect me QE or not ... does it ?

the spore govt will absorb all the USD pouring into the system by issuing more and more bonds...

unless you work in spore BUT paid in USD ..then yes .. you start to convert your salary to SGD asap ...or hedge it by buying assets ..

if you are paid in SGD ... why bother ?

kingkong1984
28-11-10, 06:39
Simple effect, hot money to Asia. Stocks rally up, employment up, GDP up, currency up. Some of these will eventually be in mm stations. Oh yes, travellers up, expat population up too.

Localite
28-11-10, 13:04
can someone please explain to me

QE2 effect

If you earn USD, spend USD ...does it matter if it is strong or weak ?

similarly , for layman ... you work in Singapore, you earn SGD, you spend SGD ... we know SGD is getting stronger ( becos USD is weakening)...does it matter ?

are you getting a PAY RISE becos SGD is stronger ? or do you end up paying more for the same item than before US QE ?

i feel it affects only the big companies in spore that has businness with USA ..

as an individual working, living in Spore, earning and spending SGD.. it really doesnt affect me QE or not ... does it ?

the spore govt will absorb all the USD pouring into the system by issuing more and more bonds...

unless you work in spore BUT paid in USD ..then yes .. you start to convert your salary to SGD asap ...or hedge it by buying assets ..

if you are paid in SGD ... why bother ?


It is not the USD that is the issue. Issue is that to push the USD down by 10% Fed is printing money and as a side effect lots of that come here. The money cannot stay in the bank, as interest rate is nothing, so it has to go into something else. shares, ppty etc.

So as a Singaporean you are indirectly affected by this +vely or -vely depending whether you are looking to buy / sell.

Fleur
30-11-10, 08:28
Can anyone advise me if there might be any pitfall in buying a ten year-old leasehold cluster housing? Thanks.

DC33_2008
30-11-10, 08:33
It's better to go for FH or 999LH landed property if $ is not an issue.

spikey69
30-11-10, 08:53
Can anyone advise me if there might be any pitfall in buying a ten year-old leasehold cluster housing? Thanks.

for investment or homestay? Ang Mo Kio area?

kingkong1984
30-11-10, 09:16
Can anyone advise me if there might be any pitfall in buying a ten year-old leasehold cluster housing? Thanks.
Too big is no gd, b or c size just nice but i like triple A cause its firm like rock.

proud owner
30-11-10, 09:49
It is not the USD that is the issue. Issue is that to push the USD down by 10% Fed is printing money and as a side effect lots of that come here. The money cannot stay in the bank, as interest rate is nothing, so it has to go into something else. shares, ppty etc.

So as a Singaporean you are indirectly affected by this +vely or -vely depending whether you are looking to buy / sell.

can you explain what are the side effects ?

whose money are these that comes into spore ?
individual ?
corp ?
govt ?

to me these are funds .. managed by fund managers .. they will go into stocks, commodities , maybe some properties etc ..

but how does an individual sporean get affected by QE ?

he doesnt have USD thats depreciating... he doesnt have MORE money in banks thats paying 0 pct ...

QE affects big corps, govt.. or rich individuals who have business thats paid in USD .. but how many rich individuals are there in spore ?
20 pct ? of the population?
can this 20 pct buy up so much properties that the remaining 80 pcts of the population also have to follow and buy ?

when this 80 pct are not affected by QE at all

Fleur
30-11-10, 10:03
for investment or homestay? Ang Mo Kio area?

For both. What is the likelihood of enbloc? :)

spikey69
30-11-10, 10:13
For both. What is the likelihood of enbloc? :)

i guess that if you can state which devt that you are looking at, the gurus here can advise better.

land118
12-12-10, 12:29
Interesting read:

Why super-rich are snapping up homes in S’pore
posted Oct 6, 2010 4:56 AM by Poon Paul * [ updated Oct 6, 2010 4:57 AM ]
Whenever I visit my friend at his sprawling Binjai Rise*bungalow, I would jokingly ask him if he has had the opportunity to say “hello” to his newfound neighbour, Asian star-turned-Hollywood actor, Jet Li.

Ever since news broke that the celebrity snapped up a Good Class Bungalow (GCB) for a reported S$19.8 million, there has been a lot of talk about Singapore attracting the rich and famous as well foreigner eligibility in buying such properties.

I have to say, despite its no-nonsense and staid*reputation, Singapore has over the years done a good job in shedding its conservative image to one that is hip and “happening”.


Foreigners have often been lured here due to the ease of doing business, our political stability, geographic location and efficiency.
However, they, particularly those in show biz, also bemoan about the lack of entertainment and liken the city to a “cultural desert”.

Nevertheless, Singapore has managed to successfully reinvent itself to a place that is buzzing with activities, especially with recent events like the Formula One and the opening of its two new integrated resorts, Marina Bay Sands and Resorts World Sentosa.

This has helped put our city on the world map and on the radar of foreign investors.

The Global Property Guide agrees and recently said Singapore is the hottest real estate market in the world, attracting the rich from far and beyond.

Foreign eligibility

For the record, a foreigner can own landed properties in Singapore.

However, they do face restrictions and need prior approval from the Singapore Land Authority (SLA).

Foreigners will first need to be a permanent resident (PR) before they can be allowed to purchase landed homes in mainland Singapore.

Even so, getting a PR is not a guarantee.

They will need to be further assessed by the authorities based on their qualifications and their economic contribution to Singapore before being given the green light.

Having said that, Sentosa Cove*is the only place where foreigners are allowed to purchase landed property without any restrictions.

GCBs are an attractive investment asset class

The lure of owning a GCB is indeed very attractive.

GCBs*refer to low-density prime real estate that are located in the leafy, prestigious neighbourhoods such as Cluny Road, Ridley Park, Leedon*Park, King Albert Park, Binjai*Park and Yarwood Avenue.

According to DTZ, freehold landed properties in prime areas moved up 2 percent quarter-on-quarter to S$1, 611 per sq ft, lower than the 3.3 percent growth recorded in the second quarter.

Meanwhile, freehold units outside the prime areas have hit a new high in the third quarter this year.

It’s per sq ft pricing has now gone up 1.7 percent quarter-on-quarter to $952 per sq ft, surpassing the high of $943 per sq ft recorded during the 1996 boom for the first time.

Despite the slowdown in demand from ultra high net worth investors due to their cautious sentiment over the growth of major economies in the West, I do believe GCBs will continue to be an attractive investment asset class.

Firstly, they will always be in great demand due to their limited availability – there are around 1,000 GCBs spread across Singapore.

Secondly, they offer a good rental yield.

A real estate agent whom I spoke to who specialises in the GCB market said investors can expect to earn between $28,000 to $35,000 in rental income per month.

With the dismal interest rates that banks are currently offering (at less than 1 percent), it is no wonder cash rich investors would prefer to park their money in the GCB market.

In the meantime, I am hoping with bated breath that I would “accidentally” bump into Jet Li the next time I come round Binjai Rise and perhaps snag an autograph or two.

Khalil Adis is an experienced property writer, with in-depth knowledge of Singapore’s and Malaysia’s property market.

By Khalil Adis*(courtesy of PropertyGuru)

land118
12-12-10, 12:30
http://www.landedliving.com/landed-house-news-1