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Thread: A less volatile property market seen in 2011

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    Default A less volatile property market seen in 2011

    [url]http://www.businesstimes.com.sg/sub/news/story/0,4574,416104-1291492740,00.html?[/url]

    Published December 4, 2010

    [B][SIZE="5"]A less volatile property market seen in 2011[/SIZE][/B]

    [B]GLS programme adds record $9.4b to govt coffers in first 11 mths[/B]

    By UMA SHANKARI


    BOOSTED by a buoyant property market, the Government Land Sales (GLS) programme has added a record $9.4 billion of revenue to the state coffers in the first 11 months of this year - more than five times the $1.8 billion of sales recorded last year.

    The figures were revealed last night by Simon Cheong, president of the Real Estate Developers Association of Singapore (Redas). He was speaking at a dinner to celebrate the association's 51st anniversary.

    Mr Cheong said that developers were positive about the real estate market in Singapore in the long term given the government's continuous drive to reposition the economy. Redas estimates that sales of new homes by developers will hit 14,500 units for the whole of 2010 - in line with previous analyst forecasts.

    'We believe the market will continue to be underpinned by sound economic fundamentals and a favourable business environment,' Mr Cheong said.

    But he noted that the property market began to slow down in the third quarter after two rounds of government measures to cool the market in February and again in August.

    In addition, the land supply for the second half of 2010 under the GLS programme has also been 'very significant', he said.

    'As Asian economies including Singapore adjust to this part of the world and tighten up on measures to deal with the threat of overheated property prices, the market will adjust and take into account these new challenges,' Mr Cheong said.

    'It is in our interest to see a graduated trend in value movements in order to realise a sustainable environment for real estate development rather than face the volatility arising from mismatched market forces.'

    Developers BT spoke to said that they expect a less volatile property market in 2011.

    'I see a more stable market,' said Frasers Centrepoint chief executive Lim Ee Seng. 'With the government measures, developers are more measured in their bidding. There should be sufficient supply for buyers, especially for the upgraders market.'

    Frasers Centrepoint is especially confident about the upgraders market and will continue to bid for land parcels catering to this segment, Mr Lim added.

    Said Koh Brothers managing director Francis Koh: 'A gradual and steady growth in property prices and volumes is better for the whole market.' The property market should continue to do well in 2011 if Singapore's economic performance remains strong, Mr Koh added.

    The Ministry of National Development on Nov 25 said it would release a large supply of land for new homes in H1 2011 as demand from both developers and homeowners remains robust. Including reserve list sites, the H1 2011 GLS programme will have a total of 30 sites which can generate about 14,300 residential units, most of which will be in mass-market locations. This is higher than the 13,900 residential units offered for the second half of 2010.

    And on the same day, the Monetary Authority of Singapore warned that there is 'a possibility' that property transactions and prices could pick up again given the current global conditions of ample liquidity and low interest rates.

    The boom in sales of state land in 2010 will translate to higher sale proceeds for the government's current financial year, which ends on March 31, 2011.

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    [url]http://www.straitstimes.com/Money/Story/STIStory_610278.html[/url]

    Dec 4, 2010

    [B][SIZE="5"]Gradual price rises work best for developers: Redas chief[/SIZE][/B]

    By Cheryl Lim & Esther Teo


    ROCKETING real estate prices might sound good for developers at first glance. But a calmer market, with values rising in a smooth line, works best, according to an industry leader last night.

    Mr Simon Cheong, president of the Real Estate Developers' Association of Singapore (Redas), said at the body's 51st anniversary dinner that developers should welcome gradual price increases.

    'It is in our interest to see a more graduated trend in value movements, in order to realise a sustainable environment for real estate development, rather than face the volatility from mismatched market forces,' he said.

    Investors most want certainty, political stability and a stable policy framework: three attributes which the Singapore market has, he added.

    Although many investors are concerned that real estate cycles are getting shorter and price swings are becoming more pronounced, they still believe that Singapore has sound fundamentals and a long-term policy framework to deal with the changes taking place, he said.

    Mr Cheong also touched on the eventful year which developers have had.

    Urban Redevelopment Authority (URA) statistics for the second quarter recorded a new peak in developers' sales, reaching 2,208 units in April alone, he said. In the same quarter, the URA property price index also surpassed its former all-time peak in the second quarter of 1996.

    The Government Land Sales Programme has also added about $9.4 billion in revenue to state coffers - more than five times the $1.8 billion in sales recorded for the whole of last year.

    But signs of a slowdown are appearing, he said, with prices moderating to 2.9 per cent in the third quarter from 5.3 per cent in the second quarter.

    However, private home prices are still up 14.4 per cent for the first nine months of the year.

    Mr Cheong is confident about the long-term prospects of developers.

    'We are positive about the real estate market in Singapore, given the Government's continuous drive to reposition the economy. We believe that the market will continue to be underpinned by sound economic fundamentals and a favourable business environment,' he said.

    Some experts say that while the market appears to have moderated after the Government introduced cooling measures in August, additional steps could be taken should prices and activity start to shoot up again.

    At the dinner last night, Cushman & Wakefield Singapore vice-chairman Donald Han told The Straits Times that although transaction volumes have slowed, the Government might still step in if the pace of private home sales returns to the buoyancy of April.

    But Knight Frank chairman Tan Tiong Cheng said that developers have already turned more cautious, as reflected in their more realistic bid prices for land: 'It's a sign that they feel the market won't be charging ahead. In such a scenario, there is no need to introduce measures to curb demand.'

    Trade and Industry Minister Lim Hng Kiang was guest of honour at last night's dinner, held at The Ritz-Carlton, Millenia Singapore.

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