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49% of S’poreans aspire to buy property in near future

Posted by Singapore Property Launch on 29th September 2017 in Blog
modern apartment blocks in Singapore

Property affordability sentiment is still subdued in Singapore.

Nearly five in 10 Singaporeans intend to purchase a residential property in the near future, according to PropertyGuru’s Regional Consumer Sentiment Survey for H1 2017.

Although the home purchase sentiment in the city-state is higher than Thailand’s 43 percent, it is lower than Malaysia and Indonesia with 52 percent and 60 percent respectively.

Despite the positive purchase intent, property seekers continue to worry over prices, with the property affordability sentiment here remaining at 29 from the previous survey in H2 2016. It was also unchanged in Thailand (34) and Indonesia (52), while Malaysia posted a slight increase to 38.

“In Singapore, we see that intent to purchase homes remain strong, but consumers continue to express concern on their ability to afford homes. Even as the Singapore real estate market looks to recover in 2018, concerns with affordability are likely to continue to hobble the absorption of supply,” said PropertyGuru Group’s CEO Hari V Krishnan.

Meanwhile, the study revealed that people from Singapore are open to both new and resale houses, while those from the three other Southeast Asian markets have a penchant for new units. In terms of key considerations, the respondents named location and the area’s security among the top factors influencing their purchase decision.

PropertyGuru’s latest survey involved more than 3,100 respondents across Singapore, Malaysia, Thailand and Indonesia.

credits: propertyguru

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ERA Realty to relist in Singapore

Posted by Singapore Property Launch on 23rd September 2017 in Blog
Jack Chua

ERA Realty’s CEO Jack Chua.

ERA Realty Network, the second biggest property agency here by agent numbers, plans to relist on the Singapore Exchange (SGX) to take advantage of the anticipated recovery in the housing market, reported the Business Times.

The firm and other related businesses will be floated under APAC Realty, with each share to be sold at 66 cents, according to the registered prospectus for the initial public offering (IPO).

“We are now at the initial stage of a market run. For the next one year, everyone knows the market will be good, so it’s only logical to list now,” said ERA Realty’s chief executive Jack Chua, who is also the CEO of APAC Realty.

The listing’s goal is to provide more funding to fuel ERA’s expansion in the Asia Pacific region. Of the IPO’s estimated net proceeds of $55 million, $27.1 million will go to APAC Realty, whose business is the fully-owned ERA Realty.

In turn, a larger network will help drive the brokerage business in Singapore via cross-selling as Chua expects a return of foreign buyers in the city-state, particularly the Chinese who are attracted by the lower prices of luxury real estate, while other markets have raised property taxes.

“Many Singaporeans are also buying foreign properties, so establishing our foreign presence will allow us to advise Singaporeans better,” he noted.

This move is also expected to improve its competitive edge. ERA Realty presently has 6,272 property agents in Singapore. It had the most number of agents here for six straight years until PropNex Realty and Dennis Wee Group merged, forming a group with a total of 6,858 agents.

Under the IPO, APAC Realty will offer 4.4 million shares and 44.5 million shares to retail investors and institutional investors respectively. At the same time, another 39.3 million shares will be sold to cornerstone investors Fidelity Investment, Soilbuild Group executive chairman Lim Chap Huat, Singapore-based Azure Capital and serial investor Wang Yu Huei.

The transaction will close by Tuesday (26 September) and the shares will start trading by next Thursday.

Previously, ERA Realty was listed under Hersing Corporation. But the latter’s founder sold it to Northstar Group in August 2013 one year after delisting.

Currently, Northstar Group owns 80 percent of APAC Realty, while the remaining 20 percent is held by APAC Realty’s management. After the IPO, their stakes will be proportionately diluted, but if the greenshoe option for 9.75 million shares is exercised in full, both firms will retain a combined stake of 72 percent.

credits: Propertyguru

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Analysts: Home prices to rise 10% next year

Posted by Singapore Property Launch on 21st September 2017 in Blog
Singapore Cityscape

More redevelopment deals and increased foreign buying interest is expected to drive demand for Singapore homes.

Fuelled by redevelopment deals and an increase in foreign buying, UOB Kay Hian expects home prices in Singapore to bottom out this year and climb by five to 10 percent in 2018, reported Bloomberg.

This comes even as the government has kept most of the property cooling measures in place.

Earlier this month, Morgan Stanley also predicted home prices to increase by two percent this year and 10 percent by end-2018.

“We foresee the nascent recovery spreading to the mid-range and high-end segments in the next wave, driven by replacement demand from redevelopment of old housing projects and a pick-up in home-buying interest from foreigners,” said Vikrant Pandey in a note.

This year’s redevelopment deals, which see homeowners in older buildings sell their apartments to developers, have exceeded the combined transaction value for the past four years at $3 billion. Armed with the money from these redevelopment sales, he expects these buyers to drive the demand for mid- to high-end homes.

Despite the 15 percent Additional Buyer’s Stamp Duty imposed on foreigners, Pandey also expects foreign buying to increase as other overseas destinations have introduced their own measures to cool foreign demand.

Hong Kong has doubled its stamp duties on foreign property buyers to 30 percent – exceeding that of Singapore, while Taiwan levied a punitive divestment-gains tax of up to 45 percent in January last year. Canada and Australia have also raised their transaction costs for foreign buyers.

Pandey noted that the levelling of taxation costs is making Singapore property more appealing for foreign investors.

credits: propertyguru

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Lian Beng wins contract to build Martin Modern condo

Posted by Singapore Property Launch on 18th September 2017 in Blog
Lian Beng wins contract to build Martin Modern condo

Artist’s impression of the infinity pool at Martin Modern.

A wholly-owned subsidiary of Lian Beng Group has secured a $162 million contract to construct Martin Modern, a 99-year leasehold project comprising two 30-storey condominium blocks with a total of 450 units at Robertson Quay.

According to an SGX filing on Friday (15 September), the work package for the development with landscape deck, common basement carparks and communal facilities was clinched by Lian Beng Construction (1988) via a tender held by developer GuocoLand.

The contract is expected to have a positive effect on Lian Beng’s net tangible assets per share and earnings per share for the current fiscal year ending 31 May 2018. In fact, the company’s order book reached about $699 million as of 15 September 2017 after it secured the deal.

Lian Beng is expected to start construction work on the project in September, with the contract spanning 32 months. The development is expected to receive its temporary occupation permit by 2021.

Martin Modern sold 110 of the 120 units released within two weeks of its launch on 22 July.

Prices range from $1.8 million for a two-bedroom unit to $3.86 million for a four-bedder, with early buyers eligible for a five percent discount.

credits: propertyguru

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New development charges to affect en bloc deals

Posted by Singapore Property Launch on 17th September 2017 in Blog
Residential District in Singapore

The new DC rates are expected to lead to higher breakeven prices for developers.

DBS expects the recent hike in development charge (DC) rates for condominiums to affect developers’ profitability as breakeven prices may increase by up to four percent, reported Singapore Business Review.

It noted that while most of this year’s en bloc transactions already priced in a potential six to 18 percent hike in property prices to break even, the new DC rates could add another one to three percentage point to the assumed increase in prices to break even.

This comes as 116 of the 118 sectors have raised their rates by six to 29 percent, with Sector 100, which includes Hougang, Tampines Road, Sengkang and Punggol area, registering the biggest increase.

The new DC rates would apply to cases that have been given provisional permission (PP) from 1 September.

“We believe the higher rates would especially impact the later en bloc transactions which have not been granted PP before 1 September 2017, especially those transacted in 2017, thus raising the cost of land acquisition for developers,” said DBS analysts Rachel Tan and Derek Tan.

“We believe that developers for larger en bloc sites, especially those with more than 1,000 planned new residential units per site, such as Serangoon Ville, Eunosville and Rio Casa, might look to launch projects as early as possible, especially given the large quantum of units to be cleared.

“At this moment, there are uncertainties to take up where our estimated breakeven prices are at a c. 15 percent premium to the prevailing property prices in the respective areas.”

credits: propertyguru

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Pine Grove to go en bloc again

Posted by Singapore Property Launch on 16th September 2017 in Blog
Pine Grove condominium

View of the 660-unit Pine Grove, a former HUDC estate near Ulu Pandan. (Photo: Google Maps)

After two failed attempts in 2008 and 2011, owners at Pine Grove near Ulu Pandan are trying their luck again at a collective sale, this time at a price of $1.65 billion, reported the Straits Times.

This would be the highest collective sale price since 2007, when the 619-unit Farrer Court was sold for $1.34 billion. If successful, each owner stands to gain between $2.08 million and $2.64 million.

Appointing Huttons Asia as its marketing agent, the collective sale committee is set to determine the method of apportionment and secure the requisite 80 percent approval at an extraordinary general meeting to be held on 29 October.

“We can expect good response from developers because of our prime location,” said collective sale committee chairman Kogi Murthi.

“It is among the few plots left available for residential development in the choice Holland Road district.”

The 660-unit former Housing and Urban Development Company (HUDC) estate failed to attract any bids in 2011, after the owners raised the reserve price from $1.33 billion to $1.7 billion to secure the 80 percent consent.

With 66 years left on its 99-year lease, the project has a site area of 893,227 sq ft. Zoned residential under the 2014 Master Plan, the site has a plot ratio of 2.1. Its existing plot ratio, however, now stands at 1.56, which means that the project could yield up to 2,000 units, said analysts.

credits: propertyguru

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