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A record price has been set on Sentosa Cove. This time a prime seafronting bungalow along Ocean Drive on a 7,690 sq ft plot area has been sold for $2,536 per square foot (psf) on land area. This exceeded the earlier record of $2,403 psf posted just in May this year for a bungalow on Paradise Island which has a bigger land area of about 14,983 sq ft reflecting in a much higher price of $36 million.
The latest deal amounted to $19.5 million. Its buyer is understood to be Dalip Kumar Seth, the boss of Sunrise & Co Pte Ltd, a sporting goods wholesaler/distributor which represents the Yonex and Mikasa brands.
On the mainland, a house at Cluny Hill was sold for $28 million or $1,841 psf based on its land area of 15,210 psf. On a psf basis, this is believed to be the second highest price ever achieved in the GCB market, surpassed only by the $1,899 psf that was recorded in 2007 for 32H Nassim Road. However, that was for a smaller land area of 13,423 sq ft.
Property experts note that the $1,841 psf for the latest deal at Cluny Hill surpasses the $1,800 psf which a GCB at Nassim Road sold for in April this year. That property is on 24,187 sq ft land area, resulting in an absolute price of $43.53 million.
Among the other major GCB deals in Q3 are a $21 million (about $1,300 psf) deal at Swettenham Green; the buyer is understood to be plastic surgeon Woffles Wu. There was a also a transaction at Chatsworth Road for $25 million or $1,499 psf. The seller is understood to be Pacific Asset Management’s managing director and chief investment officer Ho Tian Yee.
CB Richard Ellis’ analysis shows that the average price for GCBs sold so far this year is $1,050 psf, about 26% higher than the $831 psf for the whole of 2009.
Rising prices have widened the gap in expectations between buyers and sellers and slowed down demand this quarter.
‘Demand for GCBs has slowed in the third quarter primarily because the price expectations between owners and buyers have widened. On one hand, owners can afford to hold as they’re not in a hurry to sell; on the other, buyers can afford to purchase but are not prepared to pay what the owners are asking,’ says CB Richard Ellis director (luxury homes) Douglas Wong.
‘Some bungalow buyers are waiting and hoping to see a drop in price but most sellers are not reducing. Instead quite a number have actually revised their prices upwards lately in view of the buoyant economy, coupled with a better-than-expected stockmarket performance,’ Mr Wong says.
This price gap will probably mean fewer transactions in the next two to three months, he reckons. Mr Wong predicts relatively slow sales until perhaps early next year, by which time pent-up demand would have built up. ‘That’s when we’re likely to see an increase in GCB transactions again.’
Based on caveats captured up to Sept 23, a total 16 GCB deals have been done this quarter for a total $253.4 million – down from 36 transactions for $777.7 million in Q2 and 31 deals at $516.2 million in Q1.
The final number for Q3 may be higher as more caveats may be filed over the next few weeks.
Despite the weaker volume this quarter, the 83 deals clinched year-to-date have a total sale value of nearly $1.55 billion – just 10 per cent shy of the record $1.72 billion for the whole of last year, when there were 109 deals. CBRE feels the market is on track to record about 100-120 GCB transactions amounting to $1.8 billion for full-year 2010.
Resale property price rises but slowly
Private resale homes prices are continuing to hit record highs. However the pace of increase slowed this quarter, according to a report by DTZ.
This weakening rise is likely to come to a stop over the rest of the year as recent cooling measures on residential market take effect, it said.
‘Sales volume is expected to be lower as sellers continue to maintain their asking prices while potential buyers hold out for lower prices.’
The report said resale freehold condo prices in prime districts 9, 10 and 11 rose 1.4% to touch $1,513 psf, slowing from a 2.6% rise in the second quarter. Reason could be due to well-heeled investors remaining cautious about the growth of major economies in the West.
But the price level is already above the previous 2007 record of $1,483 psf.
Luxury condos – where prices are still just below the 2007 peak – also saw a slower rise, of 1.6% quarter-on-quarter, to $2,630 psf.
The landed homes market was not spared the slowdown. Prices of prime freehold landed homes rose by 2% quarter-on-quarter to $1,611 psf, compared with the 3.3% growth in the second quarter of this year.
Outside the prime districts, landed property prices inched up by 1.7%
to $952 psf. But this increase means these prices have, for the first
time, surpassed the high of $943 psf recorded during the 1996 boom.
DTZ said resale prices of suburban leasehold homes increased by 2% to $660 psf in this third quarter.
This compares with a 4% rise in the second quarter, which took prices to $648 psf. The 2007 peak for these homes was $615 psf.
Office rents ‘likely to rise’
The ongoing economic recovery will likely drive Grade A office rentals to rise by more than 25 per cent in two years. This is according to the latest property report by Swiss-based investment bank Credit Suisse.
The bank said that it expects rent to hit $12 per square foot (psf) for super prime office space, such as the Marina Bay Financial Centre, by 2012.
Meanwhile, rentals for Grade A office space and prime office space are expected to hit between $10.50 and $11.50 psf, and $9 psf respectively in two years, the report added. Prime Grade A office rents are currently hovering at about $8 psf, as of the second quarter of this year.
Capital values, on the other hand, will remain flat till year-end but are expected to trend upwards going forward, said the bank.
Benefiting from such gains are the office-backed real estate investment trusts (Reits) and Credit Suisse said that it is positive on Prime A office Reits.
The bank upgraded CapitaCommercial Trust (CCT) to “outperform” from “neutral” with a new target price of $1.63, compared to the previous $1.37. CCT is sitting on a cash pool of $750 million and is likely to invest it into high-yielding assets, said the bank.
The Reit counts Raffles City, One George Street and Six Battery Road as some of its prime office properties.
Credit Suisse has also upgraded K-Reit, which overlooks properties such as One Raffles Quay and Prudential Tower, to “outperform” on the back of a strong balance sheet and healthy portfolio.
The Reit is also likely to undertake some acquisitions – possibly the MBFC – the bank added.
Source : Today – 27 Sep 2010
Prices of landed homes outside prime areas hit new high
Prices of landed freehold units outside the prime districts have hit a new high in the third quarter of this year.
Property consultant DTZ said prices of homes outside the prime areas inched up 1.7 per cent quarter-on-quarter to S$952 per square foot, surpassing for the first time the high of S$943 per square foot recorded during the 1996 boom.
Meanwhile, landed freehold units in the prime districts of 9, 10 and 11 moved up 2 per cent on-quarter to S$1,611 per square foot, lower than the 3.3 per cent growth in the previous quarter.
DTZ noted that the pace of price increase for the residential sector has lost steam.
It said in a report that price growth across all housing segments slowed in the third quarter compared to the previous period.
Similar to the second quarter, mass market homes led the way in the uptrend of prices in the third quarter.
Resale prices of leasehold homes in the suburban areas increased by 2 per cent quarter-on-quarter to S$660 per square foot.
This was weaker than the growth of 4 per cent in the previous quarter as prices continued to set new record highs amid increasing buyers’ resistance.
Luxury condominiums also saw a slower increase of 1.6 per cent on-quarter to S$2,630 per square foot.
DTZ added that within the prime districts, the increase in average resale prices of freehold non-landed homes also slowed to 1.4 per cent on-quarter to S$1,513 per square foot.
The consultant attributed this to well-heeled investors remaining cautious over the growth of major economies in the West.
DTZ said the slow growth in prices is likely to come to a halt for the rest of the year following the recent implementation of government measures to cool the property market.
Sales volume is also expected to be lower as sellers continue to maintain their asking prices while potential buyers hold out for lower prices.
Source : Channel NewsAsia – 27 Sep 2010
