Singapore Property Group 新加坡房地产集团

Copthorne Orchid, which was to make way for a condo, will keep its doors open a while longer

(SINGAPORE) The Copthorne Orchid Hotel along Dunearn Road, which was slated for closure at the end of this year, will now stay open for at least three months beyond that, BT understands.

Still running: A 150-unit condo was slated to be previewed last month. Show suites for the new condo, expected to be named The Glyndebourne, have been built on the rooftop of the six-storey hotel

The hotel will continue to take bookings until March 31, 2011. Tenants will also keep operating till that date, although some sources suggest that the closure could be delayed even further – depending on property market conditions.

A 150-unit condo planned for development on the freehold site was slated to be previewed last month. Show suites for the new condo, expected to be named The Glyndebourne, have been built on the rooftop of the six-storey hotel, which is bounded by Dunearn Road, Dunkirk Avenue and Trevose Crescent. Some guest rooms on the hotel’s sixth floor have also been set aside as sales offices for the condo launch.

‘There was probably no hurry to shut the hotel at the end of this year, as the new condo planned on the site has yet to be released,’ said an industry observer.

Market watchers suggest that the delay in previewing the condo project could be due partly to more subdued buying sentiment following the government’s Aug 30 announcement of property cooling measures.

However, other sources say that City Developments Ltd (CDL) – which is managing the marketing of the condo on behalf of its hotel arm Millennium & Copthorne Hotels (M&C), which owns the hotel – may have needed more time to revamp the show suites as well as finalise brochures and other marketing materials.

Unit sizes in the proposed freehold District 11 development are said to range from about 690 square feet for a one bedroom apartment with a study to 3,563 sq ft for a five-bedroom penthouse. A property consultant said that the project could be priced at about $2,000 per square foot on average.

Agents are also said to have started gathering interest from potential buyers, including those keen on viewing the show suites.

‘They’ll probably build up sufficient interest first and look for a window of opportunity to release the project. It would be better to launch this year than next year as there’ll be more competition then,’ a property consultant reckons.

The 440-room hotel’s outlets include Palm’s Asian Brasserie (famous for its Peranakan buffet lunch) and The Topps Lounge where veteran local singers Huang Qing Yuan and Wang Li – dubbed Singapore’s King and Queen of Mandarin Pop – belt out numbers daily, attracting fans not just from Singapore but from Indonesia, Japan, Guangzhou and Hong Kong. These outlets are operated by the hotel.

Another outlet is a 4,000 sq ft restaurant called Heritage – The North Indian Cuisine, which opened in September last year. The restaurant’s owner, Heritage Management & Consultancy Services Pte Ltd, had expected the hotel to close by the end of this year. So last month, it opened Heritage Bites at Suntec City’s Fountain Terrace.

The hotel is said to enjoy high occupancy. Members of football clubs from Hong Kong, Bangkok and Melbourne taking part in the Singapore Cup tournament are also said to have been spotted there of late. Long-stay guests are said to include those working in the oil rig industry.

Hong Leong Group – the parent of M&C and CDL – acquired the hotel in the early 1970s from the Pontiac Group, according to an earlier newspaper report.

The hotel has undergone many name changes over the decades, including Orchid Inn, Novotel Orchid Inn and now Copthorne Orchid Hotel. It has a freehold land area of about 180,000 sq ft.

 HOI HUP and Sunway sold nearly 90 units at their Vacanza @ East condo by the end of Tuesday, when the project previewed to those who had registered interest with the appointed marketing agents DTZ and Huttons. A VVIP preview was held on Monday for staff/directors of Hoi Hup and Sunway as well as their special guests.

Facilities galore: The project will have a clubhouse, gymnasium, a tennis court, a lap pool, fitness station and lawn

The average price for the 12-storey freehold project is about $1,090 per square foot.

Buyers were mostly Singaporeans and the most popular units were two- and three-bedroom units, said Hoi Hup Realty director Wong Sjew Hung. ‘The majority of buyers are Singaporeans looking for a home for their own occupation or as long-term investment. This is a freehold project in a quiet estate amidst a landed housing enclave,’ Ms Wong added.

In absolute-price terms, units sold range from nearly $550,000 for a 484 sq ft one bedder to slightly above $2 million for a three bedder penthouse of over 1,900 sq ft.

Initially two blocks comprising 141 units were released but as potential buyers started requesting for apartments in other stacks in the 473-unit project, the developers began releasing more units.

The project comprises one- to four-bedroom units as well as penthouses. It will have a clubhouse, gymnasium, a tennis court, a lap pool, fitness station and lawn.

Market watchers point out that the project, located at Lengkong Tujoh, is next to the Pan Island Expressway, near the Singatronics Building and Bedok Industrial Estate. It is about a kilometre away from Kembangan MRT Station.

Hoi Hup and Sunway are developing Vacanza on a 207,000 sq ft site which they bought in October last year for $158 million, or about $445 per square foot of potential gross floor area, including an estimated development charge of about $36 million at the time.

The site, which was vacant at the time, was sold by Lee Tat Development. The residential site has a 2.1 plot ratio (ratio of maximum potential gross floor area to land area) and a 12-storey maximum height under Master Plan 2008.

WHAT is the outlook for interest rates? How will the latest changes in property financing affect you? Fret not, this article will help guide you in the right direction.

Doing your sums: If you have an existing housing loan and are thinking of buying a property, it is time to re-work your numbers

From Aug 30, 2010, regardless of whether you’re a Singaporean, permanent resident or foreigner, if you have an existing housing loan on a property – whether the property is in Singapore or overseas – the maximum financing you can get for your property purchase has been revised downwards to 70 per cent from 80 per cent previously.

And also from Aug 30, 2010, if you have an existing housing loan, and if you want to purchase another property, the minimum cash downpayment has been revised to 10 per cent from 5 per cent previously.

Thus, if you have an existing housing loan and are thinking of buying a property, it is time to re-work your numbers. And you might need to put off the decision to buy a property for the time being if you do not have the required minimum 30 per cent downpayment for the property, as the maximum financing has been reduced to 70 per cent.

However, if you have an existing property that is fully paid, and have no outstanding housing loan, and if you buy a property, you can still get up to 80 per cent financing. The above measures on the cash downpayment and 70 per cent financing limit apply to all property purchases with date of option to purchase dated Aug 30 or later.

How does it affect upgraders and people in the process of selling their property?

The government’s main intention of introducing this new measure is to deter speculation in property. However, it can affect upgraders and people in the process of selling their existing property.

For instance, if you have an existing property which has an outstanding housing loan, but want to buy a new condominium project to be completed in a few years’ time, you can only get maximum 70 per cent financing.

Those with plans to move are affected as well. If you plan to move to a new home and you purchase the new home before you sell your existing home, and if there is an outstanding loan on your existing home, you can only get a maximum of 70 per cent financing for your new home.

For those who have sold their property but the transaction is not completed yet, they might be affected as well.

In order to qualify for 80 per cent financing, homebuyers must prove the sale of their existing home to get the 80 per cent loan. For HDB flats, this requires an approval letter from HDB to the seller within two weeks from the date of the first sales appointment, which typically is about one to two months after the date of option to purchase.

For private properties, a signed sales and purchase agreement is required as proof, and a certificate from Iras showing that the stamp duty has been paid by the buyer of the existing home.

Types of housing loan packages available

With the recent entry of new players into the market, such as ANZ Bank and CIMB Bank, there are currently altogether 16 financial institutions that are active in providing housing loans in Singapore.

Each financial institution offers five to 10 different home loan packages. Thus, at any point in time, there are easily over 120 different housing loan packages available for you to choose from.

Housing loan packages with interest rates pegged to Sibor and SOR were only introduced since 2007.

Over the last three years, as interest rates remain low, and with more consumers aware of the availability of such packages, there seems to be a trend of more people choosing a housing loan package pegged to Sibor or SOR instead of floating rate packages, with interest rates pegged to bank board rates.

The reason for this is Sibor and SOR are transparent and are average market interest rates and are not subject to unilateral changes by individual banks, but each bank has its own discretion in determining the board rates.

Which is the best housing loan package?

Because of competition, banks change their housing loan packages very often. Furthermore, other than interest rates, banks vary their other terms and conditions, such as the penalty period, which varies from zero penalty period to three years’ penalty period; penalty fees, which might vary from one per cent to 1.5 per cent; flexibility in making partial repayment within the penalty period; number of years of free fire insurance provided; amount of legal subsidy provided; etc.

A common misconception is that consumers might think there is such a thing as a best housing loan package.

The fact is, different home loan packages are suitable for people with different needs and priorities. Thus, there is no one-size-fits-all solution. You need to choose a housing loan package that is most suitable for you.

In this aspect, instead of trying to check with different banks on the different home loan packages available, which can be very confusing to consumers, a better choice might be to talk to an independent mortgage consultancy, who will, based on your needs and priorities, help you shortlist a few of the housing loan packages that are most suitable for you.

This service is provided free to you as a consumer, as the mortgage brokers are separately paid a fee by the banks for the service they provide.

Outlook for interest rates

Sibor (Singapore Interbank Offered Rate), the average interest rate banks borrow/lend money to one another, is used as a guideline by banks in setting interest rates on housing loans.

Currently, Sibor is at its lowest level. The three-month Sibor (as at Sept 3) was 0.543 per cent while the SOR (Swap Offer Rate) was at 0.308 per cent. SOR is basically Sibor + US$ swap cost into S$ rates, it involves swapping US$ into S$. Thus SOR is also affected by the volatility of the exchange rate of US$ versus S$.

In turn, Sibor is affected by mainly two factors. Namely, the US Fed interest rates and the liquidity of the Singapore banking sector.

Given that the US economy remains weak, it is likely that the US will continue to keep interest rates low for the next six to 12 months. And given the ample liquidity in Singapore’s banking sector, it is likely that Sibor, and thus housing loan interest rates, will remain low in the next six to 12 months as well.

Outlook for housing loans market

This year saw the entry of two new players to the housing loan market, namely CIMB and ANZ Bank, which makes the already competitive housing loan industry even more competitive.

This is indeed good news to consumers as competition typically results in better and more competitive home loan offers from banks.

SINGAPORE’S population reached 5.08 million as at end-June 2010 based on advance estimates. This is a 26 per cent increase from the last census conducted in 2000. The Ministry of Trade and Industry also forecast that the economy would grow between 13 and 15 per cent in 2010 while the long-term economic growth should moderate to a more sustainable level of 5-6 per cent as most economists have suggested. If this population trend supported by the strong economic growth prospect continues, we should expect greater urbanisation of suburban centres.

The rise of these regional centres not only spreads jobs across the island (so as to avoid overloading the downtown) but effectively expanded the commercial area which was traditionally in the downtown, to meet Singapore’s long-term economic needs.

Four regional centres were first identified in 1990: Tampines, Jurong East, Woodlands, and Seletar. Seletar was subsequently dropped while Tampines regional centre became an exemplary success of this decentralisation plan. In 1992, Tampines New Town was given the World Habitat Award by the Building and Social Housing Foundation of the United Nations for outstanding contribution toward human settlement and development.

In addition, several sub-regional centres were also identified to serve as supporting hubs between the Central Business District and these regional centres. They include Buona Vista, Bishan, Serangoon, Paya Lebar, and Marine Parade. These commercial hubs are to be linked by orbital rail lines like the Circle Line. To date, Bishan is an exemplary sub-regional centre, buzzing with a large day and night population served by an MRT interchange, a modern retail mall, offices, and a regional riverine park.

In May 2008, the Urban Redevelopment Authority (URA) revealed the Master Plan 2008 and announced that there would be further plans to intensify these decentralised commercial hubs. Two of the plans include the Jurong Lake District and Paya Lebar Central. The former is to be transformed into a regional centre for business and leisure and the latter into a sub-regional centre with offices, retail, hotels, and attractive public spaces.

Jurong Lake District

Since the 1960s, Jurong has been synonymous with the industrialisation of Singapore. However this image is fast changing. Currently, in addition to the existing industrial areas, there is also a large resident population housed predominantly in public housing and smaller pockets of private housing estates.

The 2008 Master Plan unveiled grand plans to re- brand Jurong into a more vibrant neighbourhood. Renamed as Jurong Lake District, this 360-hectare precinct will consist of a commercial hub focused on the Jurong East MRT interchange – appropriately named as the Jurong Gateway plus a synergistic connection to the leisure destination around the existing Jurong Lake.

The 70-hectare Jurong Gateway will be set in a unique lakeside environment, providing some 500,000 sq m of office stock and another 250,000 sq m of retail and entertainment space. This quantum is in fact more than two-and-a-half times the size of today’s Tampines regional centre. Complementing the Jurong Gateway is the International Business Park, as well as the research and educational institutions in the vicinity. Coupled with plans for 1,000 new private homes to be added around the MRT station, and up to 2,800 hotel rooms in the area, it is poised to be the biggest commercial hub outside the CBD.

The public, including property developers, has embraced the plans for this new district. A few months after the launch of the 2008 Master Plan, Frasers Centrepoint Homes launched Caspian – a 712-unit, 99-year leasehold condominium located close to Lakeside MRT station. This project, despite being launched in the midst of a global economic slowdown, was sold out within weeks of its launch.

Riding on this momentum, there was also strong interest from developers when another 99-year leasehold residential site adjacent to Lakeside MRT station was launched on the confirmed list in March this year. This 16,117.2 sq m site attracted a total of 14 bids with Keppel Land putting up the winning bid of $499 psf per plot ratio. This is double the land price that Frasers Centrepoint Homes paid for the Caspian site at $248 psf per plot ratio in December 2007.

In June 2010, the white site at Jurong Gateway Road was awarded to Lend Lease when it submitted the highest tender price for the site at $650 psf per plot ratio.

As a result of strong interest in Jurong over the past six months, the Ministry of National Development has revised upwards the development charge (DC) rates for the area. According to the URA’s DC map, the Jurong Gateway falls within Sector 112 while Lakeside falls within Sector 113. Based on the commercial use group, Sector 112 witnessed the highest growth among the other 118 sectors at 25 per cent, while Sector 113 was tagged with a growth of 7 per cent. On the non-landed residential use group, both Sectors 112 and 113 saw increases of 13 per cent and 17 per cent respectively.

In the residential use group, both Tampines and Jurong Gateway started off at a similar implied land value. Possibly through greater interest in the Tampines region since the late 90s, its implied land value has edged higher. Post 2003, the residential implied land value for Jurong Gateway witnessed a surge and now commands a notable premium over Tampines. More residential developments especially in the West Coast/Clementi areas is the main factor.

Interest for development land in the Jurong Gateway and Lakeside areas are likely to intensify over the next few years. Land prices in these areas are likely to face upward pressure resulting in a narrower gap between Lakeside and Tampines, and Jurong Gateway to command an even higher premium over Tampines eventually.

Over on the commercial use group, Tampines has been enjoying a premium over the other two sectors since the mid-90s. Recent land transactions however have reduced the premium that Tampines has over Jurong Gateway. It is probable that the implied land value in Jurong Gateway would eventually surpass that in Tampines.

Paya Lebar Central

Based on the 2008 Master Plan, the vision for Paya Lebar Central is to develop it into a lively, pedestrian-friendly commercial hub with a distinctive Malay cultural identity. A new public plaza next to Paya Lebar MRT will be developed as a focal point. There are about 12 hectares of land available for development, translating to some 294,000 sq m of office, and another 200,000 of hotel and retail, spaces. In addition, there will be more community spaces and a new and wider pedestrian mall that would enhance the area’s distinctive Malay heritage.

Listed under the government land sales reserve list, there is presently a commercial site available for tender that is located next to the Paya Lebar MRT interchange. This 1.42-hectare site can generate about 59,640 sq m of commercial gross floor area with further details to be released in December 2010.

Of all the new growth areas identified by the 2008 Master Plan, Paya Lebar Central seems to be the most inert in terms of activity so far. As compared to Sector 104 (Bishan sub-regional centre), the implied land values for Sector 101 (Paya Lebar Central) for both commercial and residential use groups still lag far behind.

Perhaps due to the proximity to good schools and established amenities in Bishan, Sector 104 (Bishan sub-regional centre) commands a much higher residential land premium over Paya Lebar Central. In commercial use group terms, the Bishan sub-regional centre again has had a sustained premium over Paya Lebar Central since 1996.

Looking ahead, as the development plans for Paya Lebar Central are focused mainly on commercial activities around the Paya Lebar MRT interchange, there will be greater pressure on the implied land value to rise to that of the Bishan sub-regional centre. However the same cannot be said for the residential implied land value.

Conclusion

Tampines regional and Bishan sub-regional centres are two living examples of the impact of the 1991 Concept Plan. These areas have not only established, but commanded a premium over other areas in terms of land values. If the planner’s vision is upheld and Singapore continues to enjoy sustained economic growth, more property investments in the suburban growth centres can be expected. Land values in places such as Jurong Lake District and Paya Lebar Central can but only move northwards.

Singapore is faced with a looming under-supply situation in the prime and mid-prime segments

THE residential property market roared back to life in the second half of 2009 with both transaction volume and prices surging upwards, following a year of relative inactivity due to the global financial crisis. Against this backdrop, buyers flooded the market again and developers were busy replenishing their land banks so as to capitalise on the growing demand. The recently announced measures to cool both the HDB resale and private housing sectors may change certain dynamics in the market for enbloc sites so it may be timely for a quick review.

Prime shortage looming?

As the market became more buoyant, transactions in prime district residential properties picked up. Buyers are attracted by their central location, ability to command better rental yields, investment appeal, and other reasons.

During the first half of 2010, prime residential properties accounted for nearly one-third of primary market sales. Interest in the prime districts has been picking up in the last couple of years – in 2008, 23 per cent of primary market sales were attributable to prime properties while in 2009, there was an increase to 25 per cent.

Year-to-date, developers have poured more than $2.5 billion into residential sites (excluding executive condominium or EC sites) offered under the Government Land Sales programme (GLS).

As suburban residential sites are likely to face more challenges from the new measures, we see a likely shift by developers toward collective sales.

Most of the GLS residential sites cater to mass suburban housing where the bulk of housing demand lies. It is certainly a sub-market which no housing developer can ignore. Furthermore, GLS sites are large, offering economies of scale in the entire investment chain for a developer, including site search, acquisition, planning, design, development, marketing, and sales.

While the GLS programme caters more to the suburban sector, demand for prime and mid-prime residential properties are generally met by sites offered within the private domain, including those under collective sales.

Year-to-date, developers have spent some $1.3 billion on private residential sites, with prime district sites accounting for 33 per cent of that value. Over the total amount invested in both GLS and private sites, it accounts for just 11 per cent. This seems to suggest an under-investment in prime district sites. The amount invested in mid- prime sites is also low, at 14 per cent of the total.

At this rate there would be a shortage of supply of prime and mid-prime residential properties. Barely 300 units will be generated by the prime sites transacted thus far while mid-prime sites would yield about 700 units.

In contrast, GLS residential sites would result in well over 7,000 suburban housing units being developed. It is noted that as at the second quarter of 2010, there are 10,997 units with pre-requisites for sale but not yet launched and 39 per cent of that supply is from the prime districts. However, that quantum is barely equivalent to demand in a good year and we need to address the needs of the market beyond that time horizon.

Fallout from new measures

We now consider the recent measures to cool the market in our review. The increased holding period for Sellers’ Stamp Duty (SSD), reduced loan limit of 70 per cent, and increased upfront cash of 10 per cent for buyers with one or more outstanding mortgages would deter speculators and short- term investors, and encourage greater financial prudence amongst buyers in general. This should result in some calming effect on the market.

The HDB measures, on the other hand, have been designed to cool the HDB resale market.

The higher income ceiling for Design, Build, and Sell Scheme (DBSS) flats, increased supply for executive condominiums and DBSS flats, longer minimum occupation period (MOP) of five years for resale flats, and ban on concurrent ownership of HDB resale flats and private housing during the MOP – these are expected to moderate HDB resale activity.

As HDB households ride on a buoyant resale market to upgrade into the suburban housing market, we believe this housing segment will feel the effects of the market moderation more than the upper market segments. The prime and mid-prime residential markets appear to be more insulated from lower end market risks and could be more resilient.

While the suburban housing market appears set to have more challenges, it does not mean that it is to be avoided by developers. At realistic price levels, buyers would surely bite and any housing developer would strive to maintain an adequate suburban land stock to realise such opportunities.

However, good investment is about balance and ability to manage exposure and risks. It is timely for housing developers to review their portfolios and to re-balance if necessary. We are faced with a looming under-supply situation in the prime and mid-prime segments while the suburban market is more amply supplied.

Collective sales trends

During the course of this year, residential collective sales activity has been gradually picking up with increasing interest from buyers. In Q1, $141 million worth of collective sales were done. The quantum rose to $505 million in Q2 and registered $586 million in Q3 to date.

The outlook is for this trend to continue for the rest of this year into 2011. As suburban residential sites are likely to face more challenges from the new measures, we see a likely shift by developers toward collective sales.

An additional trend is toward increased investment in collective sale sites in prime locations. Year-to-date, only three out of 20 successful collective sales have occurred in the prime districts, accounting for 31 per cent of total collective sales value. As developers realise the under-investment in prime as well as mid-prime sites and a potential shortage of supply from these locations, they are expected to focus more on these segments.

Demand for collective sale sites will be met by more than 80 sites awaiting sales launches. Nearly half of these are in prime districts and a good number are in mid-prime locations. The stage is set for a change in market play in collective sales – all that is needed is for the players to act.

THE rental scene in the HDB market is buzzing, with strong demand for flats that is likely to continue as Singapore’s economy powers ahead.

The number of flats approved for sub-letting by the Housing and Development Board (HDB) exceeded 14,000 in the first half of this year.

This is almost 94 per cent of the total for 2009. This year’s quarterly average of 7,000 transactions is almost double last year’s average of 3,750 units.

In particular, the number of rental transactions for three-room HDB flats has already exceeded last year’s total by 235 units or 4 per cent.

Though Q3 numbers from the HDB are not yet available, it is likely that rental transactions for all the other flat types would have surpassed last year’s total.

The surge in rental demand is not surprising, considering the country’s double-digit GDP growth and full employment.

As companies increase hiring and the two integrated resorts continue to create buzz, the HDB rental market should remain strong.

Tenants for HDB flats are typically Asian professionals, service industry staff, foreign students, and permanent residents (PRs).

Currently, three-room flats account for about 39 per cent of rental transactions; four-room – 31 per cent; five-room – 22 per cent; and executive flats – 7 per cent.

ERA’s transactions show that median rents across all flat types have increased by an average of 5 per cent in Q3.

Going forward, rental demand will continue to surge as Singapore’s economy powers ahead.

Also, PRs affected by HDB’s new policy of having to sell their properties in their home country when they buy a HDB flat could decide to rent for now. This will add to the rental demand for HDB flats.

We may soon see quarterly transactions come close to 8,000 units and this is likely to push rentals up again – possibly by 8-10 per cent over the next year.

SENTOSA Cove, Singapore’s first gated waterfront residential enclave located on the eastern shores of Sentosa island, is taking shape with the completion of some 920 upscale condominium units and 200 waterfront and hillside bungalows since its inception in 2004. In tandem with the buoyant home sales on the mainland and coupled with the opening of the integrated resorts (IRs), the luxury enclave of Sentosa Cove saw the return of buying interest on the back of an improving global economy.

There are now nine condominium and seven landed housing developments for sale. The most recent launches include City Developments’ 228-unit The Residences at W Singapore Sentosa Cove, and Ho Bee & IOI’s 151-unit Seascape, both of which saw good take-up.

Non-landed

Amid favourable market conditions, sales remain strong for non-landed residential homes in Sentosa Cove. There were 104 sales transactions registered from January to July 2010.

Despite falling short of the 130 sales transactions recorded for 2009, the sales value for the first seven months of 2010 has outperformed that of last year, with $541 million recorded thus far compared with $497.9 million in 2009.

With the release of new projects, the primary market enjoyed a 430 per cent increase in volume, albeit from a relatively low base in the previous year. In the secondary market, because only The Oceanfront@Sentosa Cove received Temporary Occupation Permit (TOP) in March this year, the sub-sale activity has turned relatively quiet with only 21 caveats, down from 101 in 2009, whilst resale activity has firmed up by 57.9 per cent from 19 in 2009 to 30 transactions.

The first seven months of this year have seen rising prices across the board. Fuelled by higher prices of new launches in the vicinity, the prices of projects that were launched before 2010 have shown an increase ranging from 2.2 per cent to 30.8 per cent, with some surpassing their previous peaks in 2007.

As a result, the average price of non-landed residential in Sentosa Cove has soared from $1,691 per sq ft in 2009 to $2,344 per sq ft in 2010, representing a 38.6 per cent increase.

Appreciation in capital values of non-landed homes has lent support to the investment activities in Sentosa Cove, especially the sub-sale transactions in those projects approaching TOP dates.

Caveat matches of 19 sub-sales from January to July show that 94.7 per cent, or 18 sub-sales, yielded a profit between $179,400 and $3.06 million, significantly higher than the 71.7 per cent for the whole of 2009.

In addition, the average gain per unit almost doubled from $600,025 in 2009 to $1.16 million in the first seven months of 2010. This was a result of increased percentage of sub-sales that yielded gains exceeding $1 million.

So far this year, the sub-sales of nine units in The Oceanfront@Sentosa Cove have earned profits from $1,005,970 to $3,056,700, accounting for 47.4 per cent of the total profitable sub-sales.

On the other hand, there were only seven out of the 67 profitable sub-sales that reaped a profit of more than $1 million in the preceding year.

Landed

Unlike Good Class Bungalows (GCBs) on the mainland, the landed housing segment in Sentosa Cove is unique as it offers an exclusive waterfront.

More importantly, the landed houses in Sentosa Cove appeal to a wider market as foreigners who do not have permanent residence status are allowed to purchase them.

According to the caveats lodged between January and July 2010, 39 landed houses in Sentosa Cove have been sold, only one less than the total recorded for the whole of 2009. The transaction value has surged by 20.5 per cent from $507.3 million in 2009 to $611.3 million in the first seven months of 2010, attributed to the 19 houses costing more than $15 million each that were transacted during this period. In stark contrast, there were only nine transactions above $15 million in the preceding years from 2005 to 2009.

Of these 39 sales, foreign buyers chalked up 19 transactions or 48.7 per cent, with Chinese investors being the most dominant, inking 12 transactions, or 63.2 per cent, of all foreign purchases in the reviewed period. The Chinese buyers have ranked top among the foreigners since 2009; overtaking the Indonesians.

The average unit price based on land area climbed from $1,568 per sq ft in 2009 to $1,892 per sq ft in 2010, up by 20.7 per cent. In terms of unit price, the most expensive home sold this year was a terrace house in The Villas@Sentosa Cove which was transacted at $8 million or $2,929 per sq ft in May.

Interestingly, this house was first bought in June 2007 from the developer for $4.6 million or $1,682 per sq ft, yielding the vendor a profit of $3.4 million.

Outlook

On the economic front, Singapore has probably not seen better days. The government has revised the GDP growth forecast for 2010 up to 15 per cent from its previous forecast of 7 to 9 per cent.

Despite this, the market is not absolutely immune from external downside factors. Market sentiment has been affected by the rising concerns over the uncertainty of US economic recovery and the eurozone debt crisis. Meanwhile, the government’s latest tightening measures, coupled with the ample supply from the government land sales programme, has cast a cloud over the property market.

Nevertheless, we expect that these cooling measures would have limited impact on the luxury developments in Sentosa Cove. The government’s measures are designed to curb speculation, especially in the mass-market and public housing re-sale segments.

Still, the sales activity in Sentosa Cove may soften in the near term as buyers adopt a wait-and-see approach to the new measures.

However, the broader fundamentals for the private residential market are still good, and driven by the low interest environment, and abundant liquidity from Asia’s booming wealth, Sentosa Cove would continue to attract both local and foreign buyers who take a mid to longer term view of the market.