Interest still cool in Grange Road properties

News that the Spring Grove condominium in Grange Road could undergo a $1.045 billion collective sale has put the spotlight on other residential blocks in the same street.

The high-end sector has been down in the dumps for months, so the prospect of a big payday for Spring Grove owners has raised eyebrows among property experts.

Grange Road, like many other prime city neighbourhoods, has come under the pressures of the additional buyer’s stamp duty and the risk of more cooling measures.

Some developers have found it challenging to move new units along the stretch.

The Twin Peaks project has released 70 of its 462 units, with sales of 68 as of February at a median price of $3,157 per sq ft.

The project, which is due for completion in 2015, comprises two 35-storey towers of one-, two- and three-bedroom apartments.

Some completed projects still have apartments for sale.

Only 18 units at The Lumos have found owners. The project started sales in 2007 and all 53 units are available for purchase.

The neighbouring Cliveden at Grange, which was finished in 2011, has sold about 80 per cent of its 110 units since its 2007 launch.

The surplus of new homes will increase with the launch of at least three new projects in the area – iLiv@Grange, Ferra and Opus at Grange.

Developers have yet to announce launch dates but it is estimated that the new projects could add just over 300 new homes to the neighbourhood.

Resale activity in Grange Road has also slowed, with decreases in both prices and transaction numbers.

Mr Ong Kah Seng, director of R’ST Research, said there were around 10 to 20 resales in the area per quarter in 2010 and 2011 but that fell to fewer than 10 transactions per quarter last year.

“In 2012, (resale) prices averaged a fall of less than 5 per cent. In 2011, prices were seen as generally stable, dipping by up to 3 per cent,” said Mr Ong.

Knight Frank data shows that last year, only 21 resale transactions were made for homes in the Grange Road neighbourhood. Prices averaged $2,094 psf.

Ms Alice Tan, senior manager of research and consultancy at Knight Frank, said rents for Grange Road properties of less than 3,000 sq ft averaged $7.70 psf per month for the first two months of this year.

That is a 9.3 per cent decline from last year’s monthly average of $8.49 psf per month.

Mr Ong pointed out that Grange Road apartments have seen sustained interest from tenants even as high-end leasing activity has slowed down significantly recently.

“In 2012, rents in the area have decreased by 5 per cent on average. But the more affordable, older apartments like Spring Grove have continued to see active leasing interest and stable rents throughout 2012.”

Analysts still predict it is not going to be all doom and gloom for the area in the near future. Ms Tan said: “Investors and home buyers are constantly on the lookout for value buys in prime districts. Therefore, private homes in this locality still hold potential for improvement in demand.”

Mr Ong agreed: “There are possibilities for a gradual recovery in prices and rents in the area underpinned by its exclusive location and global economic improvements in Western countries.”

(Source: The Straits Times)

 

Hot interest in Alexandra sparks talk of boom

THE popularity of retail units at Alexandra Central has pushed the neighbourhood into the limelight, with growing talk that it could become the new hotbed of commercial property investment.

Earlier this week, buyers thronged Alexandra Central’s showroom, snapping up almost all 116 shops, with some units commanding a staggering $8,000 per sq ft price tag.

Packed Sales Gallery in Alexandra Central on Preview day

Agents The Straits Times spoke to say a 161 sq ft unit at Alexandra Central could fetch $5,000 a month in rental, which translates to $31 psf a month.

This has sparked talk among shop owners and investors that commercial property in the area could be poised for rapid growth.

The mixed-use development is at the junction of Alexandra Road and Jalan Bukit Merah, and is next to Ikea and opposite Queensway Shopping Centre. Unique with a hotel (managed by Park Hotel Group) and retail mall, Alexandra Central is poised to be an upscale shopping area within the neighbourhood. Anchorpoint mall and a row of shops at the Alexis condominium are both nearby.

A unit at the Alexis was recently rented out for slightly above $10 psf per month for the 1,100 sq ft space but agents said buyers who purchase a unit could expect rents of up to $20 psf per month for a 400 sq ft unit.

Mr Steven Tan, managing director of OrangeTee, said prices in the vicinity have risen significantly in the last few years.

“For example, a ground-floor unit in Queensway Shopping Centre with a size of 376 sq ft was sold at $1.8 million which is $4,787 psf in March 2011.”

“The same unit was sold again in October 2012 at $2.39 million which is $6,353 psf. Hence the gross profit is about 32 per cent within 11/2 years.”

Data from SLP International also pointed to a rise in such sales with transactions limited mainly to Queensway Shopping Centre.

Last year, 13 strata-titled units were sold at the centre, a jump from the four units sold in 2009, with prices over the years averaging $2,770 to $4,040 psf.

Some analysts said this could be the result of higher demand for retail space in the neighbourhood to cater to the growing resident population.

But other analysts are convinced it stems largely from the swing in investor interest towards commercial property.

Mr Nicholas Mak, head of research at SLP International, believes it is the result of the stiffer measures put in place to limit the froth in residential property sales.

“Redhill as a neighbourhood has more commercial property potential because there is more available land for future developments.

“While there might be some trickle-down effect from Redhill, Queenstown and Alexandra are fairly built up and the MRT station isn’t that close by. So any retail spending will have to come from the existing residents.”

But OrangeTee’s Mr Tan said the limited supply of retail shops could lead to higher rents and sale prices in the future.

While that may be good news for investors, it is a growing concern for shopkeepers.

Mr Ken Lim, 51, who runs a 27-year-old shoe retail business at Queensway Shopping Centre, has seen rents in the building double in the last one to two years.

“Some of the new owners have been convinced by agents that they can charge higher rents. But what does this mean for shoppers? The higher the rents, the more (retailers) will have to charge. It might mean people will start shopping elsewhere.”

(Source: The Straits Times)

 

Private property prices set to keep rising in 2013: Report

SHARPLY rising land costs, strong developer balance sheets and low interest rates should all combine to make 2013 another halcyon year for the property industry, an expert said.

Overall private property prices set to keep rising in 2013 on the back of rising land costs, increasing by up to 10 per cent next year, Savills Singapore research head Alan Cheong said in a report released yesterday.

Non-landed mass market homes are expected to see the steepest rise of 10 to 15 per cent, while the luxury market may also enjoy a 3 to 5 per cent price gain, surpassing its previous peak in 2007.

This is because astute buyers will continue to seek good buys in the luxury segment, as prices here are still lower than in Hong Kong, Mr Cheong added.

The property market has enjoyed a banner year, with a record-breaking 19,792 new homes sold in the first 10 months of the year, surpassing the previous high of 16,292 for the whole of 2010.

Executive condominiums (ECs) have also enjoyed a spectacular run, with more than 4,000 units expected to be sold by the end of the year – another record.

Only 3,935 EC units were sold in 2010 and last year combined.

“Due to a significant run-up in private condo prices, ECs will remain an attractive long-term investment asset, with demand probably surpassing that of 2012,” the report noted.

But tiny shoebox homes of 500 sq ft or less seem to have fallen out of favour with home buyers.

The proportion of shoebox homes sold, out of all new condo sales, has fallen from a three-year peak of 21 per cent in the third quarter of last year to a low of just 7 per cent in the fourth quarter of this year.

This is also well down from the three-year average of 14 per cent, Savills’ noted.

“The downtrend could be due to fewer shoebox units being built. There has also been an increase in demand for larger-sized units in tandem with the growth in wealth here,” the report said.

But the overall property market remains resilient and now has “too strong a momentum to stop”, Mr Cheong added.

Quantitative easing in the United States should see liquidity flowing into Asian economies like Singapore in search of a safe haven and currency appreciation.

Coupled with rock-bottom interest rates that are likely to remain low next year, some fresh external demand could be anticipated, he said.

However, this may be offset by local buying fatigue from the many new launches over the past years and increasing home completions.

Barring further property measures, total primary sales may hover between 16,000 and 18,000 units next year, less than this year’s likely record of 23,000 to 24,000 units, the report noted.