How Singapore Housing Market is going on.
Well-positioned projects have been taken up
In March, The 99 year leasehold EC Wandervale by Sim Lian Holdings that consists of 534 units with a varied choice of 3 Bedroom, 3 Bedroom Premium and 4 Bedroom saw a strong sales with the transaction of almost 300 units out of the total within the first month of launch.
Another EC by Sim Lian- Treasure Crest is expected to make a greater performance through the feedback from the ground. EC projects is thought to get the positive attention of market beacuse of their fair price and the well-cater to local demand.
Foreign developer get more interest in sites
Chinese developer Qingjian Realty achieved the site of Shunfu Ville for redevelopment at a cost of S$638 million marking the first large en-bloc deal in nine years. Within two weeks, Qingjian again submitted the highest bid of S$301 million for a mixed residential and commercial use site in Bukit Batok. This works out to a total investment of almost S$940 million in land purchase alone.
Meanwhile, the site at 9 Cuscaden Road was achieved by casino tycoon Stanley Ho at a mind-boggling price of S$145 million that will translate to about S$2,145 a sqf per plot ratio, including the development charge, for hotel redevelopment.
Domestic developers too pessimistic about Singapore market?
Above deals suggest that foreign developers are more positive about the Singapore market than the local ones. Just to get a thought, is it that we are too pessimistic about the growth of our housing market while our Island is regared as a key financial hub in Asia, one of the best places to do business as well as one of the most liveable cities in the world?
Foreigners tends to buy more home in the past up-cycles
From 1995 till now, the average of the proportion of foreign buyers, of private homes â€” both new and resale has been about 9.7 per cent of total transactions a quarter. Then, the proportion was consistently above the long-term average in the last up-cycle from the third quarter of 2009 to the third quarter of 2013. Similarly, the proportion of 11.8 per cent a quarter saw during the previous up-cycle from the third quarter of 2004 to the second quarter of 2008.
However, he proportion of foreign buyers has averaged about 8.7 per cent, below the historical average of 9.7 per cent when the non-landed Private Residential Property Price Index (PRPPI) turned negative in 2013. In the first quarter of 2016, the proportion stands at 9 per cent, but since the second quarter of 2015 that remarks the return of sustained foreign buying interest will help the private residential property market stage a rebound?
Foreigner developers tends to take more greater risk
In November 2009, a site in Upper Thomson Rd was achieved by Hong Kongâ€™s Cheung Kong Group for S$251 million or S$530 psf per gross floor area. It was 22 per cent higher than the second highest bid and 86 per cent higher than the lowest bid that is regarded as a risk in the time optimistic to an untested area. And surprisingly, its launch in July 2011 hit the market as an odd and showed the right astute purchase of Cheung Kong with the average price of S$1,300 psf.
Are foreign developers again seeing something that we are missing?
Room to review in negative outlook
According to macro-trends, the stock market needs to reach a trough before property prices can hit a trough, historically between one and four quarters later. There are diferent reasons for home-buying decision of foreigners and foreign developers. It is thought that Singapore is a safe haven to protect their wealth, relatively lower cost of capital, clearer legislation or might be potential investment for their children's future.
Adapted from: TODAY, 3 June 2016