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Posted by on in Trends

The price gaps for secondary private residential market in Core Central Region (CCR) versus the Rest of Central Region (RCR) and Outside Central Region (OCR) have been narrowing since the market softened, according to a report by HSR.

The price gap between CCR and RCR median prices reached a high of $610 psf in Q4 2011. In Q2 2014, this gap fell to $461 psf. This translates to a 24 percent decline.

Similarly, between CCR and OCR median prices, the price gap has fallen from a high of $870 psf to $712 psf for the same period, marking a decline of 18 percent.

One possible reason is the high correlation between the percentage of non-Singaporean buyers and the price gaps between CCR vs. RCR/OCR. "In other words, the higher the percentage of non-Singaporean buyers, the higher the gap is," the report said.

Since 2007, non-Singaporean buyers make up on average about 47 percent of yearly transactions in the CCR, 34 percent in RCR and 31 percent in OCR.

At the peak of the gap in Q4 2011, non-Singaporeans represented 61 percent of the total secondary transactions for non-landed properties in CCR compared to 35 percent in 1Q 2014.

During the last Global Financial Crisis, the price gap between CCR and RCR fell from a peak of $643 psf in Q4 2007 to $367 psf in Q1 2009. HSR believes this gap will continue to shrink by another $50 to $100 psf as property prices continue to fall.

Credits: Property Guru

Tagged in: H1 2014
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Sales in the CCR surged by 91% in July.

Developers of high-end projects are discovering that desperate times call for desperate measures. After grappling with unsold stock for over a year, some domestic developers are beginning to employ drastic price cuts to move their luxury inventory.

According to a report by Barclays, sales in the upscale Core Central Region (CCR) surged by 91% in July after developers cut prices by as much as 20%.

"In particular, The Vermont on Cairnhill managed to clear its remaining 37 units after cutting prices by some 12% from cS$2,400psf to S$2,113psf. Hallmark Residences, off Bukit Timah Road, sold 3 units in July and sold 63% of its 75 units after bringing down selling prices by 14-20% from its initial launch price of cS$2,200psf in June 2013," noted the report.

But sales at luxury developments launched in June, namely The Crest and Trilive, slowed even further in July. Barclays noted that total sales in these projects are only at 8% and 10% of their total available units.

Here's more from Barclays:

After a dismal June, July's developer sales stayed flat m/m and y/y at 484 units, as compared to 482 units each in June 2014 and July 2013.

This brought year-to-July sales to 4,893 units, down 53% y/y from 10,432 units in 7M13. Take-up at the four new launches was subdued at best, especially for those that held prices at over S$1,900psf.

Sales from previous months' launches continued to slow significantly, while one high-end project sold its remaining completed inventory after cutting prices by c12%. We expect this weak trend to continue beyond August, as the traditionally quiet Hungry Ghost Festival month kicked in from 27 July.

Credits: Singapore Business Review

Tagged in: Foreign Developers
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With Singapore property prices on the slide amid stringent cooling measures, Singaporeans are looking elsewhere to invest their hard earned money.

Of the investment opportunities that abound, top of the list is Australia, with Melbourne CBD seen as some of the most popular.

Sydney, Brisbane, and Gold Coast are close on its heels - with off plan property doing a brisk trade despite the flat market - with Singaporeans looking for safe and bankable investments.

Another hugely popular port of call is UK property - with student accommodation and more affordable areas like the north of England hitting a sweet spot.

Other European countries, such as Spain and Portugal, are also fairing well, but the 'Golden Visa' doesn't seem to be of great interest to first world Singaporeans.

Old favourites in Malaysia, Thailand, and Indonesia still remain popular, but new property taxes in Malaysia and a higher minimum purchase price have put off some buyers.

Thailand's military takeover has dampened market spirit and buyers are concerned by perceived uncertainty in the judicial system - laws have a tendency to inexplicably change when the arm is in charge there.

With presidential hopeful Joko "Jokowi" Widodo securing victory in the recent election, Indonesia is now looking like excellent investment opportunity and there are now dozens of new launches now coming on stream in Jakarta, Bali, and Lombok.

According to recent agency data, the USA is currently gaining in popularity, with California leading the pack. Property prices are on the rise and it now looks like a good time to investigate the market.

There are several Michigan and North Dakota schemes that are worth looking into as the return on investment is good at typically more than 8% per annum.

Many Singaporeans have been put off Brazil investments and fingers are being pointed at the uncertainties over EcoHouse Group for souring the market.

There are many seriously good investments out there - however, a solid bit of advice is that if it sounds too good to be true, it probably is.

Happy hunting!

Credits: Singapore Business Review

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Posted by on in Trends

It will give PropNex greater access to local and overseas projects.

PropNex Realty, the flagship subsidiary of P&N Holdings, today revealed that it has entered into a partnership with international property consultancy JLL. Under this partnership, JLL has acquired 20 per cent of PropNex International, another subsidiary of P&N Holdings and the project marketing arm of PropNex Realty.

PropNex International was formed in 2007 and has grown to dominate the Singapore new private home sales, currently marketing 40 local and International new projects in the luxury, mass market and executive condominium segments. PropNex Realty will remain 100 per cent owned by P&N Holdings.

"With this new partnership, PropNex salespersons will have greater opportunities with more local and overseas projects. They can also expect to market JLL's clients seeking to lease their properties or investing in the commercial sector with the sale of strata-titled offices, industrial and retail units," PropNex stated in a press release.

Credits: Singapore Business Review

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Trends solidify this not-so-sunny forecast.

With interim results coming soon for China property, it is believed that they will be generally lackluster, due to various trends that have led to the forecast.

According to a research note from Maybank Kim Eng, these trends are: higher gearing HoH due to slower-than-expected cash collection ratio, and most developers maintaining contract sales targets for 2014 w/ a few exceptions (potentially Hopson, Sino-Ocean).

Further, another trend was also noted in the form of lower margin guidance for some that have not guided down.

The report said that it must be recalled that Agile, CG and Shimao already guided lower GPMs before blackout.

Here's more from Maybank Kim Eng:

Est 5-8% YoY profit growth for 1H: For the sector, we expect 5-8% YoY growth in underlying profit for 1H14, with COLI, KWG, and Shimao to post highest YoY core earnings growth.

So far, a few developers including COGO (81 HK, NR) and Greenland (337 HK, NR) announced negative profit warnings.

We believe the interim earnings represent more backward looking sales and might not represent full year's picture if there are some outlier projects being delivered.

In our view, future margin outlook and the cashflow situations are key.

A good number of China developers under our coverage would have to guide more negative operating cashflow for this year and likely to slow down either new landbanking or new starts GFA to maintain healthy cashflows.

Margin-wise, we see there could be some downside risks to consensus for Yuexiu Prop and Agile.

Our 2014F earnings for Sunac, Franshion, and Agile are 5% or more above Bloomberg consensus while 8% lower for Yuexiu Prop and 7% lower for Sino-Ocean.

Over 1M, property stocks under our coverage rose an average 21%.

There should be better stock entry points given some lackluster results pending in August.

Credits: Singapore Business Review

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