Buoyant property launches defy poor economy

[800 units sold in 2 weeks]

Buoyant property launches defy poor economy

New developments Caspian and Alexis report brisk sales, add buzz to market

By ARTHUR SIM


(SINGAPORE) Frasers Centrepoint Ltd (FCL) has delivered much needed positive news by reporting that its 712-unit Caspian condominium near Jurong Lake is now 65 per cent sold with 460 units snapped up to date.


Crowd puller: Alexis, a freehold development marketed by Huttons Asia at around $1,000 psf, is a 'unique product' with small units, says PropNex CEO Mohamed Ismail -- ARTHUR LEE

Over at Alexandra, the 293-unit Alexis @ Alexandra by joint venture partners Yi Kai Group and Fission Group is said to be fully sold.

Both developments were launched this month and together, total sales of 753 units have already topped new developer sales for the whole quarter of Q1 2008.

The demand for these two developments have taken many by surprise.

Mohamed Ismail, chief executive of PropNex, which is also the marketing agent for the 99-year leasehold Caspian, said that the sales target had initially been only 250 units for its first phase.

However, after these were sold out quickly at an average price of $580 psf, more units were released at the higher price of $600 psf.

It is understood that FCL will continue selling units as long as there are buyers and that it is comfortable with the pace of sales.

Giving his take on the Caspian's success, Mr Ismail said: 'The strategy in a down market is to look at the size of the units, reach out to buyers in the same area, and keep prices low.'

Alexis, a freehold development marketed by Huttons Asia was more expensive at around $1,000 psf. However, Mr Ismail noted that Alexis is a 'unique product' with small units. He added: 'It doesn't really matter what the per square foot price is these days. If the quantum is below $1 million, there will be many takers.'

While these sales figures are encouraging, Cushman and Wakefield managing director Donald Han said that the demand could be very 'project specific' with pent-up demand quickly satisfied.

A case in point could be City Developments Ltd's (CDL) 724-unit Livia condominium project in Pasir Ris. Livia was launched in July last year and 338 units have been sold as at end December at an average price of $650 psf. Over the weekend, CDL launched 30 units at an average of $620 per sq ft but the atmosphere at the showflat is said to be relatively subdued.

Still, the launch of Caspian and Alexis has added some buzz to an otherwise quiet market.

Some developers have noted that there are buyers waiting to move.

And Teo Hong Lim, chief executive of Roxy-Pacific, the parent company of Roxy Homes, has noticed that the sale of a few units can trigger a rash of buying because those waiting on the sidelines do not want to 'miss the boat'.

Mr Teo says that Roxy Homes sees about 70-100 visitors at its showflats a day.

East Coast Properties managing director Alvin Ng says he has also noticed an increase in visitors at its showflats with sales also picking up. Asked what is driving this in light of the poor economy, Mr Ng said: 'It's really anyone's guess.'
     


New developments Caspian and Alexis report brisk sales, add buzz to market

By ARTHUR SIM


(SINGAPORE) Frasers Centrepoint Ltd (FCL) has delivered much needed positive news by reporting that its 712-unit Caspian condominium near Jurong Lake is now 65 per cent sold with 460 units snapped up to date.


Crowd puller: Alexis, a freehold development marketed by Huttons Asia at around $1,000 psf, is a 'unique product' with small units, says PropNex CEO Mohamed Ismail -- ARTHUR LEE

Over at Alexandra, the 293-unit Alexis @ Alexandra by joint venture partners Yi Kai Group and Fission Group is said to be fully sold.

Both developments were launched this month and together, total sales of 753 units have already topped new developer sales for the whole quarter of Q1 2008.

The demand for these two developments have taken many by surprise.

Mohamed Ismail, chief executive of PropNex, which is also the marketing agent for the 99-year leasehold Caspian, said that the sales target had initially been only 250 units for its first phase.

However, after these were sold out quickly at an average price of $580 psf, more units were released at the higher price of $600 psf.

It is understood that FCL will continue selling units as long as there are buyers and that it is comfortable with the pace of sales.

Giving his take on the Caspian's success, Mr Ismail said: 'The strategy in a down market is to look at the size of the units, reach out to buyers in the same area, and keep prices low.'

Alexis, a freehold development marketed by Huttons Asia was more expensive at around $1,000 psf. However, Mr Ismail noted that Alexis is a 'unique product' with small units. He added: 'It doesn't really matter what the per square foot price is these days. If the quantum is below $1 million, there will be many takers.'

While these sales figures are encouraging, Cushman and Wakefield managing director Donald Han said that the demand could be very 'project specific' with pent-up demand quickly satisfied.

A case in point could be City Developments Ltd's (CDL) 724-unit Livia condominium project in Pasir Ris. Livia was launched in July last year and 338 units have been sold as at end December at an average price of $650 psf. Over the weekend, CDL launched 30 units at an average of $620 per sq ft but the atmosphere at the showflat is said to be relatively subdued.

Still, the launch of Caspian and Alexis has added some buzz to an otherwise quiet market.

Some developers have noted that there are buyers waiting to move.

And Teo Hong Lim, chief executive of Roxy-Pacific, the parent company of Roxy Homes, has noticed that the sale of a few units can trigger a rash of buying because those waiting on the sidelines do not want to 'miss the boat'.

Mr Teo says that Roxy Homes sees about 70-100 visitors at its showflats a day.

East Coast Properties managing director Alvin Ng says he has also noticed an increase in visitors at its showflats with sales also picking up. Asked what is driving this in light of the poor economy, Mr Ng said: 'It's really anyone's guess.'
     

[Ang Mo PR]

This article should be renamed: "Buoyant property launches defy common sense"

I wonder how many of these units did this Arthur Sim guy buy for himself.

[Only God knows]

This article should be renamed: "Buoyant property launches defy common sense"

I wonder how many of these units did this Arthur Sim guy buy for himself.

Who had the common sense will only be determined later.

Maybe Ang Mo PR may end up chasing prices in 12 months only to buy at 20% higher than today's prices. Only God knows.

[natural]

It's natural to see this type of behavior in any market.  There are bound to be some good news in the midst of all of the bad news.  Unfortunately, this doesn't mean the market has turned by any means.

[to only god knows]

This article should be renamed: "Buoyant property launches defy common sense"

I wonder how many of these units did this Arthur Sim guy buy for himself.

Who had the common sense will only be determined later.

Maybe Ang Mo PR may end up chasing prices in 12 months only to buy at 20% higher than today's prices. Only God knows.

There are many things only God knows for absolute certain, significant likelihood is rather different.

Think about it, Singapore property has no positive drivers:

It went up massively and was due a correction irrespective of financial crisis.  Economy is now in worse shape than before the rise.

Population is expected to fall 5%.  If you believe the locals on here many will be expensive expats being kicked out (I'm not necessarily agreeing with that), hence the spending power goes down more than 5%.

Vast majority of new expats (small anyway) do not now get housing paid for, downward pressure on rents.

There is significant supply coming, some may get held back but it is still there and everyone knows it.

Banks are much more cautious in lending.

SGD is relatively strong against USD & EUR, long term historic highs against the likes of GBP, AUD.  Singapore is no longer a "cheap location", no one is deploying here anymore.

None of it looks good.

[Ang Mo PR]

Who had the common sense will only be determined later.

Maybe Ang Mo PR may end up chasing prices in 12 months only to buy at 20% higher than today's prices. Only God knows.

You must be the same guy who posted this pearl of wisdom in another thread: "If you know what the future holds and how much prices will really fall and when they will start rising, then you must be GOD."

I don't pretend I know how much the price will fall, or when it will come up again. What I do know, on the other hand, is how to read a historical price chart like this one:

http://www.ura.gov.sg/pr/graphics/2008/pr08-98a.pdf

Which is telling me that prices are still near historical high, and pretty much all the drivers that have pushed the prices to these levels have now disappeared (see PP's post, which is a good summary).

Or even more interesting, this chart,which correlates the URA price index to the STI, with a couple of quarters lag.

http://www.salary.sg/wp-content/uploads/2008/10/property-index-against-sti-oct-08.GIF

The blue line is the URA price index, the pink is the STI.

Now, I don't pretend to know how much the prices will come off. 70% might sound excessive, but by historical standard, 40%-50% is very plausible. But as to know how the market is oriented in the foreseable future, no need to be God...

[Vulcanl]

Ang Mo PR,

You're starting to sound an awful lot like SGD Bear.  Be careful about making careless statements or you will be called out on it.

Other than your arrogant expat condescension, what facts do you have to present that back up your negative outlook on the SG private property market?

What you have presented so far is insufficient given the paradigm shift we are living through (Asia decoupling).  Past data will not help us now.

Where are your HERE and NOW facts and data?

[SGD Bear]

how dare you show your face here?!  let alone criticize someone else's data/post?  I find that incredibly hilarious given the fact that when it comes to analyzing data and deduce conclusions, you're are as useless as a pair of t*ts on a nun...

"Paradigm shift" = Donkey losing his shirt in Singaporean property.

[VulcanASier]

Dude I think donkeys will be insulted by the comparison. Let Vulcan and the other breathless bull guy fulfill their fantasies by going for broke and buying a few more units at 2007 prices. Nothing stopping them. Mr Market will give them their well deserved comeuppance.

Donkey, how dare you show your face here?!  let alone criticize someone else's data/post?  I find that incredibly hilarious given the fact that when it comes to analyzing data and deduce conclusions, you're are as useless as a pair of t*ts on a nun...

"Paradigm shift" = Donkey losing his shirt in Singaporean property.

[eyes wide shut]

Ang Mo PR,

You're starting to sound an awful lot like SGD Bear.  Be careful about making careless statements or you will be called out on it.

Other than your arrogant expat condescension, what facts do you have to present that back up your negative outlook on the SG private property market?

What you have presented so far is insufficient given the paradigm shift we are living through (Asia decoupling).  Past data will not help us now.

Where are your HERE and NOW facts and data?

Ok, the URA vs STI is rather factual.  How about the points raised a few posts back, there were several, some a bit of conjecture (nowhere near the amount you come up with) but most based in fact.

Where are your facts.  Oh, I know, foreign reserves and that is it.  You dare to call someone out on this, you are a joke.

[Ang Mo PR]

Ang Mo PR,

You're starting to sound an awful lot like SGD Bear.  Be careful about making careless statements or you will be called out on it.

Other than your arrogant expat condescension, what facts do you have to present that back up your negative outlook on the SG private property market?

What you have presented so far is insufficient given the paradigm shift we are living through (Asia decoupling).  Past data will not help us now.

Where are your HERE and NOW facts and data?

Being called out on my statements would be the sincerest form of flattery. Please continue.

Otherwise, I find it extremely rich to be called out on facts by a guy who insists the property prices will be sustained short term by foreigners flocking in Singapore in search for jobs because the prospects here are better than elsewhere. Ignoring the fact that, if a company doesn't get him an Employment Pass BEFORE he comes, he can't do squat: not entitled to work there, to open a bank account, to rent, to get a loan etc. That is just crass ignorance.

Historical data might not be an accurate way of predicting the future, but at least they are rooted in hard data, which is always better than hazy theories backed by nothing.

You fancy yourself as some sort of intellectual because, after much training, you have learnt the copy and paste functions in Windows, and use it relentlessly to promote the same garbage theory. Wow, you even use the expression "paradigm shift" now, that's impressive. I'm sure it sounds great in dinner conversations when you start raving once more about how things are going to be honky dory again in Asia 6 months from now.

As for SGD Bear or Kubes, I do not necessarily agree with all their views, or the tone they sometimes employ, but at least they present a structured reasoning backed by actual data. Something you are clearly incapable of.

So get lost.

Or, if you prefer the Singaporean version: go fly kite.

[koi]

Ok the bears think that the property market may go down another 40 to 50%. How about shares of Sing. property counters? Many short sellers of Capitaland have suffered heavy losses during the last few trading sessions.

[OliveRoad]

Detached House, 15,055 sq ft. Done at 452 psf, jan 2009. Deal $6.8 million. down down down

[OyeVulcan]

Dude, since you have access to the internet, go to bloomberg and read the article about Japan shrinking at an annualized 12.7% - don't tell me Japan is not a part of Asia, or Korea is not a part of Asia, or even Taiwan is not a part of Asia.

The latest economic stats of these countries show how badly fcuked they are, and in a perverse way, the GDP declines are "leveraged" as in multiple times that of the US GDP's decline. Decoupling my left foot.

[to koi]

How far is capitaland off its peak.  How much off even compared to sti, a few days does not reverse this.