News Highlights Monday 7 July 2008

Developers ponder tricky math before new launches
The current buying wave at recent launches got industry players preparing for possible launches. Many factors have to be weighed when deciding to launch a project - pricing, location, the depth of demand in the particular neighbourhood, projects launched in the area, and the buyer profile in earlier projects. The ability to price projects attractively - 7-25% lower than market expectations a year ago - has been a critical factor in drawing buyers at recent launches. An increasingly important factor is the prices at which earlier projects in the area had been sold in the past couple of years. Some buyers in earlier projects may unload their units at prices below what the developer of the latest project in the area is asking.

- The Business Times, P2


Property yield spreads widen but investors wary
According to DTZ, the yield spread over the local 10-year bond rate in Singapore increased by about 1% in Q1 this year on a yoy basis to just under 4% - higher than that in China and Japan, which both have yield spreads of under 3%. The high yield spread implies growth potential and profitability in the real estate investment market. DTZ says that rentals for prime office space in Raffles Place grew 1.1% qoq to $19 psf per month in Q2 this year. In the Shenton Way/Robinson Road/Cecil Street area, average rentals in Q2 increased 2.6% qoq to $11.80 psf per month. In the HarbourFront area it's up 5.3% qoq to $10 psf per month. Rentals in Marina Centre and Orchard Road were flat at $15.50 and $13.50 psf per month respectively. DTZ believes that the outlook for Asia Pacific is relatively optimistic, supported by the occupier market and improving investment access.

- The Business Times, P2



Scouting for resale home bargains as prices weaken
Fewer completed homes have been sold in the resale market so far this year than in the previous six months. To date, around 4,000 resale transactions have been recorded, says CBRE. In contrast, more than 20,000 resale homes (excluding collective sales) changed hands last year, a record year for such deals. CBRE also said that the current downward adjustment of home prices is seen only in certain projects and locations but it may become broad-based if the subdued sentiment persists and sales volume remains low. The most resale deals were done in districts 10, 15, 16, 19 and 23, with district 15 seeing 2,200 resale transactions. District 19 chalked up the highest proportion of Singapore buyers.

- The Sunday Times, P25, July 6



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