Rise in transactions of landed homes

By Michael Lim / The Edge Property | November 12, 2015 10:00 AM SGT
The demand for landed homes in prime residential Districts 9, 10 and 11 is on the rise. A check on the latest URA Realis caveats lodged as at Oct 13 shows that 53 landed homes (with land areas ranging from 3,100 to 10,760 sq ft) were transacted in the first nine months of 2015. The figure is equivalent to the number of homes sold in 2013, and has even surpassed the number of transactions made last year.
Within the prime Central neighbourhoods of Districts 9, 10, 11 and 21 (Upper Bukit Timah, King Albert Park, Old Holland Road, Binjai Park and Yarwood Avenue), detached homes contributed to 40% of the overall transaction volume, according to Realstar Premier’s analysis. Semi-detached homes made up 37% of all transactions in the area, followed by terraced houses (23%).
“The rise in demand could be partly owing to the increase in the number of new or redeveloped units that are being put up for sale,” says William Wong, managing director of Realstar Premier. In recent years, many boutique developers and even construction companies have embarked on redevelopment of landed homes for sale.
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RealStar Premier is currently marketing 168 brand new detached, semi-detached and terraced houses worth close to $1.28 billion for sale. The houses are mainly developed by boutique developers.
What’s on the market? An example of a boutique developer is Alteo Developments, helmed by Singaporean businessman Alan Teo. Alteo Developments has redeveloped three properties to date, two of which are detached houses in the Mount Sinai area and a pair of semi-detached houses on Gilstead Road.
The detached house in Mount Sinai Road developed by Alteo was put up for sale last weekend (Oct 10 to 11) and is believed to have been sold. The newly completed 2½-storey unit contains five en suite bedrooms with a built-up area of 10,000 sq ft and comes with a swimming pool. It sits on a freehold land area of 4,900 sq ft. The house was listed at a price tag of $10.8 million ($2,200 psf).
A 5+1-bedroom, 2½-storey home with a built-up area of 10,000 sq ft developed by Alteo Developments. Asking price: $10.8 million
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Alteo Developments also purchased an old semi-detached house along Jalan Jelita which sits on a 3,821 sq ft freehold site in 2013 for $6.1 million. The property was redeveloped into a brand-new double-storey detached house which was sold last month for $7.55 million ($1,976 psf), according to caveats lodged.
Another boutique developer who has de veloped a series of seven new detached houses on Jalan Bahasa in prime District 10 is AN Developments, which is owned by an oldrich family that has been investing in Good Class Bungalows, particularly in the prestigious Queen Astrid Park neighbourhood, for decades. The seven houses were designed by acclaimed archi tects of private luxury homes in Singapore and Sentosa Cove, among them K2LD Architects, Guz Wilkinson, Aamer Architects and Kian Chong of TAKE Architects.
Two of the houses, No 60 and No 66 Jalan Bahasa, by AN Developments, are now on the market. Both were designed by Aamer Architects and are mirror images of each other. The No 60 property has a built-up area of 6,167 sq ft and sits on a land area of 5,508 sq ft. It has four en suite bedrooms, a master suite, a study and, in addition to the living and dining room, three family rooms. The house also comes with a 13.8m lap pool. Newly completed, the house is on the market with a price tag of $13.7 million ($2,487 psf).
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The No 66 house sits on a freehold site of 5,939 sq ft and has a built-up area of 6,559 sq ft. It has the same configuration and specifications as the No 60 unit and is only available for lease at $24,000 a month.
Just around the corner of Jalan Bahasa sit two newly redeveloped detached houses on Kheam Hock Road. Both houses were developed by Hwa Seng Investment, a subsidiary of civil engineering and construction company Hwa Seng Builder.
Hwa Seng is no stranger to property development, having developed the 46-unit boutique condo The Urbanite on Hertford Road, off Keng Lee Road. It is one of the consortium partners involved in the development of Heron Bay, a 394-unit executive condo in Upper Serangoon View, as well as two semi-detached houses on Mackerrow Road within the Braddell Heights area and another pair of semi-detached houses in Jalan Selanting, off Jalan Jurong Kechil, in the Upper Bukit Timah area.
The detached houses on Kheam Hock Road are a redevelopment of an old detached house which sat on a freehold land area of 11,370 sq ft. Hwa Seng purchased the site in May 2013 for $17.6 million, according to a caveat lodged with URA Realis.
Hwa Seng then tore the house down and built two brand new houses, each with a built-up area of 7,100 sq ft sitting on 5,683 sq ft of land. Each 2½-storey house comes with a basement car park for six cars, five bedrooms and an infinity pool. The asking price for each house is said to be $13.5 million.
ABSD deadline looms Another reason for the increase in transactions of new landed homes by these boutique developers is they need to sell the properties within a certain time frame, says Realstar’s Wong.
Under the guidelines set by the Inland Revenue Authority of Singapore in January 2013, developers must complete the development of land with four or fewer residential units within three years from the date of the contract or agreement to purchase the site. They also have to sell the units within three years and one month of the land transaction, failing which they will be subject to additional buyer’s stamp duty (ABSD), together with interest at 5% per annum.
However, Wong says he is starting to see developers returning to pick up old landed properties with a 999-year leasehold or freehold tenure and redevelopment potential. “They are buying with the view that the market will pick up again in two years, by which [time] their new developments will be ready for sale,” he adds.
According to Alan Cheong, head of research for Savills Singapore, prices of landed homes in prime districts 9, 10 and 11 have come off 10% to 15% from their peak in 2013. “Many of the rich feel there is limited downside from the current price levels and that could explain why we are seeing an increase in the number of landed homes being snapped up,” he says.
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This article appeared in the City & Country of Issue 699 (Oct 19, 2015) of The Edge Singapore.