CNA : S'pore, HK property investors expect portfolio value to increase

S'pore, HK property investors expect portfolio value to increase
By Tan Hui Leng, Channel NewsAsia | Posted: 03 December 2009 2103 hrs





City skyscrapers in Singapore. (file pic)


SINGAPORE: Singapore investors are not alone in their love for property. Those in Hong Kong have also allocated 25 per cent of their portfolios to property, according to a survey of high net worth individuals conducted by Barclays Wealth.

In fact, both groups expect to allocate a greater part of their portfolios to property over the next two years by about 3 percentage points.

They cited potential yield and capital appreciation as the top two advantages of residential property investment.

Barclays Wealth said on Thursday that it expects investor demand for property to stay relatively strong with economic recovery and the loosening of liquidity. But it noted that diversification is essential to any investment portfolio.

Manpreet Gill, Asia strategist, Barclays Wealth, said: "At the end of the day, 25 per cent concentration for a Singaporean respondent is a fairly high part of the portfolio to invest in one asset class – one which, depending on the specific instance, could be potentially illiquid. That's a higher number than what we would be recommending.

"At this point in time, we think it makes sense to invest in risky assets, which will include property, but also other asset classes like equities. We think diversification is a very important part of what clients and investors should be looking at today. That's one of the important findings of our survey."

Barclays also noted that property as an asset class has typically not delivered high long-term returns.

In Singapore, Barclays expects upward price movements in the mid- to higher-end segments of the market, where property prices have taken a hit because of the global credit crunch.

The survey was conducted in August and September, polling over 2,000 respondents from across the world, including the US, UK, Spain and India.

TODAY Online : First workers move into Serangoon Gardens dorm

First workers move into Serangoon Gardens dorm

05:55 AM Dec 04, 2009

SINGAPORE - The Serangoon Gardens workers' dormitory will start operations today. MediaCorp understands that about 20 male workers, who will be working in Singapore as hotel staff, are arriving from China and will move into the premises.

The dormitory is operated by Maxi Consultancy and will have an initial occupancy of 600.

A spokesperson for the operator said the foreign workers will be mostly from China, and three-quarters will be women.

The dormitory had been expected to open in August. But it faced delays, as the operator had to first fulfil 14 conditions laid out by Serangoon Gardens residents.

The latter have established four sub-committees to look into security, traffic, environmental and engagement issues.

Mr John Leow, the coordinating chairman of the committees, said: "We're happy with the precautionary measures and all the security in place. The enforcement will have to come in ... when the residents come in."

Last year, the proposal to have a foreign workers' dormitory built in the estate sparked a heated debate and protests from the residents. JOANNE CHAN

ST : More options to keep homes

Dec 4, 2009

More options to keep homes

WASHINGTON - A TOP US Treasury official said on Thursday that more needs to be done to prevent people from losing their homes, adding that the department is exploring a wide range of options to help responsible home owners.

'We particularly want to make sure that we have the tools we need to help people who are temporarily unemployed,' Assistant Treasury Secretary Michael Barr told reporters on the sidelines of a consumer conference.

The Obama administration has already created a US$75 billion (S$104 billion) taxpayer-financed program designed to help slow the rate of foreclosures. About 650,000 borrowers have completed trial modifications under the Home Affordable Modification Program.

Mr Barr characterised the program as an aggressive set of tools to engage people in the process, but said more needs to be done. 'We are looking at a wide range of tools to help people who are unemployed,' Mr Barr said. 'We need to look at a process, if we come to this point, that is fair to everyone, that is cost effective, that protects the taxpayers and that gives responsible home owners a chance to stay in their homes.'

Mr Barr expressed dissatisfaction with mortgage lenders' inability to fully execute the required steps to bring relief to borrowers who are struggling.

'It has been an area of frustration for us and for borrowers,' he told the consumer conference. 'It is up to the banks to finish the job and get borrowers into completed modification plans. We are examining their performance every day ... soon to be twice a day.' -- THOMSON REUTERS

ST : Wealthy S'poreans bullish on property

Dec 4, 2009

Wealthy S'poreans bullish on property

But Barclays advises caution as prices may 'moderate' or flatten

By Joyce Teo

WEALTHY investors in Singapore are so keen on putting their millions into pro-perty investments that even giant bank Barclays is urging caution.

A survey by Barclays Wealth has found that Singapore's high net worth individuals are more bullish on the future of the property market than a lot of their counterparts across the globe.

It has also determined that more women than men believe bricks and mortar make a less risky investment than equities.

These investors - their assets range from $1 million to more than $30 million - place about a quarter of their wealth into property, and this is expected to hit 28 per cent over the next two years.

The reason is clear: Singapore's wealthy see real estate as a better long-term solution, but Barclays' experts feel these people need a better balance.

Mr Manpreet Gill, Barclays Wealth's Asia strategist, said: 'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'

The survey polled more than 2,000 high net worth individuals around the globe, including 125 in Singapore, in August and September. It was commissioned by Barclays Wealth and written by the Economist Intelligence Unit.

It shows that Singapore, Canada and India have a larger number of investors than elsewhere who expect a rise in the value of their property investments over the next two years.

Nearly half of the respondents in Singapore think property prices will likely go up once credit starts to flow freely through the global economy.

Most of them see opportunities in the sector, though a large number feel that tight credit conditions are preventing them from capitalising on the opportunities.

Women are particularly keen. More Singaporean women than men want to invest in property in emerging markets.

The survey has also found that many Singapore investors see rental income as the main advantage of holding residential properties, with the cost of upkeep as the biggest burden.

According to Mr Gill, the momentum in the real estate market, as well as the pickup in residential prices and the improved economic outlook, are driving expectations among property investors.

However, he warns that prices of residential properties in the mid- to high-end segment may 'moderate' or possibly flatten next year due to the large supply coming onstream.

'There's a tendency to be influenced by 2007, when the market was doing very well,' he said.

Property has been a source of new wealth around the world, but it has also proved to be many investors' undoing, Barclays Wealth said in a presentation yesterday.

The good news is that Singapore investors continue to view overseas property markets as offering attractive returns over the next two years, especially in the United States, India and Britain.

This helps to 'avoid excessively concentrating risk in one asset class and region together', said Mr Gill.

Some Singapore investors are, however, prone to developing an emotional attachment to bricks and mortar and may be unwilling to sell at a short notice, according to the survey.

joyceteo@sph.com.sg


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TOO MUCH FOR COMFORT

'The survey reveals that, much like investors outside of the region, Asian high net worth investors are holding a much higher proportion of their wealth in property than we would normally recommend.'

Mr Manpreet Gill, Barclays Wealth's Asia strategist

BT : Tax shadow looms over Malaysian property sales

Business Times - 04 Dec 2009


Tax shadow looms over Malaysian property sales

Sellers rushing to beat deadline face approval hurdle

By PAULINE NG
IN KUALA LUMPUR

PROPERTY sellers rushing to dispose of their real estate in Malaysia in order to avoid paying real property gains tax (RPGT) could find their efforts thwarted should their disposal require government consent.

This is because obtaining official approval could push the sale date to one after Dec 31 - the last day before the reintroduction of RPGT, a tax specialist said.

KPMG Tax Services executive director Tai Lai Kok told BT that many transactions involving property could require state approval.

Under the RPGT Act, where a contract for the disposal of an asset is conditional and the condition is satisfied (by the exercise of a right under an option or otherwise), the acquisition and disposal of the asset shall be regarded as taking place at the time the contract was made.

But there are two exceptions: where the acquisition or disposal requires the approval by the government or an authority or committee appointed by the government, the date of disposal shall be the date of such approval; and where the approval is conditional, the date of disposal shall be the date when the last of all such conditions is satisfied.

However, the RPGT Act does not define the term 'government' - whether it refers to the state or federal government. In any event, because land matters come under state control, a number of these transactions could invariably require state approval. 'Lawyers would need to review the individual title to see what restrictions and caveats there are to ascertain if government approvals are needed.'

Lawyers said that the time taken for states to give their approval varies, some reverting in a month, and some up to six months.

'If the property is already owned by a foreigner, it is likely the transaction would require state approval,' Mr Tai said, adding that 'conditional contracts' had become an issue only because of the short 'window period' before RPGT is reintroduced.

He noted that the RPGT Act had introduced government approvals only in 2006.

Shortly after that, former prime minister Abdullah Ahmad Badawi allowed a blanket exemption on RPGT effective April 2007 to boost the sector, so the issue was not fully explored.

Moreover, the Finance Ministry and Inland Revenue Board had not come up with a clear indication as to how the conditional contracts apply. 'There is a bit of a question mark there,' Mr Tai noted.

The government is expected to rake in RM500 million (S$204 million) from RPGT next year when the tax is reintroduced at a flat 5 per cent, notwithstanding the holding period.

Because the tax was supposed to curb speculation, its across-the-board application has upset those who have held their properties for a long time - some for decades, some stretching a few generations - as the value of their assets would have greatly appreciated.

Property players have also criticised the government's reversal in policy after less than three years as inconsistent and a deterrent to foreign investors.

This week, Gerakan - a component party of the ruling federal coalition Barisan Nasional - urged the government to scrap the proposal to reintroduce RPGT as it is 'unfair and inappropriate' since it would impinge on all transactions, including those not of a speculative nature.

'In view of the serious consequences from the tax especially on the middle and low income groups, we appeal to the government to cancel the proposed 5 per cent RPGT under Budget 2010.'

Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved

BT : S'pore's rich bullish about property investments

Business Times - 04 Dec 2009


S'pore's rich bullish about property investments

High net worth investors here plan to increase their exposure: survey

By UMA SHANKARI

(SINGAPORE) SINGAPORE'S rich are among the most optimistic of investors when it comes to property investments, and are planning to raise their exposure to the asset class in the next two years, a new study shows.

The study, by Barclays Wealth and the Economist Intelligence Unit, found that 53 per cent of high net worth investors in Singapore expect an increase in the value of their property investments over the next two years. This is slightly more than the 49 per cent of respondents who hold the same view globally.

After bottoming in Q2 2009, private home prices in Singapore rose 15.8 per cent quarter on quarter in Q3. Analysts expect property prices to stay firm for the year ahead, and are especially upbeat about the high-end segment.

Wealthy investors here are also planning to allocate a larger proportion of their investment portfolios to property in future. Real estate investment among wealthy individuals in Singapore is set to rise to 28 per cent of the average portfolio over the next two years from 25 per cent now, according to the report. That excludes properties used as a principal residence.

Some 125 high net worth investors were surveyed in Singapore. They were part of the more than 2,000 high net worth individuals - with investable assets ranging from £pounds;500,000 (S$1.1 million) to more than £pounds;30 million - who were surveyed globally in August and September this year.

The survey showed that the high level of confidence in the potential of real estate was global, with investors in nine of the 10 markets covered - including the US, UK and Hong Kong - planning to increase their property allocation over the next two years.

'High net worth investors are picking up on signs of a gradual economic recovery, yet continue to remain cautious of potential dangers, after many have fallen precipitously from earlier heights,' said Didier von Daeniken, chief executive of Barclays Wealth for Asia-Pacific.

Property has always an asset of choice for Asian and Singaporean investors; and with the current recovery, interest in real estate will pick up, bankers said.

'Property is an important asset class for Asian high net worth investors,' said Olivier Denis, head of OCBC Private Bank. 'The interest in the Singapore property market has always been strong and investors are constantly scanning the market for opportunity. Moving forward, we expect the interest to stay positive provided that the overall economic climate remains stable.'

Investors are once again eyeing property as prices in many markets have fallen from earlier highs, the survey found. Barclays Wealth's survey showed that 75 per cent of high net worth investors in Singapore continue to see opportunities in the property sector.

Transactions of high-end homes - generally thought to be the domain of wealthy investors - started to pick up in Q3. The number of units transacted at more than $2,000 per square foot (psf) during the quarter is just below the number of units seen in Q1 2007 prior to the last run-up in the high-end market, noted DBS Group Research analyst Adrian Chua.

And even as the overall property market cooled in October, the high-end segment held up. Some 285 homes with a median price of more than $1,500 psf were sold in October 2009, compared with 115 in September.

'The high-end investors are coming back but it is not the same volumes of transactions we have seen in the past (during the last boom),' said Knight Frank chairman Tan Tiong Cheng.

He pointed out that the profile of investors buying high-end apartments in Singapore has changed. The previous boom was driven by financial sector employees flush with cash. This time around, interest is coming mostly from traditional investors who are sinking their funds into real estate as they consider those assets to be safe, Mr Tan said.

The survey also showed that more than half of Singaporean investors - 54 per cent - feel that tight credit conditions are preventing them from capitalising on opportunities. They also expect home prices to climb once credit starts to flow freely through the global economy.

But bankers cautioned against overexposure to property. 'While it can be tempting to seek refuge in property as a safe haven, investors must be careful to avoid overexposure to an asset class that has traditionally proven to be susceptible to economic cycles,' said Barclays' Mr von Daeniken.

Manpreet Gill, Barclays Wealth's strategist for Asia, called for diversification and said that Singaporean investors' propensity to invest outside the country is positive as it reduces risk. In the survey, the investors identified the US, India, the UK and China as attractive foreign markets.

Mr Gill also added that wealthy investors here can look at real estate investment trusts (Reits) as alternatives to brick and mortar investments.