BT : Australia's Oct home loan approvals drop

Published December 10, 2009

Australia's Oct home loan approvals drop
Central bank chief raises interest rate for 3rd straight mth



Reality check: First-home buyers accounted for 26% of dwellings that were financed in October, down from 26.1% in September, the statistics bureau said

(SYDNEY) Australian home loan approvals fell in October after central bank governor Glenn Stevens became the first Group of 20 policymaker to increase borrowing costs since the height of the global financial crisis.

The number of loans granted to build or buy houses and apartments dropped 1.4 per cent to 63,865 from September, when they gained a revised 3.3 per cent, the statistics bureau said in Sydney yesterday. The median estimate of 21 economists surveyed by Bloomberg was for a 2 per cent decline.

Approvals may slide further after Mr Stevens boosted the benchmark interest rate last week for an unprecedented third straight month and the government reduced grants to first-time buyers from as much as A$21,000 (S$27,000) in October. Consumer confidence fell this month, a separate report showed yesterday.

'Homebuyer numbers will continue to retreat from recent highs and this will weigh on overall approval numbers.' Alex Joiner, an economist at Australia & New Zealand Banking Group Ltd in Melbourne, said ahead of yesterday's report.

First-home buyers accounted for 26 per cent of dwellings that were financed in October, down from 26.1 per cent in September, the statistics bureau said yesterday.

Mr Stevens and his board increased Australia's benchmark lending rate last week by a quarter point to 3.75 per cent, as rising business confidence, a surge in house prices and higher exports to China from companies including BHP Billiton Ltd, drive a 'new upswing' in the economy forecast by the central bank to last several years.

'At the beginning of the year, I would not have expected the economy to be looking as good as it does' now, Mr Stevens said late on Tuesday in Sydney. 'I thought things would turn out rather worse than they have. But who's complaining? Not me.'

Investors are betting there is a 42 per cent chance of an interest rate increase at the central bank's next meeting in February, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange late on Tuesday.

This year's interest rate increases have added about A$150 to monthly repayments on an average A$300,000 home loan, and may prompt consumers to trim spending that surged in the first half of the year after Prime Minister Kevin Rudd's government distributed more than A$20 billion in cash handouts to households.

An index of consumer confidence dropped 3.8 per cent this month, led by waning sentiment among households with mortgages, a report by Westpac Banking Corp showed yesterday.

Demand for mortgages surged in the first half of the year amid record purchases from first-time buyers after Treasurer Wayne Swan tripled to A$21,000 a grant to buyers of new homes, and doubled to A$14,000 payments for those purchasing existing dwellings. House prices have gained 10 per cent this year.

In May, Mr Swan extended the increases through to the end of September, when they were partially reduced. The payments will be cut to their original level of A$7,000 at the end of this year.

The total value of loans fell 1.4 per cent to A$23.3 billion, yesterday's report showed. - Bloomberg

BT : Pioneer Road North site draws 8 bids

Published December 10, 2009

Pioneer Road North site draws 8 bids
Highest bid of $19.4 million came from Kng Realty
By EMILYN YAP

A 30-year leasehold industrial site at Pioneer Road North and Soon Lee Drive has attracted strong demand, pointing to sustained confidence in the economy.

By the close of tender yesterday, the Urban Redevelopment Authority (URA) had received eight bids for the 18,958.8 square metre plot, which has a maximum gross plot ratio of two. The top bid came from Kng Realty Pte Ltd, at $19.4 million or $48 per square foot per plot ratio (psf ppr).

CB Richard Ellis Research executive director Li Hiaw Ho expects the development's breakeven cost to range from $190-$210 psf.

Kng Realty's bid is more than two times that of the trigger bid - an unnamed developer had committed to pay at least $8.2 million or $20 psf ppr for the land in October.

Kng Realty's shareholders include Kim Chan Wah and Ng Hock Lye, both of whom are also shareholders of another company, Kng Development Pte Ltd.

Kng Development had won the tender for an industrial site at Kaki Bukit Road 2 in August. This firm's other shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong.

The next highest bid for the Pioneer Road North site was $18 million or $44 psf ppr, which came jointly from Sia Kong Wah and Gimp Investment Pte Ltd. Kng Realty's bid exceeded this by 7.8 per cent.

Other companies such as Soilbuild Group and EL Development also took part in the tender. The lowest bid came from Bok Seng Logistics Pte Ltd, at $9 million or $22 psf ppr.

'The healthy response to the tender reflects the more optimistic business sentiment,' said CBRE's Mr Li.

According to Knight Frank head of industrial business space Lim Kien Kim, tender participants could also have been encouraged by good industrial space take-up in the Woodlands and Tuas South areas.

URA said it will evaluate the bids and announce the award of the tender later. Industrial sites it put up for sale in the last few months have seen healthy demand. For example, the one at Kaki Bukit Road 2 which eventually went to Kng Development drew as many as 18 bids.

BT : Beijing vows to rein in property speculation

Published December 10, 2009

Beijing vows to rein in property speculation
Its planning agency aims to raise housing demand and supply of medium to low-cost property



Property bubble? China's housing prices have been rising since March, propelled by a slew of government measures, from lower mortgage downpayments to tax cuts.


(BEIJING) China will crack down on speculation in the property market and try to increase the supply of lower-cost housing, the head of the country's powerful planning agency was reported as saying yesterday.

The comments by Zhang Ping, chief of the National Development and Reform Commission, chimed with market expectations that Beijing could use targeted measures in the coming months to quell asset price rises without resorting to broader monetary tightening.

'Our country will improve housing consumption and macro-control policies, increasing the supply of mid to low-cost and price-controlled commercial property, and curb speculative house purchasing,' Mr Zhang was quoted as saying by the official Xinhua news agency.

The report did not provide any details about how the government might pursue these objectives.

The property sub-index in the Shanghai stock market ended 2.55 per cent lower, underperforming the main composite index's 1.73 per cent fall.

China's housing prices have been rising since March, propelled by a slew of government measures, from lower required downpayments on mortgages to tax cuts.

Nationwide prices rose by an annual 3.9 per cent in October.

Increases have been far more rapid in some cities. In the southern boomtown of Shenzhen, prices have soared 13.8 per cent during the same period.

While the government has welcomed a surge in the construction sector, an important pillar of the economy, some officials worry that property development is outstripping end-user demand in some locales and that prices are not affordable for ordinary citizens.

At China's key annual economic planning meeting, which ended on Monday, its top leadership said an objective for next year would be to develop smaller urban areas and support demand for 'normal' housing.

'We think this will further encourage local governments to continue the housing construction boom, which will support China's commodity demand,' Tao Wang, an economist with UBS in Beijing, said in a research note this week.

'We also expect the current preferential interest rates and other policies for housing purchases to largely remain in 2010,' she added. -- Reuters

BT : UK houses make comeback

Published December 10, 2009

UK houses make comeback
Buyers reject 'little box' apartments; investor demand for rentals disappears



Home sweet home: UK homebuilders that once rushed to build flats are now trying to meet demand for private homes; the reversal is occurring as banks restrict lending to buy-to-let apartment investors.


(LONDON) Houses are making a comeback in the UK as buyers reject 'little box' apartments and investor demand for rentals evaporates. Single-family attached homes accounted for about 24 per cent of all residences started in England in the first nine months, the highest proportion since 1992, according to the National House-Building Council. Semi-detached homes made up 17 per cent of all starts, a level not seen since 1999.

'Most people dream of having a front garden and a back garden, with a little bit of security around them,' said Alistair Leitch, finance director at Bellway plc in Newcastle, England.

UK homebuilders that once rushed to build flats are now trying to meet demand for private homes. The reversal is occurring as banks restrict lending to buy-to-let apartment investors. That helped push prices down by almost a quarter from the 2007 peak through March of this year, the most of any type of British residential property, according to the Nationwide Building Society, the country's biggest mortgage lender.

In the first nine months of this year, apartments accounted for around 40 per cent of all starts in England, the least in six years, according to the House-Building Council, the UK's biggest insurer for new homes. About 60 per cent of the properties Bellway plans to build next year will be houses, compared with just over 50 per cent in the fiscal year through July, Mr Leitch said. The company sold 4,380 homes in the year.

The proliferation in apartments was fuelled by a government policy to emphasise high-density development on disused urban sites. The goal was to preserve the limited supply of undeveloped land, while increasing the number of dwellings in England. In July 2007, the government announced a target of three million new homes by 2020.

The policy worked. As apartment blocks rose, detached houses fell to 12 per cent of the total last year from 44 per cent in 1997. The proportion of apartments rose to 51 per cent from 15 per cent in that period.

'The industry gets blamed for building little boxes, but we take our lead from the planners,' Redrow plc founder and chairman Steve Morgan said in an interview. 'The industry was guided by the government towards a high increase in density.'

The rules also created pent-up demand for family housing, he said.

A decade of soaring home prices, coupled with TV programmes such as Location, Location, Location aimed at amateur property buyers, spurred a 19-fold increase in the buy-to-rent market to £190 billion (S$431.08 billion) from 1997 to 2007, said London-based property broker Savills plc.

Investors helped spur development of high-rise apartment blocks in cities such as Birmingham and Leeds that outpaced demand. Leeds City Council said in April that about 13 per cent of centre apartments were empty, citing local tax returns.

'With investor demand largely gone, it's a question of selling new flats to occupiers', the bulk of who will be first-time buyers requiring larger mortgages, said Richard Donnell, director of research at London-based property research company Hometrack Ltd.

Apartment prices dropped 22 per cent from the peak through March to about £109,708, compared with a 16 per cent decline for detached houses to £211,595, according to Nationwide.

Apartments became 'significantly harder to sell' through 2008, Peter Redfern, chief executive officer of house builder Taylor Wimpey plc, said in an interview. Prices fell about 30 per cent at the low point of the market earlier this year, twice as much as houses, he said.

In 2000, the price difference between a newly built apartment and its resale value was 55 per cent, according Hometrack. That new-build premium has now vanished for apartments, while it remains at about 15 per cent for new houses.

To reduce risk, builders are focusing on houses and smaller developments that require less investment upfront.

Lenders and new government policies are also helping promote house construction. In April 2007, the government created new zoning guidance to promote a greater mixture of housing types, sizes and values, easing some of the emphasis on higher density.

Barclays plc, Britain's second-largest lender, is now offering five-year fixed-rate mortgages at 5.49 per cent with a 30 per cent down payment. That compares with 6.39 per cent and a 40 per cent down payment for a buy-to-rent investor.

'We have reformed the planning system to help local authorities deliver more and better homes,' said Communities and Local Government, the department responsible for planning. 'Changes to the planning policy in 2007 require councils to do more to ensure the right mix of housing is built.'

Taylor Wimpey, the UK's second-largest homebuilder by volume, got around 40 per cent of its sales from apartments at the top of the market in 2007. About 23 per cent of its land is now slated for flats. The company sold 4,702 properties in the UK in the first half of this year.

Clover Bank, a 23-house Taylor Wimpey development near Birmingham in central England, has almost sold out since the first unit was purchased in February. Two properties remained as of Nov 17, according to the company.

That contrasts with its Latitude project, a 189-apartment block about 20 kilometres away. A total of 67 apartments, first marketed in 2006, were still for sale, the development's estate agents, Knight Frank LLP said last month. Construction was temporarily halted after the property market stalled, before the work was completed earlier this year.

A 1,289 square foot free-standing house at Clover Bank costs £259,995 and includes a garden of a similar size, a garage and a driveway. By contrast, a two-bedroom flat in Latitude costs £195,000 for 677 square feet, a communal garden area, and storage area, an open-plan living room and kitchen and a concierge at the entrance to the block. - Bloomberg

BT: HK luxury home prices may rise 10% in 12 months

Published December 10, 2009

HK luxury home prices may rise 10% in 12 months

(HONG KONG) Luxury home prices in Hong Kong may rise by 10 per cent in the next 12 months as low interest rates and limited supply fuel demand, Colliers International Ltd said.


Hong Kong home prices have risen 28 per cent this year, according to the weekly Centa-City Leading Index, recovering faster than London and New York on mainland Chinese buyers and record-low mortgage rates. Luxury housing has outperformed the overall property market, according to Colliers, a global real-estate broker and manager.

'Prospective purchasers are mainly buyers coming from mainland China, 40 per cent of the total, followed evenly by upgraders, expatriates, industrialists and investors,' Ricky Poon, Colliers' executive director of residential sales, said in an e-mailed statement today.

Sales of homes worth more than HK$10 million (S$1.79 million) each jumped 44 per cent to 1,231 transactions in the first 11 months of this year from the same period in 2008, and prices rose 40 per cent on the same basis, the statement said.

Homes worth more than HK$10 million or that are larger than 1,000 sq ft are classed as luxury residences in Hong Kong. -- Bloomberg

ST : China property prices surge

Dec 10, 2009
China property prices surge

Property prices in 70 medium and large cities rose 5.7 per cent in November from a year ago, the biggest jump since July 2008, figures from the National Bureau of Statistics showed. -- PHOTO: AP

BEIJING - PROPERTY prices in Chinese cities rose at the fastest pace in 16 months in November, the government said on Thursday, amid growing concerns about bubbles building in real estate.

Property prices in 70 medium and large cities rose 5.7 per cent in November from a year ago, the biggest jump since July 2008, figures from the National Bureau of Statistics showed.

It was the sixth successive year-on-year increase, snapping a months-long slump dating from December last year when the government attempted to rein in runaway prices and as the global economic crisis kicked in.

After trying to cool the market a year ago, Beijing this year responded to the economic crisis with tax breaks and other measures to prop up the property sector, which accounts for more than 20 per cent of urban fixed investments.

But concerns are rising that bubbles are building in real estate due to rampant speculation. The house price-to-income ratio - the ratio of the median market home price and the median annual household income - is expected to hit 8.3 in China this year, the Chinese Academy of Social Sciences said in a report on Monday. A rational range is between three and six, the think tank said.

In response to mounting public complaints about excessively high house prices, the government said this week it would curb speculative home purchases next year - possibly by restricting bank loans to the sector. -- AFP.

ST : CPF extends 4% floor rate

Dec 10, 2009
CPF extends 4% floor rate

TO HELP members cope with the current economic climate, the Government will maintain the 4 per cent floor rate for interest earned on all Special and Medisave Accounts (SMA) monies and Retirement Account (RA) monies for another year until Dec 31, 2010.

After that, the 2.5% floor rate will apply for all CPF accounts, said CPF in a statement on Thursday.

Since Jan 1 last year, savings in the SMA have been invested in Special Government Securities (SSGS) which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1 per cent, adjusted quarterly.

The 12-month average yield of the 10YSGS plus 1 per cent rate worked out to be 3.31 per cent for the period Dec 1 2008 to Nov 30 2009. Since the interest rate peg for SMA monies is below 4 per cent, the SMA interest rate from Jan 1 to March 31 next year will be held at 4 per cent, said the CPF Board.

As for the Retirement Account, from Jan 1, such savings will be invested in SSGS which earn a fixed coupon equal to the 12-month average yield of the 10YSGS plus 1 per cent at the point of issuance. The interest rate to be credited to the RA will be the weighted average interest of the entire portfolio of these SSGS, and adjusted yearly in January.

Since the interest rate peg for the fixed coupon is below 4 per cent, existing RA savings will be invested in SSGS which earn a fixed coupon of 4 per cent, the floor rate. Hence, the RA interest rate from Jan 1 to Dec 31 2010 will be 4 per cent.

CPF added that an additional 1 per cent interest will continue to be paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member's SA or RA to enhance his retirement savings. If the member is above 55 years old and participates in the LIFE scheme, the additional 1 per cent interest will also apply to his annuity premium, less annuity payouts already made. The additional interest earned on the member's LIFE annuity monies will be paid into his RA.

Also from Jan 1, the Medisave Required Amount (MRA) will be raised from the current $18, 000 to $22,500.

Since Jan 1 2004, CPF members who turn 55 and are able to meet the CPF Minimum Sum1 are required to set aside a Required Amount in their Medisave Account when they make a CPF withdrawal. If such members have less than the Required Amount in their Medisave Accounts, their Ordinary and/or Special Account balances in excess of the Minimum Sum will be used to top up the Required Amount.

ST : 5.5% growth next year

Dec 10, 2009
5.5% growth next year
Forecast is higher than Govt's figure of 3% to 5%
By Robin Chan



Growth is tipped to hit 5.5 per cent next year after a 2 per cent contraction this year - based on the median expectations of 20 economists, released yesterday by the Monetary Authority of Singapore (MAS). -- ST PHOTO: SAMUEL HE

PRIVATE sector economists expect Singapore to grow even faster next year, as more signs emerge that the economy is returning to normal.

Growth is tipped to hit 5.5 per cent next year after a 2 per cent contraction this year - based on the median expectations of 20 economists, released yesterday by the Monetary Authority of Singapore (MAS).

This is better than the 4.5 per cent growth they predicted in September, and beats the Government's official forecast of 3 per cent to 5 per cent growth in 2010.

'The official view tends to be more conservative. This is natural as from a policymaker's perspective, it is always safer to stay on the cautious end of a forecast,' said DBS Bank economist Irvin Seah. 'But from the private sector perspective, many recent indicators continue to point to a recovery in the global economy.'

Economists are looking at the low base from early this year, when the economy had contracted drastically, to give a boost in growth numbers in the first half of next year. They are also counting on major economies stabilising so that consumer confidence can rebound and support manufacturing and export activity here.

'While we are not expecting demand to come back in roaring fashion next year, we do expect demand to be good and orders stable,' said Credit Suisse economist Joseph Tan.

chanckr@sph.com.sg

CPF NEW Releases: INTEREST RATES FOR SPECIAL AND MEDISAVE ACCOUNTS MONIES

News Releases

INTEREST RATES FOR SPECIAL AND MEDISAVE ACCOUNTS MONIES FROM 1 JAN 2010 TO 31 MAR 2010 AND FOR RETIREMENT ACCOUNT MONIES FROM 1 JAN 2010 TO 31 DEC 2010

News Release by:
Central Provident Fund Board
10 December 2009 --

One–Year Extension of 4% Floor Rate for all SMA and RA Monies

To help members cope with the current economic climate, the Government will maintain the 4% floor rate for interest earned on all Special and Medisave Accounts (SMA) monies and Retirement Account (RA) monies for another year until 31 December 2010. After 31 December 2010, the 2.5% floor rate will apply for all CPF accounts.

Interest Rate for SMA Monies

Since 1 January 2008, savings in the SMA have been invested in Special Government Securities (SSGS) which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities (10YSGS) plus 1%, adjusted quarterly.

The 12-month average yield of the 10YSGS plus 1% rate worked out to be 3.31% for the period 1 December 2008 to 30 November 2009. Please refer to Annex A for the 10-year SGS yield. Since the interest rate peg for SMA monies is below 4%, the SMA interest rate from 1 January 2010 to 31 March 2010 will be maintained at 4%.

Interest Rate for RA Monies

From 1 January 2010, RA savings will be invested in SSGS which earn a fixed coupon equal to the 12-month average yield of the 10YSGS plus 1% at the point of issuance. The interest rate to be credited to the RA will be the weighted average interest of the entire portfolio of these SSGS, and adjusted yearly in January.

Since the interest rate peg for the fixed coupon is below 4%, existing RA savings will be invested in SSGS which earn a fixed coupon of 4% (floor rate). Hence, the RA interest rate from 1 January 2010 to 31 December 2010 will be 4%.

Additional Interest of 1%

An additional 1% interest will continue to be paid on the first $60,000 of a member’s combined balances, with up to $20,000 from the Ordinary Account (OA). The additional interest received on the OA will go into the member’s SA or RA to enhance his retirement savings. If the member is above 55 years old and participates in the LIFE scheme, the additional 1% interest will also apply to his annuity premium, less annuity payouts already made. The additional interest earned on the member’s LIFE annuity monies will be paid into his RA.

Medisave Required Amount

From 1 January 2010, the Medisave Required Amount (MRA) will be raised from the current $18,000 to $22,500.

Since 1 January 2004, CPF members who turn 55 and are able to meet the CPF Minimum Sum1 are required to set aside a Required Amount in their Medisave Account when they make a CPF withdrawal. If such members have less than the Required Amount in their Medisave Accounts, their Ordinary and/or Special Account balances in excess of the Minimum Sum will be used to top up the Required Amount.

1The prevailing Minimum Sum is $117,000.

Public Enquiries
For more information, please visit www.cpf.gov.sg or call the CPF Call Centre at 1800-227-1188.

UK housing market making a comeback

UK housing market making a comeback
Dec 10, 2009 - PropertyGuru.com.sg

The UK housing market is making a comeback as investor demand for rentals disappears and home buyers reject 'little box' apartments.

Single-family attached houses accounted for approximately 24 percent of all residences started in England from January to September. According to the National House-Building Council, it is the highest proportion since 1992. Semi-detached homes comprised 17 percent of all starts, a level not reached since 1999.

“Most people dream of having a front garden and a back garden, with a little bit of security around them,” said Bellway plc Finance Director Alistair Leitch.

UK homebuilders who once rushed to build flats are now attempting to meet the demand for private homes. The setback is occurring as banks begin to control lending to buy-to-let apartment investors, which helped prices to go down by nearly a quarter from the 2007 peak through March 2009. According to Nationwide Building Society, the biggest mortgage lender in the country, it is already the most of any type of British residential property.

From January to September 2009, apartments accounted for approximately 40 percent of all starts in England, the least in six years, according to the House-Building Council, the biggest insurer for new homes in the UK. Around 60 percent of the properties that Bellway plans to construct in 2010 will be houses, compared with just over 50 percent in the financial year through July, said Mr. Leitch. To date, the company has sold a total of 4,380 homes.

A government policy that emphasizes high-density development on abandoned urban sites has driven the demand for apartments. It aims to preserve the limited supply of undeveloped land while it increases the number of dwellings in England. The government announced in July 2007 a target of three million new homes by 2020.

The policy was effective. As there was apparent increase in apartment blocks, detached houses declined to 12 percent of the total in 2008 from 44 percent in 1997. The proportion of apartments increased from 15 percent to 51 percent in that period.

“The industry gets blamed for building little boxes, but we take our lead from the planners,” said Steve Morgan, founder and chairman of Redrow plc. “The industry was guided by the government towards a high increase in density.”

He also added that the rules caused pent-up demand for family housing.

URA closes tender for Pioneer Road North industrial site

URA closes tender for Pioneer Road North industrial site
Dec 10, 2009 - PropertyGuru.com.sg

The Urban Redevelopment Authority (URA) has closed the tender for an industrial site at Pioneer Road North after receiving a total of eight bids. The highest bid came from property developer Kng Realty at $19.4 million.

Sia Kong Wah & Gimp Investment submitted the next highest bid of $18 million.

The top bid from Kng Realty translates to around $48 per sqft.

According to CBRE Research Executive Director Li Hiaw Ho, Kng Realty's bid was more than twice the $20 per sqft application bid.

The bid was also higher compared to Soilbuild Group’s payment of $37 per sqft for a 30-year leasehold industrial site along Pioneer Road.

Mr. Li said that the tender’s healthy response reflects a more positive business sentiment.

The industrial site was up for sale in November on a lease for 30 years. The site was originally included on the Reserve List of the Government Industrial Land Sales Programme.

URA said that it will announce the winning bidder at a later date.

Rising trend of foreign buyers at Sentosa Cove homes

Rising trend of foreign buyers at Sentosa Cove homes
Dec 10, 2009 - PropertyGuru.com.sg

Foreigners, including permanent residents contributed to the 43 percent increase of home transactions in Sentosa Cove in the first ten months of 2009, from nearly 38-39 percent in 2007 and 2008.

A Savills analysis of caveats data captured by URA's Realis system also indicated that four out of ten foreign buyers of homes in Sentosa Cove between Q4 2004 and Q4 2009 came from 'Western' countries such as Australia, New Zealand, North America, South America and Europe.

During that period, such foreign buyers were more interested in Sentosa Cove than in the other well-known districts of 11, 10, 9 and 1.

Ong Choon Fah, executive director of DTZ observes: “Buyers from Western countries appreciate the lifestyle elements in residential developments a lot more. In their home markets, units in a project that face the water or bay can sometimes be priced double that of units that don't have such a view.”

Savills also found 1,297 caveats lodged for acquisitions of private houses in Sentosa Cove over the five-year period, with 37.5 percent or 487 from foreigners, including permanent residents.

In the first ten months this year, 133 caveats were lodged for Sentosa Cove homes, 57 of these were purchased by foreign buyers. Malaysians have the largest share of 14 caveats or 25 percent, followed by UK citizens, Indonesians, mainland Chinese and individuals from Hong Kong.

Mrs. Ong from DTZ said: “What Sentosa Cove offers is very unique. It's as close to waterfront housing as you'll get in Singapore, plus it's a gated community, with limited car access to outsiders. Sentosa Cove used to be like a construction yard. Now, however, most of the homes have been developed, and foreigners may be even more inclined to buy.”

Sentosa Cove is the only location in Singapore where foreigners who do not permanently reside in the island city-state are allowed to purchase landed property, giving Sentosa Cove additional draw among other locations.

However, foreigners must seek permission from the Land Dealings (Approval) Unit, which is under the Singapore Land Authority.

Industry observers expect more high-end projects in 2010

Industry observers expect more high-end projects in 2010
Dec 10, 2009 - PropertyGuru.com.sg

Singapore's property market is beginning to stabilize and developers in the country are ready to launch more expensive homes. Industry observers remain positive for the high-end residential sector, which may have more launches in 2010 if the economy continues to move smoothly towards recovery.

Based on the estimates of Colliers International, 10,671 private homes are set to be launched in 2010, and 4,958 units or 46 percent will be in the core central region (CCR).

Prime projects that are expected to hit the market include Ardmore 3 of Wedlock Properties and the former Farrer Court site, which CapitaLand and partners purchased in 2007 through a collective sale.

The rest of central region (RCR) will account for another 3,498 units or 33 percent. The remaining 2,215 launch-ready units or 21 percent will come from the outside central region (OCR).

Distribution of homes that were launched in 2009 was almost accurately the reverse, with the bulk of units derived from the prospering mass-market sector. Colliers estimates that around 13,542 homes will be released by end-December, wherein 5,822 units or 43 percent will come from OCR.

About 3,291 units or 24 percent will be from CCR, while 4,429 units or 33 percent will come from RCR.

“Developers are likely to be encouraged to release more mid-tier or high-end units in 2010,” says Tay Huey Ying, research and advisory director at Colliers. She cites several reasons - signs of foreign buyers and investors returning, the opening of integrated resorts and improved economic prospects.

The strong take-up rate at the recent preview of Marina Bay Suites has raised hopes. Of the 90 released units, 87 were sold at an average price ranging from $2,200 to $2,500 psf.

“Positive sentiment from high net worth individuals and wealthy foreign buyers could return by H1 2010 and support transactional activity,” added Chua Yang Liang, Jones Lang LaSalle’s (JLL) head of research for Southeast Asia.

To support this view, Barclays Wealth’s recently conducted a study and the Economist Intelligence Unit learned that affluent individuals in the country plan to allot a bigger portion of their investment portfolios to property in the next two years.

As doubts linger over the sustainability of economic recovery, how much developers can sell pricey homes for remains a big question.

Prices of non-landed properties in CCR are still under the 2008 peak – 16.8 percent down at Q3, according to Urban Redevelopment Authority indices. In comparison, prices of non-landed properties in OCR shot up in 2009 and were just 2.5 percent short of the peak.

Analysts of Deutsche Bank wrote in a report on Monday that high-end prices are likely to escalate by 5 to 10 percent in the coming year.

However, even as optimism grows, some market players remain cautious of uncertainties in the economy. Dr. Chua of JLL stresses that emerging demand for property has to be supported by regional or global economic growth.

TODAY Online : Shape of growth next year

Shape of growth next year
Economists raise forecast to 5.5%, but diverge widely on some sectors' prospects
by Leong Wee Keat 05:55 AM Dec 10, 2009

Singapore - With each new forecast since the recession ran out of wind, Singapore's recovery next year appears to gain firmer footing.

But despite revising their forecast upwards again, economists remain as divided as before about how smooth the path will be.

The latest median projection from 20 economists polled by the Monetary Authority of Singapore pegs economic growth at 5.5 per cent next year, up from an earlier forecast of 4.5 per cent.

The range of their projections, however, runs from a modest 2.9 per cent to robust 7.6 per cent growth.

They cited improvements in the global economic outlook, the stabilisation of developed markets and various government stimulus packages as some reasons for a brighter year ahead.

As for the current quarter, median expectations are for 4.7 per cent growth - bringing the year to a close with the economy contracting just 2 per cent, instead of the 3.6-per-cent shrinkage economists had predicted during the last quarterly survey in September.

"The views are quite convergent that we're past the initial stage of recovery that was fuelled by inventory re-stocking and due to credit coming back on line," said Forecast Singapore economist Vishnu Varathan.

But, with the burden of demand falling on consumers in the second half of next year - as stimulus measures run out - and the economy having to outpace a higher base in that period, he feels the rate of growth will be "tempered" by then.

Indeed, the economists' quarterly forecasts see growth tapering off after the first half.

Where it comes to sectorial prospects, however, levels of optimism differed markedly.

Manufacturing, for instance, drew the sunny projection of 13 per cent growth, but also a gloomy minus-4 per cent forecast.

The outlook for non-oil domestic exports at the same time swung from 2 per cent to 18.4 per cent growth, with much riding on the recovery of the American and regional economies.

While Japan announced its 7.2-trillion yen stimulus package on Tuesday, it remains a question what the spillover effects would be for other countries, said Mr Varathan, whose other worries is that trade protectionism could escalate. Such concerns "could probably explain" the wide-ranging forecasts for the year, he added.

While CIMB-GK Research economist Song Seng Wun puts manufacturing growth at between 7 and 9 per cent next year, this is assuming the pharmaceutical industry matches this year's output, and technology producers recover from a three-year slump.

The construction sector drew even more divergent forecasts - it could contract by 4.2 per cent or grow by 15 per cent, going by economists' projections.

Optimism could derive from the "two big-ticket items", the integrated resorts, which are due for completion next year; while those of a more negative frame of mind "probably expect there is not much to build after the two IRs", said Mr Song. He noted, however, that there were some $15 billion worth of contracts due to be awarded in the next 12 months.

Then there are the wild cards the global economic system might yet spring. The Dubai World debacle and Tuesday's downgrade of Greece's credit ratings were fresh on the minds of economists here.

"The key risk is a blow up in a significant company, bank or country," said HSBC senior economist Robert Prior-Wandesforde. "The exact nature of the risk is very difficult to pin down. All we know is, there is a lot of leverage out there that needs to be paid down, and there may be difficulty in paying the debt."