Feb 22, 2010
HDB review: Findings out next month
Study being conducted as HDB prices have been rising
By Joyce Teo, Property Correspondent
NEWS of potential measures affecting the public housing market could come as soon as next month, hot on the heels of curbs announced last Friday aimed at cooling the private property market, Minister for National Development Mah Bow Tan said yesterday.
He was speaking to reporters yesterday evening at a Chinese New Year event at Tampines East Community Club.
When asked about possible measures for the Housing Board market, Mr Mah said: 'We are looking at something. I've asked HDB to look at some of the activity that is going on in the market.'
He added that he would be making 'some announcements' during the Committee of Supply debates in Parliament on his ministry's Budget next month.
Mr Mah had said late last month that HDB was embarking on a review of its rules to stamp out possible speculation, and that the findings would be out in a few months' time.
The review is being conducted as HDB prices have been rising, with some buyers said to be renting HDB flats illegally or selling them after a one-year period to make a fast profit.
Yesterday, Mr Mah noted that there was a 'high risk' of a property bubble forming in the private homes market.
Last September, the Government announced several measures which led to the sales volume slipping.
But there have since been renewed signs that the market is heating up.
Sales volume has risen sharply, with developers selling 1,476 units last month - three times higher than in December.
And prices rebounded in the second half of last year.
Mr Mah said: 'If you look at the environment, interest rates are low, there's a lot of exuberance in the market as a result of positive sentiments.
'If you see a lot of speculation, especially at a time when what we are seeing is a confluence of factors (such as) low interest rates, positive sentiment, volumes actually picking up - those are the danger signals. We have to make a decision.
'The question is, do we act now, take small steps, or wait until the bubble has formed, by which time we may have to take more drastic steps. So we decided to act now. It depends on how the market reacts. If there is a need to, we will take further measures.'
He said there were a few other possible measures the Government could take but declined to elaborate.
'It's a choice between not doing anything and letting the exuberance take over and then having to act when everything is too late.'
Taking smaller steps means that the number of people affected, especially genuine buyers, will be 'very little', he added.
Mr Mah said that given the current market situation, the introduction of a seller's stamp duty will make speculators 'think twice' about flipping properties.
'We are not against prices rising. If the economy is doing well and there is genuine demand, prices rise. It's part of the market workings.
'What we want to see is a very stable, sustainable market, that prices don't run up faster than what the economy can accommodate.'
joyceteo@sph.com.sg
Monday, February 22, 2010
ST : Homes are for keeps, not speculation: PM
Feb 22, 2010
Homes are for keeps, not speculation: PM
Singaporeans advised not to sell their homes for a quick buck
By Rachel Chang
PRIME Minister Lee Hsien Loong yesterday urged Singaporeans to treasure their homes and not use them as an easy means to make a quick buck or settle a debt.
He disclosed that MPs have been approached by many residents who have sold their homes for cash to pay off loans or make purchases.
'They have a problem finding another home or getting a loan to buy another home...it is not easy to solve the problem,' he said, in a speech underlining the importance of treating a residential property as a long-term investment.
'Property is for people to buy to live in, not for speculating,' he said.
His remarks, in Mandarin and English, at a Chinese New Year dinner last night came two days after the Government made a surprise announcement to cool property speculation.
Mr Lee stressed that the Government cannot control property prices.
'We can try to influence it, but whether it goes up or goes down depends on sentiment, depends on what happens in the region and the world...
'But we can apply measures to try to guide it in a broad way, so that if it is getting carried away, we can pull it back a bit,' he added.
The measures announced last Friday include the introduction of stamp duty on those who sell their residential property within a year of buying it. The duty is around 3 per cent of the price.
Also, buyers can borrow only up to 80 per cent, not 90 per cent, of their property's value from a financial institution.
Mr Lee said these measures were a pre-emptive move. Prices have risen sharply in the last six months, he noted.
'While it has not yet reached a dangerous level... the trend has been so fast, and the mood so exuberant, that we are worried it will get carried away beyond what is wise,' he told about 1,300 Ang Mo Kio GRC residents attending the dinner at his Teck Ghee constituency.
'It is better to pre-empt a bubble than wait for it to get serious and have to take more drastic measures,' he said, assuring Singaporeans that his government's priority is to ensure homes remain affordable.
At the other extreme, falling home prices is undesirable for the many Singaporeans who own their homes, he added.
A home, an appreciating asset in Singapore, is a nest-egg, said Mr Lee.
'Please take good care of it. It's for you to live in, it's for you as an investment, it's for you for your old age.
'Don't think of selling prematurely to make a quick buck,' he advised.
Alternatively, home-owners can pass their flats on to their children, he said and added: 'This means you need to have children to pass your home to.'
Mr Lee then reiterated his worry that not enough Singaporeans are starting families. Total fertility rate last year hit a new low of 1.23. For the Chinese community here, it was even lower at 1.09.
But falling birth rate is an issue faced by East Asian countries, he noted, and it is partly a result of changing values.
In China, young people, to avoid nagging from their parents, have resorted to 'renting' a boyfriend or girlfriend to take home during this new year period, Mr Lee observed.
'It's amusing, but it's also sad,' he said. 'I'm relieved there's no such reports in Singapore. I hope it doesn't happen.' Still, a little social pressure is useful but more importantly, parents and relatives need to encourage them and show them support.
Unmarried residents interviewed said they first needed to save enough and have a stable career before settling down and starting a family.
Said Mr Jason Quak, 28, an operations manager: 'Now you need money for everything, especially for a wedding.'
He and his 25-year-old girlfriend want to buy a flat in Ang Mo Kio, near his parents, but he is not confident he can find one within his budget of around $300,000.
Teacher D. George, 32, welcomed the latest anti-speculation measures but argued that these will not have a major impact on rising HDB prices.
rchang@sph.com.sg
--------------------------------------------------------------------------------
MAKE-BELIEVE BOYFRIEND
'It's amusing, but it's also sad. I'm relieved there's no such reports in Singapore. I hope it doesn't happen.'
PM Lee, on how young people in China 'rent' a boyfriend or girlfriend to take home, to avoid nagging from their parents
Homes are for keeps, not speculation: PM
Singaporeans advised not to sell their homes for a quick buck
By Rachel Chang
PRIME Minister Lee Hsien Loong yesterday urged Singaporeans to treasure their homes and not use them as an easy means to make a quick buck or settle a debt.
He disclosed that MPs have been approached by many residents who have sold their homes for cash to pay off loans or make purchases.
'They have a problem finding another home or getting a loan to buy another home...it is not easy to solve the problem,' he said, in a speech underlining the importance of treating a residential property as a long-term investment.
'Property is for people to buy to live in, not for speculating,' he said.
His remarks, in Mandarin and English, at a Chinese New Year dinner last night came two days after the Government made a surprise announcement to cool property speculation.
Mr Lee stressed that the Government cannot control property prices.
'We can try to influence it, but whether it goes up or goes down depends on sentiment, depends on what happens in the region and the world...
'But we can apply measures to try to guide it in a broad way, so that if it is getting carried away, we can pull it back a bit,' he added.
The measures announced last Friday include the introduction of stamp duty on those who sell their residential property within a year of buying it. The duty is around 3 per cent of the price.
Also, buyers can borrow only up to 80 per cent, not 90 per cent, of their property's value from a financial institution.
Mr Lee said these measures were a pre-emptive move. Prices have risen sharply in the last six months, he noted.
'While it has not yet reached a dangerous level... the trend has been so fast, and the mood so exuberant, that we are worried it will get carried away beyond what is wise,' he told about 1,300 Ang Mo Kio GRC residents attending the dinner at his Teck Ghee constituency.
'It is better to pre-empt a bubble than wait for it to get serious and have to take more drastic measures,' he said, assuring Singaporeans that his government's priority is to ensure homes remain affordable.
At the other extreme, falling home prices is undesirable for the many Singaporeans who own their homes, he added.
A home, an appreciating asset in Singapore, is a nest-egg, said Mr Lee.
'Please take good care of it. It's for you to live in, it's for you as an investment, it's for you for your old age.
'Don't think of selling prematurely to make a quick buck,' he advised.
Alternatively, home-owners can pass their flats on to their children, he said and added: 'This means you need to have children to pass your home to.'
Mr Lee then reiterated his worry that not enough Singaporeans are starting families. Total fertility rate last year hit a new low of 1.23. For the Chinese community here, it was even lower at 1.09.
But falling birth rate is an issue faced by East Asian countries, he noted, and it is partly a result of changing values.
In China, young people, to avoid nagging from their parents, have resorted to 'renting' a boyfriend or girlfriend to take home during this new year period, Mr Lee observed.
'It's amusing, but it's also sad,' he said. 'I'm relieved there's no such reports in Singapore. I hope it doesn't happen.' Still, a little social pressure is useful but more importantly, parents and relatives need to encourage them and show them support.
Unmarried residents interviewed said they first needed to save enough and have a stable career before settling down and starting a family.
Said Mr Jason Quak, 28, an operations manager: 'Now you need money for everything, especially for a wedding.'
He and his 25-year-old girlfriend want to buy a flat in Ang Mo Kio, near his parents, but he is not confident he can find one within his budget of around $300,000.
Teacher D. George, 32, welcomed the latest anti-speculation measures but argued that these will not have a major impact on rising HDB prices.
rchang@sph.com.sg
--------------------------------------------------------------------------------
MAKE-BELIEVE BOYFRIEND
'It's amusing, but it's also sad. I'm relieved there's no such reports in Singapore. I hope it doesn't happen.'
PM Lee, on how young people in China 'rent' a boyfriend or girlfriend to take home, to avoid nagging from their parents
ST : Ardmore Park unit sold for record project price
Feb 22, 2010
Ardmore Park unit sold for record project price
$3,688 psf for premium tower view; luxury home prices nowhere near 2007 however
By Jessica Cheam
The 2,885 sq ft Ardmore Park unit with the $10.64 million price tag boasts an unblocked panoramic view. -- BT FILE PHOTO
PRIME property prices may still be a far cry from the record levels reached during the 2007 property boom, but one Orchard Road project recently achieved a new record price.
The Straits Times understands that a 2,885 sq ft apartment at Ardmore Park was sold last week for $10.64 million, or $3,688 per sq ft (psf) - a record for the project.
The previous record for the 330-unit freehold project was $10.1 million, or $3,501 psf for a unit, achieved in October 2007, according to caveats lodged.
The home with the record-breaking price is on a high floor in a premium tower with an unblocked panoramic view, said property agent Daphne Tay of Sotheby's International Realty, who part-brokered the deal.
A foreign buyer from North Asia forked out the record sum. The sellers were an Indonesian couple who were the original owners, said Ms Tay, who has been in the industry for over 15 years. Both buyer and seller declined to be interviewed.
Property analysts said that the record deal was not unexpected, given that the luxury property segment is hotting up.
Mr Joseph Tan, executive director of residential services at CB Richard Ellis, said that this year will be a year dominated by high-end properties.
'Mass market homes, which drove the property boom last year, have reached their previous peak in terms of price, whereas the luxury market is still 20 per cent below its peak,' he said. He also noted that foreign buyers, who left in droves in the wake of the 2008 financial crisis, have been returning to the Singapore property market.
Based on caveats lodged, the number of foreign buyers rose from 1,498 in 2008 to 2,840 last year, he said.
Compared to rival cities such as Hong Kong, Singapore prime properties are still cheaper and represent good investment value, Mr Tan added.
According to a recent DTZ research report, foreigners accounted for 12 per cent of total purchases of private homes in the fourth quarter last year, up from 10 per cent in the previous quarter.
In the second half of last year, there was an increase in buyers from Britain, Korea and Australia, said the report.
High-end property prices have been inching up in tandem with the global economic recovery.
Late last year, six units at SC Global's luxury development, Seven Palms in Sentosa Cove, were sold at record prices of $11 million each, or $3,100 to $3,400 psf.
However, luxury property prices are still nowhere near the dizzying heights achieved in 2007 when a 53rd storey 5,048 sq ft private apartment in The Orchard Residences was sold for a record $5,600 psf, or $28.27 million.
That was topped, in absolute terms, by a freehold apartment on the 19th storey of The Marq on Paterson Hill which sold for a whopping $31 million, but at a lower psf price of $5,100.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that even though activity in high-end properties will pick up this year, prices this year are not likely to return to their 2007 peak.
'This year is going to be a bit turbulent for the property market, especially after the recent government measures to cool the property market. Buyers should generally be quite cautious,' he said.
The Government announced last Friday that it will introduce a sellers' stamp duty for those who resell a property within a year. It also reduced the maximum home loan amount a bank can lend a buyer from 90 per cent to 80 per cent of the property value.
The new measures aim to pre-empt a property bubble from forming and to ensure a stable and sustainable property market.
jcheam@sph.com.sg
--------------------------------------------------------------------------------
BELOW PEAK
'Mass market homes, which drove the property boom last year, have reached their previous peak in terms of price, whereas the luxury market is still 20 per cent below its peak.'
Mr Joseph Tan, executive director of residential services at CB Richard Ellis
Ardmore Park unit sold for record project price
$3,688 psf for premium tower view; luxury home prices nowhere near 2007 however
By Jessica Cheam
The 2,885 sq ft Ardmore Park unit with the $10.64 million price tag boasts an unblocked panoramic view. -- BT FILE PHOTO
PRIME property prices may still be a far cry from the record levels reached during the 2007 property boom, but one Orchard Road project recently achieved a new record price.
The Straits Times understands that a 2,885 sq ft apartment at Ardmore Park was sold last week for $10.64 million, or $3,688 per sq ft (psf) - a record for the project.
The previous record for the 330-unit freehold project was $10.1 million, or $3,501 psf for a unit, achieved in October 2007, according to caveats lodged.
The home with the record-breaking price is on a high floor in a premium tower with an unblocked panoramic view, said property agent Daphne Tay of Sotheby's International Realty, who part-brokered the deal.
A foreign buyer from North Asia forked out the record sum. The sellers were an Indonesian couple who were the original owners, said Ms Tay, who has been in the industry for over 15 years. Both buyer and seller declined to be interviewed.
Property analysts said that the record deal was not unexpected, given that the luxury property segment is hotting up.
Mr Joseph Tan, executive director of residential services at CB Richard Ellis, said that this year will be a year dominated by high-end properties.
'Mass market homes, which drove the property boom last year, have reached their previous peak in terms of price, whereas the luxury market is still 20 per cent below its peak,' he said. He also noted that foreign buyers, who left in droves in the wake of the 2008 financial crisis, have been returning to the Singapore property market.
Based on caveats lodged, the number of foreign buyers rose from 1,498 in 2008 to 2,840 last year, he said.
Compared to rival cities such as Hong Kong, Singapore prime properties are still cheaper and represent good investment value, Mr Tan added.
According to a recent DTZ research report, foreigners accounted for 12 per cent of total purchases of private homes in the fourth quarter last year, up from 10 per cent in the previous quarter.
In the second half of last year, there was an increase in buyers from Britain, Korea and Australia, said the report.
High-end property prices have been inching up in tandem with the global economic recovery.
Late last year, six units at SC Global's luxury development, Seven Palms in Sentosa Cove, were sold at record prices of $11 million each, or $3,100 to $3,400 psf.
However, luxury property prices are still nowhere near the dizzying heights achieved in 2007 when a 53rd storey 5,048 sq ft private apartment in The Orchard Residences was sold for a record $5,600 psf, or $28.27 million.
That was topped, in absolute terms, by a freehold apartment on the 19th storey of The Marq on Paterson Hill which sold for a whopping $31 million, but at a lower psf price of $5,100.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that even though activity in high-end properties will pick up this year, prices this year are not likely to return to their 2007 peak.
'This year is going to be a bit turbulent for the property market, especially after the recent government measures to cool the property market. Buyers should generally be quite cautious,' he said.
The Government announced last Friday that it will introduce a sellers' stamp duty for those who resell a property within a year. It also reduced the maximum home loan amount a bank can lend a buyer from 90 per cent to 80 per cent of the property value.
The new measures aim to pre-empt a property bubble from forming and to ensure a stable and sustainable property market.
jcheam@sph.com.sg
--------------------------------------------------------------------------------
BELOW PEAK
'Mass market homes, which drove the property boom last year, have reached their previous peak in terms of price, whereas the luxury market is still 20 per cent below its peak.'
Mr Joseph Tan, executive director of residential services at CB Richard Ellis
CNA : Measures to cool property market needed to avoid drastic measures later: PM Lee
Measures to cool property market needed to avoid drastic measures later: PM Lee
By Hoe Yeen Nie, Channel NewsAsia | Posted: 21 February 2010 2224 hrs
SINGAPORE : There may be no property bubble yet, but Prime Minister Lee Hsien Loong on Sunday said recent moves to curb speculation were necessary to avoid more drastic action later on.
Packed showrooms and fast-rising prices have become a concern for authorities, who introduced new measures on Friday to cool the property market before things got out of hand.
A Seller's Stamp Duty is imposed on all residential properties sold within one year of purchase, while loans from financial institutions are capped at 80 per cent.
At a Lunar New Year dinner at Teck Ghee in his constituency of Ang Mo Kio, Mr Lee said that while the government cannot control property prices, it can ensure prices remain affordable.
Mr Lee said: "Please take good care of it. Do not think of selling it prematurely, or making a quick buck. Because if you sell it and you can't find another house to stay or you do not have a nest egg for your old age, that is big trouble."
Mr Lee said that one's home is a long-term investment, whether as a buffer against old age, or to be passed on to one's children or grandchildren.
But this brought him to another concern - that Singaporeans are not reproducing enough.
Mr Lee noted that Singapore's low birth rate is a reflection of fundamental changes taking place across Asia.
The Total Fertility Rate fell to 1.23 last year - with the rate among Chinese Singaporeans even lower at 1.09.
In China for instance, some young adults even advertise for make-believe girlfriends and boyfriends to hold off family pressure over the Lunar New Year.
Mr Lee said: "It is amusing but it is also sad. I am relieved that I have not heard of any reports of boyfriends or girlfriends for rent in Singapore. I hope it does not happen. But I know that young people do feel some pressure."
Mr Lee added that some social pressure may be useful, but it is family support that will give young Singaporeans a nudge in the right direction. - CNA/ms
By Hoe Yeen Nie, Channel NewsAsia | Posted: 21 February 2010 2224 hrs
SINGAPORE : There may be no property bubble yet, but Prime Minister Lee Hsien Loong on Sunday said recent moves to curb speculation were necessary to avoid more drastic action later on.
Packed showrooms and fast-rising prices have become a concern for authorities, who introduced new measures on Friday to cool the property market before things got out of hand.
A Seller's Stamp Duty is imposed on all residential properties sold within one year of purchase, while loans from financial institutions are capped at 80 per cent.
At a Lunar New Year dinner at Teck Ghee in his constituency of Ang Mo Kio, Mr Lee said that while the government cannot control property prices, it can ensure prices remain affordable.
Mr Lee said: "Please take good care of it. Do not think of selling it prematurely, or making a quick buck. Because if you sell it and you can't find another house to stay or you do not have a nest egg for your old age, that is big trouble."
Mr Lee said that one's home is a long-term investment, whether as a buffer against old age, or to be passed on to one's children or grandchildren.
But this brought him to another concern - that Singaporeans are not reproducing enough.
Mr Lee noted that Singapore's low birth rate is a reflection of fundamental changes taking place across Asia.
The Total Fertility Rate fell to 1.23 last year - with the rate among Chinese Singaporeans even lower at 1.09.
In China for instance, some young adults even advertise for make-believe girlfriends and boyfriends to hold off family pressure over the Lunar New Year.
Mr Lee said: "It is amusing but it is also sad. I am relieved that I have not heard of any reports of boyfriends or girlfriends for rent in Singapore. I hope it does not happen. But I know that young people do feel some pressure."
Mr Lee added that some social pressure may be useful, but it is family support that will give young Singaporeans a nudge in the right direction. - CNA/ms
CNA : It is better to take small steps to cool property market: Minister Mah
It is better to take small steps to cool property market: Minister Mah
By Evelyn Choo, Channel NewsAsia | Posted: 21 February 2010 2120 hrs
SINGAPORE: National Development Minister Mah Bow Tan on Sunday commented on the recent measures to curb speculation in the property market.
He said it is better to take small, preventive steps to cool the property market, than to solve the problem when the bubble really forms.
Mr Mah was speaking to reporters on the sidelines of a community event.
He said he is not against property prices rising, but when danger signs appear, preventive measures have to be taken.
Mr Mah said: "What we are seeing now - a confluence of factors (such as) low interest rates, positive sentiment, volumes actually picking up - I think those are the danger signals. So we have to make a judgment as to what is going to happen. It is a choice a between not doing anything and just letting the exuberance take over and then having to act when everything is too late." - CNA/ms
By Evelyn Choo, Channel NewsAsia | Posted: 21 February 2010 2120 hrs
SINGAPORE: National Development Minister Mah Bow Tan on Sunday commented on the recent measures to curb speculation in the property market.
He said it is better to take small, preventive steps to cool the property market, than to solve the problem when the bubble really forms.
Mr Mah was speaking to reporters on the sidelines of a community event.
He said he is not against property prices rising, but when danger signs appear, preventive measures have to be taken.
Mr Mah said: "What we are seeing now - a confluence of factors (such as) low interest rates, positive sentiment, volumes actually picking up - I think those are the danger signals. So we have to make a judgment as to what is going to happen. It is a choice a between not doing anything and just letting the exuberance take over and then having to act when everything is too late." - CNA/ms
ST Letters : Citizens first, PRs have other housing options
Feb 21, 2010
YOUR LETTERS
Citizens first, PRs have other housing options
We refer to Ms Josephine Chia's letter, 'Single PR can't buy resale HDB flat' (Feb7), and Ms Teo Wai Lee's letter last Sunday, 'Single PRs and HDB flats'.
The needs of Singaporeans always come first. Permanent residents (PRs) who are singles are not eligible to buy an HDB flat alone under the Single Singapore Citizen scheme. They could consider other housing options, such as buying or renting private properties, renting a room or a whole HDB flat, or staying with their friends or relatives.
In Ms Chia's case, since her sons are Singapore citizens, she can buy an HDB flat together with either or both of them, if they meet the eligibility conditions collectively.
Lily Chan-Wong Jee Choo (Mrs)
Deputy Director (Policy and Property)
Housing & Development Board
YOUR LETTERS
Citizens first, PRs have other housing options
We refer to Ms Josephine Chia's letter, 'Single PR can't buy resale HDB flat' (Feb7), and Ms Teo Wai Lee's letter last Sunday, 'Single PRs and HDB flats'.
The needs of Singaporeans always come first. Permanent residents (PRs) who are singles are not eligible to buy an HDB flat alone under the Single Singapore Citizen scheme. They could consider other housing options, such as buying or renting private properties, renting a room or a whole HDB flat, or staying with their friends or relatives.
In Ms Chia's case, since her sons are Singapore citizens, she can buy an HDB flat together with either or both of them, if they meet the eligibility conditions collectively.
Lily Chan-Wong Jee Choo (Mrs)
Deputy Director (Policy and Property)
Housing & Development Board
ST : New home prices to stabilise
Feb 21, 2010
New home prices to stabilise
Thanks to new cooling measures, private home prices are expected to remain firm; genuine buyers not likely to be affected, say experts
By Irene Tham
People checking out the showflat for Altez in Tanjong Pagar yesterday. Analysts expect the measures to affect only a small proportion of buyers. -- PHOTO: LIANHE ZAOBAO
Rising too much and too fast? Not any more, it seems.
The prices of new private homes are expected to stabilise - and remain firm - this year, said analysts.
This is thanks to new measures which kicked in yesterday to cool the property market.
The two rules: Lending institutions can lend only up to 80 per cent of the value of the property, not 90 per cent; and a new stamp duty of around 3 per cent for those who sell the property within a year of buying it.
These moves could dampen sentiment temporarily as buyers pause and take stock, said Credo Real Estate managing director Karamjit Singh.
Ms Tay Huey Ying, director of research and advisory at real estate consultancy Colliers International, expects the measures to curb the buying frenzy.
Prices will stabilise instead of soaring like they did in the third quarter of last year, she added.
Then, private home prices spiked 15.8 per cent (from the second quarter) and 7.4 per cent in the fourth quarter (from the previous one), according to the Urban Redevelopment Authority.
Mr Singh expects the new measures to affect only a small proportion of buyers - those with a 'short-term view of their investments'.
'On the whole, demand for private homes, especially at the low end, is still expected to remain strong. Hence, prices may continue to firm up this year,' he added.
Similarly, Ms Tay said prices are likely to 'stand firm'.
The new financing rules are not expected to hurt genuine buyers, said analysts, because banks were conservative and not prone to doling out loans of 90 per cent anyway.
But some Housing Board upgraders may feel the pinch.
Dennis Wee Group's associate director Elvin Tan said two out of 10 clients were getting loans close to the maximum allowed before - 90 per cent.
'Now that they have to fork out at least 20 per cent of the price of a private property, they will suddenly feel strapped for cash,' he said.
Commenting on the new stamp duty for sellers, analysts said fly-by-night speculators will be weeded out.
They said these speculators - who tend to 'flip' a property less than a year after buying it for quick profits - make up 10 per cent to 20 per cent of all new private home buyers today.
The latest move by the Government came swiftly after last month's sharp rebound in new private home sales.
Developers sold 1,476 units, triple the 481 sold in December last year.
'Although speculative activity has not reached a level deemed excessive, there is a likelihood that its volume may rise in tandem with improved confidence and economic conditions,' Ms Tay said.
With the new measures in place, she expects private home prices to rise moderately by 10 per cent to 12 per cent this year.
Do you think the latest measures will cool the market? Send your views to suntimes@sph.com.sg
--------------------------------------------------------------------------------
What buyers say
The Sunday Times visited 10 showflats, including The Shore Residences in Katong, Altez in Tanjong Pagar and Meadows@Peirce in Upper Thomson, yesterday.
Mr Nick Chong, 43
Chief operating officer
'The stamp duty will have a larger impact on speculators, but if the market has a good growth rate, they'll do well regardless of the new rules. The rules will probably affect the middle-income speculators, those who have to borrow money to speculate, and not the richer ones.'
Mr William Shie, early 40s
Sales manager
'It won't affect people who need a house. I actually welcome the new ruling; the lower the maximum possible loan, the better, because it chases away speculators.'
Ms Doris Teo, 59
Teacher
'I don't want to borrow too much from the bank, and I definitely wouldn't get a loan of as much as 80 per cent. The news just came out so I'm still unsure of how it would affect me. But it's possible that I might have to find a flat in a cheaper location.'
Ms Elaine Lek, 31
HR executive
'If I see a place and have a good feeling about it, even with the new bank limit, I'll still figure out a way to buy the unit.'
Mr Sean Toh, 38
IT professional
'I think the new measures will affect only those who are looking for condos as an investment; it won't affect home buyers like me. I will be selling my condo in Yishun and we will use the money from that to buy a new one.'
New home prices to stabilise
Thanks to new cooling measures, private home prices are expected to remain firm; genuine buyers not likely to be affected, say experts
By Irene Tham
People checking out the showflat for Altez in Tanjong Pagar yesterday. Analysts expect the measures to affect only a small proportion of buyers. -- PHOTO: LIANHE ZAOBAO
Rising too much and too fast? Not any more, it seems.
The prices of new private homes are expected to stabilise - and remain firm - this year, said analysts.
This is thanks to new measures which kicked in yesterday to cool the property market.
The two rules: Lending institutions can lend only up to 80 per cent of the value of the property, not 90 per cent; and a new stamp duty of around 3 per cent for those who sell the property within a year of buying it.
These moves could dampen sentiment temporarily as buyers pause and take stock, said Credo Real Estate managing director Karamjit Singh.
Ms Tay Huey Ying, director of research and advisory at real estate consultancy Colliers International, expects the measures to curb the buying frenzy.
Prices will stabilise instead of soaring like they did in the third quarter of last year, she added.
Then, private home prices spiked 15.8 per cent (from the second quarter) and 7.4 per cent in the fourth quarter (from the previous one), according to the Urban Redevelopment Authority.
Mr Singh expects the new measures to affect only a small proportion of buyers - those with a 'short-term view of their investments'.
'On the whole, demand for private homes, especially at the low end, is still expected to remain strong. Hence, prices may continue to firm up this year,' he added.
Similarly, Ms Tay said prices are likely to 'stand firm'.
The new financing rules are not expected to hurt genuine buyers, said analysts, because banks were conservative and not prone to doling out loans of 90 per cent anyway.
But some Housing Board upgraders may feel the pinch.
Dennis Wee Group's associate director Elvin Tan said two out of 10 clients were getting loans close to the maximum allowed before - 90 per cent.
'Now that they have to fork out at least 20 per cent of the price of a private property, they will suddenly feel strapped for cash,' he said.
Commenting on the new stamp duty for sellers, analysts said fly-by-night speculators will be weeded out.
They said these speculators - who tend to 'flip' a property less than a year after buying it for quick profits - make up 10 per cent to 20 per cent of all new private home buyers today.
The latest move by the Government came swiftly after last month's sharp rebound in new private home sales.
Developers sold 1,476 units, triple the 481 sold in December last year.
'Although speculative activity has not reached a level deemed excessive, there is a likelihood that its volume may rise in tandem with improved confidence and economic conditions,' Ms Tay said.
With the new measures in place, she expects private home prices to rise moderately by 10 per cent to 12 per cent this year.
Do you think the latest measures will cool the market? Send your views to suntimes@sph.com.sg
--------------------------------------------------------------------------------
What buyers say
The Sunday Times visited 10 showflats, including The Shore Residences in Katong, Altez in Tanjong Pagar and Meadows@Peirce in Upper Thomson, yesterday.
Mr Nick Chong, 43
Chief operating officer
'The stamp duty will have a larger impact on speculators, but if the market has a good growth rate, they'll do well regardless of the new rules. The rules will probably affect the middle-income speculators, those who have to borrow money to speculate, and not the richer ones.'
Mr William Shie, early 40s
Sales manager
'It won't affect people who need a house. I actually welcome the new ruling; the lower the maximum possible loan, the better, because it chases away speculators.'
Ms Doris Teo, 59
Teacher
'I don't want to borrow too much from the bank, and I definitely wouldn't get a loan of as much as 80 per cent. The news just came out so I'm still unsure of how it would affect me. But it's possible that I might have to find a flat in a cheaper location.'
Ms Elaine Lek, 31
HR executive
'If I see a place and have a good feeling about it, even with the new bank limit, I'll still figure out a way to buy the unit.'
Mr Sean Toh, 38
IT professional
'I think the new measures will affect only those who are looking for condos as an investment; it won't affect home buyers like me. I will be selling my condo in Yishun and we will use the money from that to buy a new one.'
ST : A home closer to work
Feb 21, 2010
A home closer to work
By Fiona Chan
As last year drew to an end, so, finally, did my patience with my 786 sq ft 'dollhouse' apartment.
The single bathroom was just too small, the pretty-but-useless balcony too big, and the desire to move too overwhelming to ignore any longer.
And so began the arduous search for a new 'Goldilocks' house that was just right.
It didn't take long for it to, ahem, hit home that that was a fairy tale. At least, for those of us who don't rule a kingdom full of geese that lay golden eggs.
While a peasant like me can't be much of a chooser, it soon became evident that there were still dozens of choices to be made in finding a new home.
That may sound like it's stating the obvious, but it wasn't all that apparent to my husband and me when we bought our first home two years ago, as a starry-eyed, idealistic young couple.
We simply set a budget, found a location we liked, and happily mapped out our future life based on a floor plan.
Now we knew better. We had Preferences. Priorities. Prejudices.
And every single one of them, as it turned out, was a reflection on the kind of adults we were becoming.
As a home-buyer, your self-definition process starts from the very minute you choose a category to peruse in the classified ads.
Young couples who buy Housing Board flats, for instance, are on the guaranteed track to riches and wealth one day.
Not just because these are the cheapest accommodations available, allowing them to invest the rest of their money elsewhere, but also because Minister Mentor Lee Kuan Yew has publicly decreed that flat prices will keep rising as long as the economy grows.
Those who buy HDB flats and then rent them out and continue living at home with their parents will be even richer - because they clearly know their way around the rules.
As for first-time home-seekers who manage to afford private property in Singapore, a few conclusions can be drawn about them too.
They can safely be assumed to already own a kingdom, be on the way to inheriting one, or be working feverishly to usurp the nearest viable throne - or their boss' seat.
Then there's the tenure test.
Young buyers who insist on freehold condos and refuse to consider anything else tend to turn into adults who always take the safe, conservative path in life.
They will minimise risk, equate price with quality, and pat themselves on the back for their 'good investments'.
Those who opt for leasehold homes tell themselves they won't be around for another 99 years anyway. They will forever live in the moment, on the edge, and under constant stress from the big ticking time bomb they imagine is built into their leasehold walls.
And the select few who snap up really old apartments with less than 30 years left on the lease are the true daredevils of our society. They are likely to be firemen, deep-sea divers and opposition politicians.
As we discovered with our first home, size is also, well, a huge factor in house hunting.
Anyone who thinks he can live comfortably in a few hundred square feet usually grew up with even less space - or just simply does not have any imagination.
At the other extreme, young adults who buy generously sized first homes are probably not very well-acquainted with the concept of housework.
Of course, there is a whole variety of other housing judgments to be made, in more than one sense of the word.
People who buy flats on high floors believe in obtaining only the best in life; those who stay on the second floor are the epitome of cost-conscious pragmatism.
But as every Singaporean knows, the most important part of choosing a home is deciding on its location.
This is not just a matter of rental profitability or resale value. It's also a question of your fundamental, lifelong happiness.
According to Cornell economist Robert Frank, while people adjust quickly to a big house and start taking the space for granted, they never get used to a long and tedious commute to work.
The heavy traffic - whether vehicle or human - that they suffer through every day takes the same toll on their mood by the time they reach their destination, no matter how many times they have done it before. In fact, their irritation only gets worse with time.
And so the happiest people are not necessarily those who stay in the biggest houses, but those who live closest to where they work.
With that in mind, my husband and I set a budget, found a location we liked, made sure it was big enough for all our junk, and are currently happily mapping out our renovation plans.
Home may be where the heart is but, at least, now we have plenty of space for all our other organs as well.
fiochan@sph.com.sg
A home closer to work
By Fiona Chan
As last year drew to an end, so, finally, did my patience with my 786 sq ft 'dollhouse' apartment.
The single bathroom was just too small, the pretty-but-useless balcony too big, and the desire to move too overwhelming to ignore any longer.
And so began the arduous search for a new 'Goldilocks' house that was just right.
It didn't take long for it to, ahem, hit home that that was a fairy tale. At least, for those of us who don't rule a kingdom full of geese that lay golden eggs.
While a peasant like me can't be much of a chooser, it soon became evident that there were still dozens of choices to be made in finding a new home.
That may sound like it's stating the obvious, but it wasn't all that apparent to my husband and me when we bought our first home two years ago, as a starry-eyed, idealistic young couple.
We simply set a budget, found a location we liked, and happily mapped out our future life based on a floor plan.
Now we knew better. We had Preferences. Priorities. Prejudices.
And every single one of them, as it turned out, was a reflection on the kind of adults we were becoming.
As a home-buyer, your self-definition process starts from the very minute you choose a category to peruse in the classified ads.
Young couples who buy Housing Board flats, for instance, are on the guaranteed track to riches and wealth one day.
Not just because these are the cheapest accommodations available, allowing them to invest the rest of their money elsewhere, but also because Minister Mentor Lee Kuan Yew has publicly decreed that flat prices will keep rising as long as the economy grows.
Those who buy HDB flats and then rent them out and continue living at home with their parents will be even richer - because they clearly know their way around the rules.
As for first-time home-seekers who manage to afford private property in Singapore, a few conclusions can be drawn about them too.
They can safely be assumed to already own a kingdom, be on the way to inheriting one, or be working feverishly to usurp the nearest viable throne - or their boss' seat.
Then there's the tenure test.
Young buyers who insist on freehold condos and refuse to consider anything else tend to turn into adults who always take the safe, conservative path in life.
They will minimise risk, equate price with quality, and pat themselves on the back for their 'good investments'.
Those who opt for leasehold homes tell themselves they won't be around for another 99 years anyway. They will forever live in the moment, on the edge, and under constant stress from the big ticking time bomb they imagine is built into their leasehold walls.
And the select few who snap up really old apartments with less than 30 years left on the lease are the true daredevils of our society. They are likely to be firemen, deep-sea divers and opposition politicians.
As we discovered with our first home, size is also, well, a huge factor in house hunting.
Anyone who thinks he can live comfortably in a few hundred square feet usually grew up with even less space - or just simply does not have any imagination.
At the other extreme, young adults who buy generously sized first homes are probably not very well-acquainted with the concept of housework.
Of course, there is a whole variety of other housing judgments to be made, in more than one sense of the word.
People who buy flats on high floors believe in obtaining only the best in life; those who stay on the second floor are the epitome of cost-conscious pragmatism.
But as every Singaporean knows, the most important part of choosing a home is deciding on its location.
This is not just a matter of rental profitability or resale value. It's also a question of your fundamental, lifelong happiness.
According to Cornell economist Robert Frank, while people adjust quickly to a big house and start taking the space for granted, they never get used to a long and tedious commute to work.
The heavy traffic - whether vehicle or human - that they suffer through every day takes the same toll on their mood by the time they reach their destination, no matter how many times they have done it before. In fact, their irritation only gets worse with time.
And so the happiest people are not necessarily those who stay in the biggest houses, but those who live closest to where they work.
With that in mind, my husband and I set a budget, found a location we liked, made sure it was big enough for all our junk, and are currently happily mapping out our renovation plans.
Home may be where the heart is but, at least, now we have plenty of space for all our other organs as well.
fiochan@sph.com.sg
ST : 'Flipping' rate at 3-year low
Feb 21, 2010
'Flipping' rate at 3-year low
Reselling of yet-to-be completed private apartments falls to 14% last year
By Joyce Teo
Sub-sales of non-landed homes fell to a three-year low last year, with the proportion at 14 per cent of total non-landed sales, said the latest report from property consultancy DTZ.
This figure is below the 16 per cent in 2008 and 15 per cent in 2007, but much higher than the 2 per cent to 11 per cent registered between 1998 and 2006.
A sub-sale takes place when a buyer buys a new apartment, then resells it before it is built. These deals are usually used as an indicator of speculative activity in the property market.
There were some concerns about the rise in speculative buying in the middle of last year when prices were rising.
In mid-September, the Government announced cooling measures which appeared to have tempered speculative interest, said Colliers International director of research and advisory Tay Huey Ying.
New measures announced on Friday could further dampen interest a little.
The Government said it would levy a stamp duty on sellers of private homes if they were to sell the homes within a year of purchase on or after Feb 20 this year.
It also lowered the loan-to-value limit to 80 per cent for all housing loans provided by financial institutions, from 90 per cent previously.
The Government introduced these measures to 'temper sentiments and pre-empt a property bubble from forming'.
The moves come despite the comparatively lower speculative activity now.
In 1995, sub-sales accounted for a hefty 29 per cent of total non-landed sales. This figure was at 23 per cent in 1996. Last year, median sub-sale prices rose by 24 per cent.
DTZ noted that the median sub-sale price of non-landed homes rose by 3.8 per cent to $1,090 per sq ft in the fourth quarter of last year.
In the last three months of last year, Casa Merah in Tanah Merah saw the highest number of sub-sale transactions, followed by Ferraria Park in Changi.
Median sub-sale prices at Casa Merah rose to $800 psf in the fourth quarter, up from $770 psf in the third quarter and $671 psf at the end of 2008. Both projects were granted Temporary Occupation Permits in the third quarter of last year, DTZ said.
Newly completed projects or those nearing completion usually attract a higher level of sub-sales as the new buyer can move in or rent it out quickly, consultants said.
Knight Frank managing director for residential services Peter Ow thinks sub-sales as a proportion of total home sales may rise this year as many projects will be completed this year.
Other experts think that with the new measures, sub-sale numbers may hold steady this year.
In any case, consultants generally do not expect sub-sales to rise significantly this year. Said Ms Tay: 'Last year, many people bought mass market properties. But, as mass market prices may not rise substantially this year, there may not be many gains to be made in the sub-sale market.'
High-end prices are expected to rise more than mass market prices this year, but runaway prices are unlikely, said DTZ, given concerns such as credit tightening in China.
'Those who want to flip can do so only when the market is rising very fast,' said its head of South-east Asia research, Ms Chua Chor Hoon.
'The new measures won't scare away the speculators. But they will make them think very carefully about flipping as the Government could introduce more measures if needed,' said Ngee Ann Polytechnic lecturer Nicholas Mak.
joyceteo@sph.com.sg
'Flipping' rate at 3-year low
Reselling of yet-to-be completed private apartments falls to 14% last year
By Joyce Teo
Sub-sales of non-landed homes fell to a three-year low last year, with the proportion at 14 per cent of total non-landed sales, said the latest report from property consultancy DTZ.
This figure is below the 16 per cent in 2008 and 15 per cent in 2007, but much higher than the 2 per cent to 11 per cent registered between 1998 and 2006.
A sub-sale takes place when a buyer buys a new apartment, then resells it before it is built. These deals are usually used as an indicator of speculative activity in the property market.
There were some concerns about the rise in speculative buying in the middle of last year when prices were rising.
In mid-September, the Government announced cooling measures which appeared to have tempered speculative interest, said Colliers International director of research and advisory Tay Huey Ying.
New measures announced on Friday could further dampen interest a little.
The Government said it would levy a stamp duty on sellers of private homes if they were to sell the homes within a year of purchase on or after Feb 20 this year.
It also lowered the loan-to-value limit to 80 per cent for all housing loans provided by financial institutions, from 90 per cent previously.
The Government introduced these measures to 'temper sentiments and pre-empt a property bubble from forming'.
The moves come despite the comparatively lower speculative activity now.
In 1995, sub-sales accounted for a hefty 29 per cent of total non-landed sales. This figure was at 23 per cent in 1996. Last year, median sub-sale prices rose by 24 per cent.
DTZ noted that the median sub-sale price of non-landed homes rose by 3.8 per cent to $1,090 per sq ft in the fourth quarter of last year.
In the last three months of last year, Casa Merah in Tanah Merah saw the highest number of sub-sale transactions, followed by Ferraria Park in Changi.
Median sub-sale prices at Casa Merah rose to $800 psf in the fourth quarter, up from $770 psf in the third quarter and $671 psf at the end of 2008. Both projects were granted Temporary Occupation Permits in the third quarter of last year, DTZ said.
Newly completed projects or those nearing completion usually attract a higher level of sub-sales as the new buyer can move in or rent it out quickly, consultants said.
Knight Frank managing director for residential services Peter Ow thinks sub-sales as a proportion of total home sales may rise this year as many projects will be completed this year.
Other experts think that with the new measures, sub-sale numbers may hold steady this year.
In any case, consultants generally do not expect sub-sales to rise significantly this year. Said Ms Tay: 'Last year, many people bought mass market properties. But, as mass market prices may not rise substantially this year, there may not be many gains to be made in the sub-sale market.'
High-end prices are expected to rise more than mass market prices this year, but runaway prices are unlikely, said DTZ, given concerns such as credit tightening in China.
'Those who want to flip can do so only when the market is rising very fast,' said its head of South-east Asia research, Ms Chua Chor Hoon.
'The new measures won't scare away the speculators. But they will make them think very carefully about flipping as the Government could introduce more measures if needed,' said Ngee Ann Polytechnic lecturer Nicholas Mak.
joyceteo@sph.com.sg
ST : Row over sales pitch with pilgrimage twist
Feb 21, 2010
Row over sales pitch with pilgrimage twist
A real estate investment firm is drawing controversy in the Malay community by offering lucky draws to go to the Muslim holy land, in its bid to lure investors, Berita Harian reported yesterday.
The company, Amanah Nusa Indah, or ANI, offers one lucky draw chance to each person who attends its sessions to sell plots of land in Chennai, southern India.
The land is being sold at $1.20 per square foot (psf), and investors must buy at least 2,700 sq ft of land - about the size of two five-room flats. This piece of land will then be joined to those bought by others to become bigger plots, BH reported.
The controversy has been caused by the offer of sending potential investors to umrah - a minor pilgrimage to the Muslim holy cities of Mecca and Madinah.
'(Why don't they) just say they want to sell investments? Why use the umrah package to sell something?' Ms Sarah, an investment officer, was quoted as saying by the newspaper.
Another person, Ms Hawa (not her real name), became suspicious when she was told by ANI that she had won a package to the holy land, but was asked if she had a credit card. She was also told to go with her husband for an interview session.
'What has the umrah package got to do with a credit card? Why go through the interview?' Ms Hawa asked.
At ANI's office in Orchard Road, its chief operating officer, Mr Jaafar Sani, said the lucky draw was a sales gimmick.
He said of the five people who have won the umrah packages, only two were investors. The other three came and listened to sales presentations, he said.
'At first, people were suspicious. But after the first group went (for umrah), everybody wanted (our service),' he said.
It was BH's understanding that there were buyers who had paid between $3,200 and $15,000 for the plots of land.
Mr Jaafar said there were risks to every investment, adding that he could not guarantee profits. Investors must be prepared to wait five years, he said.
To ensure that the Chennai authorities do not take back the land, he said every investor had been given a land grant and a guarantee in the Tamil language by ANI's partner, who is from Chennai.
Row over sales pitch with pilgrimage twist
A real estate investment firm is drawing controversy in the Malay community by offering lucky draws to go to the Muslim holy land, in its bid to lure investors, Berita Harian reported yesterday.
The company, Amanah Nusa Indah, or ANI, offers one lucky draw chance to each person who attends its sessions to sell plots of land in Chennai, southern India.
The land is being sold at $1.20 per square foot (psf), and investors must buy at least 2,700 sq ft of land - about the size of two five-room flats. This piece of land will then be joined to those bought by others to become bigger plots, BH reported.
The controversy has been caused by the offer of sending potential investors to umrah - a minor pilgrimage to the Muslim holy cities of Mecca and Madinah.
'(Why don't they) just say they want to sell investments? Why use the umrah package to sell something?' Ms Sarah, an investment officer, was quoted as saying by the newspaper.
Another person, Ms Hawa (not her real name), became suspicious when she was told by ANI that she had won a package to the holy land, but was asked if she had a credit card. She was also told to go with her husband for an interview session.
'What has the umrah package got to do with a credit card? Why go through the interview?' Ms Hawa asked.
At ANI's office in Orchard Road, its chief operating officer, Mr Jaafar Sani, said the lucky draw was a sales gimmick.
He said of the five people who have won the umrah packages, only two were investors. The other three came and listened to sales presentations, he said.
'At first, people were suspicious. But after the first group went (for umrah), everybody wanted (our service),' he said.
It was BH's understanding that there were buyers who had paid between $3,200 and $15,000 for the plots of land.
Mr Jaafar said there were risks to every investment, adding that he could not guarantee profits. Investors must be prepared to wait five years, he said.
To ensure that the Chennai authorities do not take back the land, he said every investor had been given a land grant and a guarantee in the Tamil language by ANI's partner, who is from Chennai.
ST : Private property resale market may still rise
Feb 21, 2010
Private property resale market may still rise
Prices of private property in the resale market could still head north despite the Government's measures to curb speculation, said industry players.
The reason: People who held back hoping that prices would fall in the recession last year, but are now keen to enter, given the rebound in the market.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that based on caveats for last month, the resale market is showing strong volume.
Statistics from the Urban Redevelopment Authority showed there were 3,353 resale transactions in the fourth quarter last year, compared to 5,798 in the third quarter and 4,164 in the second.
Mr Mak added: 'With the economy picking up and greater job stability, people are buying as their sentiment has turned positive and there are expectations the market could pick up.'
Said ERA agent David Lim: 'A lot of people reckon we are still probably at the foot of the mountain, and that they should go in now.'
His average monthly transactions for private resale properties have gone up, from three or four last October to five or six in December and January.
Buyers now face tighter rules to curb speculation.
Lending institutions will now be allowed to lend only up to 80 per cent of the value of the property, not 90 per cent.
Anyone who sells a property within a year of buying it must now foot stamp duty of around 3 per cent.
Still, those with deep pockets can still speculate but they may be less active, said ERA agent Eugene Ow.
Mr Lim forsees another peak this year in terms of prices. He said: 'A large part of the investors with real money can still go in despite these measures.'
Even if they need loans, they might not need the full 90 per cent in the first place anyway, he added.
Commenting on the new measures, Knight Frank property consultant Peter Ow said mid- to long-term buyers with a horizon of more than two to three years would not be discouraged.
Also, the high-end and landed property segments should not be badly hit as people usually buy these for occupation, not speculation.
Mr Peter Ow added: 'The upgrader market will be the one affected; these are the people moving up from HDB flats to condominiums. They're the ones who borrow to the maximum of 90 per cent.'
Mr Steven Tan, executive director of property firm OrangeTee, said most banks have already been discouraging clients from taking up 90 per cent loans.
He said: 'After the financial crisis, most banks tightened credit policies and put a much higher interest rate on those borrowing 90 per cent.
'So buyers are prepared to borrow less.'
Another reason for prices possibly going up? The fear that more curbs will kick in.
Mr Mak noted the Government has yet to apply all the meaures at its disposal to cool the market.
'They could put in capital gains tax, or extend stamp duty from one year to maybe two years,' he said.
Leonard Lim & Shuli Shudderuddin
Private property resale market may still rise
Prices of private property in the resale market could still head north despite the Government's measures to curb speculation, said industry players.
The reason: People who held back hoping that prices would fall in the recession last year, but are now keen to enter, given the rebound in the market.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that based on caveats for last month, the resale market is showing strong volume.
Statistics from the Urban Redevelopment Authority showed there were 3,353 resale transactions in the fourth quarter last year, compared to 5,798 in the third quarter and 4,164 in the second.
Mr Mak added: 'With the economy picking up and greater job stability, people are buying as their sentiment has turned positive and there are expectations the market could pick up.'
Said ERA agent David Lim: 'A lot of people reckon we are still probably at the foot of the mountain, and that they should go in now.'
His average monthly transactions for private resale properties have gone up, from three or four last October to five or six in December and January.
Buyers now face tighter rules to curb speculation.
Lending institutions will now be allowed to lend only up to 80 per cent of the value of the property, not 90 per cent.
Anyone who sells a property within a year of buying it must now foot stamp duty of around 3 per cent.
Still, those with deep pockets can still speculate but they may be less active, said ERA agent Eugene Ow.
Mr Lim forsees another peak this year in terms of prices. He said: 'A large part of the investors with real money can still go in despite these measures.'
Even if they need loans, they might not need the full 90 per cent in the first place anyway, he added.
Commenting on the new measures, Knight Frank property consultant Peter Ow said mid- to long-term buyers with a horizon of more than two to three years would not be discouraged.
Also, the high-end and landed property segments should not be badly hit as people usually buy these for occupation, not speculation.
Mr Peter Ow added: 'The upgrader market will be the one affected; these are the people moving up from HDB flats to condominiums. They're the ones who borrow to the maximum of 90 per cent.'
Mr Steven Tan, executive director of property firm OrangeTee, said most banks have already been discouraging clients from taking up 90 per cent loans.
He said: 'After the financial crisis, most banks tightened credit policies and put a much higher interest rate on those borrowing 90 per cent.
'So buyers are prepared to borrow less.'
Another reason for prices possibly going up? The fear that more curbs will kick in.
Mr Mak noted the Government has yet to apply all the meaures at its disposal to cool the market.
'They could put in capital gains tax, or extend stamp duty from one year to maybe two years,' he said.
Leonard Lim & Shuli Shudderuddin
ST : New property rules: 'No effect on genuine buyers'
Feb 21, 2010
New property rules: 'No effect on genuine buyers'
Govt considered other factors besides prices in acting to prevent bubble, says Grace Fu
By Jamie Ee Wen Wei
Buyers with the financial means to hold a property will not be affected by the two new measures that came into effect yesterday, Senior Minister of State for National Development Grace Fu said.
She emphasised that the Government had acted to prevent a speculative bubble from forming.
In closely monitoring the property situation, it did not just look at prices, she said yesterday.
It also took into account a comprehensive range of indicators, including the volume of sub-sales and the 'churn' - also known as 'flipping' - in the market.
Ms Fu's comments - made at the sidelines of a community event - came a day after the new measures were announced.
From yesterday, any property sold within a year of its purchase will attract stamp duty of around 3 per cent. This is on top of the stamp duty the prospective seller had earlier paid on the purchase.
Home buyers will also have to fork out more of their own money to buy property. Lending institutions will now be allowed to lend only up to 80 per cent of the value of the property, instead of 90 per cent.
Ms Fu said rising property prices were not the only reason that the Government decided to step in.
'We don't really comment on property prices. But we look at a whole host of indicators...So it's not just about pricing,' she said.
Asked why the new rules had come hard on the heels of last September's market-cooling measures, Ms Fu said the Government had been monitoring the market very closely and felt 'it was the right thing to do for the moment'.
'We would like to, in a way, make sure that there's no bubble formation and can do it before the bubble is being formed. We think it's a suitable time,' she said.
Emphasising that the aim was to deter speculative behaviour, she said: 'We want our investors to be on a more solid ground when they invest in property.
'It should not deter genuine buyers who have the financial resources to hold a property. So, to an extent, we think it'll help maintain a healthy state of the market.'
Last September, the Government removed the interest absorption scheme and interest-only housing loans - both of which removed or reduced regular instalment payments for uncompleted properties. It had also announced the resumption of confirmed-list land sales in the first half of this year.
Asked if any financing restrictions on Housing Board loans were in the pipeline, Ms Fu said there were already stringent credit checks to curb speculation in public housing.
'Plus the fact that HDB buyers who come to us for first-time loans, they are likely to live in the house that they buy,' she said.
She added that the new rules were not meant to curb the rising cash-over-valuation (COV) sums.
'COV happens when someone is prepared to pay a price above the valuation, so as long as a person has the means, then he will be willing to pay for the flat if he thinks it's worth it.'
Meanwhile, home buyers yesterday continued to throng showflats across the island despite the new measures that had kicked in.
Those whom The Sunday Times spoke to said the new rules will not affect them.
Sales manager William Shie, who is in his 40s, welcomed the new rules.
Mr Shie, who was at the 408-unit The Shore Residences showflat in Katong, said: 'It won't affect people like me who need a house. I actually welcome the new ruling. The lower the maximum possible loan, the better, because it chases away speculators.'
jamieee@sph.com.sg
Additional reporting by Sumita Sreedharan, Debby Kwong and Ng Hui Ying
New property rules: 'No effect on genuine buyers'
Govt considered other factors besides prices in acting to prevent bubble, says Grace Fu
By Jamie Ee Wen Wei
Buyers with the financial means to hold a property will not be affected by the two new measures that came into effect yesterday, Senior Minister of State for National Development Grace Fu said.
She emphasised that the Government had acted to prevent a speculative bubble from forming.
In closely monitoring the property situation, it did not just look at prices, she said yesterday.
It also took into account a comprehensive range of indicators, including the volume of sub-sales and the 'churn' - also known as 'flipping' - in the market.
Ms Fu's comments - made at the sidelines of a community event - came a day after the new measures were announced.
From yesterday, any property sold within a year of its purchase will attract stamp duty of around 3 per cent. This is on top of the stamp duty the prospective seller had earlier paid on the purchase.
Home buyers will also have to fork out more of their own money to buy property. Lending institutions will now be allowed to lend only up to 80 per cent of the value of the property, instead of 90 per cent.
Ms Fu said rising property prices were not the only reason that the Government decided to step in.
'We don't really comment on property prices. But we look at a whole host of indicators...So it's not just about pricing,' she said.
Asked why the new rules had come hard on the heels of last September's market-cooling measures, Ms Fu said the Government had been monitoring the market very closely and felt 'it was the right thing to do for the moment'.
'We would like to, in a way, make sure that there's no bubble formation and can do it before the bubble is being formed. We think it's a suitable time,' she said.
Emphasising that the aim was to deter speculative behaviour, she said: 'We want our investors to be on a more solid ground when they invest in property.
'It should not deter genuine buyers who have the financial resources to hold a property. So, to an extent, we think it'll help maintain a healthy state of the market.'
Last September, the Government removed the interest absorption scheme and interest-only housing loans - both of which removed or reduced regular instalment payments for uncompleted properties. It had also announced the resumption of confirmed-list land sales in the first half of this year.
Asked if any financing restrictions on Housing Board loans were in the pipeline, Ms Fu said there were already stringent credit checks to curb speculation in public housing.
'Plus the fact that HDB buyers who come to us for first-time loans, they are likely to live in the house that they buy,' she said.
She added that the new rules were not meant to curb the rising cash-over-valuation (COV) sums.
'COV happens when someone is prepared to pay a price above the valuation, so as long as a person has the means, then he will be willing to pay for the flat if he thinks it's worth it.'
Meanwhile, home buyers yesterday continued to throng showflats across the island despite the new measures that had kicked in.
Those whom The Sunday Times spoke to said the new rules will not affect them.
Sales manager William Shie, who is in his 40s, welcomed the new rules.
Mr Shie, who was at the 408-unit The Shore Residences showflat in Katong, said: 'It won't affect people like me who need a house. I actually welcome the new ruling. The lower the maximum possible loan, the better, because it chases away speculators.'
jamieee@sph.com.sg
Additional reporting by Sumita Sreedharan, Debby Kwong and Ng Hui Ying
CNA : Mah cautions against seeing renting flats as easy way out
Mah cautions against seeing renting flats as easy way out
By Channel NewsAsia | Posted: 20 February 2010 2229 hrs
SINGAPORE: National Development Minister Mah Bow Tan has cautioned against seeing renting flats from HDB as an easy way out as these flats generally have low rents.
Mr Mah's comments at a January 15 PAP policy forum on "Housing in Singapore" were reported in the recent copy of Petir, which is a People's Action Party magazine.
The HDB is working to increase the supply of rental flats for the needy and there will be about 7,500 more by 2012.
Mr Mah also touched on reports that some build-to-order (BTO) flats have been very oversubscribed.
He explained that the high number of applications does not mean there are insufficient flats because a huge proportion of would-be buyers do not select a flat.
Mr Mah cited figures which showed over 40 percent of those invited to choose a BTO flat did not do so.
By Channel NewsAsia | Posted: 20 February 2010 2229 hrs
SINGAPORE: National Development Minister Mah Bow Tan has cautioned against seeing renting flats from HDB as an easy way out as these flats generally have low rents.
Mr Mah's comments at a January 15 PAP policy forum on "Housing in Singapore" were reported in the recent copy of Petir, which is a People's Action Party magazine.
The HDB is working to increase the supply of rental flats for the needy and there will be about 7,500 more by 2012.
Mr Mah also touched on reports that some build-to-order (BTO) flats have been very oversubscribed.
He explained that the high number of applications does not mean there are insufficient flats because a huge proportion of would-be buyers do not select a flat.
Mr Mah cited figures which showed over 40 percent of those invited to choose a BTO flat did not do so.
ST : From Sentosa Cove to China
Feb 20, 2010
THE SMALL LISTED PLAYER
From Sentosa Cove to China
Flushed with success from its first mover advantage on Sentosa Cove, Ho Bee is looking to China
By Joyce Teo, Property Correspondent
Ho Bee chairman and chief executive Chua Thian Poh (above) says the financial crisis has not flattened the company as some have feared. It has had just one default for The Coast condominium in Sentosa Cove (second picture) and one for Orange Grove Residences. -- PHOTOS: NG SOR LUAN, HO BEE GROUP
SENTOSA COVE was like Treasure Island for developer Ho Bee, which surfed on the wave of demand for high-end property at the enclave to make a mint. Then the tide went out.
The financial crisis and the crash in prime real estate suddenly gave the exclusive seafront estate a forlorn air and Ho Bee the look of a firm that had overplayed its hand.
The developer dismissed such concerns back then and it continues to maintain that the enclave will be a winner.
Ho Bee got in early on Sentosa Island, bought aggressively and made piles of money selling the developed units.
But when the downturn hit, that close association with Sentosa meant it quickly fell out of favour with investors.
Ho Bee shares dived to a 52-week low of 27.5 cents each at one point in March last year, but shares have since climbed as high as $1.90 in January.
There seemed cause for concern. Ho Bee, with IOI Properties, bought The Pinnacle Collection, the last condo plot on Sentosa Cove for $1.097 billion or a whopping price of $1,822 per sq ft (psf) of potential gross floor area just before the crisis set in.
Ho Bee chairman and chief executive Chua Thian Poh told The Straits Times he remained confident of the prospects of Sentosa Cove properties throughout the crisis because they are scarce.
But the market and analysts did not share that view. By early last year, Sentosa Cove values had plunged and there was talk of defaults. An agent reportedly said the enclave had lost its appeal.
Data from Colliers International then showed that some non-landed Sentosa Cove properties were sold at an average of $1,318 psf, or 46 per cent below the average of $2,431 psf at the peak in early 2008.
There were also fears of deferred payment scheme (DPS) defaults. Ho Bee completed four projects last year - The Coast, Vertis, Quinterra, Orange Grove Residences - that exposed it to risks from DPS defaults.
'At the beginning of last year, many people were looking at whether those who bought under the deferred payment scheme could fulfil their obligations to complete their purchases,' said Mr Chua.
'Our board was very cautious. We went through a lot of simulations on what was the worst scenario.
'We talked about a 10 per cent default, 20 per cent default on DPS and even up to 50 per cent default. But we were still very comfortable with it.'
Concerns lingered for a while as consumers had trouble getting financing at one point, said Mr Chua. But the situation turned the corner sooner than expected and DPS concerns evaporated.
Ho Bee said it has had just one default for The Coast in Sentosa Cove and one for Orange Grove Residences.
'We hope to have more people default so we can then take (the property) back and resell it straightaway at a higher price,' said Mr Chua with a laugh.
'Most developers should be quite comfortable during the last six to eight months of 2009.'
While the financial crisis has not flattened Ho Bee as some have feared, it has given it an opportunity to reflect.
'You focus on... your next step. You have time to think,' said Mr Chua.
Ho Bee started to explore overseas opportunities at the start of last year, a strategy it used before. It moved to London during the 1996 property peak here to avoid a property bubble that it was convinced would burst.
The bubble did burst and Ho Bee found that its British move was a godsend: Its main income until 2000 came from London.
Things are not that desperate now. Prices have risen. Take Ho Bee's The Coast condo: Sub-sale deals went for as low as $1,195 psf early last year but has since bounced back to above $2,000 psf, though deals are few.
Its gamble on Sentosa Cove has paid off, although the market has changed much in the past five years, making life harder for developers.
'Previously, when you bid for land, your margin may be low, but you still have a margin,' said Mr Chua.
But developers are now bidding for land at forward prices, he said.
'You look at the Singapore market. Almost every project is an ad hoc project as you can't have a big land bank.'
Ho Bee had the first mover advantage in Sentosa Cove, 'but when you build up the market, you have to compete with other developers for the land in Sentosa.
'Now, you are getting more and more competition in the bidding of land... less margins and more competition... so our next push will be to venture overseas,' said Mr Chua.
Over the next one to two years, Ho Bee hopes to deploy 30 to 40 per cent of its capital overseas, focusing on residential and mixed development projects.
China is under intense scrutiny. The company is in the midst of a study on jointly developing a residential project in Tangshan Nanhu Eco-City with Yanlord Land Group. It also just acquired a residential development site in Shanghai with the same partner.
'In China, you can have a big land bank. Land cost is only about 20 per cent to 30 per cent of project cost,' said Mr Chua. 'In Singapore, it is about 50 per cent to 70 per cent, so you can't afford a big land bank here.
'Hopefully, China will become our Sentosa Cove in two to three years.'
joyceteo@sph.com.sg
THE SMALL LISTED PLAYER
From Sentosa Cove to China
Flushed with success from its first mover advantage on Sentosa Cove, Ho Bee is looking to China
By Joyce Teo, Property Correspondent
Ho Bee chairman and chief executive Chua Thian Poh (above) says the financial crisis has not flattened the company as some have feared. It has had just one default for The Coast condominium in Sentosa Cove (second picture) and one for Orange Grove Residences. -- PHOTOS: NG SOR LUAN, HO BEE GROUP
SENTOSA COVE was like Treasure Island for developer Ho Bee, which surfed on the wave of demand for high-end property at the enclave to make a mint. Then the tide went out.
The financial crisis and the crash in prime real estate suddenly gave the exclusive seafront estate a forlorn air and Ho Bee the look of a firm that had overplayed its hand.
The developer dismissed such concerns back then and it continues to maintain that the enclave will be a winner.
Ho Bee got in early on Sentosa Island, bought aggressively and made piles of money selling the developed units.
But when the downturn hit, that close association with Sentosa meant it quickly fell out of favour with investors.
Ho Bee shares dived to a 52-week low of 27.5 cents each at one point in March last year, but shares have since climbed as high as $1.90 in January.
There seemed cause for concern. Ho Bee, with IOI Properties, bought The Pinnacle Collection, the last condo plot on Sentosa Cove for $1.097 billion or a whopping price of $1,822 per sq ft (psf) of potential gross floor area just before the crisis set in.
Ho Bee chairman and chief executive Chua Thian Poh told The Straits Times he remained confident of the prospects of Sentosa Cove properties throughout the crisis because they are scarce.
But the market and analysts did not share that view. By early last year, Sentosa Cove values had plunged and there was talk of defaults. An agent reportedly said the enclave had lost its appeal.
Data from Colliers International then showed that some non-landed Sentosa Cove properties were sold at an average of $1,318 psf, or 46 per cent below the average of $2,431 psf at the peak in early 2008.
There were also fears of deferred payment scheme (DPS) defaults. Ho Bee completed four projects last year - The Coast, Vertis, Quinterra, Orange Grove Residences - that exposed it to risks from DPS defaults.
'At the beginning of last year, many people were looking at whether those who bought under the deferred payment scheme could fulfil their obligations to complete their purchases,' said Mr Chua.
'Our board was very cautious. We went through a lot of simulations on what was the worst scenario.
'We talked about a 10 per cent default, 20 per cent default on DPS and even up to 50 per cent default. But we were still very comfortable with it.'
Concerns lingered for a while as consumers had trouble getting financing at one point, said Mr Chua. But the situation turned the corner sooner than expected and DPS concerns evaporated.
Ho Bee said it has had just one default for The Coast in Sentosa Cove and one for Orange Grove Residences.
'We hope to have more people default so we can then take (the property) back and resell it straightaway at a higher price,' said Mr Chua with a laugh.
'Most developers should be quite comfortable during the last six to eight months of 2009.'
While the financial crisis has not flattened Ho Bee as some have feared, it has given it an opportunity to reflect.
'You focus on... your next step. You have time to think,' said Mr Chua.
Ho Bee started to explore overseas opportunities at the start of last year, a strategy it used before. It moved to London during the 1996 property peak here to avoid a property bubble that it was convinced would burst.
The bubble did burst and Ho Bee found that its British move was a godsend: Its main income until 2000 came from London.
Things are not that desperate now. Prices have risen. Take Ho Bee's The Coast condo: Sub-sale deals went for as low as $1,195 psf early last year but has since bounced back to above $2,000 psf, though deals are few.
Its gamble on Sentosa Cove has paid off, although the market has changed much in the past five years, making life harder for developers.
'Previously, when you bid for land, your margin may be low, but you still have a margin,' said Mr Chua.
But developers are now bidding for land at forward prices, he said.
'You look at the Singapore market. Almost every project is an ad hoc project as you can't have a big land bank.'
Ho Bee had the first mover advantage in Sentosa Cove, 'but when you build up the market, you have to compete with other developers for the land in Sentosa.
'Now, you are getting more and more competition in the bidding of land... less margins and more competition... so our next push will be to venture overseas,' said Mr Chua.
Over the next one to two years, Ho Bee hopes to deploy 30 to 40 per cent of its capital overseas, focusing on residential and mixed development projects.
China is under intense scrutiny. The company is in the midst of a study on jointly developing a residential project in Tangshan Nanhu Eco-City with Yanlord Land Group. It also just acquired a residential development site in Shanghai with the same partner.
'In China, you can have a big land bank. Land cost is only about 20 per cent to 30 per cent of project cost,' said Mr Chua. 'In Singapore, it is about 50 per cent to 70 per cent, so you can't afford a big land bank here.
'Hopefully, China will become our Sentosa Cove in two to three years.'
joyceteo@sph.com.sg
ST : New beginnings at the Pinnacle
Feb 20, 2010
New beginnings at the Pinnacle
It may have been a rush but these residents are glad to usher in Chinese New Year in new abodes
By lin wenjian
Owners of units in the 50-storey Pinnacle development (above) got their keys to their homes two months ago. -- ST PHOTO: STEPHANIE YEOW
New year, new clothes, new homes in what is probably Singapore's most desirable HDB estate.
A handful of home owners at The Pinnacle@Duxton managed to do up their new abodes in time to show them off to visitors during this Chinese New Year season.
Two months ago, owners of units in the 50-storey development received the keys to their homes, following a ceremony on Dec 13 attended by Minister Mentor Lee Kuan Yew.
It has been more than five years after The Pinnacle was launched for sale under the Housing and Development Board's build-to-order scheme in May 2004.
HDB says keys to 1,530 out of 1,848 four- and five-room apartments have been issued.
The flats are erected in Duxton Plain in Cantonment Road - the site where the first two HDB rental blocks in the area were built in 1963.
Now, replacing the old slab-like blocks are condo-style flats - from 93 to 108sqm - spread over a unique hook-shaped design that ensures no window looks into a neighbouring home.
Designed by local architecture firm ARC Studio Architecture + Urbanism, Singapore, these flats boast another distinctive feature: two skybridges that link the seven blocks on the 26th and 50th storeys.
The one on the lower floor is open 24 hours only to residents. It has amenities such as an outdoor gym and a jogging track.
Beating the deadline
The public can access only the skybridge on the 50th storey from 9am to 10pm daily and non-residents have to pay $5 each for a visit.
A maximum of 200 visitors are allowed every day.
The area is close to two MRT stations - Outram and Tanjong Pagar. Both are five minutes away on foot.
Residents can shop for groceries at the nearby wet market at Chinatown Complex in Smith Street. There are also plenty of eateries and bars in Bukit Pasoh and New Bridge Road for those wanting to make merry.
With such attractive design and facilities, it is no wonder that residents were eager to move in as soon as they could.
The only problem was, the year-end period is always the peak season for interior design firms here.
'There is usually a 50 to 60 per cent increase in jobs from October to January,' says Mr Thomas Tham, ownerof design firm White Space Living, which is working on four households atThe Pinnacle.
An interior designer of another company, D'esprit Interiors, says her company handles about 10 cases in 'the one or two months leading to Chinese New Year', compared to three to four jobs it receives at other times of the year.
She declined to be named.
Despite the crunch, some Pinnacle home owners - about 10 per cent, according to a quick Life! survey of the estate - moved in just in time for the Chinese New Year.
wenjian@sph.com.sg
--------------------------------------------------------------------------------
Their love nest, finally
Who lives here: Ng Say Hian, 32, army officer, and his wife, Seow Lin, 31, senior IT analyst
Flat type: 34th storey, four-room flat, 93sq m
Cost of flat: $346,000
Keys collected: Dec 15
Moved in: Feb 13
To keep their 93 sq m flat looking as spacious as possible, Mrs Ng Seow Lin and her husband, Mr Ng Say Hian (both, top), fitted a mirror in the living room to create the illusion of a larger area and kept their furnishings to a minimum, with just a leather sofa. -- ST PHOTOS: AIDAH RAUF
The Ngs' excitement about getting the keys to their new home immediately disappeared when they stepped inside for the first time and saw how small it was.
'When we opened the door to the flat, we were quite disappointed at how small 93 sq m really is,' says Mr Ng Say Hian.
The couple, who have been married for four years, previously lived with MrNg's parents in a Hillview Road condominium and with his in-laws in a Bukit Timah house.
Thanks to the good work of their interior designer, the apartment looks more spacious.
The living room, done up in a classy black-and-white scheme, is now MrNg's favourite part of the house.
'With the elevated platform and mirror, it now feels bigger. I'm very much into entertainment, so I'll probably invest in a good sound system to set the living room up to be my haven,' he says.
To keep the area as spacious as possible, a cream-coloured L-shaped leather sofa is the only loose piece of furniture there.
'We prefer our place to be neat and tidy, with no hidden or hard-to-reach corners, so cleaning is easier,' says Mrs Ng.
Mr Ng adds: 'We gave the interior designer a budget of $30,000 to achieve a minimalist look, and worked very closely with him to get everything ready so we could spend the Chinese New Year holidays in our new home.'
The home owners are planning a housewarming party today and Mr Ng intends to borrow as many access cards as he can from his neighbours so he can take all his guests to the skybridge on the 50th storey at the same time.
Each household at The Pinnacle has four cards.
Even though the Ngs no longer enjoy the convenience of living with their parents, they are happy to finally have a place to call their own.
'The sense of ownership we have is very satisfying and we know that this place is a good buy, as an investment and as a place to live in,' MrNg says.
His wife adds with a laugh: 'Our parents are also getting old, so they should not be still helping us with household chores.'
--------------------------------------------------------------------------------
'The sense of ownership we have is very satisfying and we know that this place is a good buy, as an investment and as a place to live in'
Mr Ng
--------------------------------------------------------------------------------
Love the view
Who lives here: James Tan, 48, tour agency sales manager, his wife Serene, 49, legal secretary, their daughter Cassandra, 21, student, and son Ericson, 19, student
Flat type: 42nd storey, four-room flat, 93 sq m
Cost of flat: $369,000
Keys collected: Dec 14
Moved in: Jan 10
Hanging lamps (above) in the 93 sq m home of James Tan, his wife Serene and children Ericson and Cassandra (all, top) are part of the apartment?s showpieces, which also include paintings and rosewood furniture. -- ST PHOTOS: TERENCE TAN
Mr James Tan and his family could move in to their new home at The Pinnacle less than a month after collecting their keys mostly because they kept renovations to a minimum.
There was one big problem, though: Mr Tan and his wife's beloved rosewood daybed could not be dismantled and therefore could not fit into the lift.
'The movers had to carry it up from the first floor,' Mrs Tan says. That feat took seven hours and cost them $400.
The Tans are used to living on the outskirts of the city. Their previous home was a maisonette in Geylang East, whose location they loved. But with their children grown up and spending less time at home, they wanted a smaller place than the 140 sq m maisonette.
'My son will be enlisting for national service in two years and my daughter sometimes goes on overseas exchange programmes that last a few months each time. That leaves just the two of us and we don't need such a big space,' Mr Tan explains.
'Our queue number was in the 900s, so during the two-week selection period in July 2004, I checked the Internet every day to see which units were taken up so that when it came to our turn, we would have a good idea of which one to choose,' says Mrs Tan.
Although they did not get a unit in their preferred B and C blocks, which they say have the best view of the city, they are satisfied with their choice.
'The first thing I see when I wake up is a beautiful sea view. It is fantastic,' says Mr Tan, who asks that Life! not identify the block he lives in.
So proud is his family of their new home that they invited friends and relatives over during the Chinese New Year holidays, something they hardly did in the 14 years they lived in Geylang East.
'Some even took the initiative to ask to visit me,' he says with a chuckle.
In all, they spent $20,000 on the renovations, which included painting the walls in a cosy shade of rose white, wiring up the apartment and installing built-in cabinets.
Another $3,000 was spent on five hanging lamps. 'They add character and, together with my paintings, are showpieces of the place. Apart from those, we brought over most of the furniture from our old place because we really like them,' Mr Tan says of their rosewood sofa, dining set and TV console.
From The Pinnacle, the Tans take less time to get to work and school.
Mr Tan is just one MRT stop away from his office in Raffles Place. His wife takes a five-minute stroll to the law firm she works at in Tanjong Pagar.
Daughter Cassandra now has a direct bus to the National University of Singapore. 'The journey used to take me more than an hour, compared to 40 minutes now,' says the second-year arts student.
Her brother Ericson's daily 30-minute commute to Ngee Ann Polytechnic in Clementi is also an improvement from the 45 minutes he used to take.
They are also nearer to Mr Tan's 70-year-old mother, who lives in nearby Neil Road. He says: 'We used to visit her only on weekends. Now we see her at least three times a week.'
--------------------------------------------------------------------------------
'The first thing I see when I wake up is a beautiful sea view. It is fantastic'
Mr Tan on the view from his 42nd-storey flat
--------------------------------------------------------------------------------
In time for baby's arrival
Who lives here: Darien Loh, 30, business development executive, and his wife, Eunice, 29, bank executive
Flat type: 5th storey, four-room flat, 96 sq m
Cost of flat: $465,000
Keys collected: Dec 15
Moved in: Second week of this month
With its spacious area, the living room is Mr Darien Loh?s favourite part of his 96 sq m flat. With him is his wife, Eunice. -- ST PHOTOS: STEPHANIE YEOW
The view of Cantonment Road from the apartment?s living room is peppered with greenery such as trees.
No doubt The Pinnacle is highly desirable and located in an excellent area close to the central business districts, and the skybridges are a great feature with stunning views of the city skyline.
Whatever. After viewing about three flats every week for the past two years, Mr and Mrs Darien Loh are just relieved they now live in a home they own.
They had been living with Mr Loh's parents in a flat in Clementi since tying the knot in September 2008.
'The skybridges are a nice bonus but I can probably do without them,' Mr Loh says.
When they received the selection notice in March last year, the couple initially agreed that they would not settle for a unit below the sixth floor.
In the end, they decided to buy their fifth-storey apartment.
Mrs Loh says: 'There were only four units left on the fourth and fifth floors. We went ahead and chose one on the higher floor. We did not want to pay the cash-over-valuation price and an agent's fee needed for a resale flat.'
Renovations started almost immediately after they received their keys, as the couple wanted to move in before Mrs Loh delivers their first child next month.
Built-in furniture is a key element in their design. The dining table, the cupboards and the shoe cabinet are made to measure.
'We made it a point to conceal all electrical wires and not to have hanging lamps because we want the whole place to look neat,' Mr Loh says.
The long wall beside the kitchen is bare at the moment because Mrs Loh intends to cover it with a montage of family photos.
The total cost of renovations was $30,000.
Less than a month after moving in, they already have their favourite corners.
Mrs Loh says: 'I love our bedroom most. It is where I feel most relaxed and I can do whatever I want.'
Her husband likes to chill out in the living room. 'This is where I watch TV, read the papers or have a drink to relax after work,' he says.
'It's the biggest part of the house, so I don't feel hemmed in when I'm here.'
--------------------------------------------------------------------------------
'We did not want to pay the cash-over-valuation price and an agent's fee for a resale flat'
Mrs Eunice Loh on why she changed her mind about getting an apartment that is at least on the sixth floor
New beginnings at the Pinnacle
It may have been a rush but these residents are glad to usher in Chinese New Year in new abodes
By lin wenjian
Owners of units in the 50-storey Pinnacle development (above) got their keys to their homes two months ago. -- ST PHOTO: STEPHANIE YEOW
New year, new clothes, new homes in what is probably Singapore's most desirable HDB estate.
A handful of home owners at The Pinnacle@Duxton managed to do up their new abodes in time to show them off to visitors during this Chinese New Year season.
Two months ago, owners of units in the 50-storey development received the keys to their homes, following a ceremony on Dec 13 attended by Minister Mentor Lee Kuan Yew.
It has been more than five years after The Pinnacle was launched for sale under the Housing and Development Board's build-to-order scheme in May 2004.
HDB says keys to 1,530 out of 1,848 four- and five-room apartments have been issued.
The flats are erected in Duxton Plain in Cantonment Road - the site where the first two HDB rental blocks in the area were built in 1963.
Now, replacing the old slab-like blocks are condo-style flats - from 93 to 108sqm - spread over a unique hook-shaped design that ensures no window looks into a neighbouring home.
Designed by local architecture firm ARC Studio Architecture + Urbanism, Singapore, these flats boast another distinctive feature: two skybridges that link the seven blocks on the 26th and 50th storeys.
The one on the lower floor is open 24 hours only to residents. It has amenities such as an outdoor gym and a jogging track.
Beating the deadline
The public can access only the skybridge on the 50th storey from 9am to 10pm daily and non-residents have to pay $5 each for a visit.
A maximum of 200 visitors are allowed every day.
The area is close to two MRT stations - Outram and Tanjong Pagar. Both are five minutes away on foot.
Residents can shop for groceries at the nearby wet market at Chinatown Complex in Smith Street. There are also plenty of eateries and bars in Bukit Pasoh and New Bridge Road for those wanting to make merry.
With such attractive design and facilities, it is no wonder that residents were eager to move in as soon as they could.
The only problem was, the year-end period is always the peak season for interior design firms here.
'There is usually a 50 to 60 per cent increase in jobs from October to January,' says Mr Thomas Tham, ownerof design firm White Space Living, which is working on four households atThe Pinnacle.
An interior designer of another company, D'esprit Interiors, says her company handles about 10 cases in 'the one or two months leading to Chinese New Year', compared to three to four jobs it receives at other times of the year.
She declined to be named.
Despite the crunch, some Pinnacle home owners - about 10 per cent, according to a quick Life! survey of the estate - moved in just in time for the Chinese New Year.
wenjian@sph.com.sg
--------------------------------------------------------------------------------
Their love nest, finally
Who lives here: Ng Say Hian, 32, army officer, and his wife, Seow Lin, 31, senior IT analyst
Flat type: 34th storey, four-room flat, 93sq m
Cost of flat: $346,000
Keys collected: Dec 15
Moved in: Feb 13
To keep their 93 sq m flat looking as spacious as possible, Mrs Ng Seow Lin and her husband, Mr Ng Say Hian (both, top), fitted a mirror in the living room to create the illusion of a larger area and kept their furnishings to a minimum, with just a leather sofa. -- ST PHOTOS: AIDAH RAUF
The Ngs' excitement about getting the keys to their new home immediately disappeared when they stepped inside for the first time and saw how small it was.
'When we opened the door to the flat, we were quite disappointed at how small 93 sq m really is,' says Mr Ng Say Hian.
The couple, who have been married for four years, previously lived with MrNg's parents in a Hillview Road condominium and with his in-laws in a Bukit Timah house.
Thanks to the good work of their interior designer, the apartment looks more spacious.
The living room, done up in a classy black-and-white scheme, is now MrNg's favourite part of the house.
'With the elevated platform and mirror, it now feels bigger. I'm very much into entertainment, so I'll probably invest in a good sound system to set the living room up to be my haven,' he says.
To keep the area as spacious as possible, a cream-coloured L-shaped leather sofa is the only loose piece of furniture there.
'We prefer our place to be neat and tidy, with no hidden or hard-to-reach corners, so cleaning is easier,' says Mrs Ng.
Mr Ng adds: 'We gave the interior designer a budget of $30,000 to achieve a minimalist look, and worked very closely with him to get everything ready so we could spend the Chinese New Year holidays in our new home.'
The home owners are planning a housewarming party today and Mr Ng intends to borrow as many access cards as he can from his neighbours so he can take all his guests to the skybridge on the 50th storey at the same time.
Each household at The Pinnacle has four cards.
Even though the Ngs no longer enjoy the convenience of living with their parents, they are happy to finally have a place to call their own.
'The sense of ownership we have is very satisfying and we know that this place is a good buy, as an investment and as a place to live in,' MrNg says.
His wife adds with a laugh: 'Our parents are also getting old, so they should not be still helping us with household chores.'
--------------------------------------------------------------------------------
'The sense of ownership we have is very satisfying and we know that this place is a good buy, as an investment and as a place to live in'
Mr Ng
--------------------------------------------------------------------------------
Love the view
Who lives here: James Tan, 48, tour agency sales manager, his wife Serene, 49, legal secretary, their daughter Cassandra, 21, student, and son Ericson, 19, student
Flat type: 42nd storey, four-room flat, 93 sq m
Cost of flat: $369,000
Keys collected: Dec 14
Moved in: Jan 10
Hanging lamps (above) in the 93 sq m home of James Tan, his wife Serene and children Ericson and Cassandra (all, top) are part of the apartment?s showpieces, which also include paintings and rosewood furniture. -- ST PHOTOS: TERENCE TAN
Mr James Tan and his family could move in to their new home at The Pinnacle less than a month after collecting their keys mostly because they kept renovations to a minimum.
There was one big problem, though: Mr Tan and his wife's beloved rosewood daybed could not be dismantled and therefore could not fit into the lift.
'The movers had to carry it up from the first floor,' Mrs Tan says. That feat took seven hours and cost them $400.
The Tans are used to living on the outskirts of the city. Their previous home was a maisonette in Geylang East, whose location they loved. But with their children grown up and spending less time at home, they wanted a smaller place than the 140 sq m maisonette.
'My son will be enlisting for national service in two years and my daughter sometimes goes on overseas exchange programmes that last a few months each time. That leaves just the two of us and we don't need such a big space,' Mr Tan explains.
'Our queue number was in the 900s, so during the two-week selection period in July 2004, I checked the Internet every day to see which units were taken up so that when it came to our turn, we would have a good idea of which one to choose,' says Mrs Tan.
Although they did not get a unit in their preferred B and C blocks, which they say have the best view of the city, they are satisfied with their choice.
'The first thing I see when I wake up is a beautiful sea view. It is fantastic,' says Mr Tan, who asks that Life! not identify the block he lives in.
So proud is his family of their new home that they invited friends and relatives over during the Chinese New Year holidays, something they hardly did in the 14 years they lived in Geylang East.
'Some even took the initiative to ask to visit me,' he says with a chuckle.
In all, they spent $20,000 on the renovations, which included painting the walls in a cosy shade of rose white, wiring up the apartment and installing built-in cabinets.
Another $3,000 was spent on five hanging lamps. 'They add character and, together with my paintings, are showpieces of the place. Apart from those, we brought over most of the furniture from our old place because we really like them,' Mr Tan says of their rosewood sofa, dining set and TV console.
From The Pinnacle, the Tans take less time to get to work and school.
Mr Tan is just one MRT stop away from his office in Raffles Place. His wife takes a five-minute stroll to the law firm she works at in Tanjong Pagar.
Daughter Cassandra now has a direct bus to the National University of Singapore. 'The journey used to take me more than an hour, compared to 40 minutes now,' says the second-year arts student.
Her brother Ericson's daily 30-minute commute to Ngee Ann Polytechnic in Clementi is also an improvement from the 45 minutes he used to take.
They are also nearer to Mr Tan's 70-year-old mother, who lives in nearby Neil Road. He says: 'We used to visit her only on weekends. Now we see her at least three times a week.'
--------------------------------------------------------------------------------
'The first thing I see when I wake up is a beautiful sea view. It is fantastic'
Mr Tan on the view from his 42nd-storey flat
--------------------------------------------------------------------------------
In time for baby's arrival
Who lives here: Darien Loh, 30, business development executive, and his wife, Eunice, 29, bank executive
Flat type: 5th storey, four-room flat, 96 sq m
Cost of flat: $465,000
Keys collected: Dec 15
Moved in: Second week of this month
With its spacious area, the living room is Mr Darien Loh?s favourite part of his 96 sq m flat. With him is his wife, Eunice. -- ST PHOTOS: STEPHANIE YEOW
The view of Cantonment Road from the apartment?s living room is peppered with greenery such as trees.
No doubt The Pinnacle is highly desirable and located in an excellent area close to the central business districts, and the skybridges are a great feature with stunning views of the city skyline.
Whatever. After viewing about three flats every week for the past two years, Mr and Mrs Darien Loh are just relieved they now live in a home they own.
They had been living with Mr Loh's parents in a flat in Clementi since tying the knot in September 2008.
'The skybridges are a nice bonus but I can probably do without them,' Mr Loh says.
When they received the selection notice in March last year, the couple initially agreed that they would not settle for a unit below the sixth floor.
In the end, they decided to buy their fifth-storey apartment.
Mrs Loh says: 'There were only four units left on the fourth and fifth floors. We went ahead and chose one on the higher floor. We did not want to pay the cash-over-valuation price and an agent's fee needed for a resale flat.'
Renovations started almost immediately after they received their keys, as the couple wanted to move in before Mrs Loh delivers their first child next month.
Built-in furniture is a key element in their design. The dining table, the cupboards and the shoe cabinet are made to measure.
'We made it a point to conceal all electrical wires and not to have hanging lamps because we want the whole place to look neat,' Mr Loh says.
The long wall beside the kitchen is bare at the moment because Mrs Loh intends to cover it with a montage of family photos.
The total cost of renovations was $30,000.
Less than a month after moving in, they already have their favourite corners.
Mrs Loh says: 'I love our bedroom most. It is where I feel most relaxed and I can do whatever I want.'
Her husband likes to chill out in the living room. 'This is where I watch TV, read the papers or have a drink to relax after work,' he says.
'It's the biggest part of the house, so I don't feel hemmed in when I'm here.'
--------------------------------------------------------------------------------
'We did not want to pay the cash-over-valuation price and an agent's fee for a resale flat'
Mrs Eunice Loh on why she changed her mind about getting an apartment that is at least on the sixth floor
ST : From wet markets to prime homes
Feb 20, 2010
THE NEW PLAYER
From wet markets to prime homes
Heeton Holdings gave up its stable, low-yielding wet market business for the glamorous world of high-end property last year. Why did it make the switch?
By Joyce Teo, Property Correspondent
HEADING FOR A NEW HIGH
'The wet markets offer us a stable yield but they can never take the firm to a new high the way property development can.'
Heeton chairman and founder Toh Khai Cheng (right, with operating officer Danny Low)
IT WOULD take a huge leap of imagination to come up with a more incompatible business mix than the one Heeton Holdings had been wrestling with since 2003.
The firm's chalk and cheese make-up had the glamour, prestige - and risk - of prime property development on one hand and oh-so-last-century but oh-so-safe heartland wet markets on the other.
Irreconcilable business differences of that magnitude led to the inevitable divorce last year when Heeton sold off the wet markets.
The move also marked the completion of the firm's makeover from old school market landlord to real estate player.
It has been a long time coming. Heeton listed in September 2003, branding itself largely as the first wet market operator on the Singapore Exchange. Its property business was seen as a side line.
While the wet markets contributed just 10 per cent of annual revenue, that became the firm's defining characteristic.
'Analysts always asked us about our wet market business,' said chief operating officer Danny Low.
That distraction was removed last year when the firm sold its five wet markets to supermarket chain Sheng Siong, leaving it free to focus on its growing property business.
'We knew it (wet markets) was a sunset industry. Our store operators are old. When they retire or pass away, our stores will be empty,' said Mr Low.
He said Heeton intended to sell the markets as early as two years ago and there were offers but it was all or nothing. 'There is no point selling one market. If we sell one, we'll still be a wet market operator.'
Heeton chairman and founder Toh Khai Cheng, who led the firm into the wet market business in the 1990s, said Sheng Siong came knocking last year and they decided to sell.
'The wet markets offer us a stable yield but they can never take the firm to a new high the way property development can,' he told The Straits Times in Mandarin.
Mr Toh started out in property development more than 30 years ago and earned the nickname the 'Sembawang King' as he was behind numerous projects in that area, including Hong Lim Mansions and Hong Heng Garden.
Heeton's focus now is mostly on prime, boutique projects. Its latest launch was the 175-unit Lincoln Suites near the Novena MRT station which it is developing with three other developers.
It bought the former Mitre Hotel site in Killiney Road late last year and is preparing to launch a Grange Road project.
'In prime areas, you can try out new ideas,' said Mr Low.
'Otherwise, we'll end up doing just run-of-the-mill projects. Nobody will remember us.'
Until three years ago, its aim was to focus on just selling. Little thought was put into product differentiation, branding and so on.
But now it is thinking long term, acknowledging that to be a trusted developer you need to show the buyers that you intend to be around for a while.
'You want your project to not only be able to sell, but also at a premium,' Mr Low said.
This is why it roped in an Italian architect as well as yoo, the design firm co-founded by popular designer Philippe Starck and developer John Hitchcock, to design its 29-unit Grange Road project.
'You have to differentiate yourself when you build a brand. For instance, developers used to dangle branded appliances as carrots, but that's now outdated,' said Mr Low.
Grappling with changing tastes is one thing, coping with the financial crisis is another. The downturn made it clear that there was no sure way to the bank, although Heeton had recurring income from its investment properties and wet markets to fall back on.
Its Grange Road project has been one victim. The launch has been delayed for more than a year and Heeton may have to lower its price expectations slightly when it finally does hit the market sometime in April to June if the high-end market has yet to truly pick up.
Heeton and its partners also had to delay the launch of Lincoln Suites. They bought the site during the 2007 boom at a record price of $1,449 per sq ft of potential gross floor area for the Newton area.
The downturn forced them to alter their plans for the prime project, including ensuring there were several small units - they comprise 75 per cent of the block - to keep the price quantum low.
Heeton also plans to build mostly small units on the old Mitre Hotel site.
'These few years, the risks in the market have increased,' said founder Toh. 'Land is so expensive now.'
To mitigate the risks, they will continue to venture into the region where markets require a 'lower investment' and yet come with 'lower risk and greater potential,' said Mr Toh.
Heeton is also building a hospitality arm to give it a new stream of recurring income. It is starting by converting its 39-unit El Centro project in Tanjong Pagar into high-end serviced apartments or a boutique hotel.
Whatever the project, Heeton acknowledges that it needs to provide an edge. If it is building suburban projects, then it wants to offer good quality.
Prime projects mean giving buyers 'something different', said Mr Low.
'I didn't say I will give you a Porsche but I will give you a Mercedes, as we don't want to shortchange people.'
joyceteo@sph.com.sg
THE NEW PLAYER
From wet markets to prime homes
Heeton Holdings gave up its stable, low-yielding wet market business for the glamorous world of high-end property last year. Why did it make the switch?
By Joyce Teo, Property Correspondent
HEADING FOR A NEW HIGH
'The wet markets offer us a stable yield but they can never take the firm to a new high the way property development can.'
Heeton chairman and founder Toh Khai Cheng (right, with operating officer Danny Low)
IT WOULD take a huge leap of imagination to come up with a more incompatible business mix than the one Heeton Holdings had been wrestling with since 2003.
The firm's chalk and cheese make-up had the glamour, prestige - and risk - of prime property development on one hand and oh-so-last-century but oh-so-safe heartland wet markets on the other.
Irreconcilable business differences of that magnitude led to the inevitable divorce last year when Heeton sold off the wet markets.
The move also marked the completion of the firm's makeover from old school market landlord to real estate player.
It has been a long time coming. Heeton listed in September 2003, branding itself largely as the first wet market operator on the Singapore Exchange. Its property business was seen as a side line.
While the wet markets contributed just 10 per cent of annual revenue, that became the firm's defining characteristic.
'Analysts always asked us about our wet market business,' said chief operating officer Danny Low.
That distraction was removed last year when the firm sold its five wet markets to supermarket chain Sheng Siong, leaving it free to focus on its growing property business.
'We knew it (wet markets) was a sunset industry. Our store operators are old. When they retire or pass away, our stores will be empty,' said Mr Low.
He said Heeton intended to sell the markets as early as two years ago and there were offers but it was all or nothing. 'There is no point selling one market. If we sell one, we'll still be a wet market operator.'
Heeton chairman and founder Toh Khai Cheng, who led the firm into the wet market business in the 1990s, said Sheng Siong came knocking last year and they decided to sell.
'The wet markets offer us a stable yield but they can never take the firm to a new high the way property development can,' he told The Straits Times in Mandarin.
Mr Toh started out in property development more than 30 years ago and earned the nickname the 'Sembawang King' as he was behind numerous projects in that area, including Hong Lim Mansions and Hong Heng Garden.
Heeton's focus now is mostly on prime, boutique projects. Its latest launch was the 175-unit Lincoln Suites near the Novena MRT station which it is developing with three other developers.
It bought the former Mitre Hotel site in Killiney Road late last year and is preparing to launch a Grange Road project.
'In prime areas, you can try out new ideas,' said Mr Low.
'Otherwise, we'll end up doing just run-of-the-mill projects. Nobody will remember us.'
Until three years ago, its aim was to focus on just selling. Little thought was put into product differentiation, branding and so on.
But now it is thinking long term, acknowledging that to be a trusted developer you need to show the buyers that you intend to be around for a while.
'You want your project to not only be able to sell, but also at a premium,' Mr Low said.
This is why it roped in an Italian architect as well as yoo, the design firm co-founded by popular designer Philippe Starck and developer John Hitchcock, to design its 29-unit Grange Road project.
'You have to differentiate yourself when you build a brand. For instance, developers used to dangle branded appliances as carrots, but that's now outdated,' said Mr Low.
Grappling with changing tastes is one thing, coping with the financial crisis is another. The downturn made it clear that there was no sure way to the bank, although Heeton had recurring income from its investment properties and wet markets to fall back on.
Its Grange Road project has been one victim. The launch has been delayed for more than a year and Heeton may have to lower its price expectations slightly when it finally does hit the market sometime in April to June if the high-end market has yet to truly pick up.
Heeton and its partners also had to delay the launch of Lincoln Suites. They bought the site during the 2007 boom at a record price of $1,449 per sq ft of potential gross floor area for the Newton area.
The downturn forced them to alter their plans for the prime project, including ensuring there were several small units - they comprise 75 per cent of the block - to keep the price quantum low.
Heeton also plans to build mostly small units on the old Mitre Hotel site.
'These few years, the risks in the market have increased,' said founder Toh. 'Land is so expensive now.'
To mitigate the risks, they will continue to venture into the region where markets require a 'lower investment' and yet come with 'lower risk and greater potential,' said Mr Toh.
Heeton is also building a hospitality arm to give it a new stream of recurring income. It is starting by converting its 39-unit El Centro project in Tanjong Pagar into high-end serviced apartments or a boutique hotel.
Whatever the project, Heeton acknowledges that it needs to provide an edge. If it is building suburban projects, then it wants to offer good quality.
Prime projects mean giving buyers 'something different', said Mr Low.
'I didn't say I will give you a Porsche but I will give you a Mercedes, as we don't want to shortchange people.'
joyceteo@sph.com.sg
ST : From story plots to plots of land
Feb 20, 2010
THE PART-TIME DEVELOPER
From story plots to plots of land
Popular Holdings, known for its chain of bookstores, wants to churn out best-sellers
Popular's head, Mr Chou, insists on having full-sized showflats, such as this one in Shelford Road. -- ST PHOTO: AZIZ HUSSIN
WHEN the boss of the Popular bookstore chain answered the seductive call of property development some four years ago, his shareholders were horrified.
'They probably thought I was drunk... I was already 70, why would I do something like a flash in the pan?' says Mr Chou Cheng Ngok.
'My shareholders gave me hell. 'What if you flop? What are you doing?' they asked.'
But Mr Chou, now 73, the firm's chairman and managing director, decided to pursue his enduring interest in property.
When he first landed in Hong Kong from Singapore at the age of 27, he caught the real estate bug.
He has since handled several property developments there, a place he has called home for the past 45 years.
He told The Straits Times last week: 'I came to realise that the book business is a high capital investment with a fixed profit margin. From the 100th to the 110th shop, can the profits still be phenomenal?'
'Property is cyclical. The book business is not cyclical... You've got to be very sensitive about when you jump in and in which part of the cycle you are ready to sell.
'Cycles are shorter and shorter but it is still about four to five years apart, so you can't overstretch in case you have to hold.'
Popular's first project here began in 2006 when it bought 15,070 sq ft of land in Robin Road in Bukit Timah for $12.5 million.
The firm sold all 14 units at the One Robin project from April last year for more than $1,310 per sq ft.
While it was a sell-out, the ride was not exactly smooth.
Popular held back the launch when the market weakened in 2008 but opted to sell last April when things got brighter. But as it turned out, 'we actually sold it a bit early', admitted Mr Chou, as prices started to pick up around May.
He hopes his timing will be better for his second project, the 19-unit 18 Shelford.
Mr Chou started building work in mid-2008 and will launch soon.
The firm has taken a hit from its property dealings. It reported a net loss of $17.6 million for the year ended April 30, instead of the previous year's $13.6 million profit, due to the fall in fair value of 18 Shelford and another project, 8 Raja.
'For a smaller player, the timing is even more crucial as you don't have a name to rely on. You have to ride the wave,' says Mr Chou.
Big projects are also out of the question. 'We don't have much capital. We don't want or dare to try big developments.'
Fortunately, small projects give smaller firms like Popular the chance to showcase their design ideas and quality, as buyers warm up to them as developers.
That is why Popular insisted on building a full-sized show unit for its first two projects. 'If you see the quality, you wouldn't mind the name so much,' says Mr Chou.
The margins could have been higher if they had cut corners, he says, but they are in it for the long haul.
Mr Chou sees his projects as places that he too would enjoy living in. 'It's more the thrill of building something that you think is nice and comfortable, nothing ostentatious.'
Property looks set to become one of Popular's core businesses although for now it is playing it slow and steady.
Buying land is tricky for small players now. If Popular thinks a site is overpriced, it will walk away.
'You need experience and discipline. You can get carried away because the profit is so phenomenal,' says Mr Chou.
'You cannot foresee everything. You must hope for the best and prepare for the worst.'
JOYCE TEO
--------------------------------------------------------------------------------
TRACKING THE CYCLES
'Property is cyclical. The book business is not cyclical... You've got to be very sensitive about when you jump in and in which part of the cycle you are ready to sell.'
BEING CAUTIOUS
'We don't have much capital. We don't want or dare to try big developments.'
BEING PRUDENT
'Cycles are shorter and shorter but it is still about four to five years apart, so you don't overstretch just in case you have to hold.'
TIMING IS CRUCIAL
'For a smaller player, the timing is even more crucial as you don't have a name to rely on. You have to ride the wave.'
THE PART-TIME DEVELOPER
From story plots to plots of land
Popular Holdings, known for its chain of bookstores, wants to churn out best-sellers
Popular's head, Mr Chou, insists on having full-sized showflats, such as this one in Shelford Road. -- ST PHOTO: AZIZ HUSSIN
WHEN the boss of the Popular bookstore chain answered the seductive call of property development some four years ago, his shareholders were horrified.
'They probably thought I was drunk... I was already 70, why would I do something like a flash in the pan?' says Mr Chou Cheng Ngok.
'My shareholders gave me hell. 'What if you flop? What are you doing?' they asked.'
But Mr Chou, now 73, the firm's chairman and managing director, decided to pursue his enduring interest in property.
When he first landed in Hong Kong from Singapore at the age of 27, he caught the real estate bug.
He has since handled several property developments there, a place he has called home for the past 45 years.
He told The Straits Times last week: 'I came to realise that the book business is a high capital investment with a fixed profit margin. From the 100th to the 110th shop, can the profits still be phenomenal?'
'Property is cyclical. The book business is not cyclical... You've got to be very sensitive about when you jump in and in which part of the cycle you are ready to sell.
'Cycles are shorter and shorter but it is still about four to five years apart, so you can't overstretch in case you have to hold.'
Popular's first project here began in 2006 when it bought 15,070 sq ft of land in Robin Road in Bukit Timah for $12.5 million.
The firm sold all 14 units at the One Robin project from April last year for more than $1,310 per sq ft.
While it was a sell-out, the ride was not exactly smooth.
Popular held back the launch when the market weakened in 2008 but opted to sell last April when things got brighter. But as it turned out, 'we actually sold it a bit early', admitted Mr Chou, as prices started to pick up around May.
He hopes his timing will be better for his second project, the 19-unit 18 Shelford.
Mr Chou started building work in mid-2008 and will launch soon.
The firm has taken a hit from its property dealings. It reported a net loss of $17.6 million for the year ended April 30, instead of the previous year's $13.6 million profit, due to the fall in fair value of 18 Shelford and another project, 8 Raja.
'For a smaller player, the timing is even more crucial as you don't have a name to rely on. You have to ride the wave,' says Mr Chou.
Big projects are also out of the question. 'We don't have much capital. We don't want or dare to try big developments.'
Fortunately, small projects give smaller firms like Popular the chance to showcase their design ideas and quality, as buyers warm up to them as developers.
That is why Popular insisted on building a full-sized show unit for its first two projects. 'If you see the quality, you wouldn't mind the name so much,' says Mr Chou.
The margins could have been higher if they had cut corners, he says, but they are in it for the long haul.
Mr Chou sees his projects as places that he too would enjoy living in. 'It's more the thrill of building something that you think is nice and comfortable, nothing ostentatious.'
Property looks set to become one of Popular's core businesses although for now it is playing it slow and steady.
Buying land is tricky for small players now. If Popular thinks a site is overpriced, it will walk away.
'You need experience and discipline. You can get carried away because the profit is so phenomenal,' says Mr Chou.
'You cannot foresee everything. You must hope for the best and prepare for the worst.'
JOYCE TEO
--------------------------------------------------------------------------------
TRACKING THE CYCLES
'Property is cyclical. The book business is not cyclical... You've got to be very sensitive about when you jump in and in which part of the cycle you are ready to sell.'
BEING CAUTIOUS
'We don't have much capital. We don't want or dare to try big developments.'
BEING PRUDENT
'Cycles are shorter and shorter but it is still about four to five years apart, so you don't overstretch just in case you have to hold.'
TIMING IS CRUCIAL
'For a smaller player, the timing is even more crucial as you don't have a name to rely on. You have to ride the wave.'
ST : survives highs and lows of property cycle by being flexible
Feb 20, 2010
THE BIG-NAME VETERAN
ST Saturday Special Report :Kwek Leng Beng, executive chairman of Hong Leong Group Singapore, survives highs and lows of property cycle by being flexible
By Joyce Teo, Property Correspondent
Mr Kwek (above) believes the Hong Leong Group's strength lies in its substantial land bank which gives it flexibility in timing its launches and when it comes to replenishing its stock of sites. Being financially strong, the company is also able to ride out a downturn. Last year, for instance, it cut prices slightly as the downturn rolled in. -- PHOTOS: ST FILE, CDL
PROPERTY booms, crashes, fads... you name it, real estate tycoon Kwek Leng Beng has seen them all in his 68 years.
Yet even one as experienced and savvy as he could not have predicted the way the market has roared back to life after being knocked flat on its back by the financial crisis.
'The recovery was expected but not its intensity and swiftness. I was quite surprised at how strong it was,' said the executive chairman of Hong Leong Group Singapore.
'The world took swift action and came up with stimulus packages which we have never heard of in our lifetime.'
Yet, 'no one can time to sell at the highest price, so like many developers, Hong Leong Group decided to sell on the way up', he said.
That was how Hong Leong ignited the property market in late 2004: Its launch of the huge The Sail @ Marina Bay galvanised buyers and developers across the island.
'We knew the market would turn around soon but we didn't know when... So we knew we would have a hard task selling 1,111 units but we bought the land cheap. So we priced to sell,' Mr Kwek told The Straits Times.
'We could try to hold on until we thought the price and time was right, but we didn't because there was no way to get the exact time.'
Its motivation was to lock in profits for its listed development arm City Developments (CDL) as soon as possible but the firm also wanted its buyers to make some money, said Mr Kwek. At The Sail @ Marina Bay, the initial launch price of $900 per sq ft on average rose to about $950 psf on strong demand back in late 2004.
The second tower was launched a year later in a slightly improved market at an average of $1,080 psf.
The Sail strategy hints at the firm's overarching gameplan - remain flexible in all things.
'When the market is really bad, you have to accept it. You sort of improve, think of new designs, think of what you can do, further revise your old plans so that when the market turns, you are most up to date,' said Mr Kwek.
Last year, the Hong Leong Group showed its flexibility by cutting prices, albeit slightly, as the downturn rolled in.
The market had tanked by the time it launched the later phases of the 724-unit Livia in Pasir Ris. Earlier units went for $650 psf, later for $620 psf.
But while some developers took deep cuts, it reduced prices by only 5 per cent. 'We do not undercut or slash our prices to the bone,' said Mr Kwek.
'If you cut as much as other developers do, they will cut again, and you cut again. To some extent, we are financially strong so we can hold.
'The other reason is if this project is 50 per cent sold, so what? I still have 50 per cent. I can take another piece out of my land bank that is cheap and launch it.
'But people without a land bank do not have such flexibility.'
Hong Leong's substantial land bank has given it a lot more flexibility - that word again - in timing its launches and when it comes to replenishing its stock of sites. 'Otherwise, you have got nothing to do, all your people sit down, fold their arms and wait for the market to go up,' said Mr Kwek.
But those developers with little or no land left will have to replenish their land banks urgently but the equation has became harder.
Mr Kwek pointed out that in bad times, land prices do not fall as much as condo prices.
In late 2008, he shelved the $2.5 billion high-profile South Beach project in Beach Road until building costs fall to 'reasonable levels'.
Last year, when construction prices were slipping, it re-negotiated contracts with its contractors. It also went ahead to build developments like The Arte in Jalan Datoh before the launch as it could.
The Arte was then released in April. More projects followed. Optima@Tanah Merah hit the market in July and sold out within three days at $810 psf. Hundred Trees in West Coast Drive also sold well, achieving $910 psf on average last September. Hong Leong said it was the top seller last year with more than 2,100 units shifted.
But like other developers, the Hong Leong Group had to face a potentially big problem last year - defaults arising from property bought on the deferred payment scheme (DPS).
But that turned out to be a 'non-event', said Mr Kwek.
'That was a genuine concern... But you cannot assume that everybody who buys on DPS is going to default,' he said. 'In practice, you can sue them.
'Developers also understand hard times. So why do you go after them? Let them slowly pay. As long as they can pay, allow them the chance.'
The Hong Leong group had 'a few cases' where the buyers could not pay but there were only two defaults last year. They took back the units.
'Theoretically, there should be more, but there weren't as we were sympathetic,' Mr Kwek said.
Apart from being flexible on the payment deadline, what they did was to alert the buyers on getting a loan early.
Early last year, consumers found it tough to get sufficient loans as the banks turned very cautious and valuations fell.
Said CDL group general manager Chia Ngiang Hong: 'Two months before our projects obtained TOP (temporary occupation permit), we wrote to the buyers to say: 'Hey, your payment is coming up soon', and we told them we have spoken to some banks willing to arrange their applications, and they dealt with the banks themselves.'
'Bankers are bankers. They have to be cautious,' said Mr Kwek.
Still, Mr Kwek added: 'The banks shouldn't be looking at the loan quantum alone. They should look at how many years you have been working, etc, and then restructure the loan.'
'Property moves in cycles... The majority do not understand what investing in property is about. They buy property one day and hope to sell it the next so as to make a quick and big profit,' said Mr Kwek.
'The key problem is that many of us lack confidence, we rush when prices are rising and then stay away frightened when prices are at rock bottom.'
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
ON WHEN TO SELL
'No one can time to sell at the highest price, so like many developers, Hong Leong Group decided to sell on the way up.'
ON BEING ADAPTABLE
'When the market is really bad, you have to accept it. You sort of improve, think of new designs, think of what you can do, further revise your old plans so that when the market turns, you are most up to date.'
ON SLASHING PRICES
'We do not undercut or slash our prices to the bone. If you cut as much as other developers do, they will cut again, and you cut again. To some extent, we are financially strong so we can hold.'
THE BIG-NAME VETERAN
ST Saturday Special Report :Kwek Leng Beng, executive chairman of Hong Leong Group Singapore, survives highs and lows of property cycle by being flexible
By Joyce Teo, Property Correspondent
Mr Kwek (above) believes the Hong Leong Group's strength lies in its substantial land bank which gives it flexibility in timing its launches and when it comes to replenishing its stock of sites. Being financially strong, the company is also able to ride out a downturn. Last year, for instance, it cut prices slightly as the downturn rolled in. -- PHOTOS: ST FILE, CDL
PROPERTY booms, crashes, fads... you name it, real estate tycoon Kwek Leng Beng has seen them all in his 68 years.
Yet even one as experienced and savvy as he could not have predicted the way the market has roared back to life after being knocked flat on its back by the financial crisis.
'The recovery was expected but not its intensity and swiftness. I was quite surprised at how strong it was,' said the executive chairman of Hong Leong Group Singapore.
'The world took swift action and came up with stimulus packages which we have never heard of in our lifetime.'
Yet, 'no one can time to sell at the highest price, so like many developers, Hong Leong Group decided to sell on the way up', he said.
That was how Hong Leong ignited the property market in late 2004: Its launch of the huge The Sail @ Marina Bay galvanised buyers and developers across the island.
'We knew the market would turn around soon but we didn't know when... So we knew we would have a hard task selling 1,111 units but we bought the land cheap. So we priced to sell,' Mr Kwek told The Straits Times.
'We could try to hold on until we thought the price and time was right, but we didn't because there was no way to get the exact time.'
Its motivation was to lock in profits for its listed development arm City Developments (CDL) as soon as possible but the firm also wanted its buyers to make some money, said Mr Kwek. At The Sail @ Marina Bay, the initial launch price of $900 per sq ft on average rose to about $950 psf on strong demand back in late 2004.
The second tower was launched a year later in a slightly improved market at an average of $1,080 psf.
The Sail strategy hints at the firm's overarching gameplan - remain flexible in all things.
'When the market is really bad, you have to accept it. You sort of improve, think of new designs, think of what you can do, further revise your old plans so that when the market turns, you are most up to date,' said Mr Kwek.
Last year, the Hong Leong Group showed its flexibility by cutting prices, albeit slightly, as the downturn rolled in.
The market had tanked by the time it launched the later phases of the 724-unit Livia in Pasir Ris. Earlier units went for $650 psf, later for $620 psf.
But while some developers took deep cuts, it reduced prices by only 5 per cent. 'We do not undercut or slash our prices to the bone,' said Mr Kwek.
'If you cut as much as other developers do, they will cut again, and you cut again. To some extent, we are financially strong so we can hold.
'The other reason is if this project is 50 per cent sold, so what? I still have 50 per cent. I can take another piece out of my land bank that is cheap and launch it.
'But people without a land bank do not have such flexibility.'
Hong Leong's substantial land bank has given it a lot more flexibility - that word again - in timing its launches and when it comes to replenishing its stock of sites. 'Otherwise, you have got nothing to do, all your people sit down, fold their arms and wait for the market to go up,' said Mr Kwek.
But those developers with little or no land left will have to replenish their land banks urgently but the equation has became harder.
Mr Kwek pointed out that in bad times, land prices do not fall as much as condo prices.
In late 2008, he shelved the $2.5 billion high-profile South Beach project in Beach Road until building costs fall to 'reasonable levels'.
Last year, when construction prices were slipping, it re-negotiated contracts with its contractors. It also went ahead to build developments like The Arte in Jalan Datoh before the launch as it could.
The Arte was then released in April. More projects followed. Optima@Tanah Merah hit the market in July and sold out within three days at $810 psf. Hundred Trees in West Coast Drive also sold well, achieving $910 psf on average last September. Hong Leong said it was the top seller last year with more than 2,100 units shifted.
But like other developers, the Hong Leong Group had to face a potentially big problem last year - defaults arising from property bought on the deferred payment scheme (DPS).
But that turned out to be a 'non-event', said Mr Kwek.
'That was a genuine concern... But you cannot assume that everybody who buys on DPS is going to default,' he said. 'In practice, you can sue them.
'Developers also understand hard times. So why do you go after them? Let them slowly pay. As long as they can pay, allow them the chance.'
The Hong Leong group had 'a few cases' where the buyers could not pay but there were only two defaults last year. They took back the units.
'Theoretically, there should be more, but there weren't as we were sympathetic,' Mr Kwek said.
Apart from being flexible on the payment deadline, what they did was to alert the buyers on getting a loan early.
Early last year, consumers found it tough to get sufficient loans as the banks turned very cautious and valuations fell.
Said CDL group general manager Chia Ngiang Hong: 'Two months before our projects obtained TOP (temporary occupation permit), we wrote to the buyers to say: 'Hey, your payment is coming up soon', and we told them we have spoken to some banks willing to arrange their applications, and they dealt with the banks themselves.'
'Bankers are bankers. They have to be cautious,' said Mr Kwek.
Still, Mr Kwek added: 'The banks shouldn't be looking at the loan quantum alone. They should look at how many years you have been working, etc, and then restructure the loan.'
'Property moves in cycles... The majority do not understand what investing in property is about. They buy property one day and hope to sell it the next so as to make a quick and big profit,' said Mr Kwek.
'The key problem is that many of us lack confidence, we rush when prices are rising and then stay away frightened when prices are at rock bottom.'
joyceteo@sph.com.sg
--------------------------------------------------------------------------------
ON WHEN TO SELL
'No one can time to sell at the highest price, so like many developers, Hong Leong Group decided to sell on the way up.'
ON BEING ADAPTABLE
'When the market is really bad, you have to accept it. You sort of improve, think of new designs, think of what you can do, further revise your old plans so that when the market turns, you are most up to date.'
ON SLASHING PRICES
'We do not undercut or slash our prices to the bone. If you cut as much as other developers do, they will cut again, and you cut again. To some extent, we are financially strong so we can hold.'
ST : Year of living dangerously
Feb 20, 2010
PROPERTY DEVELOPERS'
Year of living dangerously
Every buyer takes a risk when investing in the property market, but that risk is magnified hundreds of times when you are a developer. With boom and bust cycles becoming shorter and more violent, what does it take to survive? And why are more non-traditional players - jewellers, manufacturers and even F&B giants - increasingly dabbling in the market despite the risks?
By Joyce Teo, Property Correspondent
Frasers Centrepoint launched its Caspian project (above) last February, jumpstarting what was then a quiet market. -- ST FILE PHOTO
YOU could hear a pin drop in the private homes market at the start of last year. No hype, no launches, no buyers.
Just six months later, it seemed as if all hell had broken loose.
Demand went through the roof, showflats were back on centre stage, buyers were queueing around the block and developers couldn't believe their luck.
The astonishing surge in interest - it was a recession, after all - sent sales rocketing to 14,725 units last year, just a tad below the 2007 record of 14,811 units.
Turnarounds don't get much more dramatic than that, but the tumultuous year did more than just get once-fearful buyers rushing back to the market.
It also underlined the huge risks - and rewards - that lie in property development, while igniting an intense Darwinian selection process that sorted out the quick-witted and cashed-up from the slow and complacent.
Property cycles seem shorter nowadays, said property tycoon Kwek Leng Beng.
'The world moves so fast, you have to adjust your thinking to the new circumstances,' said the executive chairman of the Hong Leong Group.
Indeed, it was a make-it-up-as-you-go sort of year for developers.
They certainly had no help from conventional wisdom, which dictates that property cycles take about seven years from boom to bust. The Urban Redevelopment Authority's price index for private homes shows that values were relatively stable from 2000 to the early part of 2007 before a dizzying three-year spell that took the market from boom to bust and back to boom.
In 2007, prices in the high-end sector were largely chased up by foreign demand. Some new prime condominiums sold for more than $4,000 per sq ft - an unprecedented level - but mass-market homes attracted little interest.
But it was the reverse last year, with the mass-market sector under siege as HDB upgraders rushed in, sending prices at some new condos to record levels in their area, while the high-end segment had yet to recover fully.
'The fluctuations within a cycle are more pronounced these days,' said the chief executive of the Real Estate Developers Association of Singapore (Redas), Dr Steven Choo.
A CALCULATED GAMBLE
TO MANY of us, property development still seems like a no-brainer: Buy a patch of land, erect posh condo blocks with all the trimmings, sell for vast profits to cashed-up foreigners or starry-eyed locals. How hard can it be?
Well, as last year showed, it can be pretty darn hard. What looks like a licence to print money turns out to be a multi-million-dollar high-wire act of timing, taste, instinct, pluck and luck, according to Dr Choo.
'It is very challenging. It may seem very glamorous but when you get down to it, it's actually very tough,' he said.
'It does take a lot of experience to stay profitable and ride through the cycles. You must come up with the right product mix, time it right and calculate it right.'
The process starts with the initial land purchase and that is also the most crucial factor: Over-pay, and you can struggle to ever make the deal work, given that the land price can comprise 50 to 70 per cent of total development cost.
Analysts have been warning that developers risk over-paying for land this year as they rush to replenish their land banks.
But even assuming that the plot has been secured at a favourable price, time lag is always an issue, say consultants.
Developers have to work quickly as holding costs - fees, interest charges, taxes and so on - are high.
And once a project gets the green light, there are initial costs for professionals such as consultants, engineers and architects before a labourer even lifts a shovel.
'Once you buy land, you have to follow through a development timeline. If you buy government land, you have to complete construction within a certain period,' said Knight Frank chairman Tan Tiong Cheng.
This period is now seven years, after it was extended by a year last year.
This is where timing is vital and when any number of uncertainties can upset even the best-laid plans.
The sale price factored in at the start of the project may not hold up nine months or so down the track when the launch is held.
Construction costs may continue to rise while selling prices fall, as was the case in mid-2008.
And sales figures may not be what developers had hoped for.
And if they cannot sell their units before demand slows, they will be stuck with unwanted flats - possibly for years.
Singapore's largest private developer, Far East Organization, for instance, still has a few unsold units from Rafflesia in Bishan, which was completed in 2003.
'From a cashflow point of view, you can sell everything out,' said the firm's executive director and chief operating officer of property sales, Mr Chia Boon Kuah.
'But if you're fully sold, you can't participate in the cycle. You need inventory to do so.'
Developers in Singapore have been known to hold on to unsold units for more than a decade, but holding on to a 99-year leasehold mass-market project poses another risk as the tenure runs lower every year.
'Once the remaining lease gets closer to 80 years, the price depreciation starts to be more apparent,' said Cushman & Wakefield managing director Donald Han.
During the Asian financial crisis, developers who bought sites at a high in 1996 could not turn a profit as demand waned and prices weakened.
That was after the Government increased land supply for private homes in May 1996 to temper prices, as well as lowered loan-to-value limits to 80 per cent, said a UBS Investment Research report last month.
'In some cases, developers held the land for up to three to eight years before launching the homes for sale,' it said.
Of course, it is impossible for any developer to get the timing perfectly right. All sorts of external factors, such as the health of the global economy, can affect property cycles.
When the property market heads south, what developers need are deep pockets.
'There was nothing much one could do when the market was down. Those developers that did not have holding power undercut to sell,' said Mr Kwek.
'Those with financial clout could decide to hold instead because they knew the market was going to return and could wait for it.'
That is one thing that separates the big boys from the tiddlers, who often have limited capital and a hard time convincing nervous bankers to lend to them.
'If you don't have deep pockets, and you make a wrong development decision, you can keel over very quickly,' said an industry observer who declined to be named.
In April 2008, small developer Bravo Building Construction pulled out of three collective sale deals when the market turned sour. The biggest of the deals was the mega $516 million Tulip Garden in Holland Road, which it bought in mid-2007 and for which it had to forfeit its $25.8 million deposit.
That is why alarm bells rang over some smaller listed players, such as SC Global and Ho Bee, around a year ago.
Analysts feared they had borrowed too much to buy land in prime areas where prices were falling fast. The concern was that these smaller firms could go under as they were stuck with the high cost of servicing their bank loans, and unable to launch or shift new high-end units.
Their stock was punished. SC Global shares lost more than 90 per cent of their value, falling from a high of $3.37 in 2007 to just 29.5 cents in March last year. They have since recovered to about $2, thanks to the market turnaround.
The banks got worried too. They started scrutinising the books of developers they had lent to, and looked at their collective loan position.
Credo Real Estate managing director Karamjit Singh said: 'Because of the banks' lack of confidence, it became very difficult for land transactions to take place. If anyone could buy land, he would need a lot of cash to cover the bulk of the purchase price. Basically, banks were not prepared to lend.'
To make things worse, developers faced the risk of previous sales coming undone.
The two great fears, said an industry observer, were the possibility of foreigners bailing out of Singapore, and large numbers of defaults from buyers who used the deferred payment scheme.
The scheme allowed buyers to defer paying the bulk of their purchase price until completion of the project.
'Banks were worried. Everybody was sweating,' said a property expert who declined to be named.
Many analysts were predicting fire sales and different degrees of defaults, as banks had turned very cautious on lending. Developers held their breath.
Fortunately, the large defaults that many had anticipated did not materialise, though there were some who lost out on their bets.
In February last year, a small developer, Jewel 1, backed out of a planned $44 million en bloc purchase of Cairnhill Heights at the 11th hour. It had bought the site during the collective sale frenzy in 2007, subject to government approval.
Two months later, a China investor made the news for failing to pay $30 million for 20 units at The Fernhill condo when the project obtained its temporary occupation permit. The investor later managed to resell 19 units, albeit at a loss.
Keppel Land also had to grant a six-month payment extension to a buyer who bought 51 units at its The Suites @ Central project.
MOVING FAST
LUCKILY, the global recession - while deep - did not last very long.
Just six months after the financial meltdown, the local property market stirred back to life together with a global rally in stock markets.
The suddenness and improbability of the turnaround caught everyone by surprise.
The pace at which things changed brought home to developers the need to be fast on their feet if they wanted to avoid being caught napping.
Being nimble, and being able to change tack to meet changed conditions, can make the difference between laughing all the way to the bank and crying into your beer.
ECG Property Group chief executive Eric Cheng told The Straits Times: 'You can't control the market but you can get a feel of it. So when the market is right, you must get your showflat and permits ready to launch as quickly as possible.'
Developers showed fast footwork last year when they quickly came up with small units to satisfy buyers shy about plonking down large amounts of cash amid a slumping economy and languishing stock market.
EL Development managing director Lim Yew Soon said his company was fortunate to have reacted fast by switching to small units for Illuminaire, when it had originally planned to ride out the year. If the firm had stuck to Plan A, it would not have been able to sell out the project at the price it achieved by switching to small units.
Some smaller developers slashed prices by up to half to move units and generate cashflow, while others offered sweeteners such as stamp duty waivers.
Far East Organization said it cut prices across the board after Lehman Brothers collapsed in September 2008. Prices of mid-end projects went down by 10 to 23 per cent.
But it quickly raised prices when it saw that demand was more resilient and pushed out several projects in the second half, said Far East Organization's Mr Chia. In the end, the company had a record year.
The financial crisis was unlike anything that had hit the industry before and was more unforgiving on smaller players than big guns like Far East Organization.
'If the worst-case scenario materialised - that is, the economy had shrunk 10 per cent - many businesses which had expanded during the previous three to four years would have failed,' said CIMB-GK regional economist Song Seng Wun.
'Many developers, especially the newer players which jumped into the fray in the high-end sector, or the highly leveraged ones, would have been under severe pressure. They may even have failed.'
The crisis was a sobering event for developers, coming right after the euphoria of 2007.
'Every cycle will be an eye-opener for the smaller boys. They typically do not have strong holding power like the big boys do,' said Cushman & Wakefield's Mr Han.
Yet despite the victims and the bloodletting that occurs in every cycle, the lure of bricks and mortar and the profit they can bring soon work their magic again.
But as ECG's Mr Cheng cautioned, it's not a game for learners: 'Developers must have the courage to buy land when others are not buying, and sell when you feel the market is right. And that's when experience comes in.
'Property development is not easy.'
joyceteo@sph.com.sg
PROPERTY DEVELOPERS'
Year of living dangerously
Every buyer takes a risk when investing in the property market, but that risk is magnified hundreds of times when you are a developer. With boom and bust cycles becoming shorter and more violent, what does it take to survive? And why are more non-traditional players - jewellers, manufacturers and even F&B giants - increasingly dabbling in the market despite the risks?
By Joyce Teo, Property Correspondent
Frasers Centrepoint launched its Caspian project (above) last February, jumpstarting what was then a quiet market. -- ST FILE PHOTO
YOU could hear a pin drop in the private homes market at the start of last year. No hype, no launches, no buyers.
Just six months later, it seemed as if all hell had broken loose.
Demand went through the roof, showflats were back on centre stage, buyers were queueing around the block and developers couldn't believe their luck.
The astonishing surge in interest - it was a recession, after all - sent sales rocketing to 14,725 units last year, just a tad below the 2007 record of 14,811 units.
Turnarounds don't get much more dramatic than that, but the tumultuous year did more than just get once-fearful buyers rushing back to the market.
It also underlined the huge risks - and rewards - that lie in property development, while igniting an intense Darwinian selection process that sorted out the quick-witted and cashed-up from the slow and complacent.
Property cycles seem shorter nowadays, said property tycoon Kwek Leng Beng.
'The world moves so fast, you have to adjust your thinking to the new circumstances,' said the executive chairman of the Hong Leong Group.
Indeed, it was a make-it-up-as-you-go sort of year for developers.
They certainly had no help from conventional wisdom, which dictates that property cycles take about seven years from boom to bust. The Urban Redevelopment Authority's price index for private homes shows that values were relatively stable from 2000 to the early part of 2007 before a dizzying three-year spell that took the market from boom to bust and back to boom.
In 2007, prices in the high-end sector were largely chased up by foreign demand. Some new prime condominiums sold for more than $4,000 per sq ft - an unprecedented level - but mass-market homes attracted little interest.
But it was the reverse last year, with the mass-market sector under siege as HDB upgraders rushed in, sending prices at some new condos to record levels in their area, while the high-end segment had yet to recover fully.
'The fluctuations within a cycle are more pronounced these days,' said the chief executive of the Real Estate Developers Association of Singapore (Redas), Dr Steven Choo.
A CALCULATED GAMBLE
TO MANY of us, property development still seems like a no-brainer: Buy a patch of land, erect posh condo blocks with all the trimmings, sell for vast profits to cashed-up foreigners or starry-eyed locals. How hard can it be?
Well, as last year showed, it can be pretty darn hard. What looks like a licence to print money turns out to be a multi-million-dollar high-wire act of timing, taste, instinct, pluck and luck, according to Dr Choo.
'It is very challenging. It may seem very glamorous but when you get down to it, it's actually very tough,' he said.
'It does take a lot of experience to stay profitable and ride through the cycles. You must come up with the right product mix, time it right and calculate it right.'
The process starts with the initial land purchase and that is also the most crucial factor: Over-pay, and you can struggle to ever make the deal work, given that the land price can comprise 50 to 70 per cent of total development cost.
Analysts have been warning that developers risk over-paying for land this year as they rush to replenish their land banks.
But even assuming that the plot has been secured at a favourable price, time lag is always an issue, say consultants.
Developers have to work quickly as holding costs - fees, interest charges, taxes and so on - are high.
And once a project gets the green light, there are initial costs for professionals such as consultants, engineers and architects before a labourer even lifts a shovel.
'Once you buy land, you have to follow through a development timeline. If you buy government land, you have to complete construction within a certain period,' said Knight Frank chairman Tan Tiong Cheng.
This period is now seven years, after it was extended by a year last year.
This is where timing is vital and when any number of uncertainties can upset even the best-laid plans.
The sale price factored in at the start of the project may not hold up nine months or so down the track when the launch is held.
Construction costs may continue to rise while selling prices fall, as was the case in mid-2008.
And sales figures may not be what developers had hoped for.
And if they cannot sell their units before demand slows, they will be stuck with unwanted flats - possibly for years.
Singapore's largest private developer, Far East Organization, for instance, still has a few unsold units from Rafflesia in Bishan, which was completed in 2003.
'From a cashflow point of view, you can sell everything out,' said the firm's executive director and chief operating officer of property sales, Mr Chia Boon Kuah.
'But if you're fully sold, you can't participate in the cycle. You need inventory to do so.'
Developers in Singapore have been known to hold on to unsold units for more than a decade, but holding on to a 99-year leasehold mass-market project poses another risk as the tenure runs lower every year.
'Once the remaining lease gets closer to 80 years, the price depreciation starts to be more apparent,' said Cushman & Wakefield managing director Donald Han.
During the Asian financial crisis, developers who bought sites at a high in 1996 could not turn a profit as demand waned and prices weakened.
That was after the Government increased land supply for private homes in May 1996 to temper prices, as well as lowered loan-to-value limits to 80 per cent, said a UBS Investment Research report last month.
'In some cases, developers held the land for up to three to eight years before launching the homes for sale,' it said.
Of course, it is impossible for any developer to get the timing perfectly right. All sorts of external factors, such as the health of the global economy, can affect property cycles.
When the property market heads south, what developers need are deep pockets.
'There was nothing much one could do when the market was down. Those developers that did not have holding power undercut to sell,' said Mr Kwek.
'Those with financial clout could decide to hold instead because they knew the market was going to return and could wait for it.'
That is one thing that separates the big boys from the tiddlers, who often have limited capital and a hard time convincing nervous bankers to lend to them.
'If you don't have deep pockets, and you make a wrong development decision, you can keel over very quickly,' said an industry observer who declined to be named.
In April 2008, small developer Bravo Building Construction pulled out of three collective sale deals when the market turned sour. The biggest of the deals was the mega $516 million Tulip Garden in Holland Road, which it bought in mid-2007 and for which it had to forfeit its $25.8 million deposit.
That is why alarm bells rang over some smaller listed players, such as SC Global and Ho Bee, around a year ago.
Analysts feared they had borrowed too much to buy land in prime areas where prices were falling fast. The concern was that these smaller firms could go under as they were stuck with the high cost of servicing their bank loans, and unable to launch or shift new high-end units.
Their stock was punished. SC Global shares lost more than 90 per cent of their value, falling from a high of $3.37 in 2007 to just 29.5 cents in March last year. They have since recovered to about $2, thanks to the market turnaround.
The banks got worried too. They started scrutinising the books of developers they had lent to, and looked at their collective loan position.
Credo Real Estate managing director Karamjit Singh said: 'Because of the banks' lack of confidence, it became very difficult for land transactions to take place. If anyone could buy land, he would need a lot of cash to cover the bulk of the purchase price. Basically, banks were not prepared to lend.'
To make things worse, developers faced the risk of previous sales coming undone.
The two great fears, said an industry observer, were the possibility of foreigners bailing out of Singapore, and large numbers of defaults from buyers who used the deferred payment scheme.
The scheme allowed buyers to defer paying the bulk of their purchase price until completion of the project.
'Banks were worried. Everybody was sweating,' said a property expert who declined to be named.
Many analysts were predicting fire sales and different degrees of defaults, as banks had turned very cautious on lending. Developers held their breath.
Fortunately, the large defaults that many had anticipated did not materialise, though there were some who lost out on their bets.
In February last year, a small developer, Jewel 1, backed out of a planned $44 million en bloc purchase of Cairnhill Heights at the 11th hour. It had bought the site during the collective sale frenzy in 2007, subject to government approval.
Two months later, a China investor made the news for failing to pay $30 million for 20 units at The Fernhill condo when the project obtained its temporary occupation permit. The investor later managed to resell 19 units, albeit at a loss.
Keppel Land also had to grant a six-month payment extension to a buyer who bought 51 units at its The Suites @ Central project.
MOVING FAST
LUCKILY, the global recession - while deep - did not last very long.
Just six months after the financial meltdown, the local property market stirred back to life together with a global rally in stock markets.
The suddenness and improbability of the turnaround caught everyone by surprise.
The pace at which things changed brought home to developers the need to be fast on their feet if they wanted to avoid being caught napping.
Being nimble, and being able to change tack to meet changed conditions, can make the difference between laughing all the way to the bank and crying into your beer.
ECG Property Group chief executive Eric Cheng told The Straits Times: 'You can't control the market but you can get a feel of it. So when the market is right, you must get your showflat and permits ready to launch as quickly as possible.'
Developers showed fast footwork last year when they quickly came up with small units to satisfy buyers shy about plonking down large amounts of cash amid a slumping economy and languishing stock market.
EL Development managing director Lim Yew Soon said his company was fortunate to have reacted fast by switching to small units for Illuminaire, when it had originally planned to ride out the year. If the firm had stuck to Plan A, it would not have been able to sell out the project at the price it achieved by switching to small units.
Some smaller developers slashed prices by up to half to move units and generate cashflow, while others offered sweeteners such as stamp duty waivers.
Far East Organization said it cut prices across the board after Lehman Brothers collapsed in September 2008. Prices of mid-end projects went down by 10 to 23 per cent.
But it quickly raised prices when it saw that demand was more resilient and pushed out several projects in the second half, said Far East Organization's Mr Chia. In the end, the company had a record year.
The financial crisis was unlike anything that had hit the industry before and was more unforgiving on smaller players than big guns like Far East Organization.
'If the worst-case scenario materialised - that is, the economy had shrunk 10 per cent - many businesses which had expanded during the previous three to four years would have failed,' said CIMB-GK regional economist Song Seng Wun.
'Many developers, especially the newer players which jumped into the fray in the high-end sector, or the highly leveraged ones, would have been under severe pressure. They may even have failed.'
The crisis was a sobering event for developers, coming right after the euphoria of 2007.
'Every cycle will be an eye-opener for the smaller boys. They typically do not have strong holding power like the big boys do,' said Cushman & Wakefield's Mr Han.
Yet despite the victims and the bloodletting that occurs in every cycle, the lure of bricks and mortar and the profit they can bring soon work their magic again.
But as ECG's Mr Cheng cautioned, it's not a game for learners: 'Developers must have the courage to buy land when others are not buying, and sell when you feel the market is right. And that's when experience comes in.
'Property development is not easy.'
joyceteo@sph.com.sg
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