ST : Tourist coaches near DFS store irk residents

March 1, 2010

Tourist coaches near DFS store irk residents

Illegally parked vehicles create congestion and noise in residential area

By Maria Almenoar



Some of the tourist coaches that park illegally on Claymore Road behind the DFS building in nearby Scotts Road. Coaches also park illegally in Draycott Drive, Draycott Park, Ardmore Park and Claymore Hill. Parking is not allowed in front of the DFS store. -- ST PHOTO: CHEW SENG KIM

UNSIGHTLY, noisy and congested - these are common complaints that residents of the upmarket area of Ardmore Park and Draycott Drive have because of tourist coaches parking illegally there.

During the day and especially at weekends, the area becomes a huge temporary carpark for these coaches whose drivers wait for tourists shopping at the Duty Free Shopping (DFS) building in nearby Scotts Road.

Parking is not allowed in front of the DFS store and there are only four parking spaces for large vehicles along Claymore Hill and Claymore Road behind the store.

So, to avoid heading to carparks such as that in Newton Circus, which is about a five-minute drive away, coach drivers wait in their vehicles for between half an hour and 11/2 hours before circling back to pick up their passengers.

They park illegally at the side of Draycott Drive, Draycott Park, Ardmore Park, Claymore Hill and Claymore Road and leave the vehicle engines running while they sit in the air-conditioned buses reading, take a nap or clean their vehicles.

In some cases, they double-park next to legal spaces.

Residents also complain that they leave their rubbish behind.

Draycott Drive resident Rose Mei, 62, who has lived in the area for the past three years, is angry that her road is being used as a carpark for the big buses.

'It's a terrible sight and it is impossible to have a peaceful afternoon at home with the noise of the engines,' she said.

The housewife said she has contacted the Traffic Police numerous times about the issue, as the Land Transport Authority has said it is not the relevant authority to deal with such matters.

'The police are quick to respond to the call but after they ask the bus drivers to move away, the drivers just circle round and come back to park,' she said.

When contacted, the police said they were aware of the situation, adding that they conduct regular patrols along these roads. Enforcement actions have been taken against vehicles found to be parked illegally, they added.

Last year, more than 1,300 summonses were issued against vehicles parked illegally in this area, said police spokesman Stanley Norbert.

'The Traffic Police have also requested the tour agencies and bus companies to remind their drivers to refrain from parking their vehicles indiscriminately, causing inconvenience to other road users,' he said.

Motorists who park their vehicles illegally can be fined up to $150 and could incur three demerit points.

When the police are not patrolling the area, security guards at several condominiums in the area take the initiative to drive away the tourist coaches.

But they said that they could only ensure that the coaches are not parked in front of the condominium they are in charge of.

A security guard at a condominium in Draycott Drive, who declined to be named, said: 'There are usually between four and 10 of these buses at any one time.

'The buses obstruct the road and my residents have problems turning in and out of the carpark... Not a pleasant sight for such a high-class area.'

mariaa@sph.com.sg

TODAY Online : 'For market forces to decide'

'For market forces to decide'

05:55 AM Mar 01, 2010

by S Ramesh rameshs@mediacorp.com.sg

SINGAPORE - The wet markets here may not be optimising space in land-scarce Singapore, said Senior Minister Goh Chok Tong, but some Singaporeans prefer them to supermarkets as a matter of tradition.

And while there was a need in the future to look into the amount of space that wet markets occupy, there was no denying their popularity.

"All of us are traditionalists - we're brought up to go to wet markets. We're able to poke at the fish, touch the fruits before you buy them and chat with the stall holders," said Mr Goh. "You go to the supermarket, you're unable to chat and bargain."

Mr Goh was speaking at the official opening of the new $18.2-million Geylang Serai market, which has an increased seating capacity with 365 wider stalls.

The original market opened in 1964 and was known as the Malay Emporium of Singapore. But it was gutted by a fire in 1999 and moved to a temporary location in Sims Avenue.

While he favours "the ability of the market to retain this character" of selling mostly or even all halal food, Mr Goh said with several new blocks coming up in the area, there would be more Chinese and Indian families staying there. So, it was important for the stalls to cater to the need of all races, he said.

Although the Malay community likes the Geylang Serai market because all the products and foodstuff are halal, "that doesn't mean that the market can be designated as a halal market" because the market is not a private market but "a common space for all Singaporeans".

Mr Goh added that if a stall becomes available in the Geylang Serai market, some stall holders may want to cater to the non-Muslims in the area.

Despite this, the makeup of stalls there should be determined by market forces, he said.

"If you want to open a non-halal stall over here, the demand for your item may not be there. Why not consider elsewhere? But it's for (hawkers) to decide, not for the Government to designate. Any tender must be open to everybody," said Mr Goh.

Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved

ST : Copthorne Orchid to go ahead with condo plans

Feb 28, 2010

Copthorne Orchid to go ahead with condo plans

Tenants upset at being kept in the dark; hotel says 'sufficient time' to serve proper notice

By Irene Tham

Tenants had heard it before: The Copthorne Orchid Hotel would be torn down for a condominium.

So there was a sense of deja vu when they learnt from reading The Straits Times last Monday that the 440-room hotel in Dunearn Road would go.

In 2005, City Developments Ltd (CDL) had said it planned to turn the hotel's site into a condominium. But that did not happen.

CDL owns hotelier Millennium & Copthorne (M&C), which operates the Copthorne Orchid Hotel.

But its latest announcement seems to be for real. A CDL spokesman told The Sunday Times it wants to launch the condominium project as early as this July.

The property developer has not decided on a firm date to put the 150 units of the project on sale as it 'had just obtained provisional permission to redevelop'.

Depending on how well the condominium sells and existing tenancy obligations, the building may be torn down only next year or later.

M&C held back its plans in 2005 'as there was a projected shortage of hotel rooms', its spokesman said.

But its recent announcement was not good news to its tenants - one of which has been leasing space in the hotel for 35 years.

Madam Anne Lee, 52, owner of Anne Salon, was upset that the hotel withheld such important information as she renewed her lease just three months ago.

'They must tell us so we can start looking for another landlord,' said Madam Lee, who has been running her salon there since 1975.

Nice Express, which operates its Singapore-Kuala Lumpur express bus service from the hotel, was also not informed about the plans.

Mr Charles Lawrence, 56, operations and sales supervisor at Nice's Singapore office, said: 'I do not know whether to move or stay.'

This comes at a bad time for Nice as it spent $100,000 last year to renovate its office at the hotel.

When asked why tenants were not informed, an M&C spokesman said: 'We have not sent out any notices as there is no firm date yet.

'The terms of the tenancy agreement contain a three-month notice clause. We have sufficient time on hand to serve proper and timely notice to all our tenants.'

BT : Turning old CBD offices into prime new homes

Business Times - 01 Mar 2010


Turning old CBD offices into prime new homes

As Marina Bay financial district takes shape, developers are making exciting plans

By UMA SHANKARI

(SINGAPORE) Some one million square feet of office space in the Central Business District (CBD) is likely to be converted into at least 1,000 private homes over the next three years.

Property analysts say that with the Marina Bay financial district now taking distinct shape, developers are looking to recycle older office buildings in the current CBD in anticipation of business activity moving to the new hotspot.

Redevelopment plans are also motivated by climbing luxury home prices which contrast sharply with falling office rents.

City Developments said at its results briefing last Thursday that it was looking to see if it could convert any of its office buildings in the 'old' CBD to residential use.

'It is a question of demand,' said CityDev chairman Kwek Leng Beng at the briefing.

CityDev's parent company Hong Leong Holdings is already redeveloping 76 Shenton Way, which has a net lettable area (NLA) of about 92,700 square feet of office space.

The 202-unit residential project due to come up on the site is likely to be launched within the next few weeks.

Other similar conversions in the pipeline include UIC Building on Shenton Way and Starhub Centre on Cuppage Road.

'With the theme of working, living and playing in 21st century Singapore fast becoming a lifestyle reality, we see great potential in quality residential developments in the core central region,' said a Hong Leong spokesman.

The trend is not new. Developers were looking to convert selected office space into residential use as far back as 2007. City- Dev, for example, launched its One Shenton residential project in January 2007, converting an office block into residential space. Since then, 316 apartments in the 341-unit project have been sold, with many going for more than $2,000 per sq ft (psf).

But other such plans were put on hold when in May 2007, fearing a shortage of office space, the Urban Redevelopment Authority (URA) called a halt to all conversion of offices in the central area to curb further depletion of existing stock.

The ban was lifted in late 2008 as fears of an office space oversupply emerged.

Knight Frank chairman Tan Tiong Cheng said that with the Marina Bay Sands integrated resort (IR) now ready to open its doors and the entire Marina Bay area taking shape, developers are now taking another look at their buildings located in the current CBD.

'It is the government's intention to have a new CBD in Marina South. So there is concern that some of the older office buildings may not be relevant to future needs,' said Mr Tan. 'Office rents have also dipped, so it is a good time to look at redeveloping some of these buildings now that the ban has been lifted.'

Elsewhere on Shenton Way, UIC has received permission to redevelop UIC Building into a mostly residential project. UIC's board says it is still assessing all alternatives to ensure the best use for the building. But sources told BT that the conversion could start some time this year. The property has close to 400,000 sq ft of office space.

Office real estate investment trust (Reit) CapitaCommercial Trust also said in January that it is looking at redeveloping Starhub Centre on Cuppage Road into a residential and commercial project with up to 80 per cent of the gross floor area devoted to residential use. The property currently has an NLA of about 280,000 sq ft and analysts estimate that 200-300 upmarket homes could be built on the site.

Other office properties that could be converted (either fully or partly) into private homes include KOP Capital's The Spazio on Cecil Street, and three buildings owned by Fission Group and Yi Kai Group - VTB Building on Robinson Road, and Aviva Building and Cecil House on Cecil Street.

In all, around one million square feet of office space could be removed from the market and transformed into upmarket homes.

City living has, in recent years, become more popular and luxury home prices are expected to climb this year. UBS Investment Research, for example, expects luxury home prices to rise 40 per cent in 2010 to reach $4,000 psf and maintains that prime home prices (in districts 9, 10, 11) could reach 2007 levels this year.

Falling office rents and an upcoming glut of office supply also means that office rents are widely expected to continue falling. Property firm Savills expects a 20-25 per cent fall in Grade A office rents in Singapore this year.

But Knight Frank's Mr Tan says that not all office buildings in the present CBD can be converted into homes.

'City living is only attractive if you have a view of the sea or you have some kind of a city vista,' he said.

The conversion of some office space into residential units will lend support to rents, analysts said.

UBS Investment Research said in late January that it now expects over one million sq ft of office space to be removed in 2010 and 2011, instead of the 550,000 sq ft expected earlier.

'As a result, we upgrade our prime office rents in 2010-2013 by 5 per cent,' said UBS analyst Regina Lim. 'We now expect prime office rent of $8.70 psf per month by end-2010 and $9.70 psf per month by end-2011.'

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Great response: CityDev launched its One Shenton project in January 2007, turning an office block into residential space. It has sold 316 of the 341 units in the project.

ST : Anatomy of a good home buy

Feb 28, 2010

small change

Anatomy of a good home buy

The key to making a savvy property purchase lies in these seven common sense basics

By Annie Lim

I am no expert when it comes to investing in property, but as I have invested in numerous properties over the last decade, I have gained some valuable experience.

I made money from some and lost money from others. Some say you need luck to make money in real estate, but I believe there are some fundamentals that one can use as a guide to make as infallible a decision as possible.

1 Good location

In property selection, particularly for investment purposes, the key is location. For owner-occupied properties, location may be less significant as individuals have different preferences. Some like

quieter locations away from commercial activities while others choose to be close to specific amenities.

Proximity and accessibility to schools, transport lines, shopping centres, factories and specific suburbs are some important factors to consider.

Even for an owner-occupied property, it is important to consider how other people would view the location should you decide to sell it one day. In short, try to be as objective as possible when it comes to location.

2 Good site

Is the property in a good site? Is it next to an MRT station, bus stop, monsoon drain or power cables? Or is it at a T-junction? There is nothing technically wrong with T-junctions, but some people believe it obstructs the flow of good luck in one's life.

Is the site prone to flash floods and so on? Many people like to live near MRT stations, but some foreigners prefer to avoid the constant noise of the trains. They may prefer quieter areas.

When choosing the site of the property, consider the points that will appeal to your potential buyers in the future.

3 Good layout

Do you like the layout of the apartment or house? Many people prefer their living rooms to feel spacious. Are there many angles and nooks in the house? Some people may consider them bad fengshui.

A more practical consideration is whether the living room and bedrooms are irregularly shaped, with lots of unusable space. A good, clean layout will save you the time, effort and money that you otherwise would have to spend on redesigning around oddly shaped and oddly positioned living areas.

4 Good address

Securing a good address without paying a premium for it is like a windfall. It may not matter much to you now but a good address, such as a nice sounding road name or an auspicious sounding unit number like #08-08, may attract more interest and demand in the property and also a higher price when it is time to sell.

5 Good history

Many potential buyers like to know the background of the property they are buying. Who are the current owners? Why are they selling? Who built the property and how old is it? Is the property owner-occupied or rented out? These things matter in the making of personal and economic decisions.

If the property is for investment, then the purchaser should look into two other areas:

6 Good rental yield

What is the expected rental yield for the property? Is this an acceptable level for you? What is the median rent for properties in that area?

7 Good potential for capital appreciation

What is the median price for property prices in that area? What is the highest and lowest price for properties in that area over the last three, five and 10 years?

The writer is managing director of mortgage consultant Global Creatif Financial. The views expressed are her own.

ST : Housing in S'pore still affordable

Feb 27, 2010
HDB'S 50TH ANNIVERSARY

Housing in S'pore still affordable
By Tu Yong & Yu Shi Ming, For The Straits Times

HOUSING is a perennial hot topic of discussion, especially in Singapore where it touches almost every segment of society - from the low to middle income in public housing to the middle and higher income aspiring to upgrade to private property.

The recent spikes in both public and private housing prices have added fuel to the debate on affordability. Analysts and experts have attributed the price increase to a rise in demand, especially from foreigners and permanent residents.

What is clear is that housing demand changes constantly, which means that government policies seeking to offer decent and affordable homes have to keep changing too.

The International Housing Conference last month, organised by the Housing and Development Board (HDB) to mark its 50th anniversary, gave the housing authorities a platform to share ideas and strategies.

Even with the best of intentions, it is often hard to give people equal access to affordable housing because of uncertainty about the number who need it as well as an inelastic housing supply.

This commentary aims to compare the housing situation in Singapore, Hong Kong, London and Sydney.

As with most countries, Singapore's housing provision system is rooted in its historical and political background. During the initial years of independence, the Government adopted a subsidised rent system to resolve an urgent housing shortage.

However, by 1964, it was decided that home ownership was a better strategy as it was thought that citizens would be more likely to sink their roots in the country if they owned a stake in it. This marks the first deviation from public housing systems in countries with a strong welfare focus, such as the United Kingdom and the Netherlands. By the late 1970s, when many welfare countries were starting to revamp their public housing systems due to economic reasons, public home ownership was thriving in Singapore because of the development of the resale market for public housing.

Over the last few decades, the HDB has become the dominant housing provider, accounting for the homes of 82 per cent of the population. Table 1 shows the key differences between the housing systems in four major cities, including Singapore. It provides a broad picture of the composition of public and private housing and the proportion of rental and ownership for each category.

Table 1 makes two key points: One, these cities differ from Singapore in that most of their housing is provided by the private sector. This is also the case in most countries.

Two, only Singapore has a significant proportion of ownership when it comes to public sector housing. In fact, public housing in London and Sydney is solely rental, while Hong Kong has 35 per cent public housing ownership as compared with more than 95 per cent here.

Clearly, housing systems in different countries are shaped by their respective history, economy and the cultural and social needs of their people. Each system has its own merits and limitations; what matters is whether it can offer decent and affordable housing. We assess these two criteria in terms of living space, ratio of income to housing price as well as housing options. Table 2 compares the population density, ratio of median housing price to median annual household income and the average living space per person in Singapore, Hong Kong and London.

Table 2 shows that it is not meaningful to rate housing systems based on one factor alone. Take population density, for example. While Singapore scores the highest of the three, much of Hong Kong's land area is unbuildable because of the terrain, which means that the living space per person in the territory is less than half of that in Singapore. In fact, living space per person in Singapore compares favourably to that in London, where land supply is not a constraint.

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

As for housing options, some countries offer greater diversity. In London, for example, if a family is unable to buy or rent a good home from the open market, a range of affordable options is available, including public housing from the local authorities at a subsidised rent. There is also the possibility of buying a home through shared ownership, a part-buy, part-rent scheme from one of the independent, non-profit associations providing low-cost housing.

In Singapore, the HDB has diversified its housing types over the years through design, construction and technology. For example, besides the bulk of build-to-order flats, it also engages private developers to build public housing under the Design, Build and Sell Scheme.

While housing systems vary from country to country, what is important is the ease with which people can live in quality homes, defined as housing with water, sewerage and electricity.

In Singapore, all this - together with estate maintenance and neighbourhood amenities - has been achieved by the HDB over a relatively short history of 50 years.

Perhaps the success has also raised expectations. Each spike in house prices - fluctuations in prices will likely increase, given Singapore's open economy and rapidly changing global economic climate - will heighten the anxiety of potential buyers, despite the empirical evidence that housing in Singapore is still very much affordable by any standard.

The writers are from the Department of Real Estate, National University of Singapore.


--------------------------------------------------------------------------------

In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.

ST : 'Residences' expert@work in naming a condo

Feb 28, 2010

'Residences' expert@work in naming a condo

By Goh Chin Lian

What's the name of your condo?

If you bought a unit in the 1980s, you probably live in a project with words like 'palm', 'garden' or 'park' in the name.

In more recent times, it became fashionable to incorporate auspicious numbers, like Scotts 28 and 8@Woodleigh.

Now, many developers have plumped for Residences.

Examples include Residences Botanique in Serangoon, Kovan Residences in Upper Serangoon, The Shore Residences in Katong, Vista Residences in Balestier, Holland Residences in the Holland Road area and Tembeling Residence in the East Coast area.

A spokesman for the Street and Building Names Board said that of the 25 to 30 condominium names it approved in 2008 and last year, names with terms like 'residences', 'suites' and '@' were most popular.

New property player Ferrell Asset Management opted for Ferrell Residences for its first condo in Bukit Timah, saying thatthe word 'residences' evokes 'a very personal and intimate feeling towards the development'.

Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, shares a similar view. 'The word conjures a very homely image,' he said. The firm's projects include Orange Grove Residences and Dakota Residences.

For developer TG Group, there is a more mundane reason for naming its 102-unit development in the East Coast, St Patrick's Residences.

It conforms to the residential zoning of the area, and differentiates itself from industrial or commercial zones, said its head of corporate affairs, Mr Lowell Loh.

Frasers Centrepoint Homes, which is launching Residences Botanique this weekend, also drew attention to the word Botanique.

It reflects the wide array of plants and landscaping of the resort-style condo, said a spokesman.

Far East Organization said it tries to express what makes a development unique via the condo's name.

Its The Shore Residences is so named because its 'large waterscape with mini beaches and coconut trees' aims to recapture the old Katong ambience with a long shoreline.

But do names really matter with buyers? Apparently not, it seems. Mrs Debora Neo, 44, who lives in Rivervale Crest condo in Sengkang, said price and location matter more.

Proximity to schools is also crucial, said the mother of two teenage children.

As for the use of 'residences', she said it reminded her not of a home or condominium, but of serviced apartments for foreigners here for a short stay.

How important is the name of the condominium when you are deciding whether to buy it? Send your comments to suntimes@sph.com.sg

ST : Fresh curbs not stopping property buyers

Feb 28, 2010

Fresh curbs not stopping property buyers

Over 300 of 350 released Estuary units snapped up in the wake of new anti-speculation rules

By Leonard Lim



The Estuary condo in Yishun is the first major property launch since government measures to curb speculation were announced last week. The 99-year leasehold condo's showflat saw a steady stream of visitors yesterday. --ST PHOTO: NG SOR LUAN

They came, they saw, they bought.

As of yesterday, more than 300 of about 350 units in The Estuary condominium that were released for sale have been snapped up.

The MCL Land project in Yishun is the first major property launch since measures were announced by the Government last week to curb speculation.

These were: stamp duty to be paid if the buyer sells the property within a year, and lending institutions allowed to lend only up to 80 per cent of the property's value, not 90 per cent.

Yesterday, more than 80 pairs of shoes were seen outside The Estuary's showflat when The Sunday Times visited at 1.30pm.

The number increased steadily to more than 100 pairs by 2pm as people came to check out the 99-year leasehold condo.

Most were families with young children or young couples, lured by the condo's proximity to Lower Seletar Reservoir and attractive prices of about $750 per sq ft.

Inside, all the 15 tables set aside for prospective buyers were filled most of the afternoon.

Sales of the 350 released units began last week. The project has 608 units - comprising one-, two-, three- and four-bedroom types.

'It's been encouraging so far despite the measures,' said an MCL Land staff member, noting that demand was evenly distributed across the various apartment types.

'At first, there was more interest in the one-bedroom units but when the measures were announced, this died off a little.'

One- and two-bedroom units have usually been popular among speculators at launches over the past year. They make up nearly 40 per cent of units in The Estuary, which is near Khatib MRT station.

Small apartments have been targets for speculators because the lump-sum outlay is relatively more affordable.

The Government's measures to curb excesses have come at the right time, said Madam Angie Ng who bought a three-bedroom unit at The Estuary for about $930,000 yesterday.

'I'm relieved actually. We were waiting for this launch and then the measures came. That'll help curb speculators and prices won't be jacked up,' she said.

Madam Ng, 36, who works in the banking industry, is married with two children and lives in a five-room flat in Yishun.

Property agents said The Estuary's relatively distant location from the city also meant it might not be as attractive for speculators.

The prices were the key lure for the buyers, about 70 per cent of whom live nearby in Woodlands and Marsiling.

'For upcoming projects in Singapore, the prices are at least $900 psf,' said ERA agent Shayne Lim, 34, noting that prices have even reached $1,200 psf in Ang Mo Kio.

'And there hasn't been a new condo in the Yishun area for over 10 years,' she said of the good buying response.

People in the real estate sector will also be monitoring sales at another condo - Vision@West Coast - which is set to be launched soon.

Located on West Coast Highway, the 99-year leasehold development has 281 apartments and 14 strata houses. Sizes start at about 800 sq ft for a two-bedroom unit and rise to 5,000 sq ft for the strata houses.

'Demand should be strong as the location also boasts sea views,' predicted property agent Jimmy Tan.

The asking price for the project, he added, could be around $1,100 psf.

limze@sph.com.sg

ST : Don't be chained to loan woes

Feb 28, 2010

Don't be chained to loan woes

Shop around for best interest rate, choose the optimal tenure, and read the fine print

By Lorna Tan, Senior Correspondent



It must be tempting to splash out a bit now that the worst of the recession - and the belt-tightening that it forced on us - is over.

After all, some firms have started restoring pay cuts to employees and year-end bonuses have been paid.

With the mood improving, the urge to snap up that big-ticket item with cash or a loan is getting stronger.

Using cash is one thing, but excessive borrowing can lead to financial trouble.

'Loans can help us to purchase high-value items or essentials that we do not have the savings or the full amount for at the moment - but it should be something we can afford in the long run,' said GE Money Singapore's president and chief executive, Mr Rahul Gupta.

And the same principle should apply, whether for a home loan, a car loan, a home renovation loan, one for education, or even one for a holiday.

'Consumers need to ensure that loans taken are well within their means,' said Mr Gupta.

Here are eight things to consider when taking out a loan:

1 A need or a want?

Before taking a loan, ask yourself if the item or service is meant to satisfy a need or a want.

Ms Tan Huey Min, assistant director at Credit Counselling Singapore, suggests that if it is a 'want' - not necessary and just for consumption - perhaps it would be better to save for it rather than to pay a 'premium' price (that is, the interest cost of borrowing). For instance, don't borrow to pay for a vacation or a new kitchen appliance.

Take time to consider if there is an alternative to borrowing now or borrow a smaller amount instead. Better still, don't buy it at all if it is unnecessary.

However, if the purchase is for investment purposes, then perhaps it is okay to get a loan. This could be for renovations that add value to your home, or enhancing your future income earning ability via training and education.

2 Interest cost of borrowing

Consumers should be aware of the type of interest rate that is stated in the loan agreement or marketing material.

And when considering loan options, compare like with like, said Mr Gupta.

Some loans use the annual percentage rate (APR), which reflects the actual interest cost of borrowing, while others refer to the simple interest rate. Shop around for the lowest APR.

The simple interest rate is calculated by applying a flat rate on the original principal amount for the entire loan tenure.

The APR is interest calculated based on the declining principal balance over the tenure of the loan.

As the borrower makes monthly repayments, the principal is reduced every month, so the interest payable on the principal also reduces each month.

Sometimes a loan comes with a zero per cent interest cost if it's paid via a credit card. Make sure you pay off the debt before the interest starts to build up. If you miss a payment, you may be automatically bumped up to the highest annual interest rate of 24 per cent.

3 Current debt service ratio

Before taking the loan, calculate your debt service ratio. It is the percentage of your monthly income needed to service long-term liabilities.

It provides a useful guide to how much of your take-home pay - that is gross pay less 20 per cent employee CPF contribution and personal income taxes - is used to pay debts.

Debt payments are monthly expenses like mortgage, car loans, personal loans or even credit card debts. A healthy debt servicing ratio - debt divided by income - should be 35 per cent or less.

To put it another way, out of every $1,000 of after-tax and CPF income, you should spend $350 or less on debt repayments.

Ms Tan cautions that if the consumer already has a high amount of outstanding debt to service, it is best to pay down existing debt first before incurring more.

And even if your debt service ratio is less than 35 per cent, it is prudent to consider if you have surplus funds to take on another loan repayment after paying monthly living expenses.

Make sure you know your cash inflow and outflow before taking on another loan.

4 Loan tenure

It is worth considering the optimal loan tenure as it affects monthly repayments and interest paid.

Generally a longer loan tenure means smaller monthly repayments but a shorter loan tenure may lead to lower interest paid, says GE Money.

For example, Mr Mark Tan takes a $10,000 loan for a period of five years at an APR of 18per cent per annum (pa).

His monthly repayment is $254 so the total interest he will pay over the five-year loan tenure is $5,236, over and above the $10,000 loan amount.

If he takes a loan period of three years at an APR of 18 per cent pa, his monthly repayment will be $362 but the total interest paid over three years will be $3,015.

So to minimise the interest payable, a shorter loan tenure may be an option, but the repayments will be higher.

Some financial experts suggest you make the highest repayments you can manage so that you clear the debt in the shortest possible time.

When deciding on a loan tenure, consider your monthly commitments and take the appropriate loan tenure based on your monthly cash flow.

5 Early payment options

Not all loans allow customers to settle early, so read and understand the terms and conditions of the loan before signing up.

An early settlement fee is usually imposed if a loan is paid off early.

For example, if you redeem your GE Money personal loan before the full term expires, an early redemption fee of 3 per cent to 5 per cent of the outstanding amount at the time will apply.

Home loan customers are urged to look beyond interest rates and consider factors such as the lock-in period and penalty fees.

Another potential cost is the loan cancellation fee. An investor who buys a property on speculation and then applies for a loan might be hit with a cancellation fee if the property is sold before the loan is disbursed.

Cancellation fees can range between 0.75per cent and 1.5per cent of the loan amount, and can be quite substantial. For example, if the loan amount is $1million, the cancellation fee works out to $15,000.

6 Late payment fees

Most loans stipulate late payment fees. These are over and above the interest charged for late payment, so go through the terms and conditions of loan agreements thoroughly to ensure you understand them clearly.

Pay special attention to fees incurred for late payment.

For instance, credit cards typically charge a one-time administrative fee of $50 to $80 for late payment. This is besides the 24per cent interest charged on the sum that is rolled over.

So keep track of the payment dates and remember to pay before the due date. Try to have fewer loans or credit facilities and avoid having multiple sources of credit. In order not to incur interest and penalty fees, pay your outstanding credit in full.

7 Payment flexibility

Avoid defaulting on loan repayments as it will hurt your credit history. However, a typical loan tenure is for at least a year, and sometimes it is hard to predict what will happen so far into the future.

You might hit cash flow difficulties at some point, so it is worth looking for loans that offer some payment flexibility and provide rewards for prompt payment.

For example, Mr Gupta says that GE Money's James personal loan, which caters to people earning $30,000 and above, offers several flexible payment options. They include allowing customers to defer two payments a year, paying only the interest component or paying higher or lower instalments at the start, or end of their loans.

Such features offer flexibility in managing your cash flow, particularly during unforeseen circumstances. GE Money customers are also rewarded for prompt payment by having part of their interest component, or their last instalment amount of the loan, waived.

For those who can't meet their monthly payments, experts suggest that they approach their lender first for assistance to restructure a loan. Financial institutions will usually review such requests on a case by case basis. A responsible lender will work with its customers to provide a solution.

8 Other loan terms and conditions

Make sure you understand the key fees and charges stipulated by a loan agreement. This makes you aware of what to expect when a loan is taken and reduces any surprises after it has commenced.

If you are acting as a guarantor for a loan, be clear about the terms and conditions of the agreement, especially those related to your obligations as a guarantor.

Ms Tan says: 'In the eyes of the creditor, the guarantor is the 'same' as the borrower, meaning, both the borrower and the guarantor are jointly and severely liable for the loan.'

This means that even if you are willing to act as a guarantor, you should also consider your own ability to make repayments in case the principal borrower fails to repay.

She recalled a case in which a person (let's call him John) became a guarantor for a stranger (Jim), who wanted to buy a car, in return for a fee.

When Jim defaulted on his car loan, the car financier pursued legal action against both people.

Jim could not repay and became a bankrupt. In the end, John assumed the balance of the loan, which was $30,000, after the car was sold and makes regular payment to avoid being made a bankrupt by the car financier.

lorna@sph.com.sg

ST : HDB may tweak rules to curb property speculators

Feb 28, 2010

property

HDB may tweak rules to curb property speculators

Experts suggest some measures which can be taken to cool resale market

By Joyce Teo



HDB flats (right) that are well-located are in demand, and some private property owners buy them for their rental yield. -- ST PHOTO: ALPHONSUS CHERN

Frustrated buyers have pointed their fingers at permanent residents and private property speculators for pushing up HDB resale flat prices to record levels.

They claim the speculators snap up resale flats and then rent them out illegally or sell them quickly but legally after the stipulated one-year period.

A week ago, National Development Minister Mah Bow Tan said the Government is looking into 'something' regarding measures for the HDB market.

Property experts reckoned the Government could extend the minimum occupation period for those who bought their flats with bank loans as well as make checks to ensure owners are not flouting the rules.

Under HDB rules, those who buy resale flats without housing grants can sell their flats after 21/2 years if they take a loan from HDB, or one year if they take a bank loan.

They can rent out the entire flat only if they have lived in it for at least three years.

Buyers who take up housing grants for their purchases can sell only after a minimum occupation period of five years.

'Speculation is not an issue right now. But it may become an issue if buyers are sure that prices will continue to rise for the next year,' said the managing director of C&H Realty, Mr Albert Lu.

ERA Asia-Pacific associate director Eugene Lim said the Government has already started to rein in the sizzling HDB resale market with the lowering of the loan-to-value limit (LTV) for housing loans taken from banks.

This means buyers can borrow less than before - at up to 80 per cent of the property's valuation instead of 90 per cent previously.

This will likely affect deals for the high-value resale flats involving cash-over-valuation (COV) of anywhere from $50,000 to $90,000, as buyers will now have to fork out more down payment, in addition to the cash, said Mr Lim.

COV is the amount over and above the flat's valuation that is payable only in cash.

There are not many other things the Government can look at, as it will not want to affect genuine demand, property experts said.

While the lower LTV limit will have an impact, it won't be big, said Mr Chris Koh, director of Dennis Wee Properties.

'It is the 5 per cent cash down payment and the COV that the buyers find challenging to come up with,' he said.

An industry observer suggested that the Government may raise the first-time applicant's housing grant to buy resale flats.

The Government can also extend the minimum occupation period for those who bought resale flats with bank loans to as long as 21/2 years, though this may not go down well with the banks as this may increase their risk exposure, property pundits said.

'The banks may not agree to extending the period, but this area needs to be looked into so that people will not look at flats as a quick one-year turnaround investment,' said Mr Koh.

Mr Lu suggested that the Government ban private property owners from buying resale flats if their sole intention is to rent them out.

HDB flats are in demand as the well-located ones can easily command a rental yield of 7 per cent to 8 per cent.

HDB, he said, can conduct regular checks to see that the private property owners are living in their flats instead of renting them out during the minimum three-year occupation period.

'This, however, does not solve the problem of private property owners renting out their HDB flats legally after the minimum three-year occupation period,' Mr Lu said.

HDB owners can buy private property but they must continue to live in their flats.

However, those who have obtained prior approval from HDB to sublet their flats can live in the private property.

Some property experts suggest going back to the days when flats could not be easily rented out.

'One possible measure is to revert to the old system of allowing HDB flats to be rented out only if the owner has valid reasons such as being posted overseas to work,' said Mr Lu.

Mr Koh added that HDB flats should not be seen as a short-term investment as this changes the whole concept of government housing.

joyceteo@sph.com.sg


--------------------------------------------------------------------------------

SUGGESTED CHANGES

· Extend minimum occupation period for those who buy HDB flats with a bank loan

· Check to ensure that owners are not flouting occupation rules

· Raise first-time applicant's housing grant to buy resale flats

· Ban private property owners from buying resale flats to use as rental property

· Revert to old system where HDB flats may be rented out only for valid reasons

BT : Another Yishun industrial site up for tender

Business Times - 27 Feb 2010

Another Yishun industrial site up for tender

Knight Frank sees interest in plot near ITE East (Yishun) due to recent strong take-up in Woodlands

By EMILYN YAP

FOR the second time in a week, the government will be putting an industrial site in Yishun up for tender.

According to the Urban Redevelopment Authority (URA) yesterday, a developer triggered the sale of a 60-year leasehold site at Yishun Avenue 6 (Parcel 8). The developer - which was not identified - committed to pay at least $11.5 million, or around $30 per sq ft per plot ratio (psf ppr), for the land.

The 1.43 ha plot on the reserve list has been available for sale since November 2007. It is zoned for Business 1 use and has a maximum permissable gross plot ratio of 2.5.

This parcel is across the road from ITE East (Yishun) and is near Yishun Industrial Park and Yishun MRT station. It also seems to be adjacent to another site - at Yishun Avenue 6 (Parcel 1) - which was similarly triggered for sale on Tuesday. For the latter, a developer also committed to pay at least $11.5 million.

Knight Frank's head of industrial business space Lim Kien Kim believes that there will be interest in Parcel 8. This is because industrial space end-users have been looking for land in the northern part of the island, he said.

He added that industrial space in Woodlands has recently seen strong take-up, and this could encourage developers to bid for the site.

Mr Lim felt that offers could reasonably be expected to come in at around $35 psf ppr, or $13.4 million. But he pointed out that with buoyant sentiment in the market, higher bids are possible.

URA will launch the public tender for the site in about two weeks.

Demand for industrial plots has been strong in the last few months. In December, a 30-year leasehold site at Pioneer Road North/Soon Lee Drive drew eight bids, with the highest coming in at $19.4 million, or $48 psf ppr.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

ST Forum : Review law on en bloc sales

Feb 27, 2010

TREASURING HOMES

Review law on en bloc sales

IF MONDAY'S advice to treasure our homes and not use them to make a quick buck is to be heeded ('Homes are for keeps, not speculation: PM'), the Government should review the law permitting collective property sales.

Such sales exercises invite speculation in the private property market at the expense of a home owner's security.

I have not lived in peace for the past three years because my neighbours voted to go en bloc. The main argument of the pro-collective sale lobby had nothing to do with urban renewal. It was about reaping a windfall.

The bid at my condominium, Green Lodge in Toh Tuck Road, fell through last month, but there is nothing to stop my neighbours from trying again.

I dissented because I treasure my home for the reasons implied in Monday's report: It gives me peace, familiarity and stability in the twilight of my life; and it is my nest egg which I do not wish taken away from me by others' temptation to make a fast buck.

But how can I take good care of my treasured asset if I have no control over it?

The power to sell my home lies not in me but in 80 per cent of my neighbours. And that is why the law must be changed.

Tan Keng Ann

ST : Residential development charges up

Feb 27, 2010
Residential development charges up
New rates reflect improved property market, but commercial site fees dip
By Joyce Teo

THE improved property market has prompted the Government to raise the fees developers pay to enhance the use of residential sites.

The fee - called a development charge (DC) - closely reflects recent land and property values as it is adjusted every six months.

A developer pays a DC if he wants to intensify the use of a site, for instance, by redeveloping an existing project into a bigger one.

Rising values - and developers bidding aggressively for suburban residential land - have forced the Government's hand, although the increases were mostly within expectations.

From next Monday, the DC will go up by about 12 per cent on average for landed homes and around 8 per cent for non-landed properties. But the rate for commercial sites has dipped given the muted market.

The new rates highlight the rapid rebound in residential property. The DC for landed homes had not been revised for two years, while the non-landed rate was down 2 per cent six months ago.

Experts say the higher charges will add to developers' costs and could affect collective or en bloc sales and the conversion of office buildings to residential use.

The DC rises vary across the island.

While the average rise for landed properties is 12 per cent, the DC will jump by around 17 per cent in the prime areas of Tanglin, Holland and Bukit Timah, the HDB towns of Hougang, Toa Payoh and Ang Mo Kio, and Sentosa.

The DC for Sentosa rose the most - by 17.3 per cent - this round, supported by the recent strong transaction volume in that area, said Jones Lang LaSalle.

The largest rise in the non-landed homes sector will be a hike of 15 per cent in the mass-market areas of Mountbatten and Katong, as well as in Paya Lebar, Eunos, Bedok North, Simei and Tampines.

The central areas of Spottiswoode Park and Cantonment, Orchard Road and Sentosa Island also saw double-digit rises, because of surging prices and some recent land acquisition activity.

'Overall, the rise in non-landed residential (development charge) rates is expected to add to developers' land banking costs - particularly for collective sale sites that require payment (of the charge),' said Colliers International's executive director of investment sales, Mr Ho Eng Joo.

This may hamper or derail their land banking plans, he added.

It is a different story in the commercial sector, where DCs will go down 2 per cent on average, with the exception of booming Sentosa, where the rate will go up by 13 per cent.

Rates will fall by up to 13.3 per cent around Raffles Quay and Shenton Way.

The dip for commercial property will be welcomed. The office sector has been subdued, land sales during the review period have been muted and the business environment is still uncertain despite signs of recovery, said Colliers International.

The Central Business District (CBD) will also see the completion of about 2.2million sq ft of office space this year, raising the real threat of a damaging oversupply.

'A cut in DC rates in these locations will hence provide the necessary stabilising effect to the market, amid daunting concerns about the potential supply,' said Mr Ho.

Consultants also noted that the fall in commercial DC rates in the CBD will be met with a rise in residential rates.

'This would affect the conversion of office buildings to residential uses in the CBD, especially those on leasehold land as they would also have to top up the lease,' said DTZ's head of South-east Asia research, Ms Chua Chor Hoon.

There are a number of players that are keen to convert and they will have to recalculate their sums as the DC rates have increased, said Mr Ho.

Sentosa is the only area of the country that registered a rise - of 12 per cent - in the DC for the hotel and hospital sector, which will remain untouched everywhere else.

Sentosa is paying the price of the integrated resort, which has pushed up values and, hence, the DC increases in the landed residential, commercial and hotel/hospital sectors, said Ms Chua.

The National Development Ministry sets the rates every March and September in consultation with the Chief Valuer.

joyceteo@sph.com.sg