'We overreacted'
Some Serangoon Gardens residents admit concerns unfounded
05:55 AM Apr 26, 2010
by Ong Dai Lin
SINGAPORE - Yes, we overreacted to the building of a dormitory for foreign workers in our estate, admitted more than half of the Serangoon Gardens residents interviewed by MediaCorp, but the issues raised were relevant and ultimately benefited the estate, they added.
More than 100 days after the Serangoon Gardens foreign workers' dormitory opened - a move that had drawn sharp criticism from residents determined to protect their affluent haven - there has been no friction between residents and the workers.
In fact, residents told MediaCorp reporters, who spent a day in the estate soliciting views, that they generally did not see the workers around the neighbourhood and were pleased that they had not encountered any problems with them.
Residents, such as teacher Jacqueline Loy, told MediaCorp that their concerns proved unfounded, thanks largely to how the entrances to the workers' quarters have been designed. She pointed out that entrance to the dormitory was on the other side of the estate.
This point about workers being out of sight, and so out of mind, was made by several others interviewed. "The dormitory is all fenced up and blocked, so we don't see them around," said Mrs Janet Cheng. "I also don't hear any complaints about the workers from my neighbours."
In 2008, the Government announced plans to convert the former Serangoon Garden Technical School along Burghley Drive into a workers' dormitory. This led to an outcry from residents.
To allay their concerns, the dormitory was fenced up and the exit to Serangoon Gardens estate was sealed. A 400m slip road, which cost $2 million, was also built to allow vehicles direct access to the dormitory from the Central Expressway.
There were, however, those who felt that the entire saga was not a complete overreaction.
"We may have overreacted a bit but if we did not complain, the dormitory entrance may not have changed," said Ms Jenny Chan, 26.
Despite the current arrangements, there was still a handful who were unhappy about the choice of Serangoon Gardens for a workers' dormitory. "There are other housing estates in Singapore, why was the dormitory not set up in other estates?" asked resident Karen Neo.
Member of Parliament for the area, Mrs Lim Hwee Hua, told MediaCorp that one reason there had not been many problems was that residents had worked with volunteers who represented them and voiced their concerns. "If concerns about disamenities like traffic congestion were not surfaced by the residents initially, there might have been post-dorm operation issues," she said.
Mrs Lim is also hoping to organise joint events to promote interaction and understanding between the residents and workers.
Workers living in the dormitory told MediaCorp that they had been told by the dormitory operator not to loiter around the estate.
While residents seem to have been placated - workers complained about the long walk to the dormitory entrance and the living conditions. Said waitress Mu Jing: "The decoration of the dormitory is very bare. The rooms are filled with steel beds."
Ms Xia Yu, who works as a hotel housekeeper, said: "There are eight people living in a room, it can be quite cramped at times."
The dormitory, which houses about 600 workers, has a provision shop, canteen and barber shop. But such no-frills accommodation is the norm, said a manager of another dormitory for foreign workers.
"The most important thing is that the basic necessities of a mini mart and canteen are met."
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Monday, April 26, 2010
ST : Homing in on $1 million
Apr 26, 2010
a day with Anthea Yeo
Homing in on $1 million
That is the income Anthea Yeo and her husband, both property agents, are aiming for this year
By john lui
Property agent Anthea Yeo is in a hurry. Not just because she is in a rush to see her client, but because the mother of two has set a target of $1 million this year in income between her and her husband.
At age 34, the PropNex agent is in the prime of her earning years in a market that is hitting historical highs in prices.
She is at the right age, with the right amount of experience. She is talking on her hands-free unit while driving.
'Don't bargain. You get a sea view, no noon sun,' she tells one prospective buyer.
She rattles off other facts about the unit - where the bedroom doors face, the size of the balcony - from memory. At any one time, she remembers detailed information about 15 properties.
'Clients don't want to hear, 'Hold on, I will call you back with the information',' she says. According to her, this instant recall is what sets the pros apart from the wannabes.
Everyone has a relative or friend who is a property or insurance agent. But the majority of them are dabblers - people who wait for deals to come to them. What distinguishes Ms Yeo from your aunt or cousin who holds an agent's licence is that she goes after the deals, with a vengeance.
At night, when most people are watching television, she is making cold calls to owners, asking them to sell or rent through her.
She is designing flyers, placing ads in The Straits Times or on property websites, scanning documents for overseas clients or updating her Facebook page or personal website with the latest units.
The $1-million mark is not impossible. She and her husband have hit it before, though on average they make between $20,000 and $50,000 a month. Achieving it took some doing.
In 2006, when she was starting out, she staked out new condominiums for weeks, buttonholing owners as they left the building, hoping they would appoint her as their sales agent. Or she would make cold calls from lists purchased from property database agencies. Each name cost $3.
Of course, not everyone is pleased to receive a call from her.
'You have to develop bulletproof skin,' she says.
Chasing dreams
Her mother is looking after her children, a 21/2-year-old girl and a boy of eight months, while she and her husband, Mr Jude Teem, 37, a tattoo artist- turned-property agent, chase their dream. She grabs time with them when she can, sometimes taking her daughter on the road with her.
Once Ms Yeo has reached her career goals, which include earning a steady income as a team manager, she will be able to give her children her time as well as the best life they could ask for, she says.
A couple of milestones have been reached: The couple own their dream car, a BMW convertible, in addition to a Honda Stream MPV, and they have just bought a $1.8-million terrace home at the new Luxus Hill development in Ang Mo Kio, which will be completed in three years. By which time, she hopes to spend more time with her children by becoming a sales manager.
So, on top of everything else, she and her husband are recruiting and training agents for their team, now 25 strong. She mentors them, gives them sales leads and gets a small slice of their commissions.
She is near her goal.
'When you are young and girlish, the clients don't trust you. When you get too old, they think you are too slow,' she says.
Her first appointment of the day is 9.30am. Leaving from her three- room HDB flat in Ang Mo Kio, she arrives at the Marbella condo in Mount Sinai Road 10 minutes early.
'You wait for the client, you never make the client wait for you,' she says.
She parks her Honda Stream and, once inside the two-bedroom, 18th-floor apartment, she draws open the curtains and switches on the air-conditioner to freshen up the air.
The potential renters, a German couple, come on time. The foreigners, like many others, are baffled by the bomb shelter and Ms Yeo rattles off the explanation.
'If anything happens, stay in there and wait for help,' she says with the practised ease of a comedian making the same joke for some time.
The couple nod and make a joke about the nuclear bomb-grade shelters in Switzerland.
Clothes-drying is another area ripe with cultural confusion, so the couple's own agent advises the Westerners, who are assumed to have never hung washing on a line before, how to use the drying area.
'Hang your towels out till they are 70 per cent dry, then use the dryer so they get fluffy,' she says.
Ms Yeo, who represents the apartment's owners, likes working with other agents. Though her commission is halved, she makes up for it with volume and speed.
Agent-to-agent conversations cut right to the chase, without the waffling and emotional handholding that owners and buyers often need. Other agents have the units she wants for her buyers and vice-versa.
The downside is the frustration of working with one of the many newbies and dabblers choking up the market now. It makes her blood boil when she has to carry the slack, yet split her commission.
The rent of $4,800 is in a zone where there are more landlords than renters, so the German couple can afford to be picky.
The problem for Ms Yeo is that Singaporean landlords are picky, too. Many of them have 'holding power', she says, in that they are in no hurry to rent or sell their properties. This has led to situations such as the one at the appointment we go to in the afternoon.
This 1,200 sq ft, three-bedroom condo unit in the Novena area is her problem child.
She has shown it to 30 prospects in three months, many times the average for a unit to find a tenant. It is old and the din of construction nearby is ever- present.
We see one potential renter, a man in his 40s, who says he likes the large living room. He takes some pictures and leaves without expressing too much interest.
This unit has eaten up hours of her time because the owner refuses to budge on the $4,900 rent, thanks to almost- daily news reports about the surging property market.
Dealing with tycoons
Ms Yeo, an accountancy graduate from Nanyang Technological University, had tried being a Singapore Airlines stewardess and teaching business at the Institute of Technical Education, but felt frustrated by poor pay, boredom or office politics.
She and her husband wanted to make money for themselves, not earn a salary, but had a natural resistance, as many do, to doing sales. Then they met her husband's nephew, who was earning $10,000 a month as a property agent. So in 2006, she dropped out of a master's programme at the Lee Kuan Yew School of Public Policy in National University of Singapore to pursue the dream.
On the same day as the Novena and Mount Sinai appointments, we meet a client from the Mauritius, in town with his family for a holiday as well as to shop for property as an investment.
We meet at the sales office of The Adria in River Valley Road. The actual development will be located in Derbyshire Road in the Novena area, which is Ms Yeo's speciality.
The 40something man is a property dealer in his home country and walks the lavishly appointed showflat quickly. He stabs at the floor plan with his finger and peppers the Far East Organization sales representative with questions.
'Is the planter box included in the quoted floor area?' he asks. It is. Pros like him and Ms Yeo know how showflats are meant to enhance reality. Doors and some walls are omitted and balconies are treated as part of the living room to make the space look larger.
Sometimes, it is better not to look at the showflat, he says, because it skews cold-hearted business judgment.
'An ugly place might be the one that will make the most money,' he says.
There is location and square footage, of course, but he is also concerned that the Adria units he likes are next to the lift, which could be noisy and a turn-off to potential tenants. He is also worried about the windows, which he thinks give the neighbours too much of the view inside.
Ms Yeo speaks to the millionaire on equal terms. Her advice to the agents in her and her husband's team: Do not be intimidated by clients or you will never be able to give honest advice.
She also asks the client to check with his wife before making a decision.
Spouses are a tricky business for agents. The unconsulted partner can turn vengeful when left out of the decision and cause all kinds of problems. Angry wives have accused her of using her feminine wiles to close deals.
The tycoon has researched the property on the Internet before coming to Singapore, so agents now must know information not on the Web, she says, such as the latest benchmark figures for rent and sales in the area not yet reflected on any website.
There is one more visit, to a $6.5- million penthouse off Orchard Road that the owner, an expatriate, wants to sell.
It is 6pm and it is her last viewing for the day. She works when clients have free time. This means she is busiest on weekends. She takes lunch in her car, either before or after the normal noon-to-2pm slot. She dares to switch off her mobile phone on only one day a year, the first day of Chinese New Year.
She does not have a 10pm viewing tonight as she did the previous evening, but she will be working at home in any case.
The $1-million target is in sight and the clock is ticking.
johnlui@sph.com.sg
--------------------------------------------------------------------------------
'Clients don't want to hear, 'Hold on, I will call you back with the information''
Ms Anthea Yeo, on remembering details of the properties she is marketing
'You have to develop bulletproof skin'
On making cold calls to home owners
'When you are young and girlish, the clients don't trust you. When you get too old, they think you are too slow'
On being at her prime in the industry
'You wait for the client, you never make the client wait for you'
On being early for her appointments
Chasing deals with a vengeance, Ms Yeo has detailed information of about 15 properties at her fingertips and makes cold calls at night. -- ST PHOTOS: JOYCE FANG
a day with Anthea Yeo
Homing in on $1 million
That is the income Anthea Yeo and her husband, both property agents, are aiming for this year
By john lui
Property agent Anthea Yeo is in a hurry. Not just because she is in a rush to see her client, but because the mother of two has set a target of $1 million this year in income between her and her husband.
At age 34, the PropNex agent is in the prime of her earning years in a market that is hitting historical highs in prices.
She is at the right age, with the right amount of experience. She is talking on her hands-free unit while driving.
'Don't bargain. You get a sea view, no noon sun,' she tells one prospective buyer.
She rattles off other facts about the unit - where the bedroom doors face, the size of the balcony - from memory. At any one time, she remembers detailed information about 15 properties.
'Clients don't want to hear, 'Hold on, I will call you back with the information',' she says. According to her, this instant recall is what sets the pros apart from the wannabes.
Everyone has a relative or friend who is a property or insurance agent. But the majority of them are dabblers - people who wait for deals to come to them. What distinguishes Ms Yeo from your aunt or cousin who holds an agent's licence is that she goes after the deals, with a vengeance.
At night, when most people are watching television, she is making cold calls to owners, asking them to sell or rent through her.
She is designing flyers, placing ads in The Straits Times or on property websites, scanning documents for overseas clients or updating her Facebook page or personal website with the latest units.
The $1-million mark is not impossible. She and her husband have hit it before, though on average they make between $20,000 and $50,000 a month. Achieving it took some doing.
In 2006, when she was starting out, she staked out new condominiums for weeks, buttonholing owners as they left the building, hoping they would appoint her as their sales agent. Or she would make cold calls from lists purchased from property database agencies. Each name cost $3.
Of course, not everyone is pleased to receive a call from her.
'You have to develop bulletproof skin,' she says.
Chasing dreams
Her mother is looking after her children, a 21/2-year-old girl and a boy of eight months, while she and her husband, Mr Jude Teem, 37, a tattoo artist- turned-property agent, chase their dream. She grabs time with them when she can, sometimes taking her daughter on the road with her.
Once Ms Yeo has reached her career goals, which include earning a steady income as a team manager, she will be able to give her children her time as well as the best life they could ask for, she says.
A couple of milestones have been reached: The couple own their dream car, a BMW convertible, in addition to a Honda Stream MPV, and they have just bought a $1.8-million terrace home at the new Luxus Hill development in Ang Mo Kio, which will be completed in three years. By which time, she hopes to spend more time with her children by becoming a sales manager.
So, on top of everything else, she and her husband are recruiting and training agents for their team, now 25 strong. She mentors them, gives them sales leads and gets a small slice of their commissions.
She is near her goal.
'When you are young and girlish, the clients don't trust you. When you get too old, they think you are too slow,' she says.
Her first appointment of the day is 9.30am. Leaving from her three- room HDB flat in Ang Mo Kio, she arrives at the Marbella condo in Mount Sinai Road 10 minutes early.
'You wait for the client, you never make the client wait for you,' she says.
She parks her Honda Stream and, once inside the two-bedroom, 18th-floor apartment, she draws open the curtains and switches on the air-conditioner to freshen up the air.
The potential renters, a German couple, come on time. The foreigners, like many others, are baffled by the bomb shelter and Ms Yeo rattles off the explanation.
'If anything happens, stay in there and wait for help,' she says with the practised ease of a comedian making the same joke for some time.
The couple nod and make a joke about the nuclear bomb-grade shelters in Switzerland.
Clothes-drying is another area ripe with cultural confusion, so the couple's own agent advises the Westerners, who are assumed to have never hung washing on a line before, how to use the drying area.
'Hang your towels out till they are 70 per cent dry, then use the dryer so they get fluffy,' she says.
Ms Yeo, who represents the apartment's owners, likes working with other agents. Though her commission is halved, she makes up for it with volume and speed.
Agent-to-agent conversations cut right to the chase, without the waffling and emotional handholding that owners and buyers often need. Other agents have the units she wants for her buyers and vice-versa.
The downside is the frustration of working with one of the many newbies and dabblers choking up the market now. It makes her blood boil when she has to carry the slack, yet split her commission.
The rent of $4,800 is in a zone where there are more landlords than renters, so the German couple can afford to be picky.
The problem for Ms Yeo is that Singaporean landlords are picky, too. Many of them have 'holding power', she says, in that they are in no hurry to rent or sell their properties. This has led to situations such as the one at the appointment we go to in the afternoon.
This 1,200 sq ft, three-bedroom condo unit in the Novena area is her problem child.
She has shown it to 30 prospects in three months, many times the average for a unit to find a tenant. It is old and the din of construction nearby is ever- present.
We see one potential renter, a man in his 40s, who says he likes the large living room. He takes some pictures and leaves without expressing too much interest.
This unit has eaten up hours of her time because the owner refuses to budge on the $4,900 rent, thanks to almost- daily news reports about the surging property market.
Dealing with tycoons
Ms Yeo, an accountancy graduate from Nanyang Technological University, had tried being a Singapore Airlines stewardess and teaching business at the Institute of Technical Education, but felt frustrated by poor pay, boredom or office politics.
She and her husband wanted to make money for themselves, not earn a salary, but had a natural resistance, as many do, to doing sales. Then they met her husband's nephew, who was earning $10,000 a month as a property agent. So in 2006, she dropped out of a master's programme at the Lee Kuan Yew School of Public Policy in National University of Singapore to pursue the dream.
On the same day as the Novena and Mount Sinai appointments, we meet a client from the Mauritius, in town with his family for a holiday as well as to shop for property as an investment.
We meet at the sales office of The Adria in River Valley Road. The actual development will be located in Derbyshire Road in the Novena area, which is Ms Yeo's speciality.
The 40something man is a property dealer in his home country and walks the lavishly appointed showflat quickly. He stabs at the floor plan with his finger and peppers the Far East Organization sales representative with questions.
'Is the planter box included in the quoted floor area?' he asks. It is. Pros like him and Ms Yeo know how showflats are meant to enhance reality. Doors and some walls are omitted and balconies are treated as part of the living room to make the space look larger.
Sometimes, it is better not to look at the showflat, he says, because it skews cold-hearted business judgment.
'An ugly place might be the one that will make the most money,' he says.
There is location and square footage, of course, but he is also concerned that the Adria units he likes are next to the lift, which could be noisy and a turn-off to potential tenants. He is also worried about the windows, which he thinks give the neighbours too much of the view inside.
Ms Yeo speaks to the millionaire on equal terms. Her advice to the agents in her and her husband's team: Do not be intimidated by clients or you will never be able to give honest advice.
She also asks the client to check with his wife before making a decision.
Spouses are a tricky business for agents. The unconsulted partner can turn vengeful when left out of the decision and cause all kinds of problems. Angry wives have accused her of using her feminine wiles to close deals.
The tycoon has researched the property on the Internet before coming to Singapore, so agents now must know information not on the Web, she says, such as the latest benchmark figures for rent and sales in the area not yet reflected on any website.
There is one more visit, to a $6.5- million penthouse off Orchard Road that the owner, an expatriate, wants to sell.
It is 6pm and it is her last viewing for the day. She works when clients have free time. This means she is busiest on weekends. She takes lunch in her car, either before or after the normal noon-to-2pm slot. She dares to switch off her mobile phone on only one day a year, the first day of Chinese New Year.
She does not have a 10pm viewing tonight as she did the previous evening, but she will be working at home in any case.
The $1-million target is in sight and the clock is ticking.
johnlui@sph.com.sg
--------------------------------------------------------------------------------
'Clients don't want to hear, 'Hold on, I will call you back with the information''
Ms Anthea Yeo, on remembering details of the properties she is marketing
'You have to develop bulletproof skin'
On making cold calls to home owners
'When you are young and girlish, the clients don't trust you. When you get too old, they think you are too slow'
On being at her prime in the industry
'You wait for the client, you never make the client wait for you'
On being early for her appointments
Chasing deals with a vengeance, Ms Yeo has detailed information of about 15 properties at her fingertips and makes cold calls at night. -- ST PHOTOS: JOYCE FANG
ST : Rise in ads seeking development sites
Apr 26, 2010
Rise in ads seeking development sites
By Esther Teo
PROPERTY developers, keen to ride the buoyant market, seem to be getting more aggressive in replenishing their depleting land banks.
Some, such as Far East Organization, have taken out advertisements in publications such as The Straits Times to seek development sites of various sizes in the city area and suburbs.
They want to develop homes, office buildings and shopping complexes.
Experts say that while this is not uncommon, developers are usually more discreet. However, their depleting land banks might be prompting these developers to look beyond acquiring land through the government land sales (GLS) programme.
Singapore Press Holdings' Cats Classifieds said advertisements placed by developers seeking to acquire sites had doubled over the past year.
Research compiled by property consultancy DTZ this month showed that out of 16 major developers in Singapore, half had fewer than 1,000 residential units left in their land banks as of Feb 28. Another five developers had between 1,000 and 2,000 units.
Many developers ran down their land banks in the recession and were suprised by the rapid rebound.
The numbers do not factor in strong March home sales - which means that many developers' land banks would have shrunk further by the end of last month.
Some experts are thus predicting more collective sales in the second half of this year.
Chesterton Suntec International's research and consultancy director, Mr Colin Tan, said placing ads could be a more aggressive method adopted by developers to replenish their land bank rather than passively waiting on the Government to release new sites.
'They might be looking beyond just industry people and businesses to target the layman as well in the hope of triggering collective sales... It might not just be vacant land that they're looking for,' he said.
Mr Tan added that in such cases, developers might get better price deals as they have a better understanding of how the market is moving - for example, if government sites have recently been tendered at record prices - compared to the sellers, who may be less savvy.
However, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the party with the upper hand is mostly determined on a case-by-case basis, depending on who is the savvier of the two.
Knight Frank manager of consultancy and research Ong Kah Seng noted that such advertisements could be a means of acquiring prime freehold development sites since the GLS programme offers only land with 99-year leases.
'For developers looking at high-end residential developments, collective sales and private treaties are still the main avenues to acquire prime freehold sites.'
Mr Ong, however, added that acquiring land through the GLS scheme has its advantages such as not needing to go through lengthy negotiations and the ability to start making development plans soon after the site is awarded.
CB Richard Ellis residential executive director Joseph Tan added that developers will still participate in the GLS programme as there are many choices available and the sites do not attract development charges. If prices are reasonable, however, they may also look at private treaties and collective sales, he said.
Rise in ads seeking development sites
By Esther Teo
PROPERTY developers, keen to ride the buoyant market, seem to be getting more aggressive in replenishing their depleting land banks.
Some, such as Far East Organization, have taken out advertisements in publications such as The Straits Times to seek development sites of various sizes in the city area and suburbs.
They want to develop homes, office buildings and shopping complexes.
Experts say that while this is not uncommon, developers are usually more discreet. However, their depleting land banks might be prompting these developers to look beyond acquiring land through the government land sales (GLS) programme.
Singapore Press Holdings' Cats Classifieds said advertisements placed by developers seeking to acquire sites had doubled over the past year.
Research compiled by property consultancy DTZ this month showed that out of 16 major developers in Singapore, half had fewer than 1,000 residential units left in their land banks as of Feb 28. Another five developers had between 1,000 and 2,000 units.
Many developers ran down their land banks in the recession and were suprised by the rapid rebound.
The numbers do not factor in strong March home sales - which means that many developers' land banks would have shrunk further by the end of last month.
Some experts are thus predicting more collective sales in the second half of this year.
Chesterton Suntec International's research and consultancy director, Mr Colin Tan, said placing ads could be a more aggressive method adopted by developers to replenish their land bank rather than passively waiting on the Government to release new sites.
'They might be looking beyond just industry people and businesses to target the layman as well in the hope of triggering collective sales... It might not just be vacant land that they're looking for,' he said.
Mr Tan added that in such cases, developers might get better price deals as they have a better understanding of how the market is moving - for example, if government sites have recently been tendered at record prices - compared to the sellers, who may be less savvy.
However, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the party with the upper hand is mostly determined on a case-by-case basis, depending on who is the savvier of the two.
Knight Frank manager of consultancy and research Ong Kah Seng noted that such advertisements could be a means of acquiring prime freehold development sites since the GLS programme offers only land with 99-year leases.
'For developers looking at high-end residential developments, collective sales and private treaties are still the main avenues to acquire prime freehold sites.'
Mr Ong, however, added that acquiring land through the GLS scheme has its advantages such as not needing to go through lengthy negotiations and the ability to start making development plans soon after the site is awarded.
CB Richard Ellis residential executive director Joseph Tan added that developers will still participate in the GLS programme as there are many choices available and the sites do not attract development charges. If prices are reasonable, however, they may also look at private treaties and collective sales, he said.
ST : Redas chief: Media misconstrued speech
Apr 24, 2010
Redas chief: Media misconstrued speech
IN HER commentary on Tuesday, ('Property: Do something drastic or do nothing?'), Ms Chua Mui Hoong had categorised me under the school of thought that 'wants the Government to 'do nothing' about rising property prices' on the basis that 'private property served just 16.5 per cent of the population and should be left free of government intervention'. That was not what I said.
At the launch of the NUS Singapore Residential Price Index on March 24, I had highlighted in my speech that Singapore's residential market is unique in having a very dominant and successful public housing sector which provides a roof over 83.5 per cent of the population.
The strong public housing resale market has helped to realise wealth for many Singaporeans and helped the ongoing upgrading process.
The private housing segment of the market serves only 16.5 per cent of the demography. In this regard, and given the academic forum, I had merely raised an academic question whether the state should be so concerned with intervention in the private residential market.
Nowhere in the speech did I state the view that 'the state should keep its hands off, and developers should be able to price condo units as high as the market can accept'.
Having a free market does not mean having an unregulated market, which many in the media have incorrectly ascribed to my comments. I had in fact observed that the Government is the custodian of state land and it has a range of measures it can use to rein in the market.
Simon Cheong
President
Real Estate Developers' Association of Singapore (Redas)
Redas chief: Media misconstrued speech
IN HER commentary on Tuesday, ('Property: Do something drastic or do nothing?'), Ms Chua Mui Hoong had categorised me under the school of thought that 'wants the Government to 'do nothing' about rising property prices' on the basis that 'private property served just 16.5 per cent of the population and should be left free of government intervention'. That was not what I said.
At the launch of the NUS Singapore Residential Price Index on March 24, I had highlighted in my speech that Singapore's residential market is unique in having a very dominant and successful public housing sector which provides a roof over 83.5 per cent of the population.
The strong public housing resale market has helped to realise wealth for many Singaporeans and helped the ongoing upgrading process.
The private housing segment of the market serves only 16.5 per cent of the demography. In this regard, and given the academic forum, I had merely raised an academic question whether the state should be so concerned with intervention in the private residential market.
Nowhere in the speech did I state the view that 'the state should keep its hands off, and developers should be able to price condo units as high as the market can accept'.
Having a free market does not mean having an unregulated market, which many in the media have incorrectly ascribed to my comments. I had in fact observed that the Government is the custodian of state land and it has a range of measures it can use to rein in the market.
Simon Cheong
President
Real Estate Developers' Association of Singapore (Redas)
ST ; Live life on high
Apr 24, 2010
Live life on high
Tall ceilings and windows and the unique lifestyle are reasons Singaporeans choose loft apartments
By tay suan chiang
When married couple Lawrence Mui and Jeanne Lim were looking for an apartment in 2007, they immediately fell in love with their loft unit when they were taken to see it.
'I had previously seen pictures of loft apartments in magazines and on the Internet,' says Mr Mui, 34, a sales manager. 'It provides a kind of lifestyle that is very different from living in a regular apartment.'
Their dream home is a two-bedroom loft apartment at the Icon in Tanjong Pagar. They paid $1.8 million for the 1,044 sq ft unit, which was developed by Far East Organization.
In cities such as New York, lofts are expansive apartments with no partitions. But in Singapore, the lofts can be as small as 579 sq ft but with double-volume space and a mezzanine level.
The Muis' bedroom is on the mezzanine level while the second bedroom on the first level is now a walk-in wardrobe.
'The apartment fits the requirement of young couples like us looking for city living,' says Ms Lim, 33, who is in wealth management.
Upmarket property developer SC Global is believed to be the first to introduce loft living in Singapore.
In 2000, it launched The Lincoln Modern near Newton, a 30-storey tower with 56 split-level loft apartments, and every unit boasted double-volume 6m-high ceilings and windows.
The uniqueness of its design was recognised by the Royal Institute of British Architects which conferred on the condo its Worldwide Award for 2005, making it the first residential development in Asia to receive such an accolade.
An SC Global spokesman says: 'The Lincoln Modern was ahead of its time with the introduction of a new concept of space in Singapore that remains unique even today.'
Since then, more developers have introduced loft living in their residential projects. But still not every condo has them.
An industry expert, who declined to be named, says by building lofts, fewer units can be built within a block. He adds: 'And it suits only buyers of a certain kind.'
Indeed, trader C.S. Toh, who bought an Icon loft, says such small lofts are 'most ideal for singles or childless couples. This was one of the reasons we were drawn to the development'.
The 41-year-old lives there with his wife, who declined to be named. They do not plan to have children.
For Mr Mui, it was the apartment's high ceiling that also attracted him.
'We can hang a chandelier from the high ceiling, and the 6m-high window gives us a breathtaking panoramic view of the city.'
Over at The Rochester at Buona Vista, future loft home owners will be able to look out onto lush greenery.
'Our loft apartments overlook the expanse of greenery of Rochester Park. Imagine waking up at the eye level of tree canopies - it will truly be a stunning window view,' says a spokesman for United Engineers, developer of The Rochester.
When ready next year, the 366-unit condo will have 60 loft apartments.
The spokesman says buyers are singles, childless couples and 'creative home-office types' who are working out of the artisan village in the Portsdown area. All its loft units are sold out.
Over at upcoming condo Soleil@ Sinaran near Novena, developed by Frasers Centrepoint Homes, nine of its 32 two-bedroom loft units are still available. Prices start from $1,296 per square foot for a 1,432 sq ft unit.
Its spokesman says such units 'especially appeal to the well-heeled trendy professionals and young couples as they offer more creative design options'.
He adds that the pricing for these units is similar to other bedroom types, and it depends on the apartment's size, level and the direction it faces.
While loft units tend to be just one- or two-bedroom units, one developer has gone a step further by introducing a five-bedroom loft unit.
Wing Tai Holding's Ascentia Sky by Tanglin has two mega 3,025 sq ft lofts.
There are three bedrooms on the first storey and two more on the mezzanine level, which also has a family lounge area.
The mega lofts are not yet launched but there have already been inquiries from potential buyers. The lofts are expected to sell for $4.3 million.
Great views but cleaning is a pain
On why such apartments were introduced, Ms Len Siew Lian, Wing Tai's general manager for property, says: 'We have interest from residents at the Tanglin bungalow enclave, as well as those with an extended family, who seek rare, large-sized five-bedroom apartments that can provide them with much needed space to suit their lifestyle needs.'
She adds: 'These mega loft units offer them a landed feel up in the sky, providing premium views of the city and surrounding greenery, and the residents can enjoy full condominium facilities in a premier quality development.'
Wing Tai is also offering potential buyers a choice in customising their apartment, since the lofts are yet to be built. Ms Len says they can configure the upper level into a private master suite or have it designed as separate spaces for children.
Even public housing has caught onto loft living. To date, the Housing Board is offering 281 loft units in three projects - at Treelodge@Punggol, Punggol Sapphire and SkyTerrace@Dawson.
The Punggol lofts will be ready next year while the Dawson units will be ready in 2015. The HDB loft units range from 1,044 sq ft to 1,603 sq ft.
While double-volume space and high windows are attractive, they do present some maintenance problems.
Icon loft resident Daniel Gan has found it a bit of a challenge to clean his 6m-high windows. 'I use a very tall ladder and improvise with a pole as a duster to clean them and other areas of the unit,' says the 34-year-old, who is a commercial pilot.
Still, that has not stopped bank administrative officer Tan Hwee Siam from buying a loft unit at Soleil@Sinaran. Her apartment will be ready next year. The 41-year-old says: 'I will worry about the window- cleaning later. I want to enjoy the spaciousness of the loft first.'
taysc@sph.com.sg
Mr Lawrence Mui and Ms Jeanne Lim's $1.8-million two-bedroom loft apartment at the Icon offers views of the Tanjong Pagar area. -- ST PHOTO: RAJ NADARAJAN
What is a loft?
Mention the word 'lofts' and images of a spacious apartment with an open- plan concept come to mind.
Launched in 2000, The Lincoln Modern condo (above) is believed to be Singapore's pioneer in loft living. -- PHOTO: SC GLOBAL
The loft concept was believed to have started in New York in the 1950s, when artists and bohemians searched for spaces that they could work and live in.
Former warehouses and other industrial facilities were converted into living spaces that were very wide and open, with exposed beams and plumbing.
Lofts have now morphed into living spaces that come with a larger lower level and a smaller one upstairs.
Interior designer Peter Tay, who has done loft showflats for local developers, describe such apartments as those that have 'double volume space with a mezzanine level'.
The kitchen, dining and living areas are on the first floor, with a bedroom on the mezzanine.
The first loft apartments to be introduced in Singapore in 2000 were at The Lincoln Modern, near Newton.
Live life on high
Tall ceilings and windows and the unique lifestyle are reasons Singaporeans choose loft apartments
By tay suan chiang
When married couple Lawrence Mui and Jeanne Lim were looking for an apartment in 2007, they immediately fell in love with their loft unit when they were taken to see it.
'I had previously seen pictures of loft apartments in magazines and on the Internet,' says Mr Mui, 34, a sales manager. 'It provides a kind of lifestyle that is very different from living in a regular apartment.'
Their dream home is a two-bedroom loft apartment at the Icon in Tanjong Pagar. They paid $1.8 million for the 1,044 sq ft unit, which was developed by Far East Organization.
In cities such as New York, lofts are expansive apartments with no partitions. But in Singapore, the lofts can be as small as 579 sq ft but with double-volume space and a mezzanine level.
The Muis' bedroom is on the mezzanine level while the second bedroom on the first level is now a walk-in wardrobe.
'The apartment fits the requirement of young couples like us looking for city living,' says Ms Lim, 33, who is in wealth management.
Upmarket property developer SC Global is believed to be the first to introduce loft living in Singapore.
In 2000, it launched The Lincoln Modern near Newton, a 30-storey tower with 56 split-level loft apartments, and every unit boasted double-volume 6m-high ceilings and windows.
The uniqueness of its design was recognised by the Royal Institute of British Architects which conferred on the condo its Worldwide Award for 2005, making it the first residential development in Asia to receive such an accolade.
An SC Global spokesman says: 'The Lincoln Modern was ahead of its time with the introduction of a new concept of space in Singapore that remains unique even today.'
Since then, more developers have introduced loft living in their residential projects. But still not every condo has them.
An industry expert, who declined to be named, says by building lofts, fewer units can be built within a block. He adds: 'And it suits only buyers of a certain kind.'
Indeed, trader C.S. Toh, who bought an Icon loft, says such small lofts are 'most ideal for singles or childless couples. This was one of the reasons we were drawn to the development'.
The 41-year-old lives there with his wife, who declined to be named. They do not plan to have children.
For Mr Mui, it was the apartment's high ceiling that also attracted him.
'We can hang a chandelier from the high ceiling, and the 6m-high window gives us a breathtaking panoramic view of the city.'
Over at The Rochester at Buona Vista, future loft home owners will be able to look out onto lush greenery.
'Our loft apartments overlook the expanse of greenery of Rochester Park. Imagine waking up at the eye level of tree canopies - it will truly be a stunning window view,' says a spokesman for United Engineers, developer of The Rochester.
When ready next year, the 366-unit condo will have 60 loft apartments.
The spokesman says buyers are singles, childless couples and 'creative home-office types' who are working out of the artisan village in the Portsdown area. All its loft units are sold out.
Over at upcoming condo Soleil@ Sinaran near Novena, developed by Frasers Centrepoint Homes, nine of its 32 two-bedroom loft units are still available. Prices start from $1,296 per square foot for a 1,432 sq ft unit.
Its spokesman says such units 'especially appeal to the well-heeled trendy professionals and young couples as they offer more creative design options'.
He adds that the pricing for these units is similar to other bedroom types, and it depends on the apartment's size, level and the direction it faces.
While loft units tend to be just one- or two-bedroom units, one developer has gone a step further by introducing a five-bedroom loft unit.
Wing Tai Holding's Ascentia Sky by Tanglin has two mega 3,025 sq ft lofts.
There are three bedrooms on the first storey and two more on the mezzanine level, which also has a family lounge area.
The mega lofts are not yet launched but there have already been inquiries from potential buyers. The lofts are expected to sell for $4.3 million.
Great views but cleaning is a pain
On why such apartments were introduced, Ms Len Siew Lian, Wing Tai's general manager for property, says: 'We have interest from residents at the Tanglin bungalow enclave, as well as those with an extended family, who seek rare, large-sized five-bedroom apartments that can provide them with much needed space to suit their lifestyle needs.'
She adds: 'These mega loft units offer them a landed feel up in the sky, providing premium views of the city and surrounding greenery, and the residents can enjoy full condominium facilities in a premier quality development.'
Wing Tai is also offering potential buyers a choice in customising their apartment, since the lofts are yet to be built. Ms Len says they can configure the upper level into a private master suite or have it designed as separate spaces for children.
Even public housing has caught onto loft living. To date, the Housing Board is offering 281 loft units in three projects - at Treelodge@Punggol, Punggol Sapphire and SkyTerrace@Dawson.
The Punggol lofts will be ready next year while the Dawson units will be ready in 2015. The HDB loft units range from 1,044 sq ft to 1,603 sq ft.
While double-volume space and high windows are attractive, they do present some maintenance problems.
Icon loft resident Daniel Gan has found it a bit of a challenge to clean his 6m-high windows. 'I use a very tall ladder and improvise with a pole as a duster to clean them and other areas of the unit,' says the 34-year-old, who is a commercial pilot.
Still, that has not stopped bank administrative officer Tan Hwee Siam from buying a loft unit at Soleil@Sinaran. Her apartment will be ready next year. The 41-year-old says: 'I will worry about the window- cleaning later. I want to enjoy the spaciousness of the loft first.'
taysc@sph.com.sg
Mr Lawrence Mui and Ms Jeanne Lim's $1.8-million two-bedroom loft apartment at the Icon offers views of the Tanjong Pagar area. -- ST PHOTO: RAJ NADARAJAN
What is a loft?
Mention the word 'lofts' and images of a spacious apartment with an open- plan concept come to mind.
Launched in 2000, The Lincoln Modern condo (above) is believed to be Singapore's pioneer in loft living. -- PHOTO: SC GLOBAL
The loft concept was believed to have started in New York in the 1950s, when artists and bohemians searched for spaces that they could work and live in.
Former warehouses and other industrial facilities were converted into living spaces that were very wide and open, with exposed beams and plumbing.
Lofts have now morphed into living spaces that come with a larger lower level and a smaller one upstairs.
Interior designer Peter Tay, who has done loft showflats for local developers, describe such apartments as those that have 'double volume space with a mezzanine level'.
The kitchen, dining and living areas are on the first floor, with a bedroom on the mezzanine.
The first loft apartments to be introduced in Singapore in 2000 were at The Lincoln Modern, near Newton.
ST LETTER : Ban hourly rated hotels from residential areas
Apr 25, 2010
YOUR LETTERS
Ban hourly rated hotels from residential areas
I refer to last Sunday's article, 'Budget hotels move in... then sex workers follow'.
Budget hotels have no place in a residential area, especially a hotel that offers hourly rates.
The hourly rates are used mainly by sex workers and not by normal tourists or workers. And with the presence of budget hotels offering such rates, sex workers will definitely follow.
The response from the Urban Redevelopment Authority (URA) - that the Hotel 81 and Fragrance Hotel sites in Upper Serangoon Road are zoned as commercial and residential land - is a weak one.
Citizens depend on agencies like the URA and the Hotels Licensing Board (HLB) to plan the development of land. Thus, they have the responsibility to consider the impact of proposed businesses on a particular area.
It was reported that 'in January last year, the HLB banned all hotels in heritage-rich Joo Chiat from offering hourly rates, to curb vice activities' and that 'if a hotel is found to be involved in such activities, the board can revoke its licence'.
Surely a couple renting a room for two hours do not do so just to watch television or sleep?
Alvin Yip
YOUR LETTERS
Ban hourly rated hotels from residential areas
I refer to last Sunday's article, 'Budget hotels move in... then sex workers follow'.
Budget hotels have no place in a residential area, especially a hotel that offers hourly rates.
The hourly rates are used mainly by sex workers and not by normal tourists or workers. And with the presence of budget hotels offering such rates, sex workers will definitely follow.
The response from the Urban Redevelopment Authority (URA) - that the Hotel 81 and Fragrance Hotel sites in Upper Serangoon Road are zoned as commercial and residential land - is a weak one.
Citizens depend on agencies like the URA and the Hotels Licensing Board (HLB) to plan the development of land. Thus, they have the responsibility to consider the impact of proposed businesses on a particular area.
It was reported that 'in January last year, the HLB banned all hotels in heritage-rich Joo Chiat from offering hourly rates, to curb vice activities' and that 'if a hotel is found to be involved in such activities, the board can revoke its licence'.
Surely a couple renting a room for two hours do not do so just to watch television or sleep?
Alvin Yip
ST : What to invest in? Try new HDB flats
Apr 25, 2010
small change
What to invest in? Try new HDB flats
For those who are eligible, there are many tangible benefits to be reaped
By Dennis Chan
As I am a financial journalist, one question that is regularly asked of me at gatherings among relatives and friends is: What to invest in?
An equally popular follow-up is: Where are prices headed?
Heck, even my hairdresser asks me that whenever I pop by the salon, about once a month, for a haircut. 'Hard to tell,' is my usual response, accompanied by a sagely nod.
When it comes to stocks and shares, can anyone tell the future accurately and consistently?
That is not to say I do not have some bright ideas about investing. Getting a new HDB flat is a perennial favourite of mine when asked for advice by people who do not already own one.
'Is that it? Aren't you preaching to the converted?' some of you may rightly ask, given that more than 80 per cent of Singaporeans live in HDB flats.
To a certain extent, I am stating the obvious. But this 'wisdom' may not be apparent to all, especially to those who have certain notions about public housing.
And even among those who do not mind public housing, there are some who simply cannot countenance living in the outlying areas like Sengkang and Punggol where most of the new flats are being built.
For them, nothing less than a flat in a mature town will do. I do not doubt many of them have legitimate reasons for sticking to their stand.
As the mainstay of the HDB building programme is in the suburbs, those who insist on a home in a mature estate must realistically turn to the resale flat market.
But from an investment point of view, getting resale flats during a property boom often translates to paying frothy prices. It is not a smart thing to do, especially when one is starting out on a marriage.
Consider the expenses a courting couple usually face once they decide to get married.
Walking down the aisle is just a first step, not the fairy-tale ending that romance novelists like to write about.
A successful wedding proposal is like a city winning the rights to host the Olympics.
First, there is the euphoria: The man may dance a little jig of delight while his bride-to-be swoons over her quail egg-sized diamond ring. But then comes the hard planning and budgeting.
Get it right and the couple may bask in everlasting warmth and glory like the 1984 Los Angeles Olympics, often cited as the most financially successful Games.
Mess it up and they can expect to carry a lasting millstone like Montreal 1976 (It took the Canadian city 30 years to pay off its Olympic Games debts).
Similarly, money woes can make or break a marriage.
A couple tying the knot will typically need to set aside money for four major cash-flow draining events: the wedding, honeymoon, home purchase and renovation.
This is not an issue if they have wealthy parents who are willing to underwrite all or part of the expenses. But for those who have to finance their own way, prioritising and allocating resources judiciously are critical. Invariably, cash will be tight.
Under such circumstances, the right thing to do is to choose an affordable flat and to pay as little cash as possible.
The idea is to save as much of your salary as possible. The accumulated savings can then be channelled to other investments.
In other words, you do not want to be putting all your eggs into one investment - a house that also doubles as your home. You should also avoid getting mired in debt by buying an expensive home, as this could put stress on the marriage.
One way to acquire an inexpensive home is to choose a resale flat that is unpopular. A flat on a low floor or in an unpopular estate is more likely to be sold at a price that is close to its valuation. As HDB loans are pegged to valuation, a flat that is sold at close to its valuation price or lower may allow the buyer to borrow up to 90 per cent from the HDB.
A big advantage of buying from the resale market is the immediate occupation it affords: The buyer can choose to move into the flat the moment the sale is completed.
But if one can wait, a better alternative is to buy a flat directly from the HDB. Unlike resale flats, there is no haggling over price with the seller. This can be a source of comfort to a buyer who is unfamiliar with the property market and who is not confident he can negotiate a good deal in the open market.
The chances of getting a new flat are pretty good as the HDB has continually ramped up its building programme as well as reserving the bulk of its flats for first-time buyers.
So what if the new flats are mostly found in Sengkang and Punggol? They are fast growing into thriving townships, much like what Tampines, Jurong West and Woodlands have become.
New flats are affordable and priced significantly below the market. Take, for example, the price of a four-room flat at Punggol Emerald and Punggol Waves, which the HDB launched for sale last week.
They are being sold at between $243,000 and $323,000. In comparison, prices of resale flats nearby ranged from $355,000 to $385,000.
To help reduce out-of-pocket expenses on renovations, the HDB is also giving the buyer the option of having the flooring of his flat done up at an additional selling price. For a four-room flat, that amounts to $3,250.
As added icing on the cake, a new HDB flat generally comes with a 99-year lease at the time the HDB hands over the keys to the buyer.
In comparison, the clock on a leasehold property sold by the Government to a private developer starts running down from the date of full payment of land price by the successful tenderer, which is typically within 90 days from the date of award of tender of the land parcel.
Factoring in the time for construction and other delays, the buyer of a 99-year leasehold condominium is usually left with 94 to 95 years by the time he gets the keys to his flat.
It is worse for land that was sold at peak prices in 2007.
Take, for example, the South Beach mixed development at Beach Road. The 99-year leasehold site was won by a City Developments-led consortium in a government tender in 2007, but construction has been delayed as a result of the financial crisis. There are plans to start construction by next year.
Any further delays could shave the initial lease by up to a decade by the time the development is ready for occupation. The consortium has up to 2016 to complete the project.
Some people see such delays as insignificant as there are many other factors that determine the value of a property. But at the end of the day, tenure does matter as it is what differentiates a leasehold property from a freehold one.
To recap, some of the benefits of buying a new HDB flat are that it:
· Is more affordable;
· Requires less cash upfront;
· Is sold at a fixed price. No bargaining is needed;
· Affords buyers a fresh 99-year lease;
· Cannot be seized by creditors to pay off debts in the event of bankruptcy provided the purchase was not financed by a bank loan. This protection also applies to resale flats; and
· Is much cheaper than comparative homes in the market. This means there is a built-in protection against falling prices in a market downturn.
In conclusion, I would advise those who are eligible for public housing to buy a new HDB flat as a first step to investing in their future, even if they aspire to live in private homes eventually.
This is because the HDB home ownership programme provides tangible benefits that are available only to Singaporeans. Citizenship has its privilege.
dennis@sph.com.sg
New flats are good buys, being priced significantly below the market level. Four-room flats at Punggol Emerald, for example, cost between $262,000 and $323,000, compared to $355,000 and $385,000 for resale flats in nearby areas. -- PHOTO: HDB
small change
What to invest in? Try new HDB flats
For those who are eligible, there are many tangible benefits to be reaped
By Dennis Chan
As I am a financial journalist, one question that is regularly asked of me at gatherings among relatives and friends is: What to invest in?
An equally popular follow-up is: Where are prices headed?
Heck, even my hairdresser asks me that whenever I pop by the salon, about once a month, for a haircut. 'Hard to tell,' is my usual response, accompanied by a sagely nod.
When it comes to stocks and shares, can anyone tell the future accurately and consistently?
That is not to say I do not have some bright ideas about investing. Getting a new HDB flat is a perennial favourite of mine when asked for advice by people who do not already own one.
'Is that it? Aren't you preaching to the converted?' some of you may rightly ask, given that more than 80 per cent of Singaporeans live in HDB flats.
To a certain extent, I am stating the obvious. But this 'wisdom' may not be apparent to all, especially to those who have certain notions about public housing.
And even among those who do not mind public housing, there are some who simply cannot countenance living in the outlying areas like Sengkang and Punggol where most of the new flats are being built.
For them, nothing less than a flat in a mature town will do. I do not doubt many of them have legitimate reasons for sticking to their stand.
As the mainstay of the HDB building programme is in the suburbs, those who insist on a home in a mature estate must realistically turn to the resale flat market.
But from an investment point of view, getting resale flats during a property boom often translates to paying frothy prices. It is not a smart thing to do, especially when one is starting out on a marriage.
Consider the expenses a courting couple usually face once they decide to get married.
Walking down the aisle is just a first step, not the fairy-tale ending that romance novelists like to write about.
A successful wedding proposal is like a city winning the rights to host the Olympics.
First, there is the euphoria: The man may dance a little jig of delight while his bride-to-be swoons over her quail egg-sized diamond ring. But then comes the hard planning and budgeting.
Get it right and the couple may bask in everlasting warmth and glory like the 1984 Los Angeles Olympics, often cited as the most financially successful Games.
Mess it up and they can expect to carry a lasting millstone like Montreal 1976 (It took the Canadian city 30 years to pay off its Olympic Games debts).
Similarly, money woes can make or break a marriage.
A couple tying the knot will typically need to set aside money for four major cash-flow draining events: the wedding, honeymoon, home purchase and renovation.
This is not an issue if they have wealthy parents who are willing to underwrite all or part of the expenses. But for those who have to finance their own way, prioritising and allocating resources judiciously are critical. Invariably, cash will be tight.
Under such circumstances, the right thing to do is to choose an affordable flat and to pay as little cash as possible.
The idea is to save as much of your salary as possible. The accumulated savings can then be channelled to other investments.
In other words, you do not want to be putting all your eggs into one investment - a house that also doubles as your home. You should also avoid getting mired in debt by buying an expensive home, as this could put stress on the marriage.
One way to acquire an inexpensive home is to choose a resale flat that is unpopular. A flat on a low floor or in an unpopular estate is more likely to be sold at a price that is close to its valuation. As HDB loans are pegged to valuation, a flat that is sold at close to its valuation price or lower may allow the buyer to borrow up to 90 per cent from the HDB.
A big advantage of buying from the resale market is the immediate occupation it affords: The buyer can choose to move into the flat the moment the sale is completed.
But if one can wait, a better alternative is to buy a flat directly from the HDB. Unlike resale flats, there is no haggling over price with the seller. This can be a source of comfort to a buyer who is unfamiliar with the property market and who is not confident he can negotiate a good deal in the open market.
The chances of getting a new flat are pretty good as the HDB has continually ramped up its building programme as well as reserving the bulk of its flats for first-time buyers.
So what if the new flats are mostly found in Sengkang and Punggol? They are fast growing into thriving townships, much like what Tampines, Jurong West and Woodlands have become.
New flats are affordable and priced significantly below the market. Take, for example, the price of a four-room flat at Punggol Emerald and Punggol Waves, which the HDB launched for sale last week.
They are being sold at between $243,000 and $323,000. In comparison, prices of resale flats nearby ranged from $355,000 to $385,000.
To help reduce out-of-pocket expenses on renovations, the HDB is also giving the buyer the option of having the flooring of his flat done up at an additional selling price. For a four-room flat, that amounts to $3,250.
As added icing on the cake, a new HDB flat generally comes with a 99-year lease at the time the HDB hands over the keys to the buyer.
In comparison, the clock on a leasehold property sold by the Government to a private developer starts running down from the date of full payment of land price by the successful tenderer, which is typically within 90 days from the date of award of tender of the land parcel.
Factoring in the time for construction and other delays, the buyer of a 99-year leasehold condominium is usually left with 94 to 95 years by the time he gets the keys to his flat.
It is worse for land that was sold at peak prices in 2007.
Take, for example, the South Beach mixed development at Beach Road. The 99-year leasehold site was won by a City Developments-led consortium in a government tender in 2007, but construction has been delayed as a result of the financial crisis. There are plans to start construction by next year.
Any further delays could shave the initial lease by up to a decade by the time the development is ready for occupation. The consortium has up to 2016 to complete the project.
Some people see such delays as insignificant as there are many other factors that determine the value of a property. But at the end of the day, tenure does matter as it is what differentiates a leasehold property from a freehold one.
To recap, some of the benefits of buying a new HDB flat are that it:
· Is more affordable;
· Requires less cash upfront;
· Is sold at a fixed price. No bargaining is needed;
· Affords buyers a fresh 99-year lease;
· Cannot be seized by creditors to pay off debts in the event of bankruptcy provided the purchase was not financed by a bank loan. This protection also applies to resale flats; and
· Is much cheaper than comparative homes in the market. This means there is a built-in protection against falling prices in a market downturn.
In conclusion, I would advise those who are eligible for public housing to buy a new HDB flat as a first step to investing in their future, even if they aspire to live in private homes eventually.
This is because the HDB home ownership programme provides tangible benefits that are available only to Singaporeans. Citizenship has its privilege.
dennis@sph.com.sg
New flats are good buys, being priced significantly below the market level. Four-room flats at Punggol Emerald, for example, cost between $262,000 and $323,000, compared to $355,000 and $385,000 for resale flats in nearby areas. -- PHOTO: HDB
ST : What if you can't afford to retire?
Apr 25, 2010
What if you can't afford to retire?
Options for low-income elderly folk
By Lorna Tan
The reality of just how much it costs to retire is sinking in for many people.
As a result, more expect not to be able to retire completely - they will need to turn to part-time jobs in their golden years.
This was a key finding in a recent survey by Russell Investments and The Nielsen Company on how Singaporeans are planning for their retirement.
The findings indicated that about 70 per cent of the more than 500 respondents believe they will need some part-time work to supplement their retirement income.
Singapore's rapidly ageing population is a cause for concern, with the number of people aged 65 and older expected to treble to 900,000 in 20 years, from about 300,000.
Adding to the bleak picture: The survey indicated that only half of Singaporeans who have not reached retirement age have made financial plans for their nest eggs.
It is no wonder that experts constantly emphasise that when you fail to plan, you plan to fail. But for those who do not have time on their side and have yet to start mapping out their plans, not all hope is lost.
The Sunday Times looks at the income options available to low-income elderly people, particularly those with no financial plans. Some of these options look at the flat as an asset, as well as a source of rental and retirement income.
· Lease Buyback Scheme (LBS)
Launched on March 1 last year, the scheme allows low-income elderly Singaporeans living in three-room and smaller flats to monetise their flats to supplement their retirement needs.
It is believed that these households need more financial help, as they are unlikely to be able to take advantage of other options such as downsizing to a small flat or subletting a room.
Under the scheme, the HDB will buy back the tail end of a flat's 100-year lease at market valuation, leaving a 30-year lease for the owner. For example, if a flat has 70 years left, the HDB buys 40 years of the lease from the owner. It pays the market rate for the 40-year lease and this money goes to the CPF Life national annuity scheme in the flat owner's name. He will then receive a monthly income stream for life.
According to a study last year on unlocking housing equity for retirement by Dr Ngee-Choon Chia and Dr Albert Tsui, a three-room flat which is now worth $236,000 has an estimated housing value, unlocked from a 40-year lease, of about $109,000 at present.
The monthly annuity payouts from CPF Life through the buyback of the three-room flat is $694 to $724 for a man and $620 to $650 for a woman. Monthly payouts for women are lower than for men because of the longer life expectancy of women, on average.
Both the study's authors are from the economics department at the National University of Singapore (NUS).
To be eligible for LBS, the homeowner must be aged at least 62, have enjoyed only one housing subsidy and must have occupied the flat for at least five years, among other conditions. If the owner dies before his lease runs out, his family gets the refund of the balance.
At the start of this month, the scheme was broadened to include those who previously owned four-room or bigger flats.
It also includes those with outstanding housing loans exceeding $5,000, but who are able to buy an annuity under CPF Life for at least $60,000 with the HDB payout. Previously, the household had to have less than $5,000 outstanding on a home loan.
With the revision in rules, the number of elderly households that stand to benefit from LBS has risen to 34,800 or 82 per cent of elderly households in three-room and smaller flats.
One key advantage of the LBS is that you get to live in your home and at the same time receive a lifelong income.
Mr Ben Fok, chief executive of Grandtag Financial Consultancy, says: 'This option is viable for owners who are comfortable to stay where they are and do not wish to move or downgrade to a smaller flat. They prefer not to sublet their flat as privacy may be important to them.'
The downside is that upon the death of the retiree, he may not leave behind anything for his loved ones. In Asian culture, this may not be well accepted, says Mr Christopher Tan, chief executive of wealth management company Providend.
And retirees may also not like the idea that the house they are living in no longer belongs to them.
Mr Leong Sze Hian, president of the Society of Financial Service Professionals, however, believes that the owner will be worse off under this option.
He believes that HDB flats will be worth more 30 years down the road. After all, they have always increased in value historically, as old flats may be selected for en bloc redevelopment. Under this programme, the residents of affected blocks will be offered replacement flats. In fact, he notes that older flats have generally appreciated more, as they are in mature estates with more amenities.
Based on an annual price appreciation of 5 per cent for an HDB flat, Mr Leong works out that a flat valued at $200,000 now will be worth $864,388 in 30 years.
· Subletting
Another viable option is for elderly people to sublet their rooms. Mr Leong says this option is suitable for the retiree who wants to grow old in his own flat and still have some rental income.
According to the NUS study, about seven in 10, or 74 per cent, of the elderly prefer to 'age-in-place'.
The retiree can also opt to sublet his entire flat by moving in with his children. One key advantage of this is that the appreciating equity of the flat is retained by the flat owner, adds Mr Leong.
Mortgage consultancy Housing LoanSG.com founder Dennis Ng prefers this option to LBS, as he believes it is possible to rent out a room for $400 to $500 a month while the elderly person still retains ownership of the home.
Mr Fok cautions, however, that the owner may have to pay income tax for rent collected.
Of course, the inconvenience of having strangers in the house cannot be avoided. The owner will have to contend with losing some degree of privacy as well as putting up with strangers who may have different lifestyle habits.
Says Mr Tan: 'Not only is your privacy being intruded upon, but your whole life may be disrupted too. You share his friends if he brings them back, and you have to share the kitchen, the bathroom, the TV set and more. I am not sure whether a retiree is willing to sacrifice so much during his golden years.'
· Downsizing
Another option is for elderly people to sell their flats and downgrade to smaller flats or to HDB studio apartments.
According to the NUS study, significant sums will be cashed out if elderly people downgrade to smaller units. On average, $79,000 or $132,000 can be cashed out by downgrading from four-room to three-room or two-room flats, respectively. The sums could be even higher now, given the current trend of appreciating HDB prices.
If, say, $79,000 is placed in an annuity, a man can get a monthly payout of $502 to $526, and a woman can get $450 to $472 a month, for life.
If the elderly person opts to downgrade to an HDB studio apartment, which costs less than $100,000 currently, the cash proceeds would be even higher, says Mr Ng.
Most financial experts agree that downsizing seems to be the best financial option. After all, most retirees will conclude that they do not need to live in a big flat upon retiring.
The advantages are clear, says Mr Tan.
'You may get some cash for selling your bigger house and buying a smaller one, and at retirement, you do not have to spend so much energy cleaning the bigger premises. At the same time, expenses such as utility costs are lower with a smaller apartment.'
Mr Fok likes this option because it can help to reduce one's debt if there is an outstanding mortgage.
'You clear your debt and use the proceeds to buy a smaller home and be debt-free,' he adds.
· Working longer
Mr Tan believes that the real option is really retiring later and working longer. But in order to do that, he proposes the following:
· Accept that you have to work through your golden years. This is really a mindset shift, and you must make this shift at least five years before your planned retirement age or before you leave your current place of work.
To suddenly realise that you have to work longer without mentally preparing for it may be very tough to accept for a retiree.
· Keep yourself healthy. Many may want to work but find that they no longer have the health to keep working.
· Keep yourself relevant to the corporate world. Decide what is needed in the job market now; find something you would like to do and go for training. After all, you are bound to want to do something that you like, so it is best to start preparing yourself early.
· If you want to go into business, prepare a business plan and do a cost-benefit analysis. Ask yourself if you can afford to lose your money.
lorna@sph.com.sg
--------------------------------------------------------------------------------
IT'S ALL ABOUT MONEY
Senior Correspondent Lorna Tan has compiled her financial articles into a book. Talk Money is out at bookstores. It costs $22 (before GST). Grab a copy now!
What if you can't afford to retire?
Options for low-income elderly folk
By Lorna Tan
The reality of just how much it costs to retire is sinking in for many people.
As a result, more expect not to be able to retire completely - they will need to turn to part-time jobs in their golden years.
This was a key finding in a recent survey by Russell Investments and The Nielsen Company on how Singaporeans are planning for their retirement.
The findings indicated that about 70 per cent of the more than 500 respondents believe they will need some part-time work to supplement their retirement income.
Singapore's rapidly ageing population is a cause for concern, with the number of people aged 65 and older expected to treble to 900,000 in 20 years, from about 300,000.
Adding to the bleak picture: The survey indicated that only half of Singaporeans who have not reached retirement age have made financial plans for their nest eggs.
It is no wonder that experts constantly emphasise that when you fail to plan, you plan to fail. But for those who do not have time on their side and have yet to start mapping out their plans, not all hope is lost.
The Sunday Times looks at the income options available to low-income elderly people, particularly those with no financial plans. Some of these options look at the flat as an asset, as well as a source of rental and retirement income.
· Lease Buyback Scheme (LBS)
Launched on March 1 last year, the scheme allows low-income elderly Singaporeans living in three-room and smaller flats to monetise their flats to supplement their retirement needs.
It is believed that these households need more financial help, as they are unlikely to be able to take advantage of other options such as downsizing to a small flat or subletting a room.
Under the scheme, the HDB will buy back the tail end of a flat's 100-year lease at market valuation, leaving a 30-year lease for the owner. For example, if a flat has 70 years left, the HDB buys 40 years of the lease from the owner. It pays the market rate for the 40-year lease and this money goes to the CPF Life national annuity scheme in the flat owner's name. He will then receive a monthly income stream for life.
According to a study last year on unlocking housing equity for retirement by Dr Ngee-Choon Chia and Dr Albert Tsui, a three-room flat which is now worth $236,000 has an estimated housing value, unlocked from a 40-year lease, of about $109,000 at present.
The monthly annuity payouts from CPF Life through the buyback of the three-room flat is $694 to $724 for a man and $620 to $650 for a woman. Monthly payouts for women are lower than for men because of the longer life expectancy of women, on average.
Both the study's authors are from the economics department at the National University of Singapore (NUS).
To be eligible for LBS, the homeowner must be aged at least 62, have enjoyed only one housing subsidy and must have occupied the flat for at least five years, among other conditions. If the owner dies before his lease runs out, his family gets the refund of the balance.
At the start of this month, the scheme was broadened to include those who previously owned four-room or bigger flats.
It also includes those with outstanding housing loans exceeding $5,000, but who are able to buy an annuity under CPF Life for at least $60,000 with the HDB payout. Previously, the household had to have less than $5,000 outstanding on a home loan.
With the revision in rules, the number of elderly households that stand to benefit from LBS has risen to 34,800 or 82 per cent of elderly households in three-room and smaller flats.
One key advantage of the LBS is that you get to live in your home and at the same time receive a lifelong income.
Mr Ben Fok, chief executive of Grandtag Financial Consultancy, says: 'This option is viable for owners who are comfortable to stay where they are and do not wish to move or downgrade to a smaller flat. They prefer not to sublet their flat as privacy may be important to them.'
The downside is that upon the death of the retiree, he may not leave behind anything for his loved ones. In Asian culture, this may not be well accepted, says Mr Christopher Tan, chief executive of wealth management company Providend.
And retirees may also not like the idea that the house they are living in no longer belongs to them.
Mr Leong Sze Hian, president of the Society of Financial Service Professionals, however, believes that the owner will be worse off under this option.
He believes that HDB flats will be worth more 30 years down the road. After all, they have always increased in value historically, as old flats may be selected for en bloc redevelopment. Under this programme, the residents of affected blocks will be offered replacement flats. In fact, he notes that older flats have generally appreciated more, as they are in mature estates with more amenities.
Based on an annual price appreciation of 5 per cent for an HDB flat, Mr Leong works out that a flat valued at $200,000 now will be worth $864,388 in 30 years.
· Subletting
Another viable option is for elderly people to sublet their rooms. Mr Leong says this option is suitable for the retiree who wants to grow old in his own flat and still have some rental income.
According to the NUS study, about seven in 10, or 74 per cent, of the elderly prefer to 'age-in-place'.
The retiree can also opt to sublet his entire flat by moving in with his children. One key advantage of this is that the appreciating equity of the flat is retained by the flat owner, adds Mr Leong.
Mortgage consultancy Housing LoanSG.com founder Dennis Ng prefers this option to LBS, as he believes it is possible to rent out a room for $400 to $500 a month while the elderly person still retains ownership of the home.
Mr Fok cautions, however, that the owner may have to pay income tax for rent collected.
Of course, the inconvenience of having strangers in the house cannot be avoided. The owner will have to contend with losing some degree of privacy as well as putting up with strangers who may have different lifestyle habits.
Says Mr Tan: 'Not only is your privacy being intruded upon, but your whole life may be disrupted too. You share his friends if he brings them back, and you have to share the kitchen, the bathroom, the TV set and more. I am not sure whether a retiree is willing to sacrifice so much during his golden years.'
· Downsizing
Another option is for elderly people to sell their flats and downgrade to smaller flats or to HDB studio apartments.
According to the NUS study, significant sums will be cashed out if elderly people downgrade to smaller units. On average, $79,000 or $132,000 can be cashed out by downgrading from four-room to three-room or two-room flats, respectively. The sums could be even higher now, given the current trend of appreciating HDB prices.
If, say, $79,000 is placed in an annuity, a man can get a monthly payout of $502 to $526, and a woman can get $450 to $472 a month, for life.
If the elderly person opts to downgrade to an HDB studio apartment, which costs less than $100,000 currently, the cash proceeds would be even higher, says Mr Ng.
Most financial experts agree that downsizing seems to be the best financial option. After all, most retirees will conclude that they do not need to live in a big flat upon retiring.
The advantages are clear, says Mr Tan.
'You may get some cash for selling your bigger house and buying a smaller one, and at retirement, you do not have to spend so much energy cleaning the bigger premises. At the same time, expenses such as utility costs are lower with a smaller apartment.'
Mr Fok likes this option because it can help to reduce one's debt if there is an outstanding mortgage.
'You clear your debt and use the proceeds to buy a smaller home and be debt-free,' he adds.
· Working longer
Mr Tan believes that the real option is really retiring later and working longer. But in order to do that, he proposes the following:
· Accept that you have to work through your golden years. This is really a mindset shift, and you must make this shift at least five years before your planned retirement age or before you leave your current place of work.
To suddenly realise that you have to work longer without mentally preparing for it may be very tough to accept for a retiree.
· Keep yourself healthy. Many may want to work but find that they no longer have the health to keep working.
· Keep yourself relevant to the corporate world. Decide what is needed in the job market now; find something you would like to do and go for training. After all, you are bound to want to do something that you like, so it is best to start preparing yourself early.
· If you want to go into business, prepare a business plan and do a cost-benefit analysis. Ask yourself if you can afford to lose your money.
lorna@sph.com.sg
--------------------------------------------------------------------------------
IT'S ALL ABOUT MONEY
Senior Correspondent Lorna Tan has compiled her financial articles into a book. Talk Money is out at bookstores. It costs $22 (before GST). Grab a copy now!
ST : Home sales will continue to sizzle
Apr 25, 2010
property
Home sales will continue to sizzle
Economic recovery and better job prospects will sustain demand: Experts
By Esther Teo
With first-quarter home sales rocketing to a higher-than-expected 4,446 units, property experts say that the strong sales momentum will probably spill over into the second quarter as developers plan more sizeable launches.
In fact, at least 12 developments have been identified by property consultants as possible launches this quarter.
These include Far East Organization's 361-unit Waterfront Gold at Bedok Reservoir Road, Wing Tai Holdings' 43-unit Le Nouvel Ardmore at Ardmore Park and KSH Holdings' 250-unit Cityscape@Farrer Park.
The strong economic recovery and better employment prospects will continue to sustain demand, Knight Frank manager of consultancy and research Ong Kah Seng said.
This is especially so after the latest government announcement of stellar first-quarter 13.1 per cent growth for the economy year-on-year and its upward revision of full-year gross domestic product growth to 7 per cent to 9 per cent from the previous 4.5 per cent to 6.5 per cent, further contributing to positive market sentiments.
CB Richard Ellis (CBRE) residential executive director Joseph Tan added that with the coming months seeing more sizeable project launches in varying locations, there will be enough choices to continue drawing the interest of potential buyers.
Sales in the first quarter were dominated by units in the core central region, where prime and higher-end properties such as those in Cairnhill and Holland Road, or Sentosa, are located. They made up 44 per cent of total sales, according to CBRE.
The second quarter is also likely to see similar posh launches following a laggard performance of high-end residential properties in the past two years, experts say.
'The launch and sales activity outside the central region (OCR) was buoyant in 2009 and a number of mass-market projects were launched last year. Hence fewer sites will be launched in the OCR area,' Mr Ong said.
However, buyers can still expect to see mid-tier and mass-market launches this quarter, such as The Minton in Hougang Street 11 and UOL Group's Terrene condominium.
CBRE's Mr Tan noted that more than 500 units of UOL Group's 616-unit Waterbank at Dakota had been sold in the two weeks since its preview early this month.
Ms Christine Sun, Savills Singapore's senior manager of research and consultancy, pointed out that buying interest had remained strong despite recent anti-speculation measures.
'The residential market is likely to perform as well moving forward, especially over the next few months as developers push out new launches to ride on the current sentiment and buyers race to lock in the lower borrowing rates ahead of the expected interest rate revision by the second half of this year,' she added.
Home sales of 4,446 units in the first quarter were more than double the 1,860 units sold in the previous quarter and 67 per cent more than sales in the same period last year.
If the pace continues throughout the year, total sales of new homes could be comparable to last year's volume of 14,688 units, property experts say.
Home hunters, however, will be pleased to note that with the Government's close monitoring, most experts do not expect prices to spiral upwards rapidly.
Although Knight Frank's Mr Ong expects to see high-end residential properties receiving strong buying interest and enjoying a higher price increase, any rise is likely to be 'incremental and sustainable'.
He said: 'The overall interest for high-end residential properties will be underpinned by sound economic fundamentals and buyers who carefully evaluated the investment potential of high-end residential properties.
'The integrated resorts can enhance the international exposure and familiarity of Singapore, and provide further opportunities for owners and sellers of high-end residential properties.'
Savills' Ms Sun said prices are likely to see moderate rises only.
She expects a 10 per cent to 15 per cent increase in the high-end market and a 5 per cent to 10 per cent increase in prices for the mid-tier and mass markets after their strong run last year.
esthert@sph.com.sg
property
Home sales will continue to sizzle
Economic recovery and better job prospects will sustain demand: Experts
By Esther Teo
With first-quarter home sales rocketing to a higher-than-expected 4,446 units, property experts say that the strong sales momentum will probably spill over into the second quarter as developers plan more sizeable launches.
In fact, at least 12 developments have been identified by property consultants as possible launches this quarter.
These include Far East Organization's 361-unit Waterfront Gold at Bedok Reservoir Road, Wing Tai Holdings' 43-unit Le Nouvel Ardmore at Ardmore Park and KSH Holdings' 250-unit Cityscape@Farrer Park.
The strong economic recovery and better employment prospects will continue to sustain demand, Knight Frank manager of consultancy and research Ong Kah Seng said.
This is especially so after the latest government announcement of stellar first-quarter 13.1 per cent growth for the economy year-on-year and its upward revision of full-year gross domestic product growth to 7 per cent to 9 per cent from the previous 4.5 per cent to 6.5 per cent, further contributing to positive market sentiments.
CB Richard Ellis (CBRE) residential executive director Joseph Tan added that with the coming months seeing more sizeable project launches in varying locations, there will be enough choices to continue drawing the interest of potential buyers.
Sales in the first quarter were dominated by units in the core central region, where prime and higher-end properties such as those in Cairnhill and Holland Road, or Sentosa, are located. They made up 44 per cent of total sales, according to CBRE.
The second quarter is also likely to see similar posh launches following a laggard performance of high-end residential properties in the past two years, experts say.
'The launch and sales activity outside the central region (OCR) was buoyant in 2009 and a number of mass-market projects were launched last year. Hence fewer sites will be launched in the OCR area,' Mr Ong said.
However, buyers can still expect to see mid-tier and mass-market launches this quarter, such as The Minton in Hougang Street 11 and UOL Group's Terrene condominium.
CBRE's Mr Tan noted that more than 500 units of UOL Group's 616-unit Waterbank at Dakota had been sold in the two weeks since its preview early this month.
Ms Christine Sun, Savills Singapore's senior manager of research and consultancy, pointed out that buying interest had remained strong despite recent anti-speculation measures.
'The residential market is likely to perform as well moving forward, especially over the next few months as developers push out new launches to ride on the current sentiment and buyers race to lock in the lower borrowing rates ahead of the expected interest rate revision by the second half of this year,' she added.
Home sales of 4,446 units in the first quarter were more than double the 1,860 units sold in the previous quarter and 67 per cent more than sales in the same period last year.
If the pace continues throughout the year, total sales of new homes could be comparable to last year's volume of 14,688 units, property experts say.
Home hunters, however, will be pleased to note that with the Government's close monitoring, most experts do not expect prices to spiral upwards rapidly.
Although Knight Frank's Mr Ong expects to see high-end residential properties receiving strong buying interest and enjoying a higher price increase, any rise is likely to be 'incremental and sustainable'.
He said: 'The overall interest for high-end residential properties will be underpinned by sound economic fundamentals and buyers who carefully evaluated the investment potential of high-end residential properties.
'The integrated resorts can enhance the international exposure and familiarity of Singapore, and provide further opportunities for owners and sellers of high-end residential properties.'
Savills' Ms Sun said prices are likely to see moderate rises only.
She expects a 10 per cent to 15 per cent increase in the high-end market and a 5 per cent to 10 per cent increase in prices for the mid-tier and mass markets after their strong run last year.
esthert@sph.com.sg
ST : People's Park Complex packed
Apr 25, 2010
People's Park Complex packed
By Shuli Sudderuddin
Forty years on, is People's Park Complex still popular with shoppers?
Yes, said tenants like Mr Tan Seng Hua, 45, who has worked in the building for 20 years. His family runs a shop called France Shoes.
He said the complex still attracts traffic, though it may not be as popular as it once was. The customers are largely middle-aged.
The New Bridge Road landmark, which opened in 1970, was crowded when The Sunday Times visited it last Friday and yesterday.
One shopper, who wanted to be known only as Jamie, had come all the way from Clementi to use the money-changer services.
'The rates are very good here so I don't mind the journey,' said the manager in her 30s.
A chef from China, who wanted to be known only as Mr Liu, said he often comes to pick up books.
'The books here are in Chinese so they're suitable for me. The stationery is also cheaper than elsewhere,' said the 39-year-old.
Spotted too were teenagers.
Ms Nur Ain Rahman, 18, a salesgirl, came with her family to buy blouses. Prices are from $10 and two blouses cost $16.
'The designs here are suited for the young and the clothes are really cheap, so I come here sometimes,' she said.
According to Ms Teo Choon Ling, 40, People's Park Complex used to have more retail outlets and families would come to shop.
Her family has run sound-equipment firm I-flex Marketing there over the last 30 years.
She noted that the mall now has many travel agents and massage parlours.
But there are other types of shops to draw consumers.
On the first floor are money- changers as well as shops and kiosks selling clothes and accessories. In the middle of the atrium is a store selling books and stationery.
There are also familiar chain stores such as Osim, SK Jewellery and KFC. The third floor is dotted with reflexology shops and older jewellery shops selling jade.
Tucked away in a long corridor is a series of dingy-looking massage parlours where staff wait in the doorway.
The presence of massage parlours does not bother Ms Jane Yee, 50, who runs wedding shop Moments That Last. She said she would stay as she has many regular customers.
Turning up regularly at People's Park Complex too are those who want to book packages and air tickets.
But there is also plenty of competition, said an employee of Super Travels who declined to be named.
There are at least eight travel agencies, with many on the higher floors. Big names include SA Tours and Five Stars Tours.
Do you shop at People's Park Complex? What do you like about it? E-mail your views to suntimes@sph.com.sg
Shoppers at People's Park Complex yesterday, just days after a fire had caused a mass evacuation. While the New Bridge Road landmark may not be as popular as it once was, it still attracts shopping traffic, particularly middle-aged customers. -- ST PHOTO: NG SOR LUAN
People's Park Complex packed
By Shuli Sudderuddin
Forty years on, is People's Park Complex still popular with shoppers?
Yes, said tenants like Mr Tan Seng Hua, 45, who has worked in the building for 20 years. His family runs a shop called France Shoes.
He said the complex still attracts traffic, though it may not be as popular as it once was. The customers are largely middle-aged.
The New Bridge Road landmark, which opened in 1970, was crowded when The Sunday Times visited it last Friday and yesterday.
One shopper, who wanted to be known only as Jamie, had come all the way from Clementi to use the money-changer services.
'The rates are very good here so I don't mind the journey,' said the manager in her 30s.
A chef from China, who wanted to be known only as Mr Liu, said he often comes to pick up books.
'The books here are in Chinese so they're suitable for me. The stationery is also cheaper than elsewhere,' said the 39-year-old.
Spotted too were teenagers.
Ms Nur Ain Rahman, 18, a salesgirl, came with her family to buy blouses. Prices are from $10 and two blouses cost $16.
'The designs here are suited for the young and the clothes are really cheap, so I come here sometimes,' she said.
According to Ms Teo Choon Ling, 40, People's Park Complex used to have more retail outlets and families would come to shop.
Her family has run sound-equipment firm I-flex Marketing there over the last 30 years.
She noted that the mall now has many travel agents and massage parlours.
But there are other types of shops to draw consumers.
On the first floor are money- changers as well as shops and kiosks selling clothes and accessories. In the middle of the atrium is a store selling books and stationery.
There are also familiar chain stores such as Osim, SK Jewellery and KFC. The third floor is dotted with reflexology shops and older jewellery shops selling jade.
Tucked away in a long corridor is a series of dingy-looking massage parlours where staff wait in the doorway.
The presence of massage parlours does not bother Ms Jane Yee, 50, who runs wedding shop Moments That Last. She said she would stay as she has many regular customers.
Turning up regularly at People's Park Complex too are those who want to book packages and air tickets.
But there is also plenty of competition, said an employee of Super Travels who declined to be named.
There are at least eight travel agencies, with many on the higher floors. Big names include SA Tours and Five Stars Tours.
Do you shop at People's Park Complex? What do you like about it? E-mail your views to suntimes@sph.com.sg
Shoppers at People's Park Complex yesterday, just days after a fire had caused a mass evacuation. While the New Bridge Road landmark may not be as popular as it once was, it still attracts shopping traffic, particularly middle-aged customers. -- ST PHOTO: NG SOR LUAN
ST : Pay us for fire damage: Tenants
Apr 25, 2010
Pay us for fire damage: Tenants
People's Park Complex tenants want compensation from building management for damaged stores
By Irene Tham
Sooty air-conditioning ducts, faulty computers, stained ceiling boards and drenched carpets and documents.
These were the effects of last Wednesday's fire at People's Park Complex that caused a mass evacuation.
Several tenants are considering seeking compensation for the damage caused by the fire, which started in a reportedly illegal storeroom on the fifth floor of the building.
'We are seriously considering the necessary claims for compensation,' said Mr S. H. Almenoar, 66, a partner at law firm R Ramason & Almenoar.
It is located on the fourth floor of the building.
Water used to put out the fire dripped from the ceiling and soaked a few stacks of case files and damaged two computers - now fixed - belonging to the law firm.
New ceiling boards that the firm installed a few months ago were also stained with brown water marks, although the flooded fifth floor was drained last Thursday.
Another fourth-floor tenant, a Chinese physician, had to close his shop last Thursday as the carpet in his clinic was soaked by water dripping from the ceiling.
'My insurance firm said I cannot claim from them because the fire was not on my floor. I hope to get some compensation from the building management,' said Mr Yee Heng Huat, 49.
It cost him about $1,000 to close his shop for more than a day and deal with the soaked carpet.
A Chinese herbal shop owner, who wanted to be known only as Mrs Tan, was assessing the damage to her goods in a storeroom on the fourth floor when The Sunday Times visited last Thursday.
'The building must be upgraded. The building management must do something about the damage,' said Mrs Tan, who is in her 70s.
At Five Stars Tours, located on the fifth floor where the fire broke out, it was business as usual last Thursday as the office was intact.
'Our insurance company is handling the claims for the costs involved in cleaning the ventilation ducts,' said Miss Chris Tay, deputy general manager at Five Stars.
Mr Wilson Goh, complex manager at SCMS Property Management, which manages People's Park Complex, could not be reached for comment at press time.
The Singapore Civil Defence Force (SCDF) had said the owner did not have its approval to convert the fifth-floor carpark space into storage rooms or to build the stores.
'This is a serious fire safety violation and SCDF will follow up to take action against the offender,' it said in a statement.
Firefighters were alerted to the fire by a call at about 3.30pm. There was confusion as to whether there was a fire although two alarms had gone off in the space of 15 minutes.
Even when flames engulfed part of the fifth floor, many tenants continued serving customers instead of evacuating. This was because there was no announcement over the public address system.
An employee of a travel agency on the fourth floor told The Sunday Times that the building management gave conflicting reports.
'When the first fire alarm rang, my colleague called the management office to check but was told there was no cause for alarm,' said the travel agency staff, who declined to be named.
'We started to evacuate when we saw people leaving the complex.'
The complex was closed only at about 4pm.
There were no injuries and the blaze was put out in 45 minutes.
itham@sph.com.sg
Pay us for fire damage: Tenants
People's Park Complex tenants want compensation from building management for damaged stores
By Irene Tham
Sooty air-conditioning ducts, faulty computers, stained ceiling boards and drenched carpets and documents.
These were the effects of last Wednesday's fire at People's Park Complex that caused a mass evacuation.
Several tenants are considering seeking compensation for the damage caused by the fire, which started in a reportedly illegal storeroom on the fifth floor of the building.
'We are seriously considering the necessary claims for compensation,' said Mr S. H. Almenoar, 66, a partner at law firm R Ramason & Almenoar.
It is located on the fourth floor of the building.
Water used to put out the fire dripped from the ceiling and soaked a few stacks of case files and damaged two computers - now fixed - belonging to the law firm.
New ceiling boards that the firm installed a few months ago were also stained with brown water marks, although the flooded fifth floor was drained last Thursday.
Another fourth-floor tenant, a Chinese physician, had to close his shop last Thursday as the carpet in his clinic was soaked by water dripping from the ceiling.
'My insurance firm said I cannot claim from them because the fire was not on my floor. I hope to get some compensation from the building management,' said Mr Yee Heng Huat, 49.
It cost him about $1,000 to close his shop for more than a day and deal with the soaked carpet.
A Chinese herbal shop owner, who wanted to be known only as Mrs Tan, was assessing the damage to her goods in a storeroom on the fourth floor when The Sunday Times visited last Thursday.
'The building must be upgraded. The building management must do something about the damage,' said Mrs Tan, who is in her 70s.
At Five Stars Tours, located on the fifth floor where the fire broke out, it was business as usual last Thursday as the office was intact.
'Our insurance company is handling the claims for the costs involved in cleaning the ventilation ducts,' said Miss Chris Tay, deputy general manager at Five Stars.
Mr Wilson Goh, complex manager at SCMS Property Management, which manages People's Park Complex, could not be reached for comment at press time.
The Singapore Civil Defence Force (SCDF) had said the owner did not have its approval to convert the fifth-floor carpark space into storage rooms or to build the stores.
'This is a serious fire safety violation and SCDF will follow up to take action against the offender,' it said in a statement.
Firefighters were alerted to the fire by a call at about 3.30pm. There was confusion as to whether there was a fire although two alarms had gone off in the space of 15 minutes.
Even when flames engulfed part of the fifth floor, many tenants continued serving customers instead of evacuating. This was because there was no announcement over the public address system.
An employee of a travel agency on the fourth floor told The Sunday Times that the building management gave conflicting reports.
'When the first fire alarm rang, my colleague called the management office to check but was told there was no cause for alarm,' said the travel agency staff, who declined to be named.
'We started to evacuate when we saw people leaving the complex.'
The complex was closed only at about 4pm.
There were no injuries and the blaze was put out in 45 minutes.
itham@sph.com.sg
ST : Australia tightens rules for foreign property buyers
Apr 25, 2010
Australia tightens rules for foreign property buyers
Sydney - Australia clamped down on foreigners buying property yesterday, after complaints that a rapid influx of Asian money had helped make its housing among the most expensive in the world.
The government reimposed tough rules relaxed in 2008 that say temporary residents need permission to buy homes and must sell when they leave the country, while foreigners investing from abroad can buy only new properties.
The rules are backed by stiff new penalties including compulsory sell orders, as well as expanded monitoring and a crackdown on real estate agents who help foreigners flout the rules.
They follow growing disquiet that ordinary Australians are being priced out of the market after a decade-long property boom that has accelerated over the past year.
'We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done,' said Prime Minister Kevin Rudd.
'We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action.'
Property experts in Singapore say that the rules for temporary residents will affect the market Down Under.
Mrs Doris Tan, managing director of Singapore's DST International Property Services, said that, with new rules in place, investors might turn to other places like London since the pound sterling is weak.
'This new ruling will definitely result in a drop of property prices in Australia,' she said.
House prices have been red-hot in Australia's major cities, especially Sydney and Melbourne and also Perth, centre of the country's booming minerals exports to Asia.
Victoria state, whose capital is Melbourne, smashed the billion-dollar weekly sales barrier in March, while Rupert Murdoch's son Lachlan landed a record US$23 million (S$31.5 million) property at a Sydney auction in November.
An international survey released in January found Australia's housing was the least affordable among six advanced nations including the United States, Britain, Canada, New Zealand and Ireland.
The Australian Treasury has been reportedly investigating 50 cases of suspicious residential property purchases by foreigners in Melbourne, contributing to rising property prices.
Under reinstated regulations, temporary residents and foreign students will be screened to determine if they will be allowed to purchase a property.
Foreign residents without temporary visas cannot buy existing houses, and may buy property only if it adds to the housing stock. If buying land, they must build within two years or sell it to stop 'land banking'.
Travel details and ownership data will be matched to catch cheats, and the public will have a new hotline to report foreigners they suspect of breaches.
Those leaving Australia must sell their properties and the government will claw back any capital gains made by foreign investors who breach the arrangements. Real estate agents will face new penalties under civil law.
This rule, DST's Mrs Tan said, would have a great impact on people whose children study in Australia. 'Asian parents will still buy the property for their children, to have a home away from home. Parents will now treat the money as money spent on rent and they must be prepared to sell when their children leave the country,' she said.
Australia's opposition has said foreign investors are outbidding locals at house auctions, while media reports refer to cashed-up Asian buyers snapping up homes for their children studying in the country.
However experts also blame a lack of housing supply and say government handouts, including grants for first-time buyers, have inflated prices.
AFP, Xinhua
Additional reporting by Debbie Kwong
Australia tightens rules for foreign property buyers
Sydney - Australia clamped down on foreigners buying property yesterday, after complaints that a rapid influx of Asian money had helped make its housing among the most expensive in the world.
The government reimposed tough rules relaxed in 2008 that say temporary residents need permission to buy homes and must sell when they leave the country, while foreigners investing from abroad can buy only new properties.
The rules are backed by stiff new penalties including compulsory sell orders, as well as expanded monitoring and a crackdown on real estate agents who help foreigners flout the rules.
They follow growing disquiet that ordinary Australians are being priced out of the market after a decade-long property boom that has accelerated over the past year.
'We want to make sure that Australian working families are not being priced out of their own family homes. That is why we have acted in the way in which we have done,' said Prime Minister Kevin Rudd.
'We want to make sure that foreign speculators are not going to force up prices for Australians seeking to buy their own home, buy their first home and we think this is the right course of action.'
Property experts in Singapore say that the rules for temporary residents will affect the market Down Under.
Mrs Doris Tan, managing director of Singapore's DST International Property Services, said that, with new rules in place, investors might turn to other places like London since the pound sterling is weak.
'This new ruling will definitely result in a drop of property prices in Australia,' she said.
House prices have been red-hot in Australia's major cities, especially Sydney and Melbourne and also Perth, centre of the country's booming minerals exports to Asia.
Victoria state, whose capital is Melbourne, smashed the billion-dollar weekly sales barrier in March, while Rupert Murdoch's son Lachlan landed a record US$23 million (S$31.5 million) property at a Sydney auction in November.
An international survey released in January found Australia's housing was the least affordable among six advanced nations including the United States, Britain, Canada, New Zealand and Ireland.
The Australian Treasury has been reportedly investigating 50 cases of suspicious residential property purchases by foreigners in Melbourne, contributing to rising property prices.
Under reinstated regulations, temporary residents and foreign students will be screened to determine if they will be allowed to purchase a property.
Foreign residents without temporary visas cannot buy existing houses, and may buy property only if it adds to the housing stock. If buying land, they must build within two years or sell it to stop 'land banking'.
Travel details and ownership data will be matched to catch cheats, and the public will have a new hotline to report foreigners they suspect of breaches.
Those leaving Australia must sell their properties and the government will claw back any capital gains made by foreign investors who breach the arrangements. Real estate agents will face new penalties under civil law.
This rule, DST's Mrs Tan said, would have a great impact on people whose children study in Australia. 'Asian parents will still buy the property for their children, to have a home away from home. Parents will now treat the money as money spent on rent and they must be prepared to sell when their children leave the country,' she said.
Australia's opposition has said foreign investors are outbidding locals at house auctions, while media reports refer to cashed-up Asian buyers snapping up homes for their children studying in the country.
However experts also blame a lack of housing supply and say government handouts, including grants for first-time buyers, have inflated prices.
AFP, Xinhua
Additional reporting by Debbie Kwong
ST : Sun's out, laundry's out - at playground
Apr 25, 2010
Sun's out, laundry's out - at playground
Neighbours fume as HDB residents hang laundry out to dry in public areas
By Jamie Ee Wen Wei
They may not have washed their dirty laundry in public.
But some HDB residents are certainly airing them in public - in playgrounds and fitness corners in their estate.
Naturally, their neighbours are giving them dirty looks.
They complain that the laundry, draped across the playground equipment and benches, are an eyesore and prevent other residents from using the facilities.
At least two estates, Senja Road and Fernvale, are known to have this problem.
Two residents had recently flagged the issue on Stomp, Singapore Press Holdings' citizen journalism website.
One of them, student Cedric Lee, 18, said he started seeing residents sunning their laundry in the playground in his Senja Road estate in Bukit Panjang a few months ago.
They usually do so on sunny days or weekends.
Everything - from mattresses and bedsheets to carpets and even underwear - is brought out into the open.
Mr Lee said: 'Some children wanted to play in the playground but couldn't because of all these clothes hanging at the playground.'
Housewife Chew Lee Seah, 40, said her three kids have to find alternative play areas. 'Just imagine crawling under red underwear and black bras. It's just disgusting,' she fumed.
Over at Sengkang West, resident Ong Hwee Jing, 25, also observed that some residents are using the playground and fitness equipment for their drying needs.
'It's not only an eyesore, residents also have to dodge the clothes lines. They should be more considerate,' she said.
When The Sunday Times visited the two estates last week, a Sengkang West resident admitted that he airs his bedsheets at the playground occasionally.
'The weather is so hot I thought nobody would go to the playground. It's been raining so much these days there's no sunlight coming into our house,' he said.
Town councils of both estates said the hanging of laundry in common areas is 'strictly not allowed'.
A spokesman for Holland-Bukit Panjang Town Council said it received 10 complaints last year from residents in Senja Road estate.
It has advised residents to be more considerate and remove their laundry from these areas. Educational posters have been put up on notice boards in the lift lobbies.
The Ang Mo Kio-Yio Chu Kang Town Council had three complaints from residents of Fernvale estate in Sengkang. A spokesman said its officers found a maid from a ground-floor unit who had hung laundry at the playground.
The town council has spoken to her.
Some people feel more should be done. Housewife Uma Ram, 38, said offenders should be given a 'stern warning'.
Others are more sympathetic. School bus driver Chia Eng Wah, 52, said: 'As long as they don't disturb anyone, it's OK.'
jamieee@sph.com.sg
Have you seen residents hang laundry in open areas in your estate? E-mail suntimes@sph.com.sg
Clothes draped over the playground equipment in Senja Road estate. Everything from carpets to underwear has been spotted. -- PHOTO COURTESY OF CEDRIC LEE
Sun's out, laundry's out - at playground
Neighbours fume as HDB residents hang laundry out to dry in public areas
By Jamie Ee Wen Wei
They may not have washed their dirty laundry in public.
But some HDB residents are certainly airing them in public - in playgrounds and fitness corners in their estate.
Naturally, their neighbours are giving them dirty looks.
They complain that the laundry, draped across the playground equipment and benches, are an eyesore and prevent other residents from using the facilities.
At least two estates, Senja Road and Fernvale, are known to have this problem.
Two residents had recently flagged the issue on Stomp, Singapore Press Holdings' citizen journalism website.
One of them, student Cedric Lee, 18, said he started seeing residents sunning their laundry in the playground in his Senja Road estate in Bukit Panjang a few months ago.
They usually do so on sunny days or weekends.
Everything - from mattresses and bedsheets to carpets and even underwear - is brought out into the open.
Mr Lee said: 'Some children wanted to play in the playground but couldn't because of all these clothes hanging at the playground.'
Housewife Chew Lee Seah, 40, said her three kids have to find alternative play areas. 'Just imagine crawling under red underwear and black bras. It's just disgusting,' she fumed.
Over at Sengkang West, resident Ong Hwee Jing, 25, also observed that some residents are using the playground and fitness equipment for their drying needs.
'It's not only an eyesore, residents also have to dodge the clothes lines. They should be more considerate,' she said.
When The Sunday Times visited the two estates last week, a Sengkang West resident admitted that he airs his bedsheets at the playground occasionally.
'The weather is so hot I thought nobody would go to the playground. It's been raining so much these days there's no sunlight coming into our house,' he said.
Town councils of both estates said the hanging of laundry in common areas is 'strictly not allowed'.
A spokesman for Holland-Bukit Panjang Town Council said it received 10 complaints last year from residents in Senja Road estate.
It has advised residents to be more considerate and remove their laundry from these areas. Educational posters have been put up on notice boards in the lift lobbies.
The Ang Mo Kio-Yio Chu Kang Town Council had three complaints from residents of Fernvale estate in Sengkang. A spokesman said its officers found a maid from a ground-floor unit who had hung laundry at the playground.
The town council has spoken to her.
Some people feel more should be done. Housewife Uma Ram, 38, said offenders should be given a 'stern warning'.
Others are more sympathetic. School bus driver Chia Eng Wah, 52, said: 'As long as they don't disturb anyone, it's OK.'
jamieee@sph.com.sg
Have you seen residents hang laundry in open areas in your estate? E-mail suntimes@sph.com.sg
Clothes draped over the playground equipment in Senja Road estate. Everything from carpets to underwear has been spotted. -- PHOTO COURTESY OF CEDRIC LEE
TODAY ONLINE : A new trend?
A new trend?
05:55 AM Apr 24, 2010
by Jo-ann Huang joannhuang@mediacorp.com.sg
SINGAPORE - Boutique developments are the new buzzword among property investors who value privacy and exclusivity.
Unlike condominiums or landed properties, boutique developments offer a smaller but luxurious living space with high-quality furnishings, personalised amenities, sleek interiors and avant-garde facades, often in prime locations or scenic spots.
A key selling point is the sense of privacy afforded by such developments, which typically consists of only 20 to 40 units of one to four bedrooms.
And what these developments lack in size, they more than make up for in their unique features.
"Some locations lend themselves more readily to boutique developments, for example, projects in lush green areas, seafronts, on a hilltop, overlooking city lights or some other interesting features," said Colin Tan, head of research and consultancy at Chesterton Suntec International.
"The other way to add exclusivity to boutique developments is to tie in with hotels for special concierge services, especially if the location does not have a natural advantage.
"Large apartment sizes can be a special feature in themselves but of course this reduces affordability," he added.
Mr Tan said such developments don't come cheap and are more likely to be bought by homeowners rather than investors. Such homeowners tend to be working couples or singles who earn between $5,000 to $6,000 a month, said Mr Dennis Yong, head of special projects at HSR International.
But investors are unfazed by the high prices. The Holland Collection was launched today (April 24), and its developers said it is likely to "attract sizeable interest among home owners and property investors."
Developed jointly by Lippo Group and CLSA Capital Partners Real Estate Fund, the freehold Holland Collection is located in the prime district 10 location on Holland Road.
All 26 units are selling for an average of $2,000 per square foot (psf) and range from 1,281 square feet for a two-bedroom unit to 3,606 square feet for a four-bedroom penthouse.
Selling at about the same price are the 34-unit Ferrell Residences on Bukit Timah Road at $2,001 psf and the 15-unit Promont at Cairnhill Circle at $2,086 psf, according to statistics from the Urban Redevelopment Authority.
But given that such developments are niche investments, investors should be aware of the caveats especially if they are looking to sell.
"The marketing period will be much longer as the property is catering to a niche market. Hence panic-selling will not get you a good price. But price-wise, it will not be much worse off than other types of properties in property downturn," said Chesterton's Mr Tan.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Apr 24, 2010
by Jo-ann Huang joannhuang@mediacorp.com.sg
SINGAPORE - Boutique developments are the new buzzword among property investors who value privacy and exclusivity.
Unlike condominiums or landed properties, boutique developments offer a smaller but luxurious living space with high-quality furnishings, personalised amenities, sleek interiors and avant-garde facades, often in prime locations or scenic spots.
A key selling point is the sense of privacy afforded by such developments, which typically consists of only 20 to 40 units of one to four bedrooms.
And what these developments lack in size, they more than make up for in their unique features.
"Some locations lend themselves more readily to boutique developments, for example, projects in lush green areas, seafronts, on a hilltop, overlooking city lights or some other interesting features," said Colin Tan, head of research and consultancy at Chesterton Suntec International.
"The other way to add exclusivity to boutique developments is to tie in with hotels for special concierge services, especially if the location does not have a natural advantage.
"Large apartment sizes can be a special feature in themselves but of course this reduces affordability," he added.
Mr Tan said such developments don't come cheap and are more likely to be bought by homeowners rather than investors. Such homeowners tend to be working couples or singles who earn between $5,000 to $6,000 a month, said Mr Dennis Yong, head of special projects at HSR International.
But investors are unfazed by the high prices. The Holland Collection was launched today (April 24), and its developers said it is likely to "attract sizeable interest among home owners and property investors."
Developed jointly by Lippo Group and CLSA Capital Partners Real Estate Fund, the freehold Holland Collection is located in the prime district 10 location on Holland Road.
All 26 units are selling for an average of $2,000 per square foot (psf) and range from 1,281 square feet for a two-bedroom unit to 3,606 square feet for a four-bedroom penthouse.
Selling at about the same price are the 34-unit Ferrell Residences on Bukit Timah Road at $2,001 psf and the 15-unit Promont at Cairnhill Circle at $2,086 psf, according to statistics from the Urban Redevelopment Authority.
But given that such developments are niche investments, investors should be aware of the caveats especially if they are looking to sell.
"The marketing period will be much longer as the property is catering to a niche market. Hence panic-selling will not get you a good price. But price-wise, it will not be much worse off than other types of properties in property downturn," said Chesterton's Mr Tan.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY Online : Some COVs turn negative
Some COVs turn negative
A few flats sold under valuation
05:55 AM Apr 24, 2010
by Esther Ng
SINGAPORE - Rising cash-over-valuations (COV) have been the gripe of home-hunters, but some have gotten lucky in Queenstown.
Between January and March, the median COV for executive flats there was a negative $6,000, meaning a buyer paid below valuation - a far cry from the $50,000 median COV for the same flat type in the same area, in the preceding quarter.
But the first-quarter median COV for executive flats in Toa Payoh was a staggering $63,500. This was the highest COV sum in the Housing and Development Board's list released on Friday, which broke down flat prices for the first quarter. In all three instances, HDB noted, the figures should not be taken as representative as there were fewer than 20 resale transactions in those towns for those flat types.
Indeed, overall, the median COV for the first three months of the year stabilised at $25,000 after a marginal increase of just $1,000 - compared to the fourth quarter of last year which saw the COV double.
And the HDB's resale price index rose more slowly as well, by 2.8 per cent, as the number of resale transactions slipped 5 per cent - in large part, some analysts noted, due to the huge cash-out-of-pocket sums being demanded by sellers.
Generally, resale flats in Bishan attracted the highest median COV of $32,000, followed by those in Punggol ($31,000) and Marine Parade, Central and Sengkang ($30,000).
The COV rose for three-, four- and five-room flat types in Kallang/Whampoa, where a five-room unit which previously drew a $16,600 COV now commanded $40,000. The trend was similar in Clementi.
"It could be that market is playing catch-up and that that people have bought flats in anticipation of the Circle Line," said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
In general, "COVs are still going up but at a much slower pace and they might be starting to reach a ceiling", he noted. But prices overall would continue to rise as "the valuation of resale flats will also rise".
For those short on cash, Woodlands, Pasir Ris and Geylang were their best bets, with the median COV ranging from $20,000 to $22,000.
To meet demand, HDB said it plans to launch about 12,300 new Build-To-Order (BTO) flats by September, with 1,100 to be offered next month in Yishun and Jurong West. In addition, a Punggol executive condominium site on the Government's Reserve List will be put up for tender early next month.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
A few flats sold under valuation
05:55 AM Apr 24, 2010
by Esther Ng
SINGAPORE - Rising cash-over-valuations (COV) have been the gripe of home-hunters, but some have gotten lucky in Queenstown.
Between January and March, the median COV for executive flats there was a negative $6,000, meaning a buyer paid below valuation - a far cry from the $50,000 median COV for the same flat type in the same area, in the preceding quarter.
But the first-quarter median COV for executive flats in Toa Payoh was a staggering $63,500. This was the highest COV sum in the Housing and Development Board's list released on Friday, which broke down flat prices for the first quarter. In all three instances, HDB noted, the figures should not be taken as representative as there were fewer than 20 resale transactions in those towns for those flat types.
Indeed, overall, the median COV for the first three months of the year stabilised at $25,000 after a marginal increase of just $1,000 - compared to the fourth quarter of last year which saw the COV double.
And the HDB's resale price index rose more slowly as well, by 2.8 per cent, as the number of resale transactions slipped 5 per cent - in large part, some analysts noted, due to the huge cash-out-of-pocket sums being demanded by sellers.
Generally, resale flats in Bishan attracted the highest median COV of $32,000, followed by those in Punggol ($31,000) and Marine Parade, Central and Sengkang ($30,000).
The COV rose for three-, four- and five-room flat types in Kallang/Whampoa, where a five-room unit which previously drew a $16,600 COV now commanded $40,000. The trend was similar in Clementi.
"It could be that market is playing catch-up and that that people have bought flats in anticipation of the Circle Line," said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
In general, "COVs are still going up but at a much slower pace and they might be starting to reach a ceiling", he noted. But prices overall would continue to rise as "the valuation of resale flats will also rise".
For those short on cash, Woodlands, Pasir Ris and Geylang were their best bets, with the median COV ranging from $20,000 to $22,000.
To meet demand, HDB said it plans to launch about 12,300 new Build-To-Order (BTO) flats by September, with 1,100 to be offered next month in Yishun and Jurong West. In addition, a Punggol executive condominium site on the Government's Reserve List will be put up for tender early next month.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
BT : Numbers say that property still has legs
Business Times - 24 Apr 2010
SHOW ME THE MONEY
Numbers say that property still has legs
It's attractive for investment as long as interest rates stay low, rentals hold firm and capital value is maintained
By TEH HOOI LING
SENIOR CORRESPONDENT
PROPERTY has always been a hot topic in Singapore, and it has gained even more limelight of late given the continued strength in the prices. Some government measures introduced to cool the market have not overly dampened investors' sentiment.
Yesterday, the Urban Redevelopment Authority released some detailed data for the property market in the first quarter. I've decided to update some of the charts and analysis that I've done before with the latest set of data.
The first chart plots the growth of Singapore's gross domestic product (GDP), the URA private property price index and the Straits Times Index since 1975. In that 35 years, the stock market and the property market more or less tracked the growth of the economy. But there were bouts of over exuberance and excessive depression for the property and the stock markets. In that short history, the property market has shown itself to be more prone to over exuberance or the formation of so-called bubbles, though the stock market too has had its fair share of both irrational exuberance and pessimism.
The Singapore property market started to race ahead of the underlying economy in 1994 and 1995, and peaked in 1996. That huge deviation proved to be a bubble. The bubble was pricked by the government's anti-speculative measures, and later by the Asian financial crisis. Property prices then corrected severely and closed the gap with the domestic economy. In 2007, property prices started to climb again. The correction came soon after in 2008, but it now appears that could just have been a blip. Prices have again resumed their north-ward march, and properties are now at their highest level relative to the GDP since 1999. The years of 1994, 1995, 1996 and 1997 of course saw significantly higher property prices relative to the GDP.
But a few things are different this time round, primarily the low interest rates that we all enjoy today.
Chart 2 plots the one-year interbank rate against the rental yield. Here, you can see that there remains a relatively big buffer between the interest rate and the rental yield of a private non-landed property. The rental yield is calculated based on the median rental of a non-landed private property over its median price.
And as a result of the very low interest rates today, an investor who takes up an 80 per cent loan to be paid off over 30 years can entirely service his or her monthly mortgage payment from the rental income. Here, the mortgage rate is calculated based on the one-year interbank rate plus 1.5 percentage points.
Based on URA's numbers, the median price of an apartment in the first quarter of 2010 was $9,952 per sq metre (psm), and for condominiums, $10,490 psm. Let's take the average of the two to represent the median price of a non-landed property. That works out to $10,221 psm. A 100 sq metre unit would cost some $1.02 million. Assume that an 80 per cent loan is taken and that the housing loan rate is 1.5 percentage points above the interbank rate, which was at 0.625 per cent. For a $818,000 loan on a 2.125 per cent interest over 30 years, the monthly mortgage payment is $3,074.
On the rental side, the median for a non-landed private property is $34.06 psm per month. So the rental income from a 100 sq metre unit would be $3,406. That more than covers the mortgage payment. However, additional expenses relating to owning a property like property tax or property maintenance are not taken into consideration.
There was negative cash flow for property investors between Q2 2005 and Q1 2008. Since Q2 2008, however, there has been a positive cash flow. Indeed the positive cash flow could have been bigger for those who had opted for floating rate housing loans. They are in fact paying much lower rates than 2.125 per cent.
Such a situation would last for only as long as rentals stay firm and interest rates remain low. But rates are at their lowest in the last 20 years. The median level of interbank rate in the last 20 years was 2.7 per cent. Based on current rentals, the interbank rate has to go up only by less than one percentage point to 1.5 per cent for cash flow to turn negative for property investors. Unless one is of the view that the low interest rates today is the 'new normal', it is logical to assume that interest rates will rise to more 'normal' levels sooner or later. For perspective, the median interbank rate in the last 10 years is 1.375 per cent.
The current low bank rates also means that the rental return on equity (ROE) for a property investor is high, at 9.5 per cent. Here, the rental is reduced by 10 per cent to factor in property tax and some of the other expenses. It however does not take into consideration potential capital appreciation. Again, the assumption is 80 per cent loan at a rate of 1.5 percentage points above the interbank rate. A rise in interbank rate to 1.5 per cent would reduce the ROE to 6 per cent, while an interbank rate of 2 per cent would slash the return to 4 per cent.
On the affordability front, the numbers continue to look reasonable. I take the average income of the 71st to 80th percentile households in Singapore. According to the Department of Statistics, the average monthly income for this group was $8,010 in 2006, $8,730 in 2007, $9,720 in 2008 and $9,559 in 2009. I then compare these to the median price of condominiums in those four years.
Again, assume the condo is 100 sq m, the loan is 80 per cent over 30 years, and the rate is 1.5 percentage points above the one-year interbank rate. In the above scenario, the mortgage payments these households need to fork out has fallen to 29 per cent, well within the recommended range of how much each household should set aside for mortgage payments.
So, the above analysis shows that one, the top 30 per cent of Singapore households can still comfortably afford a non-landed private property. Two, from an investment point of view, property remains attractive for as long as interest rates remain low, rentals holding firm, and capital value being maintained.
There is only a small buffer for interest rates to go up before properties become unattractive as a rental yielding asset. Meanwhile, rentals are not expected to chalk up significant gains. Not helping matters are the substantial number of new stock coming onto the market in the next few years.
But what is unknown is the demand. Singapore's status as a happening and safe hub city in Asia is gaining traction. Given the small size of the city, a small increase in demand can translate into big price movements. No one can tell how the market will look like in the future. But for as long as one can afford to own a property with an ample margin of safety, it remains one of the best places to park one's money in, over the long term.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
SHOW ME THE MONEY
Numbers say that property still has legs
It's attractive for investment as long as interest rates stay low, rentals hold firm and capital value is maintained
By TEH HOOI LING
SENIOR CORRESPONDENT
PROPERTY has always been a hot topic in Singapore, and it has gained even more limelight of late given the continued strength in the prices. Some government measures introduced to cool the market have not overly dampened investors' sentiment.
Yesterday, the Urban Redevelopment Authority released some detailed data for the property market in the first quarter. I've decided to update some of the charts and analysis that I've done before with the latest set of data.
The first chart plots the growth of Singapore's gross domestic product (GDP), the URA private property price index and the Straits Times Index since 1975. In that 35 years, the stock market and the property market more or less tracked the growth of the economy. But there were bouts of over exuberance and excessive depression for the property and the stock markets. In that short history, the property market has shown itself to be more prone to over exuberance or the formation of so-called bubbles, though the stock market too has had its fair share of both irrational exuberance and pessimism.
The Singapore property market started to race ahead of the underlying economy in 1994 and 1995, and peaked in 1996. That huge deviation proved to be a bubble. The bubble was pricked by the government's anti-speculative measures, and later by the Asian financial crisis. Property prices then corrected severely and closed the gap with the domestic economy. In 2007, property prices started to climb again. The correction came soon after in 2008, but it now appears that could just have been a blip. Prices have again resumed their north-ward march, and properties are now at their highest level relative to the GDP since 1999. The years of 1994, 1995, 1996 and 1997 of course saw significantly higher property prices relative to the GDP.
But a few things are different this time round, primarily the low interest rates that we all enjoy today.
Chart 2 plots the one-year interbank rate against the rental yield. Here, you can see that there remains a relatively big buffer between the interest rate and the rental yield of a private non-landed property. The rental yield is calculated based on the median rental of a non-landed private property over its median price.
And as a result of the very low interest rates today, an investor who takes up an 80 per cent loan to be paid off over 30 years can entirely service his or her monthly mortgage payment from the rental income. Here, the mortgage rate is calculated based on the one-year interbank rate plus 1.5 percentage points.
Based on URA's numbers, the median price of an apartment in the first quarter of 2010 was $9,952 per sq metre (psm), and for condominiums, $10,490 psm. Let's take the average of the two to represent the median price of a non-landed property. That works out to $10,221 psm. A 100 sq metre unit would cost some $1.02 million. Assume that an 80 per cent loan is taken and that the housing loan rate is 1.5 percentage points above the interbank rate, which was at 0.625 per cent. For a $818,000 loan on a 2.125 per cent interest over 30 years, the monthly mortgage payment is $3,074.
On the rental side, the median for a non-landed private property is $34.06 psm per month. So the rental income from a 100 sq metre unit would be $3,406. That more than covers the mortgage payment. However, additional expenses relating to owning a property like property tax or property maintenance are not taken into consideration.
There was negative cash flow for property investors between Q2 2005 and Q1 2008. Since Q2 2008, however, there has been a positive cash flow. Indeed the positive cash flow could have been bigger for those who had opted for floating rate housing loans. They are in fact paying much lower rates than 2.125 per cent.
Such a situation would last for only as long as rentals stay firm and interest rates remain low. But rates are at their lowest in the last 20 years. The median level of interbank rate in the last 20 years was 2.7 per cent. Based on current rentals, the interbank rate has to go up only by less than one percentage point to 1.5 per cent for cash flow to turn negative for property investors. Unless one is of the view that the low interest rates today is the 'new normal', it is logical to assume that interest rates will rise to more 'normal' levels sooner or later. For perspective, the median interbank rate in the last 10 years is 1.375 per cent.
The current low bank rates also means that the rental return on equity (ROE) for a property investor is high, at 9.5 per cent. Here, the rental is reduced by 10 per cent to factor in property tax and some of the other expenses. It however does not take into consideration potential capital appreciation. Again, the assumption is 80 per cent loan at a rate of 1.5 percentage points above the interbank rate. A rise in interbank rate to 1.5 per cent would reduce the ROE to 6 per cent, while an interbank rate of 2 per cent would slash the return to 4 per cent.
On the affordability front, the numbers continue to look reasonable. I take the average income of the 71st to 80th percentile households in Singapore. According to the Department of Statistics, the average monthly income for this group was $8,010 in 2006, $8,730 in 2007, $9,720 in 2008 and $9,559 in 2009. I then compare these to the median price of condominiums in those four years.
Again, assume the condo is 100 sq m, the loan is 80 per cent over 30 years, and the rate is 1.5 percentage points above the one-year interbank rate. In the above scenario, the mortgage payments these households need to fork out has fallen to 29 per cent, well within the recommended range of how much each household should set aside for mortgage payments.
So, the above analysis shows that one, the top 30 per cent of Singapore households can still comfortably afford a non-landed private property. Two, from an investment point of view, property remains attractive for as long as interest rates remain low, rentals holding firm, and capital value being maintained.
There is only a small buffer for interest rates to go up before properties become unattractive as a rental yielding asset. Meanwhile, rentals are not expected to chalk up significant gains. Not helping matters are the substantial number of new stock coming onto the market in the next few years.
But what is unknown is the demand. Singapore's status as a happening and safe hub city in Asia is gaining traction. Given the small size of the city, a small increase in demand can translate into big price movements. No one can tell how the market will look like in the future. But for as long as one can afford to own a property with an ample margin of safety, it remains one of the best places to park one's money in, over the long term.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : Private home prices continue upward climb
Apr 24, 2010
Private home prices continue upward climb
Values shoot up 5.6% for Q1 but there are signs of moderation
By Joyce Teo
PRICES of private homes are still heading north with values shooting up 5.6 per cent for the first quarter.
Strong demand from buyers last month helped to push prices beyond the flash estimate of 5.1 per cent but there are signs of some moderation amid the market heat.
The rise for the three months to March 31 was below the 7.4 per cent increase in the fourth quarter of last year, according to the Urban Redevelopment Authority (URA) yesterday, but prices are now just 1.4 per cent below the 2008 peak.
They are also 3.5 per cent below the heights hit in 1996 but will likely breach these levels by the second quarter, said Colliers International research and advisory director Tay Huey Ying.
Despite the robust numbers, experts said cooling measures imposed last September and in February appeared to have helped rein in runaway price rises and put a brake on speculation.
Ms Tay also believes the continued rise in prices has deterred some buyers and so helped moderate values.
Detached homes were the star performer in the first quarter, rising 9.6 per cent, up from the 7.9 per cent climb in the previous quarter.
Overall, the landed homes segment rose 8.3 per cent, after a similar rise in the fourth quarter last year. Non-landed home prices rose by 4.9 per cent.
Since the second quarter last year, landed home prices have risen 35 per cent, noted DTZ's head of South-east Asia research, Ms Chua Chor Hoon.
City centre non-landed homes - the only sector where prices have yet to cross the 2008 peak - rose by 3.3 per cent in the first quarter.
Prices in the city fringes and suburban areas increased by 7.9 per cent and 4.3 per cent respectively.
In suburban areas, prices of uncompleted homes rose more than prices of resale homes as some developers have set benchmarks for new launches. Apartments at The Vision in the West Coast area, for instance, sold for more than $1,000 per sq ft (psf) in March.
Yet while prices are still rising, they are now supported by rising rents. First quarter rents jumped by 4.7 per cent compared to a 0.6 per cent climb in the previous quarter, which followed five quarters of decline.
The rise indicates that residential rents could have bottomed out and are on the road to recovery, said CBRE Research executive director Li Hiaw Ho.
'Anecdotal evidence suggests an increase in the hiring of expatriate staff in the financial services and biomedical sectors as economic fundamentals improve, which, in turn, have translated to the increase in rents,' he said.
Ms Tay believes rents can strengthen by 10 per cent to 15 per cent this year as more expatriates arrive.
The resale market was also active, with 4,261 units transacted, up 6.5 per cent from the previous quarter.
In the first quarter, the 806 sub-sales accounted for 8.5 per cent of total sales. CBRE pointed out that the proportion of sub-sales fell below 10 per cent for the first time since the first quarter of 2007. Sub-sales are seen as a proxy for speculation.
This has helped take some pressure off prices, said Ms Tay.
While high-end and mid-tier home prices are forecast to rise 15 per cent to 20 per cent this year, mass market homes are expected to see a smaller gain of around 10 per cent, said Ms Tay.
In the new launch market, buying remains keen for selected projects.
A tie-up between Hong Realty and City Developments sold about 300 units of the 429-unit Tree House in Chestnut Avenue on Thursday, priced at about $800 psf.
joyceteo@sph.com.sg
Private home prices continue upward climb
Values shoot up 5.6% for Q1 but there are signs of moderation
By Joyce Teo
PRICES of private homes are still heading north with values shooting up 5.6 per cent for the first quarter.
Strong demand from buyers last month helped to push prices beyond the flash estimate of 5.1 per cent but there are signs of some moderation amid the market heat.
The rise for the three months to March 31 was below the 7.4 per cent increase in the fourth quarter of last year, according to the Urban Redevelopment Authority (URA) yesterday, but prices are now just 1.4 per cent below the 2008 peak.
They are also 3.5 per cent below the heights hit in 1996 but will likely breach these levels by the second quarter, said Colliers International research and advisory director Tay Huey Ying.
Despite the robust numbers, experts said cooling measures imposed last September and in February appeared to have helped rein in runaway price rises and put a brake on speculation.
Ms Tay also believes the continued rise in prices has deterred some buyers and so helped moderate values.
Detached homes were the star performer in the first quarter, rising 9.6 per cent, up from the 7.9 per cent climb in the previous quarter.
Overall, the landed homes segment rose 8.3 per cent, after a similar rise in the fourth quarter last year. Non-landed home prices rose by 4.9 per cent.
Since the second quarter last year, landed home prices have risen 35 per cent, noted DTZ's head of South-east Asia research, Ms Chua Chor Hoon.
City centre non-landed homes - the only sector where prices have yet to cross the 2008 peak - rose by 3.3 per cent in the first quarter.
Prices in the city fringes and suburban areas increased by 7.9 per cent and 4.3 per cent respectively.
In suburban areas, prices of uncompleted homes rose more than prices of resale homes as some developers have set benchmarks for new launches. Apartments at The Vision in the West Coast area, for instance, sold for more than $1,000 per sq ft (psf) in March.
Yet while prices are still rising, they are now supported by rising rents. First quarter rents jumped by 4.7 per cent compared to a 0.6 per cent climb in the previous quarter, which followed five quarters of decline.
The rise indicates that residential rents could have bottomed out and are on the road to recovery, said CBRE Research executive director Li Hiaw Ho.
'Anecdotal evidence suggests an increase in the hiring of expatriate staff in the financial services and biomedical sectors as economic fundamentals improve, which, in turn, have translated to the increase in rents,' he said.
Ms Tay believes rents can strengthen by 10 per cent to 15 per cent this year as more expatriates arrive.
The resale market was also active, with 4,261 units transacted, up 6.5 per cent from the previous quarter.
In the first quarter, the 806 sub-sales accounted for 8.5 per cent of total sales. CBRE pointed out that the proportion of sub-sales fell below 10 per cent for the first time since the first quarter of 2007. Sub-sales are seen as a proxy for speculation.
This has helped take some pressure off prices, said Ms Tay.
While high-end and mid-tier home prices are forecast to rise 15 per cent to 20 per cent this year, mass market homes are expected to see a smaller gain of around 10 per cent, said Ms Tay.
In the new launch market, buying remains keen for selected projects.
A tie-up between Hong Realty and City Developments sold about 300 units of the 429-unit Tree House in Chestnut Avenue on Thursday, priced at about $800 psf.
joyceteo@sph.com.sg
ST : Big jump in subletting deals
Apr 24, 2010
Big jump in subletting deals
By Esther Teo
EVEN as Housing Board (HDB) flat prices show signs of moderating after frenetic rises last year, the HDB rental market seems to be bucking the trend with a sharp upswing in subletting deals.
The HDB's Resale Price Index rose by 2.8 per cent in the first quarter over the previous one - slower than the 3.9 per cent jump in the previous three months.
The level of resale deals sold above valuation also remained unchanged at a heady 93 per cent. Median cash-over-valuation was $25,000 - a marginal rise of $1,000 over the quarter before - while the number of resale deals fell 5 per cent to 8,484.
Experts say that the Government's aggressive moves to supply more flats are beginning to cool the sizzling market.
'The number of new build-to-order (BTO) flats to be launched by HDB this year in a variety of locations, supplemented by upcoming design, build and sell scheme and executive condominium projects, are expected to take some steam off the resale HDB market,' ERA Asia Pacific associate director Eugene Lim said.
Chesterton Suntec International's research and consultancy director Colin Tan noted the HDB plans to launch about 12,000 BTO flats in the first nine months of this year, up from its initial plan of the same number over the full year.
The number of subletting deals shot up by about 69 per cent from 3,902 in the fourth quarter of last year to 6,606 in the first quarter. This brings the total number of HDB flats approved for subletting to about 27,300 units in the first quarter.
'The increased volume of transactions could be due to a higher number of renewal cases, higher demand for subletting of flats and a greater public awareness of the need to seek HDB's authorisation for subletting of whole flats,' HDB said.
Median subletting rent levels were stable from the previous quarter with only slight rises for two-room and five-room flats. But the central region bucked the trend with some hefty rent rises.
Two-room flat rents fell slightly but three-, four- and five-roomers all posted jumps in median rents to $1,900, $2,300 and $3,300 respectively from $1,730, $2,250 and $2,500 the quarter before.
Mr Tan says this could be due to the integrated resort effect which might have driven prices up. 'Some people might also like to take a gamble and sell their properties at high prices and then rent to consolidate their cash,' he added.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that the limited number of centrally located flats was a key reason for the jump in rentals though he added the data pool was small.
Mr Lim said with strong economic growth and confidence, resale HDB prices are set to rise by 5 per cent to 8 per cent this year.
Big jump in subletting deals
By Esther Teo
EVEN as Housing Board (HDB) flat prices show signs of moderating after frenetic rises last year, the HDB rental market seems to be bucking the trend with a sharp upswing in subletting deals.
The HDB's Resale Price Index rose by 2.8 per cent in the first quarter over the previous one - slower than the 3.9 per cent jump in the previous three months.
The level of resale deals sold above valuation also remained unchanged at a heady 93 per cent. Median cash-over-valuation was $25,000 - a marginal rise of $1,000 over the quarter before - while the number of resale deals fell 5 per cent to 8,484.
Experts say that the Government's aggressive moves to supply more flats are beginning to cool the sizzling market.
'The number of new build-to-order (BTO) flats to be launched by HDB this year in a variety of locations, supplemented by upcoming design, build and sell scheme and executive condominium projects, are expected to take some steam off the resale HDB market,' ERA Asia Pacific associate director Eugene Lim said.
Chesterton Suntec International's research and consultancy director Colin Tan noted the HDB plans to launch about 12,000 BTO flats in the first nine months of this year, up from its initial plan of the same number over the full year.
The number of subletting deals shot up by about 69 per cent from 3,902 in the fourth quarter of last year to 6,606 in the first quarter. This brings the total number of HDB flats approved for subletting to about 27,300 units in the first quarter.
'The increased volume of transactions could be due to a higher number of renewal cases, higher demand for subletting of flats and a greater public awareness of the need to seek HDB's authorisation for subletting of whole flats,' HDB said.
Median subletting rent levels were stable from the previous quarter with only slight rises for two-room and five-room flats. But the central region bucked the trend with some hefty rent rises.
Two-room flat rents fell slightly but three-, four- and five-roomers all posted jumps in median rents to $1,900, $2,300 and $3,300 respectively from $1,730, $2,250 and $2,500 the quarter before.
Mr Tan says this could be due to the integrated resort effect which might have driven prices up. 'Some people might also like to take a gamble and sell their properties at high prices and then rent to consolidate their cash,' he added.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that the limited number of centrally located flats was a key reason for the jump in rentals though he added the data pool was small.
Mr Lim said with strong economic growth and confidence, resale HDB prices are set to rise by 5 per cent to 8 per cent this year.
BT : Resist excessive debt in buying property
Business Times - 24 Apr 2010
WEALTH INSIGHTS
Resist excessive debt in buying property
Property investment is not risk free, and leverage can cut both ways, magnifying gains and losses
Wong Sui Jau
General Manager
Fundsupermart.com
AS WITH all investments, it is always more risky to put all your eggs into just one basket. Lately, rising property prices has become a hot topic and many investors have jumped into the property market. While the gains in property prices, even among resale HDB flats, have been eye catching over the last one year, it is important not to become over-leveraged into property.
It is odd that many people keep large amounts in their bank savings accounts or fixed deposits, refusing to take any kind of risk with it, even for low-risk fixed income type investments. Yet, once the opportunity to buy a property crops up during a property boom, they unhesitatingly take out all that money and place it into the initial down payment for the property. Buying property as an investment entails risk just like every other investment. It is by no means guaranteed or anywhere near the same level of risk as money being parked in savings accounts or fixed deposits.
In fact, most people have to take up a housing loan to buy property. Thus, there is leverage involved. You are essentially borrowing money to make an investment. This can cut both ways. On the upside, you gain more without having to fork out the full sum. This is why people feel that you can make big money on property. It is because your gains are magnified relative to your actual investment, the rest are all made on borrowed money. The current very-low interest rates make it that much easier to borrow large amounts. However, on the flipside, if the property market falls and you are forced to sell at a loss at some point, then your losses would be magnified due to your loans.
As an example of this, let's assume you borrowed $800,000 to buy a $1,000,000 property. If that property fell by 20 per cent after which you were forced to sell at a loss, then your actual loss is tremendous. For an initial capital of $200,000, you have now lost $200,000, so all your capital has been wiped out. On top of that, you had to pay for the interest on the loan, plus the legal fees and taxes on purchase and sale of that property. This is why leverage cuts both ways and this makes property far more risky than money in savings accounts. Yet, while some people are not willing to risk investing in any other kind of financial instrument with their bank savings, they seem willing to throw it all into property as an investment, when the relative risks of property investing are far higher.
A further worrying trend is with investors using a bigger and bigger chunk of their wealth for property investing. We have often heard of this phrase 'don't put all your eggs into one basket'. Fund managers always buy a whole basket of stocks instead of just one, and no matter how much they like a stock, they can't put more than 10 per cent of the fund into that one stock. The same should go for property. No matter how much you are convinced that property prices are going up, or that the property you bought is going to shoot up, you shouldn't put all your money on this one thing. Many advisers recommend putting at most 30 per cent of your wealth into property. And this includes your monthly housing instalment payments as a percentage of your monthly income. With the rise in property prices over the last one year, I believe that there are many investors who are committing well over 30 per cent of their money towards property. This is because with physical property, you can't choose to buy it in bite-sized amounts. These days, a resale HDB flat, depending on location, can cost $500,000 to $600,000. And most condominiums are selling at over $1 million, if not higher. It is difficult to say you want to choose to buy 'only' a $400,000 condominium because you don't want to spend over 30 per cent of your wealth on just property. Right now, it would probably be next to impossible to find such a condominium.
Based on the Singapore Department of Statistics recent report on household income last year, the medium monthly household income for households with at least one working person was $5,398 in 2009. This means that for the median household earning $5,398 per month, if they want to stick to the 30 per cent rule, they shouldn't be spending more than $1,799 per month in housing instalments. Not unless they wish to over extend themselves so much into property investing.
Based on a monthly housing instalment payment of $1,800 for a loan period of 30 years at 2 per cent interest (I am assuming this would be closer to the normal rate after the super-low first year rate which most banks give), such a household should be servicing a loan of not more than $487,000. This would allow this median household to purchase a property worth just $608,750 assuming they borrow 80 per cent. And that means they have to fork out $121,750 in upfront capital, not counting taxes and agent fees.
These numbers also go up significantly as one goes for bigger, more expensive property. To buy a $1,000,000 property, which many condominiums are being priced at these days, with a 80 per cent loan, the monthly instalment payment at 2 per cent over 30 years will be $2,956 (around $3,000 per month). They also get worse if interest rates go up (please refer to table).
Thus, despite the desire to own property, it is important to do your sums first. While the potential for capital gain is there, try to resist the temptation to buy as big a house as you can. People max out the loan amount, and saddle themselves with huge monthly housing loan instalments in their desire to buy property. This is dangerous for two reasons. Firstly, the upfront capital you will have to commit is huge and there is absolutely no diversification. If something happens to that property, or perhaps that area becomes less attractive, or simply, the entire property market takes a knock, most of your money, locked up in that property, will then take a big hit.
Not only that, a big property loan is also a loan on all of your future income. It is not just the big upfront payment, you will be paying big sums to service the loan every other month once you choose to buy as big a property as you can. Your future income is a very risky thing to bet to the limit on in a quest to get a big house. All it takes is a change of a job, or a layoff, and it is possible that your income will accordingly change as well. But your bank doesn't care if your income happens to shrink, they will just repossess your house if you can't service the loan! So, unless you are absolutely sure that your job and future income is rock-solid secure (perhaps you work in the civil sector), otherwise, it is not advisable to put most of your income towards paying off your housing loan.
What if you have done your sums, realise that you can't quite start off with that dream condominium home immediately, but you really want to invest your money? There are many other investment options which don't quite require the kind of 'all bets on the table' scenario that buying a property often requires. You can buy property stocks, Reits, or property unit trusts, all of which can give you exposure to the property market without having to bet everything on just property alone and you can do all these without having to take on leverage. The leveraged aspect of property buying in general only makes things that much riskier. People read about hedge funds using leverage, about margin trading, derivative trading, and they associate all these with high risk. But consider that if you borrow 80 per cent to buy a property, then effectively, you have leveraged yourself up to five times your original capital in your investment. That, in itself, is a substantial amount of leverage.
In conclusion, the desire to own your own property is very strong in Singapore, and this trend is likely to continue. The rise in property prices over the last one year has also made many people jump into the property market in search of gains. But property investment is by no means risk free. In fact, due to the leveraged nature of having to take on housing loans to buy a property, investing in property can result in one losing all of one's capital or more if the property market goes south. As with any kind of market, there are cycles, and it is by no means a given that property can go only up. There are some properties bought at the height of the previous property highs in 1996 which are now only barely breaking even or still underwater (and this is a 14-year wait for these investors already). So, as with all investing, exercise prudence, diversify, and don't commit all of your money into just one thing alone even if its property. It is risky to be over-leveraged into property.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ADDING UP
The Pinnacle@Duxton, Singapore's tallest public housing project to date. These days, a resale HDB flat can cost $500,000 to $600,000
WEALTH INSIGHTS
Resist excessive debt in buying property
Property investment is not risk free, and leverage can cut both ways, magnifying gains and losses
Wong Sui Jau
General Manager
Fundsupermart.com
AS WITH all investments, it is always more risky to put all your eggs into just one basket. Lately, rising property prices has become a hot topic and many investors have jumped into the property market. While the gains in property prices, even among resale HDB flats, have been eye catching over the last one year, it is important not to become over-leveraged into property.
It is odd that many people keep large amounts in their bank savings accounts or fixed deposits, refusing to take any kind of risk with it, even for low-risk fixed income type investments. Yet, once the opportunity to buy a property crops up during a property boom, they unhesitatingly take out all that money and place it into the initial down payment for the property. Buying property as an investment entails risk just like every other investment. It is by no means guaranteed or anywhere near the same level of risk as money being parked in savings accounts or fixed deposits.
In fact, most people have to take up a housing loan to buy property. Thus, there is leverage involved. You are essentially borrowing money to make an investment. This can cut both ways. On the upside, you gain more without having to fork out the full sum. This is why people feel that you can make big money on property. It is because your gains are magnified relative to your actual investment, the rest are all made on borrowed money. The current very-low interest rates make it that much easier to borrow large amounts. However, on the flipside, if the property market falls and you are forced to sell at a loss at some point, then your losses would be magnified due to your loans.
As an example of this, let's assume you borrowed $800,000 to buy a $1,000,000 property. If that property fell by 20 per cent after which you were forced to sell at a loss, then your actual loss is tremendous. For an initial capital of $200,000, you have now lost $200,000, so all your capital has been wiped out. On top of that, you had to pay for the interest on the loan, plus the legal fees and taxes on purchase and sale of that property. This is why leverage cuts both ways and this makes property far more risky than money in savings accounts. Yet, while some people are not willing to risk investing in any other kind of financial instrument with their bank savings, they seem willing to throw it all into property as an investment, when the relative risks of property investing are far higher.
A further worrying trend is with investors using a bigger and bigger chunk of their wealth for property investing. We have often heard of this phrase 'don't put all your eggs into one basket'. Fund managers always buy a whole basket of stocks instead of just one, and no matter how much they like a stock, they can't put more than 10 per cent of the fund into that one stock. The same should go for property. No matter how much you are convinced that property prices are going up, or that the property you bought is going to shoot up, you shouldn't put all your money on this one thing. Many advisers recommend putting at most 30 per cent of your wealth into property. And this includes your monthly housing instalment payments as a percentage of your monthly income. With the rise in property prices over the last one year, I believe that there are many investors who are committing well over 30 per cent of their money towards property. This is because with physical property, you can't choose to buy it in bite-sized amounts. These days, a resale HDB flat, depending on location, can cost $500,000 to $600,000. And most condominiums are selling at over $1 million, if not higher. It is difficult to say you want to choose to buy 'only' a $400,000 condominium because you don't want to spend over 30 per cent of your wealth on just property. Right now, it would probably be next to impossible to find such a condominium.
Based on the Singapore Department of Statistics recent report on household income last year, the medium monthly household income for households with at least one working person was $5,398 in 2009. This means that for the median household earning $5,398 per month, if they want to stick to the 30 per cent rule, they shouldn't be spending more than $1,799 per month in housing instalments. Not unless they wish to over extend themselves so much into property investing.
Based on a monthly housing instalment payment of $1,800 for a loan period of 30 years at 2 per cent interest (I am assuming this would be closer to the normal rate after the super-low first year rate which most banks give), such a household should be servicing a loan of not more than $487,000. This would allow this median household to purchase a property worth just $608,750 assuming they borrow 80 per cent. And that means they have to fork out $121,750 in upfront capital, not counting taxes and agent fees.
These numbers also go up significantly as one goes for bigger, more expensive property. To buy a $1,000,000 property, which many condominiums are being priced at these days, with a 80 per cent loan, the monthly instalment payment at 2 per cent over 30 years will be $2,956 (around $3,000 per month). They also get worse if interest rates go up (please refer to table).
Thus, despite the desire to own property, it is important to do your sums first. While the potential for capital gain is there, try to resist the temptation to buy as big a house as you can. People max out the loan amount, and saddle themselves with huge monthly housing loan instalments in their desire to buy property. This is dangerous for two reasons. Firstly, the upfront capital you will have to commit is huge and there is absolutely no diversification. If something happens to that property, or perhaps that area becomes less attractive, or simply, the entire property market takes a knock, most of your money, locked up in that property, will then take a big hit.
Not only that, a big property loan is also a loan on all of your future income. It is not just the big upfront payment, you will be paying big sums to service the loan every other month once you choose to buy as big a property as you can. Your future income is a very risky thing to bet to the limit on in a quest to get a big house. All it takes is a change of a job, or a layoff, and it is possible that your income will accordingly change as well. But your bank doesn't care if your income happens to shrink, they will just repossess your house if you can't service the loan! So, unless you are absolutely sure that your job and future income is rock-solid secure (perhaps you work in the civil sector), otherwise, it is not advisable to put most of your income towards paying off your housing loan.
What if you have done your sums, realise that you can't quite start off with that dream condominium home immediately, but you really want to invest your money? There are many other investment options which don't quite require the kind of 'all bets on the table' scenario that buying a property often requires. You can buy property stocks, Reits, or property unit trusts, all of which can give you exposure to the property market without having to bet everything on just property alone and you can do all these without having to take on leverage. The leveraged aspect of property buying in general only makes things that much riskier. People read about hedge funds using leverage, about margin trading, derivative trading, and they associate all these with high risk. But consider that if you borrow 80 per cent to buy a property, then effectively, you have leveraged yourself up to five times your original capital in your investment. That, in itself, is a substantial amount of leverage.
In conclusion, the desire to own your own property is very strong in Singapore, and this trend is likely to continue. The rise in property prices over the last one year has also made many people jump into the property market in search of gains. But property investment is by no means risk free. In fact, due to the leveraged nature of having to take on housing loans to buy a property, investing in property can result in one losing all of one's capital or more if the property market goes south. As with any kind of market, there are cycles, and it is by no means a given that property can go only up. There are some properties bought at the height of the previous property highs in 1996 which are now only barely breaking even or still underwater (and this is a 14-year wait for these investors already). So, as with all investing, exercise prudence, diversify, and don't commit all of your money into just one thing alone even if its property. It is risky to be over-leveraged into property.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ADDING UP
The Pinnacle@Duxton, Singapore's tallest public housing project to date. These days, a resale HDB flat can cost $500,000 to $600,000
Subscribe to:
Posts (Atom)
Posts
