Apr 27, 2010
MRT network driving up land value
By Dickson Li
THE opening of new MRT stations has pushed up property prices across the island and made it hard for developers to find land at viable prices.
Wing Tai Asia property director Chng Chee Beow told a discussion yesterday: 'The transportation networking makes things much closer and that brings up property prices.
'The biggest headache facing developers now is this: How can you find land with a reasonable price, so that the final cost of the product is reasonable?'
The panel discussion was held as part of the graduation ceremony for students in the Singapore Management University (SMU)-Building and Construction Authority advanced management programme.
The three-month course is for professionals in the building industry.
Analysts at the event, which was held at SMU, believe that property prices still have some room to move.
'With 700 sq km of land, and five million people, (prices) can only go one way - up,' said CIMB-GK Research economist Song Seng Woon.
'Opportunities are opening up in Singapore - when we see residential properties popping up, we see businesses setting up shop too. For instance, we are now seeing stronger pick-up in office rental so, all in all, this will support the residential market as well.'
Keppel Land, for instance, still has most of its assets in Singapore because the value of its assets here is 'very high', even though it wants overseas earnings to hit 50 per cent of the total, said chief executive Kevin Wong yesterday.
'We have been investing in office buildings... Marina Bay Financial Centre is a good example,' he added.
'Other than China, we're quite big in Vietnam and we're looking very carefully at Indonesia, where we have quite a significant exposure.'
Mr Song also points to the larger growth story in the region to explain his optimism about property values.
The price rises are a 'combination of not just local buying, but also because we've seen growth around the region and we get more buyers coming in from Hong Kong and mainland China', he said.
Low interest rates have fuelled the boom in property markets across the region, and 'property is one asset that you can leverage up on', he says.
The threat of central banks starting to roll back on monetary stimulus by raising interest rates does not worry Mr Song.
'Even if rates go up, it's going to be in environment where there's growth opportunity and momentum. So any tightening at this point will be accompanied by strong growth,' he said.
Tuesday, April 27, 2010
ST : Govt proposes changes to en bloc sale rules
Apr 27, 2010
parliament
Govt proposes changes to en bloc sale rules
By Joyce Teo
COLLECTIVE property sales will be streamlined under proposed changes unveiled in Parliament yesterday, in the wake of a number of highly contentious drawn-out legal disputes.
At the same time, new checks and balances will be added into the legislation to ensure that the process is fair, and that unwilling sellers are not unduly harassed.
The Government proposes that if one attempt at an en bloc sale fails, then a two-year restricted period will apply, during which it will be far tougher to try again.
This is meant to discourage repeated attempts to sell when there is insufficient support among owners.
The proposals also aim to strip out some of the potentially time-wasting legal hurdles that may impede a sale.
Some recent attempted en bloc sales, such as Horizon Towers and Gillman Heights, have become bogged down in acrimonious disputes that have dragged on for some two years or more.
To speed up the process, the Strata Titles Board (STB) will be stripped of its role of making rulings in disputed cases.
The STB will continue its mediation role, but this will be limited to 60 days, again to expedite the resolution of disputes over contentious sales.
In other words, warring parties can head to the High Court earlier in the process to have their disputes resolved.
This will help reduce costs and time taken in resolving the more contentious cases, said the Law Ministry.
Government data shows that from 2006 to now, about 10 per cent of the 124 en bloc sale applications that went to the STB ended up in the High Court.
All these proposed changes were introduced in a Bill in Parliament yesterday, following feedback the Ministry of Law received on the Land Titles (Strata) Act.
The latest major overhaul of collective sale rules, aimed at achieving greater transparency, took effect in 2007.
Some of the recent en bloc sale disputes have centred on the role and motives of sales committee members.
The Government proposes that committee members be subject to stricter disclosure requirements. They will have to declare the extent to which they, their immediate family members and related firms have interests in the strata development and the date of purchase of the units.
This, said the Law Ministry, will allow owners to make a more informed choice on who they want to elect.
The proposals also aim to streamline the en bloc sale process at the stage of holding extraordinary general meetings (EGMs) of owners.
The Government proposes doing away with some EGM requirements, which industry experts applaud as a practical move. For instance, EGMs will not have to be called to update owners on consent levels, sales proposals, bid amounts received, or the terms and conditions of the sale and purchase agreement (when the developer buys the site).
This information can be supplied at regular meetings, which are easier to call as no decision-making is required from owners on these matters.
EGMs would still be required to appoint lawyers, consultants, approve the apportionment method, and the terms and conditions of the collective sale agreement (when owners agree to sell).
The two-year restricted period addresses complaints of owners who say a small number of keen sellers can cause trouble by repeatedly trying to sell, thereby wasting management funds.
During these two years, the first retry to convene an EGM to reappoint a sales committee will require the agreement of 50 per cent of the owners, up from the usual level of 20 per cent by share value or 25 per cent by the total number of owners.
Any subsequent attempts to convene EGMs within this period will need 80 per cent. If there is another failed attempt, the stricter rules will apply for another two years.
One critic of this proposal is Credo Real Estate managing director Karamjit Singh, who said this is 'a hindrance to majority owners seeking to reinitiate a sale in a booming market, as they may miss the sale opportunity'.
Said law firm Rodyk & Davidson partner Norman Ho: 'The changes tidy up the whole process. Frivolous cases where people try and try can be avoided, and EGMs can be cut down from at least four currently to two, making the process easier to handle.'
These proposed changes are expected to take effect in June this year.
parliament
Govt proposes changes to en bloc sale rules
By Joyce Teo
COLLECTIVE property sales will be streamlined under proposed changes unveiled in Parliament yesterday, in the wake of a number of highly contentious drawn-out legal disputes.
At the same time, new checks and balances will be added into the legislation to ensure that the process is fair, and that unwilling sellers are not unduly harassed.
The Government proposes that if one attempt at an en bloc sale fails, then a two-year restricted period will apply, during which it will be far tougher to try again.
This is meant to discourage repeated attempts to sell when there is insufficient support among owners.
The proposals also aim to strip out some of the potentially time-wasting legal hurdles that may impede a sale.
Some recent attempted en bloc sales, such as Horizon Towers and Gillman Heights, have become bogged down in acrimonious disputes that have dragged on for some two years or more.
To speed up the process, the Strata Titles Board (STB) will be stripped of its role of making rulings in disputed cases.
The STB will continue its mediation role, but this will be limited to 60 days, again to expedite the resolution of disputes over contentious sales.
In other words, warring parties can head to the High Court earlier in the process to have their disputes resolved.
This will help reduce costs and time taken in resolving the more contentious cases, said the Law Ministry.
Government data shows that from 2006 to now, about 10 per cent of the 124 en bloc sale applications that went to the STB ended up in the High Court.
All these proposed changes were introduced in a Bill in Parliament yesterday, following feedback the Ministry of Law received on the Land Titles (Strata) Act.
The latest major overhaul of collective sale rules, aimed at achieving greater transparency, took effect in 2007.
Some of the recent en bloc sale disputes have centred on the role and motives of sales committee members.
The Government proposes that committee members be subject to stricter disclosure requirements. They will have to declare the extent to which they, their immediate family members and related firms have interests in the strata development and the date of purchase of the units.
This, said the Law Ministry, will allow owners to make a more informed choice on who they want to elect.
The proposals also aim to streamline the en bloc sale process at the stage of holding extraordinary general meetings (EGMs) of owners.
The Government proposes doing away with some EGM requirements, which industry experts applaud as a practical move. For instance, EGMs will not have to be called to update owners on consent levels, sales proposals, bid amounts received, or the terms and conditions of the sale and purchase agreement (when the developer buys the site).
This information can be supplied at regular meetings, which are easier to call as no decision-making is required from owners on these matters.
EGMs would still be required to appoint lawyers, consultants, approve the apportionment method, and the terms and conditions of the collective sale agreement (when owners agree to sell).
The two-year restricted period addresses complaints of owners who say a small number of keen sellers can cause trouble by repeatedly trying to sell, thereby wasting management funds.
During these two years, the first retry to convene an EGM to reappoint a sales committee will require the agreement of 50 per cent of the owners, up from the usual level of 20 per cent by share value or 25 per cent by the total number of owners.
Any subsequent attempts to convene EGMs within this period will need 80 per cent. If there is another failed attempt, the stricter rules will apply for another two years.
One critic of this proposal is Credo Real Estate managing director Karamjit Singh, who said this is 'a hindrance to majority owners seeking to reinitiate a sale in a booming market, as they may miss the sale opportunity'.
Said law firm Rodyk & Davidson partner Norman Ho: 'The changes tidy up the whole process. Frivolous cases where people try and try can be avoided, and EGMs can be cut down from at least four currently to two, making the process easier to handle.'
These proposed changes are expected to take effect in June this year.
ST : Up to market to set prices of resale flats
Apr 27, 2010
parliament
Up to market to set prices of resale flats
By Esther Teo
NATIONAL Development Minister Mah Bow Tan said the Government has no intention of trying to fine-tune HDB policy for first-time buyers, preferring to leave it to the market.
His comments to Parliament yesterday also included the release of sales figures for the past two years that give a snapshot of how the markets for new and resale flats are faring.
He told MPs that about 8,000 first-time buyers bought resale HDB flats in each of the past two calendar years. This is out of about an average of 18,000 flats sold in each of those years.
Of the resale buyers, at least 6,800 had a monthly household income of less than $8,000, meaning they qualified for the CPF housing grant.
The new/resale ratio has fluctuated over the years. When resale prices were lower, such flats comprised as much as 70 per cent of total sales, but the proportion is coming down now as resale prices head north, he said.
Mr Mah was responding to a question from MP Lim Wee Kiak (Sembawang GRC), who asked if the Government will take steps to encourage more first-time resale buyers to allow for 'the renewing of estates'.
Dr Lim also asked if the Government would consider increasing the CPF housing grant or introducing another form of financing for the cash-over-valuation (COV) as a way of increasing the incentive for buying a resale flat.
Mr Mah reiterated that as the Government did not have a particular view on the new/resale ratio, there was no need to introduce incentives.
'The most important point is whether we have enough flats overall for first-timers to purchase, whether new or resale... I don't think we want to skew the decision either way; we will let the market take care of it.'
While build-to-order flats were priced lower due to subsidies, they required a longer waiting time and were mostly in non-mature estates, which might not suit some buyers, he said.
The minister also addressed MP Ho Geok Choo's (West Coast GRC) suggestion that the valuation process be reviewed to address high COVs.
Mr Mah said: 'The resale flat prices must be set by the market and the COV is part and parcel of the resale flat price.'
He added that there was nothing unusual about having a COV in the HDB resale market. 'Just last year, we had COVs which were either zero or negative, which reflected the market situation at that time. I dare say that as the market cools down and as supply catches up with demand, the COV prices will start to moderate as well.'
parliament
Up to market to set prices of resale flats
By Esther Teo
NATIONAL Development Minister Mah Bow Tan said the Government has no intention of trying to fine-tune HDB policy for first-time buyers, preferring to leave it to the market.
His comments to Parliament yesterday also included the release of sales figures for the past two years that give a snapshot of how the markets for new and resale flats are faring.
He told MPs that about 8,000 first-time buyers bought resale HDB flats in each of the past two calendar years. This is out of about an average of 18,000 flats sold in each of those years.
Of the resale buyers, at least 6,800 had a monthly household income of less than $8,000, meaning they qualified for the CPF housing grant.
The new/resale ratio has fluctuated over the years. When resale prices were lower, such flats comprised as much as 70 per cent of total sales, but the proportion is coming down now as resale prices head north, he said.
Mr Mah was responding to a question from MP Lim Wee Kiak (Sembawang GRC), who asked if the Government will take steps to encourage more first-time resale buyers to allow for 'the renewing of estates'.
Dr Lim also asked if the Government would consider increasing the CPF housing grant or introducing another form of financing for the cash-over-valuation (COV) as a way of increasing the incentive for buying a resale flat.
Mr Mah reiterated that as the Government did not have a particular view on the new/resale ratio, there was no need to introduce incentives.
'The most important point is whether we have enough flats overall for first-timers to purchase, whether new or resale... I don't think we want to skew the decision either way; we will let the market take care of it.'
While build-to-order flats were priced lower due to subsidies, they required a longer waiting time and were mostly in non-mature estates, which might not suit some buyers, he said.
The minister also addressed MP Ho Geok Choo's (West Coast GRC) suggestion that the valuation process be reviewed to address high COVs.
Mr Mah said: 'The resale flat prices must be set by the market and the COV is part and parcel of the resale flat price.'
He added that there was nothing unusual about having a COV in the HDB resale market. 'Just last year, we had COVs which were either zero or negative, which reflected the market situation at that time. I dare say that as the market cools down and as supply catches up with demand, the COV prices will start to moderate as well.'
ST : New HDB flats still affordable: Mah
Apr 27, 2010
parliament
New HDB flats still affordable: Mah
Prices within the means of the various income groups
By Sue-Ann Chia
THE hot issue of high property prices received another airing in Parliament yesterday, with the Government releasing fresh figures to show new flats are affordable to all first-time buyers.
In giving the numbers, National Development Minister Mah Bow Tan also addressed the issue of how findings can change when different base years are used to look at the HDB resale price index and household incomes.
He was replying to Mr Lim Biow Chuan (Marine Parade GRC) who had asked for housing affordability data based on how the median household income has risen in comparison to the HDB resale price index. Mr Lim also wanted to know if resale prices had risen faster than the growth of median household income in the last decade when different base years are used.
The issue of the relative pace of price and income increases first came under scrutiny early this month when Mr Mah released the two sets of figures in a Straits Times interview.
They showed that HDB home prices are not beyond reach. This is because the resale price index has risen by an average of 3.2 per cent annually from 1999 to last year, lower than the 3.9 per cent increase in median household income.
But opposition Reform Party member Hazel Poa later wrote in a blog post that the results would be different if the base year is changed from 1999, to say 2001 or 2006.
Mr Mah did not refer to Ms Poa, but said in his reply to Mr Lim: 'It is possible that prices of resale flats have risen faster than incomes when indexed against different years.'
Using more recent years like 2004 to index the growth, he said the an-nual growth in the resale price index exceeded income growth, owing to strong demand and the quick economic recovery (see chart).
But he also pointed out that if 1995 was used as the base year, it would yield a different result as resale flat prices rose by 2.8 per cent, lower than income growth of 3.2 per cent.
'Ultimately, what matters is whether at all times, first-time home buyers are able to afford HDB flats,' he said.
To that, the answer is 'yes', he said, as the Government has done two things to ensure new flats are not priced out of reach. One, new flats of different sizes and in different locations for different income groups are always available. Two, setting these flat prices so that they are well within the means of buyers in various income ceiling groups.
Elaborating on how new flats are affordable, he referred to a formula called the debt service ratio (DSR). It compares the monthly mortgage instalment to the monthly household income. The average DSR for new flats launched in the last six months when property prices surged ranged from 17 per cent to 25 per cent (see table). This applies to new flats in non-mature estates. For those in more central locations and mature estates, the DSR is around 30 per cent.
These figures are within the international benchmark for housing affordability, which ranges from 30 per cent to 35 per cent, he said.
But Nominated MP Paulin Straughan pointed out that the majority of flat owners seem to be using most of their Central Provident Fund (CPF) savings to pay for their home loans, with those living in three- and four-room flats having to top them up with cash. Will this lead to insufficient retirement savings, she asked.
Mr Mah said: 'I have to emphasise that buying an HDB flat is not an expenditure, it is an investment...because when you buy an HDB flat, at the end of the tenure of the flat or towards your retirement, that HDB flat is a very significant store of value.'
Citing a Department of Statistics survey, he said on average a Singaporean family has more than $100,000 in asset value in their flat. If that asset is monetised, they need not fear using up their CPF savings to pay for it.
'This is another vindication of our home ownership policy because if we were to use that same amount of money - 25 per cent of income - to rent rather than to buy a place, then at the end of 20 or 30 years, you will not be having this asset which you can use for retirement income,' said Mr Mah.
On whether the $8,000 household income ceiling for new flat buyers will be raised, he said the answer is still 'no'.
'We've a finite housing budget... and at the household income ceiling of $8,000 today, we're actually subsidising about 80 per cent of the population,' he said.
sueann@sph.com.sg
parliament
New HDB flats still affordable: Mah
Prices within the means of the various income groups
By Sue-Ann Chia
THE hot issue of high property prices received another airing in Parliament yesterday, with the Government releasing fresh figures to show new flats are affordable to all first-time buyers.
In giving the numbers, National Development Minister Mah Bow Tan also addressed the issue of how findings can change when different base years are used to look at the HDB resale price index and household incomes.
He was replying to Mr Lim Biow Chuan (Marine Parade GRC) who had asked for housing affordability data based on how the median household income has risen in comparison to the HDB resale price index. Mr Lim also wanted to know if resale prices had risen faster than the growth of median household income in the last decade when different base years are used.
The issue of the relative pace of price and income increases first came under scrutiny early this month when Mr Mah released the two sets of figures in a Straits Times interview.
They showed that HDB home prices are not beyond reach. This is because the resale price index has risen by an average of 3.2 per cent annually from 1999 to last year, lower than the 3.9 per cent increase in median household income.
But opposition Reform Party member Hazel Poa later wrote in a blog post that the results would be different if the base year is changed from 1999, to say 2001 or 2006.
Mr Mah did not refer to Ms Poa, but said in his reply to Mr Lim: 'It is possible that prices of resale flats have risen faster than incomes when indexed against different years.'
Using more recent years like 2004 to index the growth, he said the an-nual growth in the resale price index exceeded income growth, owing to strong demand and the quick economic recovery (see chart).
But he also pointed out that if 1995 was used as the base year, it would yield a different result as resale flat prices rose by 2.8 per cent, lower than income growth of 3.2 per cent.
'Ultimately, what matters is whether at all times, first-time home buyers are able to afford HDB flats,' he said.
To that, the answer is 'yes', he said, as the Government has done two things to ensure new flats are not priced out of reach. One, new flats of different sizes and in different locations for different income groups are always available. Two, setting these flat prices so that they are well within the means of buyers in various income ceiling groups.
Elaborating on how new flats are affordable, he referred to a formula called the debt service ratio (DSR). It compares the monthly mortgage instalment to the monthly household income. The average DSR for new flats launched in the last six months when property prices surged ranged from 17 per cent to 25 per cent (see table). This applies to new flats in non-mature estates. For those in more central locations and mature estates, the DSR is around 30 per cent.
These figures are within the international benchmark for housing affordability, which ranges from 30 per cent to 35 per cent, he said.
But Nominated MP Paulin Straughan pointed out that the majority of flat owners seem to be using most of their Central Provident Fund (CPF) savings to pay for their home loans, with those living in three- and four-room flats having to top them up with cash. Will this lead to insufficient retirement savings, she asked.
Mr Mah said: 'I have to emphasise that buying an HDB flat is not an expenditure, it is an investment...because when you buy an HDB flat, at the end of the tenure of the flat or towards your retirement, that HDB flat is a very significant store of value.'
Citing a Department of Statistics survey, he said on average a Singaporean family has more than $100,000 in asset value in their flat. If that asset is monetised, they need not fear using up their CPF savings to pay for it.
'This is another vindication of our home ownership policy because if we were to use that same amount of money - 25 per cent of income - to rent rather than to buy a place, then at the end of 20 or 30 years, you will not be having this asset which you can use for retirement income,' said Mr Mah.
On whether the $8,000 household income ceiling for new flat buyers will be raised, he said the answer is still 'no'.
'We've a finite housing budget... and at the household income ceiling of $8,000 today, we're actually subsidising about 80 per cent of the population,' he said.
sueann@sph.com.sg
ST : China mulls over tax on residential property
Apr 27, 2010
China mulls over tax on residential property
BEIJING: China is likely to introduce a property tax on residential housing in the first half of the year as part of its attempts to curb spiralling real estate prices, state media reported yesterday.
Such a move would mark a significant escalation of its struggle to cool down a booming property market now widely described as a bubble, the Wall Street Journal said.
The levy would be imposed on a trial basis in Beijing, Shanghai, Chongqing and Shenzhen, the Economic Observer newspaper said, citing sources.
Government agencies including the central bank, the Finance Ministry and the State Administration of Taxation are working out when to implement the tax, it said.
China currently has no such levy on residential property. It does impose a 1.2 per cent tax on 70 per cent to 90 per cent of the value of commercial real estate.
Details of the new tax were not yet finalised, the report said, such as whether it would be levied against all homes or merely on additional residences purchased by an individual home buyer beyond the first property.
The report came after Beijing recently announced a range of new measures to prevent the growth of asset bubbles and soaring property prices.
Official data showed real estate prices in 70 cities jumped 11.7 per cent last month, the fastest year-on-year rise for a single month in five years.
Beijing recently tightened curbs on advance sales of new projects, introduced new restrictions on loans for third-home purchases, and raised minimum down payments for second homes.
State media reports last week said banking regulators had ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein in speculation.
How the authorities handle any property tax will have significant implications for China's economy, and will ripple through global markets, the Journal said in its report yesterday.
It added that the construction boom is the main driver of the recovery in China and underpins the country's demand for raw materials, which has helped support global prices for commodities such as copper and iron ore.
Opponents fear new taxes would shatter confidence in the real estate market, leading to a bust that would damage the entire economy, it said.
AGENCE FRANCE-PRESSE
With additional information from the Wall Street Journal
China mulls over tax on residential property
BEIJING: China is likely to introduce a property tax on residential housing in the first half of the year as part of its attempts to curb spiralling real estate prices, state media reported yesterday.
Such a move would mark a significant escalation of its struggle to cool down a booming property market now widely described as a bubble, the Wall Street Journal said.
The levy would be imposed on a trial basis in Beijing, Shanghai, Chongqing and Shenzhen, the Economic Observer newspaper said, citing sources.
Government agencies including the central bank, the Finance Ministry and the State Administration of Taxation are working out when to implement the tax, it said.
China currently has no such levy on residential property. It does impose a 1.2 per cent tax on 70 per cent to 90 per cent of the value of commercial real estate.
Details of the new tax were not yet finalised, the report said, such as whether it would be levied against all homes or merely on additional residences purchased by an individual home buyer beyond the first property.
The report came after Beijing recently announced a range of new measures to prevent the growth of asset bubbles and soaring property prices.
Official data showed real estate prices in 70 cities jumped 11.7 per cent last month, the fastest year-on-year rise for a single month in five years.
Beijing recently tightened curbs on advance sales of new projects, introduced new restrictions on loans for third-home purchases, and raised minimum down payments for second homes.
State media reports last week said banking regulators had ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein in speculation.
How the authorities handle any property tax will have significant implications for China's economy, and will ripple through global markets, the Journal said in its report yesterday.
It added that the construction boom is the main driver of the recovery in China and underpins the country's demand for raw materials, which has helped support global prices for commodities such as copper and iron ore.
Opponents fear new taxes would shatter confidence in the real estate market, leading to a bust that would damage the entire economy, it said.
AGENCE FRANCE-PRESSE
With additional information from the Wall Street Journal
BT : Property financing tightened up a notch
Business Times - 27 Apr 2010
Property financing tightened up a notch
(HONG KONG) China has tightened real-estate financing by requiring developers to submit fund-raising plans for review, stepping up efforts to prevent a bubble even as the central bank pledged to maintain an 'easy' monetary policy.
The China Securities Regulatory Commission has sent financing requests from 41 companies to the Ministry of Land and Resources for reviews of land-use compliance, according to a statement posted on a government website on April 24.
Central bank governor Zhou Xiaochuan said in a statement at an International Monetary Fund meeting in Washington the same day that China will keep its 'relatively easy' monetary policy.
The two statements reflect policy makers' aim of both damping a surge in domestic property prices and sustaining an economic rebound amid uncertainty about the strength of a global recovery. The latest move adds to curbs on loans for third-home purchases, increased downpayment requirements and higher mortgage rates announced this month.
'The government only wants to curtail the excessive gains in some areas,' Li Daokui, an adviser to the central bank, said last week. 'Measures to increase home supply will follow.'
Any declines in property prices would add to a slump in equities in hurting returns on savings. China's one-year bank deposit rate has also fallen below the pace of inflation, eroding households' purchasing power.
The real-estate 'crackdown' will spur 'large pools of funds to enter the stock market', analysts led by Yu Jun at Beijing-based Citic Securities Co, China's largest brokerage, said in a report. An estimated 400 billion yuan (S$80.1 billion) may flow out of property into equities, with consumer-related shares with small capitalisations among those benefiting, Citic says.
Property prices in 70 cities went up by 11.7 per cent in March, the most since comparable records began in 2005, and China's economy expanded 11.9 per cent from a year earlier in the first quarter, suggesting tighter policies are needed.
Chinese banks lent a record 9.6 trillion yuan last year, and introduced a four trillion yuan stimulus package, to bolster growth through the global financial crisis. Officials remain unconvinced that the sustainability of the world economic recovery is assured.
'The outlook for the global economy faces many uncertainties,' Mr Zhou said in his statement. 'We will continue to implement a proactive fiscal policy and a relatively easy monetary policy, and will continuously improve the policy package to respond to the international financial crisis to maintain good momentum of the economic recovery.'
China's equities have fallen this year because of concern ending government stimulus along with measures to curb inflation will hurt economic growth.
The Shanghai Composite index is down 9 per cent in 2010, the world's eighth-worst performer. A gauge of property stocks in Shanghai has declined by more than 18 per cent.
Companies planning to invest in real estate through equity financing are subject to the reviews.
Companies with real-estate business that are planning to pay back bank loans or boosting operating capital are also required to submit equity financing plans to the ministry, China's securities regulator said.
The ministry will provide official comment on the companies' financing plans to the stock regulator after reviewing whether land purchases were made legally, according to the statement. It will also review whether there are cases of real estate being left idle and changes in the use of properties.
Developing nations with faster growth rates need to maintain 'good recovery momentum while also preventing the accumulation of asset bubbles, requiring the timely consideration of an exit from stimulus policies', Mr Zhou said.
China will continue with 'stable and relatively rapid' growth this year, while balancing 'inflation expectations', Mr Zhou said. The central government projects gross domestic product growth of about 8 per cent and an inflation rate of 3 per cent this year, the statement said.
People's Bank of China deputy governor Yi Gang said on April 24 that China should take 'early signs of inflation seriously' amid 'robust' economic growth.
China's policy makers raised the bank reserve ratio twice this year to contain inflation and slow loan growth. To cool the housing market, China on April 20 ordered developers not to take deposits for sales of uncompleted flats. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Property financing tightened up a notch
(HONG KONG) China has tightened real-estate financing by requiring developers to submit fund-raising plans for review, stepping up efforts to prevent a bubble even as the central bank pledged to maintain an 'easy' monetary policy.
The China Securities Regulatory Commission has sent financing requests from 41 companies to the Ministry of Land and Resources for reviews of land-use compliance, according to a statement posted on a government website on April 24.
Central bank governor Zhou Xiaochuan said in a statement at an International Monetary Fund meeting in Washington the same day that China will keep its 'relatively easy' monetary policy.
The two statements reflect policy makers' aim of both damping a surge in domestic property prices and sustaining an economic rebound amid uncertainty about the strength of a global recovery. The latest move adds to curbs on loans for third-home purchases, increased downpayment requirements and higher mortgage rates announced this month.
'The government only wants to curtail the excessive gains in some areas,' Li Daokui, an adviser to the central bank, said last week. 'Measures to increase home supply will follow.'
Any declines in property prices would add to a slump in equities in hurting returns on savings. China's one-year bank deposit rate has also fallen below the pace of inflation, eroding households' purchasing power.
The real-estate 'crackdown' will spur 'large pools of funds to enter the stock market', analysts led by Yu Jun at Beijing-based Citic Securities Co, China's largest brokerage, said in a report. An estimated 400 billion yuan (S$80.1 billion) may flow out of property into equities, with consumer-related shares with small capitalisations among those benefiting, Citic says.
Property prices in 70 cities went up by 11.7 per cent in March, the most since comparable records began in 2005, and China's economy expanded 11.9 per cent from a year earlier in the first quarter, suggesting tighter policies are needed.
Chinese banks lent a record 9.6 trillion yuan last year, and introduced a four trillion yuan stimulus package, to bolster growth through the global financial crisis. Officials remain unconvinced that the sustainability of the world economic recovery is assured.
'The outlook for the global economy faces many uncertainties,' Mr Zhou said in his statement. 'We will continue to implement a proactive fiscal policy and a relatively easy monetary policy, and will continuously improve the policy package to respond to the international financial crisis to maintain good momentum of the economic recovery.'
China's equities have fallen this year because of concern ending government stimulus along with measures to curb inflation will hurt economic growth.
The Shanghai Composite index is down 9 per cent in 2010, the world's eighth-worst performer. A gauge of property stocks in Shanghai has declined by more than 18 per cent.
Companies planning to invest in real estate through equity financing are subject to the reviews.
Companies with real-estate business that are planning to pay back bank loans or boosting operating capital are also required to submit equity financing plans to the ministry, China's securities regulator said.
The ministry will provide official comment on the companies' financing plans to the stock regulator after reviewing whether land purchases were made legally, according to the statement. It will also review whether there are cases of real estate being left idle and changes in the use of properties.
Developing nations with faster growth rates need to maintain 'good recovery momentum while also preventing the accumulation of asset bubbles, requiring the timely consideration of an exit from stimulus policies', Mr Zhou said.
China will continue with 'stable and relatively rapid' growth this year, while balancing 'inflation expectations', Mr Zhou said. The central government projects gross domestic product growth of about 8 per cent and an inflation rate of 3 per cent this year, the statement said.
People's Bank of China deputy governor Yi Gang said on April 24 that China should take 'early signs of inflation seriously' amid 'robust' economic growth.
China's policy makers raised the bank reserve ratio twice this year to contain inflation and slow loan growth. To cool the housing market, China on April 20 ordered developers not to take deposits for sales of uncompleted flats. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : The shoeshine boy's hottest tip: China property
Business Times - 27 Apr 2010
The shoeshine boy's hottest tip: China property
By ANDY XIE
'MY maid just asked for leave,' a friend in Beijing told me recently. 'She's rushing home to buy property. I suggested she borrow 70 per cent, so she could cap the loss.' It wasn't the first time I had heard such a story in China. Friends in Shanghai have told me similar ones. It seems all the housemaids are rushing into the market at the same time.
There are benefits to housekeeping for fund managers. China's housemaids may be Asia's answer to the shoeshine boy whose stock tips prompted Joseph Kennedy to sell his shares before the Wall Street Crash of 1929.
Another friend recently vacationed in the southern island-resort city of Sanya in Hainan province and felt compelled to visit a development sales office. Everyone she knew had bought there already. It's either buy or be unsocial. 'You should buy two,' the sharp sales girl suggested. 'In three years, the price will have doubled. You could sell one and get one free.' How could anyone resist an offer like that? The evidence in official-corruption cases no longer involves cash stashed in refrigerators or starlet mistresses in Versace. The evidence is now apartments. One mid-level official in Shanghai was caught with 24 of them.
First, let me make it perfectly clear that calling China's real-estate market a 'bubble' isn't denying China's development success. As optimism is an essential ingredient in a bubble, economic success is a necessary condition. Nor am I saying that prices will drop tomorrow. A bubble evolves and bursts in its own time. When it is about to burst, I'll let you know.
Expectations of a Chinese currency revaluation are, perhaps, the most important force inflating the bubble. First, it plays to latent human desire for a free lunch. You just need to exchange your money for yuan. According to all the experts on Wall Street, you can only gain. The money has been gushing into China.
Second, the revaluation story has kept Chinese money inside the country. The US dollar has always been the safe-haven asset for Chinese. This is why Chinese banks had a large dollar deposit base. Of course, anybody who was somebody had dollars offshore. Now all that money is back. More importantly, any income, legal or otherwise, now stays in China.
Why would corrupt officials keep apartments rather than cash? Well, according to Wall Street, the yuan is going to appreciate. So holding dollars is out of the question. And why hold Chinese cash when property prices are always going up? The corruption money can be turbocharged in the real-estate market. Only when they are caught do they understand the downside of holding fixed assets.
The massive liquidity waves have prompted Chinese banks to lend as much as possible. One Wall Street tradition adopted quickly in China was bonus recipients signing company cheques to themselves. All you need is to report eye-popping quarterly earnings. It is an easier game than on Wall Street: The Chinese government keeps the lending spread wide by fixing both the deposit and lending rates. You just have to lend. The earnings will follow. Might the loans turn bad in three years?
Well, I'm not going to give back my bonuses, right? For a bubble to last, you need a force to hold it together when it stumbles. Wall Street kept pumping out new natural or synthetic products to turn debt into demand for assets. Local governments play this role in China.
When it comes to interested parties, Chinese governments are knee-deep in the bubble. They get all the money from land sales. Land values have risen to half of the development cost. In hot spots, land costs more than the development - the governments want to collect the future price gain immediately.
When properties are sold, transaction and profit taxes kick in. Developers pay more levies to the governments than they earn. When developers finally book their earnings, they must put it to work, as good Wall Street analysts would recommend, so they buy land.
As land prices are much higher, their measly earnings aren't enough, so they have to borrow. The governments get all their earnings and debt repayments. Can you blame them for boosting the market whenever it slips? Land obsession is another force at work.
China was a rural economy not so long ago. The most important asset was always land. 'Be a government official and become rich' is a millennium-old Chinese saying. It didn't explain where the money went. It always went into agricultural land. In cities, you only see buildings, not paddy fields. But the buildings sit on land.
Now housemaids are in the market. Who else? Never underestimate 1.3 billion people. Welcome to China, the land of getting rich quick. -- Bloomberg
The writer is an independent economist based in Shanghai and was formerly Morgan Stanley's chief economist for the Asia-Pacific region. The opinions expressed are his own
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The shoeshine boy's hottest tip: China property
By ANDY XIE
'MY maid just asked for leave,' a friend in Beijing told me recently. 'She's rushing home to buy property. I suggested she borrow 70 per cent, so she could cap the loss.' It wasn't the first time I had heard such a story in China. Friends in Shanghai have told me similar ones. It seems all the housemaids are rushing into the market at the same time.
There are benefits to housekeeping for fund managers. China's housemaids may be Asia's answer to the shoeshine boy whose stock tips prompted Joseph Kennedy to sell his shares before the Wall Street Crash of 1929.
Another friend recently vacationed in the southern island-resort city of Sanya in Hainan province and felt compelled to visit a development sales office. Everyone she knew had bought there already. It's either buy or be unsocial. 'You should buy two,' the sharp sales girl suggested. 'In three years, the price will have doubled. You could sell one and get one free.' How could anyone resist an offer like that? The evidence in official-corruption cases no longer involves cash stashed in refrigerators or starlet mistresses in Versace. The evidence is now apartments. One mid-level official in Shanghai was caught with 24 of them.
First, let me make it perfectly clear that calling China's real-estate market a 'bubble' isn't denying China's development success. As optimism is an essential ingredient in a bubble, economic success is a necessary condition. Nor am I saying that prices will drop tomorrow. A bubble evolves and bursts in its own time. When it is about to burst, I'll let you know.
Expectations of a Chinese currency revaluation are, perhaps, the most important force inflating the bubble. First, it plays to latent human desire for a free lunch. You just need to exchange your money for yuan. According to all the experts on Wall Street, you can only gain. The money has been gushing into China.
Second, the revaluation story has kept Chinese money inside the country. The US dollar has always been the safe-haven asset for Chinese. This is why Chinese banks had a large dollar deposit base. Of course, anybody who was somebody had dollars offshore. Now all that money is back. More importantly, any income, legal or otherwise, now stays in China.
Why would corrupt officials keep apartments rather than cash? Well, according to Wall Street, the yuan is going to appreciate. So holding dollars is out of the question. And why hold Chinese cash when property prices are always going up? The corruption money can be turbocharged in the real-estate market. Only when they are caught do they understand the downside of holding fixed assets.
The massive liquidity waves have prompted Chinese banks to lend as much as possible. One Wall Street tradition adopted quickly in China was bonus recipients signing company cheques to themselves. All you need is to report eye-popping quarterly earnings. It is an easier game than on Wall Street: The Chinese government keeps the lending spread wide by fixing both the deposit and lending rates. You just have to lend. The earnings will follow. Might the loans turn bad in three years?
Well, I'm not going to give back my bonuses, right? For a bubble to last, you need a force to hold it together when it stumbles. Wall Street kept pumping out new natural or synthetic products to turn debt into demand for assets. Local governments play this role in China.
When it comes to interested parties, Chinese governments are knee-deep in the bubble. They get all the money from land sales. Land values have risen to half of the development cost. In hot spots, land costs more than the development - the governments want to collect the future price gain immediately.
When properties are sold, transaction and profit taxes kick in. Developers pay more levies to the governments than they earn. When developers finally book their earnings, they must put it to work, as good Wall Street analysts would recommend, so they buy land.
As land prices are much higher, their measly earnings aren't enough, so they have to borrow. The governments get all their earnings and debt repayments. Can you blame them for boosting the market whenever it slips? Land obsession is another force at work.
China was a rural economy not so long ago. The most important asset was always land. 'Be a government official and become rich' is a millennium-old Chinese saying. It didn't explain where the money went. It always went into agricultural land. In cities, you only see buildings, not paddy fields. But the buildings sit on land.
Now housemaids are in the market. Who else? Never underestimate 1.3 billion people. Welcome to China, the land of getting rich quick. -- Bloomberg
The writer is an independent economist based in Shanghai and was formerly Morgan Stanley's chief economist for the Asia-Pacific region. The opinions expressed are his own
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Marina Bay Sands gets its licence to deal just in time
Business Times - 27 Apr 2010
Marina Bay Sands gets its licence to deal just in time
By ARTHUR SIM
(SINGAPORE) The Marina Bay Sands (MBS) casino has been awarded its licence - just one day before it was scheduled to open. This means that the casino, along with 963 hotel rooms, the Sands Expo and Convention Centre, the event plaza and portions of the shopping mall, will open today as planned.
In a statement released around noon yesterday, Marina Bay Sands said it is 'pleased to announce that it has been awarded the casino licence by the Casino Regulatory Authority (CRA) of Singapore'.
CRA also made an announcement yesterday morning through its website that it had issued a casino licence to Marina Bay Sands on April 26, 2010. 'The casino operator must ensure that it remains suitable to manage and operate a casino in accordance with Section 45 of the Casino Control Act,' added CRA.
Section 45 refers to the suitability of applicants of the casino licence. It sets out the criteria for which suitability is assessed, including having a 'sound and stable financial background' and not having a 'business association with any person, body or association who or which, in the opinion of the Authority, is not of good repute'.
The news of the award of the casino licence comes after some market speculation that MBS's casino opening would be delayed.
This was partly because of the fact that CRA had awarded Resorts World Sentosa its casino licence about a week before the opening date of its casino in February.
There had also been reports earlier this month about alleged links between Las Vegas Sands (LVS) and a junket promoter with triad links in Macau and that the Nevada Gaming Commission (NGC) - which regulates a substantial chunk of LVS's business operations - was carrying out its own investigations.
Earlier this year, the New Jersey Casino Control Commission (NJCCC) declared that it found MGM Mirage's partnership with Pansy Ho, daughter of Stanley Ho 'unsuitable' because of Mr Ho's alleged links with Macau triads.
Dean Macomber, a gaming consultant and president of Macomber International, said that there is some market speculation that the NJCCC resolution could put pressure on NGC to act. But he also added that while all agencies have the same goal of effectively regulating the gaming industry, 'each venue in the US seems to approach this task a little bit differently'.
This seems to be true in Asia too.
Sean Monaghan, managing director at AG Leisure Partners, says: 'The CRA has been acting to keep certain elements away from Singapore. Every jurisdiction operates differently.'
With construction cranes still visible at the MBS site, it is perhaps not too surprising that there has been doubt about the Marina Bay integrated resort (IR) opening on time.
Derek da Cunha, author of Singapore Places Its Bets, adds: 'The fact that the casino licence was given only a day before the scheduled opening indicates that the company had been working round-the- clock to meet its own imposed deadline while allaying any concerns the authorities may have had.
'I also think there may have been competing pressures at work here, not least of which is the fact that the initial MICE event - the Inter-Pacific Bar Association conference - is to be held from May 2-5,' he added.
The Grand Opening of MBS is actually scheduled for June 23, when the rest of the hotel rooms and suites, the Sands SkyPark and additional shops are expected to open.
The museum, theatres and the remainder of the shops will open towards the end of the year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
All set: Visitors on a platform of The Helix bridge, which leads to the Marina Bay Sands (right). The casino and a few other parts of the IR start operations today.
Marina Bay Sands gets its licence to deal just in time
By ARTHUR SIM
(SINGAPORE) The Marina Bay Sands (MBS) casino has been awarded its licence - just one day before it was scheduled to open. This means that the casino, along with 963 hotel rooms, the Sands Expo and Convention Centre, the event plaza and portions of the shopping mall, will open today as planned.
In a statement released around noon yesterday, Marina Bay Sands said it is 'pleased to announce that it has been awarded the casino licence by the Casino Regulatory Authority (CRA) of Singapore'.
CRA also made an announcement yesterday morning through its website that it had issued a casino licence to Marina Bay Sands on April 26, 2010. 'The casino operator must ensure that it remains suitable to manage and operate a casino in accordance with Section 45 of the Casino Control Act,' added CRA.
Section 45 refers to the suitability of applicants of the casino licence. It sets out the criteria for which suitability is assessed, including having a 'sound and stable financial background' and not having a 'business association with any person, body or association who or which, in the opinion of the Authority, is not of good repute'.
The news of the award of the casino licence comes after some market speculation that MBS's casino opening would be delayed.
This was partly because of the fact that CRA had awarded Resorts World Sentosa its casino licence about a week before the opening date of its casino in February.
There had also been reports earlier this month about alleged links between Las Vegas Sands (LVS) and a junket promoter with triad links in Macau and that the Nevada Gaming Commission (NGC) - which regulates a substantial chunk of LVS's business operations - was carrying out its own investigations.
Earlier this year, the New Jersey Casino Control Commission (NJCCC) declared that it found MGM Mirage's partnership with Pansy Ho, daughter of Stanley Ho 'unsuitable' because of Mr Ho's alleged links with Macau triads.
Dean Macomber, a gaming consultant and president of Macomber International, said that there is some market speculation that the NJCCC resolution could put pressure on NGC to act. But he also added that while all agencies have the same goal of effectively regulating the gaming industry, 'each venue in the US seems to approach this task a little bit differently'.
This seems to be true in Asia too.
Sean Monaghan, managing director at AG Leisure Partners, says: 'The CRA has been acting to keep certain elements away from Singapore. Every jurisdiction operates differently.'
With construction cranes still visible at the MBS site, it is perhaps not too surprising that there has been doubt about the Marina Bay integrated resort (IR) opening on time.
Derek da Cunha, author of Singapore Places Its Bets, adds: 'The fact that the casino licence was given only a day before the scheduled opening indicates that the company had been working round-the- clock to meet its own imposed deadline while allaying any concerns the authorities may have had.
'I also think there may have been competing pressures at work here, not least of which is the fact that the initial MICE event - the Inter-Pacific Bar Association conference - is to be held from May 2-5,' he added.
The Grand Opening of MBS is actually scheduled for June 23, when the rest of the hotel rooms and suites, the Sands SkyPark and additional shops are expected to open.
The museum, theatres and the remainder of the shops will open towards the end of the year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
All set: Visitors on a platform of The Helix bridge, which leads to the Marina Bay Sands (right). The casino and a few other parts of the IR start operations today.
BT : Harder to try and try again for en bloc sales
Business Times - 27 Apr 2010
Harder to try and try again for en bloc sales
Bill seeks to put restrictions in place; other changes may simplify process
By UMA SHANKARI
(SINGAPORE) A new amendment bill introduced in Parliament yesterday will make it harder for property owners to keep re-trying for a collective sale.
But analysts said other changes - such as allowing contested sales to bypass Strata Titles Board (STB) hearings and reducing the number of extraordinary general meetings (EGMs) that must be held - could help to speed up the en bloc sale process.
A key revision that has been tabled will make it harder for motivated owners to re-start an en bloc process once it fails as there will be a two-year restriction period.
Within this restriction period, the first re-try to convene an EGM will need 50 per cent of share value or number of owners. And for the second and subsequent re-tries, 80 per cent will be needed.
Right now, the support of either 20 per cent of owners by share value or 25 per cent of the total number of owners is needed to call an EGM to start the process.
'The objective of this change is to discourage numerous attempts at en bloc sales where there is insufficient level of interest and support from owners,' said the Ministry of Law in a statement. It also added that this move prevents management committee funds from depleting.
The amendment bill to the Land Titles (Strata) Act also looks to streamline the role of the STB and balance the interests of minority and majority owners. The changes are expected to take effect in June.
'In recent years, a number of en bloc sale applications have become highly contentious, with objectors raising questions on points of law ranging from fiduciary to constitutional law,' said the Ministry of Law. 'Many of these cases have ended up in the High Court and even the Court of Appeal. This has resulted in lengthy and costly proceedings.'
In addition, once a sales committee (SC) is formed it will have one year to obtain the first signature for the collective sale agreement (CSA) or it will be automatically dissolved. This is to ensure that the sales process is not dragged out.
Analysts were not too worried about the two-year restriction period.
Credo Real Estate managing director Karamjit Singh said en bloc transaction volumes are driven more by market forces and owners' expected gains.
'But having said that, the two-year restriction period following a failed attempt may be disadvantageous to some projects that may want to capitalise on improved market sentiments, should that happen after the failed attempt,' said Mr Singh.
But Chua Chor Hoon, head of DTZ's South-east Asia research team, said that the two-year restriction period could have a large impact as the definition of a failed attempt covers a whole host of situations - including right at the beginning, when the quorum required for an EGM to discuss a collective sale is not met within an hour and the EGM is dissolved.
The new amendments could also speed up the process 'in theory'.
'It helps to eliminate some of the ambiguities in the current legislation and will help to expedite the process,' said Ho Eng Joo, executive director for investment sales at Colliers International.
The Ministry of Law last amended the Act in 2007, introducing changes to make the en bloc sale process more transparent.
Then, it was decided that SCs will have to be properly formed and elected. It was also decided that CSAs will have to be witnessed by lawyers who can clarify doubts and explain terms and liabilities. And even after they signed, potential sellers were given a five-day 'cooling-off period' during which they can change their minds.
This latest round of changes comes as activity in the collective sales market appears to be picking up after falling off sharply in 2008 and 2009.
According to data from CBRE Research, there were 110 collective sale transactions worth a total of $11.9 billion in 2007. This fell to eight deals worth $381 million in 2008 and just one deal worth $101 million in 2009 as the property market took a downturn.
But since the start of this year, five collective sales worth $275 million in all have gone through - signalling that the en bloc market could be picking up again.
'There has been more interest on the ground from Q3 and Q4 last year,' said Jeremy Lake, executive director of investment properties at CBRE.
Most analysts were also disappointed that two measures, in particular, were not axed.
'I am disappointed that they have not removed the cooling off period of five working days, notwithstanding the requirement that a solicitor must witness the signatures of the owners executing in Singapore,' said law firm Rodyk & Davidson partner Norman Ho. CBRE's Mr Lake likewise pointed out that the requirement for the CSA to be witnessed by lawyers is the 'biggest hindrance' to a collective sale going through.
'The main problem that SCs face at the moment is securing the 80 per cent or 90 per cent agreement needed and that is principally due to the need to have the signing witnessed by lawyers,' he said. Sometimes it was difficult to get a lawyer and owner together at the same time to get the CSA signed, he said.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Harder to try and try again for en bloc sales
Bill seeks to put restrictions in place; other changes may simplify process
By UMA SHANKARI
(SINGAPORE) A new amendment bill introduced in Parliament yesterday will make it harder for property owners to keep re-trying for a collective sale.
But analysts said other changes - such as allowing contested sales to bypass Strata Titles Board (STB) hearings and reducing the number of extraordinary general meetings (EGMs) that must be held - could help to speed up the en bloc sale process.
A key revision that has been tabled will make it harder for motivated owners to re-start an en bloc process once it fails as there will be a two-year restriction period.
Within this restriction period, the first re-try to convene an EGM will need 50 per cent of share value or number of owners. And for the second and subsequent re-tries, 80 per cent will be needed.
Right now, the support of either 20 per cent of owners by share value or 25 per cent of the total number of owners is needed to call an EGM to start the process.
'The objective of this change is to discourage numerous attempts at en bloc sales where there is insufficient level of interest and support from owners,' said the Ministry of Law in a statement. It also added that this move prevents management committee funds from depleting.
The amendment bill to the Land Titles (Strata) Act also looks to streamline the role of the STB and balance the interests of minority and majority owners. The changes are expected to take effect in June.
'In recent years, a number of en bloc sale applications have become highly contentious, with objectors raising questions on points of law ranging from fiduciary to constitutional law,' said the Ministry of Law. 'Many of these cases have ended up in the High Court and even the Court of Appeal. This has resulted in lengthy and costly proceedings.'
In addition, once a sales committee (SC) is formed it will have one year to obtain the first signature for the collective sale agreement (CSA) or it will be automatically dissolved. This is to ensure that the sales process is not dragged out.
Analysts were not too worried about the two-year restriction period.
Credo Real Estate managing director Karamjit Singh said en bloc transaction volumes are driven more by market forces and owners' expected gains.
'But having said that, the two-year restriction period following a failed attempt may be disadvantageous to some projects that may want to capitalise on improved market sentiments, should that happen after the failed attempt,' said Mr Singh.
But Chua Chor Hoon, head of DTZ's South-east Asia research team, said that the two-year restriction period could have a large impact as the definition of a failed attempt covers a whole host of situations - including right at the beginning, when the quorum required for an EGM to discuss a collective sale is not met within an hour and the EGM is dissolved.
The new amendments could also speed up the process 'in theory'.
'It helps to eliminate some of the ambiguities in the current legislation and will help to expedite the process,' said Ho Eng Joo, executive director for investment sales at Colliers International.
The Ministry of Law last amended the Act in 2007, introducing changes to make the en bloc sale process more transparent.
Then, it was decided that SCs will have to be properly formed and elected. It was also decided that CSAs will have to be witnessed by lawyers who can clarify doubts and explain terms and liabilities. And even after they signed, potential sellers were given a five-day 'cooling-off period' during which they can change their minds.
This latest round of changes comes as activity in the collective sales market appears to be picking up after falling off sharply in 2008 and 2009.
According to data from CBRE Research, there were 110 collective sale transactions worth a total of $11.9 billion in 2007. This fell to eight deals worth $381 million in 2008 and just one deal worth $101 million in 2009 as the property market took a downturn.
But since the start of this year, five collective sales worth $275 million in all have gone through - signalling that the en bloc market could be picking up again.
'There has been more interest on the ground from Q3 and Q4 last year,' said Jeremy Lake, executive director of investment properties at CBRE.
Most analysts were also disappointed that two measures, in particular, were not axed.
'I am disappointed that they have not removed the cooling off period of five working days, notwithstanding the requirement that a solicitor must witness the signatures of the owners executing in Singapore,' said law firm Rodyk & Davidson partner Norman Ho. CBRE's Mr Lake likewise pointed out that the requirement for the CSA to be witnessed by lawyers is the 'biggest hindrance' to a collective sale going through.
'The main problem that SCs face at the moment is securing the 80 per cent or 90 per cent agreement needed and that is principally due to the need to have the signing witnessed by lawyers,' he said. Sometimes it was difficult to get a lawyer and owner together at the same time to get the CSA signed, he said.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : More Marina Bay Suites units this week
Business Times - 27 Apr 2010
More Marina Bay Suites units this week
CDL sells 360 Tree House units; 570 units at Waterbank at Dakota taken up
By KALPANA RASHIWALA
(SINGAPORE) The next batch of units at Marina Bay Suites will be released by the the project's developer on Thursday, BT understands.
Prices have yet to be finalised, say sources.
The units to be released are expected to be above the 46th level sky terrace in the 66-storey development. This is unlike the initial batch of 90-odd units released by the developer late last year, which were mostly below the 46th storey; they were sold at between $1,900 per square foot and $2,600 psf.
At the nearby Marina Bay Residences, units have transacted in the sub-sale market at $2,100 psf to $3,050 psf, based on caveats lodged from January to early April this year.
However, at least one unit in the project, which is expected to receive Temporary Occupation Permit soon, was recently transacted at $3,500 psf - a three-bedroom-plus-study unit of 1,970 sq ft on the 46th floor.
Both projects have 99-year leasehold tenure and are being developed by a consortium controlled by Keppel Land, Cheung Kong Holdings and Hongkong Land Holdings.
Joseph Tan, executive director (residential) at CB Richard Ellis, which is one of the marketing agents for Marina Bay Suites, notes that owners of high-floor, prime facing units in the project are currently asking prices ranging from $3,800 to $5,600 psf.
Elsewhere in Singapore, developers continue to chalk up sales.
City Developments Ltd (CDL) has sold 360 units at its Tree House condo at Chestnut Avenue since previewing the project last week. The 99-year leasehold project has an average price of about $820 psf. To date, CDL has released 400 of the project's 429 units.
Over in the Holland Road area, CLSA Capital Partners Real Estate Fund and Lippo sold six units at their Holland Collection project last week. This means that the developers have sold eight units in the 26-unit project since previewing the project last month. Units sold last week include two penthouses (at about $6.3 million each) and a strata bungalow that fetched $6 million.
The buyers in the freehold project are mostly foreigners. The eight units sold to date are priced between $1,850 psf and $2,200 psf. The freehold project is four storeys high and has an attic level.
Meanwhile, UOL Group is understood to have achieved further sales of about 50 units at its Waterbank at Dakota condo last week, taking total sales to 570 units in the 616-unit project. The average price for the 99-year leasehold development is $1,170 psf. It has been on the market for about 21/2 weeks.
However, sales of condos on Sentosa Cove continue to be slow. For instance, CDL has to date sold about 25 units at The Residences at W Sentosa Cove. The 99-year leasehold project, priced at $2,500-3,000 psf, has been on the market for nearly a month now. To date, CDL has released 56 of the project's 228 units.
Ho Bee and IOI, which are developing The Seascape on a more attractive spot on Sentosa Cove, are said to have sold about 33 units to date. The project has an average price of about $2,700 psf, with achieved prices ranging from $2,619 psf to $3,145 psf. The Seascape came to market at about the same time as The Residences at W.
Meanwhile, property giant Far East Organization told BT that it has sold 112 homes so far this month (as at Sunday). This is close to its 128-unit sales for the whole of March.
Looking ahead, the group hopes to launch in mid-May a 104-unit, low-rise freehold development in the East Coast area. Unit sizes at The Sound range from 581 sq ft for a one bedder to 1,873 sq ft for a five-bedroom compact unit with an attic.
A CDL spokeswoman said that the group's planned launches include a condo at Pasir Ris located next to Livia, which will comprise 642 units, as well as a 158-unit condo on the former Concorde Residences site at Thomson Road.
'We are also in the midst of designing the redevelopment of Copthorne Orchid (hotel) into a condominium comprising about 150 units,' she added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The Sound: Far East Organization is looking to launch the 104-unit, low-rise freehold project in the East Coast area in mid-May. In its other projects, the developer has sold a total of 112 units so far this month
More Marina Bay Suites units this week
CDL sells 360 Tree House units; 570 units at Waterbank at Dakota taken up
By KALPANA RASHIWALA
(SINGAPORE) The next batch of units at Marina Bay Suites will be released by the the project's developer on Thursday, BT understands.
Prices have yet to be finalised, say sources.
The units to be released are expected to be above the 46th level sky terrace in the 66-storey development. This is unlike the initial batch of 90-odd units released by the developer late last year, which were mostly below the 46th storey; they were sold at between $1,900 per square foot and $2,600 psf.
At the nearby Marina Bay Residences, units have transacted in the sub-sale market at $2,100 psf to $3,050 psf, based on caveats lodged from January to early April this year.
However, at least one unit in the project, which is expected to receive Temporary Occupation Permit soon, was recently transacted at $3,500 psf - a three-bedroom-plus-study unit of 1,970 sq ft on the 46th floor.
Both projects have 99-year leasehold tenure and are being developed by a consortium controlled by Keppel Land, Cheung Kong Holdings and Hongkong Land Holdings.
Joseph Tan, executive director (residential) at CB Richard Ellis, which is one of the marketing agents for Marina Bay Suites, notes that owners of high-floor, prime facing units in the project are currently asking prices ranging from $3,800 to $5,600 psf.
Elsewhere in Singapore, developers continue to chalk up sales.
City Developments Ltd (CDL) has sold 360 units at its Tree House condo at Chestnut Avenue since previewing the project last week. The 99-year leasehold project has an average price of about $820 psf. To date, CDL has released 400 of the project's 429 units.
Over in the Holland Road area, CLSA Capital Partners Real Estate Fund and Lippo sold six units at their Holland Collection project last week. This means that the developers have sold eight units in the 26-unit project since previewing the project last month. Units sold last week include two penthouses (at about $6.3 million each) and a strata bungalow that fetched $6 million.
The buyers in the freehold project are mostly foreigners. The eight units sold to date are priced between $1,850 psf and $2,200 psf. The freehold project is four storeys high and has an attic level.
Meanwhile, UOL Group is understood to have achieved further sales of about 50 units at its Waterbank at Dakota condo last week, taking total sales to 570 units in the 616-unit project. The average price for the 99-year leasehold development is $1,170 psf. It has been on the market for about 21/2 weeks.
However, sales of condos on Sentosa Cove continue to be slow. For instance, CDL has to date sold about 25 units at The Residences at W Sentosa Cove. The 99-year leasehold project, priced at $2,500-3,000 psf, has been on the market for nearly a month now. To date, CDL has released 56 of the project's 228 units.
Ho Bee and IOI, which are developing The Seascape on a more attractive spot on Sentosa Cove, are said to have sold about 33 units to date. The project has an average price of about $2,700 psf, with achieved prices ranging from $2,619 psf to $3,145 psf. The Seascape came to market at about the same time as The Residences at W.
Meanwhile, property giant Far East Organization told BT that it has sold 112 homes so far this month (as at Sunday). This is close to its 128-unit sales for the whole of March.
Looking ahead, the group hopes to launch in mid-May a 104-unit, low-rise freehold development in the East Coast area. Unit sizes at The Sound range from 581 sq ft for a one bedder to 1,873 sq ft for a five-bedroom compact unit with an attic.
A CDL spokeswoman said that the group's planned launches include a condo at Pasir Ris located next to Livia, which will comprise 642 units, as well as a 158-unit condo on the former Concorde Residences site at Thomson Road.
'We are also in the midst of designing the redevelopment of Copthorne Orchid (hotel) into a condominium comprising about 150 units,' she added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The Sound: Far East Organization is looking to launch the 104-unit, low-rise freehold project in the East Coast area in mid-May. In its other projects, the developer has sold a total of 112 units so far this month
BT : China poised to slap tax on home purchases
Business Times - 27 Apr 2010
China poised to slap tax on home purchases
(BEIJING) China is likely to introduce a property tax on residential housing in the first half of the year as part of its attempts to curb spiralling real estate prices, state media reported yesterday.
The levy would be imposed on a trial basis in Beijing, Shanghai, the south-western municipality of Chongqing and the southern city of Shenzhen, the Economic Observer newspaper said, citing sources familiar with the matter.
Government agencies including the central bank, the finance ministry and the State Administration of Taxation were still working out when to implement the tax, it said.
China currently has no such levy on residential property but it does impose a 1.2 per cent tax on 70 to 90 per cent of the value of commercial real estate.
Details of the new tax were not yet finalised, the report said, such as whether it would be levied against all homes or merely on additional residences purchased by an individual home buyer beyond the first property.
The report came after Beijing recently announced a range of measures to prevent the growth of asset bubbles and soaring property prices. Official data showed real estate prices in 70 cities jumped 11.7 per cent in March, the fastest year-on-year rise for a single month in five years.
The government recently tightened restrictions on advance sales of new property developments, introduced new curbs on loans for third home purchases, and raised minimum down payments for second homes. State media reports last week also said banking regulators had ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein in real estate speculation.
The new property tax was also expected to help replenish the coffers of local governments, which have been severely depleted by the government-led investment binge of the past year linked to an economic stimulus programme, the report said. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
China poised to slap tax on home purchases
(BEIJING) China is likely to introduce a property tax on residential housing in the first half of the year as part of its attempts to curb spiralling real estate prices, state media reported yesterday.
The levy would be imposed on a trial basis in Beijing, Shanghai, the south-western municipality of Chongqing and the southern city of Shenzhen, the Economic Observer newspaper said, citing sources familiar with the matter.
Government agencies including the central bank, the finance ministry and the State Administration of Taxation were still working out when to implement the tax, it said.
China currently has no such levy on residential property but it does impose a 1.2 per cent tax on 70 to 90 per cent of the value of commercial real estate.
Details of the new tax were not yet finalised, the report said, such as whether it would be levied against all homes or merely on additional residences purchased by an individual home buyer beyond the first property.
The report came after Beijing recently announced a range of measures to prevent the growth of asset bubbles and soaring property prices. Official data showed real estate prices in 70 cities jumped 11.7 per cent in March, the fastest year-on-year rise for a single month in five years.
The government recently tightened restrictions on advance sales of new property developments, introduced new curbs on loans for third home purchases, and raised minimum down payments for second homes. State media reports last week also said banking regulators had ordered lenders to conduct quarterly stress tests on mortgages as the government tries to clamp down on bad loans and rein in real estate speculation.
The new property tax was also expected to help replenish the coffers of local governments, which have been severely depleted by the government-led investment binge of the past year linked to an economic stimulus programme, the report said. -- AFP
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : S'pore property market may be near peak
Business Times - 27 Apr 2010
S'pore property market may be near peak
Increases in demand are pushing prices up, says economist
By FELDA CHAY
(SINGAPORE) The rising prices seen in the local property market are unlikely to come down anytime soon, even though the market might be near its peak, said CIMB-GK economist Song Seng Wun at a panel discussion on Singapore's building and construction industry.
Speaking at the graduation ceremony of a three-month course for professionals in the building and construction industry at the Singapore Management University (SMU), Mr Song said that the low interest rate environment, combined with the view that property is an asset class that can be leveraged upon, may continue to keep prices up.
'And if you take the view that it doesn't look like (interest) rates are going to go up anytime soon this year - and even if rates go up it is going up in an environment where there is growth opportunity and growth momentum - any tightening at this point will be accompanied by strong growth,' he said.
Also pushing up prices are increases in demand from both local and foreign buyers, added Mr Song.
However, the market might be near its peak, if historical data is anything to go by.
The year-on-year increase at this juncture, said Mr Song, has hit 30 per cent.
'I notice that when we get to a point where property prices year-on-year start to reach the region of 30-40 per cent, it tends to signal the peak of the market over previous cycles, so we are nearly there in terms of year-on-year numbers,' said Mr Song.
The panel discussion - which included panellists such as Keppel Land group chief executive Kevin Wong, WingTai Asia's property director Chng Chee Beow and City Developments Ltd's deputy general manager for design and projects Anthony Chia - also touched on growth in Asia, with all the developers on the panel expressing an interest to expand within the region.
Keppel Land, for one, is looking to have 50 per cent of its earnings coming from overseas markets, said Mr Wong.
Keppel Land's earnings from overseas in FY2009 represented about 31 per cent of its attributable profit.
But venturing overseas is not easy, and to turn into a successful global entity, it is important to know the target market, said Mr Chia.
'There is very little shortcut to that and that's how tough it is in some of these foreign markets . . . it's all about culture, it's all about people and understanding the market.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
S'pore property market may be near peak
Increases in demand are pushing prices up, says economist
By FELDA CHAY
(SINGAPORE) The rising prices seen in the local property market are unlikely to come down anytime soon, even though the market might be near its peak, said CIMB-GK economist Song Seng Wun at a panel discussion on Singapore's building and construction industry.
Speaking at the graduation ceremony of a three-month course for professionals in the building and construction industry at the Singapore Management University (SMU), Mr Song said that the low interest rate environment, combined with the view that property is an asset class that can be leveraged upon, may continue to keep prices up.
'And if you take the view that it doesn't look like (interest) rates are going to go up anytime soon this year - and even if rates go up it is going up in an environment where there is growth opportunity and growth momentum - any tightening at this point will be accompanied by strong growth,' he said.
Also pushing up prices are increases in demand from both local and foreign buyers, added Mr Song.
However, the market might be near its peak, if historical data is anything to go by.
The year-on-year increase at this juncture, said Mr Song, has hit 30 per cent.
'I notice that when we get to a point where property prices year-on-year start to reach the region of 30-40 per cent, it tends to signal the peak of the market over previous cycles, so we are nearly there in terms of year-on-year numbers,' said Mr Song.
The panel discussion - which included panellists such as Keppel Land group chief executive Kevin Wong, WingTai Asia's property director Chng Chee Beow and City Developments Ltd's deputy general manager for design and projects Anthony Chia - also touched on growth in Asia, with all the developers on the panel expressing an interest to expand within the region.
Keppel Land, for one, is looking to have 50 per cent of its earnings coming from overseas markets, said Mr Wong.
Keppel Land's earnings from overseas in FY2009 represented about 31 per cent of its attributable profit.
But venturing overseas is not easy, and to turn into a successful global entity, it is important to know the target market, said Mr Chia.
'There is very little shortcut to that and that's how tough it is in some of these foreign markets . . . it's all about culture, it's all about people and understanding the market.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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