Business Times - 29 Apr 2010
High demand for US home loans but refinancing falls
(NEW YORK) US mortgage applications fell last week as a drop in home refinancing volume outweighed the highest demand for home purchase loans in six months, data from an industry group showed yesterday.
A modest rise in mortgage rates weighed on demand for home refinancing loans, while the imminent expiration of federal home buyer tax credits likely drove consumers to lock in rates, which remain historically low and are widely expected to move higher as the economy recovers.
The Mortgage Bankers Association said that its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, decreased 2.9 per cent for the week ended April 23.
The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 3.1 per cent.
The MBA's seasonally adjusted purchase index, a tentative early indicator of home sales, increased 7.4 per cent, reaching its highest level since the week ended Oct 16.
'Purchase activity continues to increase as we approach the end of the homebuyer tax credit programme,' Michael Fratantoni, MBA's vice-president of research and economics, said in a statement.
'Purchase applications were up almost 9 per cent from a month ago, with a disproportionate share of the increase due to government purchase applications. Government applications for purchasing a home accounted for almost 49 per cent of all purchase applications last week,' he said.
To qualify for tax credits of US$8,000 for first-time home buyers and US$6,500 for home owners buying a new residence, eligible borrowers must sign contracts by April 30 and close loans by June 30.
Recent data on sales of new and existing home sales indicate a strong benefit from the tax credits. Government data showed sales of newly built US single-family homes touched their highest level in eight months in March, while industry data showed sales of previously owned homes also gained in March.
James Mallozzi, chairman and chief executive officer of Prudential Real Estate and Relocation Services, said that while home buyer tax credits have helped both first-time home buyers and the US housing market overall, their expiration should not deter home purchasing activity.
'When it comes to home sales, the absolute level of home prices ranks first in importance, the level of mortgage rates ranks second, while the home buyer tax credits ranks a distant third,' he said.
The MBA said that borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.08 per cent, up 0.04 percentage point from the previous week. Interest rates were also above the year-ago level of 4.62 per cent. An all-time low of 4.61 per cent was set in the week ended March 27, 2009, based on a survey that dates to 1990.
Mortgage rates could head towards 5.50 per cent or 6 per cent later this year, Mr Mallozzi said.
'This could dampen demand and I foresee a slow housing recovery,' he said.
The MBA said that fixed 15-year mortgage rates averaged 4.38 per cent, up from 4.34 per cent the previous week. Rates on one-year adjustable-rate mortgages, or ARMs, increased to 7.03 per cent from 6.95 per cent\. \-- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Thursday, April 29, 2010
BT : Sitting on a pot of 'collective' gold
Business Times - 29 Apr 2010
Sitting on a pot of 'collective' gold
Developers who snagged en bloc sites earlier have reason to smile
By KALPANA RASHIWALA
(SINGAPORE) While the market mulls over the impact that rule changes will have on collective sales, the spotlight has fallen on developers sitting on prime sites acquired during the previous en bloc boom in 2006-2007.
If the proposed changes make it tougher for prime freehold residential sites to make their way to the market, that will be good news to developers who are already holding such sites acquired earlier.
A compilation by property consultant CB Richard Ellis shows that developers currently have 26 sites in prime districts 9, 10 and 11 snapped up in collective sales in 2006 and 2007 where new projects are still to be launched.
These sites are planned for redevelopment into nearly 4,300 new homes. Outside the prime districts, developers could build a further 4,700 homes on 16 sites purchased through collective sales in 2006-2007
CapitaLand, City Developments Ltd (CDL), Wing Tai, GuocoLand and Overseas Union Enterprise are among the developers who bought prime district en bloc sale plots earlier. For instance, CapitaLand, together with its partners, acquired the Farrer Court plot and is planning a 1,715-unit redevelopment project. Hong Leong Group (including CDL) has exposure to six sites slated for development into over 600 units in locations like Leonie Hill, Anderson and Thomson roads.
These sites and projects will become more precious to developers and they will want to time their launch more judiciously if it gets tougher to replenish landbank in this segment through en bloc sales, say industry observers.
CB Richard Ellis executive director Jeremy Lake says: 'The proposed amendments are unlikely to facilitate the en bloc process significantly and as such, the number of collective sales coming to the market is likely to remain relatively limited.
'From a developer's point of view, it will be more difficult to replace landbank in prime areas so those who have such sites may think more carefully about the timing of launch of new projects on these sites as it will not be easy to find replacement land.'
Giving a more pessimistic take, a developer said: 'I don't think anyone would be too far wrong to say that en bloc sales are just about the only source of supply for prime district freehold sites. The proposed amendments to the Land Titles (Strata) Act will put the 'last nail in the coffin' for en bloc sales in the near future, and the market will be completely dried up for freehold District 9, 10, 11 land supply.'
This will create upward pressure on land prices, he added.
Putting things in perspective, DTZ senior director (investment sales) Shaun Poh says: 'En bloc sales in many developments have already been activated and these are unlikely to be affected by the proposed amendments. The supply from this source should be enough for the market for the time being.
'However, the future pipeline of en bloc sales will be affected.'
On Monday, the Ministry of Law released proposed amendments that will among other things make it harder to restart a collective sale within two years of a failed attempt. Any attempts to convene EGMs to appoint a sales committee during this period will require higher requisition levels from owners - 50 per cent by share value or total number of owners for the first re-try and 80 per cent for any subsequent attempts.
'Already it's not easy to secure requisitions for EGMs based on existing thresholds of 20 per cent by share value or 25 per cent of number of owners,' says DTZ's Mr Poh.
'Now that they're proposing to raise the threshold for restarting previously failed en bloc attempts, it's going to be more difficult for those who want to have another shot when, say, the market suddenly turns hot.'
On a more positive note, Credo Real Estate managing director Karamjit Singh notes that the instances of failed attempts that will be affected by the two-year restriction do not cover cases where owners' 80 or 90 per cent majority consent was secured but the Collective Sales Agreement (CSA) expired because a buyer could not be found in time.
'The projects that may be affected are likely to be those that had attempted an en bloc sale when they should not have, either owing to the project not being fundamentally 'enblocable' or the market was not on their side to an extent that the majority owners rejected the proposal,' he said.
MinLaw hopes its proposal will discourage repeated attempts at en bloc sales where there isn't enough support from owners.
Industry players lauded MinLaw's proposal to streamline the number of EGMs, which should speed up the process. 'We expect to see further en-bloc activity this year,' said Chris Fossick, managing director Singapore and South East Asia for Jones Lang LaSalle.
Others, however, complain that the the ministry is not doing anything to mitigate bottlenecks caused by the need to have lawyers witness signing of the CSA.
This has also jacked up legal costs. Some have suggested doing away with this requirement since those who sign are given a five-day cooling-off period.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Hot asset: Developers of prime sites like Farrer Court (above) will time their project launches more carefully
Sitting on a pot of 'collective' gold
Developers who snagged en bloc sites earlier have reason to smile
By KALPANA RASHIWALA
(SINGAPORE) While the market mulls over the impact that rule changes will have on collective sales, the spotlight has fallen on developers sitting on prime sites acquired during the previous en bloc boom in 2006-2007.
If the proposed changes make it tougher for prime freehold residential sites to make their way to the market, that will be good news to developers who are already holding such sites acquired earlier.
A compilation by property consultant CB Richard Ellis shows that developers currently have 26 sites in prime districts 9, 10 and 11 snapped up in collective sales in 2006 and 2007 where new projects are still to be launched.
These sites are planned for redevelopment into nearly 4,300 new homes. Outside the prime districts, developers could build a further 4,700 homes on 16 sites purchased through collective sales in 2006-2007
CapitaLand, City Developments Ltd (CDL), Wing Tai, GuocoLand and Overseas Union Enterprise are among the developers who bought prime district en bloc sale plots earlier. For instance, CapitaLand, together with its partners, acquired the Farrer Court plot and is planning a 1,715-unit redevelopment project. Hong Leong Group (including CDL) has exposure to six sites slated for development into over 600 units in locations like Leonie Hill, Anderson and Thomson roads.
These sites and projects will become more precious to developers and they will want to time their launch more judiciously if it gets tougher to replenish landbank in this segment through en bloc sales, say industry observers.
CB Richard Ellis executive director Jeremy Lake says: 'The proposed amendments are unlikely to facilitate the en bloc process significantly and as such, the number of collective sales coming to the market is likely to remain relatively limited.
'From a developer's point of view, it will be more difficult to replace landbank in prime areas so those who have such sites may think more carefully about the timing of launch of new projects on these sites as it will not be easy to find replacement land.'
Giving a more pessimistic take, a developer said: 'I don't think anyone would be too far wrong to say that en bloc sales are just about the only source of supply for prime district freehold sites. The proposed amendments to the Land Titles (Strata) Act will put the 'last nail in the coffin' for en bloc sales in the near future, and the market will be completely dried up for freehold District 9, 10, 11 land supply.'
This will create upward pressure on land prices, he added.
Putting things in perspective, DTZ senior director (investment sales) Shaun Poh says: 'En bloc sales in many developments have already been activated and these are unlikely to be affected by the proposed amendments. The supply from this source should be enough for the market for the time being.
'However, the future pipeline of en bloc sales will be affected.'
On Monday, the Ministry of Law released proposed amendments that will among other things make it harder to restart a collective sale within two years of a failed attempt. Any attempts to convene EGMs to appoint a sales committee during this period will require higher requisition levels from owners - 50 per cent by share value or total number of owners for the first re-try and 80 per cent for any subsequent attempts.
'Already it's not easy to secure requisitions for EGMs based on existing thresholds of 20 per cent by share value or 25 per cent of number of owners,' says DTZ's Mr Poh.
'Now that they're proposing to raise the threshold for restarting previously failed en bloc attempts, it's going to be more difficult for those who want to have another shot when, say, the market suddenly turns hot.'
On a more positive note, Credo Real Estate managing director Karamjit Singh notes that the instances of failed attempts that will be affected by the two-year restriction do not cover cases where owners' 80 or 90 per cent majority consent was secured but the Collective Sales Agreement (CSA) expired because a buyer could not be found in time.
'The projects that may be affected are likely to be those that had attempted an en bloc sale when they should not have, either owing to the project not being fundamentally 'enblocable' or the market was not on their side to an extent that the majority owners rejected the proposal,' he said.
MinLaw hopes its proposal will discourage repeated attempts at en bloc sales where there isn't enough support from owners.
Industry players lauded MinLaw's proposal to streamline the number of EGMs, which should speed up the process. 'We expect to see further en-bloc activity this year,' said Chris Fossick, managing director Singapore and South East Asia for Jones Lang LaSalle.
Others, however, complain that the the ministry is not doing anything to mitigate bottlenecks caused by the need to have lawyers witness signing of the CSA.
This has also jacked up legal costs. Some have suggested doing away with this requirement since those who sign are given a five-day cooling-off period.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Hot asset: Developers of prime sites like Farrer Court (above) will time their project launches more carefully
TODAY ONLINE : Office market is 'bottoming out'
Office market is 'bottoming out'
Raffles Place not losing lustre yet, says CCT's CEO
05:55 AM Apr 29, 2010
SINGAPORE - Raffles Place is not likely to lose its lustre as a business district, said Ms Lynette Leong, chief executive officer of CapitaCommercial Trust (CCT), which has three office properties in the area.
Despite some financial institutions moving to Marina Bay, she is seeing interest from existing tenants and potential tenants for more office space in the Trust's Raffles Place properties, which include One George Street, HSBC Building and Six Battery Road.
"We believe the enlargement of the Central Business District by the extension of its boundaries ... to encompass Marina Bay is well planned to meet this anticipated growing office demand," said Ms Leong.
CCT, which held its AGM yesterday, assured the 230-odd unitholders present that the office market is bottoming out and CCT intends to ride the upside of the recovery through its "well-located properties and financial flexibility".
"If the property has reached an optimal stage of its life cycle, then we will divest the asset and reinvest the sale proceeds into assets which have got better potential for upside," said Ms Leong of CCT's portfolio reconstitution strategy.
Under this strategy, CCT recently sold one of its assets, Robinson Point, to a private fund run by AEW Asia for $203.25 million.
Besides its properties in Raffles Place, CCT also counts Wilkie Edge, Bugis Village, Starhub Centre, Raffles City, Golden Shoe Car Park, Market Street Car Park and Capital Tower in its Singapore portfolio.
However, Ms Leong said with 4.5 million sq ft of office space coming on stream in the next two years, there was uncertainty clouding the recovery of office rentals.
CCT also told unitholders that as of the end of last month, the trust had tenants committed to renew close to 8 per cent of the leases due, leaving a balance of about 16 per cent of leases unrenewed. Distribution per unit for Q1 rose to 1.93 cents per unit from 1.62 cents in the corresponding period last year.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Raffles Place not losing lustre yet, says CCT's CEO
05:55 AM Apr 29, 2010
SINGAPORE - Raffles Place is not likely to lose its lustre as a business district, said Ms Lynette Leong, chief executive officer of CapitaCommercial Trust (CCT), which has three office properties in the area.
Despite some financial institutions moving to Marina Bay, she is seeing interest from existing tenants and potential tenants for more office space in the Trust's Raffles Place properties, which include One George Street, HSBC Building and Six Battery Road.
"We believe the enlargement of the Central Business District by the extension of its boundaries ... to encompass Marina Bay is well planned to meet this anticipated growing office demand," said Ms Leong.
CCT, which held its AGM yesterday, assured the 230-odd unitholders present that the office market is bottoming out and CCT intends to ride the upside of the recovery through its "well-located properties and financial flexibility".
"If the property has reached an optimal stage of its life cycle, then we will divest the asset and reinvest the sale proceeds into assets which have got better potential for upside," said Ms Leong of CCT's portfolio reconstitution strategy.
Under this strategy, CCT recently sold one of its assets, Robinson Point, to a private fund run by AEW Asia for $203.25 million.
Besides its properties in Raffles Place, CCT also counts Wilkie Edge, Bugis Village, Starhub Centre, Raffles City, Golden Shoe Car Park, Market Street Car Park and Capital Tower in its Singapore portfolio.
However, Ms Leong said with 4.5 million sq ft of office space coming on stream in the next two years, there was uncertainty clouding the recovery of office rentals.
CCT also told unitholders that as of the end of last month, the trust had tenants committed to renew close to 8 per cent of the leases due, leaving a balance of about 16 per cent of leases unrenewed. Distribution per unit for Q1 rose to 1.93 cents per unit from 1.62 cents in the corresponding period last year.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY ONLINE: Two prime freehold commercial sites up for public tender
Two prime freehold commercial sites up for public tender
05:55 AM Apr 29, 2010
SINGAPORE - The red-hot property market has prompted the sale of two prime freehold commercial buildings.
One is a four-storey building at 23 and 25 Kampong Bahru Road, opposite the Singapore General Hospital. The price is $16 million, or $1,421 per square foot of gross floor area. The site area is about 3,402 sq ft, with a total strata area of some 11,259 sq ft.
The boutique building has been set aside for commercial use, but the vendor is seeking approval to convert it to hotel use.
Another building up for sale is another four-storey building at 213 Upper Thomson Road. It is set amid an established, affluent private residential enclave near the Singapore Island Country Club.
The asking price for the building is $5.5 million, which works out to $823 per square foot of gross floor area. This building has a site area of approximately 2,446 sq ft and a gross floor area of about 6,679 sq ft.
The proposed developments for the property are corporate offices, showroom space and F&B businesses.
CB Richard Ellis is the marketing agent for this public tender, which closes on May 20. Ephraim Seow
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Apr 29, 2010
SINGAPORE - The red-hot property market has prompted the sale of two prime freehold commercial buildings.
One is a four-storey building at 23 and 25 Kampong Bahru Road, opposite the Singapore General Hospital. The price is $16 million, or $1,421 per square foot of gross floor area. The site area is about 3,402 sq ft, with a total strata area of some 11,259 sq ft.
The boutique building has been set aside for commercial use, but the vendor is seeking approval to convert it to hotel use.
Another building up for sale is another four-storey building at 213 Upper Thomson Road. It is set amid an established, affluent private residential enclave near the Singapore Island Country Club.
The asking price for the building is $5.5 million, which works out to $823 per square foot of gross floor area. This building has a site area of approximately 2,446 sq ft and a gross floor area of about 6,679 sq ft.
The proposed developments for the property are corporate offices, showroom space and F&B businesses.
CB Richard Ellis is the marketing agent for this public tender, which closes on May 20. Ephraim Seow
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
ST : Bid too high, so Beijing cancels land auction
Apr 29, 2010
Bid too high, so Beijing cancels land auction
BEIJING: A land auction in Beijing was cancelled after bidding exceeded a price ceiling set for the lot, as the Chinese government expands efforts to rein in the nation's property market.
The highest price bid for the Beijing lot, zoned for residential development, at the auction on Monday was 4,718 yuan (S$950) per sq m, exceeding the 4,700 yuan per sq m limit set by the government, the Ministry of Land and Resources said on its website yesterday.
The ministry's Beijing branch said it began setting limits on the price of land this month on a trial basis.
'Imagine a seller refuses your business because he thinks you are paying too much for his products,' Bank of America-Merrill Lynch analysts wrote in a report distributed yesterday.
'It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.'
China began requiring developers to pay higher deposits for land purchases last month, and banned banks from lending to developers found to be hoarding land, as Premier Wen Jiabao pledged to crack down on real estate speculation and keep housing affordable.
Property prices in 70 Chinese cities gained a record 11.7 per cent last month compared with prices a year earlier.
The average price of land in 105 Chinese cities rose 8.1 per cent in the first quarter from the price a year earlier, to 2,700 yuan per sq m.
The ministry's Beijing branch this month began limiting how much land developers may buy.
Videos will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing's land bureau and developers for purchases of lots will be made public, according to the statement.
China's property stocks have plunged 20 per cent this year, making them the worst performers among
major industry groups after Beijing began clamping down on the property market.
China will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises, state media reported yesterday.
The move could stand in the way of about 110 billion yuan in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily.
The suspension will allow the Ministry of Land and Resources to examine whether companies have used illegal methods to manipulate market prices, the newspaper said.
BLOOMBERG, REUTERS
Bid too high, so Beijing cancels land auction
BEIJING: A land auction in Beijing was cancelled after bidding exceeded a price ceiling set for the lot, as the Chinese government expands efforts to rein in the nation's property market.
The highest price bid for the Beijing lot, zoned for residential development, at the auction on Monday was 4,718 yuan (S$950) per sq m, exceeding the 4,700 yuan per sq m limit set by the government, the Ministry of Land and Resources said on its website yesterday.
The ministry's Beijing branch said it began setting limits on the price of land this month on a trial basis.
'Imagine a seller refuses your business because he thinks you are paying too much for his products,' Bank of America-Merrill Lynch analysts wrote in a report distributed yesterday.
'It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.'
China began requiring developers to pay higher deposits for land purchases last month, and banned banks from lending to developers found to be hoarding land, as Premier Wen Jiabao pledged to crack down on real estate speculation and keep housing affordable.
Property prices in 70 Chinese cities gained a record 11.7 per cent last month compared with prices a year earlier.
The average price of land in 105 Chinese cities rose 8.1 per cent in the first quarter from the price a year earlier, to 2,700 yuan per sq m.
The ministry's Beijing branch this month began limiting how much land developers may buy.
Videos will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing's land bureau and developers for purchases of lots will be made public, according to the statement.
China's property stocks have plunged 20 per cent this year, making them the worst performers among
major industry groups after Beijing began clamping down on the property market.
China will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises, state media reported yesterday.
The move could stand in the way of about 110 billion yuan in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily.
The suspension will allow the Ministry of Land and Resources to examine whether companies have used illegal methods to manipulate market prices, the newspaper said.
BLOOMBERG, REUTERS
BT : Beijing land sale scrapped as bid tops set ceiling
Business Times - 29 Apr 2010
Beijing land sale scrapped as bid tops set ceiling
(SHANGHAI) An auction of land in Beijing was cancelled after bidding exceeded a price ceiling set for the lot as the Chinese government expands efforts to rein in the nation's property market.
The highest price bid for the Beijing lot, zoned for residential development, at the auction on Monday was 4,718 yuan (S$945) per square metre, exceeding the 4,700 yuan per square metre limit set by the government, the Ministry of Land and Resources said on its website yesterday.
The ministry's Beijing branch said it began setting limits on the price of land this month on a trial basis.
'Imagine a seller refuses your business because he thinks you are paying too much for his products?' Bank of America-Merrill Lynch analysts led by David Cui wrote in a report distributed yesterday. 'It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.'
China began requiring developers pay higher deposits for land purchases last month and banned banks from lending to developers found to be hoarding land as Premier Wen Jiabao pledged to crack down on real-estate speculation and keep housing affordable. Property prices in 70 Chinese cities gained a record 11.7 per cent in March from a year earlier.
The Beijing branch of the land ministry this month began limiting how much land developers may buy, according to a statement posted to its website on April 21. Video will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing's land bureau and developers for purchases of lots will be made public, according to the statement.
Separately, the land ministry's Shanghai bureau said on Tuesday it had postponed the auctioning of four land plots previously scheduled for yesterday to May 7, citing a 'technical hitch.' The average price of land in 105 Chinese cities rose 8.1 per cent in the first quarter from a year earlier to 2,700 yuan per square metre, Minister of Land and Resources Xu Shaoshi said last week.
China's property stocks have plunged 20 per cent this year, making them the worst performers among major industry groups. China Vanke, the nation's biggest publicly traded developer, has fallen 28 per cent this year compared with a 12 per cent drop in the benchmark Shanghai Composite Index.
Regulators have halted share sales by property developers to give the Ministry of Land and Resources the chance to investigate if companies manipulated market prices, the China Daily reported yesterday, citing an unidentified source close to the China Securities Regulatory Commission.
Beijing will be issuing policies limiting how many homes residents of the city are allowed to buy, the Shanghai Securities News reported yesterday. The city will also 'basically' stop loans for the purchase of third homes. - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Beijing land sale scrapped as bid tops set ceiling
(SHANGHAI) An auction of land in Beijing was cancelled after bidding exceeded a price ceiling set for the lot as the Chinese government expands efforts to rein in the nation's property market.
The highest price bid for the Beijing lot, zoned for residential development, at the auction on Monday was 4,718 yuan (S$945) per square metre, exceeding the 4,700 yuan per square metre limit set by the government, the Ministry of Land and Resources said on its website yesterday.
The ministry's Beijing branch said it began setting limits on the price of land this month on a trial basis.
'Imagine a seller refuses your business because he thinks you are paying too much for his products?' Bank of America-Merrill Lynch analysts led by David Cui wrote in a report distributed yesterday. 'It demonstrates the type of pressure the central government is putting on local officials to get the property market right this time; this increases the risk of potential overshooting in the property market crackdown.'
China began requiring developers pay higher deposits for land purchases last month and banned banks from lending to developers found to be hoarding land as Premier Wen Jiabao pledged to crack down on real-estate speculation and keep housing affordable. Property prices in 70 Chinese cities gained a record 11.7 per cent in March from a year earlier.
The Beijing branch of the land ministry this month began limiting how much land developers may buy, according to a statement posted to its website on April 21. Video will also be taken of land auctions, notary personnel will observe the bidding, and contracts between Beijing's land bureau and developers for purchases of lots will be made public, according to the statement.
Separately, the land ministry's Shanghai bureau said on Tuesday it had postponed the auctioning of four land plots previously scheduled for yesterday to May 7, citing a 'technical hitch.' The average price of land in 105 Chinese cities rose 8.1 per cent in the first quarter from a year earlier to 2,700 yuan per square metre, Minister of Land and Resources Xu Shaoshi said last week.
China's property stocks have plunged 20 per cent this year, making them the worst performers among major industry groups. China Vanke, the nation's biggest publicly traded developer, has fallen 28 per cent this year compared with a 12 per cent drop in the benchmark Shanghai Composite Index.
Regulators have halted share sales by property developers to give the Ministry of Land and Resources the chance to investigate if companies manipulated market prices, the China Daily reported yesterday, citing an unidentified source close to the China Securities Regulatory Commission.
Beijing will be issuing policies limiting how many homes residents of the city are allowed to buy, the Shanghai Securities News reported yesterday. The city will also 'basically' stop loans for the purchase of third homes. - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Non-central home prices outpace prime areas
Business Times - 29 Apr 2010
Non-central home prices outpace prime areas
NUS index shows they climbed 1.2% in March while central region home prices dipped
By UMA SHANKARI
(SINGAPORE) Prices of non-landed private homes outside Singapore's prime districts are now growing at a faster rate than prices in the prime districts, according to a new index compiled by the National University of Singapore (NUS).
Flash estimates for March released yesterday show that 'non-central' home prices climbed 1.2 per cent last month, taking the first-quarter rise to 4.4 per cent.
In contrast, prices in the central region - postal districts 1-4 and 9-11 - dipped 0.07 per cent in March. For Q1, they rose 1.7 per cent.
NUS's Singapore Residential Price Index also shows that overall home prices rose 0.3 per cent last month and 2.8 per cent in Q1.
This puts the overall current value of the index just 0.1 per cent below the peak in November 2007. Prices in the central region are now 9.3 per cent below that peak, while prices in non-central areas are 6.4 per cent above the previous peak in January 2008.
'The rate of price growth in the central area has slowed, but for the non-central region, we have not seen an obvious decline in the rate of growth yet,' said Associate Professor Lum Sau Kim, who leads the group that compiles the index.
In 2009, price growth in the central region outpaced that in non-central areas. Home prices grew 27.3 per cent in the central region and 19.5 per cent in non-central areas. The overall index rose 22.2 per cent.
Analysts say that the moderation in the growth of prices - seen in both the NUS index and official Urban Redevelopment Authority index - is a sign that government measures to cool the market, implemented in September 2009 and February 2010, have reined in runaway price increases.
Official data released by URA last week showed that prices of non-landed properties increased 4.9 per cent in Q1, down from 7.2 per cent in the preceding quarter.
URA's index also showed that prices in the 'core central region', which roughly correlates to the central region classification used by the NUS index, rose 4.4 per cent in Q1 - faster than home prices in the 'outside central region', which rose 4.3 per cent.
URA's index showed that prices in the mid-level 'rest of central region' rose 7.9 per cent in Q1.
The numbers from URA and NUS differ because the two indices use different methods to track prices.
NUS's index, which is compiled by the Institute of Real Estate Studies, was launched in March to serve as a resource for developing property derivatives in Singapore.
It is computed using the market values of a basket of completed properties. Uncompleted projects are not included in the basket as price movements for such projects can be different from those in the rest of the market.
But the impact of new launches on the prices of completed properties in the vicinity is factored in.
The URA index, on the other hand, includes transactions at new launches and sub-sales. The differences mean that the two indices can throw up different numbers, market watchers have said.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Slowing down: Analysts say that the moderation in the growth of prices is a sign that government measures to cool the market have reined in runaway price increases
Non-central home prices outpace prime areas
NUS index shows they climbed 1.2% in March while central region home prices dipped
By UMA SHANKARI
(SINGAPORE) Prices of non-landed private homes outside Singapore's prime districts are now growing at a faster rate than prices in the prime districts, according to a new index compiled by the National University of Singapore (NUS).
Flash estimates for March released yesterday show that 'non-central' home prices climbed 1.2 per cent last month, taking the first-quarter rise to 4.4 per cent.
In contrast, prices in the central region - postal districts 1-4 and 9-11 - dipped 0.07 per cent in March. For Q1, they rose 1.7 per cent.
NUS's Singapore Residential Price Index also shows that overall home prices rose 0.3 per cent last month and 2.8 per cent in Q1.
This puts the overall current value of the index just 0.1 per cent below the peak in November 2007. Prices in the central region are now 9.3 per cent below that peak, while prices in non-central areas are 6.4 per cent above the previous peak in January 2008.
'The rate of price growth in the central area has slowed, but for the non-central region, we have not seen an obvious decline in the rate of growth yet,' said Associate Professor Lum Sau Kim, who leads the group that compiles the index.
In 2009, price growth in the central region outpaced that in non-central areas. Home prices grew 27.3 per cent in the central region and 19.5 per cent in non-central areas. The overall index rose 22.2 per cent.
Analysts say that the moderation in the growth of prices - seen in both the NUS index and official Urban Redevelopment Authority index - is a sign that government measures to cool the market, implemented in September 2009 and February 2010, have reined in runaway price increases.
Official data released by URA last week showed that prices of non-landed properties increased 4.9 per cent in Q1, down from 7.2 per cent in the preceding quarter.
URA's index also showed that prices in the 'core central region', which roughly correlates to the central region classification used by the NUS index, rose 4.4 per cent in Q1 - faster than home prices in the 'outside central region', which rose 4.3 per cent.
URA's index showed that prices in the mid-level 'rest of central region' rose 7.9 per cent in Q1.
The numbers from URA and NUS differ because the two indices use different methods to track prices.
NUS's index, which is compiled by the Institute of Real Estate Studies, was launched in March to serve as a resource for developing property derivatives in Singapore.
It is computed using the market values of a basket of completed properties. Uncompleted projects are not included in the basket as price movements for such projects can be different from those in the rest of the market.
But the impact of new launches on the prices of completed properties in the vicinity is factored in.
The URA index, on the other hand, includes transactions at new launches and sub-sales. The differences mean that the two indices can throw up different numbers, market watchers have said.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Slowing down: Analysts say that the moderation in the growth of prices is a sign that government measures to cool the market have reined in runaway price increases
BT : China suspends capital raising by property firms
Business Times - 29 Apr 2010
China suspends capital raising by property firms
Moratorium may block 110b yuan in share issues planned by 45 companies
(BEIJING) China will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises, state media reported yesterday.
The move could stand in the way of about 110 billion yuan (S$22 billion) in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily.
The suspension will allow the authorities to examine whether companies have used illegal methods to manipulate market prices, the newspaper said.
Beijing, wary about the risks of an asset bubble, has been trying to cool the real estate market, raising mortgage rates and down payment requirements for second homes and pushing local governments to control speculative buying.
Those steps complement general efforts to prevent the economy from overheating as it fully regained its momentum with the help of booming credit and grew nearly 11.9 per cent in the first quarter from a year earlier, the fastest since 2007.
China's banking regulator has also issued new guidelines to make it harder for property developers to obtain funding from trust companies, the 21st Century Business Herald quoted an unnamed executive at a trust company as saying.
Real estate firms seeking loans from trust firms must meet the minimum capital requirement and provide proof of their qualifications for developing a project, the newspaper said.
This would represent a clarification and tightening of rules governing the financing relationship between trust firms and property developers. Real estate firms have been turning to trust companies because they have looser capital requirements than banks.
Share prices of Chinese property firms have tumbled over the past week, dragging down the main stock index in Shanghai to its lowest level in more than half a year.
But the formation of a property bubble in China has become one of the major risks to sustainable economic growth, the Development Research Centre, a think-tank under the State Council, said yesterday.
In its report, published in the China Economic Times, it said that steps taken in recent months by the government had not yet succeeded in tamping down on surging property prices.
'If the controls are not forceful, with our country's growth and development clearly outstripping that of other countries, hot money inflows will quicken and excessive domestic liquidity will increase, progressively inflating asset bubbles,' it said. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Towering prices: Beijing, wary about the risks of an asset bubble, has been trying to cool the real estate market, raising mortgage rates and down payment requirements for second homes and pushing local governments to control speculative buying
China suspends capital raising by property firms
Moratorium may block 110b yuan in share issues planned by 45 companies
(BEIJING) China will place a moratorium on capital raising by real estate firms as part of a broader campaign to rein in property price rises, state media reported yesterday.
The move could stand in the way of about 110 billion yuan (S$22 billion) in share issues planned by 45 companies, unnamed sources close to the China Securities Regulatory Commission told the China Daily.
The suspension will allow the authorities to examine whether companies have used illegal methods to manipulate market prices, the newspaper said.
Beijing, wary about the risks of an asset bubble, has been trying to cool the real estate market, raising mortgage rates and down payment requirements for second homes and pushing local governments to control speculative buying.
Those steps complement general efforts to prevent the economy from overheating as it fully regained its momentum with the help of booming credit and grew nearly 11.9 per cent in the first quarter from a year earlier, the fastest since 2007.
China's banking regulator has also issued new guidelines to make it harder for property developers to obtain funding from trust companies, the 21st Century Business Herald quoted an unnamed executive at a trust company as saying.
Real estate firms seeking loans from trust firms must meet the minimum capital requirement and provide proof of their qualifications for developing a project, the newspaper said.
This would represent a clarification and tightening of rules governing the financing relationship between trust firms and property developers. Real estate firms have been turning to trust companies because they have looser capital requirements than banks.
Share prices of Chinese property firms have tumbled over the past week, dragging down the main stock index in Shanghai to its lowest level in more than half a year.
But the formation of a property bubble in China has become one of the major risks to sustainable economic growth, the Development Research Centre, a think-tank under the State Council, said yesterday.
In its report, published in the China Economic Times, it said that steps taken in recent months by the government had not yet succeeded in tamping down on surging property prices.
'If the controls are not forceful, with our country's growth and development clearly outstripping that of other countries, hot money inflows will quicken and excessive domestic liquidity will increase, progressively inflating asset bubbles,' it said. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Towering prices: Beijing, wary about the risks of an asset bubble, has been trying to cool the real estate market, raising mortgage rates and down payment requirements for second homes and pushing local governments to control speculative buying
BT : Sands eyes US$12 billion from sale of Macau assets
Business Times - 29 Apr 2010
Sands eyes US$12 billion from sale of Macau assets
CEO raises Marina Bay Sands forecast, investment to be recouped in 5 years
(SINGAPORE) Las Vegas Sands Corp chairman Sheldon Adelson said that the planned sale of the casino operator's Macau malls and apartments may raise as much as US$12 billion and recoup their construction costs.
'It will be like US$12 billion if we add up all the apartments and all the retail in
Macau,' including those in buildings still under construction, Mr Adelson, the founder and chief executive officer of Las Vegas Sands, said in an interview in Singapore on Tuesday. The company may start selling the Macau assets within 21/2 years, he said.
Sands, which Adelson describes as 'an Asian company with a presence in Las Vegas and the US', gets 73 per cent of its revenue from Macau, the world's largest gambling market. He was in Singapore on Tuesday to open the first phase of Marina Bay Sands, and raised his earnings forecast for the resort, saying that the US$5.5 billion invested in it will be recouped in five years.
Sands' casino resort on Tuesday opened 963 of its 2,560 hotel rooms, the casino, the meeting and convention facilities, parts of its shopping mall and some restaurants. A grand opening party will be held on June 23 when the second phase is unveiled, including a sky park, additional shops and more restaurants.
Asia will contribute 85 per cent of revenue once the Singapore casino 'ramps up', said Mr Adelson. Last year's sales totalled US$4.56 billion, with 27 per cent coming from Las Vegas, where the company is based.
Macau assets that Sands may sell include the Four Seasons apartments and shopping areas in the Venetian Macau casino resort and in the Four Seasons hotel, Mr Adelson said. The plan also includes selling condominiums at the St Regis, where construction is resuming.
'That is our fundamental business model - we get our money back from the sale of non-core business assets,' he said.
Still, Jonathan Galaviz, an independent strategist who follows travel and leisure in Asia, said that apartments and malls in Macau may be a tough sell to investors, given that the city isn't a proven place for housing investment, and that a huge asset bubble may be developing in Asian real estate.
'Second-home buyers in Asia tend to have an affinity for beach and costal destinations, so Macau's proposition will need to be unique in order to compete,' Mr Galaviz said in an e-mail. As for malls, 'the average length of stay for Macau's average tourist - around one night - doesn't yet lend itself to a strong and dynamic retail opportunity'.
Sands fell US$1.51, or 5.8 per cent, to close at US$24.69 on the New York Stock Exchange composite trading on Tuesday. The stock has gained 65 per cent this year.
Mr Adelson, who is Sands' controlling shareholder, said in December that selling the retail areas at the Four Seasons and the Venetian would raise enough money to pay Sands' debt. The company has US$12.2 billion of bonds and loans due from next year to 2015, according to data compiled by Bloomberg.
The billionaire, who previously said that the Singapore project would add more than US$1 billion in annual earnings before interest, tax, depreciation and amortisation, didn't provide a new figure apart from saying that he was raising his forecast. The return period compares with four years for the Macau project, which cost about half as much to build, Mr Adelson said.
The Marina Bay Sands in Singapore will be a 'grand slam home run', Mr Adelson said. 'Asian people just love to gamble.'
Singapore aims to lure 17 million visitors and triple annual tourism revenue to S$30 billion (US$22 billion) by 2015, helped by two casino resorts, Marina Bay Sands and Genting Bhd's Resorts World Sentosa.
The Marina Bay Sands casino, which makes up about 3 per cent of the 15,000 sq m resort, has about 600 table games and more than 1,500 slot machines.
Asia has room for five to 10 cities like Las Vegas, Mr Adelson said. The most likely countries to approve casinos in the region are Japan and Taiwan, he said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Rowing away: Sands may sell the Four Seasons apartments and shopping areas in the Venetian Macau (above) and in the Four Seasons hotel, Mr Adelson says
Sands eyes US$12 billion from sale of Macau assets
CEO raises Marina Bay Sands forecast, investment to be recouped in 5 years
(SINGAPORE) Las Vegas Sands Corp chairman Sheldon Adelson said that the planned sale of the casino operator's Macau malls and apartments may raise as much as US$12 billion and recoup their construction costs.
'It will be like US$12 billion if we add up all the apartments and all the retail in
Macau,' including those in buildings still under construction, Mr Adelson, the founder and chief executive officer of Las Vegas Sands, said in an interview in Singapore on Tuesday. The company may start selling the Macau assets within 21/2 years, he said.
Sands, which Adelson describes as 'an Asian company with a presence in Las Vegas and the US', gets 73 per cent of its revenue from Macau, the world's largest gambling market. He was in Singapore on Tuesday to open the first phase of Marina Bay Sands, and raised his earnings forecast for the resort, saying that the US$5.5 billion invested in it will be recouped in five years.
Sands' casino resort on Tuesday opened 963 of its 2,560 hotel rooms, the casino, the meeting and convention facilities, parts of its shopping mall and some restaurants. A grand opening party will be held on June 23 when the second phase is unveiled, including a sky park, additional shops and more restaurants.
Asia will contribute 85 per cent of revenue once the Singapore casino 'ramps up', said Mr Adelson. Last year's sales totalled US$4.56 billion, with 27 per cent coming from Las Vegas, where the company is based.
Macau assets that Sands may sell include the Four Seasons apartments and shopping areas in the Venetian Macau casino resort and in the Four Seasons hotel, Mr Adelson said. The plan also includes selling condominiums at the St Regis, where construction is resuming.
'That is our fundamental business model - we get our money back from the sale of non-core business assets,' he said.
Still, Jonathan Galaviz, an independent strategist who follows travel and leisure in Asia, said that apartments and malls in Macau may be a tough sell to investors, given that the city isn't a proven place for housing investment, and that a huge asset bubble may be developing in Asian real estate.
'Second-home buyers in Asia tend to have an affinity for beach and costal destinations, so Macau's proposition will need to be unique in order to compete,' Mr Galaviz said in an e-mail. As for malls, 'the average length of stay for Macau's average tourist - around one night - doesn't yet lend itself to a strong and dynamic retail opportunity'.
Sands fell US$1.51, or 5.8 per cent, to close at US$24.69 on the New York Stock Exchange composite trading on Tuesday. The stock has gained 65 per cent this year.
Mr Adelson, who is Sands' controlling shareholder, said in December that selling the retail areas at the Four Seasons and the Venetian would raise enough money to pay Sands' debt. The company has US$12.2 billion of bonds and loans due from next year to 2015, according to data compiled by Bloomberg.
The billionaire, who previously said that the Singapore project would add more than US$1 billion in annual earnings before interest, tax, depreciation and amortisation, didn't provide a new figure apart from saying that he was raising his forecast. The return period compares with four years for the Macau project, which cost about half as much to build, Mr Adelson said.
The Marina Bay Sands in Singapore will be a 'grand slam home run', Mr Adelson said. 'Asian people just love to gamble.'
Singapore aims to lure 17 million visitors and triple annual tourism revenue to S$30 billion (US$22 billion) by 2015, helped by two casino resorts, Marina Bay Sands and Genting Bhd's Resorts World Sentosa.
The Marina Bay Sands casino, which makes up about 3 per cent of the 15,000 sq m resort, has about 600 table games and more than 1,500 slot machines.
Asia has room for five to 10 cities like Las Vegas, Mr Adelson said. The most likely countries to approve casinos in the region are Japan and Taiwan, he said. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Rowing away: Sands may sell the Four Seasons apartments and shopping areas in the Venetian Macau (above) and in the Four Seasons hotel, Mr Adelson says
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